Exhibit 1.1
GPH Draft April __, 1999
ACCREDO HEALTH, INCORPORATED
3,000,000 Shares
Option to Purchase 450,000 Shares
Common Stock
UNDERWRITING AGREEMENT
March ___, 1999
Xxxxxxxxx & Xxxxx LLC
NationsBanc Xxxxxxxxxx Securities LLC
SunTrust Equitable Securities Corporation
Co-Managers
c/x Xxxxxxxxx & Xxxxx LLC
Xxx Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Accredo Health, Incorporated, a Delaware corporation (herein called the
Company), proposes to issue and sell 3,000,000 shares of its authorized but
unissued Common Stock, $0.01 par value (herein called the Common Stock) (said
shares of Common Stock being herein called the Underwritten Stock). The
Company proposes to grant to the Underwriters (as hereinafter defined) an
option to purchase up to 450,000 additional shares of Common Stock (herein
called the Option Stock and with the Underwritten Stock herein collectively
called the Stock). The Common Stock is more fully described in the
Registration Statement and the Prospectus hereinafter described.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the Underwriters, which
term shall also include any underwriter purchasing Stock pursuant to Section
3(b) hereof). You represent and warrant that you have been authorized by each of
the other Underwriters to enter into this Agreement on its behalf and to act for
it in the manner herein provided.
1. Registration Statement. The Company has filed with the Securities and
Exchange Commission (herein called the Commission) a registration statement on
Form S-1 (No. 333-62679), including the related preliminary prospectus, for the
registration of the Stock under the Securities Act of 1933, as amended (herein
called the Securities Act). Copies of such registration statement and of each
amendment thereto, if any, including the related preliminary prospectus (meeting
the requirements of Rule 430A of the rules and regulations of the Commission,
except for the omission of share amounts) heretofore filed by the Company with
the Commission have been delivered to you.
The term Registration Statement as used in this Agreement shall mean such
registration statement, including all exhibits and financial statements and all
information omitted therefrom in reliance upon Rule 430A and contained in the
Prospectus referred to below, in the form in which it became effective, any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission with respect to the Stock (herein called a Rule
462(b) registration statement), and, in the event of any amendment thereto after
the effective date of such registration statement (herein called the Effective
Date), the term Registration Statement shall also mean (from and after the
effectiveness of such amendment) such registration statement as so amended
(including any Rule 462(b) registration statement). The term Prospectus as used
in this Agreement shall mean the prospectus relating to the Stock first filed
with the Commission pursuant to Rule 424(b) and Rule 430A (or if no such filing
is required, as included in the Registration Statement) and, in the event of any
supplement or amendment to such prospectus after the Effective Date, shall also
mean (from and after the filing with the Commission of such supplement or of the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term Preliminary Prospectus as used in this Agreement shall mean each
preliminary prospectus included in such registration statement prior to the time
it becomes effective.
- 2 -
The Registration Statement, in the form delivered to you, has been
declared effective under the Securities Act, and no post-effective amendment to
the Registration Statement has been filed as of the date of this Agreement. No
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the Commission. The Company has caused
to be delivered to you copies of the Registration Statement and of each
Preliminary Prospectus and has consented to the use of such copies for the
purposes permitted by the Securities Act. No order preventing or suspending the
use of any Preliminary Prospectus has been issued by the Commission.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Underwriters as follows:
(a) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of incorporation, has full corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement and the Prospectus and as being conducted, and is
duly qualified as a foreign corporation and in good standing in all
jurisdictions in which the character of the property owned or leased or the
nature of the business transacted by it makes qualification necessary (except
where the failure to be so qualified would not have a material adverse effect on
the business, properties, financial condition, results of operations or
prospects of the Company and its subsidiaries, taken as a whole). The Company
does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Exhibit 21 of the
Registration Statement and the joint ventures referred to in the Prospectus.
(b) Each of the Company and its subsidiaries has all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public, regulatory and governmental
agencies and bodies to own, lease and operate its properties and conduct its
business as now being conducted and as described in the Registration Statement
and the Prospectus, and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially burdensome
restriction not disclosed in the Registration Statement and the Prospectus.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any material
adverse change in the business, properties, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, other than as set
forth in the Registration Statement and the Prospectus. Since such dates,
neither the Company nor any of its subsidiaries has entered into any material
transaction not referred to in the Registration Statement and the Prospectus
other than in the ordinary course of business.
(d) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and any later date on which Option Stock
is to be
- 3 -
purchased, the Registration Statement and the Prospectus will comply, in all
material respects, with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder; on the Effective Date, the
Registration Statement did not contain any untrue statement of a material fact
and did not omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. On the
Effective Date the Prospectus did not and, on the Closing Date and any later
date on which Option Stock is to be purchased, the Registration Statement and
the Prospectus will not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
the representations and warranties in this paragraph (d) shall apply to
statements in, or omissions from, the Registration Statement or the Prospectus
made in reliance upon and in conformity with information herein or otherwise
furnished in writing to the Company by or on behalf of the Underwriters for use
in the Registration Statement or the Prospectus.
(e) The authorized, issued and outstanding capital stock and the
outstanding long-term debt of the Company is as described in the Prospectus as
of the dates specified therein. Except as described in the Prospectus, there are
no outstanding warrants, options or other rights to acquire any capital stock of
the Company. All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable, and
conform to the description thereof contained in the Prospectus. All of the
issued shares of capital stock of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, security interests and claims whatsoever other than as described
in the Prospectus. The Stock will be, when issued and sold to the Underwriters
as provided herein duly and validly issued, fully paid and nonassessable and
conforms to the description thereof in the Prospectus. No further approval or
authority of the stockholders or the Board of Directors of the Company is
required for the issuance and sale of the Stock by the Company as contemplated
herein.
