EXHIBIT INDEX
ITEM PAGE
NUMBER NUMBER
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1 --Form of Underwriting Agreement.
23.2 --Consent of Ernst & Young L.L.P.
Exhibit 1
Draft of May 30, 1996
4,400,000 Shares
UNIVERSAL HEALTH SERVICES, INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
, 1996
SMITH BARNEY INC.
BEAR, STEARNS & CO.
DILLON, READ & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN & CO.
As Representatives of the Several Underwriters
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Universal Health Services, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell an aggregate of 4,000,000 shares (the "Firm Shares")
of its Class B common stock, par value $0.01 per share (the "Common Stock"), to
the several Underwriters named in Schedule I hereto (the "Underwriters"), and
Alan B. Miller (the "Selling Stockholder") proposes to sell an aggregate of
400,000 shares of Common Stock. In addition, solely for the purpose of covering
over-allotments, the Company proposes to sell to the Underwriters, upon the
terms and conditions set forth in Section 2 hereof, up to an additional 660,000
shares (the "Additional Shares") of Common Stock. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares." The
Company and the Selling Stockholders are hereinafter sometimes referred to as
the "Sellers."
The Company and the Selling Stockholders wish to confirm as follows their
agreement with you (the "Representatives") and the other several Underwriters on
whose behalf you are acting, in connection with the several purchases of the
Shares by the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and filed
with the Securities and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Act"), a
registration statement on Form S-3 under the Act (the
"registration statement"), including a prospectus subject to completion,
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits) as amended at the time it becomes effective or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a post-
effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If an abbreviated
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act (an "Abbreviated Registration Statement"), the
term "Registration Statement" as used in this Agreement includes the Abbreviated
Registration Statement. The term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration Statement, or, if the
prospectus included in the Registration Statement omits information in reliance
on Rule 430A under the Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this Agreement means the prospectus in the form included
in the Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectus filed with the Commission pursuant to
Rule 424(b). The term "Prepricing Prospectus" as used in this Agreement means
the prospectus subject to completion in the form included in the registration
statement at the time of the initial filing of the registration statement with
the Commission, and as such prospectus shall have been amended from time to time
prior to the date of the Prospectus. Any reference herein to the registration
statement, the Registration Statement, any Prepricing Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Form S-3 under the Act, as of the date of the
registration statement, the Registration Statement, such Prepricing Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to the registration statement, the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") and so incorporated by reference. As used
herein, the term "Incorporated Documents" means the documents which at the time
are incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectus, the Prospectus or any amendment or
supplement thereto.
2. Agreements to Sell and Purchase. Subject to such adjustments as you may
determine in order to avoid fractional shares, the Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Sellers herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $ per share (the
"purchase price per share"), the number of Firm Shares which bears the same
proportion to the aggregate number of Firm Shares to be issued and sold by the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number of Firm Shares increased as set
forth in Section 12 hereof) bears to the aggregate number of Firm Shares to be
sold by the Sellers.
Subject to such adjustments as you may determine in order to avoid
fractional shares, the Selling Shareholder agrees, subject to all the terms and
conditions set forth herein, to sell to each Underwriter and, upon the basis of
the representations, warranties and agreements of the
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Sellers herein contained and subject to all the terms and conditions set forth
herein, each Underwriter agrees to purchase from the Selling Shareholder at the
purchase price per share that number of Firm Shares which bears the same
proportion to the number of Firm Shares to be sold by the Selling Shareholder as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto (or such number of Firm Shares increased as set forth in
Section 12 hereof) bears to the aggregate number of Firm Shares to be sold by
the Sellers.
The Company also agrees, subject to all the terms and conditions set forth
herein, to sell to the Underwriters, and, upon the basis of the representations,
warranties and agreements of the Company herein contained and subject to all the
terms and conditions set forth herein, the Underwriters shall have the right to
purchase from the Company, at the purchase price per share, pursuant to an
option (the "over-allotment option") which may be exercised at any time and from
time to time prior to 9:00 P.M., New York City time, on the 30th day after the
date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of 660,000 Additional Shares. The
Additional Shares may be purchased solely to cover over-allotments, if any,
incurred by the Underwriters in connection with the offer and sale of the
Shares. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments as you may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be purchased by the Underwriters as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares increased as set forth in Section 12 hereof) bears to
the aggregate number of Firm Shares.
Certificates in transferable form for the Shares that the Selling
Stockholder agrees to sell pursuant to this Agreement have been placed in
custody with ________________ (the "Custodian") for delivery under this
Agreement pursuant to a Custody Agreement and Power of Attorney (the "Custody
Agreement") executed by the Selling Stockholder appointing
_________________________ as agents and attorneys-in-fact (the "Attorneys-in-
Fact"). The Selling Stockholder agrees that (i) the Shares represented by the
certificates held in custody pursuant to the Custody Agreement are subject to
the interests of the Underwriters and the Company, (ii) the arrangements made by
the Selling Stockholder for such custody are, except as specifically provided in
the Custody Agreement, irrevocable and (iii) the obligations of the Selling
Stockholder hereunder and under the Custody Agreement shall not be terminated by
any act of the Selling Stockholder or by operation of law, whether by the death
or incapacity of the Selling Stockholder or the occurrence of any other event.
If the Selling Stockholder shall die or be incapacitated or if any other event
shall occur before the delivery of the Shares hereunder, certificates for the
Shares to be sold by such Selling Stockholder shall be delivered to the
Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity or other event had not occurred, regardless of whether or not the
Attorneys-in-Fact or any Underwriter shall have received notice of such death,
incapacity or other event. Each Attorney-in-Fact represents that he is
authorized, on behalf of the Selling Stockholder, to execute this Agreement and
any other documents necessary or desirable in connection with the Custody
Agreement and the sale of the Shares to be sold hereunder by the Selling
Stockholder, to make delivery of the certificates for such Shares, to receive
the proceeds of the sale of such Shares, to give receipts for such proceeds, to
pay therefrom any expenses to be borne by the Selling Stockholder in connection
with the sale and public offering of such Shares, to distribute the balance
thereof to the Selling Stockholder,
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and to take such other actions as may be necessary or desirable in connection
with the transactions contemplated by this Agreement. Each Attorney-in-Fact
agrees to perform his duties under the Custody Agreement.
3. Terms of Public Offering. The Company has been advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the Underwriters
of and payment for the Firm Shares shall be made at the office of Smith Barney
Inc., 388 Greenwich Street, New York, New York 10013, at 10:00 A.M., New York
City time, on , 1996 (the "Closing Date"). The place of closing for
the Firm Shares and the Closing Date may be varied by agreement between you and
the Company.
