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Draft - November 14, 2000
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REHABCARE GROUP, INC.
(a Delaware corporation)
Shares of Common Stock
PURCHASE AGREEMENT
Dated: , 2000
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SECTION 1. Representations and Warranties..............................................................2
(a) Representations and Warranties by the Company...............................................2
(b) Representations and Warranties by the Selling Shareholders.................................12
(c) Officer's Certificates and Selling Shareholders Certificates...............................14
SECTION 2. Sale and Delivery to Underwriters; Closing.................................................15
(a) Initial Securities.........................................................................15
(b) Option Securities..........................................................................15
(c) Payment....................................................................................15
(d) Denominations; Registration................................................................16
SECTION 3. Covenants of the Company...................................................................16
(a) Compliance with Securities Regulations and Commission Requests.............................16
(b) Filing of Amendments.......................................................................17
(c) Delivery of Registration Statements........................................................17
(d) Delivery of Prospectus.....................................................................17
(e) Continued Compliance with Securities Laws..................................................17
(f) Blue Sky Qualifications....................................................................18
(g) Rule 158...................................................................................18
(h) Use of Proceeds............................................................................18
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(i) Listing....................................................................................18
(j) Restriction on Sale of Securities..........................................................18
(k) Reporting Requirements.....................................................................19
(l) Compliance with Rule 463...................................................................19
SECTION 4. Payment of Expenses........................................................................19
(a) Expenses...................................................................................19
(b) Expenses of the Selling Shareholders.......................................................19
(c) Termination of Agreement...................................................................20
(d) Allocation of Expenses.....................................................................20
SECTION 5. Conditions of Underwriters' Obligations....................................................20
(a) Effectiveness of Registration Statement....................................................20
(b) Opinion of Counsel for Company.............................................................20
(c) Opinion of Counsel for the Selling Shareholders............................................20
(d) Opinion of Counsel for the Underwriters....................................................21
(e) Officers' Certificate......................................................................21
(f) Certificate of the Selling Shareholder.....................................................21
(g) Accountant's Comfort Letter................................................................21
(h) Bring-down Comfort Letter..................................................................21
(i) Approval of Listing........................................................................21
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(j) No Objection...............................................................................22
(k) Lock-up Agreements.........................................................................22
(l) Form W-8 or W-9............................................................................22
(m) Conditions to Purchase of Option Securities................................................22
(n) Additional Documents.......................................................................23
(o) Termination of Agreement...................................................................23
SECTION 6. Indemnification............................................................................23
(a) Indemnification of Underwriters by the Company.............................................23
(b) Indemnification of the Underwriters by the Selling Shareholders............................24
(c) Indemnification of Company, Directors and Officers and Selling Shareholders................24
(d) Actions against Parties; Notification......................................................25
(e) Settlement without Consent if Failure to Reimburse.........................................25
(f) Other Agreements With Respect to Indemnification...........................................25
SECTION 7. Contribution...............................................................................25
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.............................27
SECTION 9. Termination of Agreement...................................................................27
(a) Termination; General.......................................................................27
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(b) Liabilities................................................................................28
SECTION 10. Default by One or More of the Underwriters.................................................28
SECTION 11. Default by One or More of the Selling Shareholders or the Company..........................29
SECTION 12. Notices....................................................................................29
SECTION 13. Parties....................................................................................29
SECTION 14. GOVERNING LAW AND TIME.....................................................................30
SECTION 15. Effect of Headings.........................................................................30
SCHEDULES
Schedule A -- List of Underwriters............................................................................Sch A
Schedule B -- Selling Shareholders............................................................................Sch B
Schedule C -- Pricing Information.............................................................................Sch C
Schedule D -- List of Persons subject to Lock-up..............................................................Sch D
EXHIBITS
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Exhibit A-1 -- Form of Opinion of Company's Counsel..............................................................A-1
Exhibit A-2 -- Form of Opinion of Company's Regulatory Counsel...................................................A-2
Exhibit A-3 -- Form of Opinion of Counsel to Each of the Selling Shareholders....................................A-3
Exhibit B -- Form of Lock-up Letter.............................................................................B
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REHABCARE GROUP, INC.
(a Delaware corporation)
Shares of Common Stock
RehabCare Group, Inc., a Delaware corporation (the "Company") and
the persons listed on Schedule B hereto under the heading "Selling
Shareholders" (the "Selling Shareholders"), confirm their agreement with
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and each of the other Underwriters named in Schedule A
hereto (collectively, the "Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for
whom Merrill Lynch, S.G. Cowan Securities Corporation, Advest, Inc. and
Robert W. Baird & Co. are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
sale by the Selling Shareholders, acting severally and not jointly, and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.01 per share, of
the Company ("Common Stock") set forth in said Schedules A and B hereto, and
with respect to the grant by the Company and the Selling Shareholders, acting
severally and not jointly to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or
any part of up to - additional shares of Common Stock to cover
over-allotments, if any. The aforesaid - shares of Common Stock (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the -
shares of Common Stock subject to the option described in Section 2(b) hereof
(the "Option Securities") are hereinafter called, collectively, the
"Securities".
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as
the Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333--) covering
the registration of the Securities under the Securities Act of 1933, as
amended (the "1933 Act"), including the related preliminary prospectus (the
"Form of Prospectus"). Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus in accordance with
the provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations. The information
included in any such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be part of
such registration statement at the time it became effective pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information." Each
Form of Prospectus used before such registration statement became effective,
and any prospectus that omitted the Rule 430A Information that was used after
such effectiveness and prior to the execution and delivery of this Agreement,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto,
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schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information, is herein called
the "Registration Statement." Any registration statement filed pursuant to
Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
Form of Prospectus, including the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities, is herein called the "Prospectus" 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 copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
in the Registration Statement, any preliminary prospectus (including the Form
of Prospectus) or the Prospectus (or other references of like import) shall
be deemed to mean and include all such financial statements and schedules and
other information which is incorporated by reference in the Registration
Statement, any preliminary prospectus (including the Form of Prospectus) or
the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing
of any document under the Securities Exchange Act of 1934 (the "1934 Act")
which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and if any Option Securities
are purchased, as of each Date of Delivery (if any) referred to in Section
2(b) hereof, and agrees with each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each
of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by
the Commission, and any request on the part of the Commission for
additional information has been complied with.
