Exhibit 1.01
[ ] SHARES
VISTACARE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[______], 2002
XXXXXX BROTHERS INC.
XX XXXXX SECURITIES CORPORATION
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXX & COMPANY, INC.
As Representatives of the several
underwriters named in Schedule 1 hereto
c/x XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
VistaCare, Inc., a Delaware corporation (the "COMPANY"), and certain
stockholders of the Company named in Schedule 2 (each, a "SELLING SHAREHOLDER",
and, collectively, the "SELLING SHAREHOLDERS") propose to sell an aggregate of [
] shares (the "FIRM STOCK") of the Company's Class A Common Stock, par value
$0.01 per share (the "COMMON STOCK"). Of the [ ] shares of the Firm Stock, [ ]
are being sold by the Company and [ ] by the Selling Shareholders. In addition,
the Selling Shareholders propose to grant to the Underwriters named in Schedule
1 hereto (the "UNDERWRITERS") an option to purchase up to an additional [ ]
shares of the Common Stock on the terms and for the purposes set forth in
Section 3 (the "OPTION STOCK"). The Firm Stock and the Option Stock, if
purchased, are hereinafter collectively called the "STOCK." This is to confirm
the agreement concerning the purchase of the Stock from the Company and the
Selling Shareholders by the Underwriters.
Section 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations (the "RULES AND REGULATIONS") of the United States Securities and
Exchange Commission (the "COMMISSION") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and each of the amendments
thereto have been delivered by the Company to you as the representatives (the
"REPRESENTATIVES") of the Underwriters. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"PRELIMINARY PROSPECTUS" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company with
the consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "REGISTRATION STATEMENT" means such registration
statement, as amended at the Effective Time, including all information contained
in the final prospectus filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations and deemed to be a part of the registration statement as
of the Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"PROSPECTUS" means the prospectus in the form first used to confirm sales of
Stock. If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in Section 17)
have been duly incorporated or organized and are validly existing as
corporations or limited partnerships, as the case may be, in good standing under
the laws of their respective jurisdictions of incorporation, are duly qualified
to do business and are in good standing as foreign corporations or limited
partnerships in each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses requires such
qualification, except where the failure to so qualify and be in good standing
would not have a material adverse effect on the general affairs, management,
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries taken as a whole (a
"MATERIAL ADVERSE EFFECT"), and have all power and authority necessary to own or
hold their respective properties and to conduct the businesses in which they are
engaged; and none of the subsidiaries of the Company other than FHI Health
Systems, Inc., FHI GP, Inc., Family Hospice, Ltd., Vista Hospice Care, Inc. and
VistaCare USA, Inc. is a "significant subsidiary", as such term is defined in
Rule 405 of the Rules and Regulations.
(d) The Company has an authorized capitalization as set forth in the
Prospectus. All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, were issued in compliance with federal
and state securities laws, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus. All of the Company's options,
warrants and other rights to purchase or exchange any securities for shares of
the Company's capital stock have been duly and validly authorized and issued,
were issued in compliance with federal and state securities laws, and conform to
the description thereof contained in the Prospectus. All of the issued shares of
capital stock of each subsidiary of the Company that is a corporation have been
duly and validly authorized and issued and are fully paid and non-assessable,
and all of the partnership interests of each subsidiary of the Company that is a
limited partnership have been duly and validly authorized and issued, and all
such shares and partnership interests are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(e) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor
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in accordance with this Agreement, will be duly and validly issued, fully paid
and non-assessable; and the Stock will conform to the descriptions thereof
contained in the Prospectus. Upon payment for and delivery of the Stock to be
sold by the Company pursuant to this Agreement, the Underwriters will acquire
good and valid title to such Stock, in each case free and clear of all liens,
encumbrances, equities, preemptive rights, subscription rights, other rights to
purchase, voting or transfer restrictions and other claims.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or is bound or the charter or by-laws or
other constitutional document of the Company or any of its subsidiaries or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT") and applicable state securities laws in connection
with the purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(h) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting such
person the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act. The holders of outstanding shares of
the Company's capital stock are not entitled to preemptive or other rights to
subscribe for the Stock. Except as described in the Prospectus, no options,
warrants or other rights to purchase, agreements or other obligations to issue,
or rights to convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are outstanding. No
shares of the Common Stock have been granted under the Company's 2002 Employee
Stock Purchase Plan and no options to purchase shares of the Common Stock have
been granted under the Company's 2002 Non-Employee Director Stock Option Plan.
(i) The Company has not sold or issued any shares of Common Stock during
the six-month period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the Securities Act other
than shares issued pursuant to employee benefit plans, qualified stock options
plans or other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(j) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included in the Prospectus,
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since such date, there has not
been any material change in the capital stock or long-
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term debt of the Company or any of its subsidiaries (other than changes
occurring in the ordinary course of business in the outstanding amount of loans
under that certain loan and security agreement to which the Company is a party)
or any material adverse change, in or affecting the general affairs, management,
consolidated financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus.
(k) The financial statements (including the related notes and supporting
schedules) filed as part of the Registration Statement or included in the
Prospectus present fairly the financial condition and results of operations of
the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
(l) Ernst & Young LLP, who have certified certain financial statements
of the Company, whose report appears in the Prospectus and who have delivered
the letters referred to in Section 9(f) hereof, are independent public
accountants as required by the Securities Act and the Rules and Regulations.
