EXHIBIT 1.1
OCCUSYSTEMS, INC.
6% Convertible Subordinated Notes due 2001
PURCHASE AGREEMENT
December 18, 1996
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
ALEX. XXXXX & SONS INCORPORATED
XXXXX XXXXXXX INC.
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
OccuSystems, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, Alex.
Xxxxx & Sons Incorporated and Xxxxx Xxxxxxx Inc. (each, an "Initial Purchaser"),
$85,000,000 aggregate principal amount of its 6% Convertible Subordinated Notes
due 2001 (the "Firm Notes"). The Company also proposes to issue and sell to the
Initial Purchasers not more than an additional $12,750,000 principal amount of
its 6% Convertible Subordinated Notes due 2001 (the "Additional Notes"), if
requested by the Initial Purchasers as provided in Section 1 hereof. The Firm
Notes and the Additional Notes are herein collectively referred to as the
"Notes." The Notes are to be issued pursuant to an indenture (the "Indenture")
to be dated as of December 24, 1996 between the Company and United States Trust
Company of New York, as trustee (the "Trustee"), pursuant to which the Notes, as
provided therein, will be convertible at the option of the holders thereof into
shares of the Company's common stock, par value $.01 per share (the "Common
Stock"). The Notes and the Common Stock issuable upon conversion thereof are
herein collectively referred to as the "Securities". The Securities and
the Indenture are more fully described in the Final Offering
Memorandum (as hereinafter defined). Capitalized terms used in the Final
Offering Memorandum without definition herein have the respective meanings
specified in the Final Offering Memorandum.
The Securities will be offered and sold to the Initial Purchasers pursuant
to an exemption from the registration requirements of the Securities Act of
1933, as amended (collectively with the rules and regulations of the SEC
thereunder, the "Act"). The Initial Purchasers have advised the Company that
they will offer and sell the Securities purchased by them hereunder in
accordance with Section 5 hereof as soon as the Initial Purchasers deem
advisable after the execution and delivery of this Agreement.
In connection with the offer and sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated December 3, 1996 (the
"Preliminary Offering Memorandum"), and a final offering memorandum, dated
December 18, 1996 (the "Final Offering Memorandum"). Each of the Preliminary
Offering Memorandum and the Final Offering Memorandum sets forth certain
information concerning the Company and the Securities. The term "Preliminary
Offering Memorandum" and "Final Offering Memorandum" as used herein shall
include all documents incorporated by reference therein. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Memorandum
and the Final Offering Memorandum, and any amendment or supplement thereto
prepared by the Company, in connection with the offer and sale of the Securities
by the Initial Purchasers.
The holders of the Securities will be entitled to the benefits of a
registration rights agreement (the "Registration Rights Agreement"), to be dated
December 24, 1996, between the Company and the Initial Purchasers, in
substantially the form of Exhibit A hereto.
1. Agreements to Sell and Purchase. (a) On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, (i) the Company agrees to issue and sell and (ii) each
Initial Purchaser agrees, severally and not jointly, to purchase from the
Company the principal amount of Firm Notes set forth opposite the name of such
Initial Purchaser in Schedule I hereto, at a purchase price of 97% of their
principal amount (the "Purchase Price").
(b) On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, (i) the Company agrees
to issue and sell the Additional Notes and (ii) the Initial Purchasers shall
have the
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right to purchase, severally and not jointly, the Additional Notes from the
Company at the Purchase Price. Additional Notes may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Notes. The Initial Purchasers may exercise their right to purchase
Additional Notes in whole or in part from time to time by giving written notice
thereof to the Company at any time within 30 days after the date of this
Agreement. Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation shall give any
such notice on behalf of the Initial Purchasers and such notice shall specify
the aggregate principal amount of Additional Notes to be purchased pursuant to
such exercise and the date for payment and delivery thereof. The date specified
in any such notice shall be a business day (i) no earlier than the Closing Date
(as hereinafter defined), (ii) no later than ten business days after such notice
has been given and (iii) no earlier than two business days after such notice has
been given. If any Additional Notes are to be purchased, each Initial Purchaser,
severally and not jointly, agrees to purchase from the Company the principal
amount of Additional Notes which bears the same proportion to the total
principal amount of Additional Notes to be purchased from the Company as the
principal amount of Firm Notes set forth opposite the name of such Initial
Purchaser in Schedule I bears to the total principal amount of Firm Notes.
(c) The Company hereby agrees (and the Company shall, concurrently
with the execution of this Agreement, deliver an agreement executed by each of
the directors and executive officers of the Company, pursuant to which each such
person agrees) not to offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any Common Stock of the Company or any
securities convertible into or exercisable or exchangeable for such Common Stock
or in any other manner transfer all or a portion of the economic consequences
associated with the ownership of any such Common Stock, for a period of 90 days
after the date of the Final Offering Memorandum without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding
the foregoing, during such period the Company may (i) grant stock options and
issue and award restricted stock pursuant to the Company's existing stock option
and other incentive plans, as such plans may be amended, or any stock option or
other incentive plans that may hereafter be adopted by the Company, (ii) issue
shares of the Company's Common Stock upon (A) the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof or (B)
the exercise of any option under any such plan, and (iii) offer, sell, contract
to sell, or grant any option to purchase or otherwise dispose of any Common
Stock or any securities
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convertible into or exercisable or exchangeable for Common Stock, or in any
manner transfer all or a portion of the economic consequences associated with
the ownership of Common Stock, in connection with (A) the acquisition (directly
or indirectly) of all or a part of another corporation, partnership, other
entity, sole proprietorship, or other business (whether through a merger,
consolidation, share exchange, asset acquisition, or otherwise), or (B) the
formation of a joint venture with a non-affiliate of the Company; provided that
the recipient of any such shares or other securities issued, or economic
consequences transferred, pursuant to this clause (iii) agrees in writing to be
bound by the foregoing restrictions for the remainder of such 90-day period. In
addition, each such director and officer, and any other persons acquiring Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock pursuant to clause (iii) above, may make a bona fide gift or gifts
or charitable contributions, or may make a distribution to the stockholders,
partners, or other interest holders of such persons, provided that such
transferee or transferees similarly agree in writing for the benefit of the
Initial Purchasers not to offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any Common Stock of the Company or securities
convertible into or exercisable or exchangeable for such Common Stock
transferred to them for a period of 90 days after the date of the Final Offering
Memorandum.
2. Delivery and Payment. (a) Delivery to the Initial Purchasers of and
payment for the Firm Notes shall be made at 10:00 A.M., New York City time, on
December 20, 1996 (the "Closing Date") at the offices of Xxxxxx & Xxxxxx L.L.P.,
3700 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx. The Closing Date and
the location of delivery of and the form of payment for the Firm Notes may be
varied by agreement between you and the Company.
(b) Delivery to the Initial Purchasers of and payment for any
Additional Notes to be purchased by the Initial Purchasers shall be made at the
offices of Xxxxxx & Xxxxxx L.L.P., 3700 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx,
Xxxxxx, Xxxxx, at 10:00 A.M., New York City time, on the date specified in the
exercise notice given by you pursuant to Section 1(b) (the "Option Closing
Date"). Any such Option Closing Date and the location of delivery of and the
form of payment for the Additional Notes may be varied by agreement between you
and the Company.
(c) At or prior to the Closing Date and each Option Closing Date, if
any, the Company shall execute and deliver for
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authentication the Notes to be purchased and sold on such date and shall deposit
in global form Notes (except for those purchased by institutional "accredited
investors", which shall be in definitive form) with The Depository Trust Company
("DTC") for the account or accounts of participants in DTC (including Euroclear
and CEDEL, as the case may be) purchasing beneficial interests therein. The
Initial Purchasers shall pay or cause the purchase price for such Notes to be
paid to or upon the order of the Company by wire transfer of same day funds
against delivery of such Notes to or for the respective accounts of the Initial
Purchasers. Certificates evidencing the Notes shall be registered in the name of
Cede & Co. as nominee of DTC or such other name or names and in such authorized
denominations as the Initial Purchasers may request in writing at least two full
business days prior to the Closing Date or the Option Closing Date, as the case
may be. The Company will permit the Initial Purchasers to inspect such
certificates at the New York offices of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation at least one full business day prior to the Closing Date and each
Option Closing Date, if any.
3. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (b) below, as many copies of the Final Offering Memorandum and
any amendments and supplements thereto as each Initial Purchaser may
reasonably request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(b) At any time prior to the earlier of the expiration of nine months
after the date of the Final Offering Memorandum and the date of the
completion of the sale of the Securities by the Initial Purchasers, the
Company will not amend or supplement the Final Offering Memorandum
(including by way of filing with the SEC any document or report that upon
such filing would become part of the Final Offering Memorandum) if the
Initial Purchasers reasonably object to such amendment or supplement within
two business days after receiving a copy thereof, and if at any time prior
to the earlier of the expiration of nine months after the date of the Final
Offering Memorandum and the date of the completion of the sale of the
Securities by the Initial Purchasers, any event occurs as a result of which
the Final Offering Memorandum, as then amended or supplemented, would
include
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any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it should be necessary to
amend or supplement the Final Offering Memorandum to comply with applicable
law, the Company will promptly notify the Initial Purchasers of the same,
will prepare and provide to the Initial Purchasers the proposed amendment
or supplement which will correct such statement or omission or effect such
compliance and will not publish such amendment or supplement if the Initial
Purchasers reasonably object to the publication of such amendment or
supplement within two business days after receiving a copy thereof.
(c) The Company will arrange for the qualification of the Securities
for sale by the Initial Purchasers under the laws of such jurisdictions, if
any, as the Initial Purchasers may reasonably designate in writing prior to
the date of this Agreement and will maintain such qualifications in effect
so long as reasonably required for the distribution of the Securities,
provided, however, that the Company shall not be required in connection
therewith to qualify to do business in any jurisdiction where it is not now
so qualified or to take any action which would subject it to general or
unlimited service of process or taxation in any jurisdiction where it is
not now so subject. The Company will promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose and will use all reasonable efforts to have such suspensions lifted
as promptly as practicable.
