EXHIBIT 99.1
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CROSS COUNTRY HEALTHCARE, INC.
(a Delaware corporation)
4,172,868 Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: April 14, 2005
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CROSS COUNTRY HEALTHCARE, INC.
(a Delaware corporation)
4,172,868 Shares of Common Stock
(Par Value $.0001 Per Share)
UNDERWRITING AGREEMENT
April 14, 2005
Citigroup Global Markets Inc.
βββ� βββββββββ� ββββββ
βββ� ββββ, βββ� ββββ βββββ�
Ladies and Gentlemen:
Cross Country Healthcare, Inc., a Delaware corporation (the
"Company"), and the persons listed in Schedule A hereto under the heading "Name
of Selling Shareholder" (the "Selling Shareholders"), confirm their respective
agreements with Citigroup Global Markets Inc. (the "Underwriter") with respect
to the sale by the Selling Shareholders, acting severally and not jointly, and
the purchase by the Underwriter, of the respective numbers of shares of Common
Stock, par value $.0001 per share, of the Company ("Common Stock") set forth in
said Schedule A hereto. The aforesaid 4,172,868 shares of Common Stock to be
purchased by the Underwriter are hereinafter called the "Securities."
The Company and the Selling Shareholders understand that the
Underwriter proposes to make a public offering of the Securities as soon as the
Underwriter deems advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-120189) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), and the offering thereof from time to time
in accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"). Such registration statement has been
declared effective by the Commission, and the Company has filed such
post-effective amendments thereto as may be required prior to the execution of
this Agreement and each such post-effective amendment has been declared
effective by the Commission. Such registration statement (as so amended, if
applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the final prospectus supplement relating to the offering of
the Securities, in the forms first furnished to the Underwriter by the Company
for use in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall also be deemed to
include all documents incorporated therein by reference pursuant to the 1933 Act
or the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to
the execution of this Agreement (including, but not limited to, the Company's
Annual Report on Form 10-K filed with the Commission on March 16, 2005, the
Company's Form 10-K/A filed with the Commission on April 14, 2005 and the
Company's Proxy Statement on Schedule 14A filed with the Commission on April 11,
2005); provided, further, that if the Company files a registration statement
with the Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the
"Rule 462(b) Registration Statement"), then all references to "Registration
Statement" shall also be deemed to include the Rule 462 (b) Registration
Statement; and provided, further, that if the Company elects to rely upon Rule
434 of the 1933 Act Regulations, then all references to "Prospectus" shall also
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be deemed to include the final or preliminary prospectus and the applicable term
sheet or abbreviated term sheet (the "Term Sheet"), as the case may be, in the
forms first furnished to the Underwriter by the Company in reliance upon Rule
434 of the 1933 Act Regulations, and all references to the date of the
Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus"
shall be deemed to refer to (i) any prospectus used before the Registration
Statement became effective and (ii) any prospectus that omitted, as applicable,
the Rule 430A Information, the Rule 434 Information or other information to be
included upon pricing in a form of prospectus filed with the Commission pursuant
to Rule 424(b) ("Rule 424(b)") of the 1933 Act Regulations and was used after
such effectiveness and prior to the initial delivery of the Prospectus to the
Underwriter by the Company. For purposes of this Agreement, all references to
the Registration Statement, Prospectus, Term Sheet or preliminary prospectus or
to any amendment or supplement to any of the foregoing shall be deemed to
include any copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("βββββ�").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be, prior to the execution of this Agreement; and all references
in this Agreement to amendments or supplements to the Registration Statement,
Prospectus or preliminary prospectus shall be deemed to include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, Prospectus or preliminary prospectus, as the case may
be, after the execution of this Agreement.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Underwriter as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with the
Underwriter, as follows:
(i) Compliance with Registration Requirements; Incorporated
Documents. The Company meets the requirements for use of Form S-3
under the 1933 Act. Each of the Registration Statement and any Rule
462(b) Registration Statement has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued
under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments
thereto (including the filing of the Company's most recent Annual
Report on Form 10-K with the Commission (the "Annual Report on Form
10-K")) became effective and at the Closing Time, the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither the Prospectus nor any amendments or supplements thereto
(including any prospectus wrapper), at the time the Prospectus or any
amendments or supplements thereto were issued and at the Closing Time,
included or will include an untrue statement of a material fact or
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omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Company elects to rely
upon Rule 434 of the 1933 Act Regulations ("Rule 434"), the Company
will comply with the requirements of Rule 434. The representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or the Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by the Underwriter expressly for use in the
Registration Statement or the Prospectus.
The Prospectus, each preliminary prospectus and the
prospectuses filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule
424 under the 1933 Act, complied when so filed in all material
respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectus delivered to the Underwriter for use in connection
with this offering will, at the time of such delivery, be identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to βββββ�, except to the extent permitted by
Regulation S-T.
