AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 20, 2002
REGISTRATION NO. 333-83450
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------------
CROSS COUNTRY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 7363 13-4066229
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
6551 PARK OF COMMERCE BLVD, N.W.
SUITE 200
BOCA RATON, FL 33487
(561) 998-2232
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
JOSEPH A. BOSHART
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CROSS COUNTRY, INC.
6551 PARK OF COMMERCE BLVD, N.W.
SUITE 200
BOCA RATON, FL 33487
(561) 998-2232
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES OF COMMUNICATIONS TO:
STEPHEN W. RUBIN, ESQ. MICHAEL W. BLAIR, ESQ.
PROSKAUER ROSE LLP STEVEN J. SLUTZKY, ESQ.
1585 BROADWAY DEBEVOISE & PLIMPTON
NEW YORK, NEW YORK 10036-8299 919 THIRD AVENUE
(212) 969-3000 NEW YORK, NEW YORK 10022
(212) 909-6000
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of this registration statement.
------------------------------
If any securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The following exhibits are filed herewith unless otherwise indicated
NO. DESCRIPTION
- --------------------- ------------------------------------------------------------
1.1 Form of Underwriting Agreement
2.1 Cross Country Staffing Asset Purchase Agreement, dated
June 24, 1999, by and among W. R. Grace & Co.--Conn., a
Connecticut corporation, Cross Country Staffing, a Delaware
general partnership, and the Registrant, a Delaware
corporation (incorporated by reference to Exhibit 2.1 of the
Company's registration statement on Form S-1, dated
July 11, 2001)
2.2 Agreement and Plan of Merger, dated as of October 29, 1999,
by and among the Registrant, CCTC Acquisition, Inc. and
Certain Stockholders of Cross Country Staffing, Inc and
TravCorps Corporation and the Stockholders of TravCorps
Corporation (incorporated by reference to Exhibit 2.2 of the
Company's registration statement on Form S-1, dated
July 11, 2001)
2.3 Stock Purchase Agreement, dated as of December 15, 2000, by
and between Edgewater Technology, Inc. and the Registrant
(incorporated by reference to Exhibit 2.3 of the Company's
registration statement on Form S-1, dated July 11, 2001)
3.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to Exhibit 3.1 of the
Company's registration statement on Form S-1, dated
July 11, 2001)
3.2 Amended and Restated By-laws of the Registrant (incorporated
by reference to Exhibit 3.2 of the Company's registration
statement on Form S-1, dated July 11, 2001)
4.1 Form of specimen common stock certificate (incorporated by
reference to Exhibit 4.1 of the Company's registration
statement on Form S-1, dated October 22, 2001)
4.2 Amended and Restated Stockholders Agreement, dated
August 23, 2001, among the Registrant, a Delaware
corporation, the CEP Investors and the Investors
(incorporated by reference to Exhibit 4.2 of the Company's
registration statement on Form S-1, dated July 11, 2001)
4.3 Registration Rights Agreement, dated as of October 29, 1999,
among the Registrant, a Delaware corporation, and the CEP
Investors and the MSDWCP Investors (incorporated by
reference to Exhibit 4.3 of the Company's registration
statement on Form S-1, dated July 11, 2001)
4.4 Amendment to the Registration Rights Agreement, dated as of
August 23, 2001, among the Registrant, a Delaware
corporation, and the CEP Investors and the MSDWCP Investors
(incorporated by reference to Exhibit 4.4 of the Company's
registration statement on Form S-1, dated July 11, 2001)
4.5 Stockholders Agreement, dated as of August 23, 2001, among
the Registrant, Joseph Boshart and Emil Hensel and the
Financial Investors (incorporated by reference to Exhibit
4.5 of the Company's registration statement on Form S-1,
dated July 11, 2001)
II-1
NO. DESCRIPTION
- --------------------- ------------------------------------------------------------
5.1+ Opinion of Proskauer Rose LLP as to the legality of the
common stock being registered
10.1 Employment Agreement, dated as of June 24, 1999, between
Joseph Boshart and the Registrant (incorporated by reference
to Exhibit 10.1 of the Company's registration statement on
Form S-1, dated July 11, 2001)
10.2 Employment Agreement, dated as of June 24, 1999, between
Emil Hensel and the Registrant (incorporated by reference to
Exhibit 10.2 of the Company's registration statement on
Form S-1, dated July 11, 2001)
10.3 Employment Agreement termination, dated as of December 21,
2000, between Bruce Cerullo and the Registrant (incorporated
by reference to Exhibit 10.3 of the Company's registration
statement on Form S-1, dated July 11, 2001)
10.4 Lease Agreement, dated April 28, 1997, between Meridian
Properties and the Registrant (incorporated by reference to
Exhibit 10.4 of the Company's registration statement on
Form S-1, dated July 11, 2001)
10.5 Lease Agreement, dated October 31, 2000, by and between
Trustees of the Goldberg Brothers Trust, a Massachusetts
Nominee Trust and TVCM, Inc. (incorporated by reference to
Exhibit 10.5 of the Company's registration statement on
Form S-1, dated July 11, 2001)
10.6 222 Building Standard Office Lease between Clayton Investors
Associates, LLC and Cejka & Company (incorporated by
reference to Exhibit 10.6 of the Company's registration
statement on Form S-1, dated July 11, 2001)
10.7+ Amended and Restated 1999 Stock Option Plan of the
Registrant
10.8+ Amended and Restated Equity Participation Plan of the
Registrant
10.9+ Third Amended and Restated Credit Agreement, dated as of
February 11, 2002, among the Registrant, the Lenders Party
thereto, Salomon Smith Barney, Inc., as Arranger, Citicorp
USA, Inc. as Administrative Agent, Collateral Agent, Issuing
Bank and Swingline Lender, Bankers Trust Company, as
Syndication Agent, and Wachovia Bank, N.A., as Documentation
Agent
10.10 Waiver and Amendment No. 1 dated as of May 3, 2001, to the
Credit Agreement dated as of July 29, 1999, as amended and
restated as of December 16, 1999 and March 16, 2001 by and
among the Registrant, the Lenders Party thereto, Salomon
Smith Barney, Inc., as Arranger, Citicorp USA, Inc. as
Administrative Agent, Collateral Agent, Issuing Bank and
Swingline Lender, Bankers Trust Company, as Syndication
Agent, and Wachovia Bank, N.A., as Documentation Agent
(incorporated by reference to Exhibit 10.10 of the Company's
registration statement on Form S-1, dated July 11, 2001)
10.11 Form of Subsidiary Guarantee Agreement, dated as of
December 16, 1999, among the Registrant's subsidiary
guarantors and Citicorp USA, Inc., as collateral agent for
the Obligees (incorporated by reference to Exhibit 10.11 of
the Company's registration statement on Form S-1, dated
July 11, 2001)
10.12 Form of Security Agreement, dated as of July 29, 1999, as
amended and restated as of December 16, 1999 among the
Registrant and Citicorp USA, Inc. as collateral agent for
the Obligees (incorporated by reference to Exhibit 10.12 of
the Company's registration statement on Form S-1, dated
July 11, 2001)
II-2
NO. DESCRIPTION
- --------------------- ------------------------------------------------------------
10.13 Form of Pledge Agreement, dated as of July 29, 1999, as
amended and restated as of December 16, 1999, among the
Registrant and Citicorp USA, Inc., as collateral agent for
the Obligees (incorporated by reference to Exhibit 10.13 of
the Company's registration statement on Form S-1, dated
July 11, 2001)
10.14 Form of Indemnity, Subrogation and Contribution Agreement,
dated as of December 16, 1999, among the Registrant, the
subsidiaries of the Registrant and Citicorp USA, Inc., as
collateral agent for the Obligees (incorporated by reference
to Exhibit 10.14 of the Company's registration statement on
Form S-1, dated July 11, 2001)
21.1** List of subsidiaries of the Registrant
24.1+ Power of Attorney (included on signature page of the
Registration Statement)
- ------------------------
** Previously filed and filed in revised form
+ Previously filed
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Boca Raton, Florida, on the 20th
day of March, 2002.