(d) During the period of three years after the latest Option Closing
Date, the Company will not, and will not permit any of its "affiliates" (as
defined in Rule 144 under the Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired
by any of them, except pursuant to an effective registration statement
under the Act.
(e) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under
the
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Act, except pursuant to a registered public offering as provided in the
Registration Rights Agreement.
(f) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States,
except pursuant to a registered public offering as provided in the
Registration Rights Agreement.
(g) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, the Company will,
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), provide to each holder of such restricted securities and
to each prospective purchaser (as designated by such holder) of such
restricted securities, upon the request of such holder or prospective
purchaser, any information required to be provided by Rule 144A(d)(4) under
the Act. This covenant is intended to be for the benefit of the holders,
and the prospective purchasers designated by such holders, from time to
time of such restricted securities.
(h) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf will engage in any directed selling efforts
in the United States with respect to the Securities, except pursuant to a
registered public offering as provided in the Registration Rights
Agreement, and each of them will comply with the offering restrictions
requirements of Regulation S. Terms used in this paragraph have the
meanings given to them by Regulation S.
(i) The Company will cooperate with the Initial Purchasers and use all
reasonable efforts to permit the Securities to be eligible for clearance
and settlement through The Depository Trust Company and, with respect to
any Securities sold in accordance with Regulation S under the Act, Cedel
and Euroclear.
(j) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, the
Company agrees to pay all costs, expenses, fees and taxes incident to and
in connection with: (i) the preparation, printing and
distribution of the Preliminary Offering Memorandum and the
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Final Offering Memorandum (including, without limitation, financial
statements and supplements thereto), (ii) the preparation, printing
(including, without limitation, reasonable word processing and duplication
costs) and delivery of this Agreement, the Registration Rights Agreement
and the Indenture and all other agreements, memoranda, correspondence and
other documents printed and delivered in connection herewith and with the
sale of the Securities by the Initial Purchasers to certain purchasers as
set forth in Section 5 hereof, (iii) the issuance and delivery of the
Securities, (iv) the preparation of certificates for the Securities
(including, without limitation, printing thereof), (v) the fees,
disbursements and expenses of the Company's counsel and accountants, (vi)
all expenses and listing fees in connection with the application for
quotation of the Securities on PORTAL, (vii) all fees and expenses
(including fees and expenses of counsel) of the Company in connection with
approval of the Securities by DTC for "book-entry" transfer and eligibility
of settlement of transactions in the Securities through Euroclear and Cedel
and (iiiv) the performance by the Company of its other obligations under
this Agreement.
4. Representations and Warranties of the Company. The Company
represents and warrants to each Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the Final Offering
Memorandum do not, and any supplement or amendment to them 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 the
light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this paragraph
4(a) shall not apply to statements in or omissions from the Preliminary
Offering Memorandum and the Final Offering Memorandum (or any supplement or
amendment thereto) made in reliance upon and in conformity with information
relating to you furnished to the Company in writing by you expressly for
use therein. No stop order preventing the use of the Preliminary Offering
Memorandum or the Final Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated
by this Agreement are subject to the registration requirements of the Act,
has been issued.
(b) Neither the Company, nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Act
8
("Regulation D")), nor any person acting on its or their behalf has,
directly or indirectly, made offers or sales of any security, or solicited
offers to buy any security, under circumstances that would require the
registration of the Securities under the Act.
(c) No securities of the same class as the Notes have been issued and
sold by the Company within the six-month period immediately prior to the
date hereof.
(d) Neither the Company, nor any of its affiliates, nor any person
acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(e) None of the Company, its subsidiaries or any of its or their
affiliates or any person acting on its or their behalf has engaged or will
engage in any directed selling efforts (as defined in Regulation S) in the
United States with respect to the Securities, and the Company, its
subsidiaries and its or their affiliates and all persons acting on its or
their behalf have complied with and will comply with the offering
restriction requirements of Regulation S.
(f) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(g) The Company has agreed to permit the Securities to be designated
PORTAL eligible securities, will pay the requisite fees related thereto and
has been advised by the National Association of Securities Dealers, Inc.
PORTAL Market ("PORTAL") that the Securities have been designated PORTAL
eligible securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc.
(h) The Company will cause the Common Stock issuable upon conversion
of the Notes to be listed for quotation on the Nasdaq National Market prior
to the 90th day following the latest date of initial issuance of the Notes.
(i) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Indenture and the Registration Rights Agreement and to issue, sell and
deliver the Securities as provided herein and therein.
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(j) This Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
and except as the enforceability hereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of equity.
(k) The Indenture has been duly and validly authorized by the Company
and, when duly executed and delivered by the Company, will be the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms except as the enforceability thereof
may be limited by bankruptcy, rehabilitation, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and by
general principles of equity, and except to the extent that the waiver
contained in Section 4.9 of the Indenture may be unenforceable. The
Indenture conforms in all material respects to the description thereof
contained in the Final Offering Memorandum.
(l) The Notes have been duly and validly authorized for issuance by
the Company and, when issued and authenticated in accordance with the terms
of the Indenture and delivered to and paid for by the Initial Purchasers in
accordance with the terms of this Agreement, will be the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture
except (1) as the enforceability thereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of equity, and
(2) to the extent that the waiver contained in Section 4.9 of the Indenture
may be deemed unenforceable. The Notes conform in all material respects to
the description thereof in the Final Offering Memorandum.
(m) The Notes are convertible into Common Stock in accordance with the
terms of the Indenture; the shares of Common Stock initially issuable upon
conversion of the Notes have been duly authorized and reserved for issuance
upon such conversion and, when issued upon such conversion, will be validly
issued, fully paid and nonassessable and will
10
conform to the description thereof contained in the Final Offering
Memorandum; the Company has the authorized and outstanding capital stock as
set forth in the Final Offering Memorandum; and the stockholders of the
Company have no preemptive rights with respect to the Notes or the Common
Stock issuable upon conversion of the Notes.
(n) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except as the
enforceability thereof may be limited by (i) bankruptcy, rehabilitation,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally, (ii) general principles of equity, or (iii) the
enforceability of rights to indemnification and contribution thereunder by
federal or state securities laws. The Registration Rights Agreement
conforms in all material respects to the description thereof in the Final
Offering Memorandum.
(o) The (i) issuance and sale of the Securities by the Company, (ii)
execution, delivery and performance by the Company of this Agreement, the
Indenture and the Registration Rights Agreement, (iii) compliance by the
Company with all the provisions hereof and with the provisions of the
Indenture and the Registration Rights Agreement and (iv) the consummation
by the Company of the transactions contemplated hereby and by the Indenture
and the Registration Rights Agreement will not conflict with, or constitute
a breach or a violation of any of the terms or provisions of, or a default
under, the certificate of incorporation or by-laws or other governing
documents of the Company or any of its subsidiaries, or any indenture,
material agreement, or material instrument to which it or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound
or to which any of their respective properties is subject or any law,
statute, rule, regulation, judgment or decree applicable to the Company or
any of its subsidiaries; provided, however, that the repurchase of the
Notes upon the consummation of a change of control under the Indenture
would constitute a breach of the Loan Agreement.
(p) The Company is subject to and in material compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
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(q) The Company is not required to deliver the information specified
in Rule 144A(d)(4) in connection with the resale by the Initial Purchasers
of the Securities as set forth in Section 5 hereof.
(r) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(s) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement and
the Final Offering Memorandum to register the Securities under the Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(t) Each of the Company and its subsidiaries that is a corporation has
been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as it is currently
being conducted and to own, lease and operate its properties, and each is
duly qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Each of the
Company's subsidiaries that is a partnership has been duly formed and is
currently existing under the laws of its jurisdiction of formation and has
the partnership power and authority to carry on its business as it is
currently being conducted and to own, lease and operate its properties, and
each is duly qualified to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the Company and its subsidiaries, taken
as a whole.
(u) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and, with respect to shares of capital stock,
are fully paid and non-assessable, and are owned by the Company or a
wholly-owned subsidiary of the Company, free and clear of
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any security interest, claim, lien, encumbrance or adverse interest of any
nature except for a pledge of the shares of the subsidiaries' stock and
other ownership interests to Creditanstalt-Bankverein pursuant to the
Amended and Restated Loan and Security Agreement, dated January 3, 1995, as
amended, among the Company, OccuCenters, Inc., and Creditanstalt-
Bankverein, as agent for the lenders (the "Loan Agreement").
(v) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive rights, rights of first refusal or other
similar rights (in each case created by statute or under the Company's
certificate of incorporation or bylaws or any agreement to which the
Company is a party) that have not been waived or satisfied.
(w) The authorized capital stock of the Company conforms in all
material respects to the description thereof contained in the Final
Offering Memorandum.
(x) Neither the Company nor any of its subsidiaries is in violation of
its respective charter or bylaws or in default in the performance of any
obligation, agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other agreement, indenture
or instrument material to the conduct of the business of the Company and
its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which it or any of its subsidiaries or their
respective property is bound except for such violations or defaults which,
individually or in the aggregate, would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(y) There are no material legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any of
their respective property is the subject, and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated. No contract
or document of a character that would be required to be described in the
Final Offering Memorandum if the Final Offering Memorandum were a
prospectus included in a registration statement on Form S-3 under the Act
is not so described.
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(z) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimination in the
hiring, promotion or pay of employees nor any applicable federal or state
wages and hours laws, nor any provisions of the Employee Retirement Income
Security Act or the rules and regulations promulgated thereunder, which in
each case could reasonably be expected to result in any material adverse
change in the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(aa) Each of the Company and its subsidiaries has such permits,
licenses, franchises, consents, approvals, orders, certificates and
authorizations of governmental or regulatory authorities ("permits"),
including, without limitation, under any applicable Environmental Laws, as
are necessary to own, lease and operate its respective properties and to
conduct its business except for those the absence of which would not result
in a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole; each of the Company and its subsidiaries has fulfilled
and performed all of its material obligations with respect to such permits
and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such permit; each
such permit is in full force and effect, each of the Company and its
subsidiaries is operating in compliance with its permits, and there are no
proceedings pending or, to the Company's knowledge, threatened against the
Company or any of its subsidiaries that seek to cause any permit material
to the conduct or prospects of the business of the Company and its
subsidiaries, taken as a whole, to be revoked, withdrawn, cancelled,
suspended or not renewed, except where the failure of a permit to be in
full force or effect or noncompliance with a permit would not, individually
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and, except as described in the Final
Offering Memorandum, such permits contain no restrictions that are
materially burdensome to the Company and its subsidiaries, taken as a
whole.
