UNDERWRITING AGREEMENT
December 20, 2005
UBS Securities LLC
CIBC World Markets Corp.
Jefferies & Company, Inc.
as Managing
Underwriters
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171-0026
Ladies and
Gentlemen:
Sun Healthcare Group, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the underwriters named in
Schedule A annexed hereto (the "Underwriters"), for whom you
are acting as representative(s), an aggregate of 6,000,000 shares
(the "Firm Shares") of common stock, $0.01 par value per share (the
"Common Stock"), of the Company. In addition, solely for the
purpose of covering over-allotments, the Company proposes to grant
to the Underwriters the option to purchase from the Company up to
an additional 900,000 shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus
which is referred to below.
The Company has prepared and filed, in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules
and regulations thereunder (collectively, the "Act"), with the
Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (File No. 333-123335)
under the Act (the "registration statement"), relating to, among
other things, the Shares. Amendments to such registration
statement, if necessary or appropriate, have been similarly
prepared and filed with the Commission in accordance with the
Act. Such registration statement, as so amended, has become
effective under the Act.
Except where the context otherwise requires, "Registration
Statement," as used herein, means the registration statement, as
amended at the time of such registration statement's effectiveness
for purposes of Section 11 of the Act, as such section applies to
the respective Underwriters (the "Effective Time"), including (i)
all documents filed as a part thereof or incorporated or deemed to
be incorporated by reference therein, (ii) any information
contained or incorporated by reference in a prospectus filed with
the Commission pursuant to Rule 424(b) under the Act, to the extent
such information is deemed, pursuant to Rule 430B or Rule 430C
under the Act, to be part of the registration statement at the
Effective Time, and (iii) any registration statement filed to
register the offer and sale of Shares pursuant to Rule 462(b) under
the Act.
The Company has furnished to you, for use by the Underwriters and
by dealers in connection with the offering of the Shares, copies of
one or more preliminary prospectus supplements, and the documents
incorporated by reference therein, relating to the Shares.
Except where the context otherwise requires, "Pre-Pricing
Prospectus," as used herein, means each such preliminary prospectus
supplement, in the form so furnished, including any basic
prospectus (whether or not in preliminary form) furnished to you by
the Company and attached to or used with such preliminary
prospectus supplement. The parties hereto agree that the only
Pre-Pricing Prospectus is the preliminary prospectus supplement
relating to the Shares, dated December 7, 2005, together with the
basic prospectus attached thereto. Except where the context
otherwise requires, "Basic Prospectus," as used herein, means any
such basic prospectus and any basic prospectus furnished to you by
the Company and attached to or used with the Prospectus Supplement
(as defined below).
Except where the context otherwise requires, "Prospectus
Supplement," as used herein, means the final prospectus supplement,
relating to the Shares, filed by the Company with the Commission
pursuant to Rule 424(b) under the Act on or before the second
business day after the date hereof (or such earlier time as may be
required under the Act), in the form furnished by the Company to
you for use by the Underwriters and by dealers in connection with
the offering of the Shares.
Except where the context otherwise requires, "Prospectus," as used
herein, means the Prospectus Supplement together with the Basic
Prospectus attached to or used with the Prospectus Supplement.
"Permitted Free Writing Prospectuses," as used herein, means the
documents listed on Schedule B attached hereto and each "road show"
(as defined in Rule 433 under the Act), if any, related to the
offering of the Shares contemplated hereby that is a "written
communication" (as defined in Rule 405 under the Act) (each such
road show, a "Road Show") listed on Schedule C attached hereto.
"Disclosure Package," as used herein, means any Pre-Pricing
Prospectus or Basic Prospectus, in either case together with any
combination of one or more of the Permitted Free Writing
Prospectuses, if any.