At the respective times the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective
amendments thereto became effective and at the Closing Time (and,
if any Option Securities are purchased, at the Date of Delivery),
the Registration Statement, the Rule 462(b) Registration Statement
and any amendments and
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supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any amendments
or supplements thereto were issued and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery),
included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Representatives
expressly for use in the Registration Statement or the Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration
Statement and the Prospectus, when they became effective or at the
time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations or the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), as applicable, and, when read together with the
other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus were issued
and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
(iii) INDEPENDENT ACCOUNTANTS. To the best of the Company's
knowledge, the accountants who certified the financial statements
and supporting schedules included in the Registration Statement are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements
included in the Registration Statement and the Prospectus, together
with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the
dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements
have been prepared in conformity with United States generally
accepted accounting principles ("GAAP") applied on a consistent
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basis throughout the periods involved. The supporting schedules, if
any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information
included in the Prospectus present fairly the information shown
therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration
Statement. The as adjusted financial statements and the related
notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein and have
been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B)
there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been
no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the state of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in
a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) and [may include additional subsidiaries if
appropriate] (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as
a corporation in good standing under the laws of the jurisdiction
of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each such Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation
of the
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preemptive or similar rights of any securityholder of such
Subsidiary. The only subsidiaries of the Company are (a) the
subsidiaries disclosed in the Registration Statement and (b)
certain other subsidiaries which, considered in the aggregate as a
single Subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(viii) CAPITALIZATION. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant
to this Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). The shares of issued and outstanding capital stock of
the Company including, without limitation, the Securities to be
sold by the Selling Shareholders have been duly authorized and
validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company. The shares of issued and
outstanding capital stock of the Company have been issued in
compliance with all federal and state laws. Except as disclosed in
the Prospectus, there are no outstanding options or warrants to
purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into or
any contracts or commitments to sell shares of the Company's
capital stock or any such options, rights, warrants, convertible
securities or obligations. The description of the Company's stock
option and purchase plans and the options or other rights granted
and exercised thereunder set forth in the Prospectus accurately and
fairly describe the information required to be shown with respect
to such plans, arrangements, options and rights.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The
Securities to be purchased by the Underwriters from the Company and
the Selling Shareholders have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when
issued, sold and delivered by the Company and the Selling
Shareholders pursuant to this Agreement against payment of the
consideration set forth herein will be validly issued, fully paid
and non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Prospectus and such description
conforms to the rights set forth in the instruments defining the
same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights
of any securityholder of the Company.
(xi) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company
nor any of its subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets
of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would
not result in a Material
<PAGE>
Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated in
this Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company
with its obligations under this Agreement have been duly authorized
by all necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, the Agreements
and Instruments (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not result in a Material
Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any
subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting
on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any subsidiary.
(xii) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any subsidiary exists or, to the
knowledge of the Company, is imminent, and the Company is not aware
of any existing or imminent labor disturbance by the employees of
any of its or any subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, would result in a
Material Adverse Effect.
(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court
or governmental agency or body, domestic or foreign, now pending,
or, to the knowledge of the Company, threatened, against or
affecting the Company or any subsidiary, which is required to be
disclosed in the Registration Statement (other than as disclosed
therein), or which would result in a Material Adverse Effect, or
which could materially and adversely affect the properties or
assets thereof or the consummation of the transactions contemplated
in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is
a party or of which any of their respective property or assets is
the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business,
would not result in a Material Adverse Effect.
(xiv) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which have not
been so described and filed as required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
<PAGE>
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest
of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or
in the aggregate, would result in a Material Adverse Effect.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities under this Agreement or the
consummation of the transactions contemplated by this Agreement,
except such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations and foreign or state
securities or blue sky laws.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Company and
its subsidiaries and each of the rehabilitation programs or
staffing services provided or managed by them, possess such
permits, licenses, provider numbers, certificates, approvals
(including, without limitation, certificate of need approvals),
consents, orders, certifications (including, without limitation,
certification under the Medicare and Medicaid programs),
accreditations and other authorizations (collectively,
"Governmental Licenses") issued by, and have made all declarations
and filings with, the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them (including, without limitation, Governmental
Licenses as are required (i) under such federal and state
healthcare laws as are applicable to the Company and its
subsidiaries and (ii) with respect to those facilities and programs
operated or managed by the Company, or any of their subsidiaries
that participate in the Medicare and/or Medicaid programs, to
receive reimbursement thereunder); the Company, and its
subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, result in a Material Adverse
Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not result in a Material Adverse Effect; and
none of the Company, or any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a Material Adverse Effect.
(xviii) ACCOUNTS RECEIVABLE. The accounts receivable of the
Company and its subsidiaries subject to payment or reimbursement of
third party payors such as Medicare, Medicaid, private insurance
companies, health maintenance organizations, preferred provider
organizations, managed care systems and other third party payors
(including, without limitation, Blue Cross plans) have been and
will continue to be adjusted to reflect reimbursement policies of
these third
<PAGE>
party payors. The accounts receivable relating to such third party
payors do not and shall not exceed amounts the Company and its
subsidiaries are entitled to receive.
(xix) COMPLIANCE WITH SOCIAL SECURITY ACT AND OTHER FEDERAL
ENFORCEMENT INITIATIVES. Neither the Company nor, to the
knowledge of the Company, any officers, directors or stockholders,
employees or other agents of the Company or any of its subsidiaries
or any of the rehabilitation programs or staffing services provided
or managed by them, has engaged in any activities which are
prohibited under Federal Medicare and Medicaid statutes including,
but not limited to, 42 U.S.C. Sections 1320a-7 (Program Exclusion),
1320a-7a (Civil Monetary Penalties), 1320a-7b (the Anti-kickback
Statute), 42 U.S.C. Section 1395nn and 1396b (the "Stark" law,
prohibiting certain self-referrals), or any other federal law,
including, but not limited to, the federal TRICARE statute, 10
U.S.C. Section 1071 ET SEQ., the Federal Civil False Claims Act, 31
U.S.C. Sections 3729-32, Federal Criminal False Claims Act, 18
U.S.C. Section 287, False Statements Relating to Health Care
Matters, 18 U.S.C. Section 1035, Health Care Fraud, 18 U.S.C.
