EXHIBIT 1.1
[2,000,000] SHARES*
AMEDISYS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
St. Petersburg, Florida
August __, 2004
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxxxxx & Company, Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
Amedisys, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
several Underwriters named in Schedule I hereto (the "Underwriters"), an
aggregate of 2,000,000 shares of the Company's common stock, par value $0.001
per share (the "Common Stock"). The aggregate of 2,000,000 shares of Common
Stock to be purchased from the Company are called the "Firm Shares." In
addition, the Company has agreed to sell to the Underwriters, upon the terms and
conditions stated herein, up to an additional 150,000 shares of Common Stock and
certain stockholders of the Company named in Schedule II hereto (the "Selling
Stockholders") have severally and not jointly agreed to sell to the
Underwriters, upon the terms and conditions stated herein, up to an additional
150,000 shares of Common Stock to cover over-allotments by the Underwriters, if
any, each Selling Stockholder selling up to the amount set forth opposite such
Selling Stockholder's name in Schedule II hereto. The additional 150,000 shares
to be sold by the Company (the "Company Additional Shares") and the additional
150,000 shares to be sold by the Selling Stockholders (the "Selling Stockholder
Shares") are collectively referred to in this Agreement as the "Additional
Shares." The Firm Shares and the Additional Shares are collectively referred to
in this Agreement as the "Shares." Xxxxxxx Xxxxx & Associates, Inc., Jefferies &
Co., Inc and Xxxx Xxxxx Xxxx Xxxxxx, Incorporated are acting as the
representatives of the several Underwriters and in such capacity are referred to
in this Agreement as the "Representatives."
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* Plus an additional 300,000 shares subject to the Underwriters over-allotment
option.
The Company wishes to confirm as follows its agreement with you and the
other several Underwriters, on whose behalf you are acting, in connection with
the several purchases of the Shares from the Company.
1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 (File No.
333-118352), including a prospectus subject to completion, relating to the
Shares. Such registration statement, as amended, including the financial
statements, exhibits and schedules thereto, at the time when it becomes
effective and as thereafter amended by any post-effective amendment, is referred
to in this Agreement as the "Registration Statement." The prospectus in the form
included in the Registration Statement or, if the prospectus included in the
Registration Statement omits certain information in reliance upon Rule 430A
under the Act and such information is thereafter included in a prospectus filed
with the Commission pursuant to Rule 424(b) under the Act or as part of a
post-effective amendment to the Registration Statement after the Registration
Statement becomes effective, the prospectus as so filed, is referred to in this
Agreement as the "Prospectus." If the Company elects, with the consent of the
Representatives, to rely on Rule 434 under the Act, all references to the
Prospectus shall be deemed to include the form of prospectus and the term sheet
contemplated by Rule 434, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the Act (the "Rule 434 Prospectus"). If
the Company files another registration statement with the Commission to register
a portion of the Shares pursuant to Rule 462(b) under the Act (the "Rule 462
Registration Statement"), then any reference to "Registration Statement" herein
shall be deemed to include the registration statement on Form S-3 (File No.
333-118352) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the Act. The prospectus subject to
completion in the form included in the Registration Statement at the time of the
initial filing of such Registration Statement with the Commission and as such
prospectus is amended from time to time until the date of the Prospectus is
referred to in this Agreement as the "Preliminary Prospectus." All references in
this Agreement to the Registration Statement, the Rule 462 Registration
Statement, the Rule 434 Prospectus, a Preliminary Prospectus or the Prospectus,
or any amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX"). Any reference in this Agreement to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the date of the
Registration Statement, such Preliminary Prospectus or the Prospectus, as the
case may be, and any reference to any amendment or supplement to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act"), that, upon filing,
are incorporated by reference therein, as required by paragraph (b) of Item 12
of Form S-3. As used herein, the term "Incorporated Documents" means the
documents that at the time of filing are incorporated by reference in the
Registration
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Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto.
2. Agreements to Sell and Purchase. The Company hereby agrees to
issue and sell the Firm Shares to the Underwriters and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, each Underwriter
agrees, severally and not jointly, to purchase from the Company at a purchase
price of $[______] per Share (the "purchase price per Share"), the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
The Company and the Selling Stockholders hereby also agree to sell to
the Underwriters, and, upon the basis of the representations, warranties and
agreements of the Company and the Selling Stockholders herein contained and
subject to all the terms and conditions set forth herein, the Underwriters shall
have the right for 30 days from the date of the Prospectus to purchase from the
Company and the Selling Stockholders up to 100,000 and 200,000 Additional
Shares, respectively, at the purchase price per Share for the Firm Shares. The
Additional Shares may be purchased solely for the purpose of covering
over-allotments, if any, made in connection with the offering of the Firm
Shares. If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase the number of Additional Shares
(subject to such adjustments as you may determine to avoid fractional shares)
that bears the same proportion to the total number of Additional Shares to be
purchased by the Underwriters as the number of Shares set forth opposite the
name of such Underwriter in Schedule I hereto bears to the total number of
Shares. The option to purchase Additional Shares may be exercised at any time
within 30 days after the date of the Prospectus.
3. Terms of Public Offering. The Company has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.
Not later than 12:00 p.m., New York time, on the second business day
following the date the Shares are released by the Underwriters for sale to the
public, the Company shall deliver or cause to be delivered copies of the
Prospectus in such quantities and at such places as the Representatives shall
request.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of the Firm Shares and payment therefor shall be made at the
offices of Xxxxxxxx & Xxxxxxxx, LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX
00000 at 10:00 a.m., New York time, on [_________], or such other time not later
than 10 business days after such date as shall be agreed upon by the
Representatives and the Company (the time and date of such closing are called
the "Closing Date"). The place of closing for the Firm Shares and the Closing
Date may be varied by agreement between the Representatives and the Company. The
Company hereby acknowledges that circumstances under which the Representatives
may provide notice to postpone the Closing Date as originally
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scheduled include any determination by the Company or the Representatives to
recirculate to the public copies of an amended or supplemented Prospectus or a
delay as contemplated by the provisions of Section 11 hereof.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the offices of Xxxxxxxx &
Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 at 10:00 a.m. New
York time on such date or dates (the "Additional Closing Date") (which may be
the same as the Closing Date, but shall in no event be earlier than the Closing
Date nor earlier than three nor later than ten business days after the giving of
the notice hereinafter referred to) as shall be specified in a written notice,
from the Representatives on behalf of the Underwriters to the Company and the
Selling Stockholders, of the Underwriters' determination to purchase a number,
specified in such notice, of Additional Shares. Such notice may be given at any
time within 30 days after the date of the Prospectus and must set forth (i) the
aggregate number of Additional Shares as to which the Underwriters are
exercising the option and (ii) the names and denominations in which the
certificates for which the Additional Shares are to be registered. The place of
closing for the Additional Shares and the Additional Closing Date may be varied
by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 1:00 p.m., New York time, not later than the
second full business day preceding the Closing Date or the Additional Closing
Date, as the case may be. Such certificates shall be made available to you in
St. Petersburg, Florida for inspection and packaging not later than 9:30 a.m.,
New York time, on the business day immediately preceding the Closing Date or the
Additional Closing Date, as the case may be. The certificates evidencing the
Firm Shares and any Additional Shares to be purchased hereunder shall be
delivered to you on the Closing Date or the Additional Closing Date, as the case
may be, against payment of the purchase price therefore by wire transfer of
immediately available funds to an account specified in writing, not later than
the close of business on the business day next preceding the Closing Date by the
Company or the Additional Closing Date by the Company and the Selling
Stockholders. Payment for the Shares sold by the Company hereunder shall be
delivered by the Representatives to the Company. Payment for the Shares sold by
the Selling Stockholders hereunder shall be delivered by the Representatives to
the Custodian (as defined herein).
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price per Share
for the Firm Shares and the Additional Shares, if any, that the Underwriters
have agreed to purchase. Xxxxxxx Xxxxx and Associates, Inc., Jefferies &
Company, Inc. and Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, individually and not as
Representatives of the Underwriters, may, but shall not be obligated to, make
payment for any Shares to be purchased by any Underwriter whose funds shall not
have been received by the Representatives by the Closing Date or the Additional
Closing Date, as the case may be, for the account of such Underwriter, but
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any such payment shall not relieve such Underwriter from any of its obligations
under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Shares to be sold by such Selling Stockholder to the
several Underwriters, or otherwise in connection with the performance of such
Selling Stockholder's obligations hereunder and (ii) the Custodian is authorized
to deduct for such payment any such amounts from the proceeds to such Selling
Stockholder hereunder and to hold such amounts for the account of such Selling
Stockholder with the Custodian under the Custody Agreement (as defined herein).
5. Covenants and Agreements.
5.1 Of the Company. The Company covenants and agrees with the
several Underwriters as follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective, if it has
not already become effective, and will advise you promptly and, if requested by
you, will confirm such advice in writing (i) when the Registration Statement has
become effective and the time and date of any filing of any post-effective
Registration Statement or any amendment or supplement to any Preliminary
Prospectus or the Prospectus and the time and date that any post-effective
amendment to the Registration Statement becomes effective, (ii) if Rule 430A
under the Act is employed, when the Prospectus has been timely filed pursuant to
Rule 424(b) under the Act, (iii) of the receipt of any comments of the
Commission, or any request by the Commission for amendments or supplements to
the Registration Statement, any Preliminary Prospectus or the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purposes and (v) within the period of time
referred to in Section 5.1(e) below, of any change in the Company's condition
(financial or other), business, prospects, properties, net worth or results of
operations, or of any event that comes to the attention of the Company that
makes any statement made in the Registration Statement or the Prospectus (as
then amended or supplemented) untrue in any material respect or that requires
the making of any additions thereto or changes therein in order to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading in any material respect, or of the
necessity to amend or supplement the Prospectus (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal or lifting of such order at the earliest possible time. If the
Company elects, with the consent of the Representatives, to rely on Rule 434
under the Act, the Company will provide the Underwriters with copies of the form
of Rule 434 Prospectus (including copies of a term sheet that complies with the
requirements of Rule 434 under the Act), in such number as the Underwriters may
reasonably request, and file
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with the Commission in accordance with Rule 424(b) of the Act the form of
Prospectus complying with Rule 434(b)(2) of the Act before the close of business
on the first business day immediately following the date hereof. If the Company
elects not to rely on Rule 434 under the Act, the Company will provide the
Underwriters with copies of the form of Prospectus, in such number as the
Underwriters may reasonably request, and file with the Commission such
Prospectus in accordance with Rule 424(b) of the Act before the close of
business on the first business day immediately following the date hereof.
(b) The Company will furnish to you, without charge, two
signed duplicate originals of the Registration Statement as originally filed
with the Commission and of each amendment thereto, including financial
statements and all exhibits thereto, and will also furnish to you, without
charge, such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto as you may reasonably request.