Any reference herein to the registration statement, the
Registration Statement, any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any
Permitted Free Writing Prospectus shall be deemed to refer to and
include the documents, if any, incorporated by reference, or deemed
to be incorporated by reference, therein (the "Incorporated
Documents"), including, unless the context otherwise requires, the
documents, if any, filed as exhibits to such Incorporated
Documents. Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration
Statement, any Basic Prospectus, any Pre-Pricing Prospectus, the
Prospectus Supplement, the Prospectus or any Permitted Free Writing
Prospectus shall be deemed to refer to and include the filing of
any document under the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder (collectively, the
"Exchange Act") on or
after the initial
effective date of the Registration Statement, or the date of such
Basic Prospectus, such Pre-Pricing Prospectus, the Prospectus
Supplement, the Prospectus or such Permitted Free Writing
Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
As used in this Agreement, "business day" shall mean a day on which
the New York Stock Exchange (the "NYSE") is open for trading.
The terms "herein," "hereof," "hereto," "hereinafter" and similar
terms, as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph,
sentence or other subdivision of this Agreement. The term
"or," as used herein, is not exclusive.
The Company and the Underwriters agree as follows:
1.
Sale and Purchase . Upon the basis of the
representations and warranties and subject to the terms and
conditions herein set forth, the Company agrees to issue and sell
to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the
number of Firm Shares set forth opposite the name of such
Underwriter in Schedule A attached hereto, subject to
adjustment in accordance with Section 8 hereof, in each case
at a purchase price of $5.646 per Share. The Company is
advised by you that the Underwriters intend (i) to make a public
offering of their respective portions of the Firm Shares as soon
after the effectiveness of this Agreement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the
terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial
public offering to such extent as you may determine.
In addition, the Company hereby grants to the several Underwriters
the option (the "Over-Allotment Option") to purchase, and upon the
basis of the representations and warranties and subject to the
terms and conditions herein set forth, the Underwriters shall have
the right to purchase, severally and not jointly, from the Company,
ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional
Shares as may be necessary to cover over-allotments made in
connection with the offering of the Firm Shares, at the same
purchase price per share to be paid by the Underwriters to the
Company for the Firm Shares. The Over-Allotment Option may be
exercised by UBS Securities LLC ("UBS") on behalf of the several
Underwriters at any time and from time to time on or before the
30th day following the date hereof, by written notice to the
Company. Such notice shall set forth the aggregate number of
Additional Shares as to which the Over-Allotment Option is being
exercised, and the date and time when the Additional Shares are to
be delivered (any such date and time being herein referred to as an
"additional time of purchase"); provided , however ,
that no additional time of purchase shall be earlier than the time
of purchase (as defined below) nor earlier than the second business
day after the date on which the Over-Allotment Option shall have
been exercised nor later than the tenth business day after the date
on which the Over-Allotment Option shall have been exercised.
The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the
aggregate number of Additional Shares being purchased as the number
of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares
(subject, in each case, to
such adjustment
as you may determine to eliminate fractional shares), subject to
adjustment in accordance with Section 8 hereof.
2.
Payment and Delivery . Payment of the purchase price
for the Firm Shares shall be made to the Company by Federal Funds
wire transfer, against delivery of the certificates for the Firm
Shares to you through the facilities of The Depository Trust
Company for the respective accounts of the Underwriters. Such
payment and delivery shall be made at 10:00 A.M., New York
City time, on December 27, 2005 (unless another time shall be
agreed to by you and the Company or unless postponed in accordance
with the provisions of Section 8 hereof). The time at
which such payment and delivery are to be made is hereinafter
sometimes called "the time of purchase." Electronic transfer
of the Firm Shares shall be made to you at the time of purchase in
such names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be
made at the additional time of purchase in the same manner and at
the same office as the payment for the Firm Shares.
Electronic transfer of the Additional Shares shall be made to you
at the additional time of purchase in such names and in such
denominations as you shall specify.
Deliveries of the documents described in Section 6 hereof with
respect to the purchase of the Shares shall be made at the offices
of Skadden, Arps, Slate, Meagher & Flom LLP at Four Times
Square, New York, NY 10036, at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares
or the Additional Shares, as the case may be.
3.