Section 1347, or the federal Food, Drug & Cosmetics Act, 21 U.S.C.
Section 360aaa, or any regulations promulgated pursuant to such
statutes, or related state or local statutes or regulations or any
rules of professional conduct, including but not limited to the
following: (i) knowingly and willfully making or causing to be made
a false statement or representation of a material fact in any
applications for any benefit or payment under the Medicare or
Medicaid program or from any third party (where applicable federal
or state law prohibits such payments to third parties); (ii)
knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in
determining rights to any benefit or payment under the Medicare or
Medicaid program or from any third party (where applicable federal
or state law prohibits such payments to third parties); (iii)
failing to disclose knowledge by a claimant of the occurrence of
any event affecting the initial or continued right to any benefit
or payment under the Medicare or Medicaid program or from any third
party (where applicable federal or state law prohibits such
payments to third parties) on its own behalf or on behalf of
another, with intent to secure such benefit or payment
fraudulently; (iv) knowingly and willfully offering, paying,
soliciting or receiving any remuneration (including any kickback,
bribe or rebate), directly or indirectly, overtly or covertly, in
cash or in kind (a) in return for referring an individual to a
person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part
by Medicare or Medicaid or any third party (where applicable
federal or state law prohibits such payments to third parties), or
(b) in return for purchasing, leasing or ordering or arranging for
or recommending the purchasing, leasing or ordering of any good,
facility, service, or item for which payment may be made in whole
or in part by Medicare or Medicaid or any third party (where
applicable federal or state law prohibits such payments to third
parties); (v) knowingly and willfully referring an individual to a
person with which they have ownership or certain other financial
arrangements (where applicable federal law prohibits such
referrals); and (vi) knowingly and willfully violating any
enforcement initiative instituted by any governmental agency
(including, without limitation, the Office of the Inspector General
and the Department of Justice).
(xx) REGULATORY FILINGS. None of the Company, or any of its
subsidiaries or any of the rehabilitation programs managed by any of
them has failed to file with applicable regulatory authorities any
statement, report, information or form required by any applicable
law, regulation or order, except where the failure to be so in
compliance would not, individually or in the
<PAGE>
aggregate, have a Material Adverse Effect. All such filings or
submissions were in compliance with applicable laws, regulations
or orders when filed and no deficiencies have been asserted by any
regulatory commission, agency or authority with respect to any such
filings or submissions.
(xxi) TITLE TO PROPERTY. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all other properties
owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company or any
of its subsidiaries; and all of the leases and subleases material
to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in
full force and effect, and neither the Company nor any subsidiary
has any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xxii) INVESTMENT COMPANY ACT. None of the Company or its
subsidiaries is and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus none of them will be,
"investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
(xxiii) ENVIRONMENTAL LAWS. Except as described in the
Registration Statement and except as could not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to
pollution or protection of human health or safety, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances
(including, without limitation asbestos, polychlorinated biphenyls,
area formaldehyde insulation, petroleum or petroleum products)
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, handling, release or threatened release of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and
its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries
and (D) there are no events or circumstances that could form the
basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental
<PAGE>
body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxiv) REGISTRATION RIGHTS. Except as specifically disclosed
in the Prospectus under the caption "Shares Eligible for Future
Sale-," there are no persons with registration rights or other
similar rights to have any securities of the Company, or any of its
subsidiaries registered pursuant to the Registration Statement or
otherwise registered by the Company or any other person under the
1933 Act.
(xxv) INSURANCE. The Company and each of its subsidiaries
and each of the rehabilitation programs operated or managed by them
are insured by insurers of recognized financial responsibility
against such loses and risks and in such amounts as are prudent and
customary in the healthcare industry; none of the Company or its
subsidiaries or any of the rehabilitation programs operated or
managed by them has been refused any material insurance coverage
sought or applied for; and the Company has no reason to believe
that it or any of the rehabilitation programs operated or managed
by them, will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its
operations except where the failure to renew or maintain such
coverage would not result in a Material Adverse Effect. The
officers and directors of the Company are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as the Company believes are prudent and
customary for officers' and directors' liability insurance of a
public company and as the Company believes could cover claims which
could be made in connection with the issuance of the Securities;
and the Company has no reason to believe that it will not be able
to renew its existing directors' and officers' liability insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to cover its
officers and directors.
(xxvi) TAX RETURNS AND PAYMENT OF TAXES. The Company, and
its subsidiaries have timely filed all federal, state, local and
foreign tax returns that are required to be filed or have duly
requested extensions thereof and all such tax returns are true,
correct and complete, except to the extent that any failure to file
or request an extension, or any incorrectness would not result in a
Material Adverse Effect. The Company and its subsidiaries have
timely paid all taxes shown as due on such filed tax returns
(including any related assessments, fines or penalties), except to
the extent that any such taxes are being contested in good faith
and by appropriate proceedings, or to the extent that any failure
to pay would not result in a Material Adverse Effect; and adequate
charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iii) above in
accordance with GAAP in respect of all Federal, state, local and
foreign taxes for all periods as to which the tax liability of the
Company and its subsidiaries has not been finally determined or
remains open to examination by applicable taxing authorities. None
of the Company or its subsidiaries is a "United States real
property holding corporation" within the meaning of Section
897(c)(2) of the Internal Revenue Code of 1986, as amended (the
"Code").
(xxvii) NO STABILIZATION OR MANIPULATION. None of the
Company or its subsidiaries or, to the best of their knowledge, any
of their directors, officers or affiliates has taken or will take,
directly or indirectly, any action designed to, or that might
reasonably be expected to cause or result in
<PAGE>
stabilization or manipulation of the price of the Securities in
violation of Regulation M under the Securities Exchange Act of
1934, as amended (the "1934 Act").