(c) The Company will not file any Rule 462 Registration
Statement or any amendment to the Registration Statement or make any amendment
or supplement to the Prospectus unless (i) you shall have previously been
advised thereof and been given a reasonable opportunity to review such filing,
amendment or supplement and (ii) you have not reasonably objected to such
filing, amendment or supplement after being so advised and having been given a
reasonable opportunity to review such filing, amendment or supplement.
(d) Prior to the execution and delivery of this
Agreement, the Company has delivered or will deliver to you, without charge, in
such quantities as you have requested or may hereafter reasonably request,
copies of each form of the Preliminary Prospectus. Consistent with the
provisions of Section 5.1(e) hereof, the Company consents to the use, in
accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares are offered by the several
Underwriters and by dealers, prior to the date of the Prospectus, of each
Preliminary Prospectus so furnished by the Company.
(e) As soon after the execution and delivery of this
Agreement as is practicable and thereafter from time to time for such period as
in the reasonable opinion of counsel for the Underwriters a prospectus is
required by the Act to be delivered in connection with sales by any Underwriter
or a dealer (the "Prospectus Delivery Period"), and for so long a period as you
may request for the distribution of the Shares, the Company will deliver to each
Underwriter and each dealer, without charge, as many copies of the Prospectus
(and of any amendment or supplement thereto) as they may reasonably request. The
Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are offered
by the several Underwriters and by all dealers to whom Shares may be sold, both
in connection with the offering and sale of the Shares and for such period of
time thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If at any time prior to the
later of (i) the completion of the distribution of the Shares pursuant to the
offering contemplated by the Registration
6
Statement or (ii) the expiration of prospectus delivery requirements with
respect to the Shares under Section 4(3) of the Act and Rule 174 thereunder, any
event shall occur that in the judgment of the Company or in the opinion of
counsel for the Underwriters is required to be set forth in the Prospectus (as
then amended or supplemented) or should be set forth therein in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with the Act or any other law, the Company will forthwith
prepare and, subject to Sections 5.1(a) and 5.1(c) hereof, file with the
Commission and use its best efforts to cause to become effective as promptly as
possible an appropriate supplement or amendment thereto, and will furnish to
each Underwriter who has previously requested Prospectuses, without charge, a
reasonable number of copies thereof.
(f) The Company will cooperate with you and counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offering and sale by the several Underwriters and by dealers under
the securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
as may be reasonably necessary in order to effect and maintain such registration
or qualification for so long as required to complete the distribution of the
Shares; provided that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to general service of process in suits, other than
those arising out of the offering or sale of the Shares, as contemplated by this
Agreement and the Prospectus, in any jurisdiction where it is not now so
subject. In the event that the qualification of the Shares in any jurisdiction
is suspended, the Company shall so advise you promptly in writing. The Company
will use its best efforts to qualify or register its Common Stock for sale in
non-issuer transactions under (or obtain exemptions from the application of) the
Blue Sky laws of each state where necessary to permit market making transactions
and secondary trading and will comply with such Blue Sky laws and will continue
such qualifications, registrations and exemptions in effect for a period of [1]
year after the date hereof.
(g) The Company will make generally available to its
security holders a consolidated earnings statement (in form complying with the
provisions of Rule 158), which need not be audited, covering a twelve-month
period commencing after the effective date of the Registration Statement and the
Rule 462 Registration Statement, if any, and ending not later than 15 months
thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of Section 11(a) of
the Act.
(h) During the Prospectus Delivery Period, the Company
will file all documents required to be filed with the Commission pursuant to
Sections 13, 14 and 15 of the Exchange Act in the manner and within the time
periods required by the Exchange Act.
(i) During the period ending three years from the date
hereof, the Company will furnish to you and, upon your request, to each of the
other Underwriters,
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(i) as soon as available, a copy of each proxy statement, quarterly or annual
report or other report of the Company mailed to stockholders or filed with the
Commission, the National Association of Securities Dealers, Inc. (the "NASD") or
the Nasdaq Stock Market ("NASDAQ") or any national securities exchange and (ii)
from time to time such other information concerning the Company as you may
reasonably request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof (except pursuant to
a termination under Section 12 hereof, other than clauses (iv) or (v)) or if
this Agreement shall be terminated by the Underwriters because of any inability,
failure or refusal on the part of the Company to perform in all material
respects any agreement herein or to comply in all material respects with any of
the terms or provisions hereof or to fulfill in all material respects any of the
conditions of this Agreement, the Company agrees to reimburse you and the other
Underwriters for the reasonable fees and disbursements of counsel for the
Underwriters, in an amount up to $100,000 incurred by you in connection
herewith.
(k) The Company will apply the net proceeds from the sale
of the Shares to be sold by it hereunder in accordance in all material respects
with the statements under the caption "Use of Proceeds" in the Prospectus.
(l) If Rule 430A under the Act is employed, the Company
will timely file the Prospectus or term sheet (as described in Rule 434(b) under
the Act) pursuant to Rule 424(b) under the Act.
(m) For a period of 90 days after the date of the
Prospectus first filed pursuant to Rule 424(b) under the Act, without the prior
written consent of Xxxxxxx Xxxxx & Associates, Inc., the Company will not, (i)
directly or indirectly, issue, sell, offer or contract to sell or otherwise
dispose of or transfer any shares of Common Stock or securities convertible into
or exchangeable or exercisable for shares of Common Stock (collectively,
"Company Securities") or any rights to purchase Company Securities, or file any
registration statement under the Act with respect to any of the foregoing or
(ii) enter into any swap or other agreement that transfers, in whole or in part,
directly or indirectly, the economic consequences of ownership of Company
Securities whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, except to the
Underwriters pursuant to this Agreement and except for grants of options or
restricted shares pursuant to the Company's stock option, stock bonus or other
stock plans or arrangements in effect as of the date hereof and described in the
Prospectus and except for issuances of shares of Common Stock upon the exercise
of options outstanding as of the date hereof under such stock plans.
(n) Prior to the Closing Date or the Additional Closing
Date, as the case may be, the Company will furnish to you, as promptly as
possible, copies of any unaudited interim consolidated financial statements of
the Company and its subsidiaries for any period subsequent to the periods
covered by the financial statements appearing in the Prospectus.
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(o) The Company will comply with all provisions of any
undertakings contained in the Registration Statement.
(p) The Company will not at any time, directly or
indirectly, take any action designed, or which might reasonably be expected to
cause or result in, or which will constitute, stabilization or manipulation of
the price of the shares of Common Stock to facilitate the sale or resale of any
of the Shares.
(q) The Company will timely file with NASDAQ all
documents and notices required by NASDAQ of companies that have or will issue
securities that are traded on NASDAQ.
(r) The Company shall engage and maintain, at its
expense, a transfer agent and, if necessary under the jurisdiction of its
incorporation or the rules of any national securities exchange on which the
Common Stock is listed, a registrar (which, if permitted by applicable laws and
rules may be the same entity as the transfer agent) for the Common Stock.
(s) The Company will continue to maintain the current key
employee life insurance policy of $4.5 million on the life of Xxxxxxx X. Xxxxx,
the Company's Chief Executive Officer.
5.2 Of Each Selling Stockholder. Each Selling Stockholder
covenants and agrees with the several Underwriters as follows:
(a) Such Selling Stockholder will execute and deliver a
Lock-Up Agreement, in the form of Exhibit A attached hereto ("Lock-Up
Agreement").
(b) Such Selling Stockholder will review the Prospectus
and will comply with all agreements and satisfy all conditions on its part to be
complied with or satisfied pursuant to this Agreement on or prior to the Closing
Date and will advise the Underwriters prior to the Closing Date if any
statements to be made on behalf of such Selling Stockholder in the certificate
contemplated by Section 9(m) hereof would be inaccurate if made as of the
Closing Date.
(c) On the Additional Closing Date, all stock transfer
and other taxes (other than income taxes) that are required to be paid in
connection with the sale and transfer of the Additional Shares to be sold by
such Selling Stockholder to the Underwriters hereunder will have been fully paid
for by such Selling Stockholder and all laws imposing such taxes will have been
fully complied with.
(d) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations promulgated thereunder, with
respect to the transactions herein contemplated, such Selling Stockholder shall
deliver to you at least two days prior to the Closing Date a properly completed
and executed United States Treasury Department Substitute Form W-9.
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6. Representations and Warranties.
6.1 Of the Company. The Company hereby represents and warrants to
each Underwriter on the date hereof, and shall be deemed to represent and
warrant to each Underwriter on the Closing Date and the Additional Closing Date,
as the case may be, that:
(a) The Company satisfies all of the requirements of the
Act for use of Form S-3 for the offering of Shares contemplated hereby. Each
Preliminary Prospectus included as part of the Registration Statement as
originally filed or as part of any amendment or supplement thereto, or filed
pursuant to Rule 424(a) under the Act, complied as to form when so filed in all
material respects with the provisions of the Act, except that this
representation and warranty does not apply to statements in or omissions from
such Preliminary Prospectus (or any amendment or supplement thereto) made in
reliance upon and in strict conformity with information relating to any
Underwriter furnished to the Company in writing by or on behalf of any
Underwriter through you expressly for use therein, or furnished to the Company
in writing by or on behalf of any Selling Stockholder expressly for use therein.
The Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus and no proceeding for that purpose has been instituted or
threatened by the Commission or the securities authority of any state or other
jurisdiction.
(b) The Company has prepared each of the Registration
Statement, any Rule 462 Registration Statement and any post-effective amendment
thereto, and the Prospectus and any amendments or supplements thereto. The
Registration Statement (including any Rule 462 Registration Statement), in the
form in which it becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, and the Prospectus, and
any supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act, will comply as to form in all material respects with the
provisions of the Act and will not at any such times contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, except that
this representation and warranty does not apply to statements in or omissions
from the Registration Statement or the Prospectus (or any amendment or
supplement thereto) made in reliance upon and in strict conformity with
information relating to any Underwriter furnished to the Company in writing by
or on behalf of any Underwriter through you expressly for use therein.
(c) Each Preliminary Prospectus and the Prospectus, if
filed by electronic transmission pursuant to XXXXX (except as may be permitted
by Regulation S-T under the Act), was identical to the copy thereof delivered to
the Underwriters for use in connection with the offer and sale of the Shares.