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 heretofore become effective under the
Act or, with respect to any registration statement to be filed to
register the offer and sale of Shares pursuant to Rule 462(b) under
the Act, will be filed with the Commission and become effective
under the Act no later than 10:00 P.M., New York City time, on the
date of determination of the public offering price for the Shares;
no stop order of the Commission preventing or suspending the use of
any Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing
Prospectus, or the effectiveness of the Registration Statement, has
been issued, and no proceedings for such purpose have been
instituted or, to the Company's knowledge, are contemplated by the
Commission;
(b) the
Registration Statement complied when it became effective, complies
as of the date hereof and, as amended or supplemented, at the time
of purchase, each additional time of purchase, if any, and at all
times during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of
Shares, will comply, in all material respects, with the
requirements of the Act; the conditions to the use of Form "S-3" in
connection with the offering and sale of the Shares as contemplated
hereby have been satisfied; the Registration
Statement meets, and the offering and sale of the Shares as
contemplated hereby complies with, the requirements of Rule 415
under the Act (including, without limitation, Rule 415(a)(5)); the
Registration Statement did not, as of the Effective Time, 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; each Pre-Pricing Prospectus
complied, at the time it was filed with the Commission, and
complies as of the date hereof, in all material respects with the
requirements of the Act; each Pre-Pricing Prospectus as of the
earlier of the date of such Pre-Pricing Prospectus and the date
such Pre-Pricing Prospectus was filed with the Commission, as of
the date hereof and as of the time of purchase did not or will not,
as then amended or supplemented, 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 at no such times
did or will any Pre-Pricing Prospectus, as then amended or
supplemented, together with any combination of one or more of the
then issued Permitted Free Writing Prospectuses, if any, 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; each Basic Prospectus complied or will comply, at the
time it was or will be filed with the Commission, complies as of
the date hereof (if filed with the Commission on or prior to the
date hereof) and, at the time of purchase, each additional time of
purchase, if any, and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, will comply, in all material
respects, with the requirements of the Act; each Basic Prospectus
as of the earlier of the date of such Basic Prospectus and the date
such Basic Prospectus was filed with the Commission, as of the date
hereof and as of the time of purchase did not or will not, as then
amended or supplemented, 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 at no such times did or
will any Basic Prospectus, as then amended or supplemented,
together with any combination of one or more of the then issued
Permitted Free Writing Prospectuses, if any, 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; each
of the Prospectus Supplement and the Prospectus will comply, as of
the date that it is filed with the Commission, the date of the
Prospectus Supplement, the time of purchase, each additional time
of purchase, if any, and at all times during which a prospectus is
required by the Act to be delivered (whether physically or through
compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares, in all material respects, with
the requirements of the Act (in the case of the Prospectus,
including, without limitation, Section 10(a) of the Act); each of
the Prospectus Supplement and the Prospectus as of the earlier of
the date of the Prospectus Supplement and the date the Prospectus
Supplement is filed with the Commission, as of the date hereof and
as of the later of the time of purchase and the latest additional
time of purchase, if any, and the end of the period during which a
prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares did not or will
not, as then amended or supplemented, 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; each Permitted Free Writing Prospectus as of the date
of such Permitted Free Writing Prospectus, as of the date hereof
and as of the time of purchase did not or will not include any
information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, any
Pre-Pricing Prospectus or the Prospectus, including any document
incorporated by reference therein or, when taken together with each
Pre-Pricing Prospectus, 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; provided, however, that the
Company makes no representation or warranty with respect to any
statement contained in the Registration Statement, any Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing Prospectus
in reliance upon and in conformity with information concerning an
Underwriter and furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in the
Registration Statement, such Pre-Pricing Prospectus, the Prospectus
or such Permitted Free Writing Prospectus; each Incorporated
Document, at the time such document was filed with the Commission
or at the time such document became effective, as applicable,