(m) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects, except such as are described in the Prospectus or such
as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and all assets held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the Company
and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the conduct
of their respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
(o) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses (collectively, the "INTELLECTUAL PROPERTY") necessary
for the conduct of their respective businesses except where failure to own or
possess such rights would not have a Material Adverse Effect, and have no reason
to believe that the conduct of their respective businesses will conflict with,
and have not received any notice of any claim of conflict with, any such rights
of others.
(p) There are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, could reasonably be
expected to have a Material Adverse Effect; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement.
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(r) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent, which could reasonably be expected to
have a Material Adverse Effect.
(t) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to the termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(u) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes due thereon, other than taxes the validity of which the Company is
contesting in good faith by adequate proceedings and for which the Company has
established adequate reserves in accordance with generally accepted accounting
principles, and no tax deficiency has been determined adversely to the Company
or any of its subsidiaries which has had (nor does the Company have any
knowledge of any tax deficiency which, if determined adversely to the Company or
any of its subsidiaries, could reasonably be expected to have) a Material
Adverse Effect.
(v) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
non-material liabilities and obligations which were incurred in the ordinary
course of business, (iii) entered into any transaction not in the ordinary
course of business or (iv) declared or paid any dividend on its capital stock.
(w) The Company and each of its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(x) Neither the Company nor any of its subsidiaries (i) is in violation
of its constitutional documents, (ii) is in default in any material respect, and
no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is subject or
(iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business.
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(y) Neither the Company nor any of its subsidiaries, nor, to the
knowledge of the Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its subsidiaries,
has used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(z) The Company and its subsidiaries possess such permits, licenses,
provider numbers, certificates, approvals (including certificate of need
approvals), consents, orders, certifications (including certification under the
Medicare and Medicaid programs), accreditations (including, accreditation by the
Joint Commission on Accreditation of Healthcare Organizations) and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by, and have made
all declarations and filings with, the appropriate federal, state or local
regulatory agencies or bodies necessary to conduct the businesses now operated
by them, except where the failure to so declare or file would not, singly and in
the aggregate, have a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly and in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect. Except for any
hospice agencies or inpatient facilities under development as of the date
hereof, all of the hospice agencies and inpatient facilities (collectively, the
"FACILITIES") operated by the Company and its subsidiaries are eligible to
participate in the Medicare and available Medicaid programs.
(aa) The accounts receivable of the Company and its subsidiaries have
been adjusted to reflect material changes in the reimbursement policies of third
party payors such as Medicare, Medicaid, private insurance companies, health
maintenance organizations, preferred provider organizations, managed care
systems and other third party payors. The Company's accounts receivable, after
giving effect to the allowance for doubtful accounts, relating to such third
party payors do not exceed amounts the Company and its subsidiaries are entitled
to receive in any material respect.
(bb) Neither the Company nor its subsidiaries, nor, to the knowledge of
the Company, any officer, director, stockholder, employee or other agent of the
Company or any of its subsidiaries or the Facilities operated by the Company or
any of its subsidiaries, has engaged, directly or indirectly, in (i) any
material activities which are prohibited under Medicare and Medicaid statutes or
any regulations promulgated pursuant to such statutes, or (ii) any activities
which are prohibited under related state or local statutes or regulations or any
rules of professional conduct, including the following: (A) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in connection with the receipt of or claim for any benefit or
payment under the Medicare or Medicaid program or from any other third party
payor; (B) failing to disclose knowledge by a claimant of the occurrence of any
event affecting the initial or continued right to any benefit or payment under
the Medicare or Medicaid program or from any other third party payor on its own
behalf or on behalf of another, with intent to secure such benefit or payment
fraudulently; (C) knowingly and willfully offering, paying, soliciting or
receiving any remuneration, in cash or in kind (1) in return for referring an
individual to a person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare or
Medicaid or any other third party payor, or (2) in return for purchasing,
leasing or ordering or arranging for, or recommending the purchasing, leasing or
ordering of, any good, facility, service, or item for which payment may be made
in whole or in part by Medicare or
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Medicaid or any other third party payor; (D) knowingly and willfully referring
an individual to a person or entity with which it has ownership or other
financial arrangements (where applicable federal or state law prohibits such
referrals); and (E) knowingly and willfully violating any enforcement initiative
instituted by any governmental agency (including the Office of the Inspector
General and the Department of Justice).
(cc) Neither the Company nor any of its subsidiaries or any of the
Facilities operated by the Company or any of its subsidiaries has failed to file
with applicable regulatory authorities any statement, report, information or
form required by any applicable law, regulation or order, except where the
failure to so file would not, singly and in the aggregate, have a Material
Adverse Effect. Except as described in the Prospectus and except for any
failures to be in compliance or deficiencies which would not, singly and in the
aggregate, have a Material Adverse Effect, all such filings or submissions were
in compliance with applicable laws when filed and no deficiencies have been
asserted by any regulatory commission, agency or authority with respect to any
such filings or submissions.
(dd) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not reasonably be expected to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or could
not reasonably be expected to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect. The terms "HAZARDOUS wastes", "TOXIC
WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(ee) Neither the Company nor any of its subsidiaries is, nor as of the
Delivery Date (as defined in Section 5 hereof) will be, an "investment company"
as defined in the Investment Company Act of 1940, as amended.