CROSS COUNTRY, INC.
By: /s/ JOSEPH A. BOSHART
-----------------------------------------
Joseph A. Boshart
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Each person whose signature appears below hereby constitutes and appoints
Joseph A. Boshart and Emil Hensel, his true and lawful attorneys-in-fact and
agents with full power of substitution and resubstitution, for him and in his
name, place, and stead, in any and all capacities, to sign any and all
(1) amendments (including post-effective amendments) and additions to this
Registration Statement and (2) Registration Statements, and any and all
amendments thereto (including post-effective amendments), relating to the
offering contemplated pursuant to Rule 462(b) under the Securities Act of 1933,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, and hereby
grants to such attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents or
his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons, as of the
20th day of March, 2002, in the capacities indicated.
SIGNATURE TITLE
--------- -----
* President, Chief Executive Officer and
------------------------------------------- Director
Joseph A. Boshart (Principal Executive Officer)
* Chief Financial Officer and Director
------------------------------------------- (Principal Financial Officer and Principal
Emil Hensel Accounting Officer)
*
------------------------------------------- Director
Karen H. Bechtel
*
------------------------------------------- Director
W. Larry Cash
*
------------------------------------------- Director
Bruce A. Cerullo
*
------------------------------------------- Director
Thomas C. Dircks
II-4
SIGNATURE TITLE
--------- -----
*
------------------------------------------- Director
A. Lawrence Fagan
*
------------------------------------------- Director
M. Fazle Husain
*
------------------------------------------- Director
Joseph Swedish
*
------------------------------------------- Director
Joseph Trunfio
By: /s/ JOSEPH A. BOSHART
--------------------------------------
Joseph A. Boshart
Attorney-in-fact
II-5
EXHIBIT 1.1
Draft - March 15, 2002
================================================================================
CROSS COUNTRY, INC.
(a Delaware corporation)
9,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: March [20], 2002
================================================================================
TABLE OF CONTENTS
PAGE
Section 1. Representations and Warranties.............................2
(a) Representations and Warranties by the Company..............2
(b) Representations and Warranties by each of the Selling
Shareholders..............................................12
(c) Officer's Certificates....................................15
Section 2. Sale and Delivery to Underwriters; Closing................16
(a) Initial Securities........................................16
(b) Option Securities.........................................16
(c) Payment...................................................16
(d) Denominations; Registration...............................17
Section 3. Covenants of the Company..................................17
(a) Compliance with Securities Regulations and Commission
Requests..................................................17
(b) Filing of Amendments......................................18
(c) Delivery of Registration Statements.......................18
(d) Delivery of Prospectus....................................19
(e) Continued Compliance with Securities Laws.................19
(f) Blue Sky Qualifications...................................19
(g) Rule 158..................................................20
(h) Listing...................................................20
(i) Restriction on Sale of Securities.........................20
(j) Reporting Requirements....................................20
Section 4. Payment of Expenses.......................................21
(a) Expenses..................................................21
(b) Expenses of the Selling Shareholders......................21
(c) Termination of Agreement..................................21
(d) Allocation of Expenses....................................22
Section 5. Conditions of Underwriters' Obligations...................22
(a) Effectiveness of Registration Statement...................22
(b) Opinion of Counsel for Company............................22
(c) Opinion of Counsel for the Selling Shareholders...........22
(d) Opinion of Counsel for Underwriters.......................23
(e) Officers' Certificate.....................................23
(f) Certificate of each Selling Shareholder...................23
(g) Accountant's Comfort Letters..............................23
(h) Bring-down Comfort Letters................................24
i
TABLE OF CONTENTS
(continued)
PAGE
(i) Approval of Listing.......................................24
(j) No Objection..............................................24
(k) Lock-up Agreements........................................24
(l) Form W-8 or W-9...........................................24
(m) Conditions to Purchase of Option Securities...............24
(n) Additional Documents......................................25
(o) Termination of Agreement..................................25
Section 6. Indemnification...........................................26
(a) Indemnification of the Underwriters by the Company........26
(b) Indemnification of the Underwriters by the Selling
Shareholders..............................................27
(c) Indemnification of Company, Directors and Officers and
Selling Shareholders......................................27
(d) Actions against Parties; Notification.....................28
(e) Settlement without Consent if Failure to Reimburse........28
(f) Other Agreements with Respect to Indemnification..........29
Section 7. Contribution..............................................29
Section 8. Representations, Warranties and Agreements to Survive
Delivery..................................................31
Section 9. Termination of Agreement..................................31
(a) Termination; General......................................31
(b) Liabilities...............................................31
Section 10. Default by One or More of the Underwriters................31
Section 11. Default by one or More of the Selling Shareholders........32
Section 12. Notices...................................................33
Section 13. Parties...................................................33
Section 14. GOVERNING LAW AND TIME....................................34
Section 15. Effect of Headings........................................34
ii
TABLE OF CONTENTS
(continued)
PAGE
SCHEDULES
Schedule A - List of Underwriters..........................Sch A-1
Schedule B - List of Selling Shareholders .................Sch B-1
Schedule C - Pricing Information...........................Sch C-1
Schedule D - List of Persons Subject to Lock-up............Sch D-1
Schedule E - List of Subsidiaries of the Company...........Sch E-1
EXHIBITS
Exhibit A -1 Form of Opinion of Company's Counsel...........A-1-1
Exhibit A -2 Form of Opinion of Selling Shareholders'
Counsel........................................A-2-1
Exhibit B - Form of Lock-up Letter.............................B-1
iii
CROSS COUNTRY, INC.
(a Delaware corporation)
9,000,000 Shares of Common Stock
(Par Value $.0001 Per Share)
PURCHASE AGREEMENT
March [20], 2002
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Salomon Smith Barney Inc.
Banc of America Securities LLC
CIBC World Markets, Inc.