(xxviii) CERTAIN TRANSACTIONS. Except as disclosed in the
Prospectus, there are no outstanding loans, advances, or guarantees
of indebtedness by the Company or its subsidiaries to or for the
benefit of any of the executive officers or directors of the
Company or any of the members of the families of any of them that
would be required to be so disclosed under the 1933 Act, the 1933
Act Regulations or Form S-3.
(xxix) STATISTICAL AND MARKET DATA. The statistical and
market-related data included in the Prospectus are derived from
sources which the Company reasonably and in good faith believes to
be accurate, reasonable and reliable and the statistical and
market-related data included in the Prospectus agrees with the
sources from which it was derived.
(xxx) ACCOUNTING AND OTHER CONTROLS. The Company has
established a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions were, are and
will be executed in accordance with management's general or
specific authorization; (ii) transactions were, are and will be
recorded as necessary to permit preparation of financial statements
in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets was, is and will be permitted only in
accordance with a management's general or specific authorizations;
and (iv) the recorded accountability for assets was, is and will be
compared with existing assets at reasonable intervals and
appropriate action was, is and will be taken with respect to any
differences.
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS.
Each Selling Shareholder severally represents and warrants to each
Underwriter as of the date hereof, as of the Closing Time, and, if the
Selling Shareholder is selling Option Securities on a Date of Delivery, as
of each such Date of Delivery, and agrees with each Underwriter, as follows:
(i) ACCURATE DISCLOSURE. With respect to each Selling
Shareholder, to the extent that any statements or omissions made in
the Registration Statement, any preliminary prospectus, the
Prospectus or any amendment or supplement thereto are made in
reliance upon and in conformity with written information furnished
to the Company by such Selling Shareholder expressly for use
therein, such preliminary prospectus and the Registration Statement
did, and the Prospectus and any further amendments or supplements
to the Registration Statement and the Prospectus, when they become
effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the
1933 Act and the rules and regulations of the Commission thereunder
and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(ii) AUTHORIZATION OF AGREEMENTS. Such Selling Shareholder
has the full right, power and authority to enter into this
Agreement, the Power of Attorney (the "Power of Attorney") and the
Custody Agreement (the "Custody Agreement"), and to sell, transfer
and deliver the Securities to be sold by such Selling Shareholder
under this Agreement. The execution and delivery of this
<PAGE>
Agreement, the Power of Attorney and the Custody Agreement, the
sale and delivery of the Securities to be sold by such Selling
Shareholder, the consummation by such Selling Shareholder of the
transactions contemplated under this Agreement and compliance by
such Selling Shareholder with its obligations under this Agreement
have been duly authorized by such Selling Shareholder and do not
and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any
tax, lien, charge or encumbrance upon the Securities to be sold by
such Selling Shareholder or any property or assets of such Selling
Shareholder pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Shareholder is a
party or by which such Selling Shareholder may be bound, or to
which any of the property or assets of such Selling Shareholder is
subject, nor will such action result in any violation of the
provisions of the charter or by-laws or other organizational
instrument of such Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over such Selling
Shareholder or any of its properties.
(iii) VALID AND MARKETABLE TITLE. Such Selling Shareholder
(i) has at the date hereof valid and marketable title to the
Securities to be sold by such Selling Shareholder under this
Agreement or to the options that will be exercised for such
Securities prior to the Closing Time, in each case free and clear
of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind (collectively, "Liens"), other
than pursuant to this Agreement, and (ii) will at the Closing Time
and, if any Option Securities are purchased from such Selling
Shareholder, on the Date of Delivery, have valid and marketable
title to the Securities to be sold by such Selling Shareholder
under this Agreement, including any Securities received as a result
of exercises of options, in each case free and clear of any Lien,
other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as
contemplated in this Agreement (assuming each such Underwriter has
no notice of any adverse claim, as defined in Uniform Commercial
Code as adopted in the State of New York (the "UCC")), each of the
Underwriters will receive valid and marketable title to the
Securities purchased by it from such Selling Shareholder, free and
clear of any Lien.
(iv) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT.
Such Selling Shareholder has duly executed and delivered, in the
form heretofore furnished to the Representatives, the Power of
Attorney with, as attorneys-in-fact (the "Attorneys-in-Fact") and
the Custody Agreement with, as custodian (the "Custodian"); the
Custodian is authorized to deliver the Securities to be sold by
such Selling Shareholder under this Agreement and to accept payment
therefore; and each Attorney-in-Fact is authorized to execute and
deliver this Agreement and the certificate referred to in Section
5(f) of this Agreement or that may be required pursuant to Sections
5(m) and 5(n) of this Agreement on behalf of such Selling
Shareholder, to sell, assign and transfer to the Underwriters the
Securities to be sold by such Selling Shareholder under this
Agreement, to determine the purchase price to be paid by the
Underwriters and to such Selling Shareholder, as provided in
Section 2(a) of this Agreement, to authorize the delivery of the
Securities to be sold by such Selling Shareholder under this
Agreement, to accept payment therefor, and otherwise to act on
behalf of such Selling Shareholder in connection with this
<PAGE>
Agreement.
(v) ABSENCE OF MANIPULATION. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the
Securities in violation of Regulation M under the 1934 Act.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by such Selling
Shareholder of its obligations under this Agreement or in the Power
of Attorney or the Custody Agreement, or in connection with the
offer, sale and delivery by such Selling Shareholder of the
Securities under this Agreement or the consummation by such Selling
Shareholder of the transactions contemplated by this Agreement,
except such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations and state securities
laws.
(vii) RESTRICTION ON SALE OF SECURITIES. During a period of
90 days from the date of the Prospectus, such Selling Shareholder
will not, without the prior written consent of Merrill Lynch, (i)
offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise lend, transfer or
dispose of, directly or indirectly, any share of Common Stock
whether now owned or hereafter acquired by such Selling Shareholder
or with respect to which such Selling Shareholder has or hereafter
acquires the power of disposition, or file, or request or demand
that the Company file, any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock, in cash or otherwise. The foregoing
sentence shall not apply to the Securities to be sold under this
Agreement.