complied, in all material respects, with the requirements of the
Exchange Act and did 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;
(c) prior
to the execution of this Agreement, the Company has not, directly
or indirectly, offered or sold any Shares by means of any
"prospectus" (within the meaning of the Act) or used any
"prospectus" (within the meaning of the Act) in connection with the
offer or sale of the Shares, in each case other than the
Pre-Pricing Prospectuses and the Permitted Free Writing
Prospectuses, if any; the Company has not, directly or indirectly,
prepared, used or referred to any Permitted Free Writing Prospectus
except in compliance with Rules 164 and 433 under the Act; assuming
that such Permitted Free Writing Prospectus is so sent or given
after the Registration Statement was filed with the Commission (and
after such Permitted Free Writing Prospectus was, if required
pursuant to Rule 433(d) under the Act, filed with the Commission),
the sending or giving, by any Underwriter, of any Permitted Free
Writing Prospectus will satisfy the provisions of Rule 164 or Rule
433 (without reliance on subsections (b), (c) and (d) of Rule 164);
the conditions set forth in one or more of subclauses (i) through
(iv), inclusive, of Rule 433(b)(1) under the Act are satisfied, and
the registration statement relating to the offering of the Shares
contemplated hereby, as initially filed with the Commission,
includes a prospectus that, other than by reason of Rule 433 or
Rule 431 under the Act, satisfies the requirements of Section 10 of
the Act; neither the Company nor the Underwriters are disqualified,
by reason of subsection (f) or (g) of Rule 164 under the Act, from
using, in connection with the offer and sale of the Shares, "free
writing prospectuses" (as defined in Rule 405 under the Act)
pursuant to Rules 164 and 433 under the Act; the Company is not an
"ineligible issuer" (as defined in Rule 405 under the Act) as of
the eligibility determination date for purposes of Rules 164 and
433 under the Act with respect to the offering of the Shares
contemplated by the Registration Statement; the parties hereto
agree and understand that the content of any and all "road shows"
(as defined in Rule 433 under the Act) related to the offering of
the Shares contemplated hereby is solely the property of the
Company;
(d) in
accordance with Rule 2710(b)(7)(C)(i) of the National Association
of Securities Dealers, Inc. (the "NASD"), the Shares have been
registered with the Commission on Form S-3 under the Act pursuant
to the standards for such Form S-3 in effect prior to October 21,
1992;
(e) as
of the date of this Agreement, the Company has an authorized and
outstanding capitalization as set forth in the sections of the
Registration Statement, the Pre-Pricing Prospectus and the
Prospectus entitled "Capitalization" and "Description of capital
stock" (and any similar sections or information, if any, contained
in any Permitted Free Writing Prospectus), and, as of the time of
purchase and any additional time of purchase, as the case may be,
the Company shall have an authorized and outstanding capitalization
as set forth in the sections of the Registration Statement and the
Prospectus entitled "Capitalization" and "Description of capital
stock" (and any similar sections or information, if any, contained
in any Permitted Free Writing Prospectus) (subject, in each case,
to the issuance of shares of Common Stock upon exercise of stock
options and warrants disclosed as outstanding in the Registration
Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus, the grant of options under existing
stock option plans described in the Registration Statement
(excluding the exhibits thereto), each Pre-Pricing Prospectus and
the Prospectus and the issuance of shares of Common Stock pursuant
to the Company's Plan of Reorganization); all of the issued and
outstanding shares of capital stock, including the Common Stock, of
the Company have been duly authorized and validly issued and are
fully paid and non-assessable, have been issued in compliance with
all applicable securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or
similar right; no further approval or authority of the stockholders
or the Board of Directors of the Company are required for the
issuance and sale of the Shares; and the Shares have been
authorized for inclusion on the Nasdaq National Market
("NASDAQ");
(f) The
statements set forth in the Registration Statement and the
Prospectus under the caption "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Shares, are accurate descriptions or summaries in all material
respects;
(g) the
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, to
execute and deliver this Agreement and to issue, sell and deliver
the Shares as contemplated herein;
(h) the
Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified and
in good standing would not, individually or in the aggregate, have
a material adverse
effect
on the business, properties, financial condition, results of
operations or prospects of the Company and its subsidiaries taken
as a whole (a "Material Adverse Effect");
(i) except
as disclosed in Schedule D hereto, the Company owns all of the
issued and outstanding capital stock of each of its subsidiaries
(as defined in the Act); except as disclosed in Schedule D hereto,
other than the capital stock of its subsidiaries, the Company does
