Exhibit 1.1
Xxxxxx Healthcare, Inc.
3.75% Convertible Notes Due October 1, 2014
Underwriting Agreement
New York, New York
October 4, 2007
To the Representatives
named in Schedule I
hereto of the several
Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
Xxxxxx Healthcare, Inc., a corporation organized under the laws of
Delaware (the "Company"), proposes to sell to the several underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as representatives, the principal amount of its securities identified
in Schedule I hereto (the "Underwritten Securities"). The Company also proposes
to grant to the Underwriters an option to purchase up to an additional principal
amount of securities set forth in Schedule I hereto to cover over-allotments
(the "Option Securities"; the Option Securities, together with the Underwritten
Securities, hereinafter called the "Securities"). The Securities are convertible
into shares of Common Stock, par value $0.001 per share (the "Common Stock"), of
the Company at the conversion price set forth in the Final Prospectus. The
Securities are to be issued under an indenture (the "Indenture") to be dated as
of October 11, 2007, as amended by a supplemental indenture to be dated October
11, 2007, in each case between the Company and U.S. Bank National Association,
as trustee (the "Trustee"). To the extent there are no additional Underwriters
listed on Schedule II other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. Any reference
herein to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Preliminary
Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus, any Preliminary Prospectus or the
Final Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date of the Registration
Statement or the issue date of the Base Prospectus, any Preliminary Prospectus
or the Final Prospectus, as the case may be, deemed to be incorporated therein
by reference. Certain terms used herein are defined in Section 20 hereof.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(the file number of which is set forth in Schedule I hereto) on Form S-3,
including a related Base Prospectus, for registration under the Act of the
offering and sale of the Securities. Such Registration Statement, including
any amendments thereto filed prior to the Execution Time, has become
effective. The Company may have filed with the Commission, as part of an
amendment to the Registration Statement or pursuant to Rule 424(b), one or
more preliminary prospectus supplements relating to the Securities, each of
which has previously been furnished to you. The Company will file with the
Commission a final prospectus supplement relating to the Securities in
accordance with Rule 424(b). As filed, such final prospectus supplement
shall contain all information required by the Act and the rules thereunder,
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Base Prospectus and any
Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. The Registration
Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
(b) On each Effective Date, the Registration Statement did, and when
the Final Prospectus is first filed in accordance with Rule 424(b) and on
the Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
"settlement date"), the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act and the respective rules
thereunder; on each Effective Date and at the Execution Time, the
Registration Statement did not and will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the Indenture did
or will comply in all material respects with the applicable requirements of
the Trust Indenture Act and the rules thereunder; and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Final Prospectus (together with any supplement thereto) will not
include any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to (i)
that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement
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thereto), it being understood and agreed that the only such information
furnished by or on behalf of any Underwriter consists of the information
described as such in Section 8 hereof.
(c) (i) The Disclosure Package, and (ii) each electronic road show
when taken together as a whole with the Disclosure Package, does not
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from the
Disclosure Package based upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only
such information furnished by or on behalf of any Underwriter consists of
the information described as such in Section 8 hereof.
(d) (i) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2)) of the Securities and (ii) as
of the Execution Time (with such date being used as the determination date
for purposes of this clause (ii)), the Company was not and is not an
Ineligible Issuer (as defined in Rule 405), without taking account of any
determination by the Commission pursuant to Rule 405 that it is not
necessary that the Company be considered an Ineligible Issuer.
(e) Each Issuer Free Writing Prospectus and the final term sheet
prepared and filed pursuant to Section 5(b) hereto does not include any
information that conflicts with the information contained in the
Registration Statement, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof that has
not been superseded or modified. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus based
upon and in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use therein,
it being understood and agreed that the only such information furnished by
or on behalf of any Underwriter consists of the information described as
such in Section 8 hereof.
(f) Each of the Company and its Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Disclosure Package and the Final Prospectus, and is duly qualified to
do business as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification.
