EXHIBIT 1.01
5,500,000 SHARES
VISTACARE, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
May [_], 2003
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:
Certain stockholders of VistaCare, Inc., a Delaware corporation (the
"COMPANY"), named in Schedule 2 (each, a "SELLING SHAREHOLDER", and,
collectively, the "SELLING SHAREHOLDERS") propose to sell an aggregate of
5,500,000 shares (the "FIRM STOCK") of the Company's Class A Common Stock, par
value $0.01 per share (the "COMMON STOCK"). All of the Firm Stock is being sold
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 825,000 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 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 Selling
Shareholders to the Underwriters hereunder have been duly and validly issued,
are fully paid and non-assessable and the Stock conforms to the descriptions
thereof contained in the Prospectus. Upon payment for and delivery
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of the Stock to be sold by the Selling Shareholders pursuant to this Agreement,
to the knowledge of the Company, 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) 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-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.
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(j) 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.
(k) 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.
(l) 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.
(m) 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.
(n) 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.
(o) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property 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.
(p) 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.
(q) 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.
(r) 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.
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(s) 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.
(t) 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.
(u) 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, except
for the outstanding options to purchase 20,000 shares of Common Stock approved
by the Company on April 25, 2003, (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.
(v) 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.
(w) 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.
(x) 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
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of any provision of the Foreign Corrupt Practices Act of 1977; or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(y) 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.
(z) 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.
(aa) Neither the Company nor its subsidiaries, nor, to the
knowledge of the Company, any officer, director, stockholder, employee or other
agent of the Company or any of its subsidiaries or the Facilities operated by
the Company or any of its subsidiaries, has engaged, directly or indirectly, in
(i) any material activities which are prohibited under Medicare and Medicaid
statutes or any regulations promulgated pursuant to such statutes, or (ii) any
activities which are prohibited under related state or local statutes or
regulations or any rules of professional conduct, including the following: (A)
knowingly and willfully making or causing to be made a false statement or
representation of a material fact in connection with the receipt of or claim for
any benefit or payment under the Medicare or Medicaid program or from any other
third party payor; (B) failing to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any benefit
or payment under the Medicare or Medicaid program or from any other third party
payor on its own behalf or on behalf of another, with intent to secure such
benefit or payment fraudulently; (C) knowingly and willfully offering, paying,
soliciting or receiving any remuneration, in cash or in kind (1) in return for
referring an individual to a person for the furnishing or arranging for the
furnishing of any item or service for which payment may be made in whole or in
part by Medicare or Medicaid or any other third party payor, or (2) in return
for purchasing, leasing or ordering or arranging for, or recommending the
purchasing, leasing or ordering of, any good, facility, service, or item for
which payment may be made in whole or in part by Medicare or Medicaid or any
other third party payor; (D) knowingly and willfully referring an individual to
a person or entity with which it has ownership or other financial arrangements
(where applicable federal or state law prohibits such referrals); and (E)
knowingly and willfully violating any enforcement initiative instituted by any
governmental agency (including the Office of the Inspector General and the
Department of Justice).
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(bb) 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.
(cc) 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.
(dd) 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.
(ee) 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.
(ff) 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.
SECTION 2. Representations, Warranties and Agreements of the Selling
Shareholders. Each Selling Shareholder severally, and not jointly, represents,
warrants and agrees that:
(a) The Selling Shareholder is, and immediately prior to the First
Delivery Date (as defined in Section 5 hereof) the Selling Shareholder will be
the record owner of the shares of Stock to be sold by the Selling Shareholder
hereunder on such date and such Selling Shareholder has good and valid title to
those shares, free and clear of all liens, encumbrances, equities or claims.
(b) Upon the payment and transfer contemplated by the Underwriting
Agreement, the Underwriters will acquire a security entitlement with respect to
the shares of Stock to be sold by such Selling Shareholder and no action based
on an adverse claim (within the meaning of Section 8-105 of the New York UCC
(as defined below)) may be asserted against such Underwriters with respect to
such shares.
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(c) The Selling Shareholder (other than FFC Partners I, L.P. and
FFC Executive Partners I, L.P. (together the "FFC ENTITIES")) 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 Equiserve Trust Company, N.A., 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.
