Exhibit 1.1
5,800,000 Shares
NIGHTHAWK RADIOLOGY HOLDINGS,
INC.
COMMON STOCK (PAR VALUE $0.001
PER SHARE)
UNDERWRITING
AGREEMENT
,
2006
February ,
2006
Morgan Stanley & Co.
Incorporated
Banc of America Securities
LLC
SG Cowen & Co.,
LLC
Piper Jaffray &
Co.
Montgomery & Co.,
LLC
|
c/o
|
Morgan
Stanley & Co. Incorporated
|
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
NightHawk Radiology Holdings, Inc.,
a Delaware corporation (the “ Company ”),
proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the “ Underwriters ”)
5,800,000 shares of its common stock, par value $0.001 per share
(the “ Firm Shares ”). Certain shareholders of
the Company (the “Selling Shareholders”) named in
Schedule II hereto severally propose to sell to the several
Underwriters an aggregate of not more than 870,000 additional
outstanding shares of the Company’s common stock, par value
$0.001 per share (the “ Additional Shares ”),
each Selling Shareholder selling up to the amount set forth
opposite such Selling Shareholder’s name in Schedule II
hereto, if and to the extent that you, as Managers of the offering,
shall have determined to exercise, on behalf of the Underwriters,
the right to purchase such shares of common stock granted to the
Underwriters in Section 3 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the
“ Shares .” The shares of common stock, par
value $0.001 per share of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter
referred to as the “ Common Stock .” The Company
and the Selling Shareholders are hereinafter sometimes collectively
referred to as the “ Sellers .”
The Company has filed with the
Securities and Exchange Commission (the “ Commission
”) a registration statement, including a prospectus, relating
to the Shares. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended
(the “ Securities Act ”), is hereinafter
referred to as the “ Registration Statement ”;
the prospectus in the form first used to confirm sales of Shares
(or in the form first made available to the Underwriters by the
Company to meet requests of purchasers pursuant to Rule 173 under
the Securities Act) is hereinafter referred to as the “
Prospectus .” If the Company has filed an
abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the “ Rule 462 Registration Statement
”), then any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462
Registration Statement.
For purposes of this Agreement,
“ free writing prospectus ” has the meaning set
forth in Rule 405 under the Securities Act and “ Time of
Sale Prospectus ” means the preliminary prospectus
together with the free writing prospectuses, if any, each
identified in Schedule III hereto, and “ broadly available
road show ” means a “bona fide electronic road
show” as defined in Rule 433(h)(5) under the Securities Act
that has been made available without restriction to any person. As
used herein, the terms “ Registration Statement
,” “ preliminary prospectus ,” “
Time of Sale Prospectus ” and Prospectus shall include
the documents, if any, incorporated by reference
therein.
Morgan Stanley & Co.
Incorporated (“ Morgan Stanley ”) has agreed to
reserve a portion of the Shares to be purchased by it under this
Agreement for sale to the Company’s directors, officers,
employees and business associates and other parties related to the
Company (collectively, “ Participants ”), as set
forth in the Prospectus under the heading
“Underwriters” (the “ Directed Share
Program ”). The Shares to be sold by Morgan Stanley and
its affiliates pursuant to the Directed Share Program are referred
to hereinafter as the “ Directed Shares ”. Any
Directed Shares not orally or electronically confirmed for purchase
by any Participant by the end of the business day on which this
Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. Representations and Warranties
of the Company . The Company represents and warrants to and
agrees with each of the Underwriters that:
(a) The Registration Statement has
become effective; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement,
when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any 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, (ii) the Registration Statement and the Prospectus
comply and, as amended or supplemented, if applicable, will comply
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (iii) the
Time of Sale Prospectus does not, and at the time of each sale of
the Shares in connection with the offering and at the Closing Date
(as defined in
2
Section 5), the Time of Sale
Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (iv) each broadly available
road show, if any, when considered together with the Time of Sale
Prospectus, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (v) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in
the Time of Sale Prospectus, the Registration Statement (or any
amendment or supplement thereto) or the Prospectus (or any
amendment or supplement thereto) based upon information relating to
(i) any Underwriter furnished to the Company in writing by
such Underwriter through you and (ii) any Selling Shareholder
furnished to the Company in writing by such Selling Shareholder, in
each case expressly for use therein.
(c) The Company is not an
“ineligible issuer” in connection with the offering
pursuant to Rules 164, 405 and 433 under the Securities Act. Any
free writing prospectus that the Company is required to file
pursuant to Rule 433(d) under the Securities Act has been, or will
be, filed with the Commission in accordance with the requirements
of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act or that was prepared by or on behalf of or
used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act and
the applicable rules and regulations of the Commission thereunder.