SunTrust Capital Markets, Inc.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
North Tower
New York, New York 10080
Ladies and Gentlemen:
Cross Country, Inc., a Delaware corporation (the "Company"), and the
persons listed in Schedule B hereto under the heading "Selling Shareholders"
(the "Selling Shareholders"), confirm their respective agreements with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch, Salomon Smith Barney Inc., Banc of America Securities LLC, CIBC World
Markets, Inc. and SunTrust Capital Markets, Inc. are acting as representatives
(in such capacity, the "Representatives"), with respect to the sale by the
Selling Shareholders, acting severally and not jointly, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.0001 per share, of the Company ("Common
Stock") set forth in said Schedules A and B hereto, and with respect to the
grant by the Selling
Shareholders to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 1,350,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 9,000,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 1,350,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities".
The Company and the Selling Shareholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-1 (No. 333-83450) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in any such prospectus that
was omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information". Each Form of Prospectus used before such registration statement
became effective, and any prospectus that omitted the Rule 430A Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto and schedules thereto at
the time it became effective and including the Rule 430A Information, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final Form
of Prospectus in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the
"Prospectus." For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
Section 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time
2
referred to in Section 2(c) hereof, and if any Option Securities are purchased,
as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto (including any prospectus wrapper), at the time the Prospectus or
any amendments or supplements thereto were issued and at the Closing Time
(and, if any Option Securities are purchased, at each Date of Delivery),
included or will include an untrue statement of a material fact or omitted
or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and the prospectuses filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
3
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The consolidated financial statements
included in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly the financial position of
the Company and its consolidated Subsidiaries, Cross Country Staffing,
Inc. partnership (the "Predecessor Entity"), TravCorps Corporation and
ClinForce, Inc. (collectively, the "Acquired Entities") at the dates
indicated and the statement of operations, stockholders' equity and cash
flows of the Company and its consolidated Subsidiaries, the Predecessor
Entity and the Acquired Entities for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected consolidated
financial and other data and the summary consolidated financial and other
information of the Company included in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement. The pro forma financial information and the related notes
thereto included in the Registration Statement and the Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its Subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business (a "Material Adverse Effect"), (B) there
have been no transactions entered into by the Company or any of its
Subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its Subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock.
4
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vi) GOOD STANDING OF SUBSIDIARIES. (A) Each Subsidiary of the
Company set forth on Schedule E hereto (which lists all subsidiaries of
the Company) (each a "Subsidiary" and, collectively, the "Subsidiaries")
has been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of
the outstanding shares of capital stock of any Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of
such Subsidiary.
(B) Except as disclosed in the Prospectus, there are no encumbrances
or restrictions on the ability of any Subsidiary (i) to pay any dividends
or make any distributions on such Subsidiary's capital stock, (ii) to make
any loans or advances to, or investments in the Company or any other
Subsidiary, or (iii) to transfer any of its property or assets to the
Company or any other Subsidiary.
(vii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company, including, without
5
limitation, the Securities to be sold by the Selling Shareholders, have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any securityholder of the Company. The shares of issued and outstanding
capital stock of the Company have been issued in compliance, in all
material respects, with all federal and state securities laws. Except as
disclosed in the Prospectus, there are no outstanding options or warrants
to purchase, or any preemptive rights or other rights to subscribe for or
to purchase, any securities or obligations convertible into, or any
contracts or commitments to issue or sell, shares of the Company's capital
stock or any such options, warrants, rights, convertible securities or
obligations. The description of the Company's stock option and purchase
plans and the options or other rights granted and exercised thereunder set
forth in the Prospectus accurately and fairly describe, in all material
respects, the information required to be shown with respect to such plans,
arrangements, options and rights.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Common Stock
conforms to all statements relating thereto contained in the Prospectus
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company.
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property
or assets of the Company or any Subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults under Agreements
and Instruments that would not result in a Material Adverse Effect; and
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and in the
Registration Statement and compliance by the Company with its obligations
under this Agreement have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach
of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any
6
Subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of the
Company or any Subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion of
such indebtedness by the Company or any Subsidiary.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees
of the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, would reasonably be expected to result in a
Material Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
Subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which would reasonably be
expected to result in a Material Adverse Effect, or which would reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder
or thereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any Subsidiary is a party or of which
any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, would not reasonably be expected to
result in a Material Adverse Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information,
7
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to
carry on the business now operated by them, and neither the Company nor
any of its Subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its Subsidiaries therein,
and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect.
(xv) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and foreign or state securities or blue sky laws.
(xvi) POSSESSION OF LICENSES AND PERMITS. The Company and its
Subsidiaries possess required permits, licenses (including, without
limitation, any state nursing pool licenses), provider numbers,
certificates, approvals, accreditations (including, without limitation,
accreditation required by the Joint Commission on Accreditation of
Healthcare Organizations), consents and other authorizations
(collectively, "Governmental Licenses") issued by, and have made all
required declarations and filings with, the appropriate federal, state,
local or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them (including, without limitation, the
Governmental Licenses as are required under such federal and state
healthcare laws as are applicable to the Company and its Subsidiaries; to
the best knowledge of the Company, the individual nurses and other
personnel that the Company and its subsidiaries have placed or intend to
place with clients have obtained all necessary Governmental Licenses to be
legally qualified to serve at the facilities and in the positions in which
they are staffed and the Company takes reasonable measures to ensure that
all such nurses and other personnel possess such Governmental Licenses;
the Company and its Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect;
8
and neither the Company nor any of its Subsidiaries has received any
notice of proceedings relating to the revocation or modification of any
such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xvii) NO FEES FROM THIRD-PARTY PAYORS. None of the Company or any
of its Subsidiaries receives fees, compensation or reimbursement of any
kind for any of its services from any governmental or other third-party
payor, including, without limitation, from third-party payors such as
Medicare, Medicaid, Medi-Cal, private insurance companies, health
maintenance organizations, preferred provider organizations, managed care
systems and other third party payors (including, without limitation, Blue
Cross plans).
(xviii) LICENSURE OF NURSES AND OTHER HEALTHCARE PROFESSIONALS. The
Company has established and shall administer, except to the extent that a
failure to do so would not reasonably be expected to result in a Material
Adverse Effect, a compliance program (including a written compliance
policy) applicable to the Company and its Subsidiaries, to assist the
Company, its Subsidiaries and the directors, officers and employees of the
Company and its Subsidiaries, in complying with applicable federal and
state guidelines (including, without limitation, guidelines imposed by
OSHA and JCAHO (including its Comprehensive Accreditation Manual for
Hospitals)) for the due qualification and licensure of registered nurses
and other healthcare professionals that the Company and its Subsidiaries
place through their staffing businesses.