(g) All the outstanding shares of capital stock of each Significant
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the
Disclosure Package and the Final Prospectus, all outstanding shares of
capital stock of the Significant Subsidiaries are owned by the
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Company either directly or through wholly owned subsidiaries free and clear
of any perfected security interest or any other security interests, claims,
liens or encumbrances.
(h) There is no contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to be filed as
an exhibit thereto, which is not described or filed as required (and the
Preliminary Prospectus contains in all material respects the same
description of the foregoing matters contained in the Final Prospectus).
(i) This Agreement has been duly authorized, executed and delivered by
the Company.
(j) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Disclosure Package and the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940, as
amended.
(k) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and the Trust Indenture Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Disclosure Package and the Final Prospectus.
(l) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation of, or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or any of its Significant Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any of its Significant Subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its Significant
Subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to the Company or any of its Significant Subsidiaries of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or any
of its Significant Subsidiaries or any of its or their properties, except
in the case of (ii) and (iii) above as would not (A) reasonably be expected
to have a material adverse effect on the performance of this Agreement or
the consummation of any of the transactions contemplated hereby or (B)
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings or business of the Company
and its Significant Subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business (a "Material Adverse
Effect).
(m) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
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(n) The consolidated historical financial statements and schedules of
the Company and its consolidated subsidiaries included in the Preliminary
Prospectus, the Prospectus and the Registration Statement present fairly,
in all material respects, the financial condition, results of operations
and cash flows of the Company as of the dates and for the periods
indicated, comply as to form with the applicable accounting requirements of
the Act and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected financial data
set forth under the caption "Selected Financial Data" in the Preliminary
Prospectus, the Prospectus and Registration Statement fairly present, in
all material respects, on the basis stated in the Preliminary Prospectus,
the Prospectus and the Registration Statement, the information included
therein.
(o) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its Significant Subsidiaries or its or their property is
pending or, to the best knowledge of the Company, threatened that could
have a Material Adverse Effect, except as set forth in or contemplated in
the Disclosure Package and the Final Prospectus (exclusive of any
supplement thereto).
(p) Each of the Company and each of its subsidiaries owns or leases
all such properties as are necessary to the conduct of its operations as
presently conducted.
(q) Neither the Company nor any Significant Subsidiary is in violation
or default of (i) any provision of its charter or by-laws, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or
such Significant Subsidiary or any of its properties, as applicable, except
with respect to (ii) and (iii) above where any violation or default would
not result in a Material Adverse Effect.
(r) Ernst & Young LLP, who have certified certain financial statements
of the Company and its consolidated subsidiaries and delivered their report
with respect to the audited consolidated financial statements and schedules
included in the Disclosure Package and the Final Prospectus, are
independent public accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(s) The Company has filed all tax returns that are required to be
filed or has requested extensions thereof (except in any case in which the
failure so to file would not have a Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the Final Prospectus
(exclusive of any supplement thereto), and has paid all taxes required to
be paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for any
such assessment,
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fine or penalty that is currently being contested in good faith or as would
not have a Material Adverse Effect, except as set forth in or contemplated
in the Disclosure Package and the Final Prospectus (exclusive of any
supplement thereto).
(t) No material labor dispute with the employees of the Company or any
of its Significant Subsidiaries exists or, to the Company's knowledge, is
threatened, except such dispute as would not, individually or in the
aggregate, result in a Material Adverse Effect.
(u) The Company and each of its Significant Subsidiaries are insured
by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which they are engaged; all policies of insurance and fidelity or surety
bonds, if any, insuring the Company or any of its Significant Subsidiaries
or their respective businesses, assets, employees, officers and directors
are in full force and effect; the Company and its Significant Subsidiaries
are in compliance with the terms of such policies and instruments in all
material respects; and there are no claims by the Company or any of its
Significant Subsidiaries under any such policy or instrument as to which
any insurance company is denying liability or defending under a reservation
of rights clause; neither the Company nor any such Significant Subsidiary
has been refused any insurance coverage sought or applied for; and neither
the Company nor any such Significant Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would
not have a Material Adverse Effect, except as set forth in or contemplated
in the Disclosure Package and the Final Prospectus (exclusive of any
supplement thereto).