(d) The Incorporated Documents heretofore filed, when
they were filed (or, if any amendment with respect to any such document was
filed, when such amendment was file), conformed in all material respects with
the requirements of the Exchange Act and the rules and regulations thereunder,
and any further Incorporated
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Documents so filed will, when they are filed, conform in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder; no such Incorporated Document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and no such further Incorporated Document, when it is
filed, will contain an untrue statement of a material fact or will omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(e) The capitalization of the Company is and will be as
set forth in the Prospectus as of the date set forth therein. All the
outstanding shares of Common Stock of the Company have been, and as of the
Closing Date and the Additional Closing Date, as the case may be, will be, duly
authorized and validly issued, are fully paid and nonassessable and are free of
any preemptive or similar rights; except as set forth in the Prospectus, the
Company is not a party to or bound by any outstanding options, warrants or
similar rights to subscribe for, or contractual obligations to issue, sell,
transfer or acquire, any of its capital stock or any securities convertible into
or exchangeable for any of such capital stock; the Shares to be issued and sold
to the Underwriters by the Company hereunder have been duly authorized and, when
issued and delivered to the Underwriters against full payment therefor in
accordance with the terms hereof will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; the capital stock of
the Company conforms to the description thereof in the Registration Statement
and the Prospectus (or any amendment or supplement thereto); and the delivery of
certificates for the Shares being sold by the Company against payment therefor
pursuant to the terms of this Agreement will pass valid title to the Shares
being sold by the Company, free and clear of any claim, encumbrance or defect in
title, to the several Underwriters purchasing such shares in good faith and
without notice of any lien, claim or encumbrance. The certificates for the
Shares being sold by the Company are in valid and sufficient form.
(f) Each of the Company and its subsidiaries is a
corporation duly organized and validly existing as a corporation in good
standing under the laws of the state of its incorporation with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as presently conducted and as described in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or qualify has not had or will not have a material adverse effect
on the condition (financial or other), business, properties, net worth, results
of operations or prospects of the Company and its subsidiaries (a "Material
Adverse Effect").
(g) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company free and clear of any
security interests, liens, encumbrances, equities or claims. The Company's
subsidiaries are set forth on
11
Exhibit 21 to the Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 2003, which is incorporated by reference into the Registration
Statement and the Company does not own a material interest in or control,
directly or indirectly, any other corporation, partnership, joint venture,
association, trust or other business organization. As used in this Agreement,
subsidiaries shall mean direct and indirect subsidiaries of the Company.
(h) There are no legal or governmental proceedings
pending or, to the best knowledge of the Company, threatened, against the
Company or its subsidiaries or to which the Company or its subsidiaries or any
of their properties are subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding or investigation by or
before any court or governmental or other regulatory or administrative agency or
commission pending or, to the best knowledge of the Company, threatened, against
or involving the Company or its subsidiaries, which might individually or in the
aggregate prevent or adversely affect the transactions contemplated by this
Agreement or result in a Material Adverse Effect, nor to the Company's
knowledge, is there any basis for any such action, suit, inquiry, proceeding or
investigation. There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement that are not described, filed or
incorporated by reference in the Registration Statement and the Prospectus as
required by the Act. All such contracts to which the Company or any of its
subsidiaries is a party have been duly authorized, executed and delivered by the
Company or the applicable subsidiary, constitute valid and binding agreements of
the Company or the applicable subsidiary and are enforceable against the Company
or the applicable subsidiary in accordance with the terms thereof, except as
enforceability thereof may be limited by (i) the application of bankruptcy,
reorganization, insolvency and other laws affecting creditors' rights generally
and (ii) equitable principles being applied at the discretion of a court before
which any proceeding may be brought. Neither the Company nor the applicable
subsidiary has received notice or been made aware that any other party is in
breach of or default to the Company under any of such contracts.
(i) Neither the Company nor any of its subsidiaries is
(i) in violation of (A) its certificate of incorporation or bylaws, or other
organizational documents, (B) any law, ordinance, administrative or governmental
rule or regulation applicable to the Company or any of its subsidiaries, the
violation of which would have a Material Adverse Effect or (C) any decree of any
court or governmental agency or body having jurisdiction over the Company or any
of its subsidiaries; or (ii) in default in any material respect in the
performance of any obligation, agreement or condition contained in (A) any bond,
debenture, note or any other evidence of indebtedness or (B) any agreement,
indenture, lease or other instrument (each of (A) and (B), an "Existing
Instrument") to which the Company or any of its subsidiaries is a party or by
which any of their properties may be bound, which default would have a Material
Adverse Effect; and there does not exist any state of facts that constitutes an
event of default on the part of the
12
Company or any of its subsidiaries as defined in such documents or that, with
notice or lapse of time or both, would constitute such an event of default.
(j) The Company's execution and delivery of this
Agreement and the performance by the Company of its obligations under this
Agreement have been duly and validly authorized by the Company and has been duly
executed and delivered by the Company, and this Agreement constitutes a valid
and legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except to the extent enforceability may be limited by
(i) the application of bankruptcy, reorganization, insolvency and other laws
affecting creditors' rights generally and (ii) equitable principles being
applied at the discretion of a court before which any proceeding may be brought,
except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws.
(k) None of the issuance and sale of the Shares by the
Company, the execution, delivery or performance of this Agreement by the Company
nor the consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act, the listing of the Shares for trading
on NASDAQ, the registration of the Common Stock under the Exchange Act and
compliance with the securities or Blue Sky laws of various jurisdictions, all of
which will be, or have been, effected in accordance with this Agreement and
except for the NASD's clearance of the underwriting terms of the offering
contemplated hereby as required under the NASD's Rules of Fair Practice), (ii)
conflicts with or will conflict with or constitutes or will constitute a breach
of, or a default under, the Company's certificate of incorporation or the
Company's bylaws or any agreement, indenture, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which any of its
properties may be bound, (iii) violates any statute, law, regulation, ruling,
filing, judgment, injunction, order or decree applicable to the Company or any
of its subsidiaries or any of their properties, or (iv) results in a breach of,
or default under, or results in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or requires the consent of any other party to, any
Existing Instrument, except for such conflicts, breaches, defaults, liens,
charges or encumbrances that will not, individually or in the aggregate, result
in a Material Adverse Effect.
(l) Except as described in the Prospectus, and except for
options to purchase capital stock issued pursuant to the Company's Amended and
Restated Stock Option Plan, Directors Stock Option Plan and Employee Stock
Purchase Plan, neither the Company nor any of its subsidiaries has outstanding
and at the Closing Date and the Additional Closing Date, as the case may be,
will have outstanding any options to purchase, or any warrants to subscribe for,
or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock or any such warrants or
convertible securities or obligations. No holder of securities of the Company
has rights to the registration of any securities of the Company as a result of
or in connection with the filing of the Registration Statement or the
consummation of the
13
transactions contemplated hereby that have not been satisfied or heretofore
waived in writing.
(m) KPMG LLP, the certified public accountants who have
certified the financial statements (including the related notes thereto and
supporting schedules) filed as part of the Registration Statement and the
Prospectus (or any amendment or supplement thereto), are independent public
accountants as required by the Act and the Exchange Act.
(n) The financial statements, together with related
schedules and notes, included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), present fairly the financial
condition, results of operations, cash flows and changes in financial position
of the Company on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement and
Prospectus (and any amendment or supplement thereto) is accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company. The pro forma financial information included in the
Registration Statement and Prospectus has been prepared in accordance with the
applicable requirements of the Act and includes all adjustments necessary to
present fairly the pro forma financial position of the respective entity or
entities presented therein at the respective dates indicated and the results of
their operations for the respective periods specified. No other financial
statements or schedules are required to be included in the Registration
Statement.
(o) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), (i)
neither the Company nor any of its subsidiaries has incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into any
transaction that is not in the ordinary course of business, (ii) neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, (iii) neither
the Company nor any of its subsidiaries has paid or declared any dividends or
other distributions with respect to its capital stock and the Company is not in
default under the terms of any class of capital stock of the Company or any
outstanding debt obligations, (iv) there has not been any change in the
authorized or outstanding capital stock of the Company or any material change in
the indebtedness of the Company (other than in the ordinary course of business)
and (v) there has not been any material adverse change, or any development
involving or that may reasonably be expected to result in a Material Adverse
Effect, in the condition (financial or otherwise), business, properties, net
worth or result of operations of the Company.
14
(p) All offers and sales of the Company's capital stock
and other debt or other securities prior to the date hereof were made in
compliance with or were the subject of an available exemption from the Act and
all other applicable state and federal laws or regulations, or any actions under
the Act or any state or federal laws or regulations in respect of any such
offers or sales are effectively barred by effective waivers or statutes of
limitation.
(q) The Common Stock (including the Shares) is registered
pursuant to Section 12(g) of the Exchange Act and is listed on NASDAQ, and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from NASDAQ, nor has the Company received any
notification that the Commission or the NASD is contemplating terminating such
registration or listing.
(r) The Company has not distributed and will not
distribute, and has not authorized the Underwriters to distribute, any offering
material in connection with the offering and sale of the Shares other than the
Preliminary Prospectus, the Prospectus or other offering material, if any, as
permitted by the Act.
(s) Other than excepted activity pursuant to Regulation M
under the Exchange Act, the Company has not taken and will not take, directly or
indirectly, any action that constituted, or any action designed to, or that
might reasonably be expected to cause or result in or constitute, under the Act
or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares or for any other purpose.
(t) The Company and each of its subsidiaries have filed
all tax returns required to be filed (other than certain state or local tax
returns, as to which the failure to file, individually or in the aggregate,
would not have a Material Adverse Effect), which returns are complete and
correct, and neither the Company nor any subsidiary is in default in the payment
of any taxes that were payable pursuant to said returns or any assessments with
respect thereto. Except as disclosed in the Prospectus, all deficiencies
asserted as a result of any federal, state, local or foreign tax audits have
been paid or finally settled and no issue has been raised in any such audit
that, by application of the same or similar principles, reasonably could be
expected to result in a proposed deficiency for any other period not so audited.
There are no outstanding agreements or waivers extending the statutory period of
limitation applicable to any federal, state, local or foreign tax return for any
period. On the Closing Date and the Additional Closing Date, as the case may be,
all stock transfer and other taxes that are required to be paid in connection
with the sale of the shares to be sold by the Company to the Underwriters will
have been fully paid by the Company and all laws imposing such taxes will have
been complied with.
(u) Except as set forth in the Prospectus, there are no
transactions with "affiliates" (as defined in Rule 405 promulgated under the
Act) or any officer, director or security holder of the Company (whether or not
an affiliate) that are required by the Act to be disclosed in the Registration
Statement. Additionally, no relationship, direct or
15
indirect, exists between the Company or any of its subsidiaries on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any subsidiary on the other hand that is required by the Act to be disclosed
in the Registration Statement and the Prospectus that is not so disclosed.
(v) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
investment company within the meaning of the Investment Company Act of 1940, as
amended.
(w) Each of the Company and its subsidiaries has good and
valid title to all property (real and personal) described in the Prospectus as
being owned by it, free and clear of all liens, claims, security interests or
other encumbrances except (i) such as are described in the Prospectus or (ii)
such as are not materially burdensome and do not have or will not result in a
Material Adverse Effect to the use of the property or the conduct of the
business of the Company. All property (real and personal) held under lease by
the Company and its subsidiaries is held by it under valid, subsisting and
enforceable leases with only such exceptions as in the aggregate are not
materially burdensome and do not have or result in a Material Adverse Effect to
the use of the property or the conduct of the business of the Company.