(xix) TITLE TO PROPERTY. Except to the extent specifically disclosed
in the Prospectus, the Company and its Subsidiaries have good and
marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its Subsidiaries; and all of the leases and subleases material to the
business of the Company and its Subsidiaries, considered as one
enterprise, and under which the Company or any of its Subsidiaries holds
properties described in the Prospectus, are in full force and effect, and
neither the Company or any of its Subsidiaries has any notice of any claim
of any sort that has been asserted by anyone adverse to the rights of the
Company or any of its Subsidiaries under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or
of its Subsidiaries to the continued possession of the leased or subleased
premises under any such lease or sublease.
9
(xx) INVESTMENT COMPANY ACT. None of the Company or any of its
Subsidiaries is, and upon the sale of the Securities as herein
contemplated none of them will be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxi) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, reasonably
be expected to result in a Material Adverse Effect, (A) neither the
Company nor any of its Subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree
or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances (including, without limitation, asbestos,
polychlorinated biphenyls, urea-formaldehyde, insulation, petroleum or
petroleum products) (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (C) there are no
pending or threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its Subsidiaries (including, without
limitation, any claims relating to the purchases and other corporate
transactions involving the current Subsidiaries and predecessor entities
which currently are integrated with the Company and its Subsidiaries) and
(D) there are no events or circumstances that would reasonably be expected
to form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its Subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xxii) REGISTRATION RIGHTS. Except as disclosed in the Prospectus
under the caption "Shares Eligible for Future Sale - Registration Rights"
there are no persons with registration rights or other similar rights to
have any securities of the Company or any of its Subsidiaries registered
pursuant to the Registration Statement or otherwise registered by the
Company or any other person under the 1933 Act.
10
(xxiii) INSURANCE. The Company and each of its Subsidiaries is
insured by insurers of recognized financial responsibility against such
loses and risks and in such amounts as are prudent and customary in the
industries in which the Company and its Subsidiaries operate; none of the
Company or any of its Subsidiaries has been refused any material insurance
coverage sought or applied for; and the Company has no reason to believe
that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its operations except where the
failure to renew or maintain such coverage would not reasonably be
expected to result in a Material Adverse Effect. The officers and
directors of the Company are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as the
Company believes are prudent and customary for officers' and directors'
liability insurance of a public company and as the Company believes would
cover claims which would reasonably be expected to be made in connection
with the issuance of the Securities; and the Company has no reason to
believe that it will not be able to renew its existing directors' and
officers' liability insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
cover its officers and directors.
(xxiv) TAX RETURNS AND PAYMENT OF TAXES. The Company and its
Subsidiaries have timely filed all federal, state, local and foreign tax
returns that are required to be filed or has duly requested extensions
thereof and all such tax returns are true, correct and complete, except to
the extent that any failure to file or request an extension, or any
incorrectness would not reasonably be expected to result in a Material
Adverse Effect. The Company and its Subsidiaries have timely paid all
taxes shown as due on such filed tax returns (including any related
assessments, fines or penalties), except to the extent that any such taxes
are being contested in good faith and by appropriate proceedings, or to
the extent that any failure to pay would not reasonably be expected to
result in a Material Adverse Effect; and adequate charges, accruals and
reserves have been provided for in the financial statements referred to in
Section 1(a)(iii) above in accordance with GAAP in respect of all Federal,
state, local and foreign taxes for all periods as to which the tax
liability of the Company and its Subsidiaries has not been finally
determined or remains open to examination by applicable taxing authorities
except (A) for taxes incurred after the date of the financial statements
referred to in Section 1(a)(iii) or (B) where the failure to provide for
such charges, accruals and reserves would not reasonably be expected to
result in a Material Adverse Effect. None of the Company or its
Subsidiaries is a "United States real property holding corporation" within
the meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as
amended (the "Code").
11
(xxv) NO STABILIZATION OR MANIPULATION. Neither the Company nor any
of its Subsidiaries or, to the best of their knowledge, any of their
directors, officers or affiliates has taken or will take, directly or
indirectly, any action designed to, or that could be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Securities in violation of Regulation M under the Securities Exchange Act
of 1934, as amended (the "1934 Act").
(xxvi) CERTAIN TRANSACTIONS. Except as disclosed in the Prospectus,
there are no outstanding loans, advances, or guarantees of indebtedness by
the Company or any of its Subsidiaries to or for the benefit of any of the
executive officers or directors of the Company or any of the members of
the families of any of them that would be required to be so disclosed
under the 1933 Act, the 1933 Act Regulations or Form S-1.
(xxvii) STATISTICAL AND MARKET DATA. The statistical and
market-related data included in the Prospectus are derived from sources
which the Company reasonably and in good faith believes to be accurate,
reasonable and reliable in all material respects and the statistical and
market-related data included in the Prospectus agrees with the sources
from which it was derived in all material respects.
(xxviii) ACCOUNTING AND OTHER CONTROLS. The Company has established
a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions were, are and will be executed in
accordance with management's general or specific authorization; (ii)
transactions were, are and will be recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets was, is and
will be permitted only in accordance with a management's general or
specific authorizations; and (iv) the recorded accountability for assets
was, is and will be compared with existing assets at reasonable intervals
and appropriate action was, is and will be taken with respect to any
differences.
(b) REPRESENTATIONS AND WARRANTIES BY EACH OF THE SELLING
SHAREHOLDERS. Each Selling Shareholder severally and not jointly represents and
warrants to each Underwriter as of the date hereof, as of the Closing Time, and,
if the Selling Shareholder is selling Option Securities on a Date of Delivery,
as of each such Date of Delivery, and agrees with each Underwriter, as follows:
(i) ACCURATE DISCLOSURE. The information furnished in writing by or
on behalf of such Selling Shareholder expressly for use in the
Registration Statement and any amendment or supplement thereto 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 information
12
furnished in writing by or on behalf of such Selling Shareholder expressly
for use in the Prospectus or any preliminary prospectus does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and such Selling
Shareholder is not prompted to sell the Securities to be sold by such
Selling Shareholder under this Agreement by any information concerning the
Company or any subsidiary of the Company which is not set forth in any
preliminary prospectus or the Prospectus.
(ii) AUTHORIZATION OF AGREEMENTS. Each Selling Shareholder has the
full right, power and authority to enter into this Agreement and a Power
of Attorney and Custody Agreement (the "Power of Attorney and Custody
Agreement") and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and delivery of this
Agreement and the Power of Attorney and Custody Agreement and the sale and
delivery of the Securities to be sold by such Selling Shareholder and the
consummation of the transactions contemplated herein and compliance by
such Selling Shareholder with its obligations hereunder have been duly
authorized by such Selling Shareholder and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Shareholder or any property or
assets of such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or
other agreement or instrument to which such Selling Shareholder is a party
or by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
or other organizational instrument of such Selling Shareholder, if
applicable, or any applicable treaty, law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties.