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(bb) Except as otherwise set forth in the Final Offering Memorandum or
such as are not material to the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole, each of the Company and its subsidiaries has good and marketable
title, free and clear of all liens, claims, encumbrances and restrictions
except liens for taxes not yet due and payable, to all property and assets
described in the Final Offering Memorandum as being owned by it. All leases
to which the Company or any of its subsidiaries is a party are valid and
binding and no default has occurred or is continuing thereunder, which
could reasonably be expected to result in any material adverse change in
the business, prospects, financial condition or results of operations of
the Company and its subsidiaries taken as a whole, and the Company and its
subsidiaries enjoy peaceful and undisturbed possession under all such
leases to which any of them is a party as lessee other than such exceptions
that could not reasonably be expected to result in any material adverse
change in the business, prospects, financial condition or results of
operations of the Company and its subsidiaries taken as a whole.
(cc) The Company and each of its subsidiaries maintain reasonably
adequate insurance.
(dd) Xxxxxx Xxxxxxxx LLP is an independent public accountant with
respect to the Company and its subsidiaries, and with respect to Prizm
Environmental & Occupational Health, Inc. ("Prizm"), as required by the
Act.
(ee) The consolidated financial statements of the Company and its
subsidiaries included in the Final Offering Memorandum present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated
therein at the respective dates or for the respective periods to which they
apply; the combined financial statements of Prizm incorporated by reference
in the Final Offering Memorandum present fairly the combined financial
position, results of operations and changes in financial position of Prizm
on the basis stated therein at the respective dates or for the respective
periods to which they apply; all such statements 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
Final Offering Memorandum (and any
15
amendment or supplement thereto) is, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements
and the books and records of the Company and Prizm.
(ff) Each of the Company and its subsidiaries has timely filed all
reports required to be filed in connection with federal Medicare and
applicable state Medicaid programs and due on or before the date hereof
(except where the failure to file would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole), and all required
reports are true and complete in all material respects; there are no
claims, actions or appeals pending (and the Company and its subsidiaries
have not filed any thing that would result in any claims, actions or
appeals) before any commission, board or agency with respect to any state
or federal Medicare or Medicaid cost reports or claims filed by the Company
or any of its subsidiaries on or before the date hereof, or with respect to
any disallowances by any intermediary, carrier, other insurer, commission,
board or agency in connection with any audit of any cost reports that, if
adversely determined, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole; no validation review or program
integrity review related to the Company or any of its subsidiaries has been
conducted by any commission, board or agency in connection with federal
Medicare or state Medicaid programs, and no such reviews are scheduled,
pending or, to the Company's knowledge, threatened against or affecting the
Company or any of its subsidiaries; each of the Company and its
subsidiaries has timely filed all material reports, data and other
information required by any other regulatory agency with authority to
regulate the Company, its subsidiaries, or the business of either in any
manner, except where the failure to file would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; and except as
disclosed in the Final Offering Memorandum, (i) each of the Company and its
subsidiaries is in compliance in all material respects with all rules,
regulations and requirements of all regulatory agencies, except where such
noncompliance would not have a material adverse effect on the Company and
its subsidiaries taken as a whole and (ii) the conduct of the business of
each of the Company and its subsidiaries does not violate 42 U.S.C. (S)
1320a-7b (commonly known as the "Anti-Kickback Statute") or 42 U.S.C. (S)
1395nn (commonly known as the "Xxxxx Amendments"), including all amendments
thereto to the extent effective on the date hereof, unless any violation or
noncompliance would not have
16
a material adverse effect on the Company and its subsidiaries taken as a
whole.
(gg) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(hh) Except as described in the Final Offering Memorandum, no holder
of any security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company.
(ii) The Company and each of its subsidiaries possess all licenses,
patents, patent rights, patent applications, inventions, trade secrets,
know-how, proprietary information and techniques, including processes,
trademarks, service marks, trade names, computer software and copyrights
described or referred to in the Final Offering Memorandum or owned or used
by them or that are necessary for and/or used in the conduct of their
business as described in the Final Offering Memorandum, except where the
failure to possess would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole. Any registrations covering such
patents, trademarks, service marks, trade names or copyrights owned by, or
licensed to, the Company are valid and subsisting, have not been cancelled,
abandoned or otherwise terminated and, if applicable, have been duly issued
or filed, except where any non-validity, failure to be subsisting,
cancellation, abandonment or termination would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole. Neither the
Company nor any of its subsidiaries is aware of or has received any notice
of infringement of, or conflict or claimed conflict with, asserted rights
of others with respect to any licenses, patents, patent rights, patent
applications, inventions, trade secrets, know-how, proprietary information
or techniques, including processes, trademarks, service marks, trade names,
computer software or copyrights.
(jj) Except as described in the Final Offering Memorandum, neither the
Company nor any of its subsidiaries has any agreement or understanding with
any other person or entity for the acquisition of any stock, other
securities, assets or operations of such person or entity, which
acquisition would be material to the Company and its subsidiaries taken as
a whole.
17
(kk) Neither the Company nor any agent thereof acting on its behalf
has taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Securities to violate Regulation G
(12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(ll) No bid or purchase by the Company, and no bid or purchase that
could be attributed to the Company (as a result of bids or purchases by an
"affiliated purchaser" within the meaning of Rule 10b-6 under the Exchange
Act), for or of the Common Stock, any securities of the same class or
series as the Common Stock or any securities immediately convertible into
or exchangeable for or that represent any right to acquire Common Stock, is
now pending or in progress or will have commenced at any time prior to the
completion of the distribution of the Securities by the Initial Purchasers
that would constitute a violation under Rule 10b-6 under the Exchange Act.
5. Offering of Securities. Each Initial Purchaser (i) acknowledges
that the Securities have not been registered under the Act and may not be
offered or sold except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Act or pursuant to an effective
registration statement under the Act and (ii) severally and not jointly
represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Act) and that, in
connection with each such sale, it has taken or will take reasonable steps
to ensure that the purchaser of such Securities is aware that such sale is
being made in reliance on Rule 144A, (ii) to other institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D) who provide to it and to the Company a letter in the form of
Annex A to the Final Offering Memorandum or (iii) to non-U.S. Persons in
accordance with Regulation S of the Act.
(b) Neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any
form of general solicitation or general advertising (within the meaning of
Regulation D)
18
in the United States, except pursuant to a registered public offering as
provided in the Registration Rights Agreement.
(c) No Initial Purchaser or any of their respective affiliates, nor
any person acting on its or their behalf will, directly or indirectly, make
offers or sales of any Security, or solicit offers to buy any Security,
under circumstances that would require the registration of the Securities
under the Act.
(d) No Initial Purchaser or any of their respective affiliates, nor
any person acting on its or their behalf will engage in any directed
selling efforts in the United States with respect to the Securities, except
pursuant to a registered public offering as provided in the Registration
Rights Agreement.
(e) Each of the Initial Purchasers are participating organizations in
the Depository Trust Company ("DTC").
(f) The Securities have not been and will not be registered under the
Act, are "restricted securities" within the meaning of Rule 144 under the
Act and may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except in accordance with
Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act. Each of the Initial Purchasers
represents that it has not offered, sold or delivered the Securities, and
will not offer, sell or deliver the Securities (i) (A) as part of its
distribution at any time or (B) otherwise until 40 days after the later of
the commencement of the offering and the Closing Date within the United
States or to, or for the account or benefit of, U.S. persons, except in
accordance with Rule 903 of Regulation S or Rule 144A under the Act, or to
institutional "accredited investors" in accordance with Section 5(a) or
(ii) in violation of Rule 144 under the Act. Accordingly, each Initial
Purchaser agrees that neither it, its affiliates nor any persons acting on
its or their behalf has engaged or will engage in any directed selling
efforts as defined in Regulation S with respect to the Securities, and it,
its affiliates and all persons acting on its or their behalf have complied
and will comply with the offering restriction requirements of Regulation S.
(g) Each of the Initial Purchasers represents and agrees that the
Securities offered and sold in reliance on Regulation S have been and will
be offered and sold only in
19
"offshore transactions" within the meaning of Regulation S and that such
Securities have been and will be represented upon issuance by a global
security that may not be exchanged for definitive Securities until the
expiration of the Restricted Period (as defined in Regulation S) and only
upon certification of beneficial ownership of the Securities by a non-U.S.
Person or a U.S. person who purchased such Securities in a transaction that
was exempt from the registration requirements of the Act.
(h) Each of the Initial Purchasers agrees that, at or prior to
confirmation of a sale of Securities (other than a sale pursuant to Rule
144A or to institutional "accredited investors" in accordance with Section
5(a)), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities
from it during the Restricted Period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered
under the United States Securities Act of 1933, amended
(the "Securities Act"), and may not be offered and sold
within the United States or to, or for the account or
benefit of, U.S. persons (i) (A) as part of their distribution
at any time or (B) otherwise until 40 days after the later
of the commencement of the offering and the closing date,
except in either case in accordance with Regulation S
(or Rule 144A if available) under the Securities Act or
(ii) in violation of Rule 144 under the Act. Terms used
above have the meaning given to them by Regulation S."
Terms used in this Section 5 that have meanings assigned to them in Regulation S
are used herein as so defined.