(v) No Significant Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Significant Subsidiary's capital
stock, from repaying to the Company any loans or advances to such
Significant Subsidiary from the Company or from transferring any of such
Significant Subsidiary's property or assets to the Company or any other
Significant Subsidiary of the Company, except as described in or
contemplated by the Disclosure Package and the Final Prospectus (exclusive
of any supplement thereto).
(w) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company
and its subsidiaries' internal controls over
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financial reporting are effective and the Company and its subsidiaries are
not aware of any material weakness in their internal controls over
financial reporting.
(x) The Company and its subsidiaries maintain "disclosure controls and
procedures" (as such term is defined in Rule 13a-15(e) under the Exchange
Act); such disclosure controls and procedures are effective to perform the
functions for which they were established.
(y) The Company has not taken, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(z) None of the following events has occurred or exists: (i) a failure
to fulfill the obligations, if any, under the minimum funding standards of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the regulations and published
interpretations thereunder with respect to a Plan, determined without
regard to any waiver of such obligations or extension of any amortization
period; (ii) an audit or investigation by the Internal Revenue Service, the
U.S. Department of Labor, the Pension Benefit Guaranty Corporation or any
other federal or state governmental agency or any foreign regulatory agency
with respect to the employment or compensation of employees by any of the
Company or any of its Significant Subsidiaries that could have a Material
Adverse Effect; or (iii) any breach of any contractual obligation, or any
violation of law or applicable qualification standards, with respect to the
employment or compensation of employees by the Company or any of its
Significant Subsidiaries that could have a Material Adverse Effect. None of
the following events has occurred or is reasonably likely to occur: (i) a
material increase in the aggregate amount of contributions required to be
made to all Plans in the current fiscal year of the Company and its
Significant Subsidiaries compared to the amount of such contributions made
in the most recently completed fiscal year of the Company and its
Significant Subsidiaries; (ii) a material increase in the "accumulated
post-retirement benefit obligations" (within the meaning of Statement of
Financial Accounting Standards 106) of the Company and its Significant
Subsidiaries compared to the amount of such obligations in the most
recently completed fiscal year of the Company and its Significant
Subsidiaries; (iii) any event or condition giving rise to a liability under
Title IV of ERISA that could have a Material Adverse Effect; or (iv) the
filing of a claim by one or more employees or former employees of the
Company or any of its Significant Subsidiaries related to their employment
that could have a Material Adverse Effect. For purposes of this paragraph,
the term "Plan" means a plan (within the meaning of Section 3(3) of ERISA)
subject to Title IV of ERISA with respect to which the Company or any of
its Significant Subsidiaries may have any liability.
(aa) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations promulgated in
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connection therewith (the "Xxxxxxxx-Xxxxx Act"), including Section 402
relating to loans and Sections 302 and 906 relating to certifications.
(bb) The operations of the Company and its Significant Subsidiaries
are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements and the money laundering
statutes and the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced
by any governmental agency (collectively, the "Money Laundering Laws") and
no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of
its Significant Subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.
(cc) Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of its subsidiaries is currently subject to
any sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department ("OFAC"); and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(dd) The Subsidiaries listed on Annex A attached hereto are the only
Significant Subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X.
(ee) The Company and its Significant Subsidiaries own, possess,
license or have other rights to use, on reasonable terms, sufficient
patents, patent applications, trade and service marks, trade and service
xxxx registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of
the Company's business as now conducted or as proposed in the Prospectus to
be conducted. Except as set forth in the Preliminary Prospectus and the
Prospectus (a) there are no rights of third parties to any such
Intellectual Property; (b) there is no material infringement by third
parties of any such Intellectual Property; (c) there is no pending or, to
the knowledge of the Company, threatened action, suit, proceeding or claim
by others challenging the Company's rights in or to any such Intellectual
Property; (d) there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such Intellectual
Property; and (e) there is no pending or threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other fact
which would form a reasonable basis for any such claim.