(iii) RECORD AND BENEFICIAL OWNERSHIP. Such Selling Shareholder (i)
is at the date hereof the record and beneficial owner of the Securities to
be sold by such Selling Shareholder under this Agreement, in each case
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim, equity or charge of any kind, other than pursuant to
this Agreement, (ii) will be at the Closing Time and, if any Option
Securities are purchased from such Selling Shareholder, on the Date of
Delivery, the record and beneficial owner of the Securities to be sold by
such Selling Shareholder under this Agreement, in each case free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim,
equity or charge of any kind, other than pursuant to this Agreement, and
(iii) has no knowledge of
13
any adverse claim (within the meaning of Section 8-105 of the New York
Uniform Commercial Code) that has been or that may be asserted against any
of the Securities to be sold by such Selling Shareholder under this
Agreement.
(iv) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT. Such
Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to the Representatives, the Power of Attorney and
Custody Agreement with Joseph A. Boshart, Emil Hensel, Karen H. Bechtel
and Thomas C. Dircks as attorneys-in-fact (the "Attorneys-in-Fact") and
the Company, as custodian (the "Custodian"); the Custodian is authorized
to deliver the Securities to be sold by such Selling Shareholder hereunder
and to accept payment therefor; and each Attorney-in-Fact is authorized to
execute and deliver this Agreement and the certificate referred to in
Section 5(f) of this Agreement or that may be required pursuant to
Sections 5(m) and 5(n) of this Agreement on behalf of such Selling
Shareholder, to sell, assign and transfer to the Underwriters the
Securities to be sold by such Selling Shareholder hereunder, to determine
the purchase price to be paid by the Underwriters to such Selling
Shareholder, as provided in Section 2(a) hereof, to authorize the delivery
of the Securities to be sold by such Selling Shareholder hereunder, to
accept payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(v) ABSENCE OF MANIPULATION. Such Selling Shareholder has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities in
violation of Regulation M under the 1934 Act.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by each Selling Shareholder of
its obligations hereunder or in the Power of Attorney and Custody
Agreement, or in connection with the sale and delivery of the Securities
being sold by such Selling Shareholder hereunder or the consummation of
the transactions contemplated by this Agreement except such as may have
previously been made or obtained or as may be required under the 1933 Act
or the 1933 Act Regulations or state securities laws.
(vii) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectus with respect to Charterhouse Equity
Partners III, L.P., CHEF Nominees Limited, Morgan Stanley Dean Witter
Capital Partners IV, L.P. and related private equity funds (collectively,
"Morgan Stanley Private Equity") and related entities and Bruce A. Cerullo
and during a period of 60 days from the
14
date of the Prospectus with respect to DB Capital Investors, L.P. and The
Northwestern Mutual Life Insurance Company, such Selling Shareholder will
not, without the prior written consent of Merrill Lynch, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of, or transfer any
shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, whether now owned or acquired after the
date of the Prospectus or with respect to which such Selling Shareholder
has or acquires the power or disposition, or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to the Securities to be sold
hereunder.
(viii) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all of
the Securities to be sold by such Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by
duly executed instruments of transfer or assignment in blank with
signatures guaranteed, have been placed in custody with the Custodian with
irrevocable conditional instructions to deliver such Securities to the
Underwriters pursuant to this Agreement.
(ix) NO ASSOCIATION WITH NASD. Except as expressly set forth in the
NASD Questionnaire of such Selling Shareholder previously delivered to the
Underwriters, neither such Selling Shareholder nor any of its affiliates
directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, or has any other
association with (within the meaning paragraph (dd) of Article I of the
By-Laws of the National Association of Securities Dealers, Inc. (the
"NASD")), any member firm of the NASD.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company or any of its Subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of a Selling Shareholder as such and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by such Selling Shareholder to each
Underwriter as to the matters covered thereby.
15
Section 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each Selling Shareholder, severally and not jointly, agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter, severally and
not jointly, agrees to purchase from each Selling Shareholder, at the price per
share set forth in Schedule C, the number of Initial Securities set forth in
Schedule A or B opposite the name of such Underwriter, or Selling Shareholder,
as the case may be, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) OPTION SECURITIES. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Selling Shareholders, acting severally and not
jointly, hereby grant an option to the Underwriters, severally and not jointly,
to purchase up to an additional 1,350,000 shares of Common Stock at the price
per share set forth in Schedule C, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Representatives to the Selling Shareholders
setting forth the number of Option Securities as to which the several
Underwriters are then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery for the
Option Securities (a "Date of Delivery") shall be determined by Merrill Lynch,
but shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares. If the option is
exercised for a portion, but not all, of the Option Securities, each Selling
Shareholder will sell that proportion of the total number of Option Securities
then being purchased which the number of Securities set forth in Schedule B in
the column titled "Maximum Number of Option Securities" opposite the name of
such Selling Shareholder bears to the total number of Option Securities.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & Plimpton, 919 Third Avenue, New York, New York 10022, or at such
other place as shall
16
be agreed upon by the Representatives, the Company and the Selling Shareholders
at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives, the Company and the Selling Shareholders (such time
and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities
are purchased by the Underwriters, payment of the purchase price for, and
delivery of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Selling Shareholders, on each Date of Delivery as
specified in the notice from the Representatives to the Selling Shareholders.
Payment shall be made to the Selling Shareholders by wire transfer
of immediately available funds to a bank account designated by the Custodian
pursuant to each Selling Shareholder's Power of Attorney and Custody Agreement,
against delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial Securities and the Option Securities, if any, which it
has agreed to purchase. Merrill Lynch, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
Section 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule
17
430A, and will notify the Representatives immediately, and confirm the
notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the suspension
of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 424(b) was received for filing by the Commission
and, in the event that it was not, it will promptly file such prospectus.
The Company will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall reasonably
object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished
or, if requested by the Representatives, will deliver to the
Representatives and counsel for the Underwriters, without charge, signed
copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and copies of all signed consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
18
(d) DELIVERY OF PROSPECTUS. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the
period when the Prospectus is required to be delivered under the 1933 Act
or the 1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Prospectus. If at any time when a prospectus is
required by the 1933 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
for the Company, to amend the Registration Statement or amend or
supplement any Prospectus in order that the Prospectus will not include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend the Registration Statement or amend or supplement
any Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements,
and the Company will furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Representatives may
designate and to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not
19
otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as
may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) LISTING. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and
will file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market of companies that have securities
that are traded in the over-the-counter market and quotations for which
are reported by the Nasdaq National Market.
(i) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectus, the Company will not, without the prior
written consent of the Representatives, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder, (B) any shares of Common Stock
issued by the Company upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in
the Prospectus, (C) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans
of the Company referred to in the Prospectus or (D) any shares of Common
Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(j) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1934
20
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
Section 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities and (ix) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Securities
and (x) the fees and expenses incurred in connection with the inclusion of the
Securities in the Nasdaq National Market.