(x) Each of the Company and its subsidiaries has all
permits, licenses, provider numbers, certificates, approvals (including
certificate of need approvals), consents, orders, certifications (including
certification under the Medicare and Medicaid programs), accreditations
(including, accreditation by the Joint Commission on Accreditation of Healthcare
Organizations) and other authorizations (collectively, "permit" or "permits") as
are necessary to own its properties and to conduct its business in the manner
described in the Prospectus, subject to such qualifications as may be set forth
in the Prospectus, except where the failure to have obtained any such permit has
not had and will not have a Material Adverse Effect; each of the Company and its
subsidiaries has operated and is operating its business in material compliance
with and not in material violation of all of its obligations with respect to
each such permit and no event has occurred that allows, or after notice or lapse
of time would allow, revocation or termination of any such permit or result in
any other material impairment of the rights of any such permit, subject in each
case to such qualification as may be set forth in the Prospectus; and, except as
described in the Prospectus, such permits contain no restrictions that are
materially burdensome to the Company or any of its subsidiaries. All of the
hospice agencies operated by the Company (collectively, the "Facilities")and its
subsidiaries are eligible to participate in the Medicare and available Medicaid
programs.
(y) The accounts receivable of the Company and its
subsidiaries have been adjusted to reflect material changes in the reimbursement
policies of third-party payors such as Medicare, Medicaid, private insurance
companies, health maintenance organizations, preferred provider organizations,
managed care systems and other third-party payors. The Company's accounts
receivable, after giving effect to the allowance for doubtful accounts, relating
to such third-party payors do not exceed amounts the Company and its
subsidiaries are entitled to receive in any material respect.
16
(z) Neither the Company nor its subsidiaries, nor, to the
knowledge of the Company, any officer, director, stockholder, employee or other
agent of the Company or any of its subsidiaries or the Facilities operated by
the Company or any of its subsidiaries, has engaged, directly or indirectly, in
(i) any material activities which are prohibited under Medicare and Medicaid
statutes or any regulations promulgated pursuant to such statutes, or (ii) any
activities which are prohibited under related state or local statutes or
regulations or any rules of professional conduct, including the following: (A)
knowingly and willfully making or causing to be made a false statement or
representation of a material fact in connection with the receipt of or claim for
any benefit or payment under the Medicare or Medicaid program or from any other
third-party payor; (B) failing to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any benefit
or payment under the Medicare or Medicaid program or from any other third-party
payor on its own behalf or on behalf of another, with intent to secure such
benefit or payment fraudulently; (C) knowingly and willfully offering, paying,
soliciting or receiving any remuneration, in cash or in kind (1) in return for
referring an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid or any other third-party payor, or (2) in return
for purchasing, leasing or ordering or arranging for, or recommending the
purchasing, leasing or ordering of, any good, facility, service, or item for
which payment may be made in whole or in part by Medicare or Medicaid or any
other third-party payor; (D) knowingly and willfully referring an individual to
a person or entity with which it has ownership or other financial arrangements
(where applicable federal or state law prohibits such referrals); and (E)
knowingly and willfully violating any enforcement initiative instituted by any
governmental agency (including the Office of the Inspector General and the
Department of Justice).
(aa) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(bb) The Company and its subsidiaries are (i) in
compliance with any and all applicable federal, state, local and foreign laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or other approvals would not, individually or in the
aggregate, have a Material Adverse Effect.
17
Neither the Company nor any of its subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended. Neither the Company nor any of its
subsidiaries owns, leases or occupies any property that appears on any list of
hazardous sites compiled by any state or local governmental agency.
(cc) Each of the Company and its subsidiaries owns and has
full right, title and interest in and to, or has valid licenses to use, each
material trade name, trademark, service xxxx, patent, copyright, approval, trade
secret and other similar rights (collectively "Intellectual Property") under
which the Company and its subsidiaries conduct all or any material part of its
business, and the Company has not created any lien or encumbrance on, or granted
any right or license with respect to, any such Intellectual Property except
where the failure to own or obtain a license or right to use any such
Intellectual Property has not and will not have a Material Adverse Effect; there
is no claim pending against the Company or its subsidiaries with respect to any
Intellectual Property and the Company and its subsidiaries have not received
notice or otherwise become aware that any Intellectual Property that it uses or
has used in the conduct of its business infringes upon or conflicts with the
rights of any third party. Neither the Company nor any of its subsidiaries has
become aware that any material Intellectual Property that it uses or has used in
the conduct of its business infringes upon or conflicts with the rights of any
third party.
(dd) The Company has procured Lock-Up Agreements, in the
form of Exhibit A attached hereto, from each of the Company's executive officers
and directors and the Selling Stockholders.
(ee) No officer, director or nominee for director or
stockholder of the Company has a direct or indirect affiliation or association
with any member of the NASD.
(ff) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which it
is engaged; and neither the Company nor any of its subsidiaries has 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 business at a comparable cost.
(gg) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities (including
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review and amount of its
established reserves, the Company has reasonably concluded that such associated
costs
18
and liabilities would not, individually or in the aggregate, result in a
Material Adverse Effect.
(hh) The Company, its subsidiaries and each of the
Facilities operated by the Company and its subsidiaries and, to the knowledge of
the Company, each of the licensed employees and contractors (other than
contracted agencies) of the Company and its subsidiaries in the exercise of
their respective duties on behalf of the Company, its subsidiaries or any such
Facilities, is in compliance in all material respects with all applicable
statutes, laws, ordinances, rules and regulations of any federal, state or local
governmental authority with respect to regulatory matters primarily relating to
patient healthcare (including without limitation Section 1128B(b) of the Social
Security Act, as amended, 42 U.S.C. Section 1320a-7(b) (Criminal Penalties
Involving Medicare or State Health Care Programs), commonly referred to as the
"Federal Anti-Kickback Statute," and the Social Security Act, as amended,
Section 1877, 42 U.S.C Section 1395nn (Prohibition Against Certain Referrals),
commonly referred to as the "Xxxxx Statute" (collectively, "Healthcare Laws")).
The Company and its subsidiaries have maintained in all material respects all
records required to be maintained by the Joint Commission on Accreditation of
Healthcare Organizations or the Community Health Accreditation Program (as
applicable), the Food and Drug Administration, Drug Enforcement Agency and State
Boards of Pharmacy and the federal and state Medicare and Medicaid programs as
required by the Healthcare Laws and, to the knowledge of the Company, there are
no presently existing circumstances which would result or likely would result in
material violations of the Healthcare Laws.
(ii) To the extent that and for so long as (i) The Company
or any of its subsidiaries is a "covered entity" as defined in 45 C.F.R. Section
160.103, (ii) the Company, its subsidiaries and/or their respective business and
operations are subject to or covered by the HIPAA Administrative Requirements
codified at 45 C.F.R. Parts 160 and 162 (the "Transactions Rule") and/or the
HIPAA Security and Privacy Requirements codified at 45 C.F.R. Parts 160 and 164
(the "Privacy and Security Rules"), and/or (iii) the Company or any of its
subsidiaries sponsors any "group health plans" as defined in 45 C.F.R. Section
160.103, the Company or any of its subsidiaries has: (x) completed, or will
complete on or before any applicable compliance date, thorough and detailed
surveys, audits, inventories, reviews, analyses and/or assessments, including
risk assessments, (collectively "Assessments") of all areas of its business and
operations subject to HIPAA and/or that could be adversely affected by the
failure of the Company or any of its subsidiaries to be HIPAA Compliant (as
defined below) to the extent these Assessments are appropriate or required for
the Company or any of its subsidiaries to be HIPAA Compliant; (y) developed, or
will develop on or before any applicable compliance date, a detailed plan and
time line for becoming HIPAA Compliant (a "HIPAA Compliance Plan"); and (z)
implemented, or will implement on or before any applicable compliance date,
those provisions of its HIPAA Compliance Plan necessary to ensure that the
Company or any of its subsidiaries is HIPAA Compliant. For purposes of this
Agreement, "HIPAA Compliant" shall mean that the Company or any of is
subsidiaries (1) is, or on or before any applicable compliance date will be, in
compliance in all material respects with any and all of the applicable
requirements of HIPAA, including all requirements of the Transactions Rule and
the Privacy and Security Rules and (2) is not
19
subject to, and could not reasonably be expected to become subject to, any civil
or criminal penalty or any investigation, claim or process that could reasonably
be expected to have a Material Adverse Effect.
(jj) The Company and its subsidiaries and any "employee
benefit plan" (as defined under the Employee Retirement Income Security Act of
1974, as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, its
subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA and all other applicable state and federal
laws. "ERISA Affiliate" means, with respect to the Company or a subsidiary, any
member of any group or organization described in Sections 414(b), (c), (m) or
(o) of the Code of which the Company or such subsidiary is a member. No
"reportable event" (as defined in ERISA) has occurred or is reasonably expected
to occur with respect to any "employee benefit plan" established or maintained
by the Company, its subsidiaries or any of their ERISA Affiliates. No "employee
benefit plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates, if such "employee benefit plan" were terminated,
would have any "amount of unfunded benefit liabilities" (as defined in ERISA).
Neither the Company, its subsidiaries nor any of their ERISA Affiliates has
incurred or reasonably expects to incur any liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "employee benefit
plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee
benefit plan" established or maintained by the Company, its subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or
failure to act, that would cause the loss of such qualification.
(kk) The Company and its subsidiaries have complied and
will comply in all material respects with wage and hour determinations issued by
the U.S. Department of Labor under the Service Contract Act of 1965 and the Fair
Labor Standards Act in paying its employees' salaries, fringe benefits and other
compensation for the performance of work or other duties in connection with
contracts with the U.S. government, and have complied and will comply in all
material respects with the requirements of the Americans with Disabilities Act
of 1990, the Family and Medical Leave Act of 1993, the Civil Rights Act of 1964
(Title VII), the National Labor Relations Act, the Vietnam Era Veteran's
Readjustment Act, the Age Discrimination in Employment Act, as amended by the
Older Workers' Benefit Protection Act, and federal, state and local labor laws,
each as amended except where the failure to comply with any such requirements
has not, and will not, have a Material Adverse Effect.
(ll) No labor disturbance by the employees of the Company
or any subsidiary exists or, to the best of the Company's knowledge, is imminent
and the Company is not aware of any existing or imminent labor disturbances by
the employees of any of its or any subsidiary's principal suppliers,
manufacturers', customers or contractors, which, in either case (individually or
in the aggregate), could reasonably be expected to have a Material Adverse
Effect.
20
(mm) There is and has been no failure on the part of the
Company or any of the Company's directors or officers, in their capacities as
such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations promulgated in connection therewith, that are effective as
of the date hereof, including Section 402 related to loans and Sections 302 and
906 related to certifications.