(ff) Except as disclosed in the Registration Statement, the Disclosure
Package and the Final Prospectus, the Company (i) does not have any
material lending or other relationship with any bank or lending affiliate
of the Underwriters and (ii) does not intend
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to use any of the proceeds from the sale of the Securities hereunder to
repay any outstanding debt owed to any affiliate of the Underwriters.
(gg) The Company and each of its Significant Subsidiaries possess such
valid and current certificates, authorizations or permits issued by the
appropriate states, federal or foreign agencies of bodies necessary to
conduct their respective businesses, except where such failure would not
have a Material Adverse Effect, and none of the Company nor any Significant
Subsidiary has received any notice of proceedings relating to the
revocation or modification of, or noncompliance with, any such certificate,
authorization or permit which, if the subject of an unfavorable decisions,
ruling or finding, would result in a Material Adverse Effect.
(hh) To the extent required in connection with their respective
businesses, each of the Company and its Significant Subsidiaries has the
requisite provider number or other authorization to xxxx the Medicaid
program in the state or states in which such entity operates unless failure
to maintain such provider number or other authorization would not,
individually or in the aggregate, result in a Material Adverse Effect;
neither the Company nor any of its Significant Subsidiaries is subject to
any pending, or, to the Company's knowledge, threatened or contemplated
action which could reasonably be expected to result either in revocation of
any provider number or authorization or in the Company's or any Significant
Subsidiary's exclusion from any state Medicaid programs; the Company's and
each Significant Subsidiary's business practices have been structured in a
manner reasonably designed to comply with the federal or state laws
governing Medicaid programs, including, without limitation, Sections
1320a-7a and 1320a-7b of Title 42 of the United States Code, and the
Company reasonably believes that it is in compliance with such laws in all
material respects, except as set forth in or contemplated in the Disclosure
Package and the Final Prospectus (exclusive of any supplement thereto); the
Company and each Significant Subsidiary have taken reasonable actions
designed to ensure that they do not: (i) violate the False Claims Act, 31
U.S.C. Sections 3729-3733, or (ii) allow any individual with an ownership
or control interest (as defined in 42 U.S.C. Section 1320a-3(a)(3)) in the
Company or any subsidiary or any officer, director or managing employee (as
defined in 42 U.S.C. Section 1320a-5(b)) of the Company or any subsidiary
who would be a person excluded from participation in any federal health
care program (as defined in 42 U.S.C. Section 1320a-7b(f)) as described in
42 U.S.C. Section 1320a-7(b)(8) to participate in any such federal health
care program maintained by the Company or any Significant Subsidiary; and
the Company and its Significant Subsidiaries have structured their
respective business practices in a manner reasonably designed to comply
with the federal and state laws regarding physician ownership of (or
financial relationship with), and the referral to entities providing,
healthcare related goods or services, and laws requiring disclosure of
financial interests held by physicians in entities to which they may refer
patients for the provisions of health care related goods and services, and
the Company reasonably believes that it is in material compliance with such
laws.
(ii) None of the Company, its subsidiaries nor any of their respective
officers, directors or stockholders, or, to the knowledge of the Company,
any employee or other agent of the Company or any of its subsidiaries, has
engaged on behalf of the Company
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or such subsidiary in any of the following: (i) knowingly and willfully
making or causing to be made a false statement or representation of a
material fact in any applications for any benefit or payment under the
Medicare or Medicaid or similar state program or from any third party
(where applicable federal or state law prohibits such payments to third
parties); (ii) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment under the Medicare or Medicaid or similar
state program or from any third party (where applicable federal or state
law prohibits such payments to third parties); (iii) knowingly and
willfully 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 or similar state program or from any
third party (where applicable federal or state law prohibits such payments
to third parties) on its own behalf or on behalf of another, with intent to
secure such benefit or payment fraudulently; (iv) knowingly and willfully
offering, paying, soliciting or receiving any remuneration (including any
kickback, bribe or rebate), directly or indirectly, overtly or covertly, in
cash or in kind (A) 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, Medicaid,
similar state program or plan or any third party (where applicable federal
or state law prohibits such payments to third parties), or (B) 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, Medicaid,
similar state program or plan or any third party (where applicable federal
or state law prohibits such payments to third parties).