(ff) None of the Directed Shares (as defined below) distributed in
connection with the Directed Share Program (as defined below) will be offered or
sold outside the United States.
(gg) There are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(hh) The statistical and market-related data included in the Prospectus
and the Registration Statement are based on or derived from sources which the
Company believes to be reliable and accurate.
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SECTION 2. Representations, Warranties and Agreements of the Selling
Shareholders. Each Selling Shareholder severally represents, warrants and agrees
that:
(a) The Selling Shareholder has, and immediately prior to the First
Delivery Date (as defined in Section 5 hereof) the Selling Shareholder will have
good and valid title to the shares of Stock to be sold by the Selling
Shareholder hereunder on such date, free and clear of all liens, encumbrances,
equities or claims; and upon delivery of such shares and payment therefor
pursuant hereto, good and valid title to such shares, free and clear of all
liens, encumbrances, equities or claims, will pass to the several Underwriters.
(b) The Selling Shareholder has placed in custody under a custody
agreement (the "CUSTODY AGREEMENT" and, together with all other similar
agreements executed by the other Selling Shareholders, the "CUSTODY AGREEMENTS")
with Xxxxxx, Hall & Xxxxxxx, as custodian (the "CUSTODIAN"), for delivery under
this Agreement, certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in the United
States or a member firm of the New York or American Stock Exchanges)
representing the shares of Stock to be sold by the Selling Shareholder
hereunder.
(c) The Selling Shareholder has duly and irrevocably executed and
delivered a power of attorney (the "POWER OF ATTORNEY" and, together with all
other similar agreements executed by the other Selling Shareholders, the "POWERS
OF ATTORNEY") appointing the Custodian and one or more other persons, as
attorneys-in-fact, with full power of substitution, and with full authority
(exercisable by any one or more of them) to execute and deliver this Agreement
and to take such other action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Shareholder.
(d) The Selling Shareholder has full right, power and authority to enter
into this Agreement, the Power of Attorney and the Custody Agreement; the
execution, delivery and performance of this Agreement, the Power of Attorney and
the Custody Agreement by the Selling Shareholder and the consummation by the
Selling Shareholder of the transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Selling Shareholder is a
party or by which the Selling Shareholder is bound or to which any of the
property or assets of the Selling Shareholder is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Selling Shareholder [, if applicable,] or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Selling Shareholder or the property or assets of the Selling Shareholder;
and, except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement, the Power of Attorney or the Custody
Agreement by the Selling Shareholder and the consummation by the Selling
Shareholder of the transactions contemplated hereby.
(e) The Registration Statement and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will,
when they become effective or are filed with the Commission, as the case may be,
do not and will not, as of the applicable effective date (as to the Registration
Statement and any amendment thereto) and as of the applicable filing date (as to
the Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided that no representation or warranty is made as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance upon
and in conformity with written
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information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein.
(f) The Selling Shareholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof are
not materially true and correct, is familiar with the Registration Statement and
the Prospectus (as amended or supplemented) and has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement, as
of the effective date, or the Prospectus (or any amendment or supplement
thereto), as of the applicable filing date, which has adversely affected or may
adversely affect the business of the Company and is not prompted to sell shares
of Common Stock by any information concerning the Company which is not set forth
in the Registration Statement and the Prospectus.
(g) The Selling Shareholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the shares of the Stock.
Section 3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell [ ] shares of the Firm
Stock and each of the Selling Shareholders hereby agrees to sell the number of
shares of the Firm Stock set opposite their name in Schedule 2 hereto, severally
and not jointly, to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. Each
Underwriter shall be obligated to purchase from the Company and each Selling
Shareholder that number of shares of the Firm Stock which represents the same
proportion of the number of shares of the Firm Stock to be sold by the Company
and each Selling Shareholder as the number of shares of the Firm Stock set forth
opposite the name of such Underwriter in Schedule 1 represents of the total
number of shares of the Firm Stock to be purchased by all of the Underwriters
pursuant to this Agreement. The respective purchase obligations of the
Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Selling Shareholders grant to the Underwriters an option
to purchase up to [ ] shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $[ ] per
share.
The Company and the Selling Shareholders shall not be obligated to deliver
any of the Stock to be delivered on any Delivery Date, except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
Section 4. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
It is understood that approximately [ ] shares of the Firm Stock
("DIRECTED SHARES") will initially be reserved by the Underwriters for offer and
sale to employees and persons having business
9
relationships with the Company ("DIRECTED SHARE PARTICIPANTS") upon the terms
and conditions set forth in the Prospectus (the "DIRECTED SHARE PROGRAM") and in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc. ("NASD"), and that any allocation of such Directed
Shares among such persons will be made in accordance with timely directions
received by Xxxxxx Brothers Inc. from the Company. Under no circumstances will
Xxxxxx Brothers Inc. or any Underwriter be liable to the Company or to any
Directed Share Participant for any action taken or omitted to be taken in good
faith in connection with such Directed Share Program. To the extent that any
Directed Shares are not affirmatively reconfirmed for purchase by any Directed
Share Participant on or immediately after the date of this Agreement, such
Directed Shares may be offered to the public as part of the public offering
contemplated hereby.