(b) EXPENSES OF THE SELLING SHAREHOLDERS. The Selling Shareholders,
severally, and not jointly, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters and (ii) the fees and disbursements of their respective counsel and
accountants.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
21
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
Section 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company,
any Subsidiary of the Company, or on behalf of any Selling Shareholder delivered
pursuant to the provisions hereof, to the performance by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Proskauer Rose LLP, special counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A-1 hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. At Closing
Time, the Representatives shall have received the favorable opinion, dated
as of Closing Time, of each counsel for the Selling Shareholders (which
counsel shall be reasonably satisfactory to the Representatives), each in
form and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letters for each of the other
Underwriters to the effect set forth in Exhibit A-2 hereto and to such
other effect as counsel for the Underwriters may reasonably request. The
provisions of this Section 5(c) shall not apply to CHEF Nominees Limited,
except for the opinion contained in paragraph (vi) in Exhibit A-2 hereto.
22
(d) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Debevoise & Plimpton, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters in form and substance reasonably satisfactory to the
Underwriters.
(e) OFFICERS' CERTIFICATE. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President and
Chief Executive Officer and the Chief Financial Officer and Chief
Operating Officer, dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force
and effect as though expressly made at and as of Closing Time, (iii) the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened or are contemplated by the
Commission.
(f) CERTIFICATE OF EACH SELLING SHAREHOLDER. At Closing Time, the
Representatives shall have received a certificate of each Selling
Shareholder, dated as of the Closing Time, to the effect that (i) the
representations and warranties of such Selling Shareholder contained in
Section 1(b) hereof are true and correct in all respects with the same
force and effect as though expressly made at and as of Closing Time and
(ii) such Selling Shareholder has complied in all material respects with
all agreements and all conditions on its part to be performed under this
Agreement at or prior to Closing Time.
(g) ACCOUNTANT'S COMFORT LETTERS. At the time of the execution of
this Agreement, the Representatives shall have received from Ernst & Young
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter
for each of the other Underwriters containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus.
(h) BRING-DOWN COMFORT LETTERS. At Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of Closing
Time,
23
to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) APPROVAL OF LISTING. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(j) NO OBJECTION. The NASD shall have confirmed that it has not
raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements with respect to the Securities.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of Exhibit B hereto signed by the persons listed on Schedule D hereto.
(l) FORM W-8 OR W-9. At the date of this Agreement, the
Representatives shall have received form W-8 or W-9, as required, signed
by each Selling Shareholder.
(m) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company and the Selling Shareholders contained
herein and the statements in any certificates furnished by the Company or
any Subsidiary of the Company and the Selling Shareholders hereunder shall
be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time
pursuant to Section 5(e) hereof remains true and correct as of such
Date of Delivery.
(ii) CERTIFICATE OF SELLING SHAREHOLDERS. A certificate, dated
such Date of Delivery, of each Selling Shareholder selling Option
Securities confirming that the certificate delivered at Closing Time
pursuant to Section 5(f) remains true and correct as of such Date of
Delivery.
(iii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion
of: Proskauer Rose LLP, counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery
24
and otherwise to the same effect as the opinion required by Section
5(b) hereof.
(iv) OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS. The
favorable opinion of each counsel for the Selling Shareholders
selling Option Securities (which counsel shall be reasonably
satisfactory to the Representatives), in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(v) OPINION OF COUNSEL FOR UNDERWRITERS. The favorable opinion
of Debevoise & Plimpton, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(vi) BRING-DOWN COMFORT LETTERS. A letter from Ernst & Young
in form and substance satisfactory to the Representatives and dated
such Date of Delivery, substantially in the same form and substance
as the letter furnished to the Representatives pursuant to Section
5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(n) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and
the Selling Shareholders in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(o) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase the
relevant Option Securities, may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time or such Date
of Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
25
and except that Sections 1, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.
Section 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE UNDERWRITERS BY THE COMPANY. The Company,
agrees to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information,
or the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense (a) to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any
26
amendment thereto), including the Rule 430A Information, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and (b)
with respect to any preliminary prospectus to the extent that it shall be proved
that any such loss, liability, claim, damage or expense of such Underwriter
resulted solely from the fact that such Underwriter, in contravention of a
requirement of this Agreement or applicable law, sold Securities to a person to
whom such Underwriter failed to send or give, at or prior to Closing Time, a
copy of the Prospectus (if applicable, as amended or supplemented) if the
Company has previously furnished copies thereof (sufficiently in advance of
Closing Time to allow for distribution by Closing Time) to such Underwriter and
the loss, liability, claim, damage or expense of such Underwriter resulted from
an untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in or omitted (or allegedly omitted) from the
preliminary prospectus that was corrected or included in the Prospectus (if
applicable, as amended or supplemented) prior to Closing Time.
(b) INDEMNIFICATION OF THE UNDERWRITERS BY THE SELLING SHAREHOLDERS.
Each of the Selling Shareholders severally and not jointly agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and conformity with written information
furnished to the Company by or on behalf of such Selling Shareholder expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) PROVIDED, HOWEVER, that the liability of any Selling Shareholder
pursuant to this Section 6(b) shall be limited to the net proceeds received by
such Selling Shareholder from the Securities purchased by the Underwriters from
such Selling Shareholder pursuant to this Agreement; and PROVIDED FURTHER that
(subject to Section 6(d) below) in the case of subsection (a)(ii), only if such
settlement is effected with the Selling Shareholder's prior written consent.
(c) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
SHAREHOLDERS. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Selling
Shareholder and each person, if any, who controls each Selling Shareholder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
27
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(d) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
and 6(b) above, counsel to the indemnified parties shall be selected by Merrill
Lynch, and, in the case of parties indemnified pursuant to Section 6(c) above,
counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such
28
settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
(f) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. The provisions
of this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
Section 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Shareholders on the one hand and of the Underwriters on
the other hand in connection with the statements or omissions, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
(i.e., after deducting the total underwriting discount) from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Selling Shareholders and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, bear to the aggregate initial public offering price of the
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Shareholders or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined
29
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission and (ii) no Selling
Shareholder shall be required to contribute any amount in excess of the amount
of the total net proceeds received by such Selling Shareholder from the sale of
Securities pursuant to this Agreement. Each Selling Shareholder shall be
obligated under this Section 7 only with respect to untrue statements or
omissions made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or any
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Shareholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
The provisions of this Section 7 shall not affect any agreement
among the Company and the Selling Shareholders with respect to contribution.
30
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
Section 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the Nasdaq National Market, or if trading generally
on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been
required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
Section 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or
more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or
31
any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Selling Shareholders
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Selling Shareholders to sell the
relevant Option Securities, as the case may be, either the Representatives or
the Company and the Selling Shareholders shall have the right to postpone
Closing Time or the relevant Date of Delivery, as the case may be, for a period
not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for a
Underwriter under this Section 10.
Section 11. DEFAULT BY ONE OR MORE OF THE SELLING SHAREHOLDERS.