(f) The Company has filed a registration statement pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (herein called
the Exchange Act), to register the Stock, has filed an application to list the
stock on the Nasdaq National Market, and has received notification that such
listing has been approved, subject to official notice of issuance and sale.
(g) The Company and each of its subsidiaries are conducting business
in compliance with all applicable statutes, ordinances, orders, judgements,
decrees, laws, rules and regulations of the jurisdictions in which they are
conducting business, including, without limitation, all applicable local, state
and federal environmental regulations, except where the failure to be in
compliance would not have a material adverse effect on the business, properties,
financial condition, results of operations or prospects of the Company and its
subsidiaries taken as a whole. Neither the Company nor any of its subsidiaries
has provided or provides monetary compensation to the medical community in
return for patient referrals in violation of any applicable law, rule or
regulation.
- 4 -
(h) The Company and each of its subsidiaries maintain insurance of
the types and in the amounts generally deemed adequate for their business,
including, but not limited to, professional liability insurance and insurance
covering real and personal property owned or leased by the Company or any of its
subsidiaries against theft, loss, damage, destruction, acts of vandalism, all of
which insurance is in full force and effect.
(i) The Company is not aware that (A) any executive officer, key
employee or significant group of employees of the Company or any of its
subsidiaries (the loss of whom would have a material adverse effect on the
Company) plans to terminate employment with the Company or any of its
subsidiaries or (B) any such executive officer or key employee is subject to any
non-competition, non-disclosure, confidentiality, employment, consulting or
similar agreement that would be violated by the present or proposed business
activities of the Company or any of its subsidiaries.
(j) The issuance and sale of the Stock to be sold by the Company and
the compliance by the Company with all of the provisions of this Agreement and
the consummation of the transactions herein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or material instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the Articles of Incorporation or By-laws, each as
amended to date, of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the issuance and sale of the Stock
or the consummation by the Company of the transactions contemplated by this
Agreement, except the registration under the Securities Act of the Stock and
such consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or blue sky laws in connection with the
purchase and distribution of the Stock by the Underwriters.
(k) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws. Neither the Company nor any of
its subsidiaries is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound
other than any defaults that singly or in the aggregate will not have a material
adverse effect on the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries.
(l) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock, are an accurate description of such terms in all
material respects.
- 5 -
(m) Other than as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, other than as described in the Prospectus, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(n) The Company is not and, after giving effect to the offering and
sale of the Stock, will not be an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the Investment Company
Act of 1940, as amended.
(o) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and regulations of
the Commission thereunder.
(p) Except as disclosed in the Prospectus, the Company and each of
its subsidiaries own or possess (or otherwise have rights to the use of) the
patents, patent licenses, trademarks, trade names, service marks, service names,
copyrights and other intellectual property rights (collectively, the
"Intellectual Property") necessary to carry on the Company's business as
presently conducted and as proposed in the Prospectus to be conducted, without
any conflict with the rights of others, except for such conflicts as do not and
will not have a material adverse effect on the financial position, stockholders'
equity or results of operations of the Company and each of its subsidiaries,
taken as a whole; neither the Company nor its subsidiaries have received any
notice of infringement or violation or conflict with (and knows of no such
infringement or conflict with) asserted rights of others with respect to any
Intellectual Property or any trade secrets, proprietary information, inventions,
know-how, processes and procedures owned, used by or licensed to the Company or
any such subsidiary which, singly or in the aggregate, if the subject of any
unfavorable decision, ruling or finding, would have a material adverse effect on
the financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole.
(q) The Company and its subsidiaries have endeavored in good faith
to structure their relationships with respect to the establishment of joint
ventures and management agreements in compliance with applicable governmental
laws and regulations relating to (i) licensure of pharmacies, (ii) fee-splitting
between health care providers and other entities, (iii) payment for health care
services (including without limitation the rules of participation for the
Medicare program and comparable provisions of state and federal law pertaining
to the Medicaid program), (iv) the federal and state fraud and abuse laws and
regulations thereunder (42 U.S.C. ss. 1320a-7b et seq.), and the Xxxxx law and
regulations thereunder (42 U.S.C. ss. 1395nn et seq.) collectively, the "Health
Care Laws"). To the Company's best knowledge, it is in compliance with all
- 6 -
Health Care Laws. Further, the Company has not been notified or advised by any
governmental agent or authority that it is under investigation with respect to
any violation or alleged violation of any of the Health Care Laws.