The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they
became effective or at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectus, at the date of
the Prospectus and at the Closing Time, did not and will 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.
(ii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The consolidated financial
statements included in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the
financial position of the Company and its consolidated Subsidiaries at
the dates indicated and the statement of operations, stockholders'
equity and cash flows of the Company and its consolidated Subsidiaries
for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules included in the Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected consolidated financial and
other data and the summary consolidated financial and other
information of the Company included in the Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement. The pro forma financial information and
the related notes thereto included in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the basis described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
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(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its Subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its Subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. (A) Each Subsidiary of the
Company set forth on Schedule C hereto (which lists all subsidiaries
of the Company) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital
stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and, except as otherwise
disclosed in the Registration Statement, is owned by the Company,
directly or through Subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none
of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary.
(B) Except as disclosed in the Prospectus, there are no
encumbrances or restrictions on the ability of any Subsidiary (i) to
pay any dividends or make any distributions on such Subsidiary's
capital stock, (ii) to make any loans or advances to, or investments in
the Company or any other Subsidiary, or (iii) to transfer any of its
property or assets to the Company or any other Subsidiary.
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(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to in
the Prospectus or pursuant to the exercise of convertible securities
or options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company, including, without
limitation, the Securities to be sold by the Selling Shareholders,
have been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company. The shares of issued and
outstanding capital stock of the Company have been issued in
compliance, in all material respects, with all federal and state
securities laws. Except as disclosed in the Prospectus and except for
subsequent issuances pursuant to existing employee benefit plans
referred to in the Prospectus, there are no outstanding options or
warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell,
shares of the Company's capital stock or any such options, warrants,
rights, convertible securities or obligations. The description of the
Company's stock option and purchase plans and the options or other
rights granted and exercised thereunder set forth in the Prospectus
accurately and fairly describe, in all material respects, the
information required to be shown with respect to such plans,
arrangements, options and rights.
(viii) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The Common
Stock conforms to all statements relating thereto contained in the
Prospectus and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its Subsidiaries is in violation of its charter or by-laws or
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults under Agreements and Instruments that would
not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated in this Agreement and in the Registration
Statement and compliance by the Company with its obligations under
this Agreement have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances
that would not result in a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any Subsidiary or any applicable law,
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statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company
or any Subsidiary.
(xi) Absence of Labor Dispute. Except as disclosed in the
Prospectus, no labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent,
and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary's
principal suppliers, manufacturers, customers or contractors, which,
in either case, would reasonably be expected to result in a Material
Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any Subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
would reasonably be expected to result in a Material Adverse Effect,
or which would reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder or thereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or
any Subsidiary is a party or of which any of their respective property
or assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, would not reasonably be expected to result in a Material
Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto which
have not been so described and filed as required.
(xiv) Possession of Intellectual Property. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither
the Company nor any of its Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its Subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance
or sale of the Securities under this Agreement or the consummation of
the transactions contemplated by this Agreement, except such as have
been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations and foreign or state securities or blue sky laws.
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(xvi) Possession of Licenses and Permits. The Company and its
Subsidiaries possess required permits, licenses (including, without
limitation, any state nursing pool licenses), provider numbers,
certificates, approvals, accreditations (including, without
limitation, accreditation or certifications as applicable required by
the ΐΦΜμΜΓappΟΒΤΨt Commission on Accreditation of Healthcare Organizations),
consents and other authorizations (collectively, "Governmental
Licenses") issued by, and have made all required declarations and
filings with, the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them (including, without limitation, the Governmental
Licenses) as are required under such federal and state healthcare laws
as are applicable to the Company and its Subsidiaries, except where
the failure to possess such Governmental Licenses or to make such
declarations and filings could not reasonably be expected to have a
Material Adverse Effect; to the best knowledge of the Company, the
individual nurses and other personnel that the Company and its
subsidiaries have placed or intend to place with clients have obtained
all necessary Governmental Licenses to be legally qualified to serve
at the facilities and in the positions in which they are staffed and
the Company takes reasonable measures to ensure that all such nurses
and other personnel possess such Governmental Licenses; the Company
and its Subsidiaries are in compliance with the terms and conditions
of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force
and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and
effect would not have a Material Adverse Effect; and neither the
Company nor any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xvii) No Fees from Third-Party Payors. None of the Company or
any of its Subsidiaries receives fees, compensation or reimbursement
of any kind for any of its services from any governmental or other
third-party payor, including, without limitation, from third-party
payors such as Medicare, Medicaid, Medi-Cal, private insurance
companies, health maintenance organizations, preferred provider
organizations, managed care systems and other similar third party
payors (including, without limitation, Blue Cross plans).
(xviii) Licensure of Nurses and other Healthcare Professionals.