not own, directly or indirectly, any shares of stock or any other
equity interests or long-term debt securities of any corporation,
firm, partnership, joint venture, association or other entity;
complete and correct copies of the certificates of incorporation
and the bylaws of the Company and its subsidiaries and all
amendments thereto have been made available to you, and no changes
therein will be made on or after the date hereof through and
including the time of purchase or, if later, any additional time of
purchase; each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with full corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement,
the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any; each subsidiary of the Company is
duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, have a
Material Adverse Effect; each subsidiary of the Company is in
compliance in all respects with the laws, orders, rules,
regulations and directives issued or administered by such
jurisdictions, except where the failure to be in compliance would
not, individually or in the aggregate, have a Material Adverse
Effect; all of the outstanding shares of capital stock of each of
the subsidiaries of the Company have been duly authorized and
validly issued, are fully paid and non-assessable, have been issued
in compliance with all applicable securities laws, were not issued
in violation of any preemptive right, resale right, right of first
refusal or similar right and are owned by the Company subject to no
security interest, other encumbrance or adverse claims, except as
set forth in the Registration Statement (excluding the exhibits
thereto), each Pre-Pricing Prospectus and the Prospectus; and no
options, warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligation into
shares of capital stock or ownership interests in any subsidiary of
the Company are outstanding; the Company has no subsidiaries other
than (i) subsidiaries set forth on Schedule D hereto and (ii)
subsidiaries which considered in the aggregate as a single
subsidiary, would not constitute a "significant subsidiary" as that
term is defined in Rule 1-02(w) of Regulation S-X under the
Act;
(j) the
Shares have been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly
and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights
of first refusal and similar rights; the Shares, when issued and
delivered against payment therefor as provided herein, will be free
of any restriction upon the voting or transfer thereof pursuant to
the Company's charter or bylaws or other governing documents or any
agreement or other instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of their
respective properties may be bound or affected;
(k) the
capital stock of the Company, including the Shares, conforms in all
material respects to each description thereof, if any, contained or
incorporated by reference in the Registration Statement, any
Pre-Pricing Prospectuses, the Prospectus or any Permitted Free
Writing Prospectus; the certificates for the Shares are in due and
proper form; and the holders of the Shares will not be subject to
personal liability by reason of being such holders;
(l) this
Agreement has been duly authorized, executed and delivered by the
Company;
(m) neither
the Company nor any of its subsidiaries is in breach or violation
of or in default under (nor has any event occurred which with
notice, lapse of time or both would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or a person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a part
of such indebtedness under) (A) its respective charter or bylaws,
or (B) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which any of them or any
of their respective properties may be bound or affected, or (C) any
federal, state, local or foreign law, regulation or rule, including
without limitation any such law, rule or regulation applicable to
the health care industry ("Health Care Laws") or (D) any rule or
regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without
limitation, the rules and regulations of NASDAQ), or (E) any
decree, judgment or order applicable to the Company or any of its
subsidiaries or any of their respective properties, other than in
the case of clauses (B) and (C) such breaches, violations or
defaults as would not, individually or in the aggregate, have a
Material Adverse Effect;
(n) the
execution, delivery and performance of this Agreement, the issuance
and sale of the Shares and the consummation of the transactions
contemplated hereby will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any
event which, with notice, lapse of time or both, would result in
any breach or violation of or constitute a default under or give
the holder of any indebtedness (or a person acting on such holder's
behalf) the right to require the repurchase, redemption or
repayment of all or a part of such indebtedness under (or result in
the creation or imposition of a lien, charge or encumbrance on any
property or assets of the Company or any subsidiary of the Company
pursuant to) (I) the charter or bylaws of the Company or any of its
subsidiaries, or (II) any indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any
license, lease, contract or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which any
of them or any of their respective properties may be bound or
affected, or (III) any federal, state, local or foreign law,
regulation or rule, including without limitation Health Care Laws