Delivery to the Underwriters of and payment for any Additional Shares to
be purchased by the Underwriters shall be made at the aforementioned office of
Smith Barney Inc. at such time on such date (the "Option Closing Date"), which
may be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor earlier than two nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from you on behalf of the Underwriters to the Company and the Attorneys-
in-Fact of the Underwriters' determination to purchase a number, specified in
such notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by agreement
between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request by written notice, it being understood that a facsimile
transmission shall be deemed written notice, prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date or any Option
Closing Date, as the case may be. Such certificates shall be made available to
you in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and any Additional Shares to be purchased hereunder shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor by certified or official bank check or
checks payable in immediately available funds to the order of the Company.
5. Agreements of the Company. The Company agrees with the several
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
or any Abbreviated Registration Statement to be declared effective before the
offering of the Shares may commence, the Company will endeavor to cause the
Registration Statement or such post-effective amendment to become effective as
soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement or such
post-effective amendment has become effective.
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(b) The Company will advise you promptly and, if requested by you, will
confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, which makes any statement of a material fact made in the
Registration Statement or the Prospectus (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations thereunder
to be stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, six signed copies
of the registration statement as originally filed with the Commission and of
each amendment thereto, including financial statements and all exhibits to the
registration statement and will also furnish to you, without charge, such number
of conformed copies of the registration statement as originally filed and of
each amendment thereto, but without exhibits, as you may request.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus of which you
shall not previously have been advised or to which you shall object after being
so advised or (ii) so long as, in the opinion of counsel for the Underwriters, a
prospectus is required to be delivered in connection with sales by any
Underwriter or dealer, file any information, documents or reports pursuant to
the Exchange Act, without delivering a copy of such information, documents or
reports to you, as Representatives of the Underwriters, prior to or concurrently
with such filing.
(e) Prior to the execution and delivery of this Agreement, the Company
has delivered or will deliver to you, without charge, in such quantities as you
have requested or may hereafter request, copies of each form of the Prepricing
Prospectus. The Company consents to the use, in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the jurisdictions in
which the Shares are offered by the several Underwriters and by dealers, prior
to the date of the Prospectus, of each Prepricing Prospectus so furnished by the
Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may request. The Company consents to the use of the Prospectus (and of any
amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several Underwriters and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act to be
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delivered in connection with sales by any Underwriter or dealer. If during such
period of time any event shall occur that in the judgment of the Company or in
the opinion of counsel for the Underwriters is required to be set forth in the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary to supplement or
amend the Prospectus to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto and will
expeditiously furnish copies thereof to the Underwriters and dealers in such
quantities as you shall request. In the event that the Company and you, as
Representatives of the several Underwriters, agree that the Prospectus should be
amended or supplemented, the Company, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not now so
subject.
(h) The Company will make generally available to its security holders a
consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as practicable
after the end of such period, which consolidated earnings statement shall
satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will furnish
to you (i) as soon as available, a copy of each report of the Company mailed to
stockholders or filed with the Commission, and (ii) from time to time such other
information concerning the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating this
Agreement pursuant to Section 12 or Section 13 hereof) or if this Agreement
shall be terminated by the Underwriters because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Representatives for all
out-of-pocket expenses (including fees and expenses of counsel for the
Underwriters) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the Shares
substantially in accordance with the description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely file
the Prospectus pursuant to Rule 424(b) under the Act and will advise you of the
time and manner of such filing.
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(m) Except as provided in this Agreement, the Company will not sell,
offer to sell, contract to sell or otherwise transfer or dispose of any Common
Stock (or any securities convertible into or exercisable or exchangeable for
Common Stock), or grant any options or warrants to purchase Common Stock, for a
period of ___ days after the date of the Prospectus without the prior written
consent of Smith Barney Inc.
(n) The Company has furnished or will furnish to you "lock-up" letters,
in form and substance satisfactory to you, signed by each of its current
officers and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the Prepricing Prospectus
and Prospectus, the Company has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(p) The Company will use its best efforts to have the Shares listed,
subject to notice of issuance, on the New York Stock Exchange prior to or
concurrently with the effectiveness of the registration statement.
6. Agreements of the Selling Stockholder. The Selling Stockholder agrees
with the several Underwriters as follows:
(a) Such Selling Stockholder will cooperate to the extent necessary to
cause the registration statement or any post-effective amendment thereto to
become effective at the earliest possible time.
(b) Such Selling Stockholder will pay all Federal and other taxes, if
any, on the transfer or sale of any Shares that are sold by such Selling
Stockholder to the Underwriters.
(c) Such Selling Stockholder will do or perform all things reasonably
required to be done or performed by such Selling Stockholder prior to the
Closing Date and any Option Closing Date, as the case may be, to satisfy all
conditions precedent to the delivery of the Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
(d) Such Selling Stockholder will not offer, sell, contract to sell or
otherwise dispose of, or grant any option to purchase, any shares of Common
Stock (or any securities convertible into or exercisable or exchangeable for
Common Stock) owned by such Selling Stockholder, except for the sale of Shares
to the Underwriters pursuant to this Agreement, without the prior written
consent of Smith Barney Inc. for a period of ___ days after the date of the
Prospectus.
(e) Except as stated in this Agreement and in the Prepricing Prospectus
and the Prospectus, such Selling Stockholder 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 Common Stock to
facilitate the sale or resale of the Shares.
(f) Such Selling Stockholder will advise you promptly, and if requested
by you, will confirm such advice in writing, within the period of time referred
to in Section 5(f) hereof, of any change in information relating to such Selling
Stockholder and of any change in the Company's condition (financial or other),
business, prospects, properties, net worth or results of operations
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or any other information relating to the Company or relating to any matter
stated in the Prospectus or any amendment or supplement thereto that comes to
the attention of such Selling Stockholder that suggests that any statement of a
material fact made in the Registration Statement or the Prospectus (as then
amended or supplemented, if amended or supplemented) is or may be untrue in any
material respect or that the Registration Statement or Prospectus (as then
amended or supplemented, if amended or supplemented) omits or may omit to state
a material fact or a fact necessary to be stated therein in order to make the
statements therein not misleading in any material respect.
(g) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982, as amended, with respect to the transactions herein contemplated, such
Selling Stockholder agrees to deliver to you prior to or on the Option Closing
Date a properly completed and executed United States Treasury Department Form W-
9 (or other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
7. Representations and Warranties of the Company. The Company represents and
warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus.
