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EXHIBIT 1
6,400,000 SHARES
PHYCOR, INC.
COMMON STOCK
(No Par Value)
UNDERWRITING AGREEMENT
February , 1997
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
EQUITABLE SECURITIES CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
SALOMON BROTHERS INC
As Representatives of the
Several Underwriters
c/o Alex. ▇▇▇▇▇ & Sons Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
PhyCor, Inc., a Tennessee corporation (the "Company") proposes to sell to
the several underwriters (the "Underwriters") named in Schedule I hereto for
whom you are acting as representatives (the "Representatives") an aggregate of
6,400,000 shares of the Company's Common Stock, no par value (the "Firm
Shares"). The Company and certain executive officers of the Company (the
"Selling Shareholders") also propose to sell at the Underwriters' option an
aggregate of up to 960,000 additional shares of the Company's Common Stock (the
"Option Shares") as set forth below. The respective amounts of the Firm Shares
to be purchased by the several Underwriters are set forth opposite their names
on Schedule I hereto. The respective amounts of the Option Shares to be sold by
the Company and each of the Selling Shareholders are set forth on Schedule II.
The Company and the Selling Shareholders are sometimes referred to herein
collectively as the "Sellers."
As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and the
Option Shares (to the extent the aforementioned option is exercised) are herein
collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. Representations and Warranties of the Company and the Selling
Shareholders. (a) The Company represents and warrants to each of the
Underwriters as follows:
(i) A registration statement on Form S-3 (File No. 333- ) with
respect to the Shares has been carefully prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended,
(the "Act") and the Rules and Regulations (the "Rules and Regulations") of
the Securities and Exchange Commission (the "Commission") thereunder and
has been filed with the Commission under the Act. The Company has complied
with the conditions for the use of Form S-3. Copies of such registration
statement, including any amendments thereto, the preliminary prospectuses
(meeting the requirements of Rule 430A of
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the Rules and Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have heretofore
been delivered by the Company to you, and, to the extent applicable, were
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to the Commission's Electronic Data Gathering, Analysis
and Retrieval System ("▇▇▇▇▇"), except to the extent permitted by
Regulation S-T. Such registration statement, together with any registration
statement filed by the Company pursuant to Rule 462(b) of the Act, herein
referred to as the "Registration Statement," which shall be deemed to
include all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, has become effective under
the Act and no post-effective amendment to the Registration Statement has
been filed as of the date of this Agreement. "Prospectus" means (a) the
form of prospectus first filed by the Company with the Commission pursuant
to its Rule 424(b) or (b) the term sheet or abbreviated term sheet filed by
the Company with the Commission pursuant to Rule 424(b)(7) together with
the last preliminary prospectus included in the Registration Statement
filed prior to the time it becomes effective or filed pursuant to Rule
424(a) under the Act that is delivered by the Company to the Underwriters
for delivery to purchasers of the Shares. Each preliminary prospectus
included in the Registration Statement prior to the time it becomes
effective is herein referred to as a "Preliminary Prospectus." Any
reference herein to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, as of the date of such Registration
Statement, Preliminary Prospectus or Prospectus, as the case may be, and,
in the case of any reference herein to any Prospectus, also shall be deemed
to include any documents incorporated by reference therein, and any
supplements or amendments thereto, filed with the Commission after the date
of filing of the Prospectus under Rule 424(b) or Rule 430A, and prior to
the termination of the offering of the Shares by the Underwriters. For
purposes of this Agreement, all references to the Registration Statement,
any Preliminary Prospectus, the Prospectus, or any amendment or supplement
to any of the foregoing shall be deemed to include the respective copies
thereof filed with the Commission pursuant to ▇▇▇▇▇.
(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Tennessee, with
corporate power and authority to own or lease its properties and conduct
its business as described in the Registration Statement; each of the
subsidiaries of the Company listed in Schedule III hereto (collectively,
the "Subsidiaries") has been duly incorporated and is validly existing and
in good standing under the laws of the jurisdiction of its incorporation,
with power and authority to own or lease its properties and conduct its
business as described in the Registration Statement; the Company and each
of the Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification; the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable and such shares of capital stock in each Subsidiary are
wholly owned by the Company free and clear of all liens, encumbrances and
security interests other than the pledge of shares of the capital stock of
the Subsidiaries to Citibank, N.A., as agent, pursuant to the Company's
Fifth Amended and Restated Revolving Credit and Term Loan Agreement with
Citibank dated as of July 22, 1996, as the same may be amended from time to
time; and no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligations into
shares of capital stock or ownership interests in the Subsidiaries are
outstanding, except to the extent set forth in the Registration Statement,
including the exhibits thereto. The Subsidiaries are the only subsidiaries,
direct or indirect, of the Company.
(iii) The outstanding shares of Common Stock, including all
outstanding shares of Common Stock to be sold by the Selling Shareholders,
have been duly authorized and validly issued and are fully paid and
non-assessable; the portion of the Shares to be issued and sold by the
Company have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and non-assessable;
shares of Common Stock to be sold by the
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Selling Shareholders will be at the time of their sale to the Underwriters
hereunder, validly issued, fully paid and non-assessable. No person or
entity holds a right to require or participate in the registration under
the Act of shares of Common Stock of the Company which right has not been
waived by the holder thereof as to the offering contemplated hereby and by
the Registration Statement, or satisfied by participation by such holder in
the offering. No person or entity has any preemptive or other right of
participation or first refusal with respect to any of the Shares or the
issue thereof by the Company or the sale thereof by the Company and the
Selling Shareholders, which rights have not been waived.
(iv) The information set forth under the caption "Capitalization" in
the Prospectus is true and correct in all material respects as of the dates
set forth therein. The Shares conform with the statements concerning them
set forth and incorporated by reference in the Registration Statement.
(v) The Commission has not issued an order preventing or suspending
the use of any Preliminary Prospectus or Prospectus relating to the
proposed offering of the Shares nor instituted proceedings for that
purpose. The Registration Statement contains and the Prospectus and any
amendments or supplements thereto will contain all statements which are
required to be stated therein by, and in all respects conform or will
conform, as the case may be, to the requirements of, the Act and the Rules
and Regulations. The documents incorporated by reference in the Prospectus,
at the time they are filed with the Commission will conform in all respects
to the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the Act, as applicable, and the Rules and Regulations
of the Commission thereunder. Neither the Registration Statement nor any
amendment thereto, any Preliminary Prospectus, and neither the Prospectus
nor any amendment or supplement thereto, contains or will contain, as the
case may be, any untrue statement of a material fact or omits or will omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to information contained in or omitted
from the Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use in the preparation thereof.