or (IV) any rule or regulation of any self-regulatory organization
or other non-governmental regulatory authority (including, without
limitation, the rules and regulations of NASDAQ), or (V) any
decree, judgment or order applicable to the Company or any of its
subsidiaries or any of their respective properties, other than in
the case of clause (II) for such breaches, violations and defaults
that would not, individually or in the aggregate, have a Material
Adverse Effect;
(o) no
approval, authorization, consent or order of or filing with any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, NASDAQ), or approval of
the stockholders of the Company, is required in connection with the
issuance and sale of the Shares or the consummation by the Company
of the transactions contemplated hereby other than (i) registration
of the Shares under the Act, which has been effected (or, with
respect to any registration statement to be filed hereunder
pursuant to Rule 462(b) under the Act, will be effected in
accordance herewith), (ii) any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which
the Shares are being offered by the Underwriters or (iii) under the
Conduct Rules of the National Association of Securities Dealers,
Inc. (the "NASD");
(p) except
as described in the Registration Statement (excluding the exhibits
thereto), each Pre-Pricing Prospectus and the Prospectus,
(i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any shares of Common Stock
or shares of any other capital stock or other equity interests of
the Company, (ii) no person has any preemptive rights, resale
rights, rights of first refusal or other rights to purchase any
shares of Common Stock or shares of any other capital stock of or
other equity interests in the Company, and (iii) no person,
other than the Underwriters, has the right to act as an underwriter
or as a financial advisor to the Company in connection with the
offer and sale of the Shares, in the case of each of the foregoing
clauses (i), (ii) and (iii), whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise; and no person has the
right, contractual or otherwise, to cause the Company to register
under the Act any shares of Common Stock or shares of any other
capital stock of or other equity interests in the Company, or to
include any such shares or interests in the Registration Statement
or the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale
of the Shares as contemplated thereby or otherwise;
(q) each
of the Company and its subsidiaries has all necessary licenses,
permits, authorizations, consents and approvals and has made all
necessary filings required under any applicable law, regulation or
rule, and has obtained all necessary licenses, permits,
authorizations, consents and approvals from other persons, (i) as
are necessary for such party to acquire and own, lease or operate
its properties and (ii) in order to conduct its respective
businesses, except where the failure to have or obtain such
licenses, permits, authorizations, consents or approvals would not,
individually or in the aggregate, have a Material Adverse Effect;
the Company and each of its subsidiaries have fulfilled and
performed all of their obligations with respect to such licenses,
permits, authorizations, consents and approvals, except where the
failure to fulfill or perform such obligations would not,
individually or in the aggregate, have a Material Adverse Effect;
neither the Company nor any of its subsidiaries is in violation of,
or in default under, or has received notice of any proceedings
relating to, (x) and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or modification of
any such license, permit, authorization, consent or approval or
result in any other impairment of the rights of the holder of any
such license, permit,
authorization, consent or approval or (y) any federal, state, local
or foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of its subsidiaries, except, in
the case of clauses (x) and (y), where such violation, default,
revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect;
(r) all
legal or governmental proceedings, affiliate or related party
transactions, off-balance sheet transactions (including, without
limitation, transactions related to, and the existence of,
"variable interest entities" within the meaning of Financial
Accounting Standards Board Interpretation No. 46), statutes,
regulations, contracts, licenses, agreements, properties, leases or
documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement or any Incorporated Document
have been and will be so described or filed as required;
(s) other
than as set forth in the Registration Statement (excluding the
exhibits thereto), each Pre-Pricing Prospectus and the Prospectus,
there are no actions, suits, claims, investigations or proceedings
pending or, to the Company's knowledge, threatened or contemplated
to which the Company or any of its subsidiaries or, to the
Company's knowledge, any of their respective directors or officers
is or would be a party or of which any of their respective
properties is or would be subject at law or in equity, before or by
any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory
authority (including, without limitation, NASDAQ), except any such
action, suit, claim, investigation or proceeding which, if resolved
adversely to the Company or any of its subsidiaries, would not