(b) The registration statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective amendment
thereto or any Abbreviated Registration Statement shall become effective, and
the Prospectus and any supplement or amendment thereto when filed with the
Commission under Rule 424(b) under the Act, complied or will comply in all
material respects with the provisions of the Act and did not or will not at any
such times contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except that this representation and warranty does not
apply to statements in or omissions from the registration statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(c) All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable, are free
of any preemptive or similar rights and have been issued and sold in compliance
with all Federal and state securities laws; the Shares to be issued and sold by
the Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and free of any preemptive or
similar rights. The capital stock of the Company conforms in all material
respects to the description thereof in the Registration Statement and the
Prospectus.
(d) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and
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the Prospectus, and is duly registered and qualified to conduct its business and
is in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify would not have
a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole (a "Material Adverse
Effect").
(e) All the Company's subsidiaries (as defined in the Act), are listed in
an exhibit to the Registration Statement and are referred to herein individually
as a "Subsidiary" and collectively as the "Subsidiaries." Each Subsidiary is a
corporation duly organized, validly existing and in good standing in the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business in all
material respects as described in the Registration Statement and the Prospectus
and is duly registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration, except where the failure so
to register or qualify would not have a Material Adverse Effect. All the
outstanding shares of capital stock of each of the Subsidiaries have been duly
authorized and validly issued, are fully paid and nonassessable, and are wholly-
owned by the Company directly or indirectly through one of the other
Subsidiaries, free and clear of any lien, adverse claim, security interest,
equity or other encumbrance, except as disclosed in the Registration Statement
and the Prospectus (or any amendment or supplement thereto).
(f) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries or any of their
respective properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required.
There are no agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the Prospectus or
to be filed as an exhibit to the Registration Statement that are not described
or filed as required by the Act. Neither the Company nor any of the
Subsidiaries is involved in any strike, job action or labor dispute, and to the
Company's best knowledge no such action or dispute is threatened.
(g) Neither the Company nor any of the Subsidiaries is (i) in violation
of its certificate of incorporation or by-laws or other organizational
documents, or of any law, ordinance, administrative or governmental rule or
regulation applicable to the Company or any of the Subsidiaries or of any decree
of any court or governmental agency or body having jurisdiction over the Company
or any of the Subsidiaries, or (ii) in default in any material respect in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any material
agreement, indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which it or any of their respective properties
may be bound.
(h) Neither the issuance and sale of Shares by the Company, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (i) requires
any consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act and the Exchange Act, all of which have
been or will be effected in accordance with this Agreement, and compliance with
the securities or Blue Sky laws of various
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jurisdictions) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate of incorporation or
bylaws or other organizational documents of the Company or any of the
Subsidiaries or (ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement, indenture, lease or
other instrument to which the Company or any of the Subsidiaries is a party or
by which the Company or any of the Subsidiaries or any of their respective
properties may be bound, violates or will violate any statute, law or
regulation, filing, judgment, injunction, order or decree applicable to the
Company or any of the Subsidiaries or any of their respective properties or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant to the
terms of any agreement or instrument to which it is a party or by which it may
be bound or to which any of the property or assets of it is subject.
(i) The accountants, Arthur Andersen LLP, Ernst & Young LLP, Clifton,
Gunderson & Co. and KPMG Peat Marwick LLP, who have certified or shall certify
the financial statements filed or to be filed as part of the Registration
Statement or the Prospectus (or any amendment or supplement thereto), are
independent public accountants as required by the Act.
(j) The financial statements, together with related schedules and notes
forming part of the Registration Statement and the Prospectus (and any amendment
or supplement thereto), comply with the requirements of the Act and present
fairly the consolidated financial position, results of operations and changes in
stockholders' equity and cash flows of the Company and the Subsidiaries on the
basis stated in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; the pro forma financial information included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) has been prepared in accordance with the applicable published rules and
regulations of the Commission with respect to pro forma financial information
and the assumptions used in preparing such information are reasonable; and the
other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(k) The Company has all requisite power and authority to execute, deliver
and perform its obligations under this Agreement. The execution and delivery
of, and the performance by the Company of its obligations under, this Agreement
have been duly and validly authorized by the Company. This Agreement has been
duly executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public policy and
subject to the qualification that the enforceability of the Company's
obligations hereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equitable principles.
(l) Except as disclosed in the Registration Statement and the Prospectus
(or any amendment or supplement thereto), subsequent to the respective dates as
of which such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), neither the Company nor any
of the Subsidiaries has incurred any liability or obligation, direct or
contingent, or entered into any transaction that is material to the Company
10
and the Subsidiaries taken as a whole, and there has not been any change in the
capital stock, or material increase in the short-term or long-term debt, of the
Company, or any material adverse change, or any development involving or which
may reasonably be expected to involve a prospective material adverse change, in
the condition (financial or other), business, prospects, properties, net worth
or results of operations of the Company and the Subsidiaries taken as a whole.
(m) The Company and each of the Subsidiaries has good and marketable
title to all property (real and personal) described in the Prospectus as being
owned by it, free and clear of all liens, claims, security interests or other
encumbrances, except such as are described in the Registration Statement and the
Prospectus, and all the property described in the Prospectus as being held under
lease by the Company or any of the Subsidiaries is held by it under valid,
subsisting and enforceable leases.
(n) The Company has not distributed and, prior to the later to occur of
the Closing Date and completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sale of the
Shares other than the Registration Statement, the Prepricing Prospectus, the
Prospectus or other materials, if any, permitted by the Act.
(o) Each of the Company, the Subsidiaries and, to the best of the
Company's knowledge, the owners of the facilities managed by the Company or any
Subsidiary have such permits, licenses, franchises, certificates of need and
other approvals or authorizations ("Permits") of governmental or regulatory
authorities as are necessary, except to the extent the failure to have such
Permits would not have a Material Adverse Effect, to own, lease or operate their
respective properties and to conduct their respective businesses in the manner
described in the Prospectus, including, without limitation, such Permits as are
required (x) under such federal and state health care laws as are applicable to
the Company and the Subsidiaries and their respective businesses and (y) with
respect to those facilities that are owned, leased or managed by the Company or
any Subsidiary that participate in Medicare and/or Medicaid, to receive
reimbursement thereunder, subject to such qualifications as may be set forth in
the Prospectus. The Company, each of the Subsidiaries and, to the best of the
Company's knowledge, each of the owners of the facilities managed by the Company
or any Subsidiary have in all material respects fulfilled and performed all
their respective obligations with respect to the Permits, and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such Permit, subject to such qualifications as may be set
forth in the Prospectus, which revocation, termination or impairment would have
a Material Adverse Effect. Except as described in the Prospectus, none of the
Permits contain any restriction that is materially burdensome to the Company or
any of the Subsidiaries. The Company's and each Subsidiary's business practices
do not violate any federal or state laws regarding physician ownership of (or
financial relationship with) and referral to entities providing healthcare
related goods or services, or laws requiring disclosure of financial interests
held by physicians in entities to which they may refer patients for the
provisions of health care related goods or services.