3. Purchase of the Stock by the Underwriters.
(a) On the basis of the representations and warranties and subject
to the terms and conditions herein set forth, the Company agrees to issue and
sell 3,000,000 shares of the Underwritten Stock to the several Underwriters and
each of the Underwriters agrees to purchase from the Company the respective
aggregate number of shares of Underwritten Stock set forth opposite its name in
Schedule I. The price at which such shares of Underwritten Stock shall be sold
by the Company and purchased by the several Underwriters shall be $___ per
share. In making this Agreement, each Underwriter is contracting severally and
not jointly; except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number of
shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters shall fail or
refuse (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of Section 8 or 9 hereof) to purchase and
pay for the number of shares of the Stock agreed to be purchased by such
Underwriter or Underwriters, the Company shall immediately give notice thereof
to you, and the non-defaulting Underwriters shall have the right within 24 hours
after the receipt by you of such notice to purchase, or procure one or more
other Underwriters to purchase, in such proportions as may be agreed upon
between you and such purchasing Underwriter or Underwriters and upon the terms
herein set forth, all or any part of the shares of the Stock which such
defaulting Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares
and portion, the number of shares of the Stock which each non-defaulting
Underwriter is otherwise obligated to purchase under this Agreement shall be
automatically increased on a pro rata basis to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the shares and portion which the defaulting Underwriter or
Underwriters agreed to purchase if the aggregate number of such shares of the
Stock exceeds 10% of the total number of shares of the Stock which all
Underwriters agreed to purchase hereunder. If the total number of shares of the
Stock which the defaulting Underwriter or Underwriters agreed to purchase shall
not be purchased or absorbed in accordance with the two preceding sentences, the
Company shall have the right, within 24 hours next succeeding the 24-hour period
referred to above, to make arrangements with other underwriters or purchasers
satisfactory to you for the purchase of such shares and portion on the terms
herein set forth. In any such case, either you or the Company shall have the
right to postpone the Closing Date determined as provided in Section 5 hereof
for not more than seven business days after the date originally fixed as the
Closing Date pursuant to said Section 5 in order that any necessary changes in
the Registration Statement, the Prospectus or any other documents or
arrangements may be made. If neither the non-defaulting Underwriters nor the
Company shall make arrangements within the 24-hour periods
- 7 -
stated above for the purchase of all the shares of the Stock which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph (b), and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and covenants
herein contained, and subject to the terms and conditions herein set forth, the
Company grants an option to the several Underwriters to purchase, severally and
not jointly, up to 450,000 shares in the aggregate of the Option Stock from the
Company at the same price per share as the Underwriters shall pay for the
Underwritten Stock. Said option may be exercised only to cover over-allotments
in the sale of the Underwritten Stock by the Underwriters and may be exercised
in whole or in part at any time (but not more than once) on or before the
thirtieth day after the date of this Agreement upon written or telegraphic
notice by you to the Company setting forth the aggregate number of shares of the
Option Stock as to which the several Underwriters are exercising the option.
Delivery of certificates for the shares of Option Stock, and payment therefor,
shall be made as provided in Section 5 hereof. The number of shares of the
Option Stock to be purchased by each Underwriter shall be the same percentage of
the total number of shares of the Option Stock to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Stock, as
adjusted by you in such manner as you deem advisable to avoid fractional shares.
4. Offering by Underwriters.
(a) The terms of the initial public offering by the Underwriters of
the Stock to be purchased by them shall be as set forth in the Prospectus. The
Underwriters may from time to time change the public offering price after the
closing of the initial public offering and increase or decrease the concessions
and discounts to dealers as they may determine, subject to compliance by the
Underwriters with applicable laws, rules and regulations relating thereto.
(b) The information set forth in the last paragraph on the outside
front prospectus cover page, the last paragraph on the inside front prospectus
cover page and under the caption "Underwriting" in the Registration Statement,
any Preliminary Prospectus and the Prospectus relating to the Stock filed by the
Company (insofar as such information relates to the Underwriters) constitutes
the only information furnished by the Underwriters in writing to the Company for
inclusion in the Registration Statement, any Preliminary Prospectus, and the
Prospectus, and on behalf of the respective Underwriters you represent and
warrant to the Company that the statements made therein are correct.
5. Delivery of and Payment for the Stock.
(a) Delivery of certificates for the shares of the Underwritten
Stock and the Option Stock (if the option granted by Section 3(c) hereof shall
have been
- 8 -
exercised not later than 7:00 a.m., San Francisco time, on the date two business
days preceding the Closing Date), and payment therefor, shall be made at the
office of Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000, at 7:00 a.m., San Francisco time, on the fourth business day after the
date of this Agreement, or at such time on such other day, not later than seven
full business days after such fourth business day, as shall be agreed upon in
writing by the Company and you. The date and hour of such delivery and payment
(which may be postponed as provided in Section 3(b) hereof) are herein called
the Closing Date.
(b) If the option granted by Section 3(c) hereof shall be exercised
after 7:00 a.m., San Francisco time, on the date two business days preceding the
Closing Date, delivery of certificates for the shares of Option Stock, and
payment therefor, shall be made at the office of Xxxxxxxxx & Xxxxx LLC, Xxx Xxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 at 7:00 a.m., San Francisco time, on the
third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company shall be made
to the Company or its order by, at the Company's option, wire transfer or one or
more certified or official bank check or checks in same day funds. The Company
must notify the Underwriters at least three business days preceding the Closing
Date and at least one business day preceding the purchase of the Option Stock of
its election, and if it elects to receive payment by wire transfer. Such
notification shall include the appropriate wire instructions. Such payment shall
be made upon delivery of certificates for the Stock (or by electronic delivery
through the facilities of the Depository Trust Company) to you for the
respective accounts of the several Underwriters against receipt therefor signed
by you. If certificates for the Stock are to be delivered, such certificates
shall be registered in such name or names and shall be in such denominations as
you may request at least one business day before the Closing Date, in the case
of Underwritten Stock, and at least one business day prior to the purchase
thereof, in the case of the Option Stock. Such certificates will be made
available to the Underwriters for inspection, checking and packaging at the
offices of Lewco Securities Corporation, 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on
the business day prior to the Closing Date or, in the case of the Option Stock,
by 3:00 p.m., New York time, on the business day preceding the date of purchase.
Time shall be of the essence and delivery at the time and place specified above
is a further condition to the obligations of the Underwriters.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall not
relieve such Underwriter from any of its obligations hereunder.