Section 5. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the offices of Xxxxxxxx Chance US LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "FIRST
DELIVERY DATE." On the First Delivery Date, the Company and the Selling
Shareholders shall deliver or cause to be delivered certificates representing
the Firm Stock to the Representatives for the account of each Underwriter
against payment to or upon the order of the Company and the Selling Shareholders
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Selling Shareholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time by written
notice being given to the Selling Shareholders by the Representatives. Such
notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as a "SECOND DELIVERY DATE"
and the First Delivery Date and any Second Delivery Date are sometimes each
referred to as a "DELIVERY DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, each Selling Shareholder shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of each Selling Shareholder of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligation of each Underwriter hereunder. Upon delivery, the Option Stock
shall be registered in such names and in such denominations as the
Representatives shall request in the aforesaid written notice. For the purpose
of expediting the checking and packaging of the certificates for the Option
Stock, the Selling Shareholders shall make the
10
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
Section 6. Further Agreements of the Company. The Company covenants and agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to
make no further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein; to advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to advise the Representatives, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of the
Stock for offering or sale in any jurisdiction, of the initiation or threatening
of any proceeding for any such purpose, or of any request by the Commission for
the amending or supplementing of the Registration Statement or the Prospectus or
for additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an 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 when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to file such document and to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representative, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to
the Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing;
11
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representatives copies of all materials furnished by the Company to its
stockholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (i) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock and Common Stock issued pursuant to
employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than the grant of options pursuant
to option plans existing on the date hereof), or (ii) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx Brothers
Inc. on behalf of the Underwriters; and to cause each stockholder and
optionholder listed on Schedule 3 hereto, each officer and director of the
Company and each Directed Share Participant that is an employee of the Company
to furnish to the Representatives, prior to the First Delivery Date, a letter or
letters, substantially in the form of Exhibit A hereto, pursuant to which each
such person shall agree not to, directly or indirectly, (i) offer for sale,
sell, pledge or otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or (ii) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in the case of each Officer and Director of the Company for a period
of 180 days from the date of the Prospectus and in the case of each Directed
Share Participant that is an employee of the Company for a period of 90 days
from the date of the Prospectus, in either case without the prior written
consent of Xxxxxx Brothers Inc. on behalf of the Underwriters;
(j) To apply for the inclusion of the Stock on the Nasdaq National
Market System, and to use its best efforts to effect that quotation, subject
only to official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock as set forth in
the Prospectus;
12
(l) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended and the rules and regulations of
the Commission thereunder; (m) In connection with the Directed Share Program, to
ensure that the Directed Shares will be restricted to the extent required by the
NASD or the rules of such association from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement, and Xxxxxx Brothers Inc. will
notify the Company as to which Directed Share Participants will need to be so
restricted. At the request of Xxxxxx Brothers Inc., the Company will direct the
transfer agent to place stop transfer restrictions upon such securities for such
period of time; and
(n) To comply in all material respects with all applicable securities
and other applicable laws, rules and regulations in each foreign jurisdiction in
which the Directed Shares are offered in connection with the Directed Share
Program.
Section 7. Further Agreements of the Selling Shareholders. Each Selling
Shareholder agrees:
(a) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (i) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock) or (ii) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
in each case without the prior written consent of Xxxxxx Brothers Inc.
(b) That the Stock to be sold by the Selling Shareholders hereunder,
which is represented by the certificates held in custody for the Selling
Shareholders, is subject to the interest of the Underwriters, that the
arrangements made by the Selling Shareholder for such custody are to that extent
irrevocable, and that the obligations of the Selling Shareholder hereunder shall
not be terminated by any act of the Selling Shareholder, by operation of law, by
the death or incapacity of any individual Selling Shareholder or, in the case of
a trust, by the death or incapacity of any executor or trustee or the
termination of such trust, or the occurrence of any other event.
(c) To deliver to the Representatives prior to the First Delivery Date a
properly completed and executed United States Treasury Department Form W-8 (if
the Selling Shareholder is a non-United States person or Form W-9 (if the
Selling Shareholder is a United States person).
Section 8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement, any
supplemental agreement among the Underwriters and any other related documents in
connection with the offering, purchase, sale and delivery of the Stock; (e) the
costs of delivering and distributing the Custody Agreements and the Powers of
Attorney; (f) the filing fees incident to securing the review by the NASD of the
terms of sale of the Stock; (g) any applicable listing or other fees; (h) the
fees and expenses
13
of qualifying the Stock under the securities laws of the several jurisdictions
as provided in Section 6(h) and of preparing, printing and distributing a Blue
Sky Memorandum and a Canadian "wrapper" (including related fees and expenses of
counsel to the Underwriters not to exceed $15,000); (i) all costs and expenses
of the Underwriters, including the reasonable fees and disbursements of counsel
for the Underwriters, incident to the Directed Share Program described in
Section 4; (j) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Stock, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show and (k) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement; provided that, except as provided in this Section
8 and in Section 13, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Stock which they may sell and the expenses of advertising any offering of the
Stock made by the Underwriters.