(p) The property, assets and operations of the Company and the
Subsidiaries comply in all material respects with all applicable federal, state
and local laws, rules, orders, decrees, judgments, injunctions, licenses,
permits or regulations relating to environmental matters (the "Environmental
Laws"). To the Company's best knowledge, none of the Company's nor any of the
Subsidiaries' property, assets or operations is the subject of any federal,
state or local
11
investigation evaluating whether any remedial action is needed to respond to a
release of any substance regulated by or form the basis of liability under any
Environmental Laws (a "Hazardous Material") into the environment. Neither the
Company nor any of the Subsidiaries has received any notice or claim, nor are
there any pending or, to the Company's best knowledge, threatened or reasonably
anticipated lawsuits against it with respect to violations of an Environmental
Law or in connection with the release of any Hazardous Material into the
environment. Neither the Company nor any of the Subsidiaries has any material
contingent liability in connection with any release of Hazardous Material into
the environment.
(q) The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are engaged; (ii) all
policies of insurance insuring the Company or any of the Subsidiaries or their
respective businesses, assets, employees, officers and directors are in full
force and effect; (iii) the Company and the Subsidiaries are in compliance with
the terms of such policies and instruments in all material respects; and (iv)
there are no claims by the Company or any of the Subsidiaries under any such
policy or instrument as to which any insurance company is denying liability or
defending under a reservation of rights clause.
(r) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(s) Neither the Company nor any of the Subsidiaries nor, to the Company's
best knowledge, any employee or agent of the Company or any of the Subsidiaries
has made any payment of funds of the Company or received or retained any funds
in violation of any law, rule or regulation, which payment, receipt or retention
of funds is of a character required to be disclosed in the Prospectus.
(t) The Company and the Subsidiaries have filed all federal, state, local
and foreign tax returns and tax forms required to be filed; such returns and
forms are complete and correct in all material respects; and all taxes shown by
such returns or otherwise assessed that are due or payable have been paid,
except such taxes as are being contested in good faith and as to which adequate
reserves have been provided. All payroll withholdings required to be made by
the Company with respect to employees have been made. The charges, accruals and
reserves on the books of the Company and the Subsidiaries in respect of any tax
liability for any year not finally determined are adequate to meet any
assessments or reassessments for additional taxes; and there have been no tax
deficiencies asserted and, to the best knowledge of the Company, no tax
deficiency might be reasonably asserted or threatened against the Company or any
of the Subsidiaries that could, singularly or in the aggregate, have a Material
Adverse Effect.
(u) No holder of any security of the Company has any right (other than
rights validly waived) to require registration of shares of Common Stock or any
other security of the Company because of the filing of the registration
statement or the consummation of the transactions contemplated by this Agreement
and, except as disclosed in the Prospectus, no person has the
12
right to require registration under the Act of any shares of Common Stock or
other securities of the Company. No person has the right, contractual or
otherwise, to cause the Company to permit such person to underwrite the sale of
any of the Shares. Except as described in or contemplated by the Prospectus,
there are no outstanding options, warrants or other rights calling for the
issuance of, and there are no commitments, plans or arrangements to issue, any
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company or any of the
Subsidiaries.
(v) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by any of them or necessary for the
conduct of their respective businesses, and the Company is not infringing upon
the rights of any other person with respect to the foregoing.
(w) The Company has filed in a timely manner with the Commission each
document required to be filed by it pursuant to the Exchange Act, each such
document at the time it was filed conformed in all material respects to the
requirements of the Exchange Act and none of such documents 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.
(x) The Company is not, and, upon the sale of the Shares to be issued and
sold by it hereunder and application of the net proceeds from such sale as
described in the Prospectus under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
(y) The Company and each of the Subsidiaries is in compliance with all
provisions of Florida Statutes Sec.517.075 and the regulations thereunder,
relating to issuers doing business with Cuba.
(z) Neither the execution, delivery or performance of the Asset Purchase
Agreement by and among the Company, UHS of Pennsylvania, Inc., UHS of Delaware,
Inc., Wellington Regional Medical Center, Inc., First Hospital Corporation, FHC
Management Services, Inc., Health Services Management, Inc., Horsham Clinic,
Inc., Centre Valley Management, Inc., Clarion FHC, Inc., Westcare, Inc. and
First Hospital Corporation of Florida dated April 19, 1996 (the "First Hospital
Acquisition Agreement") by the Company nor the consummation by the Company of
the transactions contemplated thereby (i) requires or required any consent,
approval, authorization or other order of, or registration with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as have been obtained by the Company or the Subsidiaries
in a timely fashion) or conflicted, conflicts or will conflict with or
constituted, constitutes or will constitute a breach of, or a default under the
certificate or articles of incorporation or bylaws or other organizational
documents of the Company or any of the Subsidiaries or (ii) conflicted,
conflicts or will conflict with or constituted, constitutes or will constitute a
breach of, or a default under, any agreement, indenture, lease or other
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound, or
violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to the Company or any of the Subsidiaries
or any of their respective properties, or will result in the creation or
imposition of any lien, charge or incumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant
13
to the terms of any agreement or instrument to which any of them is a party or
by which any of them may be bound or to which any of the property or assets of
any of them is subject.
8. Representations and Warranties of the Selling Stockholder. The Selling
Stockholder represents and warrants to each Underwriter that:
(a) Such Selling Stockholder now has, and on the Closing Date and any
Option Closing Date will have, valid and marketable title to the Shares to be
sold by such Selling Stockholder, free and clear of any lien, claim, security
interest or other encumbrance, including, without limitation, any restriction on
transfer or other defect in title.