6. Indemnification. (a) The Company agrees to indemnify and hold
harmless (i) each Initial Purchaser, (ii) each person, if any, who controls
any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and (iii) the respective officers,
directors, partners, employees, representatives and agents
of the Initial Purchasers or any controlling person (collectively, the
"Indemnified Parties") from and against any and all losses, claims,
damages, liabilities and
20
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Final Offering Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) or the Preliminary Offering Memorandum, or caused by
any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light
of the circumstances under which made, not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any
such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Initial Purchaser furnished in
writing to the Company by or on behalf of any Initial Purchaser through you
expressly for use therein. The foregoing indemnity, however, insofar as it
relates to any untrue statement or omission or alleged untrue statement or
omission made in the Preliminary Offering Memorandum but eliminated or
remedied in the Final Offering Memorandum shall not inure to the benefit of
any Indemnified Party with respect to any action or claim asserted by a
person who purchased any Notes from such Initial Purchaser unless such
person was sent or given a copy of the Final Offering Memorandum with or
prior to the written confirmation of the sale involved.
(b) In case any action shall be brought against any Indemnified
Party, based upon the Preliminary Offering Memorandum or the Final Offering
Memorandum or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Indemnified Party shall
promptly notify the Company in writing and the Company shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party and payment of all fees and
expenses. Any Indemnified Party 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
Indemnified Party unless (i) the employment of such counsel has been
specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named
parties to any such action (including any impleaded parties) include both
such Indemnified Party and the Company, and such Indemnified Party shall
have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the
right to assume the defense of such action on behalf of such
21
Indemnified Party, it being understood, however, that the Company shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all such Indemnified Parties, which firm shall be
designated in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and that all such reasonable fees and expenses shall be
reimbursed as they are incurred). The Company shall not be liable for any
settlement of any such action effected without its written consent, but if
settled with its written consent, it agrees to indemnify and hold harmless
any Indemnified Party from and against any loss or liability by reason of
such settlement. Notwithstanding the immediately preceding sentence, if in
any case where the indemnifying party agrees in writing subsequent to the
date hereof that it will be responsible for the fees and expenses of
counsel for the Indemnified Party and the Indemnified Party shall have
requested the indemnifying party to reimburse the Indemnified Party for
such fees and expenses of counsel as incurred, such indemnifying party
agrees that it shall be liable for any settlement of any action effected
without its written consent if (i) such settlement is entered into more
than twenty business days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall have failed to
reimburse the Indemnified Party in accordance with such request for
reimbursement prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of which
any Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such proceeding.
(c) Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless (i) the Company, (ii) each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and (iii) the officers, directors, partners,
employees, representatives and agents of the Company or any such
controlling person (collectively, the "Indemnified Company Parties") to the
same extent as the foregoing
22
indemnity from the Company to each Initial Purchaser but only with
reference to information relating to such Initial Purchaser furnished in
writing by or on behalf of such Initial Purchaser expressly for use in the
Preliminary Offering Memorandum or the Final Offering Memorandum (or any
amendment or supplement thereto). In case any action shall be brought
against any Indemnified Company Party based on the Preliminary Offering
Memorandum or Final Offering Memorandum and in respect of which indemnity
may be sought against any Initial Purchaser, the Initial Purchaser shall
have the rights and duties given to the Company (except that if the Company
shall have assumed the defense thereof such Initial Purchaser 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 the expense of such Initial Purchaser), and the Indemnified Company
Party shall have the rights and duties given to the Initial Purchaser, by
paragraph 6(b) hereof.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, 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 such losses, claims, damages, liabilities and judgments in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Initial Purchasers on the other hand
from the offering of the Securities. If the allocation provided by the
immediately preceding sentence is not permitted by applicable law for any
reason, the Company and the Initial Purchasers shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Initial Purchasers in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Initial Purchasers 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 total
discounts and commissions received by the Initial Purchasers in connection
with the purchase of the Securities hereunder, bear to the total price to
investors, in each case as set forth on the cover page of the Final
Offering Memorandum. The relative fault of the Company and the Initial
Purchasers
23
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 Initial Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this paragraph 6(d) were
determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments 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 6, no Initial Purchaser (or
any related Indemnified Party) shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total discounts
and commissions received by such Initial Purchaser with respect to the
Securities exceeds the amount of any damages which such Initial Purchaser
has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. 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 Initial Purchasers' obligations
to contribute pursuant to this paragraph 6(d) are several in proportion to
the respective principal amount of Notes purchased by each of the Initial
Purchasers and not joint.
7. Conditions of Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Firm Notes under this
Agreement on the Closing Date and the Additional Notes, if any, on an Option
Closing Date are subject to the satisfaction of each of the following
conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date or an
Option Closing Date, as
24
the case may be, with the same force and effect as if made on and as of the
Closing Date or an Option Closing Date.
(b) The Final Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers as promptly as practicable following
the date of this Agreement or at such other date and time as to which you
may agree; and no stop order suspending the sale of the Securities in any
jurisdiction shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date or any Option Closing Date,
prevent the issuance of the Securities; and no injunction, restraining
order or order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date or any Option
Closing Date which would prevent the issuance of the Securities on the
Closing Date or any Option Closing Date.
(d) (i) Since the date of the latest balance sheet included in the
Final Offering Memorandum, there shall not have been any material adverse
change, or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Final Offering Memorandum there shall
not have been any material change, or any development that could reasonably
be expected to result in a material adverse change, in the capital stock or
in the long-term debt of the Company from that set forth in the Final
Offering Memorandum, other than changes resulting from (x) the exercise of
stock options which were granted under the Company's currently existing
stock option plans or agreements or (y) the exercise of warrants granted to
Creditanstalt-Bankverein pursuant to the Warrant Agreement between the
Company and Creditanstalt-Bankverein dated as of January 3, 1995, as
amended, (iii) the Company and its subsidiaries shall have no liability or
obligation, direct or contingent, which is material to the Company and its
subsidiaries, taken as a whole, other than those reflected in the Final
Offering Memorandum and (iv) on the Closing Date or an Option Closing Date,
as the case may be, you
25
shall have received a certificate dated the Closing Date (or an Option
Closing Date, as appropriate), signed by Xxxx X. Xxxxxxx and Xxxxx X.
Greenwood, in their capacities as the Chief Executive Officer and Chief
Financial Officer of the Company, respectively, confirming the matters set
forth in paragraphs (a), (b) and (d) of this Section 7.
(e) The Company and the Trustee shall have entered into the Indenture
and you shall have received counterparts, conformed as executed, thereof.
(f) The Company shall have entered into the Registration Rights
Agreement and you shall have received counterparts, conformed as executed,
thereof.
(g) You shall have received on the Closing Date or an Option Closing
Date, as the case may be, an opinion (reasonably satisfactory to you and
counsel for the Initial Purchasers), dated the Closing Date (or an Option
Closing Date, as appropriate) of Xxxxxx & Xxxxxx L.L.P., counsel for the
Company, to the effect that:
(i) each of the Company and its subsidiaries that are
corporations is a corporation validly existing and in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority required to carry on its business as it
is currently being conducted and to own, lease and operate its
properties;
(ii) each of the Company and its subsidiaries that are
corporations is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock of,
or other ownership interests in, each of the Company's subsidiaries
that are corporations have been duly authorized and validly issued and
are fully paid and non-assessable, and, to such counsel's knowledge,
except as set forth in the Final Offering Memorandum, are owned by the
Company, free and clear of any
26
security interest, claim, lien, encumbrance or adverse interest of any
nature;
(iv) assuming the accuracy of the representations and warranties
of the Company and the Initial Purchasers contained in this Agreement,
the issuance and sale of the Securities to the Initial Purchasers and
the offering, resale and delivery of the Securities by the Initial
Purchasers, in each case in the manner contemplated by the Final
Offering Memorandum, are exempt from the registration requirements of
the Act and until the effectiveness of the Shelf Registration
Statement it shall not be necessary to qualify the Indenture under the
Trust Indenture Act;
(v) the Company has the corporate power and authority to enter
into and perform this Agreement, the Indenture, the Securities and the
Registration Rights Agreement;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company and (assuming due execution and delivery
thereof by the Trustee) is a valid and binding agreement of the
Company, enforceable in accordance with its terms except as the
enforceability thereof may be limited by bankruptcy, rehabilitation,
insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and general principles of equity, and
except to the extent that the waiver contained in Section 4.9 of the
Indenture may not be enforceable.