The Company has established and shall administer, except to the extent
that a failure to do so would not reasonably be expected to result in
a Material Adverse Effect, a compliance program applicable to the
Company and its Subsidiaries, to assist the Company, its Subsidiaries
and the directors, officers and employees of the Company and its
Subsidiaries, in complying with applicable federal and state
guidelines (including, without limitation, guidelines imposed by OSHA
and JCAHO) for the due qualification and licensure of registered
nurses and other healthcare professionals that the Company and its
Subsidiaries place through their staffing businesses.
(xix) Title to Property. Except to the extent specifically
disclosed in the Prospectus, the Company and its Subsidiaries have
good and marketable title to all real property owned by the Company
and its Subsidiaries and good title to all other properties owned by
them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind
except such as (a) are described in the Prospectus or (b) do not,
singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be
made of such property by the Company or any of its Subsidiaries; and
all of the leases and subleases material to the business of the
Company and its Subsidiaries, considered as one enterprise, and under
which the Company or any of its Subsidiaries holds properties
8
described in the Prospectus, are in full force and effect, and neither
the Company or any of its Subsidiaries has any notice of any claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any of its Subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
the Company or of its Subsidiaries to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xx) Investment Company Act. None of the Company or any of its
Subsidiaries is, and upon the sale of the Securities as herein
contemplated none of them will be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxi) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect, (A) neither the Company nor any of its Subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances (including, without
limitation, asbestos, polychlorinated biphenyls, urea-formaldehyde,
insulation, petroleum or petroleum products) (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and
its Subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its Subsidiaries (including, without
limitation, any claims relating to the purchases and other corporate
transactions involving the current Subsidiaries and predecessor
entities which currently are integrated with the Company and its
Subsidiaries) and (D) there are no events or circumstances that would
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any
of its Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxii) Registration Rights. Except as disclosed in the
Prospectus, there are no persons with registration rights or other
similar rights to have any securities of the Company or any of its
Subsidiaries registered pursuant to the Registration Statement or
otherwise registered by the Company or any other person under the 1933
Act.
(xxiii) Insurance. The Company and each of its Subsidiaries is
insured by insurers of recognized financial responsibility against
such loses and risks and in such amounts as are prudent and customary
in the industries in which the Company and its Subsidiaries operate;
none of the Company or any of its Subsidiaries has been refused any
material insurance coverage sought or applied for; and the Company has
no reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue
its operations except where the failure to renew or maintain such
coverage would not reasonably be expected to result in a Material
Adverse Effect. The officers and directors of the Company are insured
by
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insurers of recognized financial responsibility against such losses and
risks and in such amounts as the Company believes are prudent and
customary for officers' and directors' liability insurance of a public
company and as the Company believes would cover claims which would
reasonably be expected to be made in connection with the issuance of
the Securities; and the Company has no reason to believe that it will
not be able to renew its existing directors' and officers' liability
insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to cover its
officers and directors.
(xxiv) Tax Returns and Payment of Taxes. The Company and its
Subsidiaries have timely filed all federal, state, local and foreign
tax returns that are required to be filed or has duly requested
extensions thereof and all such tax returns are true, correct and
complete, except to the extent that any failure to file or request an
extension, or any incorrectness would not reasonably be expected to
result in a Material Adverse Effect. The Company and its Subsidiaries
have timely paid all taxes shown as due on such filed tax returns
(including any related assessments, fines or penalties), except to the
extent that any such taxes are being contested in good faith and by
appropriate proceedings, or to the extent that any failure to pay
would not reasonably be expected to result in a Material Adverse
Effect; and adequate charges, accruals and reserves have been provided
for in the financial statements referred to in Section 1(a)(iii) above
in accordance with GAAP in respect of all Federal, state, local and
foreign taxes for all periods as to which the tax liability of the
Company and its Subsidiaries has not been finally determined or
remains open to examination by applicable taxing authorities except
(A) for taxes incurred after the date of the financial statements
referred to in Section 1(a)(iii) or (B) where the failure to provide
for such charges, accruals and reserves would not reasonably be
expected to result in a Material Adverse Effect. None of the Company
or its Subsidiaries is a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Internal
Revenue Code of 1986, as amended (the "Code").
(xxv) No Stabilization or Manipulation. Neither the Company nor
any of its Subsidiaries or, to the best of their knowledge, any of
their directors, officers or affiliates has taken or will take,
directly or indirectly, any action designed to, or that could be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities in violation of Regulation
M under the 1934 Act.
(xxvi) Certain Transactions. Except as disclosed in the
Prospectus, there are no outstanding loans, advances, or guarantees of
indebtedness by the Company or any of its Subsidiaries to or for the
benefit of any of the executive officers or directors of the Company
or any of the members of the families of any of them that would be
required to be so disclosed under the 1933 Act, the 1933 Act
Regulations or Form S-3.
(xxvii) Statistical and Market Data. The statistical and
market-related data included in the Prospectus are derived from
sources which the Company reasonably and in good faith believes to be
accurate, reasonable and reliable in all material respects and the
statistical and market-related data included in the Prospectus agrees
with the sources from which it was derived in all material respects.