(b) Such Selling Stockholder now has, and on the Closing Date will have,
full legal right, power and authorization, and any approval required by law
(except such as may be required under the Act or state securities or Blue Sky
laws governing the purchase and distribution of the Shares), to sell, assign,
transfer and deliver such Selling Stockholder's Shares in the manner provided in
this Agreement, and upon delivery of and payment for such Shares hereunder, the
several Underwriters will acquire valid and marketable title to such Shares,
free and clear of any lien, claim, security interest, or other encumbrance or
restriction on transfer or other defect in title.
(c) This Agreement and the Custody Agreement have been duly authorized,
and the Custody Agreement has been, and this Agreement, when executed and
delivered on behalf of such Selling Stockholder in accordance with the Custody
Agreement, has been duly executed and delivered by or on behalf of such Selling
Stockholder and are the valid and binding agreements of such Selling Stockholder
enforceable against such Selling Stockholder in accordance with their respective
terms, except as rights to indemnity and contribution hereunder may be limited
by federal or state securities laws or principles of public policy and except as
enforcement hereof and thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable principles.
(d) Neither the execution and delivery of this Agreement or the Custody
Agreement by or on behalf of such Selling Stockholder nor the consummation of
the transactions herein or therein contemplated by or on behalf of such Selling
Stockholder requires any consent, approval, authorization or order of, or filing
or registration with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required under the
Act or state securities or Blue Sky laws governing the purchase and distribution
of the Shares) or conflicts or will conflict with or constitutes or will
constitute a breach of, or default under, or violates or will violate, any
agreement, indenture or other instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder is or may be bound or to which any of
such Selling Stockholder's property or assets is subject, or any statute, law,
rule, regulation, ruling, judgement, injunction, order or decree applicable to
such Selling Stockholder or to any property or assets of such Selling
Stockholder, except in each case as would not adversely affect the ability of
such Selling Stockholder to consummate the transactions contemplated by this
Agreement.
(e) Such Selling Stockholder has reviewed the Registration Statement and
the Prospectus. The Registration Statement does not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and the
Prospectus does not contain an untrue statement of a material fact
14
or omit to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) The representations and warranties of such Selling Stockholder in
the Custody Agreement are, and on the Closing Date will be, true and correct.
(g) Such Selling Stockholder has not taken, 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 Common Stock to facilitate the
sale or resale of the Shares, except for the lock-up arrangements described in
the Prospectus.
9. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each of you and each other Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made therein or
omitted therefrom in reliance upon and in conformity with the information
relating to such Underwriter furnished in writing to the Company by or on behalf
of any Underwriter through you expressly for use in connection therewith;
provided, however, that the indemnification contained in this paragraph (a) with
respect to any Prepricing Prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) on
account of any such loss, claim, damage, liability or expense arising from the
sale of Shares by such Underwriter to any person if (i) a copy of the Prospectus
shall not have been delivered or sent to such person within the time required by
the Act and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus and (ii) the Company has delivered the Prospectus to
the several Underwriters in requisite quantity on a timely basis to permit such
delivery or sending. The foregoing indemnity agreement shall be in addition to
any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses,
(ii) the Company has failed to assume the defense and employ counsel or
(iii) the named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling person and
the Company and such Underwriter or such controlling person shall have been
advised by its counsel that representation of such indemnified party and the
Company by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been
15
proposed) due to actual or potential differing interests between them (in which
case the Company shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such Underwriter or such controlling person).
It is understood, however, that the Company shall, in connection with any one
such action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by Smith Barney Inc., and that all
such fees and expenses shall be reimbursed as they are incurred. The Company
shall not be liable for any settlement of any such action, suit or proceeding
effected without its written consent, but if settled with such written consent,
or if there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any Underwriter
and any such controlling person, to the extent provided in the preceding
paragraph, from and against any loss, claim, damage, liability or expense by
reason of such settlement or judgment.
(c) The Selling Stockholder 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 Act or Section 20 of the Exchange Act to the same
extent as the indemnity from the Company to each Underwriter set forth in
paragraph (a) above, but subject to the provisions of paragraph (g) below. In
case any action or claim shall be brought or asserted against any Underwriter or
any such controlling person in respect of which indemnity may be sought against
the Selling Stockholder pursuant to this paragraph (c) such Selling Stockholder
shall have the rights and duties given to the Company, and each Underwriter and
any such controlling person shall have the rights and duties given to the
Underwriters, under paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Selling Stockholder may
otherwise have.
(d) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, any person who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and the Selling Stockholder, to the
same extent as the foregoing indemnity from the Company to each Underwriter, but
only with respect to information relating to such Underwriter furnished in
writing to the Company by or on behalf of such Underwriter through you expressly
for use in the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its directors, any such
officer, any such controlling person or the Selling Stockholder based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (d), such Underwriter shall
have the rights and duties given to the Company by paragraph (b) above (except
that if the Company shall have assumed the defense thereof such Underwriter
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at such Underwriter's expense), and the Company, its directors, any
such officer, any such controlling person and the Selling Stockholder shall have
the rights and duties given to the Underwriters by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability which the
Underwriters may otherwise have.
16
(e) If the indemnification provided for in this Section 9 is unavailable
to an indemnified party under paragraphs (a), (c) or (d) hereof in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
an indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Sellers on
the one hand and the Underwriters on the other hand from the offering of the
Shares, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Sellers on the one hand and the Underwriters on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Sellers on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Sellers bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault of the Sellers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Sellers on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(f) The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (e) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (e) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several in proportion to the
respective numbers of Firm Shares set forth opposite their names in Schedule I
hereto (or such numbers of Firm Shares increased as set forth in Section 12
hereof) and not joint.
(g) Notwithstanding any other provision of this Section 9, the total
liability of the Selling Stockholder for indemnification or contribution under
this Section 9 shall not exceed an amount equal to the number of Shares sold by
such Selling Stockholder hereunder multiplied by the purchase price per share
set forth in Section 2 hereof.
(h) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of
17
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such action, suit or proceeding.
(i) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Sellers set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company or the Selling Stockholder, (ii) acceptance of any
Shares and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company or the Selling Stockholder shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 9.
10. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase the Firm Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
or an Abbreviated Registration Statement to be declared effective before the
offering of the Shares may commence, the registration statement or such
post-effective amendment or Abbreviated Registration Statement shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made.