(vi) The historical consolidated financial statements of the Company
and the Subsidiaries, together with related notes and schedules as set
forth or incorporated by reference in the Registration Statement, present
fairly the financial position and the results of operations and cash flows
of the Company and Subsidiaries consolidated, at the indicated dates and
for the indicated periods. Such financial statements have been prepared in
accordance with generally accepted principles of accounting, consistently
applied throughout the periods involved, and all adjustments necessary for
a fair presentation of results for such periods have been made. The pro
forma financial statements and other pro forma financial information set
forth in the Registration Statement and the Prospectus fairly present the
information required to be presented therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements, have been properly compiled on the pro forma
bases described therein, and, in the opinion of the Company, the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein. The summary pre-transaction financial
information set forth in the Registration Statement materially complies
with that certain letter dated September 16, 1991 from the Commission to
the Company, presents fairly the information shown therein and has been
compiled on a basis consistent with the notes thereto. The summary
financial and statistical data included in the Registration Statement
presents fairly the information shown therein and have been compiled on a
basis consistent with the financial statements presented therein.
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(vii) There is no action or proceeding pending or, to the knowledge of
the Company, threatened against the Company, any of the Subsidiaries or any
of the medical practice groups, including, without limitation, clinics,
IPAs and other groups and individual practitioners, with which the Company
or the Subsidiaries have service agreements (collectively, the "Practice
Groups"), and, to the knowledge of the Company, there is no action or
proceeding pending against any individual physicians practicing in any
Practice Group, before any court or administrative agency which the Company
has reason to believe is likely to result in any material adverse change in
the business or condition of the Company and of the Subsidiaries taken as a
whole, except as set forth in the Registration Statement.
(viii) The Company and the Subsidiaries have good and marketable title
to all of the properties and assets reflected in the financial statements
(or as described in the Registration Statement) hereinabove described,
subject to no lien, mortgage, pledge, charge or encumbrance of any kind
except those reflected in such financial statements (or as described in the
Registration Statement) or which are not material in amount. The Company
and the Subsidiaries occupy leased properties under valid and binding
leases and, as to rented properties, occupy such properties as
tenants-at-will pursuant to valid and binding agreements, except where the
failure to have such leases or agreements would not have a material adverse
effect on the Company and its Subsidiaries.
(ix) The Company and the Subsidiaries have (i) filed all Federal,
State and foreign income tax returns which have been required to be filed,
(ii) paid all taxes indicated by said returns and all assessments received
by them or any of them to the extent that such taxes have become due, and
(iii) adequately provided for all tax liabilities in the financial
statements of the Company, except (a) where the failure to do so would not
have a material adverse effect on the Company and its Subsidiaries and (b)
with respect to matters described in the "Tax Audit" paragraph under the
caption "Risk Factors" in the Registration Statement.
(x) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries taken as a whole or the
earnings, business affairs, management, or business prospects of the
Company and its Subsidiaries taken as a whole, whether or not occurring in
the ordinary course of business, and there has not been any material
transaction entered into by the Company or the Subsidiaries, other than
transactions in the ordinary course of business and changes and
transactions contemplated by the Registration Statement, as it may be
amended or supplemented. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the Registration
Statement, as it may be amended or supplemented.
(xi) Neither the Company nor any of the Subsidiaries is or with the
giving of notice or lapse of time or both, will be, in violation of or in
default under its Restated Charter or By-laws or under any agreement,
lease, contract, indenture or other instrument or obligation to which it is
a party or by which it or any of its properties is bound and which default
is of material significance in respect of the business or financial
condition of the Company and the Subsidiaries taken as a whole. The
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, (i) any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company or any
Subsidiary is a party, except for any such breach or default which would
not have a material adverse effect or the Company or any of its
Subsidiaries, singly or in the aggregate, or (ii) the Restated Charter or
By-laws of the Company or any order, rule or regulation applicable to the
Company or any Subsidiary of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction.
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(xii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery
by the Company of this Agreement and the consummation of the transactions
herein contemplated (except such additional steps as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") or may be
necessary to qualify the Shares for public offering by the Underwriters
under State securities or Blue Sky laws) has been obtained or made and is
in full force and effect.
(xiii) To the Company's knowledge, the Company, each of the
Subsidiaries and each Practice Group is conducting its business in material
compliance with all the laws, rules and regulations of the jurisdictions in
which they are conducting businesses, including those relating to
healthcare. Without limiting the foregoing, the Company, each of the
Subsidiaries and, to the Company's knowledge, each Practice Group and each
physician practicing in such jurisdictions owns or possesses and is
operating in compliance with the terms, provisions and conditions of all
authorizations, approvals, orders, licenses, registrations, certificates
and permits of and from all governmental regulatory officials and bodies
necessary to conduct their respective businesses, except where the failure
to comply, individually or in the aggregate, would not have a material
adverse effect on the Company and the Subsidiaries, taken as a whole; as to
the Company and each Subsidiary and, to the Company's knowledge, as to each
Practice Group, each such authorization, approval, order, license,
registration, other certificate and permit of and from such governmental
regulatory officials and bodies is valid and in full force and effect and
there is no proceeding pending or, to the Company's knowledge, threatened
(or any basis therefor) which may cause any such authorization, approval,
order, license, registration, other certificate or permit of and from all
governmental regulatory officials and bodies that is material to the
conduct of the business of the Company and the Subsidiaries taken as a
whole as presently conducted to be revoked, withdrawn, cancelled, suspended
or not renewed. The Company has not been made aware of, or been put on
notice that, any physician in a Practice Group is not practicing in
material compliance with all such laws and regulations.
(xiv) The Company and each of the Subsidiaries owns or possesses
adequate licenses or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇
applications, tradenames, copyrights, trade secrets and know-how or other
information (collectively, "Intellectual Property") described in the
Prospectus (or the documents incorporated by reference therein) as owned by
or used by it or which is necessary to the conduct of its business as now
conducted or proposed to be conducted as described in the Prospectus (or
the documents incorporated by reference therein). The Company is not aware
of any infringement of or conflict with the rights of claims of others with
respect to any of the Company's Intellectual Property which could have a
material adverse effect on the business or financial condition of the
Company. The Company is not aware of any infringement of any of the
Company's Intellectual Property rights by any third party which could have
a material adverse effect on the business or financial condition of the
Company.
(xv) KPMG Peat Marwick LLP, who have certified certain of the
financial statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Act and
the Rules and Regulations.
(xvi) Neither the Company nor, to the Company's knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of stock to facilitate the sale or resale of the Shares. The
Company acknowledges that the Underwriters may engage in passive market
making transactions in the Shares on the Nasdaq National Market in
accordance with Rule 10b-6A under the Exchange Act (or any successor
Rules).
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(xvii) The Company is not, and after giving effect to the issuance of
the Shares will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the Company is not, nor
will be subject to regulation under said act.
(xviii) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, An Act Relating to Disclosure of Doing Business with Cuba, and the
Company further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba after
the date the Registration Statement becomes or has become effective with
the Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported or
incorporated by reference in the Prospectus, if any, concerning the
Company's business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Company will provide the Department
notice of such business or change, as appropriate, in a form acceptable to
the Department.
(xix) 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.
(xx) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their respective businesses and the value of their
respective properties and as is customary for companies engaged in similar
industries.
(xxi) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, and "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
has been issued a favorable determination letter from the Internal Revenue
Service with respect to its qualification under Section 401(a) of the Code,
and the Company is aware of no occurrence, whether by action or by failure
to act, which would cause the revocation of such determination letter or
the loss of such qualification.