If a Selling Shareholder shall fail at Closing Time or at a Date of
Delivery to sell and deliver the number of Securities which such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number to be sold by all Selling Shareholders as set
forth in Schedule B hereto, then the Underwriters may, at option of the
Representatives, by notice from the Representatives to the Company and the
non-defaulting Selling Shareholders, either (a) terminate this Agreement without
any liability
32
on the fault of any non-defaulting party except that the provisions of Sections
1, 4, 6, 7 and 8 shall remain in full force and effect or (b) elect to purchase
the Securities which the non-defaulting Selling Shareholders and the Company
have agreed to sell hereunder. No action taken pursuant to this Section 11 shall
relieve any Selling Shareholder so defaulting from liability, if any, in respect
of such default.
In the event of a default by any Selling Shareholder as referred to
in this Section 11, each of the Representatives, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time or Date of Delivery for a period not exceeding seven days in order to
effect any required change in the Registration Statement or Prospectus or in any
other documents or arrangements.
Section 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 4 World Financial
Center, North Tower, New York, New York 10281-1201, attention of Oliver T. Moses
and Syndicate Operations, with a copy to Debevoise & Plimpton, 919 Third Avenue,
New York, New York, attention of Steven J. Slutzky; and notices to the Company
shall be directed to it at 6551 Park of Commerce Blvd., Suite 200, Boca Raton,
Florida 33487, attention of Joseph Boshart, President and CEO, with a copy to
Proskauer Rose LLP, 1585 Broadway, New York, New York 10036, attention of
Stephen W. Rubin and notices to each Selling Shareholder shall be given to
Custodian at such address provided for in the Power of Attorney and Custody
Agreement.
Section 13. PARTIES. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters and the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters and the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
Section 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE
33
LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
Section 15. EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
34
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholders a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement between the Underwriters and the Company and the
Selling Shareholders in accordance with its terms.
Very truly yours,
CROSS COUNTRY, INC.
By:
--------------------------------
Name:
Title:
Each of the SELLING SHAREHOLDERS
Named in Schedule B Hereto
By:
--------------------------------
Name:
As Attorney-in-Fact acting on behalf of
the Selling Shareholders named in
Schedule B hereto.
35
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC
CIBC WORLD MARKETS, INC.
SUNTRUST CAPITAL MARKETS, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------------------
Authorized Signatory
For themselves and as Representatives of the other
Underwriters named in Schedule A hereto
36
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Merrill Lynch, Pierce, Fenner & Smith Incorporated.........
Salomon Smith Barney Inc.
Bank of America Securities LLC
CIBC World Markets, Inc.
SunTrust Capital Markets, Inc.
Total...................................................... 9,000,000
===========
Sch. A-1
SCHEDULE B
Number of Maximum Number
Initial of Option
Name of Selling Shareholder Securities Securities
--------------------------- ---------- ----------
Charterhouse Equity Partners III, L.P. ............. 5,165,151 774,773
Morgan Stanley Dean Witter Capital Partners IV, L.P.
and related private equity funds ................... 3,235,666 485,350
DB Capital Investors, L.P. ......................... 312,272 46,841
The Northwestern Mutual Life Insurance Company ..... 156,138 23,421
Bruce A. Cerullo ................................... 127,536 19,130
CHEF Nominees Limited .............................. 3,237 485
Total .............................................. 9,000,000 1,350,000
========= =========
Sch. B-1
SCHEDULE C
CROSS COUNTRY, INC.
9,000,000 Shares of Common Stock
(Par Value $.0001 Per Share)
1. The public offering price per share for the Securities,
determined as provided in said Section 2, shall be $o.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $o, being an amount equal to the public offering
price set forth above less $o per share; provided that the purchase price per
share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities.
Sch. C-1
SCHEDULE D
ENTITIES AND PERSONS SUBJECT TO LOCK-UP
Charterhouse Equity Partners III, L.P.
Morgan Stanley Dean Witter Capital Partners IV, LP
Karen H. Bechtel
Joseph A. Boshart
W. Larry Cash
Bruce A. Cerullo
Thomas C. Dircks
A. Lawrence Fagan
Emil Hensel
M. Fazle Husain
Joseph Swedish
Joseph Trunfio
Vicki Anenberg
Kevin Conlin
Annette Gardner
Dr. Franklin A. Shaffer
Tony Sims
Jonathan Ward
Carol D. Westfall
Morgan Stanley Venture Investors III, L.P.
The Morgan Stanley Venture Partners Entrepreneur Fund, L.P.
Morgan Stanley Venture Partners III, L.P.
MSDW IV 892 Investors L.P.
DB Capital Investors
The Northwestern Mutual Life Insurance Company
CHEF Nominees Limited
Sch. D-1
SCHEDULE E
SUBSIDIARIES OF CROSS COUNTRY, INC.
ClinForce, Inc.
Cejka & Company
E-Staff, Inc.
Cross Country Seminars, Inc.
CC Staffing, Inc.
Cross Country Local, Inc.
CFRC, Inc.
TVCM, Inc.
Cross Country TravCorps Inc. Limited
[NovaPro]
[New Consulting Company]
Sch. E-1
Exhibit A-1
FORM OF OPINION OF PROSKAUER ROSE LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction listed on
Schedule A attached to this opinion.
(iv) The authorized and, to our knowledge, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the exercise of convertible securities or options referred to in
the Prospectus); the shares of issued and outstanding capital stock, including,
without limitation, the Securities to be sold by the Selling Shareholders, have
been duly authorized and validly issued and, to our knowledge, are fully paid
and non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company known to us.
(v) To our knowledge, the sale of the Securities is not subject to
the preemptive or other similar rights of any securityholder of the Company.
(vi) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction listed on Schedule B attached to this opinion;
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, to our knowledge is fully paid and non-assessable and, to our
knowledge, is owned by the Company, directly or through Subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any securityholder of
such Subsidiary known to us.
A-1-1
(vii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or threatened by the Commission.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information, the Prospectus and each
amendment or supplement to the Registration Statement and the Prospectus as of
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which we
need express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(x) To our knowledge, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or any
Subsidiary is a party, or to which the property of the Company or any Subsidiary
is subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which would reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Purchase Agreement or the performance by the
Company of its obligations thereunder.
(xi) The information in the Prospectus under "Risk Factors - Because
our principal stockholders control us, they will be able to determine the
outcome of all matters submitted to our Stockholders for approval, regardless of
the preference of the minority stockholders", "Business - Facilities", "Business
- - Regulatory Issues", "Business - Legal Proceedings", "Description of Capital
Stock - Common Stock", "Description of Capital Stock - Preferred Stock",
"Certain Federal Income Tax Considerations" and in the Registration Statement
under Item 14 and Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by us and is correct in all
material respects.
(xii) To our knowledge, there are no statutes or regulations that
are required to be described in the Prospectus that are not described as
required.
A-1-2
(xiii) All descriptions in the Prospectus of contracts and other
documents to which the Company or its Subsidiaries are a party are accurate in
all material respects; to our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(xiv) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectus or filed as an exhibit to the Registration Statement.