(b) Subsequent to the effective date of this Agreement, there shall not
have occurred (i) any change, or any development involving a prospective change,
in or affecting the condition (financial or other), business, prospects,
properties, net worth, or results of operations of the Company and the
Subsidiaries not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially, adversely affect
the market for the Shares, or (ii) any event or development relating to or
involving the Company and the Subsidiaries, or any officer or director of the
Company or any of the Subsidiaries, which makes any statement made in the
Prospectus untrue or which, in the opinion of the Company and its counsel or the
Underwriters and their counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the Act or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectus to reflect
such event or development would, in your opinion, as Representatives of the
several Underwriters, materially, adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of Fulbright
& Jaworski L.L.P., counsel for the Company, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, that:
(i) The Company is a corporation duly incorporated and validly existing
in good standing under the laws of the State of Delaware with full corporate
power and authority to
18
own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and any amendment
or supplement thereto), and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify would not have a Material Adverse Effect;
(ii) The authorized capital stock of the Company is as set forth in the
Registration Statement and the Prospectus; and all the shares of capital
stock of the Company outstanding prior to the issuance of the Shares have
been duly authorized and validly issued, fully paid and nonassessable and
free of statutory and contractual preemptive rights;
(iii) The Shares to be issued and sold by the Company have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and free of (A) any preemptive rights arising under
the Company's certificate of incorporation or the Delaware General
Corporation Law or (B) to the knowledge of such counsel, similar rights that
entitle or will entitle any person to acquire any shares of capital stock of
the Company upon the issuance and sale of the Shares by the Company;
(iv) The form of certificate for the Shares conforms to the requirements
of the Delaware General Corporation Law;
(v) The Registration Statement and all post-effective amendments, if
any, have become effective under the Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending
before or contemplated by the Commission; and any required filing of the
Prospectus pursuant to Rule 424(b) has been made in accordance with Rule
424(b);
(vi) The Company has the corporate power and authority to enter into this
Agreement and to issue, sell and deliver to the Underwriters the Shares to be
issued and sold by the Company as provided herein, and this Agreement has
been duly authorized, executed and delivered by the Company and is a valid,
legal and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as enforcement of rights to indemnity
and contribution hereunder may be limited by federal or state securities laws
or principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by
general equitable principles;
(vii) To the knowledge of such counsel, neither the Company nor any of the
Subsidiaries is in violation of its certificate of incorporation or bylaws,
or other organizational documents, or in default in the performance of any
material obligation, agreement or condition contained in any bond, debenture,
note or other evidence of indebtedness made an exhibit to the Registration
Statement or known to such counsel;
(viii) Neither the offer, sale or delivery of the Shares, the execution,
delivery or performance of this Agreement, compliance by the Company with the
provisions hereof nor
19
consummation by the Company of the transactions contemplated hereby conflicts
or will conflict with or constitutes or will constitute a breach of, or a
default under, the certificate of incorporation or bylaws, or other
organizational documents, of the Company or any of the Subsidiaries or any
agreement, indenture, lease or other instrument to which the Company or any
of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or any of their respective properties is bound that is an
exhibit to the Registration Statement, or is known to such counsel after
reasonable inquiry, or to the knowledge of such counsel will result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of the Subsidiaries, nor will any such action
result in any violation of any existing law, regulation, ruling (assuming
compliance with all applicable state securities and Blue Sky laws), judgment,
injunction, order or decree known to such counsel and applicable to the
Company or any of the Subsidiaries or any of their respective properties;
(ix) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the
part of the Company or any of the Subsidiaries (except as have been obtained
under the Act and the Exchange Act or such as may be required under state
securities or Blue Sky laws governing the purchase and distribution of the
Shares) for the valid issuance and sale of the Shares to the Underwriters as
contemplated by this Agreement;
(x) The Registration Statement and the Prospectus and any supplements or
amendments thereto (except for the financial statements and the notes thereto
and the schedules and other financial and statistical data included therein,
as to which such counsel need not express any opinion) comply as to form in
all material respects with the requirements of the Act;
(xi) To the knowledge of such counsel, (A) there are no legal or
governmental proceedings pending or threatened against the Company or any of
the Subsidiaries, or to which the Company or any of the Subsidiaries or any
of their respective properties is subject, which are required to be described
in the Registration Statement or Prospectus (or any amendment or supplement
thereto) that are not described as required and (B) there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (or any amendment
or supplement thereto) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required, as the case may be;
(xii) The statements in the Registration Statement and Prospectus, insofar
as they are descriptions of contracts, agreements or other legal documents,
or refer to statements of law or legal conclusions, are accurate in all
material respects and present fairly the information required to be shown;
(xiii) The Company is not an "investment company" or a person "controlled"
by an "investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(xiv) Neither the execution, delivery or performance of the First Hospital
Acquisition Agreement, compliance by the Company with the provisions thereof
nor consummation by the Company of the transactions contemplated thereby
conflicted, conflicts or will conflict
20
with or constituted, constitutes or will constitute a breach of, or a default
under, the certificates of incorporation or bylaws or other organizational
documents of the Company or any of the Subsidiaries or any agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
properties is bound that is an exhibit to the Registration Statement or is
known to such counsel after reasonable inquiry (except where appropriate
waivers or consents thereto have heretofore been obtained by the Company), or
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries, nor
will any such action result in any violation of any existing law, regulation,
ruling, judgment, injunction, order or decree known to such counsel after
reasonable inquiry, applicable to the Company or any of the Subsidiaries or
any of their respective properties; and
(xv) The Incorporated Documents (except for the financial statements and
the notes thereto and the schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion)
appear on their face to comply as to form in all material respects with the
Exchange Act.
In addition, such counsel shall state that although such counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Registration Statement, such
counsel has participated in the preparation of the Registration Statement and
the Prospectus, including review and discussion of the contents thereof, and
nothing has come to the attention of such counsel that has caused it to believe
that the Registration Statement, at the time the Registration Statement 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 state-
ments therein not misleading, or that the Prospectus, as of its date and as of
the Closing Date or any Option Closing Date, as the case may be, contained an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that any amendment
or supplement to the Prospectus, as of its date, and as of the Closing Date or
any Option Closing Date, as the case may be, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no opinion with respect to the financial statements and the
notes thereto and the schedules and other financial and statistical data
included in the Registration Statement or the Prospectus).
In rendering their opinion as aforesaid, counsel may rely upon an opinion
or opinions, each dated the Closing Date, of other counsel retained by them or
the Company as to laws of any jurisdiction other than the United States or the
State of New York or the corporation law of the State of Delaware, provided that
(1) each such local counsel is acceptable to the Representatives, (2) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to the Representatives and is, in form and
substance, satisfactory to them and counsel for the Underwriters and (3) counsel
shall state in their opinion that they believe that they and the Underwriters
are justified in relying thereon.