Section 9. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Shareholders contained herein, to the performance by the Company and the
Selling Shareholders of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the Powers of
Attorney, the Custody Agreements, the Registration Statement and the Prospectus,
and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company and the Selling Shareholders shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(c) Xxxxxx, Xxxx & Xxxxxxx shall have furnished to the Representatives
their written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) The Company and each of its subsidiaries listed on Exhibit
21.01 to the Registration Statement (each a "Subsidiary" and collectively the
"Subsidiaries") are validly existing as corporations or limited partnerships, as
the case may be, in good standing under the laws of their respective
jurisdictions of incorporation or organization, are duly qualified to do
business and are in good standing as foreign corporations or limited
partnerships in each jurisdiction listed in Exhibit B hereto and have all
corporate and limited partnership power and authority necessary to own or hold
their respective properties and conduct the businesses in which they are
currently engaged, as described in the Registration Statement;
(ii) The authorized capital stock of the Company as of the
Effective Time is as set forth in the Prospectus under the caption
"Capitalization". All of the issued and outstanding shares of capital stock of
the Company have been duly and validly authorized and issued, were issued in
14
compliance with the registration requirements of federal and state securities
laws (assuming the accuracy of the representations and warranties made to the
Company by the purchasers of such stock), are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus. All of the
Company's outstanding options and warrants to purchase shares of the Company's
capital stock described in the Registration Statement have been duly and validly
authorized and issued, were issued in compliance with the registration
requirements of federal and state securities laws, and conform to the
description thereof contained in the Prospectus. All other rights to purchase or
exchange any securities for shares of the Company's capital stock described in
the Registration Statement have been duly and validly authorized and conform to
the description thereof in the Prospectus. All of the issued and outstanding
shares of capital stock of each Subsidiary of the Company that is a corporation
have been duly and validly authorized and issued, are fully paid and
non-assessable and, to such Counsel's knowledge, are owned of record directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims. All of the issued and outstanding partnership interests of each
Subsidiary of the Company that is a limited partnership have been duly and
validly authorized and issued and, to such Counsel's knowledge, are owned of
record directly or indirectly by the Company, and free and clear of all liens,
encumbrances, equities or claims;
(iii) The shares of the Stock being delivered on such Delivery Date
to the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor in accordance with this Agreement
will be duly and validly issued, fully paid and non-assessable;
(iv) Except as described in the Prospectus, there are no
preemptive or other rights to subscribe for or to purchase from the Company, or
any restrictions (other than under federal and state securities laws) upon the
voting or transfer of, any shares of the Stock pursuant to the Company's charter
or by-laws or any agreement or other instrument known to such counsel;
(v) To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending to which
the Company or any of its Subsidiaries is a party or of which any property or
assets of the Company or any of its Subsidiaries is the subject which, if
determined adversely to the Company or any of its Subsidiaries, would have a
Material Adverse Effect; and, to such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others which, if determined adversely to the Company or any of its Subsidiaries,
would have a Material Adverse Effect;
(vi) Based solely on telephone conversations with a member of the
staff of the Commission, the Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion on the date
specified therein and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such Delivery
Date (except for the financial statements (including the notes thereto),
financial schedules and other financial data included therein, as to which such
counsel need express no belief) comply as to form in all material respects with
the requirements of the Securities Act and the Rules and Regulations;
(viii) The statements contained in the Prospectus under the captions
"Risk Factors", "Business" and "Description of Capital Stock", insofar as they
describe federal and state statutes, rules
15
and regulations, are accurate in all material respects and the opinion of such
counsel filed as Exhibit 5.01 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to them;
(ix) To such counsel's knowledge, there are no contracts or other
documents which are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by the Rules and
Regulations which have not been described or filed as exhibits to the
Registration Statement;
(x) This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company pursuant to this Agreement and the execution,
delivery and compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an exhibit to
the Registration Statement, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or the charter or by-laws or
other constitutional documents of any of its Subsidiaries or any statute or any
order, rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its Subsidiaries
or any of their properties or assets; and, except for the registration of the
Stock under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act and
applicable securities and Blue Sky laws of the states of the United States or
the provinces of Canada and the rules and regulations of the NASD in connection
with the purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, except for such consents, approvals, authorizations,
orders, filings or registrations as have been obtained or made;
(xii) Except as described in the Prospectus, to such counsel's
knowledge, there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act;
(xiii) To the knowledge of such counsel, each "pension plan" for
which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code (consisting, of the VistaCare 401(k) Plan and
the Family Hospice Savings and Profit Sharing Plan and Trust) is (i) so
qualified in form in all material respects with all presently applicable
provisions of Section 401(a) of the Code; (ii) in compliance in form in all
material respects with all presently applicable provisions of ERISA; (iii) no
"reportable event" (as defined in Section 4043(c) of ERISA) has occurred with
respect to any such "pension plan"; and (iv) the Company has not incurred and
does not expect to incur liability under Title IV of ERISA or Sections 412 or
4971 of the Code with respect to funding or termination of, or withdrawal from,
any such "pension plan" (it being understood that such counsel has not reviewed
the operations or administration of such pension plans, and therefore, such
counsel does not express any opinion whether any action or failure to act in the
operation or administration of such pension plans has caused the loss of
qualification of such pension plans or is in violation of any applicable
requirement of ERISA); and
16
(xiv) Neither the Company nor any Subsidiary is an "investment
company" as defined in the Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the Commonwealth of Massachusetts and the General Corporation Law of
the State of Delaware. Such opinion shall also be to the effect that (x) such
counsel has acted as counsel to the Company in connection with the preparation
of the Registration Statement and (y) based on the foregoing, no facts have come
to the attention of such counsel which have caused them to believe that the
Registration Statement (except for the financial statements (including the notes
thereto), related schedules and other financial data therein, as to which such
counsel need express no belief) as of the Effective Date, 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 not
misleading, or that the Prospectus (except as stated above) contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The foregoing
opinion and statement may be qualified by a statement to the effect that such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as set forth in clause
(viii) above).