6. Further Agreements of the Company. The Company covenants and agrees as
follows:
- 9 -
(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) a Prospectus containing information previously omitted at the
time of effectiveness of the Registration Statement in reliance on Rule 430A;
provided, however, that the Company shall not file such Prospectus under Rule
424(b) or any amendment to the Registration Statement or supplement to the
Prospectus of which you shall not previously have been advised and furnished
with a copy or to which you shall have reasonably objected in writing or which
is not in compliance with the Securities Act or the rules and regulations of the
Commission. The Company will provide evidence satisfactory to the Underwriters
of the timely filing of the Prospectus filed under Rule 424(b).
(b) The Company will promptly notify each Underwriter in the event
of (i) the request by the Commission for amendment of the Registration Statement
or for any supplement to the Prospectus or for any additional information, (ii)
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement, (iii) the institution or notice of intended
institution of any action or proceeding for that purpose, (iv) the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Stock for sale in any jurisdiction, or (v) the receipt by
the Company of notice of the initiation or threatening of any proceeding for
such purpose. The Company will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be issued,
to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the date hereof, and with
respect to documents filed after the date hereof, on or before the Closing Date,
deliver to you a signed copy of the Registration Statement as originally filed
and of each amendment thereto filed prior to the time the Registration Statement
becomes effective and, promptly upon the filing thereof, a signed copy of each
post-effective amendment, if any, to the Registration Statement (together with,
in each case, all exhibits thereto unless previously furnished to you) and will
also deliver to you, for distribution to the Underwriters, a sufficient number
of additional conformed copies of each of the foregoing (but without exhibits)
so that a sufficient number of copies of each may be distributed to each
Underwriter, (ii) as promptly as possible deliver to you and send to the several
Underwriters, at such office or offices as you may designate, as many copies of
the Prospectus as you may reasonably request, and (iii) thereafter from time to
time during the period in which a prospectus is required by law to be delivered
by an Underwriter or dealer, likewise send to the Underwriters as many
additional copies of the Prospectus and as many copies of any supplement to the
Prospectus and of any amended prospectus, filed by the Company with the
Commission, as you may reasonably request for the purposes contemplated by the
Securities Act.
(d) If at any time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event relating
to or affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, to supplement or
amend the Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is
- 10 -
delivered to a purchaser of the Stock, the Company will forthwith prepare and
file with the Commission, at its own expense, a supplement to the Prospectus or
an amended prospectus so that the Prospectus as so supplemented or amended will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not misleading. In addition, upon your written request, the Company
will at its own expense prepare and file with the Commission any amendments or
supplements to the Registration Statement or Prospectus which, in the opinion of
counsel to the Underwriters, may be necessary or advisable in connection with
the distribution of the Stock by the Underwriters. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the several
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company
will submit to you, for your information, a copy of any post-effective amendment
to the Registration Statement and any supplement or amendment to the Prospectus
proposed to be filed.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified. The Company will, from time to
time, prepare and file such statements, reports, and other documents as are or
may be required to continue such qualifications in effect for so long a period
as you may reasonably request for distribution of the Stock.
(g) During a period of five years commencing with the date hereof,
the Company will furnish to you, and to each Underwriter who may so request in
writing, copies of all periodic and special reports furnished to stockholders of
the Company and upon request of all information, documents and reports filed
with the Commission.
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the Effective Date, the
Company will make generally available to its security holders an earnings
statement in accordance with Section 11(a) of the Securities Act and Rule 158
thereunder.
(i) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, the Company agrees to pay all costs
and expenses incident to the performance of its obligations under this
Agreement, including all costs and expenses incident to (i) the preparation,
printing and filing with the Commission and the National Association of
Securities Dealers, Inc. ("NASD") of the Registration Statement, any Preliminary
Prospectus and the Prospectus (other than,
- 11 -
except as provided for in paragraph (j) below and unless expressly provided for
elsewhere herein, fees and disbursements of Underwriters' counsel, fees and
expenses incurred by the Underwriters in connection with the preparation of the
Registration Statement, the Preliminary Prospectus and the Prospectus and any
advertising or marketing expenses incurred in connection with the offering by
the Underwriters), (ii) the furnishing to the Underwriters of copies of any
Preliminary Prospectus, and of the several documents required by paragraph (c)
of this Section 6 to be so furnished, (iii) the printing of documents required
to be delivered to the Underwriters pursuant hereof, (iv) the preparation,
printing and filing of all supplements and amendments to the Prospectus referred
to in paragraph (d) of this Section 6 (other than, except as provided for in
paragraph (j) below and unless expressly provided for elsewhere herein, fees and
disbursements of Underwriters' counsel and fees and expenses incurred by the
Underwriters in connection with the preparation of any such supplement or
amendment), (v) the furnishing to you and the Underwriters of the reports and
information referred to in paragraph (g) of this Section 6 and (vi) the printing
and issuance of stock certificates, including the transfer agent's fees.
(j) The Company agrees to reimburse you, for the account of the
several Underwriters, for blue sky fees and related disbursements (including,
without limitation, filing fees, counsel fees and disbursements) paid by or for
the account of the Underwriters or their counsel in qualifying the Stock under
state securities or blue sky laws and in the review of the offering by the NASD.