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase
price set forth in Schedule I hereto the principal amount of the Securities
set forth opposite such Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not
jointly, up to the principal amount of Option Securities set forth in
Schedule I hereto at the same purchase price set forth in Schedule I hereto
for the Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time
on or before the 13th day after the date of the Prospectus upon written or
telegraphic notice by the Representatives to the Company setting forth the
aggregate principal amount of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The
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aggregate principal amount of Option Securities to be purchased by each
Underwriter shall be the same percentage of the total aggregate principal
amount of the Option Securities to be purchased by the several Underwriters
as such Underwriter is purchasing of the Underwritten Securities, subject
to such adjustments as you in your absolute discretion shall make to ensure
that the Option Securities are not issued in minimum denominations of less
than $1,000 or whole multiples thereof.
(c) Each Underwriter agrees that, to the knowledge of such
Underwriter, no individual purchaser shall acquire Securities convertible
into more than 9.9% of the total outstanding Common Stock.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day immediately
preceding the Closing Date) shall be made on the date and at the time specified
in Schedule I hereto or at such time on such later date not more than three
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by wire transfer payable in same-day funds to an
account specified by the Company. Delivery of the Underwritten Securities and
the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day immediately preceding the Closing Date, the Company will
deliver the Option Securities (at the expense of the Company) to the
Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. If settlement for the Option Securities occurs after the Closing
Date, the Company will deliver to the Representatives on the settlement date for
the Option Securities, and the obligation of the Underwriters to purchase the
Option Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
11
(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Prospectus)
to the Base Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and will
not file any such proposed amendment or supplement to which you reasonably
object. The Company will cause the Final Prospectus, properly completed,
and any supplement thereto to be filed in a form approved by the
Representatives with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company will
promptly advise the Representatives (i) when the Final Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (ii) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (iii) of any request
by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement
to the Final Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any notice objecting to its use or the
institution or threatening of any proceeding for that purpose and (v) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its reasonable efforts to prevent the
issuance of any such stop order or the occurrence of any such suspension or
objection to the use of the Registration Statement and, upon such issuance,
occurrence or notice of objection, to obtain as soon as possible the
withdrawal of such stop order or relief from such occurrence or objection,
including, if necessary, by filing an amendment to the Registration
Statement or a new registration statement and using its reasonable efforts
to have such amendment or new registration statement declared effective as
soon as practicable.
(b) To prepare a final term sheet, containing solely a description of
final terms of the Securities and the offering thereof, in the form
approved by you and attached as Schedule IV hereto and to file such term
sheet pursuant to Rule 433(d) within the time required by such Rule.
(c) If, at any time prior to the filing of the Final Prospectus
pursuant to Rule 424(b), any event occurs as a result of which the
Disclosure Package would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made or the
circumstances then prevailing, not misleading, the Company will (i) notify
promptly the Representatives so that any use of the Disclosure Package may
cease until it is amended or supplemented; (ii) amend or supplement the
Disclosure Package to correct such statement or omission; and (iii) supply
any amendment or supplement to you in such quantities as you may reasonably
request.
12
(d) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172), any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, at such time not misleading, or
if it shall be necessary to amend the Registration Statement, file a new
registration statement or supplement the Final Prospectus to comply with
the Act or the Exchange Act or the respective rules thereunder, including
in connection with use or delivery of the Final Prospectus, the Company
promptly will (i) notify the Representatives of any such event, (ii)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement or new
registration statement which will correct such statement or omission or
effect such compliance, (iii) use its reasonable efforts to have any
amendment to the Registration Statement or new registration statement
declared effective as soon as practicable in order to avoid any disruption
in use of the Final Prospectus and (iv) supply any supplemented Final
Prospectus to you in such quantities as you may reasonably request.