(d) The respective counsel for each of the Selling Shareholders shall
each have furnished to the Representatives their written opinion, as counsel to
the Selling Shareholder for whom they are acting as counsel, addressed to the
Underwriters and dated the First Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) Such Selling Shareholder has full right, power and authority
to enter into this Agreement, the Power of Attorney and the Custody Agreement;
the execution, delivery and performance of this Agreement, the Power of Attorney
and the Custody Agreement by such Selling Shareholder and the consummation by
such Selling Shareholder of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which such Selling Shareholder is a party or by which such
Selling Shareholder is bound or to which any of the property or assets of such
Selling Shareholder is subject, nor will such actions result in any violation of
the provisions of the constitutive instruments and agreements of such Selling
Shareholder or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction over
such Selling Shareholder or the property or assets of such Selling Shareholder;
and, except for the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state or foreign securities laws
in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement, the Power of Attorney
or the Custody Agreement by such Selling Shareholder and the consummation by
such Selling Shareholder of the transactions contemplated hereby and thereby;
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder;
(iii) A Power-of-Attorney and a Custody Agreement have been duly
authorized, executed and delivered by such Selling Shareholder and constitute
valid and binding agreements of such Selling Shareholder, enforceable in
accordance with their respective terms;
17
(iv) Immediately prior to the First Delivery Date, such Selling
Shareholder had good and valid title to the shares of Stock to be sold by such
Selling Shareholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, and full right, power and authority to sell,
assign, transfer and deliver such shares to be sold by such Selling Shareholder
hereunder; and
(v) Good and valid title to the shares of Stock to be sold by such
Selling Shareholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters.
In rendering such opinion, such counsel may (i) state that their opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of [the jurisdiction in which such counsel practices] [and the
General Corporation Law of the State of Delaware] and (ii) in rendering the
opinion in Section 9(d)(iv) above, rely upon a certificate of such Selling
Shareholder in respect of matters of fact as to ownership of and liens,
encumbrances, equities or claims on the shares of Stock sold by such Selling
Shareholder, provided that such counsel shall furnish copies thereof to the
Representatives and state that they believe that both the Underwriters and they
are justified in relying upon such certificate.
(e) The Representatives shall have received from Xxxxxxxx Chance US LLP,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(f) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter or letters, in form and
substance satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(g) With respect to the letter or letters of Ernst & Young LLP referred
to in the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "INITIAL LETTERS"), the Company shall
have furnished to the Representatives a letter (the "BRING-DOWN LETTER") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letters and (iii)
confirming in all material respects the conclusions and findings set forth in
the initial letters.
18
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of such Delivery Date; the Company has
complied with all its agreements contained herein; and the conditions set forth
in Sections 9(a) and 9(j) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (B)
since the Effective Date no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement or the Prospectus
which has not been so set forth.
(i) Each Selling Shareholder (or the Custodian or one or more
attorneys-in-fact on behalf of each Selling Shareholder) shall have furnished to
the Representatives on the First Delivery Date a certificate, dated the First
Delivery Date, signed by, or on behalf of, such Selling Shareholder (or the
Custodian or one or more attorneys-in-fact) stating that the representations,
warranties and agreements of such Selling Shareholder contained herein are true
and correct as of the First Delivery Date and that such Selling Shareholder has
complied with all agreements contained herein to be performed by such Selling
Shareholder at or prior to the First Delivery Date.
(j) Neither the Company nor any of its subsidiaries shall have sustained
(i) since the date of the latest audited financial statements included in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus or (ii) since such date, there shall not
have been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries (other than changes occurring in the ordinary course of
business in the outstanding amount of loans under that certain loan and security
agreement to which the Company is a party) or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or
materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a banking
moratorium shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such), including, without
limitation, as a result of terrorist activities after the date hereof, or any
other calamity or crisis as to make
19
it, in the judgment of the Representatives, impracticable or inadvisable to
proceed with the public offering or delivery of the Stock being delivered on
such Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(l) The Nasdaq National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance.