(b) Each of the Selling Shareholders severally represents and warrants as
of the date hereof and the Option Closing Date, as the case may be, to each of
the Underwriters as follows:
(i) Such Selling Shareholder has and at the Option Closing Date (as
such date is hereinafter defined) will have good and valid title to the
Option Shares to be sold by such Selling Shareholder, free of any liens,
encumbrances, equities and claims, and full right, power and authority to
effect the sale and delivery of such Option Shares; and upon the delivery
of and payment for such Option Shares pursuant to this Agreement, good and
valid title thereto, free of any liens, encumbrances, equities and claims,
will be transferred to the several Underwriters.
(ii) Such Selling Shareholder has full right, power and authority to
execute and deliver this Agreement. the Power of Attorney and the Custody
Agreement (as hereinafter defined) and to perform its obligations under
such agreements. The execution and delivery of this Agreement
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and the consummation by such Selling Shareholder of the transactions herein
contemplated and the fulfillment by such Selling Shareholder of the terms
hereof will not result in a breach of any of the terms and provisions of,
or constitute a default under, any indenture, mortgage, deed of trust or
other agreement or instrument to which such Selling Shareholder is a party,
or of any order, rule or regulation applicable to the Selling Shareholder
of any court or of any regulatory body or administrative agency or other
governmental body having jurisdiction.
(iii) Such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Stock of the Company and, other
than as permitted by the Act, the Selling Shareholder will not distribute
any prospectus or other offering material in connection with the offering
of the Shares.
(iv) Without having undertaken to determine independently the accuracy
or completeness of either the representations and warranties of the Company
contained herein or the information contained in the Registration Statement
and documents incorporated by reference therein, such Selling Shareholder
has no reason to believe that the representations and warranties of the
Company contained in this Section 1 are not true and correct, is familiar
with the Registration Statement and has no knowledge of any material fact,
condition or information not disclosed in the Registration Statement and
documents incorporated by reference therein which has adversely affected or
may adversely affect the business of the Company and the Subsidiaries taken
as a whole; and the sale of the Option Shares by such Selling Shareholder
pursuant hereto is not prompted by any information concerning the Company
or any of the Subsidiaries which is not set forth in the Registration
Statement and documents incorporated by reference therein. The information
pertaining to such Selling Shareholder under the caption "Selling
Shareholders" in the Prospectus is complete and accurate in all material
aspects.
2. Purchase, Sale and Delivery of the Firm Shares. On the basis of the
representations, warranties and covenants herein contained, and subject to the
conditions herein set forth, the Company agrees to sell to the Underwriters and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$ per share, the number of Firm Shares set forth opposite the name of each
Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof. The number of Firm Shares to be purchased by each Underwriter
from the Company shall be as nearly as practicable in the same proportion to the
total number of Firm Shares being sold by the Company as the number of Firm
Shares being purchased by each Underwriter bears to the total number of Firm
Shares to be sold hereunder. The obligations of the Company and the Selling
Shareholder shall be several and not joint.
Certificates in negotiable form for the total number of the Shares to be
sold hereunder by the Selling Shareholders have been placed in custody with
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ PLLC, as custodian (the "Custodian"), pursuant to
the Letter of Transmittal and Custody Agreement (the "Custody Agreement")
executed by each Selling Shareholder for delivery of all Option Shares to be
sold hereunder by the Selling Shareholders. The Selling Shareholders
specifically agree that the Option Shares represented by the certificates held
in custody for such Selling Shareholders under the Custody Agreement are subject
to the interests of the Underwriters hereunder, that the arrangements made by
the Selling Shareholders for such custody are to that extent irrevocable, and
that the obligations of the Selling Shareholders hereunder shall not be
terminable by any act or deed of the Selling Shareholders (or by any other
person, firm or corporation, including the Company, the Custodian or the
Underwriters) or by operation of law (including the death of any Selling
Shareholder) or by the occurrence of any other event or events, except as set
forth in the Custodian Agreement. If any such event should occur prior to the
delivery to the Underwriters of the Option Shares hereunder, certificates for
the Option Shares shall be delivered by the Custodian in accordance with the
terms and conditions of this Agreement as if such event has not occurred. The
Custodian is authorized to receive and acknowledge receipt of the proceeds of
sale of the Shares held by it against delivery of such Shares.
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Payment for the Firm Shares to be sold hereunder is to be made by wire
transfer in same-day funds, payable to the order of the Company, against
delivery of certificates therefor to the Representatives for the several
accounts of the Underwriters. Such payment and delivery are to be made at the
offices of Alex. ▇▇▇▇▇ & Sons Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, at 10:00 a.m., Baltimore time, on the third business day after the
date of this Agreement, or at such other time and date not later than five
business days thereafter as you and the Company shall agree upon, such time and
date being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and not permitted by law or
executive order to be closed.) The certificates for the Firm Shares will be
delivered in such denominations and in such registrations as the Representatives
request in writing not later than the second full business day prior to the
Closing Date, and will be made available for inspection by the Representatives
at least one business day prior to the Closing Date.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
and the Selling Shareholders hereby grant an option to the several Underwriters
to purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The maximum number of Option Shares to be sold by
the Company and the Selling Shareholders is 960,000. The option granted hereby
may be exercised in whole or in part by giving written notice (i) at any time
before the Closing Date and (ii) only once thereafter within 30 days after the
date of this Agreement, by you, as Representatives of the several Underwriters,
to the Company and the Custodian setting forth the number of Option Shares as to
which the several Underwriters are exercising the option, the names and
denominations in which the Option Shares are to be registered and the time and
date at which such certificates are to be delivered. If the option granted by
the Company and the Selling Shareholders is exercised by the several
Underwriters for less than all of the Option Shares, the Underwriters will
purchase from the Selling Shareholders the maximum number of Option Shares to be
sold by each such Selling Shareholder, as set forth beside such Selling
Shareholder's name on Schedule II, before the Underwriters purchase any Option
Shares from the Company. If the option granted hereby is exercised for less than
the maximum number of Option Shares being offered by the Selling Shareholders,
the respective number of Option Shares to be sold by each of the Selling
Shareholders listed on Schedule II hereto shall be determined on a pro rata
basis in accordance with the number of shares set forth opposite their names on
Schedule II hereto, adjusted by you in such manner as to avoid fractional
shares. The time and date at which certificates for Option Shares are to be
delivered shall be determined by the Representatives but shall not be earlier
than three nor later than 10 full business days after the exercise of such
option, nor in any event prior to the Closing Date (such time and date being
herein referred to as the "Option Closing Date"). If the date of exercise of the
option is three or more days before the Closing Date, the notice of exercise
shall set the Closing Date as the Option Closing Date. The number of Option
Shares to be purchased by each Underwriter shall be in the same proportion to
the total number of Option Shares being purchased as the number of Firm Shares
being purchased by such Underwriter bears to 6,400,000, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover over-allotments in the
sale of the Firm Shares by the Underwriters. You, as Representatives of the
several Underwriters, may cancel such option at any time prior to its expiration
by giving written notice of such cancellation to the Company. To the extent, if
any, that the option is exercised, payment for the Option Shares shall be made
on the Option Closing Date in New York Clearing House funds by certified or bank