10
(xxviii) Accounting and other Controls. The Company makes and
keeps books, records and accounts which, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the
assets of the Company. The Company has established a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions were, are and will be executed in
accordance with management's general or specific authorization; (ii)
transactions were, are and will be recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets was, is and
will be permitted only in accordance with a management's general or
specific authorizations; and (iv) the recorded accountability for
assets was, is and will be compared with existing assets at reasonable
intervals and appropriate action was, is and will be taken with
respect to any differences.
(xxix) ββββββββ-βββββ� Compliance. The Company and the Company's
directors or officers, in their capacities as such, are in compliance
in all material respects with all applicable provisions of the
ββββββββ-βββββ� Act of 2002 and the rules and regulations promulgated
in connection therewith (collectively, the "ββββββββ-βββββ� Act"),
including Section 402 related to loans and Sections 302 and 906
related to certifications. Except as disclosed in the Prospectus, the
Company and the Company's directors or officers are actively taking
all commercially reasonable steps to ensure that the Company and the
Company's directors or officers, in their capacities as such, will be
in compliance with all other provisions of the ββββββββ-βββββ� Act at
the time of their effectiveness or applicability.
(b) Representations and Warranties by each of the Selling
Shareholders. Each Selling Shareholder severally and not jointly represents and
warrants to the Underwriter as of the date hereof and as of the Closing Time,
and agrees with the Underwriter, as follows:
(i) Accurate Disclosure. The information furnished in writing
by or on behalf of such Selling Shareholder expressly for use in the
Registration Statement and any amendment or supplement thereto does
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and the information furnished in
writing by or on behalf of such Selling Shareholder expressly for use
in the Prospectus or any preliminary prospectus does not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and such
Selling Shareholder is not prompted to sell the Securities to be sold
by such Selling Shareholder under this Agreement by any information
concerning the Company or any subsidiary of the Company which is not
set forth in any preliminary prospectus or the Prospectus.
(ii) Authorization of Agreements. Each Selling Shareholder has
the full right, power and authority to enter into this Agreement and
to sell, transfer and deliver the Securities to be sold by such
Selling Shareholder hereunder. The execution and delivery of this
Agreement and the sale and delivery of the Securities to be sold by
such Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by such Selling Shareholder with
its obligations hereunder have been duly authorized by such Selling
Shareholder and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by such Selling Shareholder or any property or assets of
such Selling Shareholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license,
lease or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder may be
11
bound, or to which any of the property or assets of such Selling
Shareholder is subject, nor will such action result in any violation
of the provisions of the charter or by-laws or other organizational
instrument of such Selling Shareholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over such Selling Shareholder
or any of its properties.
(iii) Record and Beneficial Ownership. Such Selling Shareholder
is the record and beneficial owner of the Securities to be sold by it
hereunder free and clear of all liens, encumbrances, equities and
claims; and upon payment for the Securities to be sold by the Selling
Shareholders to the Underwriter as provided in this Agreement, the
delivery of such Securities to Cede & Co. ("Cede") or such other
nominee as may be designated by The Depository Trust Company ("DTC"),
the registration of such Securities in the name of Cede or such other
nominee and the crediting of such Securities on the records of DTC to
security accounts in the name of the Underwriter (assuming that
neither DTC nor the Underwriter has notice of any adverse claim (as
such phrase is defined in Section 8-105 of the Uniform Commercial Code
as in effect in the State of New York (the "UCC")) to such Securities
or any security entitlement in respect thereof), (A) DTC shall be a
"protected purchaser" of such Securities within the meaning of Section
8-303 of the UCC, (B) under Section 8-501 of the UCC, the Underwriter
will acquire a security entitlement in respect of such Securities and
(C) to the extent governed by Article 8 of the UCC, no action based on
any "adverse claim" (as defined in Section 8-102 of the UCC) to such
Securities may be asserted against the Underwriter; it being
understood that for purposes of this representation and warranty, each
Selling Shareholder has assumed that when such payment, delivery and
crediting occur, (x) such Securities will have been registered in the
name of Cede or such other nominee as may be 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 securities
account or accounts in the name of the Underwriter on the records of
DTC will have been made pursuant to the UCC.
(iv) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities in violation of Regulation M under the 1934 Act.
(v) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification
or decree of, any court or governmental authority or agency, domestic
or foreign, is necessary or required for the performance by each
Selling Shareholder of its obligations hereunder, or in connection
with the sale and delivery of the Securities being sold by such
Selling Shareholder hereunder or the consummation of the transactions
contemplated by this Agreement except such as may have previously been
made or obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(vi) No Association with NASD. Neither such Selling Shareholder
nor any of its affiliates is participating in the distribution of the
offering of the Securities, and neither such Selling Shareholder nor
any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
paragraph (dd) of Article I of the By-Laws of the National Association
of Securities Dealers, Inc. (the "NASD")), the Underwriter.