(k) The Company hereby agrees that, without the prior written
consent of Xxxxxxxxx & Xxxxx LLC on behalf of the Underwriters, the Company will
not, directly or indirectly, offer, sell, pledge, contract to sell (including
any short sale), grant any option to purchase or otherwise dispose of any shares
of Common Stock or enter into any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including without limitation, any put
or call option) 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 the Common Stock for a period continuing until 180 days after the
effective date of the registration statement relating to the initial Public
Offering. The foregoing sentence shall not apply to (A) the Stock to be sold to
the Underwriters pursuant to this Agreement, (B) shares of Common Stock issued
by the Company upon the exercise of options granted or other awards under the
stock option plans of the Company (the "Option Plans"), all as described in the
Preliminary Prospectus, and (C) options to purchase Common Stock or other awards
of (or relating to) Common Stock granted under the Option Plans.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion the
market price for the Stock has been or is likely to be materially affected
(regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Prospectus), the Company will, after written
notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate
- 12 -
a press release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
(m) The Company is familiar with the Investment Company Act of 1940,
as amended, and has in the past conducted its affairs, and will in the future
conduct its affairs, in such a manner to ensure that the Company was not and
will not be an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(n) The Company will apply the net proceeds of the sale of the Stock
sold by it substantially in accordance with its statements under the caption
"Use of Proceeds" in the Prospectus.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Securities Act
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may become subject
under the Securities Act, the Exchange Act, or the common law or otherwise, and
the Company agrees to reimburse each such Underwriter and controlling person for
any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case to the extent the same arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (including the Prospectus
constituting a part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any Rule 462(b) registration
statement), or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that (1) the indemnity agreements of the Company
contained in this paragraph (a) shall not apply to any such losses, claims,
damages,
- 13 -
liabilities or expenses if such statement or omission was made in the last
paragraph on the outside front prospectus cover page, the last paragraph on the
inside front prospectus cover page, or under the caption "Underwriting" in any
Preliminary Prospectus or the Registration Statement or the Prospectus or any
such amendment thereof or supplement thereto and (2) the indemnity agreement
contained in this paragraph (a) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages, liabilities or expenses purchased the Stock which
is the subject thereof (or to the benefit of any person controlling such
Underwriter) if at or prior to the written confirmation of the sale of such
Stock a copy of the Prospectus (or the Prospectus as amended or supplemented)
was not sent or delivered to such person and the untrue statement or omission of
a material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as amended or supplemented) unless the failure is
the result of noncompliance by the Company with paragraph (c) of Section 6
hereof. The indemnity agreements of the Company contained in this paragraph (a)
and the representations and warranties of the Company contained in Section 2
hereof shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, each other
Underwriter and each person (including each partner or officer thereof) who
controls the Company or any such other Underwriter within the meaning of Section
15 of the Securities Act, from and against any and all losses, claims, damages
or liabilities, joint or several, to which such indemnified parties or any of
them may become subject under the Securities Act, the Exchange Act, or the
common law or otherwise and to reimburse each of them for any legal or other
expenses (including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against any such losses, claims, damages or
liabilities or in connection with any investigation or inquiry of, or other
proceeding which may be brought against, the respective indemnified parties, in
each case to the extent the same arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (including the Prospectus constituting a part thereof and
any Rule 462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, if such statement or omission was
made in the last paragraph on the outside front prospectus cover page, the last
paragraph on the inside front prospectus cover page, or under the caption
"Underwriting" in any Preliminary Prospectus or the Registration Statement or
the Prospectus or any such amendment thereof or supplement thereto. The
indemnity agreement of each Underwriter contained in this paragraph (b) shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any indemnified party and shall survive the delivery of
and payment for the Stock.
(c) Each party indemnified under the provision of paragraphs (a) and
(b) of this Section 7 agrees that, upon the service of a summons or other
initial legal process upon it in any action or suit instituted against it or
upon its receipt of written
- 14 -
notification of the commencement of any investigation or inquiry of, or
proceeding against, it in respect of which indemnity may be sought on account of
any indemnity agreement contained in such paragraphs, it will promptly give
written notice (herein called the Notice) of such service or notification to the
party or parties from whom indemnification may be sought hereunder. No
indemnification provided for in such paragraphs shall be available to any party
who shall fail so to give the Notice if the party to whom such Notice was not
given was unaware of the action, suit, investigation, inquiry or proceeding to
which the Notice would have related and was prejudiced by the failure to give
the Notice, but the omission so to notify such indemnifying party or parties of
any such service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnity agreement. Any
indemnifying party shall be entitled at its own expense to participate in the
defense of any action, suit or proceeding against, or investigation or inquiry
of, an indemnified party. Any indemnifying party shall be entitled, if it so
elects within a reasonable time after receipt of the Notice by giving written
notice (herein called the Notice of Defense) to the indemnified party, to assume
(alone or in conjunction with any other indemnifying party or parties) the
entire defense of such action, suit, investigation, inquiry or proceeding, in
which event such defense shall be conducted, at the expense of the indemnifying
party or parties, by counsel chosen by such indemnifying party or parties and
reasonably satisfactory to the indemnified party or parties; provided, however,
that (i) if the indemnified party or parties reasonably determine that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled to have counsel chosen by such
indemnified party or parties participate in, but not conduct, the defense. If,
within a reasonable time after receipt of the Notice, an indemnifying party
gives a Notice of Defense and the counsel chosen by the indemnifying party or
parties is reasonably satisfactory to the indemnified party or parties, the
indemnifying party or parties will not be liable under paragraphs (a) through
(c) of this Section 7 for any legal or other expenses subsequently incurred by
the indemnified party or parties in connection with the defense of the action,
suit, investigation, inquiry or proceeding, except that (A) the indemnifying
party or parties shall bear the legal and other expenses incurred in connection
with the conduct of the defense as referred to in clause (i) of the proviso to
the preceding sentence and (B) the indemnifying party or parties shall bear such
other expenses as it or they have authorized to be incurred by the indemnified
party or parties. If, within a reasonable time after receipt of the Notice, no
Notice of Defense has been given, the indemnifying party or parties shall be
responsible for any legal or other expenses incurred by the indemnified party or
parties in connection with the defense of the action, suit, investigation,
inquiry or proceeding.