cashier's check drawn to the order of the Company for the Option Shares to be
sold by it and to the order of "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, A Professional
Limited Liability Company, Custodian" for the Option Shares to be sold by the
Selling Shareholders, against delivery of certificates therefor at the offices
of Alex. ▇▇▇▇▇ & Sons Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
3. Offering by the Underwriters. It is understood that the several
Underwriters are to make a public offering of the Firm Shares as soon as the
Representatives deem it advisable to do so. The
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Firm Shares are to be initially offered to the public at the initial public
offering price set forth in the Prospectus. The Representatives may from time to
time thereafter change the public offering price and other selling terms. To the
extent, if at all, that any Option Shares are purchased pursuant to Section 2
hereof, the Underwriters will offer them to the public on the foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company and the Selling Shareholders. (a) The Company
covenants and agrees with the several Underwriters and the Selling Shareholders
that:
(i) The Company will (A) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a Prospectus containing
information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Rules and
Regulations, (B) not file any amendment to the Registration Statement or
supplement to the Prospectus of which the Representatives shall not
previously have been advised and furnished with a copy or to which the
Representatives shall have reasonably objected in writing or which is not
in compliance with the Rules and Regulations and (C) file on a timely basis
all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission subsequent to the date of the
Prospectus and prior to the termination of the offering of the Shares by
the Underwriters. To the extent applicable, the copies of the Registration
Statement and each amendment thereto (including all exhibits filed
therewith), any Preliminary Prospectus or Prospectus (in each case, as
amended or supplemented) furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(ii) The Company will advise the Representatives promptly when the
Registration Statement or any post-effective amendment thereto shall have
become effective; of the receipt of any comments from the Commission; of
any request of the Commission for amendment of the Registration Statement
or for supplement to the Prospectus or for any additional information, and
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus or
of the institution of any proceedings for that purpose, and the Company
will use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, provided
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports, and
other documents, as are or may be required to continue such qualifications
in effect for so long a period as the Representatives may reasonably
request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period
when delivery of a Prospectus is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Representatives such number of
copies of the Registration Statement, including documents incorporated by
reference therein, but without
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exhibits, and of all amendments thereto, as the Representatives may
reasonably request. To the extent applicable, all such documents shall be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(v) The Company will comply with the Act and the rules and regulations
of the Commission thereunder, and the Exchange Act, and the rules and
regulations of the Commission thereunder, so as to permit the completion of
the distribution of the Shares as contemplated in this Agreement and the
Prospectus. If during the period in which a prospectus is required by law
to be delivered by an Underwriter or dealer any event shall occur as a
result of which, in the judgment of the Company or in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus to comply with any law, the Company promptly will
either (i) prepare and file with the Commission an appropriate amendment to
the Registration Statement or supplement to the Prospectus or (ii) prepare
and file with the Commission an appropriate filing under the Exchange Act
which shall be incorporated by reference in the Prospectus so that the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not later
than 15 months after the effective date of the Registration Statement, an
earnings statement (which need not be audited) in reasonable detail,
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement, which earnings statement
shall satisfy the requirements of Section 11(a) of the Act and Rule 158 of
the Rules and Regulations and will advise you in writing when such
statement has been so made available.
(vii) The Company will, for a period of five years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of
all other documents, reports and information (including similar documents,
reports and information with respect to significant subsidiaries, as that
term is defined in the Rules and Regulations, which are not consolidated in
the Company's financial statements) furnished by the Company to its
stockholders generally or filed with any securities exchange pursuant to
the requirements of such exchange or with the Commission pursuant to the
Act or the Securities Exchange Act of 1934, as amended. To the extent
applicable, such reports or documents shall be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(viii) No offering, sale, short sale or other disposition of any
Common Stock of the Company or other securities convertible into or
exchangeable for Common Stock or derivative of Common Stock will be made
for a period of 45 days after the date of this Agreement, directly or
indirectly, by the Company otherwise than hereunder or with the prior
written consent of the Representatives except that the Company may, without
such consent, issue shares to directors pursuant to the Company's
restricted stock plan, grant options pursuant to its option plans described
in the Prospectus, issue shares upon the exercise of options and warrants
or the conversion of securities outstanding on the date of this Agreement
and described in the Prospectus and, in addition, may issue Common Stock or
securities convertible into, or exchangeable or exercisable for, shares of
Common Stock in connection with the acquisition of the operating assets of
additional Practice Groups if the terms of issuance or legal restrictions
thereon provide that such Common Stock or securities shall not be sold
publicly prior to the expiration of the 45 day period hereinabove
referenced.
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(ix) The Company will use its best efforts to list, subject to notice
of issuance, the Shares on The Nasdaq National Market ("NMS").
(x) The Company will apply the net proceeds from the sale of the
Shares for the purposes set forth in the Prospectus.
(xi) The Company is familiar with the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder and has in the past
conducted and will in the future conduct its affairs in such a manner as to
ensure that the Company was not and will not be an "investment company"
within the meaning of said Act and such rules and regulations.
(xii) The Company has caused each executive officer of the Company to
furnish to you, on or prior to the date of this agreement, a letter or
letters, in form and substance satisfactory to the Underwriters, pursuant
to which each such person shall agree not to: (A) offer to sell, contract
to sell, transfer or otherwise dispose of, directly or indirectly, any
shares of Common Stock, any options, rights or warrants to purchase any
shares of Common Stock (including any stock appreciation right, or similar
right with an exercise or conversion privilege at a price related to, or
derived from, the market price of the Common Stock) or any securities
convertible into or exchangeable for shares of Common Stock owned directly
by such person or with respect to which such person has the power of
disposition (including, without limitation, shares of Common Stock which
such person may be deemed to beneficially own in accordance with the rules
and regulations promulgated under the Exchange Act); or (B) engage in any
hedging transactions with respect to the Common Stock that may have an
impact on the market price of the Common Stock for a period beginning on
the date of such letters and expiring 45 days following the date the
Registration Statement is declared effective by the Commission (the "Lockup
Period"), directly or indirectly ("Lockup Agreements"); provided, however,
such officers, directors and specified shareholders shall be permitted to
make the following transfers: (i) transfers made by gift, provided the
donee thereof agrees in writing to be bound by the terms of the Lockup
Agreement; (ii) transfers to the transferor's affiliates, as such term is
defined in Rule 405 promulgated under the Securities Act, provided that
each transferee agrees in writing to be bound by the terms of the Lockup
Agreement; (iii) transfers made with the prior written consent of Alex.
▇▇▇▇▇ & Sons Incorporated; and (iv) transfers pursuant to the Registration
Statement.
(xiii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Stock.
(xiv) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any securities of the Company.