12
(c) Officer's Certificates. Any certificate signed by any
officer of the Company or any of its Subsidiaries delivered to the Underwriter
or to counsel for the Underwriter shall be deemed a representation and warranty
by the Company to the Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of a Selling Shareholder as such and
delivered to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty by such Selling Shareholder to the Underwriter as to
the matters covered thereby.
Section 2. Sale and Delivery to Underwriter; Closing.
-----------------------------------------
(a) Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, each Selling Shareholder, severally and not jointly, agrees to sell to
the Underwriter, and the Underwriter agrees to purchase from each Selling
Shareholder, at the price per share set forth in Schedule B, the number of
Securities set forth in Schedule A opposite the name of each Selling
Shareholder.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Debevoise &
ββββββββ LLP, βββ� βββββ� ββββββ, βββ� ββββ, βββ� ββββ βββββ�, or at such other place
as shall be agreed upon by the Underwriter, the Company and the Selling
Shareholders at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof, or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriter, the Company and the Selling
Shareholders (such time and date of payment and delivery being herein called
"Closing Time").
Payment shall be made to the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Selling Shareholders, against delivery to the Underwriter for the account of the
Underwriter of certificates for the Securities to be purchased by it.
(c) Denominations; Registration. Certificates for the Securities shall be in
such denominations and registered in such names as the Underwriter may request
in writing at least one full business day before the Closing Time. The
certificates for the Securities will be made available for examination and
packaging by the Underwriter in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
Section 3. Covenants of the Company.
------------------------
The Company covenants with the Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 434 of the 1933 Act Regulations, if and as
applicable, and will notify the Underwriter immediately, and confirm
the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to
the Prospectus or any amended Prospectus shall have been filed, (ii)
of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes.
The Company will promptly effect the filings necessary pursuant to
Rule 424 and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under
Rule 424 was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company
will make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
13
(b) Filing of Amendments. The Company will give the Underwriter
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it
became effective or to the Prospectus, whether pursuant to the 1933
Act, the 1934 Act or otherwise, will furnish the Underwriter with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Underwriter or counsel for the
Underwriter shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or, if requested by the Underwriter, will deliver to the
Underwriter and counsel for the Underwriter, without charge, signed
copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and copies of all signed consents
and certificates of experts, and will also deliver to the Underwriter,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for
the Underwriter. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriter will be identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to βββββ�, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to the
Underwriter, without charge, as many copies of each preliminary
prospectus as the Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to the Underwriter, without
charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of
the Prospectus (as amended or supplemented) as the Underwriter may
reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriter will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to βββββ�, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated
in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel
for the Underwriter or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the
Prospectus will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or supplement any Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriter such
number of copies of such amendment or supplement as the Underwriter
may reasonably request.
14
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriter, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the
Underwriter may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Listing. The Company will use its best efforts to effect
and maintain the quotation of the Securities on the Nasdaq National
Market and will file with the Nasdaq National Market all documents and
notices required by the Nasdaq National Market of companies that have
securities that are traded in the over-the-counter market and
quotations for which are reported by the Nasdaq National Market.
(i) Reporting Requirements. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required
by the 1934 Act and the rules and regulations of the Commission
thereunder.
(j) Continued Compliance with ββββββββ-βββββ� Act. Except as
disclosed in the Prospectus, (i) the Company will comply in all
material respects with all applicable provisions of the ββββββββ-βββββ�
Act and (ii) will use its commercially reasonable efforts to cause the
Company's directors and officers, in their capacities as such, to
comply in all material respects with the provisions of the
ββββββββ-βββββ� Act.
Section 4. Payment of Expenses.
--------------------
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and delivery
to the Underwriter of this Agreement and such other documents as may
be required in connection with the offering, purchase, sale, issuance
or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriter,
including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities
to the Underwriter, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the
Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriter in connection therewith
and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriter
15
of copies of each preliminary prospectus, any Term Sheet, and of the
Prospectus and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriter of copies of the
Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities and
(ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriter in connection with, the
review, if any, by the NASD of the terms of the sale of the Securities
and (x) the fees and expenses incurred in connection with the
inclusion of the Securities in the Nasdaq National Market.
(b) Expenses of the Selling Shareholders. The Selling
Shareholders, severally, and not jointly, will pay all expenses
incident to the performance of their respective obligations under, and
the consummation of the transactions contemplated by this Agreement,
including (i) any stamp duties, capital duties and stock transfer
taxes, if any, payable upon the sale of the Securities to the
Underwriter (except New York stock transfer tax) and (ii) the fees and
disbursements of their respective counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated
by the Underwriter in accordance with the provisions of Section 5,
Section 9(a)(i) or Section 9(a)(iii) hereof, the Company shall
reimburse the Underwriter for all of its out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriter.