Except for the free writing prospectuses, if any, identified in
Schedule III hereto, and electronic road shows, if any, furnished
to you before first use, the Company has not prepared, used or
referred to, and will not, without your prior consent, prepare, use
or refer to, any free writing prospectus.
(d) The Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct
its business as described in the Time of Sale Prospectus and is
duly qualified to transact business and is in good
3
standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(e) Each subsidiary of the Company
has been duly organized, is validly existing in good standing under
the laws of the jurisdiction of its organization, has the corporate
or other power and authority to own its property and to conduct its
business as described in the Time of Sale Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued and outstanding
capital stock or other ownership interests of each subsidiary of
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and, except as described in each of
the Time of Sale Prospectus and the Prospectus, are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) This Agreement has been duly
authorized, executed and delivered by the Company.
(g) The authorized capital stock of
the Company conforms as to legal matters to the description thereof
contained in each of the Time of Sale Prospectus and the Prospectus
under the captions “Capitalization” and
“Description of Capital Stock”.
(h) The shares of Common Stock
(including the Additional Shares to be sold by the Selling
Shareholders) outstanding prior to the issuance by the Company of
the Shares have been duly authorized and are validly issued, fully
paid and non assessable.
(i) The Firm Shares to be sold by
the Company have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non assessable, and the issuance of
such Firm Shares will not be subject to any preemptive or similar
rights.
(j) The execution and delivery by
the Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene (i) any
provision of applicable law or (ii) the certificate
of
4
incorporation or bylaws of the
Company or (iii) any agreement or other instrument binding
upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or (iv) any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary except, in
the case of the foregoing clauses (i) or (iii), where such
contravention would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and
sale of the Shares.
(k) There has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of
Sale Prospectus.
(l) There are no legal or
governmental proceedings pending or, to the best of the
Company’s knowledge after due inquiry, threatened to which
the Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus and are
not so described and there are no statutes, regulations, contracts
or other documents to which the Company or any of its subsidiaries
is subject, or by which the Company or any of its subsidiaries is
bound, that are required to be described in the Registration
Statement, the Time of Sale Prospectus or the Prospectus or to be
filed as exhibits to the Registration Statement that are not
described or filed as required.
(m) Each preliminary prospectus
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 Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(n) The Company is not, and after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus
will not be, required to register as an “investment
company” as such term is defined in the Investment Company
Act of 1940, as amended.
5
(o) The Company and its subsidiaries
(i) are in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants (“
Environmental Laws ”), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, be reasonably
likely to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) There are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
clean up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties) which would, singly or in the aggregate, be reasonably
likely to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) Except as described in the Time
of Sale Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration
Statement.
(r) Subsequent to the respective
dates as of which information is given in each of the Registration
Statement, the Time of Sale Prospectus and the Prospectus,
(i) the Company and its subsidiaries have not incurred any
material liability or obligation, direct or contingent, nor entered
into any material transaction; (ii) the Company has not
purchased any of its outstanding capital stock, nor declared, paid
or otherwise made any dividend or distribution of any kind on its
capital stock other than ordinary and customary dividends; and
(iii) there has not been any material change in the capital
stock, short term debt or long term debt of the Company and its
subsidiaries, except in each case as described in each of the
Registration Statement, the Time of Sale Prospectus and the
Prospectus, respectively.
6
(s) The Company and its subsidiaries
have good and marketable title to all personal property owned by
them which is material to the business of the Company and its
subsidiaries, taken as a whole, in each case, except as described
in each of the Time of Sale Prospectus and the Prospectus, free and
clear of all liens, encumbrances and defects except such as are
described in the Time of Sale Prospectus or such as do not
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 and its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in
the Time of Sale Prospectus. Neither the Company nor any of its
subsidiaries owns any real property.
(t) Except as described in the Time
of Sale Prospectus, the Company and its subsidiaries own, possess
or have rights to use, or can acquire on reasonable terms, all
material patents, patent rights, licenses, inventions, copyrights,
know how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names currently
employed by them in connection with the business now operated by
them, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing which, singly
or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would be reasonably likely to have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(u) No material labor dispute with
the employees of the Company or any of its subsidiaries exists,
except as described in the Time of Sale Prospectus, or, to the
knowledge of the Company, is imminent; and the Company is not aware
of any existing, threatened or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers or
contractors that would be reasonably likely to have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(v) The Company and each of its
subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are
engaged; neither the Company nor any of its subsidiaries has any
reason to believe that it will not be able to renew its
existing
7
insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost
that would not be reasonably likely to have a material adverse
effect on the Company and its subsidiaries, taken as a whole,
except as described in the Time of Sale Prospectus.