have, individually or in the aggregate, a Material Adverse Effect
or prevent or materially interfere with consummation of the
transactions contemplated hereby;
(t) Ernst
& Young LLP, whose report on the consolidated financial
statements of the Company and its subsidiaries is included and
incorporated by reference in the Registration Statement, the
Pre-Pricing Prospectuses and the Prospectus, are independent
registered public accountants as required by the Act and by the
rules of the Public Company Accounting Oversight Board;
(u) KPMG
LLP, whose report on the consolidated financial statements of Peak
Medical Corporation and its subsidiaries is incorporated by
reference in the Registration Statement, the Pre-Pricing
Prospectuses and the Prospectus, are independent registered public
accountants as required by the Act and by the rules of the Public
Company Accounting Oversight Board;
(v) the
financial statements included or incorporated by reference in the
Registration Statement, any Pre-Pricing Prospectus, the Prospectus
or any Permitted Free Writing Prospectus, together with the related
notes and schedules, present fairly, in all material respects, the
consolidated financial position of the Company and its subsidiaries
as of the dates indicated and of Peak Medical Corporation and its
subsidiaries as of the dates indicated and the consolidated results
of operations, cash flows and changes in stockholder's equity of
the Company and its subsidiaries for the periods specified and of
Peak Medical
Corporation and its subsidiaries for the periods specified and have
been prepared in compliance with the requirements of the Act and
the Exchange Act and in conformity with U.S. generally accepted
accounting principles applied on a consistent basis during the
periods involved, except as may be expressly stated in the related
notes thereto; all pro forma financial statements and other pro
forma financial data included or incorporated by reference in the
Registration Statement, any Pre-Pricing Prospectus, the Prospectus
or any Permitted Free Writing Prospectus comply with the
requirements of the Act and the Exchange Act, including, without
limitation, Article 11 thereof, and the assumptions used in the
preparation of such pro forma financial statements and data are
reasonable, the pro forma adjustments used therein are appropriate
to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and
data; the other financial data relating to the Company or Peak
Medical Corporation that are contained or incorporated by reference
in the Registration Statement, any Pre-Pricing Prospectus, the
Prospectus or any Permitted Free Writing Prospectus are accurately
and fairly presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there
are no financial statements (historical or pro forma) that are
required to be included or incorporated by reference in the
Registration Statement, any Pre-Pricing Prospectus or the
Prospectus (including, without limitation, as required by Rules
3-12 or 3-05 or Article 11 of Regulation S-X under the Act) that
are not included or incorporated by reference as required; the
Company and its subsidiaries do not have any material liabilities
or obligations, direct or contingent (including any off-balance
sheet obligations), not described in the Registration Statement
(excluding the exhibits thereto), each Pre-Pricing Prospectus and
the Prospectus; except as disclosed in the Registration Statement
(excluding the exhibits thereto), each Pre-Pricing Prospectus and
the Prospectus, neither the Company nor any of its subsidiaries is,
together with its "related parties," the "primary beneficiary" of
any "variable interest entity" (as such terms are used in Financial
Accounting Standards Board Interpretation No. 46); and all
disclosures contained or incorporated by reference in the
Registration Statement, any Pre-Pricing Prospectus, the Prospectus
or any Permitted Free Writing Prospectus regarding "non-GAAP
financial measures" (as such term is defined by the rules and
regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the
extent applicable;
(w) subsequent
to the respective dates as of which information is given in the
Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, in
each case excluding any amendments or supplements to the foregoing
made after the execution of this Agreement, there has not been (i)
any material adverse change, or any development involving a
prospective material adverse change, in the business, properties,
management, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, (ii) any transaction
which is material to the Company and its subsidiaries taken as a
whole, (iii) any obligation or liability, direct or contingent
(including any off-balance sheet obligations), incurred by the
Company or its subsidiaries, which is material to the Company and
its subsidiaries taken as a whole, (iv) any change in the capital
stock or outstanding indebtedness of the Company or its
subsidiaries or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the
Company
or any of its subsidiaries;
(x) neither
the Company nor any subsidiary of the Company is, and at no
time during which a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of
Shares will either of them be, and, after giving effect to the
offering and sale of the Shares, neither 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 "Investment Company Act");
(y) other