(d) Allocation of Expenses. The provisions of this Section
shall not affect any agreement that the Company and the Selling
Shareholders may make for the sharing of such costs and expenses.
Section 5. Conditions of Underwriter's Obligations.
----------------------------------------
The obligations of the Underwriter hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company, any Subsidiary of the Company, or on behalf of any Selling
Shareholder delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has
become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus containing
information relating to the description of the Securities, the
specific method of distribution and similar matters shall have been
filed with the Commission in accordance with Rule 424(b) (or any
required post-effective amendment providing such information shall
have been filed and declared effective in accordance with the
requirements of Rule 430A of the 1933 Act Regulations), or, if the
Company has elected to rely upon Rule 434 of the 1933 Act Regulations,
a Term Sheet including the Rule 434 Information shall have been filed
with the Commission in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of
Closing Time, of Proskauer Rose LLP, special counsel for the Company,
in form and substance satisfactory to counsel for the Underwriter, to
the effect set forth in Exhibit A-1 hereto and to such further effect
as counsel to the Underwriter may reasonably request.
16
(c) Opinion of General Counsel of the Company. At Closing Time,
the Underwriter shall have received the favorable opinion, dated as of
Closing Time, of the General Counsel of the Company, in form and
substance satisfactory to counsel for the Underwriter, to the effect
set forth in Exhibit A-2 hereto and to such further effect as counsel
to the Underwriter may reasonably request.
(d) Opinion of Counsel for the Selling Shareholders. At Closing
Time, the Underwriter shall have received the favorable opinion, dated
as of Closing Time, of each counsel for the Selling Shareholders
(which counsel shall be reasonably satisfactory to the Underwriter),
each in form and substance satisfactory to counsel for the
Underwriter, to the effect set forth in Exhibit A-3 hereto and to such
other effect as counsel for the Underwriter may reasonably request.
(e) Opinion of Counsel for Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of
Closing Time, of Debevoise & ββββββββ LLP, counsel for the
Underwriter, in form and substance reasonably satisfactory to the
Underwriter.
(f) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Underwriter shall have
received a certificate of the President and Chief Executive Officer
and the Chief Financial Officer, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii)
the representations and warranties in Section 1(a) hereof are true and
correct with the same force and effect as though expressly made at and
as of Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened or are contemplated by the Commission.
(g) Certificate of each Selling Shareholder. At Closing Time,
the Underwriter shall have received a certificate of each Selling
Shareholder, dated as of the Closing Time, to the effect that (i) the
representations and warranties of such Selling Shareholder contained
in Section 1(b) hereof are true and correct in all respects with the
same force and effect as though expressly made at and as of Closing
Time and (ii) such Selling Shareholder has complied in all material
respects with all agreements and all conditions on its part to be
performed under this Agreement at or prior to Closing Time.
(h) Accountant's Comfort Letters. At the time of the execution
of this Agreement, the Underwriter shall have received from Ernst &
Young LLP a letter dated such date, in form and substance satisfactory
to the Underwriter, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the
Prospectus.
(i) Bring-down Comfort Letters. At Closing Time, the
Underwriter shall have received from Ernst & Young LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (h) of this
Section, except that the specified date referred to shall be a date
not more than three business days prior to Closing Time.
17
(j) Approval of Listing. At Closing Time, the Securities shall
have been approved for inclusion in the Nasdaq National Market,
subject only to official notice of issuance.
(k) No Objection. The NASD shall have not raised any objection
with respect to the fairness and reasonableness of the underwriting
terms and arrangements with respect to the Securities.
(l) Form W-8 or W-9. At the date of this Agreement, the
Underwriter shall have received form W-8 or W-9, as required, signed
by each Selling Shareholder.
(m) Additional Documents. At Closing Time, counsel for the
Underwriter shall have been furnished with such documents and opinions
as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company and the Selling
Shareholders in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriter and counsel for the Underwriter.
(n) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement may be terminated by the Underwriter by
notice to the Company at any time at or prior to Closing Time, and
such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and
effect.
Section 6. Indemnification.
----------------
(a) Indemnification of the Underwriter by the Company. The
Company, agrees to indemnify and hold harmless the Underwriter and each person,
if any, who controls the Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information deemed to be a part
thereof, if applicable, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission or any such alleged untrue statement or
omission; provided that (subject to Section 6(e) below) any such
settlement is effected with the written consent of the Company; and
18
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Underwriter), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense (a) to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information
deemed to be a part thereof, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); and (b) with respect to any
preliminary prospectus to the extent that it shall be proved that any such loss,
liability, claim, damage or expense of the Underwriter resulted solely from the
fact that the Underwriter, in contravention of a requirement of this Agreement
or applicable law, sold Securities to a person to whom the Underwriter failed to
send or give, at or prior to Closing Time, a copy of the Prospectus (if
applicable, as amended or supplemented) if the Company has previously furnished
copies thereof (sufficiently in advance of Closing Time to allow for
distribution by Closing Time) to the Underwriter and the loss, liability, claim,
damage or expense of the Underwriter resulted from an untrue statement or
alleged untrue statement or omission or alleged omission of a material fact
contained in or omitted (or allegedly omitted) from the preliminary prospectus
that was corrected or included in the Prospectus (if applicable, as amended or
supplemented) prior to Closing Time.