(vii) the Notes have been duly authorized and when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to the Initial Purchasers against payment therefor as
provided by this Agreement, will be entitled to the benefits of the
Indenture, and will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of
equity, and except to the extent that the waiver contained in Section
4.9 of the Indenture may not be enforceable, and to such counsel's
best knowl-edge, except as otherwise set forth in the Final Offering
27
Memorandum, the issuance of the Notes is not subject to any preemptive
or similar rights;
(viii) The Notes are convertible into Common Stock in accordance
with the terms of the Indenture; the shares of Common Stock initially
issuable upon conversion of the Notes have been duly authorized and
reserved for issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable; to
such counsel's best knowledge, the issuance of such Common Stock is
not subject to any preemptive or similar rights;
(ix) the Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as rights to indemnity and contribution thereunder may be
limited by applicable law and except as the enforceability thereof may
be limited by bankruptcy, rehabilitation, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
general principles of equity;
(x) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as rights to
indemnity and contribution thereunder may be limited by applicable law
and except as the enforceability thereof may be limited by bankruptcy,
rehabilitation, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and general principles of
equity;
(xi) the Notes, the Indenture and the Registration Rights
Agreement conform as to legal matters to the descriptions thereof
contained in the Final Offering Memorandum;
(xii) the authorized capital stock of the Company, including the
Common Stock, conforms in all material respects as to legal matters to
the description thereof contained under the caption "Description of
Capital Stock" in the Final Offering Memorandum;
(xiii) to the best knowledge of such counsel, there are no
outstanding subscriptions, rights, warrants, options,
28
calls, convertible securities, commitments of sale or liens related to
or entitling any person to purchase or otherwise to acquire any shares
of the capital stock of, or other ownership interest in, the Company
or any Subsidiary except as otherwise disclosed in the Final Offering
Memorandum and except for the pledge to the Banks of capital stock of
certain of the subsidiaries;
(xiv) all the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive rights, rights of first refusal or other
similar rights (in each case created by statute or under the Company's
certificate of incorporation or bylaws or any agreement to which the
Company is a party of which such counsel has knowledge), except for
those that have been waived or satisfied in writing;
(xv) the statements under the caption "Certain Federal Income Tax
Consequences" in the Final Offering Memorandum insofar as such
statements constitute a summary of legal matters, fairly present such
legal matters in all material respects;
(xvi) to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its subsidiaries is in violation of its
respective charter or bylaws and neither the Company nor any of its
subsidiaries has received or expects to receive notice that it is in
default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture or instrument
material to the conduct of the business of the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which it or any of its subsidiaries or
their respective property is bound;
(xvii) the execution, delivery and performance of this Agreement,
the Indenture and the Registration Rights Agreement by the Company,
compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require
any consent, approval, authorization or other order of any court,
regulatory body, administrative agency or other governmental body
29
(except as such may be required under the Act, the Trust Indenture
Act, or other securities or Blue Sky laws) and will not contravene or
constitute a breach of any of the terms or provisions of, or a default
under, the charter or bylaws of the Company or any of its subsidiaries
or any agreement, indenture or other instrument known to and
identified to such counsel by the Company as material to which the
Company and any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective properties are bound,
or violate or contravene any laws, administrative regulations or
rulings or court decrees known to such counsel applicable to the
Company or any of its subsidiaries or their respective properties;
provided, however, that the repurchase of the Notes upon the
consummation of a change of control under the Indenture would
constitute a breach of the Loan Agreement;
(xviii) such counsel does not know of any legal or governmental
proceeding pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of their respective property
is subject which would be required to be described in the Final
Offering Memorandum if the Final Offering Memorandum were a prospectus
included in a registration statement on Form S-3 under the Act and is
not so described, and no contract or other document exists which would
be required to be described in the Final Offering Memorandum if the
Final Offering Memorandum were a prospectus included in a registration
statement on Form S-3 under the Act and is not so described;
(xix) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; and
(xx) to the best of such counsel's knowledge, except as otherwise
set forth in the Final Offering Memorandum, no holder of any security
of the Company has any right to require registration of shares of
Common Stock or any other security of the Company.
In addition to the matters set forth above, such opinion shall include
a statement that such counsel has no reason to believe that (except for
financial statements and other financial and statistical information and data,
as to which no
30
opinion need be expressed) the Final Offering Memorandum, as of its date and as
of the Closing Date or the Option Closing Date, as the case may be, contained
any 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, in the light of the circumstances under which they were made, not
misleading.
In providing such statement with respect to the matters covered by the
immediately preceding paragraph, such counsel may state that their opinion and
belief are based upon their participation in the preparation of the Final
Offering Memorandum and review and discussion of the contents thereof, but are
without independent check or verification except as specified.
The opinion of Xxxxxx & Xxxxxx L.L.P. described in this paragraph 7(g)
shall be rendered to you at the request of the Company and shall so state
therein.
(h) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Initial Purchasers),
dated the Closing Date, of Xxxxxxx X. Xxxx XX, Executive Vice President,
General Counsel and Secretary for the Company, to the effect that:
(i) each of the Company and its subsidiaries has such permits,
licenses, franchises, consents, approvals, orders, certificates and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own, lease and operate its respective properties and to
conduct its business in the manner described in the Final Offering
Memorandum except where the failure to have a permit would not,
individually or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(ii) to the best of such counsel's knowledge, each of the Company and
its subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus, except where the
failure to perform or fulfill such material obligations or the occurrence
of any such event would not, individually or in the aggregate, have
31
a material adverse effect on the Company and its subsidiaries, taken
as a whole; and
(iii) to the best of such counsel's knowledge, each permit is in full
force and effect, each of the Company and its subsidiaries is operating in
compliance with its permits, and there are no proceedings pending or
threatened against the Company or any of its subsidiaries that seek to
cause any permit material to the conduct or prospects of the business of
the Company and its subsidiaries, taken as a whole, to be revoked,
withdrawn, cancelled, suspended or not renewed, except where the failure of
a permit to be in full force or effect or noncompliance with a permit would
not, individually or in the aggregate, have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(i) You shall have received on the Closing Date or an Option Closing
Date, as the case may be, an opinion, dated the Closing Date (or an Option
Closing Date, as appropriate), of Weil, Gotshal & Xxxxxx LLP, counsel for
the Initial Purchasers, as to the matters referred to in clauses (iv),
(vi), (vii), (viii), (ix), (x) and (xi) of paragraph 7(g).
In addition to the matters set forth above, such opinion shall include
a statement that such counsel has no reason to believe that the Final
Offering Memorandum, as amended or supplemented, if applicable (except for
financial statements and other financial and statistical information and
data, as to which no opinion need be expressed) contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In providing such statement with respect to the matters covered by the
immediately preceding paragraph, such counsel may state that their opinion
and belief are based upon their participation in the preparation of the
Final Offering Memorandum and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without independent
check or verification except as specified.
(j) You shall have received letters on and as of the Closing Date or
an Option Closing Date, as the case may be,
32
in form and substance satisfactory to you, from Xxxxxx Xxxxxxxx LLP,
independent public accountants, with respect to the financial statements
and certain financial information contained or incorporated by reference in
the Final Offering Memorandum and substantially in the form and substance
of the letters delivered to you by such independent public accountants on
the date of this Agreement.
(k) The Company shall not have failed at or prior to the Closing Date
or an Option Closing Date, as the case may be, to perform or comply in any
material respect with any of the agreements herein contained and required
to be performed or complied with by the Company at or prior to the Closing
Date.
(l) The several obligations of the Initial Purchasers to purchase any
Additional Notes hereunder are subject to satisfaction on and as of each
Option Closing Date of the conditions set forth in paragraphs (a) through
(k) except that the opinions called for in paragraphs (g), (h) and (i) and
the letters referred to in paragraph (j) shall be revised to reflect the
sale of the Additional Notes.
8. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the execution of this Agreement.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the Final
Offering Memorandum, any material adverse change, or development that could
reasonably be expected to result in a material adverse change, in the condition,
financial or otherwise, of the Company and its subsidiaries, taken as a whole,
or the earnings, affairs, or business prospects of the Company and its
subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which would, in your judgment, make it impracticable to market the
Securities on the terms and in the manner contemplated in the Final Offering
Memorandum, (ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Securities on the terms and in the manner contemplated in the Final
Offering Memorandum, (iii) the suspension or material limitation of trading in
securities on the
33
New York Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market
or limitation on prices for securities on any such exchange or The Nasdaq Stock
Market, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business or operations of the
Company and its subsidiaries, taken as a whole, (v) the 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 your opinion has a material adverse effect
on the financial markets in the United States.
9. Default by an Initial Purchaser. If one of the Initial
Purchasers shall fail to purchase and pay for any of the Notes agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for the Notes which the defaulting Initial Purchaser agreed but
failed to purchase; provided, however, that in the event that the aggregate
principal amount of Notes which the defaulting Initial Purchaser agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of Notes
set forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Notes, and if such non-defaulting Initial Purchasers do not purchase all the
Notes, this Agreement will terminate without liability to any non-defaulting
Initial Purchaser or the Company. In the event of a default by any Initial
Purchaser as set forth in this Section 9, the Closing Date or the Option Closing
Date, as the case may be, shall be postponed for such period, not exceeding
seven days, as the remaining Initial Purchasers shall determine in order that
the required changes in the Final Offering Memorandum or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any non-defaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Company, to OccuSystems,
Inc., 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, (b) if to any Initial
Purchaser, c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 2200
00
Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Xxxxxxx X. Xxxxx, or in
any case to such other address as the person to be notified may have requested
in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and its officers and directors
and of the several Initial Purchasers set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Initial
Purchaser or by or on behalf of the Company, the officers or directors of the
Company or any controlling person of the Company, (ii) acceptance of the Notes
and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Initial Purchasers
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, the Company shall
reimburse the Initial Purchasers for all out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchasers, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Notes from any of the several Initial Purchasers merely because of
such purchase.
This Agreement shall be governed and construed in accordance with the
internal laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
35
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Initial Purchasers.
Very truly yours,
OCCUSYSTEMS, INC.
By: /s/ XXXXXXX X. XXXX XX
------------------------------
Name: Xxxxxxx X. Xxxx XX
----------------------------
Title: Executive Vice President,
---------------------------
General Counsel and
Secretary
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By: /s/ XXXXXXX XXXXXX
------------------------------------
Name: Xxxxxxx Xxxxxx
----------------------------------
Title: Vice President
---------------------------------
ALEX. XXXXX & SONS INCORPORATED
By: /s/ XXXXXXXXX X. XXXXXXXXX, XX.
------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx, Xx.
----------------------------------
Title: Managing Director
---------------------------------
XXXXX XXXXXXX INC.
By: /S/ XXXX XXXXXX
------------------------------------
Name: Xxxx Xxxxxx
----------------------------------
Title: Managing Director
---------------------------------
SCHEDULE I
Number of
Firm Notes to
Name of Initial Purchaser be Purchased
------------------------- -------------
Donaldson, Lufkin, & Xxxxxxxx
Securities Corporation ............. $ 46,750,000
Alex. Xxxxx & Sons
Incorporated........................ $ 25,500,000
Xxxxx Xxxxxxx Inc................... $ 12,750,000
------------
Total.......................... $ 85,000,000
============
EXHIBIT A
6% CONVERTIBLE SUBORDINATED NOTES DUE 2001
REGISTRATION RIGHTS AGREEMENT
DATED AS OF DECEMBER 24, 1996
BY AND AMONG
OCCUSYSTEMS, INC.