(d) The Selling Shareholder (other than the FFC Entities) 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 certain officers of
the Company 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.
(e) The Selling Shareholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement (if
applicable); the execution, delivery and performance of this Agreement, the
Power of Attorney and the Custody Agreement (if applicable) 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 (if applicable) by the Selling Shareholder and the
consummation by the Selling Shareholder of the transactions contemplated hereby
and thereby.
(f) (i) In the case of the FFC Entities and Xxxxx X. Xxxxx, each
of the FFC Entities and Xxxxx X. Xxxxx 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, (ii) in the case of each
Selling Shareholder, such Selling Shareholder has no knowledge of any material
fact, condition or information not disclosed in the Registration Statement
(required to be so set forth by the Securities Act and the Rules and
Regulations, including, but not limited to, Rule 408 under the Securities Act),
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 (required to be so disclosed by
the Securities Act and the Rules and Regulations, including, but not limited to,
Rule 408 under the Securities Act).
(g) This Agreement has been duly authorized (in the case of a
Selling Shareholder that is not a natural person), executed and delivered by the
Selling Shareholder.
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(h) 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, each of the Selling Shareholders hereby agrees to
sell the number of shares of the Firm Stock set opposite its 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 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 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 an aggregate of 825,000 shares of Option Stock.
Specifically, each Selling Shareholder agrees to sell to the Underwriters the
number of shares of Option Stock set forth opposite its name in Schedule 2
hereto. In the event that the Underwriters exercise their option in part but not
in full, each Selling Shareholder shall sell severally that number of shares of
Option Stock in proportion to the total number of shares of Option Stock set
forth opposite the name of such Selling Shareholder in Schedule 2 hereto. 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 Selling Shareholders shall not be obligated to deliver any of the
Stock to be delivered on any Delivery Date (as hereinafter defined), 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.
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 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 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
9
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 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
10
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;
(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 90 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
11
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 and each officer and director 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 90 days from the date of the Prospectus 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; and
(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.
SECTION 7. Further Agreements of the Selling Shareholders.
(a) Each Selling Shareholder agrees that the Stock to be sold by
the Selling Shareholders hereunder, which is represented by the certificates
held in custody for certain of 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 such Selling Shareholder hereunder shall not be terminated by any
act of such 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.
(b) Each Selling Shareholder agrees 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).
(c) Each of the Xxxxx and Xxxxx Xxxxx Family Trust and B&J
Associates, L.P. agrees, for a period of 90 days from the
date of the Prospectus, not to, directly or indirectly,
12
(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., and subject to certain exceptions set
forth in the Form of Lock-Up Letter Agreement attached hereto as Exhibit A.
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 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 (including related
fees and expenses of counsel to the Underwriters not to exceed $15,000); (i) 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; (j) the registration fees payable pursuant to
Section 6 of the Securities Act for the registration of the Stock; (k) the
reasonable fees and disbursements of any counsel for the Selling Shareholders;
and (l) 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
13
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 described in the Prospectus have been duly and validly authorized
and issued, were issued in 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, 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
14
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, 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 and regulations, constitute a
fair summary thereof 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 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
15
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, with respect to
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) such plan is so qualified in form in all material respects with
all presently applicable provisions of Section 401(a) of the Code; (ii) such
plan is 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
(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 (if applicable); the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement (if applicable) 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 indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which such Selling Shareholder
is a
16
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 (if applicable) 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 (if
applicable) 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;
(iv) Immediately prior to the First Delivery Date, such
Selling Shareholder is the sole registered owner of the shares of Stock to be
sold by such Selling Shareholder under this Agreement and has full right, power
and authority to sell, assign, transfer and deliver such shares to be sold by
such Selling Shareholder hereunder; and
(v) Upon the payment and transfer contemplated by the
Underwriting Agreement, the Underwriters will acquire a security entitlement
with respect to the shares of Stock to be sold by such Selling Shareholder and
no action based on an adverse claim (within the meaning of Section 8-105 of the
New York UCC (as defined below)) may be asserted against such Underwriters with
respect to such shares.