(viii) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for
all of the Securities to be sold by such Selling Shareholder
pursuant to this Agreement, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures guaranteed, have been placed in
custody with the Custodian with irrevocable conditional
instructions to deliver such Securities to the Underwriters
pursuant to this Agreement.
(ix) NO ASSOCIATION WITH NASD. Neither such Selling
Shareholder, nor any of its affiliates directly, or indirectly
through one or more intermediaries, controls, or is controlled by,
or is under common control with, or has any other association with
(within the meaning of Article I, Section (ee) of the By-laws of
the National Association of Securities Dealers, Inc. (the "NASD"))
any member firm of the NASD.
(c) OFFICER'S CERTIFICATES AND SELLING SHAREHOLDERS CERTIFICATES. Any
certificate signed by any officer of the Company or any of its subsidiaries
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to
<PAGE>
each Underwriter as to the matters covered thereby; and any certificate
signed by or on behalf of the Selling Shareholders as such and delivered to
the Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by such Selling Shareholder to each Underwriter
as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Company and each Selling Shareholder, severally and not
jointly agrees to sell to each Underwriter, severally and not jointly, and
each Underwriter, severally and not jointly, agrees to purchase from the
Company and each Selling Shareholder, at the price per share set forth in
Schedule C, the number of Initial Securities set forth in Schedule A or B
opposite the name of such Underwriter or Selling Shareholder, as the case may
be, plus any additional number of Initial Securities which such Underwriter
may become obligated to purchase pursuant to the provisions of Section 10
hereof.
(b) OPTION SECURITIES. 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 each Selling Shareholder hereby
grants an option to the Underwriters, severally and not jointly, to purchase
up to an additional -shares of Common Stock, as set forth in Schedule A or B,
as the case may be, at the price per share set forth in Schedule C, less an
amount per share equal to any dividends or distributions declared by the
Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date
hereof and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial Securities upon notice by the
Representatives to the Company and each Selling Shareholder setting forth the
number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery for the Option
Securities (a "Date of Delivery") shall be determined by Merrill Lynch, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined.
If the option is exercised as to all or any portion of the Option Securities,
each of the Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of Option Securities then being purchased
which the number of Initial Securities set forth in Schedule A opposite the
name of such Underwriter bears to the total number of Initial Securities,
and, as to the Company and each Selling Shareholder, that proportion of which
the total number of Securities set forth in Schedule A, in the column titled
"Maximum Number of Option Securities" opposite the name of the Company or the
Selling Shareholder opposite the name of the Company or the Selling
Shareholder bears to the total number of Securities to be sold by the Company
and the Selling Shareholder, subject in each case to such adjustments as
Merrill Lynch in its discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & Plimpton, 875 Third Avenue, New York, NY 10022, or at such other
place as shall be agreed upon by the Representatives and the
<PAGE>
Company and the Selling Shareholders, at 9:00 A.M. (Eastern time) on the
third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any
given day) business day after the date hereof (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives
and the Company (such time and date of payment and delivery being herein
called "Closing Time").
In addition, in the event that any or all of the Option Securities
are purchased by the Underwriters, payment of the purchase price for, and
delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by
the Representatives, the Company and the Selling Shareholders, on each Date
of Delivery as specified in the notice from the Representatives to the
Company and the Selling Shareholders.
Payment shall be made to the Company and the Selling Shareholders
by wire transfer of immediately available funds to bank accounts designated
by the Company and the Custodian pursuant to each Selling Shareholder's Power
of Attorney and Custody Agreement, as the case may be, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood
that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for,
the Initial Securities and the Option Securities, if any, which it has agreed
to purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any,
to be purchased by any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
and registered in such names as the Representatives may request in writing at
least one full business day before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Representatives in The City of New York not later than 10:00
A.M. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request
by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
<PAGE>
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or
of the initiation or threatening of any proceedings for any of such purposes.
The Company will promptly effect the filings necessary pursuant to Rule
424(b) and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), or any amendment,
supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether
pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file
or use any such document to which the Representatives or counsel for the
Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished
or will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUS. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the Prospectus. If
at any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the Underwriters or for the Company, to
<PAGE>
amend the Registration Statement or amend or supplement any Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in
the opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters may
reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and
to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement and
any Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of process or
to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation
in respect of doing business in any jurisdiction in which it is not otherwise
so subject. In each jurisdiction in which the Securities have been so
qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received
by it from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds".
(i) LISTING. The Company will use its best efforts to effect and
maintain the quotation of the Common Stock (including the Securities) on the
New York Stock Exchange.
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectus, the Company will not, without the prior
written consent of the Representatives, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of any share of Common Stock or
any securities convertible into or exercisable or exchangeable for Common
Stock or file any registration statement under the 1933 Act with respect to
any of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of
<PAGE>
ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. The foregoing sentence shall not
apply to (A) the Securities to be sold hereunder, (B) any shares of Common
Stock issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in
the Prospectus, (C) any shares of Common Stock issued or options to purchase
Common Stock granted pursuant to existing employee benefit plans of the
Company referred to in the Prospectus or (D) any shares of Common Stock
issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(l) COMPLIANCE WITH RULE 463. The Company will comply with the
requirements of Rule 463 of the 1993 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of
the certificates for the Securities to the Underwriters, including any stock
or other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, and of the Prospectus
and any amendments or supplements thereto, (vii) the preparation, printing
and delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities and (ix) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) EXPENSES OF THE SELLING SHAREHOLDERS. The Selling Shareholders,
jointly and severally, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (i) any stamp
<PAGE>
duties, capital duties and stock transfer taxes, if any, payable upon the
sale of the Securities to the Underwriters and (ii) the fees and
disbursements of their respective counsel and accountants.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company and the Selling Shareholders shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall
not affect any agreement that the Company and the Selling Shareholders may
make for the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the
Company or any subsidiary of the Company or on behalf of any Selling
Shareholder delivered pursuant to the provisions hereof, to the performance
by the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of:
(i) Thompson Coburn LLP, counsel for the Company, in form
and substance satisfactory to counsel for the UnderwriterS,
together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit A-1
hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(ii) Sonnenchein, special regulatory counsel for the Company,
in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit A-2
hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. At Closing
Time, the Underwriters shall have received the favorable opinion, dated as of
Closing Time, of each counsel for the other Selling Shareholders (which
counsel shall be satisfactory to the Underwriters), each in form and
substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letters for each of the other Underwriters to
the effect set forth in Exhibit A-3 hereto and
<PAGE>
to such other effect as counsel for the Underwriters may reasonably request.