AS THE COMPANY,
AND
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
ALEX. XXXXX & SONS INCORPORATED
AND
XXXXX XXXXXXX INC.,
AS THE INITIAL PURCHASERS
This Registration Rights Agreement is made and entered into as of December
24, 1996, by and among OccuSystems, Inc., a Delaware corporation (the
"Company"), and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, Alex. Xxxxx
& Sons Incorporated and Xxxxx Xxxxxxx Inc. (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated December
18, 1996, among the Company and the Initial Purchasers (the "Purchase
Agreement"). In order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
contained in this Agreement to the Initial Purchasers and to their respective
direct and indirect transferees. The execution of this Agreement is a condition
to the closing of the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
I. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Advice: As defined in the last paragraph of Section 4 hereof.
Affiliate of any specified person shall mean any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control," when used with respect to any person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise and the terms
"affiliated," "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Registration Rights Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is
not a day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to close.
Closing Date: The Closing Date as defined in the Purchase Agreement.
2
Common Stock: Common Stock, $.01 par value per share, of the Company.
Company: OccuSystems, Inc., a Delaware corporation, and any successor
corporation thereto.
controlling person: As defined in Section 6(a) hereof.
Damage Payment Date: Each of the semi-annual interest payment dates
provided in the Indenture.
Effectiveness Period: As defined in Section 2(a) hereof.
Effectiveness Target Date: The 180th day following the Closing Date.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC pursuant thereto.
Filing Date: The 90th day after the Closing Date.
Holder: Each registered holder of any Transfer Restricted Securities.
Indemnified Person: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated the date hereof, between the Company and
the Trustee thereunder, pursuant to which the Notes are being issued, as
amended, modified or supplemented from time to time in accordance with the terms
thereof.
Initial Purchasers: As defined in the preamble hereof.
Liquidated Damages: As defined in Section 3(a) hereof.
Notes: Up to $97,750,000 aggregate principal amount of 6% Convertible
Subordinated Notes due 2001 of the Company being issued (or authorized to be
issued) pursuant to the Indenture.
Paying Agent: As defined in the Indenture.
Proceeding: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
3
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Transfer Restricted Securities
covered by such Registration Statement, and all other amendments and supplements
to any such prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such prospectus.
Registration Default: As defined in Section 3(a) hereof.
Registration Statement: Any registration statement of the Company that
covers any of the Transfer Restricted Securities pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
Rule 144: Rule 144 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
4
Rule 424: Rule 424 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC as a replacement thereto having substantially the
same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.
Shelf Registration Statement: As defined in Section 2 hereof.
Special Counsel: Any special counsel to the holders of Transfer Restricted
Securities, for which holders of Transfer Restricted Securities will be
reimbursed pursuant to Section 5(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Securities: The Notes and the shares of Common Stock
into which the Notes are convertible, upon original issuance thereof, and at all
times subsequent thereto, until, in the case of any such Note or share, the
earliest of (i) the date on which it has been registered effectively pursuant to
the Securities Act and disposed of in accordance with the Registration Statement
relating to it, (ii) the date on which either such Note or the shares of Common
Stock issued upon conversion of such Note are distributed to the public pursuant
to Rule 144 (or any similar provisions then in effect) or are salable pursuant
to Rule 144(k) promulgated by the SEC pursuant to the Securities Act or (iii)
the date on which it ceases to be outstanding.
Trustee: United States Trust Company of New York, the trustee under the
Indenture.
underwritten registration or underwritten offering: A registration in
connection with which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
2. Shelf Registration
(a) The Company agrees to file with the SEC as promptly as practicable
after the Closing Date, but in no event later than the Filing Date, a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 covering all of the Transfer Restricted Securities (the "Shelf
Registration Statement"). The Shelf Registration Statement
5
shall be on Form S-3 under the Securities Act or another appropriate form
permitting registration of such Transfer Restricted Securities for resale by the
Holders in the manner or manners reasonably designated by them (including,
without limitation, one or more underwritten offering). The Company shall use
all reasonable efforts, as described in Section 4, to cause the Shelf
Registration Statement to be declared effective pursuant to the Securities Act
as promptly as practicable following the filing thereof, but in no event later
than the Effectiveness Target Date, and to keep the Shelf Registration Statement
continuously effective under the Securities Act for 36 months after the Closing
Date (the "Effectiveness Period"), or such shorter period ending when either (1)
all Transfer Restricted Securities covered by the Shelf Registration Statement
have been sold in the manner set forth in the Shelf Registration Statement or
(2) there cease to be outstanding any Transfer Restricted Securities.
(b) Supplements and Amendments. The Company shall use all reasonable
efforts to keep the Shelf Registration Statement continuously effective by
supplementing and amending the Shelf Registration Statement if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration Statement, if required by the Securities Act, or if
reasonably requested by the holders of a majority of the Transfer Restricted
Securities (on a fully converted basis) covered by such Shelf Registration
Statement or by any underwriter of such Transfer Restricted Securities.
(c) Suspension of Shelf Registration Statement. Notwithstanding
anything to the contrary in this Section 2, but subject to compliance with
Section 3, the Company may, by delivering written notice to the Holders,
prohibit offers and sales of Transfer Restricted Securities pursuant to the
Shelf Registration Statement at any time if (A) (i) the Company is in
possession of material non-public information, (ii) the Company determines
(based on advice of counsel) that such prohibition is necessary in order to
avoid a requirement to disclose such material non-public information and (iii)
the Company determines in good faith that disclosure of such material non-
public information would not be in the best interests of the Company and its
stockholders or (B) (i) the Company has made a public announcement relating to
an acquisition or business combination transaction including the Company and/or
one or more of its subsidiaries that is material to the Company and its
subsidiaries taken as a whole and (ii) the Company determines in good faith
that (x) offers and sales of Transfer Restricted Securities pursuant to the
Shelf Registration Statement prior to the consummation of such transaction (or
such earlier date as the Company shall determine) is not in the best interests
of the Company and its stockholders or (y) that it would be impracticable at
the time to obtain any financial statements relating to such acquisition or
business combination transaction that would be required to be set forth in the
Shelf Registration Statement; provided, however, that upon (i) the public
disclosure by the Company of the material non-public information described in
clause (A) of this paragraph or (ii) the abandonment or termination of, or the
availability of the required financial statements with respect to, a
transaction described in clause (B) of this
6
paragraph, the suspension of the use of the Shelf Registration Statement
pursuant to this Section 2(c) shall cease and the Company shall promptly comply
with Section 4(b) hereof.
3. Liquidated Damages
(a) The Company and the Initial Purchasers agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company fails to
fulfill its obligations pursuant to Section 2 and Section 4(b) hereof and that
it would not be possible to ascertain the extent of such damages. Accordingly,
in the event of such failure by the Company to fulfill such obligations, the
Company hereby agrees to pay liquidated damages ("Liquidated Damages") to each
Holder of Transfer Restricted Securities under the circumstances and to the
extent set forth below:
(i) if the Shelf Registration Statement has not been filed with
the SEC on or prior to the Filing Date; or
(ii) if the Shelf Registration Statement is not declared effective
by the SEC on or prior to the Effectiveness Target Date; or
(iii) the Shelf Registration Statement has been declared effective
by the SEC and thereafter ceases to be effective or the Prospectus
contained therein ceases to be usable (including as a result of a
suspension of the use of the Shelf Registration Statement as described in
Section 2(c) hereof), for a period of time that exceeds 90 days in any
period of 365 consecutive days;
(any of the foregoing, a "Registration Default") then the Company shall pay
Liquidated Damages to each Holder of Transfer Restricted Securities during the
first 90-day period immediately following the occurrence of such Registration
Default in an amount equal to $.05 per week per $1,000 principal amount of Notes
and, if applicable, $.0015 per week per share (subject to adjustment in the
event of stock splits, stock recombinations, stock dividends and the like) of
Common Stock constituting Transfer Restricted Securities held by such Holder for
each week or portion thereof that the Registration Default continues. The
amount of such Liquidated Damages will increase by an additional $.05 per week
per $1,000 principal amount of Notes and, if applicable, by $.0015 per week per
share (subject to adjustment as set forth above) of Common Stock constituting
Transfer Restricted Securities for each subsequent 90-day period until all
Registration Defaults have been cured; provided, however, that Liquidated
Damages shall not at any time exceed $.25 per week per $1,000 principal amount
of Notes or, if applicable, $.0015 per week per share (subject to adjustment as
set forth above) of Common Stock constituting Transfer Restricted Securities.
Following the cure of all Registration Defaults relating to any Transfer
Restricted Securities, the accrual of Liquidated Damages with
7
respect to such Transfer Restricted Securities will cease. A Registration
Default under clause (i) above shall be cured on the date that the Shelf
Registration Statement is filed with the SEC; a Registration Default under
clause (ii) above shall be cured on the date that the Shelf Registration
Statement is declared effective by the SEC; and a Registration Default under
clause (iii) above shall be cured on the date the Shelf Registration Statement
is declared effective or the Prospectus contained therein again becomes usable.
(b) The Company shall notify the Trustee within one Business Day after
each and every date on which a Registration Default occurs. On each Damage
Payment Date, Liquidated Damages shall be paid by the Company to the Holders of
Transfer Restricted Securities as of the immediately preceding Record Date (as
defined in the Indenture) specified in the Indenture in the same manner interest
is paid to Holders of Notes pursuant to the Indenture. Each obligation to pay
Liquidated Damages shall be deemed to commence accruing on the date of the
applicable Registration Default and to cease accruing when all Registration
Defaults have been cured. In no event shall the Company pay Liquidated Damages
in excess of the applicable maximum weekly amount set forth above, regardless of
whether one or multiple Registration Defaults exist (e.g., subject to increase
as set forth above for each subsequent 90-day period, Liquidated Damages shall
equal $.05 per week per $1,000 principal amount of Notes during the first 90-day
period immediately following the occurrence of the first Registration Default
regardless of whether additional Registration Defaults occur during such 90-day
period).