(m) No Underwriter shall have discovered and disclosed to the Company on
or prior to such Delivery Date that the Registration Statement or the Prospectus
or any amendment or supplement thereto contains an untrue statement of a fact
which, in the reasonable opinion of Xxxxxxxx Chance US LLP, counsel for the
Underwriters, is material or omits to state a fact which, in the reasonable
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
Section 10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
directors, officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, director,
officer, employee or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or (B) in any materials or information provided to investors by, or with
the approval of, the Company in connection with the marketing of the offering of
the Stock, including any roadshow or investor presentations made to investors by
the Company (whether in person or electronically) (the "MARKETING MATERIALS"),
(ii) the omission or alleged omission to state in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such director, officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter, director,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that (1) the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
written information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
inclusion
20
therein which information consists solely of the information specified in
Section 10(f) and (2) the Company shall not be liable to any Underwriter under
the indemnity agreement in this Section 10(a) to the extent, but only to the
extent, that such loss, claim, damage, liability or expense of such Underwriter
results from the fact that such Underwriter sold Stock to a person and there was
not sent or given to such person, at or prior to the written confirmation of
such sale to such person, to the extent required by law, a copy of the
Prospectus dated the Effective Date (the "FINAL PROSPECTUS") and the loss,
claim, damage, liability or expense of such Underwriter results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
previously delivered to such person which was corrected in the Final Prospectus,
unless the Company had not previously furnished copies of the Final Prospectus
in sufficient quantities to such Underwriter to permit delivery on a timely
basis. The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to any Underwriter or to any director, officer,
employee or controlling person of that Underwriter.
The Company agrees to indemnify and hold harmless Xxxxxx Brothers Inc.
(including its officers and employees) and each person, if any, who controls
Xxxxxx Brothers Inc. within the meaning of the Securities Act ("XXXXXX BROTHERS
ENTITIES"), from and against any loss, claim, damage or liability or any action
in respect thereof to which any of the Xxxxxx Brothers Entities may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action (i) arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared by or with the approval of the Company for distribution to
Directed Share Participants in connection with the Directed Share Program or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
arises out of, or is based upon, the failure of the Directed Share Participant
to pay for and accept delivery of Directed Shares that the Directed Share
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program, other than losses, finally judicially determined to have resulted
directly from the bad faith or gross negligence of Xxxxxx Brothers Inc. The
Company shall reimburse the Xxxxxx Brothers Entities promptly upon demand for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred.
(b) The Selling Shareholders, jointly and severally, shall indemnify and
hold harmless each Underwriter, its officers and employees, and each person, if
any, who controls any Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii) the
inaccuracy of any representation or the breach of any warranty made by such
Selling Shareholder hereunder, and shall reimburse each Underwriter, its
officers and employees and each such controlling person for any legal or other
expenses reasonably incurred by that Underwriter, its officers and employees or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Selling Shareholders shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any such
amendment or supplement in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on
21
behalf of any Underwriter specifically for inclusion therein which information
consists solely of the information specified in Section 10(f). The foregoing
indemnity agreement is in addition to any liability which the Selling
Shareholders may otherwise have to any Underwriter or any officer, employee or
controlling person of that Underwriter. Notwithstanding the provisions of this
Section 10(b), the aggregate liability of any Selling Shareholder under this
Section 10(b) shall not exceed the proceeds received by such Selling Shareholder
from the sale of shares of Stock under this Agreement.
(c) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
each Selling Shareholder and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer, Selling Shareholder or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on behalf
of that Underwriter specifically for inclusion therein, which information is
limited to the information set forth in Section 10(f), and shall reimburse the
Company and any such director, officer, Selling Shareholder or controlling
person for any legal or other expenses reasonably incurred by the Company or any
such director, officer, Selling Shareholder or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee, Selling
Shareholder or controlling person.
(d) Promptly after receipt by an indemnified party under this Section 10
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 10, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 10 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 10. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Selling Shareholder under this Section 10 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, directors, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company or such Selling
22
Shareholder. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 10(a) hereof in respect of such
claim or action, then in addition to such separate counsel for the indemnified
parties, the indemnifying party shall be liable for the fees and expenses of not
more than one separate counsel (in addition to any local counsel) for the Xxxxxx
Brothers Entities for the defense of any loss, claim, damage, liability or
action arising out of the Directed Share Program. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in this Section 10 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Shareholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Shareholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Shareholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section 10(e) were to be determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 10(e), 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 10(e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the shares of Stock underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or
23
become liable to pay by reason of any 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 Underwriters' obligations to contribute as provided in
this Section 10(e) are several in proportion to their respective underwriting
obligations and not joint. The Selling Shareholders' obligations to contribute
as provided in this Section 10(e) are several in proportion to the net proceeds
received by them respectively from the sale of the Stock under this Agreement
and not joint.
(f) The Underwriters severally confirm and the Company and the Selling
Shareholders acknowledge that the statements with respect to the public offering
of the Stock by the Underwriters set forth on the cover page of, the legend
concerning over-allotments on the inside front cover page of and the concession
and reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.
Section 11. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock set opposite the names of all
the remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be obligated
to purchase any of the Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the shares
of Stock to be purchased on such Delivery Date. If the foregoing maximums are
exceeded and if the remaining Underwriters or other underwriters satisfactory to
the Representatives do not elect to purchase all the Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Selling Shareholders to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Shareholders, except that
the Company will continue to be liable for the payment of expenses to the extent
set forth in Sections 8 and 13. As used in this Agreement, the term
"UNDERWRITER" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 11, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Shareholders for damages
caused by its default. If other Underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
24
Section 12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Selling Shareholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 9(j) or 9(k),
shall have occurred or if the Underwriters shall decline to purchase the Stock
for any reason permitted under this Agreement.