(b) Each of the Selling Shareholders covenants and agrees with the several
Underwriters and the Company that:
(i) Such Selling Shareholder will not: (A) offer to sell, contract to
sell, transfer or otherwise dispose of, directly or indirectly, any shares
of Common Stock, any options, rights or warrants to purchase any shares of
Common Stock (including any stock appreciation right, or similar right with
an exercise or conversion privilege at a price related to, or derived from,
the market price of the Common Stock) or any securities convertible into or
exchangeable for shares of Common Stock owned directly by such Selling
Shareholder or with respect to which such Selling Shareholder has the power
of disposition (including, without limitation, shares of Common Stock which
such Selling Shareholder may be deemed to beneficially own in accordance
with the rules and regulations promulgated under the Exchange Act); or (B)
engage in any hedging transactions with respect to the Common Stock that
may have an impact on the market price of the Common Stock during the
Lockup Period, directly or indirectly, otherwise than hereunder or with the
prior written consent of Alex. ▇▇▇▇▇ & Sons
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Incorporated; provided, however, such Selling Shareholder shall be
permitted to make the following transfers: (i) transfers of Common Stock
made by gift, provided the donee thereof agrees in writing to be bound by
the terms hereof; (ii) transfers to the transferor's affiliates, as such
term is defined in Rule 405 promulgated under the Securities Act, provided
that each transferee agrees in writing to be bound by the terms hereof;
(iii) transfers made with the prior written consent of Alex. ▇▇▇▇▇ & Sons
Incorporated; and (iv) transfers pursuant to the Registration Statement.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act
of 1983 with respect to the transactions herein contemplated, the Selling
Shareholders agree to deliver to you prior to or at the Closing Date a
properly completed and executed United States Treasury Department Form W-9
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
5. Costs and Expenses. The Company will pay all costs, expenses and fees
incident to the performance of the obligations of the Company and the Selling
Shareholders under this Agreement, including, without limiting the generality of
the foregoing, the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company and the Selling Shareholders, the cost
of printing and delivering to, or as requested by, the Underwriters copies of
the Registration Statement, Preliminary Prospectuses, the Prospectus, all
documents incorporated by reference in the foregoing, this Agreement, the Master
Agreement Among Underwriters, the Underwriters' internal Selling Memorandum, the
Underwriters' Questionnaire, the Invitation Letter, the Power of Attorney, the
Custody Agreement, the Blue Sky Survey and any supplements or amendments
thereto; the filing fees of the Commission; the filing fees and expenses,
including the fees and disbursements of counsel for the Underwriters, incident
to securing any required review by NASD of the terms of the sale of the Shares;
the additional listing fee of NMS and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Shares under State securities or Blue Sky laws. To the
extent, if at all, that any of the Selling Shareholders engages special legal
counsel to represent such Selling Shareholder in connection with this offering,
the fees and expenses of such counsel shall be borne by such Selling
Shareholder. Any transfer taxes imposed on the sale of the Shares to the several
Underwriters will be paid by the Sellers pro rata. The Sellers shall not,
however, be required to pay for any of the Underwriters expenses (other than
those related to qualification under State securities or Blue Sky laws and NASD
review) except that, if this Agreement shall not be consummated because the
conditions in Section 6 hereof are not satisfied, or because this Agreement is
terminated by the Representatives pursuant to Section 12 hereof, or by reason of
any failure, refusal or inability on the part of the Company or the Selling
Shareholders to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on their part to be
performed, unless such failure to satisfy said condition or to comply with said
terms be due to the default or omission of any Underwriter, then the Company
shall reimburse the several Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company and the
Selling Shareholders shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
6. Conditions of Obligations of the Underwriters. The several obligations
of the Underwriters to purchase the Firm Shares on the Closing Date and the
Option Shares, if any, on the Option Closing Date are subject to the accuracy,
as of the Closing Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company and the Selling Shareholders
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13
contained herein, and to the performance by the Company and the Selling
Shareholders of their covenants and obligations hereunder and to the following
additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made,
and any request of the Commission for additional information (to be
included in the Registration Statement or otherwise) shall have been
disclosed to the Representatives and complied with to their reasonable
request. No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of
the Company or the Selling Shareholders, shall be contemplated by the
Commission and no injunction, restraining order, or order of any nature by
a federal or state court of competent jurisdiction shall have been issued
as of the Closing Date or Option Closing Date, as the case may be, which
would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇, A Professional Limited Liability Company ("WLDD"), counsel
for the Company and the Selling Shareholders, and the opinion of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, General Counsel for the Company, each dated the Closing Date or
the Option Closing Date, as the case may be, addressed to the Underwriters
which collectively provide that:
(i) The Company has been duly organized and is validly existing as
a corporation in good standing under the laws of the State of Tennessee,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; each of the Subsidiaries has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus. The Company and each of the
Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business as described in the
Prospectus and based on inquiry of officers of the Company requires such
qualification, or in which the failure to qualify would have a
materially adverse effect upon the business of the Company and the
Subsidiaries taken as a whole, based, as to matters of fact, upon a
certificate of officers of the Company; and the outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable and are wholly owned
by the Company; and, to such counsel's knowledge, the outstanding shares
of capital stock of each of the Subsidiaries is owned free and clear of
all liens, encumbrances and security interests, other than the pledge of
shares of the capital stock of the Subsidiaries to Citibank, N.A., as
agent, pursuant to the Company's Fifth Amended and Restated Revolving
Credit and Term Loan Agreement with Citibank dated as of July 22, 1996,
as the same may be amended from time to time, and no options, warrants
or other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into any shares of capital stock
of the Subsidiaries are outstanding except as described in or
contemplated by the Registration Statement, including the exhibits
thereto.
(ii) The Company had authorized and outstanding capital stock as of
the dates indicated as set forth under the caption "Capitalization" in
the Prospectus; the authorized shares of its Common Stock have been duly
authorized; the outstanding shares of its Common Stock, including the
outstanding shares of Common Stock to be sold by the Selling
Shareholders, have been duly authorized and validly issued and are fully
paid and non-assessable; all of the Shares conform to the description
thereof contained in the Prospectus; the certificates for the Shares,
assuming they are in the form of the specimen certificate received by
such counsel, are in due and proper form; the shares of Common Stock,
including the Option Shares, if any, to be sold by the Company and the
Selling Shareholders pursuant to this Agreement have been duly
authorized and will be validly
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issued, fully paid and non-assessable when issued and paid for as
contemplated by this Agreement; and no preemptive rights of shareholders
exist with respect to any of the Shares or the issue and sale thereof.
(iii) The Registration Statement has become effective under the Act
and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.
(iv) The Registration Statement, all Preliminary Prospectuses, the
Prospectus and each amendment or supplement thereto and documents
incorporated by reference therein comply as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the applicable rules and regulations thereunder (except
that such counsel need express no opinion as to the financial
statements, schedules and other financial and statistical information
included therein). The conditions for the use of Form S-3, set forth in
the General Instructions thereto, have been satisfied.
(v) The statements under the captions "Risk Factors," "Business,"
and "Principal and Selling Shareholders" in the Prospectus, insofar as
such statements constitute a summary of documents referred to therein or
matters of law, are accurate summaries in all material respects and
fairly present the information called for with respect to such documents
and matters. Such counsel does not know of any laws, rules or
regulations or legal or governmental proceedings applicable to the
business of the Company and the Subsidiaries required to be described in
the Registration Statement or the Prospectus that are not described as
required.
(vi) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus or
incorporated by reference therein which are not so filed or described as
required or incorporated by reference, and such contracts and documents
as are summarized in the Registration Statement or the Prospectus are
fairly summarized in all material respects.