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. In rendering the opinion set
forth in paragraph (v) above, such counsel may assume that (i) The Depository
Trust Company ("DTC") is a "securities intermediary" as defined in Section 8-102
of the Uniform Commercial Code as in effect in the State of New York (the "NEW
YORK UCC"), and the State of New York is the "securities intermediary's
jurisdiction" of DTC for purposes of Section 8-110 of the New York UCC, (ii) the
shares of Stock being sold by such Selling Shareholder are registered in the
name of DTC or its nominee, and DTC or another person on behalf of DTC maintains
possession of certificates representing such shares, (iii) DTC indicates by book
entries on its books that security entitlements with respect to such shares have
been credited to the Underwriters' securities accounts and (iv) the Underwriters
are purchasing the shares without notice of any adverse claim (within the
meaning of the New York UCC).
(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
17
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 LETTER(S)"), 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 letter(s).
(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.
18
(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 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
19
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 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.
(b) The Selling Shareholders, severally in proportion to the
number of shares of Stock to be sold by each of them hereunder and not jointly,
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 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
20
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
directors, officers and employees and each such controlling person for any legal
or other expenses reasonably incurred by that Underwriter, its directors,
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 foregoing
shall apply only to written information furnished to the Company by such Selling
Shareholder specifically for inclusion in the documents referred to in clauses
(i) and (ii) of the foregoing indemnity. The foregoing indemnity agreement is in
addition to any liability which the Selling Shareholders may otherwise have to
any Underwriter or any director, 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) and Section 10(e)
shall not exceed the net proceeds received by such Selling Shareholder from the
sale of shares of Stock under this Agreement. Each Underwriter acknowledges that
(i) the name and address of each Selling Shareholder in the Prospectus and (ii)
the number of shares of Stock each selling Shareholder is offering in the
Prospectus and (iii) the information relating to such Selling Shareholder listed
on the table on page 72 of the Prospectus (including the footnotes thereto)
constitute the only information furnished in writing by or on behalf of each of
the Selling Shareholders specifically for inclusion in any Preliminary
Prospectus, the Registration Statement or the Prospectus.
(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 or a Selling Shareholder 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
21
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 directors, 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; provided, further
however, that an indemnified party (other than the Representatives whose right
to employ separate counsel is governed by the preceding clause) shall have the
right to employ counsel to represent such indemnified party and the fees and
expenses of such separate counsel shall be paid by the Company in the event (i)
the Company and such indemnified party shall have mutually agreed to the
retention of such counsel, (ii) the named parties to such proceeding (including
any impleaded parties) include both the Company and such indemnified party and
representation of both by the same counsel would be inappropriate due to actual
or potential differing interest between them, or (iii) the Company shall have
failed to assume the defense and employ counsel reasonably acceptable to such
indemnified party within a reasonable period of time after commencement of the
action. 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 or 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 or
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 or 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 or the Selling Shareholders,
on the one hand, and the total underwriting
22
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 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 and the description of discretionary sales
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
23
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.
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 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 such defaulting 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 such defaulting
Selling Shareholder 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 (212)
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
24
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 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
25
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 (including facsimile 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, the Selling Shareholders and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
VISTACARE, INC.
By: _______________________________
Name:
Title:
THE SELLING SHAREHOLDERS NAMED IN
SCHEDULE 2 HERETO
By: _______________________________
Name:
Title: Attorney-in-Fact
FFC PARTNERS I, L.P.
By: Xxxxxx Xxxxxxx & Company, LLC
as General Partner
By: _______________________________
Name:
Title:
FFC EXECUTIVE PARTNERS I, L.P.
By: Xxxxxx Xxxxxxx & Company, LLC
as General Partner
By: _______________________________
Name:
Title:
27
Accepted:
XXXXXX BROTHERS INC.
XX XXXXX SECURITIES CORPORATION
XXXXXXX XXXXX & COMPANY, L.L.C.
XXXXXXXXX & COMPANY, INC.
For themselves and as
Representatives of the
several Underwriters named in
Schedule 1 hereto
By: XXXXXX BROTHERS INC.