- 15 -
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each 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 the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock 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 fault of each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and the total underwriting discount received by the Underwriters, as
set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault 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 each indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) 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 investigation, preparing to defend or defending against
any action or claim which is the subject of this paragraph (d). Notwithstanding
the provisions of this paragraph (d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discount applicable to the
Stock purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this paragraph
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of
a summons or other initial legal process upon it in any action instituted
against it in respect of which contribution may be sought, it will promptly give
written notice of such service to the party or parties from whom contribution
may be sought, but the omission so to notify such party or parties of any such
service shall not relieve the party from whom contribution may be sought from
any obligation it may have hereunder or otherwise (except as specifically
provided in paragraph (c) of this Section 7).
- 16 -
(e) The Company will not, without the prior written consent of each
Underwriter, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not such Underwriter or any
person who controls such Underwriter within the meaning of Section 15 of the
Securities 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 such Underwriter and each such controlling
person from all liability arising out of such claim, action, suit or proceeding.
8. Termination. This Agreement may be terminated by you at any time prior
to the Closing Date by giving written notice to the Company if after the date of
this Agreement trading in the Common Stock shall have been suspended, or if
there shall have occurred (i) the engagement in hostilities or an escalation of
major hostilities by the United States or the declaration of war or a national
emergency by the United States on or after the date hereof, (ii) any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions if the effect of such outbreak, calamity,
crisis or change in economic or political conditions in the financial markets of
the United States would, in the Underwriters' reasonable judgment, make the
offering or delivery of the Stock impracticable, (iii) suspension of trading in
securities generally or a material adverse decline in value of securities
generally on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market, or limitations on prices (other than limitations on
hours or numbers of days of trading) for securities on either such exchange or
system, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of, or commencement of any
proceeding or investigation by, any court, legislative body, agency or other
governmental authority which in the Underwriters' reasonable opinion materially
and adversely affects or will materially or adversely affect the business or
operations of the Company, (v) declaration of a banking moratorium by either
federal or New York State authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in the Underwriters' reasonable opinion has a material
adverse effect on the securities markets in the United States. If this Agreement
shall be terminated pursuant to this Section 8, there shall be no liability of
the Company to the Underwriters and no liability of the Underwriters to the
Company; provided, however, that in the event of any such termination the
Company agrees to indemnify and hold harmless the Underwriters from all costs or
expenses incident to the performance of the obligations of the Company under
this Agreement, to the extent provided for in paragraphs (i) and (j) of Section
6 hereof.
9. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters to purchase and pay for the Stock shall be subject to the accuracy
of the representations and warranties on the part of the Company and the
performance by the Company of all its obligations to be performed hereunder at
or prior to the Closing Date and, solely with respect to the Option Stock, on
any later date on which Option Stock is to be purchased, as the case may be, and
to the following further conditions:
- 17 -
(a) The Registration Statement shall have become effective; and no
stop order suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
(b) The legality and sufficiency of the sale of the Stock hereunder
and the validity and form of the certificates representing the Stock, all
corporate proceedings and other legal matters incident to the foregoing, and the
form of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or prior to
the Closing Date by Xxxxxxx, Procter & Xxxx LLP, counsel for the Underwriters,
provided that such approval is not unreasonably withheld.
(c) You shall have received from Xxxxxx & Bird LLP, counsel for the
Company, an opinion, addressed to the Underwriters and dated the Closing Date,
covering the matters set forth in Annex A hereto, and if Option Stock is
purchased at any date after the Closing Date, additional opinions from each such
counsel, addressed to the Underwriters and dated such later date, confirming
that the statements expressed as of the Closing Date in such opinions remain
valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective Date, the
statements made in the Registration Statement and the Prospectus were true and
correct and neither the Registration Statement nor the Prospectus omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein, respectively, not misleading, (ii) since the
Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment filed with the Commission, (iii) since the respective
dates as of which information is given in the Registration Statement in the form
in which it originally became effective and the Prospectus contained therein,
there has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the business, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, and, since such dates, except in the ordinary
course of business, neither the Company nor any of its subsidiaries has entered
into any material transaction not referred to in the Registration Statement in
the form in which it originally became effective and the Prospectus contained
therein, (iv) neither the Company nor any of its subsidiaries has any material
contingent obligations which are not disclosed in the Registration Statement and
the Prospectus, (v) there are not any pending or known threatened legal
proceedings to which the Company or any of its subsidiaries is a party or of
which property of the Company or any of its subsidiaries is the subject which
are required to be disclosed in the Registration Statement and the Prospectus
and which are not disclosed as required, (vi) there are not any franchises,
contracts, leases or other documents which are required to be filed as exhibits
to the Registration Statement which have not been filed as required, (vii) the
representations and warranties of the Company herein are true and correct in all
material respects as of the Closing Date and on any later date on which Option
Stock is to be purchased, as the case may be, and (viii) there has not been any
material change in the market for securities in general or in political,
financial or economic conditions and which renders it
- 18 -
impracticable in your reasonable judgment to make a public offering of the
Stock, or a material adverse change in market levels for securities in general
(or those of companies in particular) or financial or economic conditions which
render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on any later
date on which Option Stock is purchased a certificate, dated the Closing Date or
such later date, as the case may be, and signed by the President and the Chief
Financial Officer of the Company, in their capacities as such officers, stating
that the respective signers of said certificate have carefully examined the
Registration Statement in the form in which it originally became effective and
the Prospectus contained therein and any supplements or amendments thereto, and
that the statements included in clauses (i) through (vii) of paragraph (d) of
this Section 9 are true and correct.