(d) OPINION OF COUNSEL FOR THE UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Debevoise & Plimpton, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters in form and substance reasonably satisfactory to the
Underwriters.
(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
are contemplated by the Commission.
(f) CERTIFICATE OF THE SELLING SHAREHOLDER. At Closing Time, the
Underwriters shall have received a certificate of each Selling Shareholder,
dated as of the Closing Time, to the effect that (i) the representations and
warranties of each Selling Shareholder contained in Section 1(b) hereof are
true and correct in all respects with the same force and effect as though
expressly made at and as of Closing Time and (ii) each Selling Shareholder
has complied in all material respects with all agreements and all conditions
on its part to be performed under this Agreement at or prior to Closing Time.
(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the Representatives shall have received from KPMG LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the Representatives
shall have received from KPMG LLP a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to
Closing Time.
(i) APPROVAL OF LISTING. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
<PAGE>
(j) NO OBJECTION. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule D hereto.
(l) FORM W-8 OR W-9. At the date of this Agreement, the
Representatives shall have received a Form W-8 or W-9, as required, signed by
each Selling Shareholder.
(m) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations and
warranties of the Company and the Selling Shareholders contained herein and
the statements in any certificates furnished by the Company or any subsidiary
of the Company and the Selling Shareholders hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the President of the Company and of the chief financial
or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(ii) CERTIFICATE OF SELLING SHAREHOLDERS. A certificate, dated
such Date of Delivery, of each Selling Shareholder selling Option
Securities confirming that the certificate delivered at Closing Time
pursuant to Section 5(f) remains true and correct as of such Date
of Delivery.
(iii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion of
Thompson Coburn LLP, counsel for the Company, together with the
favorable opinion of, special regulatory counsel for the Company,
each in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise
to the same effect as the opinions required by Section 5(b) hereof.
(iv) OPINION OF COUNSEL FOR UNDERWRITERS. The favorable opinion
of Debevoise & Plimpton counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(v) BRING-DOWN COMFORT LETTER. A letter from KPMG LLP, in
form and substance satisfactory to the Representatives and dated
such Date of Delivery, substantially in the same form and substance
as the letter furnished to the Representatives pursuant to Section
5(h) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(n) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require
<PAGE>
for the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(o) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities may be terminated by the Representatives by notice to the Company
at any time at or prior to Closing Time or such Date of Delivery, as the case
may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS BY THE COMPANY. The Company
agrees to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), including
the Rule 430A Information and the Rule 434 Information, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included
in any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement
or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i)
or (ii) above;
<PAGE>
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in
the Registration Statement (or any amendment thereto), including the Rule
430A Information, or any preliminary prospectus (or any amendment or
supplement thereto).
(b) INDEMNIFICATION OF THE UNDERWRITERS BY THE SELLING
SHAREHOLDERS. The Selling Shareholders severally in proportion to the number
of Shares to be sold by such Selling Shareholders hereunder, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a)(1)
of this Section, as incurred, but only with reference to information
furnished in writing by or on behalf of such Selling Shareholder expressly
for use in the Registration Statement (or any amendment thereto), any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto). Notwithstanding the foregoing and any provisions in Section 6(a),
the aggregate liability of any such Selling Shareholder pursuant to this
Section 6(b) shall be limited to the net proceeds received by such Selling
Shareholder from the Securities purchased by the Underwriters from such
Selling Shareholder pursuant to this Agreement; PROVIDED, HOWEVER, that this
indemnity agreement shall not apply to any loss, liability, claim, damage or
expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any Underwriter through
the Representatives expressly for use in the Registration Statement (or any
amendment thereto).
(c) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
SHAREHOLDERS. Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act and each Selling Shareholder and each person, if any, who controls each
Selling Shareholder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(d) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from
<PAGE>
any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and,
in the case of parties indemnified pursuant to Section 6(b) or 6(c) above,
counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf
of any indemnified party.
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a) (ii) effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
(f) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. The
provisions of this Section shall not affect any agreement among the Company
and the Selling Shareholders with respect to indemnification.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters on
the other hand from the offering of the Securities pursuant to this Agreement
or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company and the Selling Shareholders on the one hand and of
<PAGE>
the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, 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 hand in
connection with the offering of the Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the Selling
Shareholders and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear
to the aggregate initial public offering price of the Securities as set forth
on such cover.
The relative fault of the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, by the Selling
Shareholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 7 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 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party
and referred to above in this Section 7 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriters has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission and (ii)
no Selling Shareholder shall be required to contribute any amount in excess
of the amount of the total net proceeds received by such Selling Shareholder
from the sale of Securities pursuant to this Agreement or on a basis other
than as specified in Section 6(b) or 6(c) as the case may be.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriters within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same
<PAGE>
rights to contribution as such Underwriter, and each director of the Company,
each officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company or any Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company or such Selling
Shareholder, as the case may be. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint. The Selling Shareholders' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule B
hereto and not joint.
The provisions of this Section shall not affect any agreement among
the Company and the Selling Shareholders with respect to contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement or
in certificates of officers of the Company or any of its subsidiaries
submitted pursuant hereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, and the Selling Shareholders at any time
at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof,
<PAGE>
and provided further that Sections 1, 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right,
within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such
24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company and the Selling
Shareholders to sell the Option Securities to be purchased and sold on such
Date of Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company and the Selling
Shareholders to sell the relevant Option Securities, as the case may be,
either the Representatives or the Company and the Selling Shareholders shall
have the right to postpone Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes
any person substituted for an Underwriter under this Section 10.