(b) Indemnification of the Underwriter by the Selling
Shareholders. Each of the Selling Shareholders severally and not jointly agrees
to indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information deemed to be a part thereof,
if applicable, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and conformity with written information
furnished to the Company by or on behalf of such Selling Shareholder expressly
for use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) provided, however, that the liability of any Selling Shareholder
pursuant to this Section 6(b) shall be limited to the net proceeds received by
such Selling Shareholder from the Securities purchased by the Underwriter from
such Selling Shareholder pursuant to this Agreement; and provided further that
(subject to Section 6(e) below) in the case of subsection (a)(ii), only if such
settlement is effected with the Selling Shareholder's prior written consent. The
Underwriter acknowledges that the information relating to such Selling
Shareholder set forth in the table immediately following the fourth paragraph
under the heading "Selling Stockholders" in the Registration Statement, and in
the table immediately following the first paragraph under the heading "Selling
Stockholders" in any preliminary prospectus and the Prospectus (other than the
percentage or number of outstanding shares information) constitute the only
information furnished in writing by or on behalf of such Selling Shareholder for
inclusion in the Registration Statement, any preliminary prospectus or the
Prospectus.
19
(c) Indemnification of Company, Directors and Officers and
Selling Shareholders. The Underwriter agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Selling
Shareholder and each person, if any, who controls each Selling Shareholder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information deemed to be a
part thereof, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Underwriter expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto). The
Company acknowledges that the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities and, under the heading "Plan of
Distribution," (i) the sentences related to concessions and reallowances and
(ii) the paragraph related to stabilization, syndicate covering transactions and
penalty bids in any preliminary prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the Underwriter for
inclusion in any preliminary prospectus or the Prospectus.
(d) Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability hereunder to
the extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability which it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to Section 6(a) and 6(b) above, counsel to the indemnified parties shall be
selected by the Underwriter, and, in the case of parties indemnified pursuant to
Section 6(c) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
20
(f) Other Agreements with Respect to Indemnification. The
provisions of this Section shall not affect any agreement among the Company and
the Selling Shareholders with respect to indemnification.
Section 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriter on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Shareholders on the one hand and of the Underwriter on
the other hand in connection with the statements or omissions, which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriter on the other hand in connection
with the offering of the Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds (i.e., after
deducting the total underwriting discount) from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the Selling Shareholders and the total underwriting discount received by the
Underwriter, in each case as set forth on the cover of the Prospectus, or if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.
The relative fault of the Company and the Selling Shareholders
on the one hand and the Underwriter on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Shareholders or
by the Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriter agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
21
Notwithstanding the provisions of this Section 7, (i) the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which the Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission and
(ii) no Selling Shareholder shall be required to contribute any amount in excess
of the amount of the total net proceeds received by such Selling Shareholder
from the sale of Securities pursuant to this Agreement. Each Selling Shareholder
shall be obligated under this Section 7 only with respect to untrue statements
or omissions made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information deemed to be a
part thereof, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Selling
Shareholder expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto).
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the ββββ βββ�) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company or any Selling Shareholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company or such Selling Shareholder, as the case may be.
The provisions of this Section 7 shall not affect any agreement
among the Company and the Selling Shareholders with respect to contribution.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company or any of its
Subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of the
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriter.
Section 9. Termination of Agreement.
-------------------------
(a) Termination; General. The Underwriter may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof, any declaration by the United States of a national emergency or war, or
other calamity or crisis or act of terrorism or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Underwriter, impracticable or inadvisable to market the
22
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the Nasdaq National Market, or (iv) if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (v) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to
this Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
Section 10. Default by One or More of the Selling Shareholders.
--------------------------------------------------
If a Selling Shareholder shall fail at Closing Time to sell and
deliver the number of Securities which such Selling Shareholder or Selling
Shareholders are obligated to sell hereunder, and the remaining Selling
Shareholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Shareholders as set forth in Schedule A hereto,
then the Underwriter may, by notice from the Underwriter to the Company and the
non-defaulting Selling Shareholders, either (a) terminate this Agreement without
any liability on the fault of any non-defaulting party except that the
provisions of Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or
(b) elect to purchase the Securities which the non-defaulting Selling
Shareholders have agreed to sell hereunder. No action taken pursuant to this
Section 10 shall relieve any Selling Shareholder so defaulting from liability,
if any, in respect of such default.