(nn) The Company is in compliance, in all respects, with
the continued listing requirements of NASDAQ, and there has been no failure on
the part of the Company to comply with the applicable rules and regulations
relating to the independence and corporate governance requirements of NASDAQ.
6.2 Of the Selling Stockholders. Each Selling Stockholder hereby
represents and warrants, severally as to itself and not jointly, to each
Underwriter on the date hereof, and shall be deemed to represent and warrant to
each Underwriter on the Additional Closing Date, that:
(a) Such Selling Stockholder is the lawful owner of the
Shares to be sold by such Selling Stockholder pursuant to this Agreement and
has, and on the Additional Closing Date will have, good and valid title to such
Shares, free of all restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever.
(b) Such Selling Stockholder has, and on the Additional
Closing Date will have, full legal right, power and authority, and all
authorization and approval required by law, to enter into (i) this Agreement,
(ii) the Custody Agreement signed by such Selling Stockholder and [American
Stock Transfer & Trust Company], as custodian (the "Custodian"), relating to the
deposit of the Shares to be sold by such Selling Stockholder (the "Custody
Agreement") and (iii) the Power of Attorney appointing certain individuals named
therein as such Selling Stockholder's attorneys-in-fact (the "Attorneys") to the
extent set forth therein relating to the transactions contemplated hereby and by
the Prospectus (the "Power of Attorney") to sell, assign, transfer and deliver
the Shares to be sold by such Selling Stockholder in the manner provided herein.
(c) Each of the Agreement, the Custody Agreement and
Power of Attorney of such Selling Stockholder has been duly authorized, executed
and delivered by such Selling Stockholder and is a valid and binding agreement
of such Selling Stockholder, enforceable as to such Selling Stockholder in
accordance with its terms, except to the extent enforceability may be limited by
(i) the application of bankruptcy, reorganization, insolvency and other laws
affecting creditors' rights generally and (ii) equitable principles being
applied at the discretion of a court before which a proceeding may be brought,
except as rights to indemnity and contribution hereunder may be limited by
federal or state securities laws and, pursuant to such Power of Attorney, such
Selling Stockholder has, among other things, authorized the Attorneys, or any
one of them, to execute and deliver on such Selling Stockholder's behalf this
Agreement and any other document that they, or any one of them, may deem
necessary or desirable in connection with the transactions contemplated hereby
and thereby and to deliver the Shares to be sold by such Selling Stockholder
pursuant to this Agreement.
21
(d) None of the sale of the Shares by such Selling
Stockholder, the execution, delivery or performance by such Selling Stockholder
of this Agreement, the Custody Agreement and Power of Attorney of such Selling
Stockholder by or on behalf of such Selling Stockholder, the compliance by such
Selling Stockholder with all the provisions hereof and thereof nor the
consummation by such Selling Stockholder of the transactions contemplated hereby
and thereby (i) requires any consent, approval, authorization or other order of,
or registration or filing with, any court, regulatory body or administrative
agency or other governmental body, agency or official (except such as may be
required under the securities or Blue Sky laws of the various states), (ii)
conflicts with or will conflict with or constitutes or will constitute a breach
of or a default under, the organizational documents of such Selling Stockholder,
if such Selling Stockholder is not an individual, or any agreement, indenture,
lease or other instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder or any property of such Selling Stockholder is
bound or (iii) violates any statute, law, regulation, ruling, filing, judgment,
injunction, order or decree applicable to such Selling Stockholder or any
property of such Selling Stockholder.
(e) The information in the Prospectus under the caption
"Principal and Selling Stockholders" that specifically relates to such Selling
Stockholder does not, and will not on the Additional Closing Date contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(f) At any time prior to the Additional Closing Date, if
there is any change in the information referred to in Section 6.2(e) hereof,
such Selling Stockholder will immediately notify the Representatives of such
change.
(g) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action that constituted, or any action
designed to, or that might reasonably be expected to cause or result in or
constitute, under the Act or otherwise, stabilization or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares.
(h) Upon delivery of and payment for the Shares to be
sold by such Selling Stockholder pursuant to this Agreement, good and valid
title to such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(i) Such Selling Stockholder does not have any
registration or other similar rights to have any equity or debt securities
registered for sale by the Company under the Registration Statement or included
in the offering contemplated by this Agreement.
(j) Such Selling Stockholder has no reason to believe
that the representations and warranties of the Company contained in Section 6.1
hereof are not true and correct, is familiar with the Registration Statement and
the Prospectus and has
22
no knowledge of any material fact, condition or information not disclosed in the
Registration Statement or the Prospectus that has had or may have a Material
Adverse Effect, and is not prompted to sell shares of Common Stock by any
information concerning the Company that is not set forth in the Registration
Statement.
(k) There are no legal or governmental proceedings
pending or, to the best knowledge of such Selling Stockholder, threatened,
against such Selling Stockholder or to which such Selling Stockholder or any of
its properties are subject, that are required to be described in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto) but are not described as required. Except as described in the
Prospectus, there is no action, suit, inquiry, proceeding or investigation by or
before any court or governmental or other regulatory or administrative agency or
commission pending or, to the best knowledge of such Selling Stockholder,
threatened, against or involving such Selling Stockholder, which might
individually or in the aggregate prevent or adversely affect the transactions
contemplated by this Agreement or result in a Material Adverse Effect, nor to
such Selling Stockholders knowledge, is there any basis for any such action,
suit, inquiry, proceeding or investigation.
(l) Such Selling Stockholder agrees that the shares
represented by the certificates held in custody for the Selling Stockholders
under the Custody Agreement and Power of Attorney are subject to the interests
of the several Underwriters hereunder, that the arrangements made by such
Selling Stockholders for such custody are to that extent irrevocable and that
the obligations of such Selling Stockholder hereunder shall not be terminated by
operation of law, whether by the death of such Selling Stockholder or the
occurrence of any other event, or in the case of a trust, by the death of any
trustee(s) or the termination of such trust. If such Selling Stockholder or any
such trustee(s) should die, or if any other such event should occur, or if any
of such trusts should terminate, before the delivery of the Additional Shares
hereunder, certificates for such Additional Shares shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death or other event or termination had not occurred, regardless of whether
or not the Custodian shall have received notice of such death or other event or
termination.
7. Expenses. Whether or not the transactions contemplated hereby
are consummated or this Agreement becomes effective or is terminated, the
Company agrees to pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof and of any Preliminary
Prospectus to the Underwriters and dealers; (ii) the printing and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, each Preliminary
Prospectus, the Blue Sky memoranda, the Master Agreement Among Underwriters,
this Agreement, the Selected Dealers Agreement and all amendments or supplements
to any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) consistent with the provisions of Section
5.1(f), all expenses in connection with the
23
qualification of the Shares for offering and sale under state securities laws or
Blue Sky laws, including reasonable attorneys' fees and out-of-pocket expenses
of the counsel for the Underwriters in connection therewith; (iv) the filing
fees incident to securing any required review by the NASD of the fairness of the
terms of the sale of the Shares and the reasonable fees and disbursements of the
Underwriters' counsel relating thereto; (v) the fees and expenses associated
with including the Shares on NASDAQ; (vi) the cost of preparing stock
certificates; (vii) the costs and charges of any transfer agent or registrar;
(viii) the cost of the tax stamps, if any, in connection with the issuance and
delivery of the Shares to the respective Underwriters; (ix) all other fees,
costs and expenses referred to in Item 14 of the Registration Statement; and (x)
the transportation, lodging, graphics and other expenses incidental to the
Company's preparation for and participation in the "roadshow" for the offering
contemplated hereby. Except as provided in this Section 7 and in Section 8
hereof, the Underwriters shall pay their own expenses, including the fees and
disbursements of their counsel. In addition, in the event that the proposed
offering is terminated for the reasons set forth in Section 5.1(j) hereof, the
Company agrees to reimburse the Underwriters as provided in Section 5.1(j).
8. Indemnification and Contribution. Subject to the limitations
in this paragraph below, the Company agrees to indemnify and hold harmless you
and each other Underwriter, the directors, officers, employees and agents of
each Underwriter, and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses, including
reasonable costs of investigation and attorneys' fees and expenses
(collectively, "Damages") arising out of or based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus or in the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading, except to the extent that any such
Damages arise out of or are based upon an untrue statement or omission or
alleged untrue statement or omission that has been made therein or omitted
therefrom in reliance upon and in strict conformity with the information
furnished in writing to the Company by or on behalf of any Underwriter through
you, or by or on behalf of the Selling Stockholders, as the case may be,
expressly for use in connection therewith or (ii) any inaccuracy in or breach of
the representations and warranties of the Company contained herein or any
failure of the Company to perform its obligations hereunder or under law. This
indemnification shall be in addition to any liability that the Company may
otherwise have.
Subject to the limitations in this paragraph below, each Selling
Stockholder, severally and not jointly, agrees to indemnify and hold harmless
you and each other Underwriter, the directors, officers, employees and agents of
each Underwriter, and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any and all Damages arising out of or based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or any omission or alleged
24
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading, except to
the extent that any such Damages arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission that has been made
therein or omitted therefrom in reliance upon and in strict conformity with the
information not expressly relating to the Selling Stockholders or the offering
by them of their shares of Common Stock or furnished in writing to the Company
by or on behalf of any Underwriter through you expressly for use in connection
therewith or (ii) any inaccuracy in or breach of the representations and
warranties of such Selling Stockholder contained herein or any failure of such
Selling Stockholder to perform its obligations hereunder or under law. This
indemnification shall be in addition to any liability that the Selling
Stockholders or any Selling Stockholder may otherwise have.
In addition to their other obligations under this Section 8, each of
the Company and the Selling Stockholders, severally and not jointly, agrees
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any inaccuracy in the representations and warranties
of the Company or the Selling Stockholders herein or failure to perform their
respective obligations hereunder, all as set forth in this Section 8, the party
against whom indemnification is being sought will reimburse each Underwriter on
a monthly basis for all reasonable legal or other out-of-pocket expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding (to the extent documented by
reasonably itemized invoices therefor), notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligation
of the Company or a Selling Stockholder to reimburse each Underwriter for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, each Underwriter
shall promptly return it to the person(s) from whom it was received. Any such
interim reimbursement payments that are not made to the Underwriters within 30
days of a request for reimbursement shall bear interest compounded daily at a
rate determined on the basis of the base lending rate announced from time to
time by The Wall Street Journal from the date of such request.