(xv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than under the 1933 Act and the 1933 Act Regulations,
which have been obtained, or as may be required under the securities or blue sky
laws of the various states, as to which we need express no opinion) is necessary
or required in connection with the due authorization, execution and delivery of
the Purchase Agreement or for the issuance, sale or delivery of the Securities.
(xvi) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the Purchase
Agreement and in the Registration Statement (including the and compliance by the
Company with its obligations under the Purchase Agreement do not and will not,
whether with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(x) of the Purchase Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any Subsidiary pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument (a) filed as an exhibit to the Registration Statement or (b) listed
on a certificate of the Chief Financial Officer of the Company attached hereto
as Exhibit A (which purports to identify all material contracts or groups of
similar contracts that are material in the aggregate to the Company and its
subsidiaries taken as a whole and to which the Company or any of its
subsidiaries is a party), to which the Company or any Subsidiary is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company or any Subsidiary is subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any Subsidiary, or any
applicable
A-1-3
law, statute, rule, regulation, judgment, order, writ or decree, known to us, of
any government, government instrumentality or court having jurisdiction over the
Company or any Subsidiary or any of their respective properties, assets or
operations.
(xvii) To our knowledge, the Company and its Subsidiaries possess
required Governmental Licenses issued by, and have made all required
declarations and filings with, the appropriate regulatory agencies or bodies
necessary to conduct the business now operated by them, and the Company and its
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and, to our knowledge, neither the
Company nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xviii) To our knowledge, there are no persons with registration
rights or other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 1933 Act
other than as described in the Prospectus.
(xix) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable) (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectus
was issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or
A-1-4
other document relating to legal opinions, including, without limitation, the
Legal Opinion Accord of the ABA Section of Business Law (1991).
A-1-5
Exhibit A-2
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDER
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state securities
laws, as to which [I][we] need express no opinion) is necessary or required to
be obtained by the Selling Shareholder(s) for the performance by [each/the]
Selling Shareholder of its obligations under the Purchase Agreement or in the
Power of Attorney and Custody Agreement, or in connection with the offer, sale
or delivery of the Securities.
(ii) [Each/The] Power of Attorney and Custody Agreement has been
duly executed and delivered by the [respective] Selling Shareholder(s) [named
therein] and constitutes the legal, valid and binding agreement of [such/the]
Selling Shareholder.
(iii) The Purchase Agreement has been duly authorized, executed and
delivered by or on behalf of [each/the] Selling Shareholder.
(iv) [Each/The] Attorney-in-Fact has been duly authorized by the
Selling Shareholder(s) to deliver the Securities on behalf of the Selling
Shareholder(s) in accordance with the terms of the Purchase Agreement.
(v) The execution, delivery and performance of the Purchase
Agreement and the Power of Attorney and Custody Agreement and the sale and
delivery of the Securities and the consummation of the transactions contemplated
in the Purchase Agreement and in the Registration Statement and compliance by
the Selling Shareholder(s) with its obligations under the Purchase Agreement
have been duly authorized by all necessary action on the part of the Selling
Shareholder(s) and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of, or
default under or result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Securities or any property or assets of the Selling
Shareholder(s) pursuant to, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, license, lease or other instrument or agreement
to which [any/the] Selling Shareholder is a party or by which [his/her/it/they]
may be bound, or to which any of the property or assets of the Selling
Shareholder(s) may be subject in each case of which we have knowledge nor will
such action result in any violation of the provisions of the charter or by-laws
of the Selling Shareholder(s), if applicable, or any law, administrative
regulation, judgment or order of any governmental
A-2-1
agency or body or any administrative or court decree having jurisdiction over
[such/the] Selling Shareholder or any of its properties of which we have
knowledge.
(vi) Upon payment for the Securities to be sold by the Selling
Shareholders to you as provided in the Purchase Agreement, the delivery of such
Securities to such nominee as may be designated by The Depository Trust Company
("DTC"), the registration of such Securities in the name of such nominee and the
crediting of such Securities on the records of DTC to security accounts in your
name (assuming that neither you nor DTC have notice of any adverse claim (within
the meaning of Section 8-105 of the New York Uniform Commercial Code (the
"UCC")) to such Securities or any security entitlement in respect thereof), (A)
DTC shall be a protected purchaser of such Securities within the meaning of
Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, you will acquire a
security entitlement in respect of such Securities and (C) no action based on an
adverse claim (as defined in Section 8-102 of the UCC) to such security
entitlement may be asserted against you.
Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
A-2-2
Exhibit B
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(i)
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Each of the other Representatives
of the several Underwriters to be
named in the within-mentioned
Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Cross Country, Inc.
-----------------------------------------------
Dear Sirs:
The undersigned, a stockholder of Cross Country, Inc., a Delaware
corporation (the "Company"), understands that Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and certain other
underwriters propose to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company and the selling shareholders listed in Schedule B
to the Purchase Agreement (the "Selling Shareholders") providing for the public
offering of shares (the "Securities") of the Company's common stock, par value
$.0001 per share (the "Common Stock"). In recognition of the benefit that such
an offering will confer upon the undersigned as a stockholder of the Company,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned agrees with each underwriter to
be named in the Purchase Agreement that, during a period of 90 days from the
date of the Purchase Agreement, the undersigned will not, without the prior
written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant for the sale of,
or otherwise dispose of or transfer any shares of the Company's Common Stock or
any securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
B-1
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise. The foregoing restriction will not apply
to Securities to be sold by the Selling Shareholders under the Purchase
Agreement.
Notwithstanding the foregoing, a transfer of Common Stock or other
securities by gift (1) to a member of the immediate family of the undersigned,
or (2) to a trust for the benefit of a member of the immediate family of the
undersigned may be made, provided that prior to such transfer, the transferee
agrees in a writing delivered to Merrill Lynch to be bound by the terms of this
agreement.
In addition, the undersigned agrees that the Company and/or Merrill
Lynch may, and the undersigned will, (i) with respect to any shares of Common
Stock for which the undersigned is the record holder, cause the transfer agent
for the Company to note stop transfer instructions with respect to such shares
of Common Stock on the transfer books and records of the Company and (ii) with
respect to any shares of Common Stock for which the undersigned is the
beneficial holder but not the record holder, cause the record holder of such
shares of Common Stock to cause the transfer agent for the Company to note stop
transfer instructions with respect to such shares of Common Stock on the
transfer books and records of the Company.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this letter agreement, and that, upon
request, the undersigned will execute any additional documents necessary or
desirable in connection with the enforcement hereof. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors, and assigns of the undersigned.
Very truly yours,
Signature:
--------------------------
Print Name:
-------------------------
B-2
EXHIBIT 21.1
Cross Country Consulting, Inc.
Cross Country TravCorps, Inc.
CFRC, Inc.
TVCM, Inc.
Cejka & Company
E-Staff, Inc.
Cross Country Seminars, Inc.
CC Staffing, Inc.
ClinForce, Inc.
Jennings Ryan & Kolb, Inc.
NovaPro, Inc.
Cross Country Local, Inc.
Cross Country TravCorps Inc. Limited