(w) The Company and its subsidiaries
possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign governmental or regulatory
authorities necessary to conduct their respective businesses, and
neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, would be reasonably likely to have a material adverse
effect on the Company and its subsidiaries, taken as a whole,
except as described in the Time of Sale Prospectus.
(x) Except as described in the Time
of Sale Prospectus, the Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as described in the Time of Sale Prospectus, since the end of the
Company’s most recent audited fiscal period, there has been
(i) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and
(ii) no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting.
(y) Except as described in the
Registration Statement containing the Time of Sale Prospectus, the
Company has not sold, issued or distributed any shares of Common
Stock during the six month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulation D or
S of, the Securities Act, other than shares issued pursuant to
employee benefit plans, qualified stock option plans or other
employee compensation plans or pursuant to outstanding options,
rights or warrants.
8
(z) The Company and its subsidiaries
have established and maintain disclosure controls and procedures
(as defined in Rule 13a-15 under the Securities Exchange Act of
1934 (the “ Exchange Act ”). Such disclosure
controls and procedures are designed to ensure that material
information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s principal
executive officer and its principal financial officer by others
within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being
prepared. Such disclosure controls and procedures are effective in
timely alerting the Company’s principal executive officer and
principal financial officer to material information required to be
included in the Company’s periodic reports required under the
Exchange Act.
(aa) There are no outstanding loans
made by the Company or any of its subsidiaries to any executive
officer (as defined in Rule 3b-7 under the Exchange Act) or member
of the board of directors of the Company. The Company has not since
the initial filing of the Registration Statement with the
Commission, taken any action prohibited by Section 402 of the
Sarbanes-Oxley Act of 2002, as amended.
(bb) Each of the Company and each of
its subsidiaries has operated its business and currently is in
compliance in all material respects with all applicable federal,
state and foreign laws and all applicable rules, regulations and
policies of any domestic or foreign regulatory organization, except
where the failure to be in compliance would not be reasonably
likely to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(cc) The Registration Statement, the
Prospectus, the Time of Sale Prospectus and any preliminary
prospectus comply, and any amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus, the Time of Sale Prospectus
or any preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed Share
Program.
(dd) No consent, approval,
authorization or order of, or qualification with, any governmental
body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any
jurisdiction in which the Directed Shares are being
offered.
(ee) The Company has not offered, or
caused Morgan Stanley to offer, Shares to any person pursuant to
the Directed Share Program with
9
the specific intent to unlawfully
influence (i) a customer or supplier of the Company to alter the
customer’s or supplier’s level or type of business with
the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its
products.
2. Representations and Warranties
of the Selling Shareholders . Each Selling Shareholder
represents and warrants to and agrees with each of the Underwriters
that:
(a) This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Shareholder.
(b) The execution and delivery by
such Selling Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement will not
contravene any (i) provision of applicable law, (ii) the
limited partnership agreement of such Selling Shareholder (if such
Selling Shareholder is a limited partnership), (iii) the trust
agreements governing such Selling Shareholder (if such Selling
Shareholder is a trust), (iv) any agreement or other
instrument binding upon such Selling Shareholder, to the extent
such agreement or instrument is material to the Selling Shareholder
and its subsidiaries, taken as a whole, or (iv) any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement, except
in each case above as have already been obtained or as may be
required by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Shares.
(c) Such Selling Shareholder has,
and on the Closing Date will have, valid title to, or a valid
“security entitlement” within the meaning of
Section 8-501 of the New York Uniform Commercial Code in
respect of, the Shares to be sold by such Selling Shareholder free
and clear of all security interests, claims, liens, equities or
other encumbrances and the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement, the Custody Agreement and the Power of Attorney and to
sell, transfer and deliver the Shares to be sold by such Selling
Shareholder or a security entitlement in respect of such
Shares.
(d) With respect to any Shares
delivered by such Selling Shareholder in certificated form endorsed
to the Underwriters, delivery of the Shares to be sold by such
Selling Shareholder and payment therefor pursuant to this Agreement
will pass valid title to such Shares, free and
10
clear of any adverse claim within
the meaning of Section 8-102 of the New York Uniform
Commercial Code, to each Underwriter who has purchased such Shares
without notice of an adverse claim.