Section 13. Reimbursement of Underwriters' Expenses. If the Company or any
Selling Shareholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or such Selling Shareholder to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or such Selling Shareholder is
not fulfilled, the Company and the Selling Shareholder will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Selling Shareholders shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Shareholder shall be obligated to reimburse any Underwriter (other than
those approved by the Company in its sole discretion) on account of those
expenses.
Section 14. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) If to the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
X.X. 00000, Attention: Syndicate Registration Department, Fax (000) 000-0000,
with a copy, in the case of any notice pursuant to Section 10(d), to the
Director of Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000;
(b) If to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel (Fax: (000) 000-0000, with a
copy to Xxxxxx X. Xxxxxxxx, Esq. of Xxxxxx, Hall & Xxxxxxx at the address set
forth in the Registration Statement); provided, however, that any notice to an
Underwriter pursuant to Section 10(d) shall be delivered or sent by mail, telex
or facsimile transmission to such Underwriter at its address set forth in its
acceptance telex or facsimile to the Representatives, which address will be
supplied to any other party hereto by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Company and the Selling Shareholders shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives and the Company and the Underwriters shall be entitled to act
and rely upon any request, consent, notice or agreement given or made on behalf
of the Selling Shareholders by the Custodian;
(c) If to any Selling Shareholder, shall be delivered or sent by mail,
telex or facsimile transmission to such Selling Shareholder at the address set
forth in Schedule 2 hereto.
Section 15. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Company, the Selling
Shareholders and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(a) the representations, warranties, indemnities and agreements of the Company
and the Selling Shareholders contained in this Agreement shall also be deemed to
be for the benefit of the directors, officers and the person or persons, if any,
who control any Underwriter within the meaning of Section 15 of the Securities
Act and (b) the indemnity agreement of the Underwriters contained in
25
Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 15, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
Section 16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Shareholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
Section 17. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in the State of New York are generally authorized or obligated by law or
executive order to close and (b) "SUBSIDIARY" has the meaning set forth in Rule
405 of the Rules and Regulations.
Section 18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
Section 19. Consent to Jurisdiction. Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("RELATED PROCEEDINGS") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "SPECIFIED COURTS"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"RELATED JUDGMENT"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum.
Section 20. Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
Section 21. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
Section 22. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
26
If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
VISTACARE, INC.
By: _____________________________
Name:
Title:
Accepted:
XXXXXX BROTHERS INC. THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE 2 HERETO
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto By: _____________________________
Name:
By XXXXXX BROTHERS INC. Title: Attorney-in-Fact
By: ___________________________
Authorized Representative
27
SCHEDULE 1
Number of Firm
Underwriters Shares to be Purchased
------------ ----------------------
28
SCHEDULE 2
Number of Shares
Name and Address of Selling Shareholder of Firm Stock
--------------------------------------- ----------------
29
SCHEDULE 3
Name of Shareholders / Optionholders
30
EXHIBIT A TO UNDERWRITING AGREEMENT
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.
XX Xxxxx Securities Corporation
Xxxxxxx Xxxxx & Company, L.L.C.
Xxxxxxxxx & Company, Inc.
As Representatives of the several
Underwriters named in Schedule 1
to the Underwriting Agreement,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of
Vistacare, Inc., a Delaware corporation (the "Company"), and that the
Underwriters propose to reoffer the Shares to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or
warrant) or securities convertible into or exchangeable for Common Stock (other
than the Shares) owned by the undersigned on the date of execution of this
Lock-Up Letter Agreement or on the date of the completion of the Offering, or
(2) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, for a period of 180 days after the date of the
final Prospectus relating to the Offering.
The foregoing sentence shall not apply to bona fide gifts, sales or other
dispositions of shares of any class of the Company's capital stock, in each case
that are made exclusively between and among the undersigned or members of the
undersigned's family, or affiliates of the undersigned, including its partners
(if a partnership) or members (if a limited liability company); provided that it
shall be a condition to any such transfer that (i) the transferee/donee agrees
to be bound by the terms of the lock-up letter agreement (including, without
limitation, the restrictions set forth in the preceding sentence) to the same
extent as if the transferee/donee were a party hereto, (ii) no filing by any
party (donor, donee, transferor or transferee) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), shall be required or shall be
voluntarily made in connection with such transfer or distribution (other than a
filing on a Form 5, Schedule 13D or Schedule 13G (or 13D-A or 13G-A) made after
the expiration of the 180-day period referred to above), (iii) each party
(donor, donee, transferor or transferee) shall not be
31
required by law (including without limitation the disclosure requirements of the
Securities Act of 1933, as amended, and the Exchange Act) to make, and shall
agree to not voluntarily make, any public announcement of the transfer or
disposition, and (iv) the undersigned notifies Xxxxxx Brothers' Equity Capital
Markets at least two business days prior to the proposed transfer or
disposition.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not intend
to proceed with the Offering, if the Underwriting Agreement does not become
effective, or if the Underwriting Agreement (other than the provisions thereof
which survive termination) shall terminate or be terminated prior to payment for
and delivery of the Shares, we will be released from our obligations under this
Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By: _____________________________
Name:
Title:
Dated:____________________
32
EXHIBIT B TO UNDERWRITING AGREEMENT
LIST OF JURISDICTIONS WHERE VISTACARE AND
ITS SUBSIDIARIES CONDUCT BUSINESS
33