If any action or claim shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
jointly and severally against the Company and the Selling Stockholders, such
Underwriter or such controlling person shall promptly notify in writing the
party(s) against whom indemnification is being sought (the "indemnifying party"
or "indemnifying parties"), and such indemnifying party(s) shall assume the
defense thereof, including the employment of counsel reasonably acceptable to
such Underwriter or such controlling person and the payment of all reasonable
fees of and expenses incurred by such counsel. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person,
unless (i) the indemnifying party(s) has (have) agreed in writing to pay such
fees
25
and expenses, (ii) the indemnifying party(s) has (have) failed to assume the
defense and employ counsel reasonably acceptable to the Underwriter or such
controlling person or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter or such controlling person and
the indemnifying party(s), and such Underwriter or such controlling person shall
have been advised by its counsel that one or more legal defenses may be
available to the Underwriter that may not be available to the Company or the
Selling Stockholders, or that representation of such indemnified party and any
indemnifying party(s) by the same counsel would be inappropriate under
applicable standards of professional conduct (whether or not such representation
by the same counsel has been proposed) due to actual or potential differing
interests between them (in which case the indemnifying party(s) shall not have
the right to assume the defense of such action on behalf of such Underwriter or
such controlling person (but the Company and the Selling Stockholders, as
applicable, shall not be liable for the fees and expenses of more than one
counsel for the Underwriters and such controlling persons)). The indemnifying
party(s) shall not be liable for any settlement of any such action effected
without its (their several) written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any such action,
the indemnifying party(s) agree(s) to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss, claim,
damage, liability or expense by reason of such settlement or judgment, but in
the case of a judgment only to the extent stated in the first and second
paragraph of this Section 8.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company and the Selling Stockholders, their respective
directors, their respective officers who sign the Registration Statement and any
person who controls the Company or the Selling Stockholders within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing several indemnity from the Company and the Selling Stockholders
to each Underwriter, but only with respect to information furnished in writing
by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto. If any action or claim shall be brought or
asserted against the Company or the Selling Stockholders, any of their
respective directors, any of their respective officers or any such controlling
person based on the Registration Statement, the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Underwriter pursuant to this paragraph, such
Underwriter shall have the rights and duties given to the Company and the
Selling Stockholders by the immediately preceding paragraph (except that if the
Company and the Selling Stockholders shall have assumed the defense thereof such
Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof, but the fees and expenses of
such counsel shall be at such Underwriter's expense), and the Company and the
Selling Stockholders, their respective directors, any such officers and any such
controlling persons, shall have the rights and duties given to the Underwriters
by the immediately preceding paragraph.
In any event, the Company or the Selling Stockholders will not, without
the prior written consent of the Representatives, which consent shall not be
unreasonably withheld, settle or compromise or consent to the entry of
26
any judgment in any proceeding or threatened claim, action, suit or proceeding
in respect of which the indemnification may be sought hereunder (whether or not
the Representatives or any person who controls the Representatives within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding) unless such settlement, compromise or
consent includes an unconditional release of all Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding. Similarly, the Representatives will not, without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, settle or compromise or consent to the entry of any judgment in any
proceeding or threatened claim, action, suit or proceeding in respect of which
the indemnification may be sought hereunder unless such settlement, compromise
or consent includes an unconditional release of the Company from all liability
arising out of such claim, action, suit or proceeding.
If the indemnification provided for in this Section 8 is unavailable or
insufficient for any reason whatsoever to an indemnified party in respect of any
Damages referred to herein, then an indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Damages (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders, respectively, on the one hand, and the Underwriters on the
other hand, from the offering and sale of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative and several fault of the Company
and the Selling Stockholders, respectively, on the one hand, and the
Underwriters on the other hand, in connection with the statements or omissions
that resulted in such Damages as well as any other relevant equitable
considerations. The relative and several benefits received by the Company and
the Selling Stockholders, respectively, on the one hand, and the Underwriters on
the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
and the Selling Stockholders bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the table
on the cover page of the Prospectus; provided that, in the event that the
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company and the Selling
Stockholders or the Underwriters from the offering of the Shares shall include
the net proceeds (before deducting expenses) received by the Company and the
Selling Stockholders, and the underwriting discounts and commissions received by
the Underwriters, from the sale of such Additional Shares, in each case computed
on the basis of the respective amounts set forth in the notes to the table on
the cover page of the Prospectus. The relative fault of the Company and the
Selling Stockholders, respectively, on the one hand, and the Underwriters on the
other hand, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders, on the one hand, or by the Underwriters on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
was determined by a pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or
27
payable by an indemnified party as a result of the Damages referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
of the underwriting commissions received by such underwriter in connection with
the Shares underwritten by it and distributed to the public. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8 are several in proportion to the respective numbers
of Firm Shares set forth opposite their names in Schedule I hereto (or such
numbers of Firm Shares increased as set forth in Section 11 hereof) and not
joint.
Notwithstanding the third paragraph of this Section 8, any Damages for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as Damages are incurred after receipt of reasonably itemized invoices therefor.
The indemnity, contribution and reimbursement agreements contained in this
Section 8 and the several, and not joint, representations and warranties of the
Company and the Selling Stockholders set forth in this Agreement shall remain
operative and in full force and effect, regardless of (i) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter,
the Company, the Selling Stockholders, their respective directors or officers or
any person controlling the Company or the Selling Stockholders, (ii) acceptance
of any Shares and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Company or the Selling Stockholders, their respective
directors or officers or any person controlling the Company or the Selling
Stockholders, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 8.
It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in the third paragraph of this
Section 8, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
pursuant to the Code of Arbitration Procedure of the NASD. Any such arbitration
must be commenced by service of a written demand for arbitration or written
notice of intention to arbitrate, therein electing the arbitration tribunal. In
the event the party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Such an arbitration would be limited to
the operation of the interim reimbursement provisions contained in the third and
fifth paragraphs of this Section 8, and would not resolve the ultimate propriety
or enforceability of the obligation to reimburse expenses that is created by the
provisions of the third paragraph of this Section 8.
9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
28
(a) The Registration Statement shall have become
effective not later than 12:00 noon, New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Representatives, and all filings required by Rules 424(b), 430A and 462 under
the Act shall have been timely made.
(b) The Representatives shall be reasonably satisfied
that since the respective dates as of which information is given in the
Registration Statement and Prospectus, (i) there shall not have been any
material change in the capital stock of the Company or any material change in
the indebtedness (other than in the ordinary course of business) of the Company,
(ii) except as set forth or contemplated by the Registration Statement or the
Prospectus, no material oral or written agreement or other transaction shall
have been entered into by the Company that is not in the ordinary course of
business or that could reasonably be expected to result in a material reduction
in the future earnings of the Company, (iii) no loss or damage (whether or not
insured) to the property of the Company shall have been sustained that had or
could reasonably be expected to have a Material Adverse Effect, (iv) no legal or
governmental action, suit or proceeding affecting the Company or any of its
properties that is material to the Company or that affects or could reasonably
be expected to affect the transactions contemplated by this Agreement shall have
been instituted or threatened and (v) there shall not have been any material
change in the condition (financial or otherwise), business, management, results
of operations or prospects of the Company or its subsidiaries that makes it
impractical or inadvisable in your judgment to proceed with the public offering
or purchase of the Shares as contemplated hereby.
(c) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
Xxxxxxxx & Xxxxxxx, LLP, securities counsel to the Company, substantially to the
effect that:
(i) The capitalization of the Company conforms
in all material respects to the description thereof contained in the Prospectus
under the caption "Capitalization" and the Shares conform in all material
respects to the description of the Common Stock in the Prospectus. Except as set
forth in the Prospectus, the Company is not a party to or bound by any
outstanding options, warrants or similar rights to subscribe for, or contractual
obligations to issue, sell, transfer or acquire, any of its capital stock or any
securities convertible into or exchangeable for any of such capital stock.
(ii) The Company satisfies all of the
requirements of the Act for use of Form S-3 for the offering of Shares
contemplated by this Agreement. No opinion shall be expressed by such counsel as
to whether the Company has included or incorporated by reference the financial
statements required to be included or incorporated by reference in the Form S-3.
(iii) Such counsel has reviewed all agreements,
contracts, indentures, leases or other documents or instruments described or
referred to in the Registration Statement and the Prospectus, and such
agreements, contracts (and forms of contracts), indentures, leases or other
documents or instruments are fairly summarized or disclosed in all material
respects therein, and filed as exhibits thereto as required, and
29
such counsel does not know of any agreements, contracts, indentures, leases or
other documents or instruments required to be so summarized or disclosed or
filed that have not been so summarized or disclosed or filed.
(iv) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official is required
on the part of the Company (except such as have been obtained under the Act or
such as may be required under state securities or Blue Sky laws governing the
purchase and distribution of the Shares) for the valid issuance and sale of the
Shares to the Underwriters under this Agreement.
(v) The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
(vi) The Company has all requisite power and
authority to enter into this Agreement and to issue, sell and deliver the Shares
to be sold by it to the Underwriters as provided herein. The Agreement has been
duly authorized, executed and delivered by, and is a valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as to the extent enforceability may be limited by (i) the application of
bankruptcy, reorganization, insolvency or other laws affecting creditors' rights
generally and (ii) equitable principles being applied at the discretion of a
court before which any proceeding may be brought, and except as rights to
indemnity and contribution hereunder may be limited by federal or state
securities laws. No opinion shall be expressed by such counsel as to the
enforceability of provisions of the Agreement providing for indemnification or
contribution, to the extent such indemnification or contribution is against
public policy.
(vii) The Registration Statement has been declared
effective by the Commission under the Act. To the best knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for such purpose have
been instituted or are pending or are contemplated or threatened by the
Commission. Any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Act has been made in the manner and within the
time period required by such Rule 424(b).
(viii) The Registration Statement, including any
Rule 462 Registration Statement, the Prospectus, including any document
incorporated by a reference therein and each amendment or supplement to the
Registration Statement and the Prospectus, including any document incorporated
by reference therein, as of their respective effective or issue dates (other
than the financial statements and supporting schedules included or incorporated
by reference therein or in exhibits to or excluded from the Registration
Statement, as to which no opinion need be given) comply as to form in all
material respects with the requirements of the Act.
30
(ix) The descriptions in the Prospectus of
statutes, regulations or legal or governmental proceedings, insofar as they
purport to summarize certain of the provisions thereof, are accurate in all
material respects and fairly present the information required to be presented by
the Act and the rules and regulations thereunder.
(x) All shares of capital stock of the Company
outstanding prior to the issuance of the Shares to be issued and sold by the
Company hereunder, including the shares of Common Stock owned by the Selling
Stockholders, have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and are free of any preemptive or similar rights that entitle
or will entitle any person to acquire any Shares upon the issuance thereof by
the Company, and no such rights will exist as of the Closing Date. Except as
described in the Registration Statement or Prospectus, the Company does not have
outstanding any options 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 its capital stock or
any such options, rights, convertible securities or obligations.
(xi) To the knowledge of such counsel, no holders
of securities of the Company have rights, which have not been waived or complied
with, to the registration of shares of Common Stock or other securities of the
Company because of the filing of the Registration Statement or the offering
contemplated thereby.
(xii) The Company is not an "investment company"
or an "affiliated person" of, or "promoter" or "principal investor" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(xiii) The form of certificate used to evidence the
Common Stock is in due and proper form and complies with all applicable
requirements of the certificate of incorporation and bylaws of the Company and
the General Corporation Law of the State of Delaware.