(vii) Such counsel knows of no material legal proceedings pending
or threatened against the Company or any of the Subsidiaries, except as
described in the Prospectus.
(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated (A) do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the Restated Charter, as
amended, or By-laws, as amended, of the Company, or any agreement or
instrument known to such counsel to which the Company is a party or by
which the Company may be bound; (B) will not violate any material
statute, rule or regulation applicable to the Company; and (C) does not
require submission or approval of, or any other action by, any Federal
or state authority that regulates the provision of healthcare services
by the Company in the jurisdictions in which the Company conducts its
business.
(ix) The Company holds all licenses, authorizations, consents,
approvals, certificates and permits (individually, a "Permit") from any
regulatory body or administrative agency or other governmental body
having jurisdiction that are applicable to the operations of the Company
as now conducted or proposed to be conducted as described in the
Prospectus, all of which permits are current except where the failure to
so hold or comply with any Permit would not have, singly or in the
aggregate, a material adverse effect on the business or financial
condition of the Company. To the knowledge of such counsel, there are no
proceedings, pending or threatened, and such counsel knows of no
circumstances that could lead counsel to believe that any such
proceedings are imminent, relating to the revocation or modification of
any such Permit which, singly or in the aggregate if the subject of an
unfavorable decision, ruling or finding, could have a material adverse
effect on
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the business or financial condition of the Company. The provisions of
the Company's service agreements and other business arrangements
described in the Prospectus or incorporated by reference therein and the
operations of the Company in accordance with the terms thereof are in
material compliance with applicable law and government regulation.
(x) This Agreement has been duly authorized, executed and delivered
by the Company.
(xi) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions
herein contemplated (other than as may be required by the NASD or as
required by State securities and Blue Sky laws as to which such counsel
need express no opinion) except such as have been obtained or made,
specifying the same.
(xii) This Agreement has been duly authorized, executed and
delivered on behalf of each of the Selling Shareholders.
(xiii) Each of the Selling Shareholders has full legal right, power
and authority, and any approval required by law (other than as required
by State securities and Blue Sky laws as to which such counsel need
express no opinion), to sell, assign, transfer and deliver the portion
of the Shares to be sold by such Selling Shareholder.
(xiv) The Power of Attorney and the Custody Agreement executed and
delivered by each of the Selling Shareholders is a valid, irrevocable
instrument legally sufficient for the purposes intended.
(xv) The Underwriters (assuming that they are bona fide purchasers
within the meaning of the Uniform Commercial Code) have acquired good
and marketable title to the Shares being sold by the Selling
Shareholders on the Option Closing Date, free and clear of all claims,
liens, encumbrances and security interests whatsoever.
(xvi) Except as described in or contemplated by the Prospectus, to
the knowledge of such counsel, there are no outstanding securities of
the Company convertible or exchangeable into or evidencing the right to
purchase or subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants or rights of
any character obligating the Company to issue any shares of its capital
stock or any securities convertible or exchangeable into or evidencing
the right to purchase or subscribe for any shares of such stock; and
except as described in the Prospectus, to the knowledge of such counsel,
there is no holder of any securities of the Company or any other person
who 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 Shares or the right to have any Common Stock or
other securities of the Company included in the Registration Statement
or the right, as a result of the filing of the Registration Statement,
to require registration under the Act of any Common Stock or other
securities of the Company.
In rendering such opinion WLDD may rely as to matters governed by the
laws of states other than Tennessee, Delaware or Federal laws on local
counsel in such jurisdictions, provided that in each case WLDD shall state
that they believe that they and the Underwriters are justified in relying
on such other counsel, and, as to the matters set forth in subparagraphs
(xiii), (xiv) and (xv), exclusively as to factual matters, upon contractual
representations made by the Selling Shareholders. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads
them to believe that the Registration Statement, as of the time it became
effective under the Act (but after giving effect to the changes
incorporated pursuant to Rule 430A under the Act), and as of the Closing
Date or Option Closing Date, as the case may be, contained an untrue
statement of a
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material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that
the Prospectus or any amendment or supplement thereto, on the date it was
filed pursuant to Rule 424(b), and as of the Closing Date or Option Closing
Date, as the case may be, or any of the documents incorporated by reference
therein, as of the date of effectiveness of the Registration Statement or,
in the case of documents incorporated by reference in the Prospectus after
the date of effectiveness of the Registration Statement, as of the
respective dates when such documents were filed with the Commission and the
Registration Statement and the Prospectus, or any amendment or supplement
thereto, as of the Closing Date or the Option Closing Date, as the case may
be, 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 the light of the circumstances under which they were
made, not misleading (except that such counsel need express no view as to
financial statements, schedules and other financial information included
therein). With respect to such statement, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ may
state that their belief is based upon the procedures set forth therein, but
is without independent check and verification.
(c) The Representatives shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially to the
effect specified in subparagraphs (ii), (iii), (iv) and (x) of Paragraph
(b) of this Section 6, and that the Company is a validly organized and
existing corporation under the laws of the State of Tennessee. In rendering
such opinion ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP may rely as to all matters
governed other than by Delaware or Federal laws on the opinion of counsel
referred to in Paragraph (b) of this Section 6. In addition to the matters
set forth above, such opinion shall also include a statement to the effect
that nothing has come to the attention of such counsel which leads them to
believe that the Registration Statement, as of the time it became effective
under the Act (but after giving effect to changes incorporated pursuant to
Rule 430A under the Act), contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus or any amendment or supplement thereto, on the date it was filed
pursuant to Rule 424(b) and the Registration Statement and the Prospectus,
or any amendment or supplement thereto, as of the Closing Date or the
Option Closing Date, as the case may be, 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 the light of the
circumstances under which they were made, not misleading (except that such
counsel need express no view as to financial statements, schedules and
other financial information included therein). With respect to such
statement, ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ may state that their belief is based
upon the procedures set forth therein, but is without independent check and
verification.
(d) The Representatives shall have received at or prior to the Closing
Date from ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP a memorandum or summary, in form
and substance satisfactory to the Representatives, with respect to the
qualification for offering and sale by the Underwriters of the Shares under
the State securities or Blue Sky laws of such jurisdictions as the
Representatives may reasonably have designated to the Company.
(e) The Representatives shall have received on the date hereof,
Closing Date and the Option Closing Date, as the case may be, a signed
letter from KPMG Peat Marwick LLP, dated the date hereof, the Closing Date
and the Option Closing Date, as the case may be, in form and substance
satisfactory to you, confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating that in their opinion the
financial statements and schedules examined by them and included in the
Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations; and containing such other statements and information
as is ordinarily included in accountants'
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"comfort letters" to underwriters with respect to the financial statements
and certain financial and statistical information contained in the
Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of
the Chief Executive Officer and the Principal Financial and Accounting
Officer of the Company to the effect that, as of the Closing Date or the
Option Closing Date, as the case may be, each of them severally represents
as follows:
(i) The Registration Statement has become effective under the Act
and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been
taken or are, to his knowledge, contemplated by the Commission.