By: _______________________________
Authorized Representative
28
SCHEDULE 1
Number of Firm
Underwriters Shares to be Purchased
------------ ----------------------
Xxxxxx Brothers Inc.....................................................................
XX Xxxxx Securities Corporation.........................................................
Xxxxxxx Xxxxx & Company, L.L.C..........................................................
Xxxxxxxxx & Company, Inc................................................................
29
SCHEDULE 2
Name and Address
of Selling Number of Shares Number of Shares
Shareholder of Firm Stock of Option Stock
---------------- ---------------- ----------------
FFC Partners I, L.P.
c/o Xxxxxx Xxxxxxx & Company, LLC
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 06831...........................................
FFC Executive Partners I, L.P.
c/o Xxxxxx Xxxxxxx & Company, LLC
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 06831...........................................
Banc of America Commercial Finance Corporation
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 85004.............................................
Xxxxx and Xxxxx Xxxxx Family Trust.............................
B&J Associates, L.P. ..........................................
Bessemer Venture Partners III L.P..............................
BVP III Special Situations, L.P................................
Xxxx X. Xxxxxxx................................................
Xxxxxxx X. Xxxxxxx.............................................
Belisarius Corporation.........................................
Xxxxxxxx Xxxxx.................................................
Xxxxx X. Xxxxx.................................................
Xxxxx X. XxXxxxxxx.............................................
Xxxxxx X. Xxxxxxxxxxx..........................................
Hardymon Family Limited Partnership............................
Xxxxxxx Corporation............................................
Xxxxxxx X. Xxxxx...............................................
Xxxxxx X. Xxxxxxxx.............................................
Xxxxxx X.X. Xxxxxxxx...........................................
Xxxx X. Xxxx...................................................
Xxxxxx X. Xxxxx................................................
Xxxxxxx X. Xxxxxxxxxx..........................................
Xxxxxx X. Xxxx.................................................
---------------- ----------------
Total...................................................
================ ================
30
SCHEDULE 3
Name of Shareholders / Optionholders
Xxxxx X. Xxxxx Xxxxxxx Corporation
Xxxxx and Xxxxx Xxxxx Family Trust Xxxxxxx X. Xxxxx
B&J Associates, L.P. Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx Xxxxxx X.X. Xxxxxxxx
Xxxxx X. Xxxxx Xxxx X. Xxxx
Xxxxx X. Fine, M.D. Xxxxxx X. Xxxxx
Xxxxxxx Xxxxx Xxxxxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxx Xxxxxx X. Xxxx
Xxxxx X. Xxxxxxx BVP III Special Situations L.P.
Xxxx X. Xxxxxxxx FFC Partners I, L.P.
Xxxx X. Xxxxxxxx FFC Executive Partners I, L.P.
Xxxxxxx X. XxXxxxx Banc of America
Xxxxxx X. Matricaria Lighthouse Capital Partners
Xxxxxx Xxxxxx Xxx Xxxx
Xxxx Xxxxxxx Xxxxx Xxxxxx
Xxxxxxxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxxx Xxxx Xxxx
Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xxxx Xxxxxxxx Xxxx
Xxx Xxxxxxx Xxx X. Xxxxxxxx
Xxxxxx Xxxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxx Xxxxxxx Xxxxxx
Bessemer Venture Partners III L.P.
Xxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Belisarius Corporation
Xxxxxxxx Xxxxx
Xxxxx X. Xxxxx
Xxxxx X. XxXxxxxxx
Xxxxxx X. Xxxxxxxxxxx
Xxxxxxxx Family Limited Partnership
31
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 90 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 90-day period referred to
above), (iii) each party (donor, donee, transferor or transferee) shall not be
32
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,
Dated: __________________ By: _____________________________
Name:
Title:
33
EXHIBIT B TO UNDERWRITING AGREEMENT
LIST OF JURISDICTIONS WHERE VISTACARE AND
ITS SUBSIDIARIES CONDUCT BUSINESS
Alabama
Arizona
Colorado
Georgia
Indiana
Massachusetts
New Mexico
Nevada
Ohio
Oklahoma
Pennsylvania
South Carolina
Texas
Utah
34