4. Registration Procedures
In connection with the Company's registration obligations pursuant to
Section 2 above, the Company shall as expeditiously as possible:
(a) No fewer than five Business Days prior to the initial filing of a
Registration Statement or Prospectus and no fewer than two Business Days prior
to the filing of any amendment or supplement thereto (other than any document
that would be incorporated or deemed to be incorporated therein by reference),
furnish to the Holders of the Transfer Restricted Securities, their Special
Counsel and the managing underwriters, if any, copies of all such documents
proposed to be filed, which documents (other than those incorporated or deemed
to be incorporated by reference) will be subject to the review of such Holders,
their Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such inquiries as shall be
necessary in connection with such Registration Statement, in the reasonable
opinion of Special Counsel and such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file any such Registration Statement or related Prospectus or any amendments or
8
supplements thereto (other than any document that would be incorporated or
deemed to be incorporated in the Registration Statement by reference) to which
the Holders of a majority of the Transfer Restricted Securities, their Special
Counsel, or the managing underwriters, if any, shall reasonably object on a
timely basis; provided, that the Company may assume, for the purposes of this
subparagraph (a), that objections to the inclusion of information specifically
requested to be included in the Registration Statement by the staff of the SEC,
or in the opinion of counsel to the Company required to be in the Registration
Statement, or specifically required by the Securities Act or other applicable
law, shall not be deemed to be reasonable;
(b) Prepare and file with the SEC such amendments, including post-
effective amendments, to each Registration Statement as may be necessary,
subject to Section 2(c) hereof, to keep such Registration Statement continuously
effective for the applicable time period; cause, subject to Section 2(c) hereof,
the Prospectus and any document incorporated or deemed to be incorporated
therein by reference to be supplemented or amended, and file, subject to Section
2(c) hereof, any other required document so that, as thereafter delivered such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and comply with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Transfer Restricted
Securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement as so amended or in such Prospectus as so
supplemented;
(c) Notify the Holders of Transfer Restricted Securities to be sold or
their Special Counsel and the managing underwriters, if any, promptly (and in
the case of an event specified by clause (i)(A) of this paragraph in no event
fewer than two Business Days prior to such filing), and (if requested by any
such person), confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment is proposed to be filed, and,
(B) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC, any state securities commission, any other
governmental agency or any court of any stop order, order or injunction
suspending or enjoining the use or the effectiveness of a Registration Statement
or the initiation of any proceedings for that purpose, (iv) if at any time any
of the representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 4(l) hereof cease
to be true and correct in all material respects, (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Transfer Restricted Securities for
sale in any jurisdiction, or the initiation or threatening of any Proceeding for
such purpose,
9
and (vi) of the happening of any event that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Registration Statement,
Prospectus or documents so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that, in the case of the Prospectus, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(d) Use all reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Transfer
Restricted Securities for sale in any jurisdiction, at the earliest practicable
moment;
(e) If requested by the managing underwriters, if any, or the Holders
of a majority of the Transfer Restricted Securities (on a fully converted basis)
being sold in connection with such offering, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the
managing underwriters, if any, and such Holders reasonably request should be
included therein relating to the terms of the sale of the Transfer Restricted
Securities of such Holder in the Prospectus, and (ii) make all required filings
of such Prospectus supplement or such post-effective amendment as soon as
practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment;
provided, however, that the Company shall not be required to take any action
pursuant to this Section 4(e) that would, in the opinion of counsel for the
Company, violate applicable law;
(f) Furnish to each Holder of Transfer Restricted Securities, their
Special Counsel and each managing underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and each amendment thereto,
including financial statements (but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits,
unless requested in writing by such Holder, counsel or managing underwriter);
(g) Deliver to each Holder of Transfer Restricted Securities, their
Special Counsel, and the underwriters, if any, without charge, as many copies of
the Prospectus or Prospectuses and each amendment or supplement thereto as such
persons reasonably request; and the Company hereby consents, subject to Section
4(p) hereof, to the use of such Prospectus
10
and each amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities and the underwriters, if any, in connection with
the offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto;
(h) Prior to any public offering of Transfer Restricted Securities,
use all reasonable efforts to register or qualify or cooperate with the Holders
of Transfer Restricted Securities to be sold, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such Transfer
Restricted Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder or underwriter
reasonably requests in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any tax
in any such jurisdiction where it is not then so subject;
(i) In connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders and the managing underwriters,
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold, which certificates shall
not bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and to enable such Transfer Restricted
Securities to be in such denominations and registered in such names as the
managing underwriters, if any, or Holders may request at least two Business Days
prior to any sale of Transfer Restricted Securities;
(j) Use all reasonable efforts to cause the offering of the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or authorities within the
United States as may require such registration or approval, except as may be
required as a consequence of the nature of such selling Holder's business, in
which case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Transfer Restricted Securities; provided,
however, that the Company shall not be required to register the Transfer
Restricted Securities in any jurisdiction that would subject it to general
service of process in any such jurisdiction where it is not then so subject or
subject the Company to any tax in any such jurisdiction where it is not then so
subject or to
11
require the Company to qualify to do business in any jurisdiction where it is
not then so qualified;
(k) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Securities, provide a CUSIP number for the
Transfer Restricted Securities;
(l) Enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and take
all such other reasonable actions in connection therewith (including those
reasonably requested by the managing underwriters, if any, or the Holders of a
majority of the Transfer Restricted Securities (on a fully converted basis)
being sold) in order to expedite or facilitate the disposition of such Transfer
Restricted Securities, and in such connection, if an underwriting agreement is
entered into, (i) make such representations and warranties to the underwriters,
if any, with respect to the business of the Company and its subsidiaries
(including with respect to businesses or assets acquired or to be acquired by
any of them), and the Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be incorporated by reference therein, in each case, in
form, substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, addressed to each of the underwriters, if any,
covering the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by the
underwriters; (iii) use all reasonable efforts to obtain customary "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data is, or is
required to be, included in the Registration Statement), addressed (where
reasonably possible) to the selling Holders of Transfer Restricted Securities
and each of the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings; (iv) if an underwriting agreement is
entered into, the same shall contain indemnification provisions and procedures
no less favorable to the selling Holders of Transfer Restricted Securities and
the underwriters, if any, than those set forth in Section 6 hereof (or such
other provisions and procedures acceptable to Holders of a majority of the
Transfer Restricted Securities (on a fully converted basis) covered by such
Registration Statement and the managing underwriters); and (v) deliver such
documents and certificates as may be reasonably requested by the managing
underwriters, if any, to evidence the continued validity of the representations
and warranties made pursuant to clause (i) of this
12
Section 4(l) and to evidence compliance with any customary conditions contained
in the underwriting agreement or other agreement entered into by the Company;
(m) Make available for inspection by a representative of the Holders
of not less than 50% of the Transfer Restricted Securities (on a fully-converted
basis) being sold, any underwriter participating in any such disposition of
Transfer Restricted Securities, if any, and any Special Counsel, consultant or
accountant retained by such selling Holders or underwriter, at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries as they may reasonably request (including with respect to business
and assets acquired or to be acquired to the extent that such information is
available to the Company), and cause the officers, directors, agents and
employees of the Company and its subsidiaries (including with respect to
business and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in each case
reasonably requested by any such representa tive, underwriter, attorney,
consultant or accountant in connection with such Registration Statement,
provided, however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith designated by
the Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such persons, unless (i) disclosure of
such information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (ii) disclosure of such
information is required by law (including any disclosure requirements pursuant
to Federal securities laws in connection with the filing of any Registration
Statement or the use of any Prospectus), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement;
(n) Cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement relating to the Transfer
Restricted Securities; and in connection therewith, cooperate with the trustee
under the Indenture and the holders of the Transfer Restricted Securities to
effect such changes to the Indenture as may be required for such Indenture to be
so qualified in accordance with the terms of the TIA; and execute, and use all
reasonable efforts to cause such trustee to execute, all customary documents as
may be required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable the Indenture to be so qualified in
a timely manner;
(o) Make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder, no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in
13
which Transfer Restricted Securities are sold to underwriters in a firm
commitment or reasonable efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule 158;
and
(p) concurrently with the effectiveness of the first Registration
Statement (i) list all Notes and Common Stock covered by such Registration
Statement on any securities exchange on which the Common Stock is then listed or
(ii) authorize for quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or the National Market System of NASDAQ
all Notes and Common Stock covered by such Registration Statement if the Common
Stock is then so authorized for quotation.
The Company may require each seller of Transfer Restricted Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Transfer Restricted Securities as
is required by law to be disclosed in the applicable Registration Statement and
the Company may exclude from such registration the Transfer Restricted
Securities of any seller who unreasonably fails to furnish such information
within a reasonable time after receiving such request. Each seller of Transfer
Restricted Securities will furnish to the Company information concerning sales
made pursuant to the Registration Statement. Each such Holder agrees, by the
acquisition of Transfer Restricted Securities, and agrees to confirm such
agreement in writing upon request of the Company, to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such Holder to the Company or of the occurrence of any event as a
result of which any Prospectus relating to such registration contains or would
contain an untrue statement of a material fact regarding such Holder or such
Holder's intended method of distribution of such Transfer Restricted Securities,
or omits to state any material fact regarding such Holder or such Holder's
intended method of distribution of such Transfer Restricted Securities,
necessary to make the statements therein, in light of the circumstances then
existing, not misleading and promptly to furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
Holder or the distribution of such Transfer Restricted Securities, an untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances then existing, not
misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as
14
a recommendation by such Holder of the investment quality of the Company's
securities covered thereby and that such holding does not imply that such Holder
will assist in meeting any future financial requirements of the Company, or (ii)
in the event that such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force, the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
Each Holder of Transfer Restricted Securities agrees by acquisition of
such Transfer Restricted Securities that, upon receipt of any notice from the
Company pursuant to Section 2(c) hereof or of the happening of any event of the
kind described in Section 4(c)(ii), 4(c)(iii), 4(c)(v) or 4(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Transfer Restricted
Securities covered by such Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(b) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus, and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Holder's possession of the Prospectus
covering such Transfer Restricted Securities at the time of receipt of such
notice.