(e) With respect to any Shares
delivered by such Selling Shareholder through DTC, upon payment for
the Shares to be sold by such Selling Shareholder pursuant to this
Agreement, delivery of such Shares, as directed by the
Underwriters, to Cede & Co. (“ Cede ”)
or such other nominee as may be designated by the Depository Trust
Company (“ DTC ”), registration of such Shares
in the name of Cede or such other nominee and the crediting of such
Shares on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter
has notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code (the
“ UCC ”)) to such Shares), (A) DTC shall be
a “protected purchaser” of such Shares within the
meaning of Section 8-303 of the UCC, (B) under
Section 8-501 of the UCC, the Underwriters will acquire a
valid security entitlement in respect of such Shares and
(C) no action based on any “adverse claim”, within
the meaning of Section 8-102 of the UCC, to such Shares may be
asserted against the Underwriters with respect to such security
entitlement; for purposes of this representation, such Selling
Shareholder may assume that when such payment, delivery and
crediting occur, (x) such Shares will have been registered in
the name of Cede or another nominee designated by DTC, in each case
on the Company’s share registry in accordance with its
certificate of incorporation, bylaws and applicable law,
(y) DTC will be registered as a “clearing
corporation” within the meaning of Section 8-102 of the
UCC and (z) appropriate entries to the accounts of the several
Underwriters on the records of DTC will have been made pursuant to
the UCC.
(f) Such Selling Shareholder is not
prompted by any information concerning the Company or its
subsidiaries which is not set forth in the Time of Sale Prospectus
to sell its Shares pursuant to this Agreement.
(g) To the extent that any
statements or omissions made in the Registration Statement, the
Time of Sale Prospectus, the Prospectus, or any amendments or
supplements thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling
Shareholder expressly for use therein, (i) the Registration
Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Time
11
of Sale Prospectus does not, and at
the time of each sale of the Shares in connection with the offering
and at the Closing Date (as defined in Section 5), the Time of
Sale Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading.
In addition, each Selling
Shareholder listed on Schedule II-B hereto further represents and
warrants to and agrees with each of the Underwriters
that:
(h) The execution and delivery by
such Selling Shareholder of, and the performance by such Selling
Shareholder of its obligations under, the Custody Agreement signed
by such Selling Shareholder and Mellon Investor Services, LLC, as
Custodian, relating to the deposit of the Shares to be sold by such
Selling Shareholder (the “ Custody Agreement ”)
and the Power of Attorney appointing certain individuals as such
Selling Shareholder’s attorneys in fact to the extent set
forth therein, relating to the transactions contemplated hereby and
by the Registration Statement (the “ Power of Attorney
”) will not contravene any provision of applicable law, or
the trust agreement governing such Selling Shareholder (if such
Selling Shareholder is a trust), or any agreement or other
instrument binding upon such Selling Shareholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under the Custody Agreement
or Power of Attorney of such Selling Shareholder.
(i) The Custody Agreement and the
Power of Attorney have been duly authorized, executed and delivered
by such Selling Shareholder and are valid and binding agreements of
such Selling Shareholder.
3. Agreements to Sell and
Purchase . The Company hereby agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly,
to purchase from the Company the respective numbers of Firm Shares
set forth in Schedule I hereto opposite its name at
$
a share (the “ Purchase Price ”).
12
On the basis of the representations
and warranties contained in this Agreement, and subject to its
terms and conditions, the Selling Shareholders agree, severally and
not jointly, to sell to the Underwriters the Additional Shares, and
the Underwriters shall have the right to purchase, severally and
not jointly, up to 870,000 Additional Shares from the Selling
Shareholders at the Purchase Price. You may exercise this right on
behalf of the Underwriters in whole or from time to time in part by
giving written notice not later than 30 days after the date of this
Agreement. Any exercise notice shall specify the number of
Additional Shares to be purchased by the Underwriters and the date
on which such shares are to be purchased. Each purchase date must
be at least one business day after the written notice is given and
may not be earlier than the closing date for the Firm Shares nor
later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5
hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. On each day, if
any, that Additional Shares are to be purchased (an “
Option Closing Date ”), each Underwriter agrees,
severally and not jointly, to purchase the number of Additional
Shares (subject to such adjustments to eliminate fractional shares
as you may determine) that bears the same proportion to the total
number of Additional Shares to be purchased on such Option Closing
Date as the number of Firm Shares set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total number of
Firm Shares. On each Option Closing Date, each Selling Shareholder
agrees, severally and not jointly, to sell to the Underwriters the
number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) obtained by
multiplying the total number of Additional Shares to be purchased
on such Option Closing Date by a fraction, the numerator of which
is the number of shares set forth opposite the name of such Selling
Shareholder in Schedule II hereto and the denominator of which is
the total number of Additional Shares.