(ii) He does not know of any litigation instituted or threatened
against the Company of a character required to be disclosed in the
Registration Statement which is not so disclosed; he does not know of
any material contract required to be filed as an exhibit to the
Registration Statement which is not so filed; and the representations
and warranties of the Company contained in Section 1 hereof are true and
correct as of the Closing Date or the Option Closing Date, as the case
may be.
(iii) He has carefully examined the Registration Statement and the
Prospectus and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement, including any document incorporated by reference therein,
were true and correct in all material respects, and such Registration
Statement and Prospectus or any document incorporated by reference
therein did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading and, in his opinion, since the effective date of the
Registration Statement, no event has occurred which should have been set
forth in a supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment.
(iv) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, there has not been any
material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company and its Subsidiaries or the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the
Subsidiaries, whether or not arising in the ordinary course of business;
(v) All of the representations and warranties of the Company
contained in this Underwriting Agreement are true and correct on and as
of the date hereof and on and as of the Closing Date or the Option
Closing Date, as the case may be, with the same force and effect as if
made on and as of the Closing Date or the Option Closing Date, as the
case may be, except for representations and warranties made as of a
specific date, which were true and correct as of such date;
(vi) Each of the conditions specified in Section 6 of this
Underwriting Agreement has been, as of the Closing Date or the Option
Closing Date, as the case may be, satisfied in all respects; and
(vii) The Company has performed and/or complied with all of its
agreements and covenants required to be performed or complied with under
this Underwriting Agreement as of or prior to the Closing Date or the
Option Closing Date, if any, as the case may be.
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(g) The Representatives shall have received on the Option Closing
Date, if any, a certificate of each Selling Shareholder to the effect that,
as of the Option Closing Date each such Selling Shareholder shall represent
as follows:
(i) All of the representations and warranties of such Selling
Shareholder contained in this Underwriting Agreement are true and
correct on and as of the date hereof and on and as of the Closing Date
with the same force and effect as if made on and as of the Closing Date
except for representations and warranties made as of a specific date,
which were true and correct as of such date; and
(ii) Such Selling Shareholder has performed and/or complied with
all of such Selling Shareholder's agreements and covenants required to
be performed or complied with under this Underwriting Agreement as of or
prior to the Closing Date.
(h) The Company and the Selling Shareholders shall have furnished to
the Representatives such further certificates and documents confirming the
representations and warranties contained herein and related matters as the
Representatives may reasonably have requested.
(i) The Firm Shares and Option Shares, if any, have been approved for
designation upon notice of issuance on The Nasdaq National Market.
(j) All filings required to have been made pursuant to Rules 424 or
430A under the Act have been made.
(k) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, there has not been any material
adverse change or any development involving a prospective adverse change in
or affecting the condition, financial or otherwise, of the Company or the
earnings, business affairs, management or business prospects of the Company
whether or not arising in the ordinary course of business.
(l) The Lockup Agreements described in Section 4(a)(xii) are in full
force and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects reasonably satisfactory to the Representatives and to ▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, LLP, counsel for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Company and the Selling
Shareholders prior to the Option Closing Date, as the case may be.
In such event, the Selling Shareholder, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Sellers. The obligations of the
Sellers to sell and deliver the portion of the Shares required to be delivered
as and when specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration statement shall have been
issued and in effect or proceedings therefor initiated or threatened.
8. Indemnification. (a) The Company and each of the Selling Shareholders,
jointly and severally, agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the Act
against any losses, claims, damages or liabilities to which such Underwriter or
such controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained or incorporated by
reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the
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omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter and each such controlling person upon demand for
any legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability, action or proceeding and expenses reasonably incurred
in responding to a subpoena or governmental inquiry whether or not such
underwriter or controlling person is a party to the related action or
proceeding; provided, however, that the Company and the Selling Shareholders
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission made or incorporated
by reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof. In no event,
however, shall the liability of the Selling Shareholders for indemnification
under this Section 8(a) exceed the proceeds received by such Selling Shareholder
from the Underwriters in the offering; and provided further that the Company
shall not be liable to any Underwriter pursuant to this subsection (a) with
respect to any Preliminary Prospectus to the extent that such loss, claim,
damage or liability of such Underwriter results from the fact that such
Underwriter sold securities in any case where delivery of a Prospectus is
required by the Act if the Company has previously furnished copies of the
Prospectus to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in, or the omission of a material fact from, such Preliminary
Prospectus which was corrected in the Prospectus and such Underwriter failed to
deliver such corrected Prospectus to a purchaser of Shares as required by the
Act. This indemnity agreement will be in addition to any liability which the
Company or the Selling Shareholder may otherwise have.
(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the Registration Statement, the Selling Shareholders, and each person, if
any, who controls the Company or the Selling Shareholders within the meaning of
the Act, against any losses, claims, damages or liabilities to which the Company
or any such director, officer, Selling Shareholder or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained or incorporated by reference in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
Selling Shareholder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made or incorporated by
reference in the Registration Statement, any Preliminary Prospectus, the
Prospectus or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 8(a) or (b) shall
be available to any party who shall fail to give notice as provided in this
Section 8(c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the failure to
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give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a) or (b). In case any
such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred the fees and expenses of the counsel
retained by the indemnified party in the event (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
Such firm shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) and by the Company and the Selling
Shareholder in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgement for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or compromise
or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding, of which indemnification may be sought hereunder (whether
or not any indemnified party is an actual or potential party to such claim,
action or proceeding) unless such settlement, compromise or consent includes an
unconditional release of the indemnified party from all liability arising out of
such claim, action or proceeding.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under Section 8(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholder on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8(c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Shareholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholders on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
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The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) 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, and (iii) the Selling Shareholders
shall not be required to contribute any amount in excess of the proceeds
received by the Selling Shareholder from the Underwriters in the offering. The
Underwriters' obligations in this Section 8(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 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 8 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 Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, 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 8.
9. Default by Underwriters. If on the Closing Date or the Option Closing
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the Company
or the Selling Shareholder), you, as Representatives of the Underwriters, shall
use your best efforts to procure within 24 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholders such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 24
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to
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which such default shall occur exceeds 10% of the Firm Shares or Option Shares,
as the case may be, covered hereby, the Company and the Selling Shareholder or
you as the Representatives of the Underwriters will have the right, by written
notice given within the next 24-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company or of the Selling Shareholders except to the
extent provided in Section 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the Closing Date or
Option Closing Date, as the case may be, may be postponed for such period, not
exceeding seven days, as you, as Representatives, may determine in order that
the required changes in the Registration Statement or in the Prospectus or in
any other documents or arrangements may be effected. The term "Underwriter"
includes any person substituted for a defaulting Underwriter. Any action taken
under this Section 9 shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
10. Default by Selling Shareholders. If on the Option Closing Date, if
any, any of the Selling Shareholders fails to sell the Option Shares which such
Selling Shareholders have agreed to sell on such date as set forth in Schedule
II hereto, the Company agrees that it will sell that number of shares of Common
Stock to the Underwriters which represents the Option Shares which such Selling
Shareholders have failed to so sell, as set forth in Schedule II hereto, or such
lesser number as may be requested by the Representatives.