SECTION 11. DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS OR THE COMPANY.
(a) If a Selling Shareholder shall fail at Closing Time or at a
Date of Delivery to sell and deliver the number of Securities which such
Selling Shareholder or Selling Shareholders are obligated to sell hereunder,
and the remaining Selling Shareholders do not exercise the right hereby
granted to increase, pro rata or otherwise, the number of Securities to be
sold by them hereunder to the total number to be sold by all Selling
Shareholders as set forth in Schedule B hereto, then the Underwriters may, at
option of the Representatives, by notice from the
<PAGE>
Representatives to the Company and the non-defaulting Selling Shareholders,
either (a) terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect or (b) elect to purchase the Securities
which the non-defaulting Selling Shareholders and the Company have agreed to
sell hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Shareholder so defaulting from liability, if any, in respect of such
default.
In the event of a default by any Selling Shareholder as referred to
in this Section 11, the Representatives shall have the right to postpone
Closing Time or Date of Delivery for a period not exceeding seven days in
order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
(b) If the Company shall fail at Closing Time or at the Date of
Delivery to sell the number of Securities that it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the
part of any nondefaulting party; provided, however, that the provisions of
Sections 1, 4, 6, 7 and 8 shall remain in full force and effect. No action
taken pursuant to this Section shall relieve the Company from liability, if
any, in respect of such default.
SECTION 12. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of - with a copy
to Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022,
attention of James C. Scoville, Esq.; and notices to the Company and to the
Selling Shareholders at 7733 Forsyth Blvd., 17th Floor, St. Louis, Missouri
63105, attention of Alan C. Henderson, with a copy to Thompson Coburn LLP,
One Firstar Plaza, Suite 3400, St. Louis, Missouri 63101 attention of Robert
M. LaRose, Esq.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters and the Company and the Selling Shareholders
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and the
Selling Shareholders and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
<PAGE>
YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders
a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Underwriters and the Company and
the Selling Shareholders in accordance with its terms.
Very truly yours,
REHABCARE GROUP, INC.
By ______________________________________________
Title:
SELLING SHAREHOLDERS
By ______________________________________________
Name:
As Attorney-in-Fact acting on behalf of the
Selling Shareholders named in Schedule B
hereto.
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
S.G. COWAN SECURITIES CORPORATION
ADVEST, INC.
ROBERT W. BAIRD & Co.
By: MERRILL LYNCH & CO.
By ______________________________________________
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
<PAGE>
Draft of November 14, 2000
SCHEDULE A
<TABLE>
<CAPTION>
Number of Initial
Name of Underwriter Securities
------------------- -----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated......................... -
S.G. Cowan Securities Corporation.......................................... -
Advest, Inc................................................................ -
Robert W. Baird & Co....................................................... -
---------
Total......................................................................
---------
</TABLE>
<PAGE>
Draft of November 14, 2000
SCHEDULE B
Number of Initial Maximum Number of
Securities Option Securities
RehabCare Group, Inc. - -
SELLING SHAREHOLDERS
--------------------
- -
--------------------
- -
--------------------
- -
--------------------
Total............................ - -
*No Option Securities
<PAGE>
Draft of November 14, 2000
SCHEDULE C
REHABCARE GROUP, INC.
Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the Securities to be
paid by the several Underwriters shall be $-, being an amount equal
to the initial public offering price set forth above less $- per
share; provided that the purchase price per share for any Option
Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share
equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option
Securities.
<PAGE>
Draft of November 14, 2000
SCHEDULE D
List of persons and entities
SUBJECT TO LOCK-UP
<PAGE>
Draft of November 14, 2000
Exhibit A-1
FORM OF OPINION OF THOMPSON COBURN LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business except,
with respect to due qualification as a foreign corporation, where the
failure to so qualify would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to the Purchase Agreement or
pursuant to reservations, agreements or employee benefit plans
referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus);
the shares of issued and outstanding capital stock of the Company,
including, without limitation, the securities to be purchased by
the Underwriters from the Selling Shareholders have been duly
authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital
stock of the Company including the Securities to be purchased by
the Underwriters from the Selling Shareholders was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(v) The Securities to be purchased by the Underwriters
from the Company and the Selling Shareholders have been duly
authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement and, when issued or sold and delivered by
the Company or the Selling Shareholders, as the case may be,
pursuant to the Agreement, respectively, against payment of the
consideration set forth in the Purchase Agreement, will be validly
issued and fully paid and non-assessable and no holder of the
Securities is or will be subject to personal liability by reason of
being such a holder.
(vi) The issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(vii) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and is duly qualified
<PAGE>
as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure to so qualify
or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and, to the best of our knowledge, is owned
by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar
rights of any securityholder of such Subsidiary.
(viii) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933
Act; any required filing of the Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by
Rule 424(b); and, no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement
has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or threatened by the
Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement
to the Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to
which we need express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the
1933 Act Regulations.
(xi) The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express
no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the 1933 Act or the 1934 Act, as
applicable, and the rules and regulations of the Commission
thereunder.
(xii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and
bylaws of the Company and the requirements of the New York Stock
Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation,
to which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Purchase
Agreement or the performance by the Company of its obligations
thereunder.
(xiv) The information in the Prospectus under "Description of
Capital Stock--Common Stock", [To be
<PAGE>
amended appropriately -- "Business--Property", "Business--Regulatory
Matters", "Business--Litigation", "Description of Capital
Stock--Preferred Stock", "Certain Federal Income Tax
Considerations"] and in the Registration Statement under Item 15,
to the extent that it constitutes matters of law, summaries of
legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by us and is
correct in all material respects.
(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that
are not described as required.
(xvi) All descriptions in the Prospectus of contracts and
other documents to which the Company or its subsidiaries are a party
are accurate in all material respects, to the best of our knowledge,
there are no franchises, contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to
therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in
all material respects.