(f) You shall have received from Ernst & Young LLP, a letter or
letters, addressed to the Underwriters and dated the Closing Date and any later
date on which Option Stock is purchased, confirming that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable published rules and regulations thereunder
and, based upon the procedures described in their letter delivered to you
concurrently with the execution of this Agreement (herein called the Original
Letter), but carried out to a date not more than three business days prior to
the Closing Date or such later date on which Option Stock is purchased, (i)
confirming, to the extent true, that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of the Original Letter or to reflect the availability of more recent
financial statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries, taken as a whole,
which, in your sole judgment, makes it impractical or inadvisable to proceed
with the public offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
(g) You shall have received from Ernst & Young a letter stating that
their review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of their examination of
the Company's financial statements as at June 30, 1998, did not disclose any
weakness in internal controls that they considered to be material weaknesses.
(h) Prior to the Closing Date, the Stock to be issued and sold by
the Company shall have been duly authorized for listing by the Nasdaq National
Market upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have received from
all stockholders agreements, in form reasonably satisfactory to Xxxxxxxxx &
Xxxxx LLC, stating that without the prior written consent of Xxxxxxxxx & Xxxxx
LLC on behalf of the Underwriters, such person or entity will not, directly or
indirectly offer, sell, pledge,
- 19 -
contract to sell (including any short sale), grant any option to purchase or
otherwise dispose of any shares of Common Stock (including, without limitation,
shares of Common Stock which may be deemed to be beneficially owned by the
parties to such agreements in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock which may be
issued upon exercise of a stock option or warrant or conversion of any
convertible securities) or enter into any short sale (whether or not against the
box) or any purchase, sale or grant of any right (including without limitation,
any put or call option) 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 the Common Stock for a period continuing until 180 days
after the effective date of the registration statement relating to the initial
public offering.
The lock-up agreement described above shall not apply to transfers (i) in
connection with the initial public offering of the Company's Stock to the extent
that the stockholder is a selling stockholder in such offering, (ii) by gift,
will or intestacy, (iii) in the event the stockholder is an individual, to his
or her immediate family or to a trust the beneficiaries of which are exclusively
the stockholder and/or a member or members of his or her immediate family, (iv)
as a distribution to partners, members or shareholders of the stockholder, or
(v) to an affiliate of the stockholder; provided, however, that in the case of
transfers under clauses (ii), (iii), (iv) and (v), it shall be a condition to
the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding the Stock subject to the provisions of the
lock-up agreement, and there shall be no further transfer of such Stock except
in accordance with the lock-up agreement.
All the agreements, opinions, certificates and letters mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if you and Xxxxxxx, Procter & Xxxx LLP, counsel for the
Underwriters, shall be satisfied that they comply in form and scope.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement to the
extent provided for in paragraphs (i) and (j) of Section 6 hereof, and (ii) if
this Agreement is terminated by you because of any refusal, inability or failure
on the part of the Company to perform any agreement of the Company herein, to
fulfill any of the conditions herein, or to comply with any provision hereof
that is applicable to the Company, other than by reason of a default by any of
the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the transactions contemplated hereby.
10. Conditions of the Obligation of the Company. The obligation of the
Company to deliver the Stock shall be subject to the conditions that (a) the
Registration
- 20 -
Statement shall have become effective and (b) no stop order suspending the
effectiveness thereof shall be in effect and no proceedings therefor shall be
pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not be
fulfilled, this Agreement may be terminated by the Company by giving notice to
you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement to the
extent provided for in paragraphs (i) and (j) of Section 6 hereof.
11. Reimbursement of Certain Expenses. In addition to its other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of the Company and the several Underwriters and, with respect to
the provisions of Section 7 hereof, the several parties (in addition to the
Company and the several Underwriters) indemnified under the provisions of said
Section 7, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Stock from any of the several Underwriters.
13. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing and, if to the Underwriters, shall be mailed, sent
via overnight courier, sent by facsimile or delivered to Xxxxxxxxx & Xxxxx LLC,
Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000; and if to the Company, shall
be mailed, sent via overnight courier, sent by facsimile or delivered to it at
its office, 0000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Attention: Xxxxx X. Xxxxxxx. Any notice sent in accordance with the provisions
of this Section 13 shall be deemed to have been received on the date which is:
(i) three (3) business days after the date of proper posting, if sent by
certified U.S. mail, postage prepaid, return receipt requested; or (ii) the date
on which sent, if sent by facsimile transmission, with confirmation and with the
original to
- 21 -
be sent by certified U.S. mail; or (iii) the next business day if sent by
overnight delivery by a national courier service.
14. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on behalf of
the Company or their respective directors or officers, and (c) delivery and
payment for the Stock under this Agreement; provided, however, that if this
Agreement is terminated prior to the Closing Date, the provisions of paragraph
(k) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of California.
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
ACCREDO HEALTH, INCORPORATED
By
--------------------------
Xxxxx X. Xxxxxxx
Chief Executive Officer
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
XXXXXXXXX & XXXXX LLC
NATIONSBANC XXXXXXXXXX SECURITIES LLC
SUNTRUST EQUITABLE SECURITIES LLC
By Xxxxxxxxx & Xxxxx LLC
By:
--------------------------
- 22 -
Managing Director
Acting on behalf of the several Underwriters,
including themselves, named in Schedule I hereto.