11. Notices. All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows: if to the Underwriters, to Alex. ▇▇▇▇▇ & Sons
Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇; with a copy to Alex. ▇▇▇▇▇ & Sons Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: General Counsel; if to the Company or the
Selling Shareholders, to PhyCor, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President.
12. Termination. This Agreement may be terminated by you by notice to the
Sellers as follows:
(a) At any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m.
on the first business day following the date of this Agreement;
(b) At any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the condition, financial or otherwise, of the Company and
its Subsidiaries taken as a whole or the earnings, business affairs,
management or business prospects of the Company and its Subsidiaries taken
as a whole, whether or not arising in the ordinary course of business, (ii)
any outbreak or escalation of hostilities or declaration of war or national
emergency after the date hereof or other national or international calamity
or crisis or change in economic or political conditions if the effect of
such outbreak, escalation, declaration, emergency, calamity, crisis or
change on the financial markets of the United States would, in your
reasonable judgment, make the offering or delivery of the Shares
impracticable or inadvisable, (iii) suspension of trading in securities on
the New York Stock Exchange, the American Stock Exchange or NASDAQ or
limitation on prices (other than limitations on hours or numbers of days of
trading) for securities on either such Exchange or NASDAQ, (iv) the
enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority which in your reasonable opinion materially and adversely affects
or will materially and adversely affect the business or operations of the
Company, (v) declaration of a banking moratorium by either Federal or New
York State authorities, (vi) the taking of any action by any Federal, State
or local government or agency in
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respect of its monetary or fiscal affairs which in your reasonable opinion
has a material adverse effect on the securities markets in the United
States or (vii) the suspension of trading of the Company's Common Stock on
the Nasdaq National Market; or
(c) As provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the Company, as
to any obligation of the Underwriters to purchase the Option Shares, upon the
occurrence at any time prior to the Option Closing Date of any of the events
described in subparagraph (b) above or as provided in Sections 6 and 9 of this
Agreement.
13. Successors. This Agreement has been and is made solely for the benefit
of the Underwriters, the Company and the Selling Shareholder and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase. No
purchaser of Shares from any Underwriter shall be deemed a successor or assign
merely because of such purchase.
14. Information Provided by Underwriters. The Company, the Selling
Shareholders and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in the last paragraph on the front cover page (insofar as
such information relates to the Underwriters), information provided in
connection with Item 502(d) of Regulation S-K under the Act and information
under the caption "Underwriting" in the Prospectus.
15. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or its directors or officers and (c) delivery of and payment for the
Shares under this Agreement the other covenants of the Company in this Agreement
shall remain in full force and effect regardless of (a) any investigation made
by or on behalf of any underwriter or controlling person and (b) delivery of any
payment for the Shares under this Agreement.
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This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Maryland.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company and the several Underwriters in accordance with its terms. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as to the authority
of the signers thereof.
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
PHYCOR, INC.
By: ________________________
President
Selling Shareholders listed on
Schedule II
By: ________________________
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
EQUITABLE SECURITIES CORPORATION
MERRILL, LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
SALOMON BROTHERS INC
As Representatives of the several
Underwriters listed on Schedule I
By: ALEX. ▇▇▇▇▇ & SONS INCORPORATED
By: __________________________
Authorized Officer
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SCHEDULE I
SCHEDULE OF UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------------
Alex. ▇▇▇▇▇ & Sons Incorporated.............................
Equitable Securities Corporation............................
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.........
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc...........................................
Salomon Brothers Inc........................................
---------
Total............................................. 6,400,000
=========
25
26
SCHEDULE II
SCHEDULE OF OPTION SHARES
TO BE SOLD BY THE COMPANY AND SELLING SHAREHOLDERS
NUMBER OF
OPTION
SHARES TO BE
NAME OF SELLER SOLD
-------------- ------------
PhyCor, Inc................................................. 895,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇........................................... 40,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇............................................ 25,000
-------
Total........................................ 960,000
=======
26
27
SCHEDULE III
SCHEDULE OF SUBSIDIARIES
PERCENT OWNED
DIRECTLY BY
NAME AND ADDRESS PHYCOR, INC.
---------------- -------------
PhyCor of Ruston, Inc., a Louisiana corporation............. 100%
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Vero Beach, Inc., a Florida corporation........... 100%
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Nashville, Inc., a Tennessee corporation.......... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Charlotte, Inc., a Tennessee corporation.......... 100%
▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Winter Haven, Inc., a Tennessee corporation....... 100%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Greeley, Inc., a Tennessee corporation............ 100%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Jacksonville, Inc., a Tennessee corporation....... 100%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Pueblo, Inc., a Tennessee corporation............. 100%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Conroe, Inc., a Tennessee corporation............. 100%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PhyCor of San Antonio, Inc., a Tennessee corporation........ 100%
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
PhyCor of Richmond, Inc., a Tennessee corporation........... 100%
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Harlingen, Inc., a Tennessee corporation.......... 100%
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Laconia, Inc., a Tennessee corporation............ 100%
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Olean, Inc., a Tennessee corporation.............. 100%
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
PhyCor of Kingsport, Inc., a Tennessee corporation.......... 100%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
27
28
PERCENT OWNED
DIRECTLY BY
NAME AND ADDRESS PHYCOR, INC.
---------------- -------------
PhyCor of Irving, Inc., a Tennessee corporation............. 100%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Cleburne, Inc., a Tennessee corporation........... 100%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Birmingham, Inc., a Tennessee corporation......... 100%
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Dixon, Inc., a Tennessee corporation.............. 100%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Kentucky, Inc., a Tennessee corporation........... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Fort ▇▇▇▇▇, Inc., a Tennessee corporation......... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Northeast Arkansas, Inc., a Tennessee
corporation............................................... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Boulder, Inc., a Tennessee corporation............ 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Newnan, Inc., a Tennessee corporation............. 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Freeport, Inc., a Tennessee corporation........... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Northern Michigan, Inc., a Tennessee
corporation............................................... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Chickasha, Inc., a Tennessee corporation.......... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Corsicana, Inc., a Tennessee corporation.......... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of ▇▇▇▇▇, a Tennessee corporation.................... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PhyCor of Tidewater, Inc., a Tennessee corporation.......... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
North American Medical Management Inc., a Tennessee
corporation............................................... 100%
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
28
29
PERCENT OWNED
DIRECTLY BY
NAME AND ADDRESS PHYCOR, INC.
---------------- -------------
IPA Management Associates, Inc., a Texas corporation........ 0%
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, L.B. 6086, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
Managed Care Management Associates, Inc., a Texas
corporation............................................... 0%
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Sun State Medical Group, Inc., an Arizona corporation....... 0%
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
North American Medical Management -- Tennessee, Inc., a
Tennessee
corporation............................................... 0%
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
North American Medical Management -- Florida, Inc., a
Florida corporation....................................... 0%
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
North American Medical Management -- Illinois, Inc., an
Illinois corporation...................................... 0%
▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
North American Medical Management -- North Carolina, Inc., a
North Carolina corporation................................ 0%
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
North American Medical Marketing, Inc., a California
corporation............................................... 0%
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
29