21
(d) You shall have received on the Closing Date an opinion of Bruce R.
Gilbert, Esq., General Counsel for the Company, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, that:
(i) Each of the Company and each of the Subsidiaries are duly qualified
or licensed by each jurisdiction in which they conduct their respective
businesses and in which the failure, individually or in the aggregate, to be
so licensed or qualified could have a Material Adverse Effect, and the
Company and its Subsidiaries are duly qualified, and are in good standing, in
each jurisdiction in which they own or lease real property or maintain an
office and in which such qualification is necessary;
(ii) Each Subsidiary is a corporation duly incorporated and validly
existing and in good standing under the laws of the jurisdiction of its
organization, with full corporate or partnership power and authority to own,
lease and operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto); and all the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned of record by the Company directly, or
indirectly through one of the other Subsidiaries, free and clear of any
perfected security interest or, to such counsel's knowledge, any other lien,
adverse claim, equity or other encumbrance, except as disclosed in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto);
(iii) To the best of such counsel's knowledge, none of the Subsidiaries is
in violation of its certificate or articles of incorporation or bylaws, or
partnership agreement, or is in breach of, or in default under (nor has any
event occurred which with notice, lapse of time, or both, would constitute a
breach of, or default under), any license, indenture, mortgage, deed of
trust, bank loan or credit agreement or any other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which any of
them or their respective properties may be bound or affected or under any
law, regulation or rule or any decree, judgment or order applicable to the
Company or its Subsidiaries;
(iv) To the knowledge of such counsel, neither the Company nor any of the
Subsidiaries is in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any such
Subsidiary the violation of which would have a Material Adverse Effect, or of
any decree of any court or governmental agency or body having jurisdiction
over the Company or any of the Subsidiaries;
(v) The Company and each of the Subsidiaries have full corporate power
and authority and such Permits as are necessary to own, lease and operate
their respective properties and to conduct their respective businesses as are
now being conducted as described in the Registration Statement or the
Prospectus (or any amendment or supplement thereto), including such Permits
as are required (x) under such federal and state health care laws as are
applicable to the Company and the Subsidiaries and their respective
businesses and (y) under such HMO or similar licensure laws and such
insurance laws and regulations as are applicable to the Company and the
Subsidiaries, except where the failure to have such Permits would not have a
Material Adverse Effect;
(vi) To the knowledge of such counsel, neither the Company nor any of the
Subsidiaries is in violation of any healthcare law, ordinance, administrative
or governmental
22
rule or regulation applicable to them, respectively, or of any decree of any
court or governmental agency or body having jurisdiction over them relating
thereto, respectively, except where any such violation would not have a
Material Adverse Effect; and, in the course of such counsel's representation
of the Company or any Subsidiary, nothing has come to such counsel's
attention to cause it to believe that the Company or any Subsidiary is in
violation of any other law, ordinance, administrative or governmental rule or
regulation applicable to it or of any decree of any court or governmental
agency or body having jurisdiction over it, except where any such violation
would not have a Material Adverse Effect; and
(vii) Except as described in the Prospectus, such counsel does not know of
any holder of any securities of the Company or any of the Subsidiaries or any
other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them to underwrite
the sale of, any of the Shares or the right to have any Common Stock or other
securities of the Company included in the Registration Statement or the
right, as a result of the filing of the Registration Statement, to require
the Company to register under the Act any shares of Common Stock or other
securities of the Company, and any registration rights in connection with the
offering contemplated hereby have been validly waived.
(e) You shall have received on the Closing Date an opinion of Dewey
Ballantine, counsel for the Underwriters, dated the Closing Date and addressed
to you, as Representatives of the several Underwriters, with respect to the
matters referred to in clauses (iii) (other than subclause (B) thereof), (v),
(vi), (x) and the penultimate paragraph of Section 10(c) hereof and such other
related matters as you may request.
(f) You shall have received on the Closing Date an opinion of [Fulbright
& Jaworski L.L.P.], counsel to the Selling Stockholder, dated the Closing Date
and addressed to you, as Representatives of the several Underwriters, to the
effect that:
(i) This Agreement and the Custody Agreement have each been duly
executed and delivered by or on behalf the Selling Stockholder;
(ii) To the knowledge of such counsel, the Selling Stockholder has full
legal right, power and authorization, and any approval required by law, to
sell, assign, transfer and deliver good and marketable title to the Shares
which such Selling Stockholder has agreed to sell pursuant to this Agreement;
upon delivery of such Shares pursuant to this Agreement and payment therefor
as contemplated herein and assuming that the several Underwriters purchased
such Shares in good faith and without notice of an adverse claim within the
meaning of the Uniform Commercial Code (the "UCC"), the Underwriters will
acquire such Shares free and clear of any adverse claim (within the meaning
of Section 8-302 of the UCC); and
(iii) To the knowledge of such counsel, the execution and delivery of this
Agreement and the Custody Agreement by or on behalf of the Selling
Stockholder and the consummation of the transactions contemplated hereby and
thereby will not conflict with, violate, result in a breach of or constitute
a default under the terms or provisions of any agreement, indenture or other
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder or the assets or property of the Selling Stockholder is
bound,
23
or any court order or decree or any law, rule, or regulation applicable to
the Selling Stockholder or to the property or assets of the Selling
Stockholder.
In rendering their opinion as aforesaid, such counsel may rely as to
factual matters (i) upon certificates of the Selling Stockholder and (ii) the
representations of the Selling Stockholder contained herein and in the Custody
Agreement.
(g) You shall have received letters addressed to you and dated the date
hereof and the Closing Date from Arthur Andersen LLP, Ernst & Young LLP,
Clifton, Gunderson & Co. and KPMG Peat Marwick LLP, independent certified public
accountants, substantially in the forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company, contemplated by the
Commission at or prior to the Closing Date and any request of the Commission for
additional information (to be included in the registration statement or the
prospectus or otherwise) shall have been complied with; (ii) there shall not
have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company from that set forth
or contemplated in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); (iii) there shall not have been, since the
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectus (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company; (iv) the Company shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Company, other than those reflected in or
contemplated by the Registration Statement or the Prospectus (or any amendment
or supplement thereto); and (v) all the representations and warranties of the
Company contained in this Agreement shall be true and correct in all material
respects on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and you shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you), as to the matters set forth in this Section 10(g) and in Section 10(h)
hereof.