In the event of a default by any Selling Shareholder as
referred to in this Section 10, the Underwriter, the Company and the
non-defaulting Selling Shareholders shall have the right to postpone Closing
Time for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
Section 11. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be mailed, delivered or telefaxed to the Citigroup Global
Markets Inc. General Counsel (fax no.: (βββ�) βββ�-ββββ) and confirmed to the
General Counsel, Citigroup Global Markets Inc., at βββ� βββββββββ� ββββββ, βββ�
ββββ, βββ� ββββ, βββββ�, Attention: General Counsel, with a copy to Debevoise &
ββββββββ LLP, βββ� βββββ� ββββββ, βββ� ββββ, βββ� ββββ, attention of ββββββ β�.
βββββββ�; and notices to the Company shall be directed to it at ββββ ββββ ββ
ββββββββ ββββ., βββββ� βββ�, ββββ βββββ�, βββββββ� βββββ�, attention of ββββββ β�.
βββββββ�, President and CEO, with a copy to Proskauer Rose LLP, ββββ ββββββββ,
βββ� ββββ, βββ� ββββ βββββ�, attention of βββββββ� β�. βββββ� and notices to each
Selling Shareholder shall be directed to Metalmark Capital LLC, 1177 Avenue of
the ββββββββ, ββββ βββββ�, βββ� ββββ, βββ� ββββ βββββ�, attention of ββββ β�. βββ�,
and ββββββ βββββββ� Private Equity, ββββ ββββββββ, ββββ βββββ�, βββ� ββββ, βββ� ββββ
βββββ�, attention of βββββ� ββββββββββ, with a copy (which shall not constitute
notice) to βββββ� ββββ & ββββββββ, βββ� βββββββββ� ββββββ, βββ� ββββ, βββ� ββββ
βββββ�, attention of βββββββ� ββββββ.
23
Section 12. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriter and the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriter and the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriter and the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
Section 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 14. Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
24
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company and the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Underwriter and the
Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
Cross Country Healthcare, Inc.
By: /s/ ββββββ β�. βββββββ�
-----------------------------------
Name: ββββββ β�. βββββββ�
Title: Chief Executive Officer and President
ββββββ βββββββ� ββββ ββββββ Capital
Partners IV, L.P.
MSDW IV 892 Investors, β�.β�.
ββββββ βββββββ� ββββ ββββββ Capital
Investors IV, L.P.
By: MSDW Capital Partners IV,
LLC, as General Partner
By: Metalmark Subadvisor LLC,
as Attorney-in-Fact
By: /s/
-----------------------------------
Name:
Title:
ββββββ βββββββ� Venture Partners III, β�.β�.
ββββββ βββββββ� Venture Partners
Entrepreneur Fund, β�.β�.
ββββββ βββββββ� Venture Investors III, L.P.
By: ββββββ βββββββ� Venture Partners III,
L.L.C., as General Partner
By: ββββββ βββββββ� Venture
Capital III, Inc., as Institutional
Managing Member
By: /s/
-------------------------------------
Name:
Title:
25
CONFIRMED AND ACCEPTED,
as of the date first above written:
CITIGROUP GLOBAL MARKETS INC.
By:/s/
-------------------------------
Authorized Signatory
26
SCHEDULE A
Number of Securities
to be Purchased by
Citigroup Global
Name of Selling Shareholder Markets Inc.
-------------------------- -----------
ββββββ βββββββ� ββββ ββββββ Capital Partners IV, L.P......... 3,464,045
MSDW IV 892 Investors, L.P.................................. 371,760
ββββββ βββββββ� ββββ ββββββ Capital Investors IV, L.P........ 119,459
ββββββ βββββββ� Venture Partners III, L.P.................... 190,922
ββββββ βββββββ� Venture Investors III, L.P................... 18,334
ββββββ βββββββ� Venture Partners Entrepreneur Fund, L.P...... 8,348
---------
Total....................................................... 4,172,868
=========
Sch. A-1
SCHEDULE B
CROSS COUNTRY HEALTHCARE, INC.
4,172,868 Shares of Common Stock
(Par Value $.0001 Per Share)
1. The public offering price per share for the Securities,
determined as provided in said Section 2, shall be $16.95.
2. The purchase price per share for the Securities to be paid
by the Underwriter shall be $16.59875, being an amount equal to the public
offering price set forth above less $0.35125 per share.
Sch. B-1
SCHEDULE C
Subsidiaries of Cross Country Healthcare, Inc.
----------------------------------------------
Assignment America, Inc.
βββββ� Search, Inc.
CC Staffing, Inc.
Clinforce, Inc.
Cross Country Capital, Inc.
Cross Country Consulting, Inc.
Cross Country Local, Inc.
Cross Country Education, Inc.
Cross Country TravCorps, Inc.
HealthStaffers, Inc.
MCVT, Inc.
Med-Staff, Inc.
NovaPro, Inc.
TVCM, Inc.
Sch. C-1