(xvii) To the best of our knowledge, neither the Company nor
any subsidiary is in violation of its charter or by-laws and no
default by the Company or any subsidiary exists in the due
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration
Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement.
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court
or governmental authority or agency, domestic or foreign, (other
than under the 1933 Act and the 1933 Act Regulations, which have
been obtained, or as may be required under the securities or blue
sky laws of the various states, as to which we need express no
opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement or
for the offering, issuance, sale or delivery of the Securities.
(xix) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in
the Purchase Agreement and in the Registration Statement (including
the issuance and sale of the Securities, and the use of the
proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use Of Proceeds") and compliance by
the Company with its obligations under the Purchase Agreement do
not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(xi) of the
Purchase Agreement) under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of
the Company or any subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
any other agreement or instrument, known to us, to which the
Company or any subsidiary is a party or by which it or any of them
may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would
not have a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or by-laws of the
Company or any subsidiary, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or
any of their respective
<PAGE>
properties, assets or operations.
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the 1940 Act.
(xxi) The Rights under the Company's Shareholder Rights Plan
to which holders of the Securities will be entitled have been duly
authorized and validly issued.
Nothing has come to our attention that would lead us to
believe that the Registration Statement or any amendment thereto,
including the Rule 430A Information and Rule 434 Information (if
applicable) (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which we need make no statement), at the time such
Registration Statement or any such amendment became effective,
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 (except for financial statements and
schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which we need make no
statement), at the time the Prospectus were issued, at the time any
such amended or supplemented prospectus was issued or at the Closing
Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent they
deem proper, on certificates of responsible officers of the Company and
public officials. Such opinion shall not state that it is to be
governed or qualified by, or that it is otherwise subject to, any
treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991).
A-
<PAGE>
Exhibit A -2
FORM OF OPINION OF COMPANY'S REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
[To Come]
A-
<PAGE>
Exhibit A -3
FORM OF OPINION OF COUNSEL TO THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(i) No filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any court
or governmental authority or agency, domestic or foreign, (other
than the issuance of the order of the Commission declaring the
Registration Statement effective and such authorizations, approvals
or consents as may be necessary under state securities laws, as to
which [I][we] need express no opinion) is necessary or required to
be obtained by the Selling Shareholder(s) for the performance by
[each/the] Selling Shareholder of its obligations under the
Purchase Agreement or in the Power of Attorney and Custody
Agreement, or in connection with the offer, sale or delivery of the
Securities.
(ii) [Each/The] Power of Attorney and Custody Agreement has
been duly executed and delivered by the [respective] Selling
Shareholder(s) [named therein] and constitutes the legal, valid and
binding agreement of [such/the] Selling Shareholder.
(iii) The Purchase Agreement has been duly executed and
delivered by or on behalf of [each/the] Selling Shareholder.
(iv) [Each/The] Attorney-in-Fact has been duly authorized by
the Selling Shareholder(s) to deliver the Securities on behalf of
the Selling Shareholder(s) in accordance with the terms of the
Purchase Agreement.
(v) The execution, delivery and performance of the Purchase
Agreement and the Power of Attorney and Custody Agreement and the
sale and delivery of the Securities and the consummation of the
transactions contemplated in the Purchase Agreement and in the
Registration Statement and compliance by the Selling Shareholder(s)
with its obligations under the Purchase Agreement have been duly
authorized by all necessary action on the part of the Selling
Shareholder(s) and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under or result in the creation
or imposition of any tax, lien, charge or encumbrance upon the
Securities or any property or assets of the Selling Shareholder(s)
pursuant to, any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, license, lease or other instrument or
agreement to which [any/the] Selling Shareholder is a party or by
which [his/her/it/they] may be bound, or to which any of the
property or assets of the Selling Shareholder(s) may be subject nor
will such action result in any violation of the provisions of the
charter or by-laws of the Selling Shareholder(s), if applicable, or
any law, administrative regulation, judgment or order of any
governmental agency or body or any administrative or court decree
having jurisdiction over [such/the] Selling Shareholder or any of
its properties.
(vi) To the best of [our][my] knowledge, [each/the] Selling
Shareholder has valid and marketable title to the Securities to be
sold by [such/the] Selling Shareholder pursuant to the Purchase
Agreement, free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind, and has full
right, power and authority to sell, transfer and deliver such
Securities pursuant to the Purchase
A-
<PAGE>
Agreement. By delivery of a certificate or certificates therefor
[such/the] Selling Shareholder will transfer to the Underwriters
who have purchased such Securities pursuant to the Purchase
Agreement (without notice of any defect in the title of [such/the]
Selling Shareholder and who are otherwise bona fide purchasers for
purposes of the Uniform Commercial Code) valid and marketable title
to such Securities, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
Such opinion shall not state that it is to be governed or
qualified by, or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law
(1991).
A-
<PAGE>
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(K)
Exhibit B
, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
S.G. Cowan Securities Corporation
Advest, Inc.
Robert W. Baird & Co.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: PROPOSED PUBLIC OFFERING BY REHABCARE GROUP, INC.
Dear Sirs:
The undersigned, a stockholder, officer and/or director of RehabCare
Group, Inc., a Delaware corporation (the "Company"), understands that Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith, Incorporated ("Merrill
Lynch"), the Selling Shareholders listed in Schedule B thereto (the "Selling
Shareholders") and S.G. Cowan Securities Corporation, Advest, Inc. and Robert
Baird Securities proposes to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company providing for the public offering of shares (the
"Securities") of the Company's common stock, par value $.01 per share (the
"Common Stock"). In recognition of the benefit that such an offering will confer
upon the undersigned as a stockholder, officer and/or director of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the Purchase Agreement that, during a period of 90 days from the
date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise dispose of or transfer any shares of the Company's Common Stock or
any securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any
<PAGE>
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Common
Stock, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. The foregoing
restriction will not apply to Securities to be sold by the Selling
Shareholders under the Purchase Agreements.
Very truly yours,
Signature:__________________________________
Print Name:_________________________________