than as set forth in the Registration Statement (excluding the
exhibits thereto), each Pre-Pricing Prospectus and the Prospectus,
each of the Company and its subsidiaries has good and marketable
title to all property (real and personal) described in the
Registration Statement, any Pre-Pricing Prospectus, the Prospectus
or any Permitted Free Writing Prospectus as being owned by any of
them, free and clear of all liens, claims, security interests or
other encumbrances, except such as do not, individually or in the
aggregate, materially affect the value of such property and do not
materially interfere with the use currently made and proposed to be
made of the property by the Company and its subsidiaries; all the
property and buildings described in the Registration Statement, any
Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus as being held under lease by the Company or any
of its subsidiaries is held thereby under valid, subsisting and
enforceable leases;
(z) the
Company and its subsidiaries own, or have obtained valid and
enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and
unregistered), tradenames, service names, copyrights, trade secrets
and other proprietary information described in the Registration
Statement, any Pre-Pricing Prospectus, the Prospectus or any
Permitted Free Writing Prospectus as being owned or licensed by
them or which are necessary for the conduct of their respective
businesses as currently conducted or as proposed to be conducted,
except where the failure to own, license or have such rights would
not, individually or in the aggregate, have a Material Adverse
Effect (collectively, "Intellectual Property"); (i) there are
no third parties who have or, to the Company's knowledge, will be
able to establish rights to any Intellectual Property, except for,
and to the extent of, the ownership rights of the owners of the
Intellectual Property which is licensed to the Company;
(ii) to the Company's knowledge, there is no infringement by
third parties of any Intellectual Property; (iii) there is no
pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the Company's rights in
or to any Intellectual Property, and the Company is unaware of any
facts which could form a reasonable basis for any such action,
suit, proceeding or claim; (iv) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim
by others challenging the validity, enforceability or scope of any
Intellectual Property, and the Company is unaware of any facts
which could form a reasonable basis for any such action, suit,
proceeding or claim; (v) there is no pending or, to the
Company's knowledge, threatened action, suit, proceeding or claim
by others that the Company or any of its subsidiaries infringes or
otherwise violates any patent, trademark, copyright, tradename,
service name, trade secret or
other
proprietary rights of others, and the Company is unaware of any
facts which could form a reasonable basis for any such action,
suit, proceeding or claim; (vi) to the Company's knowledge,
there is no patent or patent application that contains claims that
interfere with the issued or pending claims of any of the
Intellectual Property; and (vii) to the Company's knowledge, there
is no prior art that may render any patent application owned by the
Company of the Intellectual Property unpatentable that has not been
disclosed to the U.S. Patent and Trademark Office;
(aa) neither
the Company nor any of its subsidiaries is engaged in any unfair
labor practice; except for matters which would not, individually or
in the aggregate, have a Material Adverse Effect, (i) there is
(A) no unfair labor practice complaint pending or, to the
Company's knowledge, threatened against the Company or any of its
subsidiaries before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or, to the Company's
knowledge, threatened, (B) no strike, labor dispute, slowdown
or stoppage pending or, to the Company's knowledge, threatened
against the Company or any of its subsidiaries and (C) no
union representation dispute currently existing concerning the
employees of the Company or any of its subsidiaries, (ii) to
the Company's knowledge, no union organizing activities are
currently taking place concerning the employees of the Company or
any of its subsidiaries and (iii) there has been no violation
of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974 or the rules and regulations
promulgated thereunder concerning the employees of the Company or
any of its subsidiaries;
(bb) the
Company and its subsidiaries and their respective properties,
assets and operations are in compliance with, and the Company and
each of its subsidiaries hold all permits, authorizations and
approvals required under, Environmental Laws (as defined below),
except to the extent that failure to so comply or to hold such
permits, authorizations or approvals would not, individually or in
the aggregate, have a Material Adverse Effect; there are no past,
present or, to the Company's knowledge, reasonably anticipated
future events, conditions, circumstances, activities, practices,
actions, omissions or plans that could reasonably be expected to
give rise to any material costs or liabilities to the Company or
its subsidiaries under, or to interfere with or prevent compliance
by the Company or its subsidiaries with, Environmental Laws; except
as would not, individually or in the aggregate, have a Material
Adverse Effect, neither the Company nor a