(xiv) The Shares have been approved for listing on
the Nasdaq National Market.
(xv) The statements (i) in the Prospectus under
the captions "Risk Factors," "Our Business--Legal Proceedings," and
"Underwriting" and (ii) in Item 14 and Item 15 of the Registration Statement,
insofar as such statements constitute matters of law, summaries of legal
matters, the Company's certificate of incorporation or bylaw provisions,
documents or legal proceedings, or legal conclusions, have been reviewed by such
counsel and fairly present and summarize, in all material respects, the matters
referred to therein.
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date and
the Additional Closing Date, as the case may be.
In addition to the opinion set forth above, such counsel shall state
that during the course of his participation in the preparation of the
Registration Statement and the Prospectus and the amendments thereto, nothing
has come to the attention of such counsel that has caused him to believe or
given him reason to believe that the Registration Statement or the Prospectus or
any amendment thereto (except for the financial statements and other financial
and accounting information contained therein or omitted therefrom as to which no
opinion need be expressed), at the date thereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Registration Statement or the Prospectus as of the date of the opinion (except
as aforesaid), contains an untrue statement of a material fact or omits to state
a material
31
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) You shall have received on the Closing Date (and the
Additional Closing Date, if any) an opinion of McKay, Williamson, Xxxxxxxx &
Xxxxxxx, LLC, counsel to the Company, substantially to the effect that:
(i) The Company is a corporation duly organized
and validly existing in good standing under the laws of the State of Delaware,
with full corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement thereto), and is duly registered or
otherwise qualified to conduct its business as a foreign corporation and is in
good standing in each jurisdiction or place where the nature of its properties
or the conduct of its business requires such registration or qualification,
except where the failure to so register or qualify does not have a Material
Adverse Effect.
(ii) Each of the Company's subsidiaries is a
corporation duly organized and validly existing in good standing under the laws
of the jurisdiction of its organization, with full corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and any amendment or
supplement thereto), and is duly registered or otherwise qualified to conduct
its business as a foreign corporation and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
to so register or qualify does not have a Material Adverse Effect; and all of
the outstanding shares of capital stock of each of the subsidiaries have been
duly authorized and validly issued, and are fully paid and nonassessable, and
are owned by the Company directly, or indirectly through one of the other
subsidiaries, free and clear of any perfected security interest, or any other
security interest, lien, adverse claim, equity or other encumbrance.
(iii) To the knowledge of such counsel after
reasonable inquiry, neither the Company nor any of its subsidiaries is in
violation of its certificate of incorporation or bylaws and is not in default in
the performance of any obligation,
32
agreement or condition contained in any bond, indenture, note or other evidence
of indebtedness or any other agreement or obligation of the Company, where the
default would have, individually or in the aggregate, a Material Adverse Effect.
(iv) Neither the offer, sale or delivery of the
Shares by the Company, the execution, delivery or performance by the Company of
this Agreement, compliance by the Company with all provisions hereof nor
consummation by the Company of the transactions contemplated hereby (A)
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the articles of incorporation or bylaws of the Company or
any of its subsidiaries or any material agreement, indenture, lease 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 or assets is bound or
(B) creates or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries or (C) violates or will result in any violation of any existing
law, statute, regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or decree that is
known to such counsel and is applicable to the Company, any of its subsidiaries
or any of their respective properties or assets.
(v) Except as described in the Registration
Statement or Prospectus, there is no action, suit, inquiry, proceeding, or
investigation by or before any court or governmental or other regulatory or
administrative agency or commission pending or, to the knowledge of such
counsel, threatened, against or involving the Company or its subsidiaries, or
the properties of either the Company or any of its subsidiaries: (A) which might
individually or in the aggregate prevent or adversely affect the transactions
contemplated by this Agreement or result in a Material Adverse Effect, nor, to
the knowledge of such counsel, is there any basis for any such action, suit,
inquiry, proceeding or investigation; or (B) that are required to be described
in the Registration Statement or Prospectus (or any amendment or supplement
thereto) that are not described as required therein.
(vi) The Shares to be issued and sold to the
Underwriters by the Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, (A) such Shares will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights that entitle or will
entitle any person to acquire any Shares upon the issuance thereof by the
Company and (B) good and valid title to such Shares, free and clear of any
claim, encumbrance or defect in title of any nature (other than any arising by
or through the Underwriters), will pass to each Underwriter that has purchased
any portion of such Shares in good faith and without knowledge of any such
claim, encumbrance or defect.
33
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date and
the Additional Closing Date, as the case may be.
In addition to the opinion set forth above, such counsel shall state
that during the course of his participation in the preparation of the
Registration Statement and the Prospectus and the amendments thereto, nothing
has come to the attention of such counsel that has caused him to believe or
given him reason to believe that the Registration Statement or the Prospectus or
any amendment thereto (except for the financial statements and other financial
and accounting information contained therein or omitted therefrom as to which no
opinion need be expressed), at the date thereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Registration Statement or the Prospectus as of the date of the opinion (except
as aforesaid), contains an untrue statement of a material fact or omits to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) You shall have received on the Additional Closing
Date, if any, an opinion of [______________], counsel to the Selling
Stockholders, substantially to the effect that:
(i) The Selling Stockholders have all requisite
power and authority to enter into this Agreement and to sell and deliver the
Selling Stockholder Shares to be sold by them to the Underwriters as provided
herein. This Agreement has been duly authorized, executed and delivered by, and
is a valid and binding agreement of, the Selling Stockholders enforceable
against the Selling Stockholders in accordance with its terms, except to the
extent enforceability may be limited by (i) bankruptcy, reorganization,
insolvency or other laws affecting enforcement of creditors' rights generally
and (ii) equitable principles being applied at the discretion of a court before
which any proceeding may be brought, and except as to indemnity and contribution
hereunder may be limited by federal or state securities laws.
(ii) The Selling Stockholder Shares to be sold to
the Underwriters by the Selling Stockholders hereunder have been duly authorized
and, when delivered to the Underwriters against payment therefor in accordance
with the terms hereof, (A) such Selling Stockholder Shares will be validly
issued, fully paid and nonassessable and free of any preemptive or similar
rights that entitle or will entitle any person to acquire any Selling
Stockholder Shares upon the sale thereof by the Selling Stockholders and (B)
good and valid title to such Selling Stockholder Shares, free and clear of any
claim, encumbrance or defect in title of any nature (other than any arising by
or through the Underwriters), will pass to each Underwriter that has purchased
any portion of such Selling Stockholder Shares in good faith and without
knowledge of any such claim, encumbrance or defect.
34
(iii) Neither the offer, sale or delivery of the
Selling Stockholder Shares by the Selling Stockholders, the execution, delivery
or performance by the Selling Stockholders of this Agreement, the Custody
Agreement and the Power of Attorney, the compliance by the Selling Stockholders
with all provisions hereof nor consummation by the Selling Stockholders of the
transactions contemplated hereby (A) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
organizational documents of such Selling Stockholder, if such Selling
Stockholder is not an individual, or any material agreement, indenture, lease or
other instrument to which such Selling Stockholder is a party or by which any of
their properties is bound, (B) creates or will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
such Selling Stockholder or (C) violates or will result in any violation of any
existing law, statute, regulation, ruling (assuming compliance with all
applicable state and securities and Blue Sky laws), judgment, injunction, order
or decree that is known to such counsel and is applicable to such Selling
Stockholder or any of its properties.
(iv) No consent, approval, authorization or other
order of, or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official is required
on the part of the Selling Stockholders (except such as have been obtained under
the Act or such as may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Selling Stockholder Shares) for
the valid sale of the Selling Stockholder Shares to the Underwriters by the
Selling Stockholders under this Agreement, the Custody Agreement and the Power
of Attorney.
(v) Each of the Custody Agreement and Power of
Attorney of the Selling Stockholders has been duly authorized, executed and
delivered by the Selling Stockholders and is a valid, legal and binding
agreement of the Selling Stockholders enforceable against the Selling
Stockholders in accordance with its terms, except to the extent enforceability
may be limited by (i) bankruptcy, reorganization, insolvency or other laws
affecting enforcement of creditors' rights generally and (ii) equitable
principles being applied at the discretion of a court before which any
proceeding may be brought, and except as to indemnity and contribution may be
limited by federal or state securities laws.
In rendering such opinion, counsel may rely, to the extent they deem
such reliance proper, as to matters of fact upon certificates of officers of the
Company and of government officials, provided that counsel shall state their
belief that they and you are justified in relying thereon. Copies of all such
certificates shall be furnished to you and your counsel on the Closing Date and
the Additional Closing Date, as the case may be.
(f) You shall have received on the Closing Date or
Additional Closing Date, as the case may be, an opinion of Xxxxxxxx & Xxxxxxxx,
LLP, as counsel for the Underwriters, dated the Closing Date or Additional
Closing Date, as the case may be, with respect to the issuance and sale of the
Shares, the Registration Statement and other related matters as you may
reasonably request, and the Company and its counsel shall
35
have furnished to your counsel such documents as they may reasonably request for
the purpose of enabling them to pass upon such matters.
(g) You shall have received letters addressed to you and
dated the date hereof and the Closing Date or the Additional Closing Date, as
the case may be, from (i) the firm of KPMG, LLP, independent certified public
accountants and (ii) the Chief Financial Officer of the Company, substantially
in the forms heretofore approved by you.
(h) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the Commission and no
proceedings for that purpose shall be pending or, to the knowledge of the
Company, shall be threatened or contemplated by the Commission at or prior to
the Closing Date or Additional Closing Date, as the case may be; (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending or, to the knowledge of the Company, threatened or contemplated by the
authorities of any jurisdiction; (iii) any request for additional information on
the part of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or such
authorities; (iv) after the date hereof, no amendment or supplement to the
Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to you and you did not object thereto in good faith;
and (v) all of the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects (except for
such representations and warranties qualified by materiality, which
representations and warranties shall be true and correct in all respects) on and
as of the date hereof and on and as of the Closing Date or Additional Closing
Date, as the case may be, as if made on and as of the Closing Date or Additional
Closing Date, as the case may be, and you shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you) to the effect set forth in this Section 9(h) and in Sections 9(b) and 9(j)
hereof.
(i) The Company shall not have failed in any material
respect at or prior to the Closing Date or the Additional Closing Date, as the
case may be, to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date or Additional Closing Date, as the case may be.
(j) The Company shall have furnished or caused to have
been furnished to you such further certificates and documents as you shall have
reasonably requested.