4. Terms of Public Offering .
Sellers are advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon
after the Registration Statement and this Agreement have become
effective as in your judgment is advisable. Sellers are further
advised by you that the Shares are to be offered to the public
initially at
$
a share (the “ Public Offering Price ”) and to
certain dealers selected by you at a price that represents a
concession not in excess of
$
a share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in
excess of
$
a share, to any Underwriter or to certain other dealers.
5. Payment and Delivery .
Payment for the Firm Shares shall be made to the Company in Federal
or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on
,
13
2006, or at such other time on the same or such
other date, not later than
,
2006, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the “
Closing Date .”
Payment for any Additional Shares
shall be made to the Selling Shareholders in Federal or other funds
immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date
specified in the corresponding notice described in Section 3
or at such other time on the same or on such other date, in any
event not later than
,
2006, as shall be designated in writing by you.
The Firm Shares and Additional
Shares shall be registered in such names and in such denominations
as you shall request in writing not later than one full business
day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or an Option Closing
Date, as the case may be, for the respective accounts of the
several Underwriters, with any transfer taxes payable in connection
with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the
Underwriters’ Obligations . The obligations of the
Company to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares
on the Closing Date are subject to the condition that the
Registration Statement shall have become effective not later than
4:00 p.m. (New York City time) on the date hereof.
The several obligations of the
Underwriters are subject to the following further
conditions:
(a) Subsequent to the execution and
delivery of this Agreement and prior to the Closing
Date:
(i) there shall not have occurred
any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change,
in the rating accorded any of the securities of the Company or any
of its subsidiaries by any “nationally recognized statistical
rating organization,” as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred
any change, or any development involving a prospective change, in
the condition,
14
financial or otherwise, or in the
earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of
Sale Prospectus that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the Shares
on the terms and in the manner contemplated in the Time of Sale
Prospectus.
(b) The Underwriters shall have
received on the Closing Date a certificate, dated the Closing Date
and signed by an executive officer of the Company, to the effect
set forth in Section 6(a)(i) above and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the
Company has complied in all material respects with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing
Date.
The officer signing and delivering
such certificate may rely upon the best of his or her knowledge as
to proceedings threatened.
(c) The Underwriters shall have
received on the Closing Date an opinion of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, outside
counsel for the Company, dated the Closing Date, to the effect
that:
(i) the Company has been duly
incorporated, is validly existing under, and by virtue of, the laws
of the jurisdiction of its incorporation, and is in good standing
under such laws. The Company has the corporate power and authority
to own its property and to conduct its business as described in the
Time of Sale Prospectus. The Company is qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a
whole;
(ii) each subsidiary of the Company
has been duly incorporated or formed, is validly existing as a
corporation or other entity in good standing under the laws of the
jurisdiction of its incorporation or formation, has the power and
authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such
15
qualification, except to the extent
that the failure to be so qualified or be in good standing would
not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) the authorized capital stock
of the Company as of September 30, 2005 was as set forth in
each of the Time of Sale Prospectus and the Prospectus under the
“Actual” column under the caption
“Capitalization;”
(iv) the shares of Common Stock
(including the Shares to be sold by the Selling Shareholders)
outstanding prior to the issuance of the Shares to be sold by the
Company have been duly authorized and are validly issued, fully
paid and non-assessable;
(v) all of the issued and
outstanding capital stock or membership or other equity interests
of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear (except
as described in each of the Time of Sale Prospectus and the
Prospectus) of all liens, encumbrances, equities or
claims;
(vi) the Shares to be sold by the
Company have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will be validly
issued, fully paid and non assessable, and the issuance of such
Shares will not be subject to any statutory preemptive or similar
rights, any preemptive rights pursuant to the Company’s
Certificate of Incorporation or Bylaws, or, to such counsel’s
knowledge, pursuant to any contract or written
agreement.;
(vii) this Agreement has been duly
authorized, executed and delivered by the Company;
(viii) the execution and delivery by
the Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene any provision
of applicable law or the certificate of incorporation or bylaws of
the Company or, to such counsel’s knowledge after inquiry,
any agreement or other instrument binding upon the Company or any
of its subsidiaries that is filed as an exhibit to the Registration
Statement, or, to such counsel’s knowledge after inquiry, any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval,
16
authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and
sale of the Shares;
(ix) the statements relating to
legal matters, documents or proceedings included in (A) the
Time of Sale Prospectus and the Prospectus under the captions
“Risk Factors–If our arrangements with our affiliated
radiologists or our customers are found to violate….”,
“Risk Factors–If our affiliated radiologists are
characterized as employees….”, “Risk
Factors–Changes in the regulatory environment may constrain
or require us to restructure our operations,”
“Business–Operations–Affili