SCHEDULE I
UNDERWRITERS
Number of Shares to be
Underwriters Purchased
Xxxxxxxxx & Xxxxx LLC
NationsBank Xxxxxxxxxx Securities LLC
SunTrust Equitable Securities Corporation
Total
ANNEX A
Matters to be Covered in the Opinion of
Xxxxxx & Bird LLP Counsel for the Company
(i) The Company has been duly incorporated and is validly
existing as a corporation and is in good standing under the laws of the
State of Delaware, and is qualified to transact business as a foreign
corporation in the State[s] of ________. The Company has the corporate
power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. Each of the Company's
corporate subsidiaries has been duly incorporated and is validly existing
as a corporation and is in good standing under the laws of the State of
Tennessee, and is qualified to transact business as a foreign corporation
in the State[s] of ________. Each of the Company an its subsidiaries is
duly qualified to do business in each jurisdiction in which it owns or
leases property or in which the conduct of its business requires such
qualification (as such properties and business are described in the
Registration Statement.) Each of the Company's corporate subsidiaries has
the corporate power and the corporate authority to own or lease its
properties and conduct its business as described in the Registration
Statement; all the issued and outstanding capital stock of each of the
subsidiaries of the Company has been duly authorized and validly issued
and is fully paid and nonassessable, and except as disclosed in the
Prospectus, is owned by the Company free and clear of all liens,
encumbrances and security interests, and to such counsel's knowledge, no
options, warrants or other rights to purchase, agreements or other
obligations to
- 23 -
issue or other rights to convert any obligations into shares of capital
stock or ownership interests in such subsidiaries are outstanding.
(ii) the authorized capital stock of the Company consists of
___ shares of Preferred Stock, none of which there are outstanding, and
___________ shares of Common Stock, $____ par value, of which there are
outstanding ___________ shares (including the Underwritten Stock plus the
number of shares of Option Stock, if any, issued on the date hereof); such
authorized capital stock has been duly authorized; all of the outstanding
shares of such capital stock (including the Underwritten Stock and the
shares of Option Stock issued, if any) have been validly issued and are
fully paid and nonassessable; and no preemptive rights of, or rights of
refusal in favor of, stockholders exist with respect to the Stock, or the
issue and sale thereof, pursuant to the Certificate of Incorporation or
Bylaws of the Company and, to the knowledge of such counsel, there are no
contractual preemptive rights, rights of first refusal or rights of
co-sale that have not been waived with respect to the issue and sale of
the Stock;
(iii) the descriptions of statutes and regulations under the
captions "Risk Factors--Government Regulation" and "Business--Government
Regulation" of the Registration Statement accurately summarize and fairly
present the matters therein described.
(iv) the Registration Statement and the Prospectus (except as
to the financial statements and schedules and other financial and
statistical data contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations of the
Commission thereunder;
(v) the information required to be set forth in the
Registration Statement in answer to Items 9, 10 (insofar as it relates to
such counsel) and 11(c) of Form S-1 is to such counsel's knowledge
accurately and adequately set forth therein in all material respects or no
response is required with respect to such Items, and, the description of
the Company's stock option plan and the options granted and which may be
granted thereunder set forth in the Prospectus accurately presents the
information required to be shown with respect to said plan and options to
the extent required by the Securities Act and the rules and regulations of
the Commission thereunder;
- 24 -
(vi) such counsel do not know of any franchises, contracts,
leases, documents or legal or governmental proceedings, pending or
threatened, which in the opinion of such counsel are of a character
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement, which are not
described and filed as required;
(vii) the Underwriting Agreement has been duly authorized,
executed and delivered by the Company;
(viii) the issuance and sale by the Company of the shares of
Stock sold by the Company and the consummation of the transactions as
contemplated by the Underwriting Agreement do not conflict with, or result
in a breach of, or a default under the Certificate of Incorporation or
Bylaws of the Company or any of its subsidiaries or any agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or any applicable law or regulation, or insofar as
is known to such counsel, any order, writ, injunction or decree to which
the Company or its subsidiaries are subject;
(ix) all holders of securities of the Company having rights to
the registration of shares of Common Stock, or other securities, because
of the filing of the Registration Statement by the Company have waived
such rights or such rights have expired by reason of lapse of time
following notification of the Company's intent to file the Registration
Statement;
(x) no consent, approval, authorization or order of any court
or governmental agency or body is required for the issuance or sale of the
Stock or the consummation of the transactions contemplated in the
Underwriting Agreement, except such as have been obtained under the
Securities Act and such as may be required under state securities or blue
sky laws in connection with the purchase and distribution of the Stock by
the Underwriters;
(xi) neither the Company nor any of its subsidiaries is an
"investment company" or an entity "controlled" by an "investment company,"
as such terms are defined in the Investment Company Act of 1940.
--------------------
Xxxxxxx has participated in conferences with officials and other
representatives of the Company, the Representatives, Underwriters' Counsel
and the independent certified public accountants of the Company, at which
such conferences the contents of the Registration Statement and Prospectus
and related matters were discussed. Based on our participations in these
conferences, our review of corporate documents furnished to us by the
Company, our understanding of applicable law and the experience we have
gained in our practice thereunder, nothing has come to the attention of
such counsel which leads us to believe that the Registration Statement
(except as to the financial statements and schedules and other financial
and statistical data contained therein, as to which such counsel need not
express any opinion or belief) at the Effective Date
- 25 -
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (except as to
the financial statements and schedules and other financial and statistical
data contained therein, as to which such counsel need not express any
opinion or belief) as of its date or at the Closing Date (or any later
date on which the Option Stock is purchased), contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or the provisions of the
Delaware General Corporation Law, upon opinions of local counsel
satisfactory in form and scope to counsel for the Underwriters, and as to
questions of fact, upon representations or certificates of officers of the
Company and of government officials. Copies of any opinions so relied upon
shall be delivered to the Representatives and to counsel for the
Underwriters and the foregoing opinion shall also state that counsel knows
of no reason the Underwriters are not entitled to rely upon the opinions
of such local counsel.
- 26 -