5. Registration Expenses
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not any
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc., (B) in compliance with
securities or Blue Sky laws (including, without limitation and in addition to
that provided for in (b) below, reasonable fees and disbursements of counsel for
the underwriters or Special Counsel for the Holders in connection with Blue Sky
qualifications of the Transfer Restricted Securities and determination of the
eligibility of the Transfer Restricted Securities for investment under the laws
of such jurisdictions as the managing underwriters, if any, or Holders of a
majority (on a fully converted basis) of Transfer Restricted Securities may
designate)), and (c) the fees payable in connection with the listing of the
Notes in accordance with Section 4(q) hereof, (ii) printing expenses (including,
without limitation, expenses of printing certificates for Transfer Restricted
Securities in a form eligible for deposit with The Depository Trust Company and
of
15
printing Prospectuses if the printing of Prospectuses is requested by the
managing underwriters, if any, (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company and Special Counsel for
the Holders (plus any local counsel, deemed appropriate by the Holders of a
majority of the Transfer Restricted Securities, on a fully converted basis), in
accordance with the provisions of Section 5(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 4(m)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) Securities Act liability insurance, if the Company so desires such
insurance, and (vii) fees and expenses of all other persons retained by the
Company. In addition, the Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the securities to
be registered on any securities exchange. Notwithstanding the foregoing, the
Holders of the Transfer Restricted Securities being registered shall pay all
commissions, placement agent fees and underwriting discounts and commissions
attributable to the sale of such Transfer Restricted Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
Holders (severally or jointly), other than Special Counsel.
(b) In connection with any registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Securities being registered or
tendered for in such registration for the reasonable fees and disbursements of
not more than one firm of attorneys representing the selling Holders (in
addition to any local counsel), which firm, if any, shall be chosen by the
Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis).
6. Indemnification
(a) The Company agrees to indemnify and hold harmless (i) each Initial
Purchaser, (ii) each Holder of Transfer Restricted Securities, (iii) each
person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) any of the foregoing (any of the persons
referred to in this clause (iii) being hereinafter referred to as a "controlling
person"), and (iv) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers, each Holder of Transfer
Restricted Securities, or any controlling person (any person referred to in
clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"Indemnified Person"), from and against any and all losses, claims, damages,
liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
preliminary Prospectus or in any amendment or supplement thereto, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the
16
statements therein (in the case of any Prospectus or preliminary Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Indemnified Person
furnished in writing to the Company by or on behalf of such Indemnified Person
expressly for use therein; provided that the foregoing indemnity with respect to
any preliminary Prospectus shall not inure to the benefit of any Indemnified
Person from whom the person asserting such losses, claims, damages, liabilities
and judgments purchased securities if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary Prospectus is
eliminated or remedied in the Prospectus and a copy of the Prospectus shall not
have been furnished to such person in a timely manner; provided that the Company
has delivered the Prospectus to such Indemnified Person in requisite quantity on
a timely basis to permit such delivery or sending. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement, any preliminary prospectus or the
Prospectus or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company, such Indemnified Person shall
promptly notify the Company in writing and the Company shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Person and payment of all fees and expenses. Any Indemnified 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 Indemnified Person, unless (i) the employment of
such counsel shall have been specifically authorized in writing by the Company,
(ii) the Company shall have failed to assume the defense and employ counsel or
(iii) the named parties to any such action (including any impleaded parties)
include both such Indemnified Person and the Company, and such Indemnified
Person shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of such Indemnified Person, it being
understood, however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all such Indemnified Persons,
which firm shall be designated in writing by such Indemnified Persons, and that
all such fees and expenses shall be reimbursed as they are incurred). The
Company shall not be liable for any settlement of any such action effected
without its written consent, but if settled with its written consent, it agrees
to indemnify and hold harmless any Indemnified Person from and against any loss
or liability by reason of such settlement. Notwithstanding the immediately
preceding sentence, if in any
17
case where the indemnifying party agrees in writing subsequent to the date
hereof that it will be responsible for the fees and expenses of counsel for the
Indemnified Person and the Indemnified Person shall have requested the
indemnifying party to reimburse the Indemnified Person for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it shall be
liable for any settlement of any action effected without its written consent if
(i) such settlement is entered into more than twenty Business Days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall have failed to reimburse the Indemnified Person in accordance with
such request for reimbursement prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) In connection with any Registration Statement in which a Holder of
Transfer Restricted Securities is participating, such Holder of Transfer
Restricted Securities agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers and any person controlling the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, to the same extent as the foregoing indemnity from the Company
to each Indemnified Person but only with reference to information relating to
such Holder furnished in writing by or on behalf of such Holder expressly for
use in such Registration Statement, the Prospectus or any preliminary
prospectus. In case any action shall be brought against the Company, any of its
directors or officers, or any person controlling the Company based on such
Registration Statement, the Prospectus or any preliminary prospectus and in
respect of which indemnity may be sought against any Holder, the Holder shall
have the rights and duties given to the Company (except that if the Company
shall have assumed the defense thereof, such Holder shall not be required to do
so, but may employ separate counsel therein and participate in defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Holder), and the Company, its directors and officers, and any person controlling
the Company shall have the rights and duties given to the Indemnified Person, by
Section 6(b) hereof. This indemnity agreement will be in addition to any other
liability which such Holder may otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, 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 such losses, claims,
damages, liabilities and judgments in such proportion as is appropriate to
reflect the relative fault of the Company and each such Indemnified Person in
connection with the
18
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and each such Indemnified
Person shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or such Indemnified
Person and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Indemnified Persons were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments 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 6, no Indemnified Person shall be
required to contribute any amount in excess of the amount by which the proceeds
received by it in connection with the sale of Transfer Restricted Securities
pursuant to this Agreement exceeds the amount of any damages which such
Indemnified Person has otherwise been required to pay or has paid by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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 Indemnified
Persons' obligations to contribute pursuant to this Section 6(d) are several in
proportion to the respective amount of Transfer Restricted Securities included
in any such Registration Statement by each Indemnified Person and not joint.
7. Rules 144 and 144A
The Company shall file the reports required to be filed by it under
the Securities Act and the Exchange Act in a timely manner and, if at any time
it is not required to file such reports but in the past had been required to or
did file such reports, it will, upon the request of any holder of Transfer
Restricted Securities, make available other information as required by, and so
long as necessary to permit, sales of its Transfer Restricted Securities
pursuant to Rule 144 and Rule 144A. Notwithstanding the foregoing, nothing in
this Section 7 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
19
8. Underwritten Registrations
(a) If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority (on a
fully converted basis) of such Transfer Restricted Securities included in such
offering, subject to the consent of the Company (which will not be unreasonably
withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
(b) Each Holder of Transfer Restricted Securities agrees, if requested
(pursuant to a timely written notice) by the managing underwriters in an
underwritten offering or placement agent in a private offering of the Company's
securities, not to effect any sale or distribution (including a sale pursuant to
Rule 144(k) and Rule 144A, but excluding non-public sales to any of its
affiliates, officers, directors, employees and controlling persons of any of the
Notes, in the case of an offering of the Company's debt securities, or the
Common Stock, in the case of an offering of the Company's equity securities),
during the period ending 90 days after the closing date of the underwritten
offering.
(c) The Initial Purchasers and all Holders of Transfer Restricted
Securities agree that, notwithstanding any other term or provision hereof, the
Company shall not be required to enter into any agreements (including
underwriting agreements) or take any other actions contemplated by Section 4(l)
hereof unless requested in writing by the holders of at least 50% of the
Transfer Restricted Securities (on a fully converted basis) sold to the Initial
Purchasers pursuant to the Purchase Agreement.
The foregoing provisions shall not apply to any Holder of Transfer
Restricted Securities if such Holder is prevented by applicable statute or
regulation from entering into any such agreement.
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9. Miscellaneous
(a) Remedies. In the event of a breach by the Company, or by a holder
of Transfer Restricted Securities, of any of their obligations under this
Agreement, each holder of Transfer Restricted Securities or the Company, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company and each holder of Transfer Restricted
Securities agree that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the holders of Transfer Restricted Securities in this Agreement or
otherwise conflicts with the provisions hereof.
(c) No Piggyback on Registrations. The Company shall not grant to any
of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in any
Shelf Registration Statement other than Transfer Restricted Securities.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, without the written consent of the Holders of a majority of
the then outstanding Tra nsfer Restricted Securities (on a fully converted
basis); provided, however, that, for the purposes of this Agreement, Transfer
Restricted Securities that are owned, directly or indirectly, by either the
Company or an Affiliate of the Company shall not be deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Transfer Restricted Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Transfer Restricted Securities may be
given by Holders of a majority of the Transfer Restricted Securities (on a fully
converted basis) being sold by such Holders pursuant to such Registration
Statement; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
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(e) Notices. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or telecopy:
(i) if to the Company, as provided in the Purchase Agreement,
(ii) if to the Initial Purchasers, as provided in the Purchase
Agreement, or
(iii) if to any other person who is then the registered Holder of
any Transfer Restricted Securities, to the address of such
Holder as it appears in the Note or Common Stock register of
the Company.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one Business Day after being timely delivered to a next
day air courier; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder of Transfer Restricted
Securities. The Company may not assign its rights or obligations hereunder
without the prior written consent of each Holder of Transfer Restricted
Securities. Notwithstanding the foregoing, no transferee shall have any of the
rights granted under this Agreement until such transferee shall acknowledge its
rights and obligations hereunder by a signed written statement of such
transferee's acceptance of such rights and obligations.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement.
(h) Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, as applied to contracts made and performed
within the State of New York without regard to principles of conflicts of law.
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(i) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(k) Attorneys' Fees. In any action or proceeding brought to enforce
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, shall
be entitled to recover its reasonable attorneys' fees in addition to any other
available remedy.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
OCCUSYSTEMS, INC.
By:________________________________
Name:______________________________
Title:_____________________________
The foregoing Registration Rights Agreement is
hereby confirmed and accepted as of the date
first above written.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
ALEX. XXXXX & SONS INCORPORATED
XXXXX XXXXXXX INC.
By: Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
By:______________________________
Name:____________________________
Title:___________________________