(i) The Company shall not have failed at or prior to the Closing Date to
have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(j) All the representations and warranties of the Selling Stockholder
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by or on behalf of the Selling Stockholder to the effect set forth in
this Section 10(i) and in Section 10(j) hereof.
(k) The Selling Stockholder shall not have failed at or prior to the
Closing Date to have performed or complied with any of their agreements herein
contained and required to be performed or complied with by such Selling
Stockholder hereunder at or prior to the Closing Date.
24
(l) The Shares shall have been listed or approved for listing subject to
notice of issuance on the New York Stock Exchange.
(m) The Company shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you, as Representatives of the Underwriters, and counsel for the
Underwriters.
Any certificate or document signed by any officer of the Company and
delivered to you, as Representatives of the several Underwriters, or to counsel
for the Underwriters, shall be deemed a representation or warranty by the
Company to each Underwriter as to the statements made therein.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of any Option Closing Date
of the conditions set forth in this Section 10, except that, if any Option
Closing Date is other than the Closing Date, the certificates, opinions and
letters referred to in paragraphs (c) through (g) and paragraph (j) shall be
dated the Option Closing Date in question and the opinions called for by
paragraphs (c), (d) and (e) shall be revised to reflect the sale of Additional
Shares.
11. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the registration statement, each
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the offering of the Shares; (iv) the printing (or
reproduction) and delivery of this Agreement, the preliminary and supplemental
Blue Sky Memoranda and all other agreements or documents printed (or reproduced)
and delivered in connection with the offering of the Shares; (v) the listing of
the Shares on the New York Stock Exchange; (vi) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states as provided in Section 5(g) hereof (including the
reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of the
preliminary and supplemental Blue Sky Memoranda and such registration and
qualification); (vii) the filing fees and the reasonable fees and expenses of
counsel for the Underwriters in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. in connection with the
offering; (viii) the transportation and other expenses incurred by or on behalf
of representatives of the Company in connection with presentations to
prospective purchasers of the Shares; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; and (x) the performance by the Company of its
other obligations under this Agreement.
25
12. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto or an Abbreviated
Registration Statement to be declared or became effective before the offering of
the Shares may commence, when notification of the effectiveness of the
registration statement or such post-effective amendment has been released by the
Commission or such Abbreviated Registration Statement has, pursuant to the
provisions of Rule 462 under the Act, become effective. Until such time as this
Agreement shall have become effective, it may be terminated by the Company, by
notifying you, or by you, as Representatives of the several Underwriters, by
notifying the Company.
If any one or more of the Underwriters shall fail or refuse to purchase
Shares which it or they have agreed to purchase hereunder, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of Shares which the Underwriters are obligated to purchase on the Closing Date,
each non-defaulting Underwriter shall be obligated, severally, in the proportion
which the number of Firm Shares set forth opposite its name in Schedule I hereto
bears to the aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Smith
Barney, Harris Upham & Co. Incorporated (predecessor of Smith Barney Inc.), to
purchase the Shares which such defaulting Underwriter or Underwriters agreed,
but failed or refused, to purchase. If any Underwriter or Underwriters shall
fail or refuse to purchase Shares which it or they are obligated to purchase on
the Closing Date and the aggregate number of Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Shares which
the Underwriters are obligated to purchase on the Closing Date and arrangements
satisfactory to you and the Company for the purchase of such Shares by one or
more non-defaulting Underwriters or other party or parties approved by you and
the Company are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any such default of any such Underwriter under this Agreement. The
term "Underwriter" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule I hereto who, with your approval and
the approval of the Company, purchases Shares which a defaulting Underwriter
agreed, but failed or refused, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company, by notice to the Company and the Attorneys-in-Fact,
if prior to the Closing Date or any Option Closing Date (if different from the
Closing Date and then only as to the Additional Shares), as the case may be,
(i) trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York shall have been declared by
26
either federal or state authorities, or (iii) there shall have occurred any
outbreak or escalation of hostilities or other international or domestic
calamity, crisis or change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to make
it, in your judgment, impracticable or inadvisable to commence or continue the
offering of the Shares at the offering price to the public set forth on the
cover page of the Prospectus or to enforce contracts for the resale of the
Shares by the Underwriters. Notice of such termination may be given by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page, the stabilization legend on the inside
front cover page and the statements in the first and third paragraphs under the
caption "Underwriting" in any Prepricing Prospectus and in the Prospectus
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at 367 South Gulph Road, King of Prussia, Pennsylvania 19406, Attention:
Alan B. Miller, Chairman of the Board, President and Chief Executive Officer,
with a copy to Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New York
10103, Attention: Anthony Pantaleoni, Esq.; or (ii) if to you, as
Representatives of the several Underwriters, care of Smith Barney Inc., 388
Greenwich Street, New York, New York 10013, Attention: Manager, Investment
Banking Division, with a copy to Dewey Ballantine, 1301 Avenue of the Americas,
New York, New York 10019, Attention: Frederick W. Kanner, Esq.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company, its directors, its officers who sign the Registration
Statement and the controlling persons referred to in Section 9 hereof and, to
the extent provided herein, their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any Underwriter of any
of the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
27
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
UNIVERSAL HEALTH SERVICES, INC.
By:
-----------------------------------------
ALLAN B. MILLER
By:
-----------------------------------------
Attorney-in-Fact
SMITH BARNEY INC.
BEAR STEARNS & CO. INC.
DILLON, READ & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
J.P. MORGAN & CO.
As Representatives of the Several Underwriters
By: SMITH BARNEY INC.
By:
------------------
Managing Director
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.
28
SCHEDULE I
UNIVERSAL HEALTH SERVICES, INC.
Number of
Underwriter Firm Shares
- ----------- -----------
Smith Barney Inc. . . . . . . . . . . . . . . .
Bear Stearns & Co. Inc. . . . . . . . . . . . .
Dillon, Read & Co. Inc. . . . . . . . . . . . .
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . .
J.P. Morgan & Co. . . . . . . . . . . . . . . .
__________
Total . . .
4,400,000
===========
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus
of Universal Health Services, Inc. for the registration of 4,400,000 shares of
Universal Health Services, Inc.'s Class B common stock, and to the incorporation
by reference therein of our report dated October 24, 1994, with respect to the
combined financial statements of Manatee Hospitals and Health Systems, Inc.
included in Universal Health Services, Inc.'s Registration Statement (Form S-3,
Registration No. 33-60287) filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Tampa, Florida
May 30, 1996