(k) At or prior to the Closing Date, you shall have
received the written commitment Lock-Up Agreements from each of the Company's
senior executive officers and directors and the Selling Stockholders not to
directly or indirectly (i) sell, offer or contract to sell or otherwise dispose
of or transfer any shares of Company Securities, whether now owned or acquired
after the date of the Prospectus or with respect to which
36
the power of disposition is acquired after the date of the Prospectus, or file
any registration statement under the Act with respect to the foregoing or (ii)
enter into any swap or other agreement or any other agreement that transfers, in
whole or in part, directly or indirectly, the economic consequences of ownership
of Company Securities whether any such swap or transaction is to be settled by
delivery of Company Securities, in cash or otherwise; other than as provided in
such written commitment before the expiration of 90 days from the Closing Date,
without the prior written consent of Xxxxxxx Xxxxx & Associates, Inc.
(l) At or prior to the effective date of the Registration
Statement, you shall have received a letter from the Corporate Financing
Department of the NASD confirming that such Department has determined to raise
no objections with respect to the fairness or reasonableness of the underwriting
terms and arrangements of the offering contemplated hereby.
(m) You shall be satisfied that, and you shall have
received a certificate dated the Additional Closing Date, if any, from each
Selling Stockholder to the effect that, as of the Additional Closing Date: (i)
the representations and warranties made by such Selling Stockholders herein are
true and correct in all material respect on the Additional Closing Date and (ii)
such Selling Stockholder has complied with all obligations and satisfied all
conditions that are required to be performed or satisfied on his or its part at
or prior to the Additional Closing Date.
(n) Nasdaq shall have approved the Shares for quotation,
subject only to official notice of issuance.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of the Additional
Closing Date of the conditions set forth in this Section 9, except that, if the
Additional Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 9 shall be dated as of the
Additional Closing Date and the opinions called for by paragraphs (c), (d), (e)
and (f) shall be revised to reflect the sale of Additional Shares.
If any of the conditions hereinabove provided for in this Section 9
shall not have been satisfied when and as required by this Agreement, this
Agreement may be terminated by you by notifying the Company of such termination
in writing or by telegram at or prior to such Closing Date, but you shall be
entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become
effective upon the later of (a) the execution and delivery hereof by the parties
hereto and (b) release of notification of the effectiveness of the Registration
Statement by the
37
Commission; provided, however, that the provisions of Sections 7 and 8 shall at
all times be effective.
11. Defaulting Underwriters. If any one or more of the
Underwriters shall fail or refuse to purchase Firm Shares that it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares that such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of the Firm Shares, each
non-defaulting Underwriter shall be obligated, severally, in the proportion in
which the number of Firm Shares set forth opposite its name in Schedule I hereto
bears to the aggregate number of Firm Shares set forth opposite the names of all
non-defaulting Underwriters or in such other proportion as you may specify in
the Agreement Among Underwriters, to purchase the Firm Shares that such
defaulting Underwriter or Underwriters agreed, but failed or refused to
purchase. If any Underwriter or Underwriters shall fail or refuse to purchase
Firm Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case that does not result in termination of this Agreement,
either you or the Company shall have the right to postpone the Closing Date, but
in no event for longer than seven (7) days, in order that the required changes,
if any, in the Registration Statement and the Prospectus or any other documents
or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such default
of any such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or the Additional Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, in your sole judgment,
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or NASDAQ, (ii) trading in securities generally on the NYSE or NASDAQ
shall have been suspended or materially limited, or minimum or maximum prices
shall have been generally established on such exchange, or additional material
governmental restrictions, not in force on the date of this Agreement, shall
have been imposed upon trading in securities generally by any such exchange or
by order of the Commission or any court or other governmental authority, (iii) a
general moratorium on commercial banking activities shall have been declared by
either federal or New York State authorities (iv) any downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act and (v) any such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities or (vi) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions or other material event the effect
of which on the financial markets of the United States is such as to make
38
it, in your judgment, impracticable or inadvisable to market the Shares or to
enforce contracts for the sale of the Shares. Notice of such cancellation shall
be promptly given to the Company and its counsel by telegraph, telecopy or
telephone and shall be subsequently confirmed by letter.
13. Failure of One or More of the Selling Stockholders to Sell and
Deliver the Shares. If one or more of the Selling Stockholders shall fail to
sell and deliver to the Underwriters the Shares to be sold and delivered by such
Selling Stockholders pursuant to this Agreement at the Additional Closing Date,
then the Underwriters shall have the right, by written notice from the
Representatives to the Company and the Selling Stockholders, to postpone the
Additional Closing Date, but in no event for longer than seven days in order
that the required changes, if any, to the Registration Statement and the
Prospectus or any other documents or arrangements may be effected.
14. Information Furnished by the Underwriters. The Company
acknowledges that (i) the sentence immediately preceding the names of the
Underwriters on the cover page of any Preliminary Prospectus and the Prospectus
and (ii) the third paragraph (except for the third sentence of such paragraph)
under the caption "Underwriting" in any Preliminary Prospectus and the
Prospectus, constitute the only information furnished by or on behalf of the
Underwriters through you or on your behalf as such information is referred to in
Sections 6.1(a), 6.1(b) and 8 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5 and
12 hereof, notice given pursuant to any of the provisions of this Agreement
shall be in writing and shall be delivered
(i) to the Company and the Selling Stockholders:
Amedisys, Inc.
0000 Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
with a copy to:
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx Xxxxxxxx & Xxxxxxx, L.L.P.
000 Xx. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, III, Esq.
(ii) to the Underwriters:
Xxxxxxx Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Riley Sweat
with a copy to:
39
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company and its directors and officers and the Selling
Stockholders.
16. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one
counterpart hereof shall have been executed on behalf of each party hereto.
The Company, the Selling Stockholders and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect to any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
40
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
AMEDISYS, INC.
By: _____________________________
Xxxxxxx X. Xxxxx
Chief Executive Officer
The Selling Stockholders Named in
Schedule II Hereto, Acting Severally
By: _____________________________
Attorney-in-Fact
CONFIRMED as of the date first above
mentioned, on behalf of the Representatives
and the other several Underwriters named in
Schedule I hereto.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXXX & COMPANY, INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
By: XXXXXXX XXXXX & ASSOCIATES, INC.
By: _______________________________
Authorized Representative
41
SCHEDULE I
NUMBER OF
NAME FIRM SHARES
---- -----------
Xxxxxxx Xxxxx & Associates, Inc.
Xxxxxxxxx & Company, Inc.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
TOTAL:
42
SCHEDULE II
SCHEDULE OF SELLING STOCKHOLDERS
Number of
Selling Stockholder
Selling Stockholder Shares to be Sold
------------------- -------------------
43
EXHIBIT A
August __, 2004
Amedisys, Inc.
00000 Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxx 00000
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXXX & COMPANY, INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the Several Underwriters
c/o Raymond Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
RE: AMEDISYS, INC. (THE "COMPANY") - RESTRICTION ON STOCK SALES
Dear Sirs:
This letter is delivered to you pursuant to the Underwriting Agreement
(the "Underwriting Agreement") to be entered into by the Company, as issuer, and
Xxxxxxx Xxxxx & Associates, Inc., Xxxxxxxxx & Company, Inc. and Xxxx Xxxxx Xxxx
Xxxxxx, Incorporated, the representatives (the "Representatives") of certain
underwriters (the "Underwriters") to be named therein. Upon the terms and
subject to the conditions of the Underwriting Agreement, the Underwriters intend
to effect a public offering of Common Stock, par value $0.001 per share, of the
Company (the "Shares"), as described in and contemplated by the registration
statement of the Company on Form S-3, File No. 333-118352 (the "Registration
Statement"), as filed with the Securities and Exchange Commission on August __,
2004 (the "Offering").
The undersigned recognizes that it is in the best financial interests
of the undersigned, as an officer or director, or an owner of stock, options,
warrants or other securities of the Company (the "Company Securities"), that the
Company complete the proposed Offering.
The undersigned further recognizes that the Company Securities held by
the undersigned are, or may be, subject to certain restrictions on
transferability, including those imposed by United States federal securities
laws. Notwithstanding these restrictions, the undersigned has agreed to enter
into this letter agreement to further assure the Underwriters that the Company
Securities of the undersigned, now held or hereafter acquired, will not enter
the public market at a time that might impair the underwriting effort.
44
Therefore, as an inducement to the Underwriters to execute the
Underwriting Agreement, the undersigned hereby acknowledges and agrees that the
undersigned will not (i) offer, sell, contract to sell, pledge, grant any option
to purchase or otherwise dispose of (collectively, a "Disposition") any Company
Securities, or any securities convertible into or exercisable or exchangeable
for, or any rights to purchase or otherwise acquire, any Company Securities held
by the undersigned or acquired by the undersigned after the date hereof, or that
may be deemed to be beneficially owned by the undersigned (collectively, the
"Lock-Up Shares"), pursuant to the Rules and Regulations promulgated under the
Securities Act of 1933, as amended (the "Act"), and the Securities Exchange Act
of 1934, as amended, for a period commencing on the date hereof and ending 90
days after the date of the Company's Prospectus first filed pursuant to Rule
424(b) under the Act, inclusive (the "Lock-Up Period"), without the prior
written consent of Xxxxxxx Xxxxx & Associates, Inc. or (ii) exercise or seek to
exercise or effectuate in any manner any rights of any nature that the
undersigned has or may have hereafter to require the Company to register under
the Act the undersigned's sale, transfer or other disposition of any of the
Lock-Up Shares or other securities of the Company held by the undersigned, or to
otherwise participate as a selling securityholder in any manner in any
registration effected by the Company under the Act, including under the
Registration Statement, during the Lock-Up Period. The foregoing restrictions
are expressly agreed to preclude the undersigned from engaging in any hedging,
collar (whether or not for any consideration) or other transaction that is
designed to or reasonably expected to lead or result in a Disposition of Lock-Up
Shares during the Lock-Up Period, even if such Lock-Up Shares would be disposed
of by someone other than such holder. Such prohibited hedging or other
transactions would include any short sale or any purchase, sale or grant of any
right (including any put or call option or reversal or cancellation thereof)
with respect to any Lock-Up Shares or with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from Lock-Up Shares.
Notwithstanding the agreement not to make any Disposition during the
Lock-Up Period, you have agreed that the foregoing restrictions shall not apply
to:
1. the Company Securities being offered in the prospectus
included in the Registration Statement; or
2. any grant or exercise of options pursuant to the Company's
stock option plan.
It is understood that, if the Underwriting Agreement (other than the
provisions thereof that survive termination) shall terminate or be terminated
prior to payment for and delivery of the Shares, you will release the
undersigned from the obligations under this letter agreement.
In furtherance of the foregoing, the Company and its transfer agent and
registrar are hereby authorized to decline to make any transfer of Lock-Up
Shares if such transfer would constitute a violation or breach of this letter.
This letter shall be binding on the undersigned and the respective successors,
heirs, personal representatives and assigns of
45
the undersigned. Capitalized terms used but not defined herein have the
respective meanings assigned to such terms in the Underwriting Agreement.
Very truly yours,
________________________________
Signature of Securityholder
46