(e) As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement or
statements of the Company and its Significant Subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158.
(f) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act (including in circumstances where such requirement may be satisfied
pursuant to Rule 172), as many copies of each Preliminary Prospectus, the
Final Prospectus and each Issuer Free Writing Prospectus and any supplement
thereto as the Representatives may reasonably request. The Company will pay
the expenses of printing or other production of all documents relating to
the offering.
(g) The Company will arrange, with the assistance of the
Representatives and Underwriters' counsel, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain such
qualifications in effect so long as required for the distribution of the
Securities; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified
or to take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the Securities, in
any jurisdiction where it is not now so subject.
(h) The Company agrees that, unless it has or shall have obtained the
prior written consent of the Representatives, and each Underwriter,
severally and not jointly, agrees with the Company that, unless it has or
shall have obtained, as the case may be, the prior written consent of the
Company, it has not made and will not make any offer
13
relating to the Securities that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a "free writing prospectus"
(as defined in Rule 405) required to be filed by the Company with the
Commission or retained by the Company under Rule 433, other than the free
writing prospectus containing the information contained in the final term
sheet prepared and filed pursuant to Section 5(b) hereto; provided that the
prior written consent of the parties hereto shall be deemed to have been
given in respect of the Free Writing Prospectuses included in Schedule III
hereto. Any such free writing prospectus consented to by the
Representatives or the Company is hereinafter referred to as a "Permitted
Free Writing Prospectus." The Company agrees that (x) it has treated and
will treat, as the case may be, each Permitted Free Writing Prospectus as
an Issuer Free Writing Prospectus and (y) it has complied and will comply,
as the case may be, with the requirements of Rules 164 and 433 applicable
to any Permitted Free Writing Prospectus, including in respect of timely
filing with the Commission, legending and record keeping.
(i) The Company will not, without the prior written consent of
Citigroup Global Markets Inc. and UBS Securities LLC, offer, sell, contract
to sell, pledge, or otherwise dispose of (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company), directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any shares of Common Stock or
any securities convertible into, or exercisable, or exchangeable for,
shares of Common Stock; or publicly announce an intention to effect any
such transaction, until the Business Day set forth on Schedule I hereto,
provided, however, that the Company may issue and sell Common Stock
pursuant to any employee stock option plan, stock ownership plan or
dividend reinvestment plan of the Company in effect at the Execution Time
and the Company may issue Common Stock issuable upon the conversion of
securities or the exercise of warrants outstanding at the Execution Time.
(j) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(k) The Company will reserve and keep available at all times, free of
preemptive rights, the full number of shares of Common Stock issuable upon
conversion of the Securities.
(l) Between the date hereof and the Closing Date, the Company will not
do or authorize any act or thing that would result in an adjustment of the
conversion price.
(m) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation, printing or reproduction and filing
with the
14
Commission of the Registration Statement (including financial statements
and exhibits thereto), each Preliminary Prospectus, the Final Prospectus
and each Issuer Free Writing Prospectus, and each amendment or supplement
to any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus, the
Final Prospectus and each Issuer Free Writing Prospectus, and all
amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of
the Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (iv) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (v) the listing of the Common Stock issuable upon
conversion of the Securities on the New York Stock Exchange; (vi) any
registration or qualification of the Securities for offer and sale under
the securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of counsel for the Underwriters
relating to such registration and qualification up to a maximum of
$10,000); (vii) any filings required to be made with the NASD, Inc.
(including filing fees and the reasonable fees and expenses of counsel for
the Underwriters relating to such filings); (viii) the transportation and
other expenses incurred by or on behalf of Company representatives in
connection with presentations to prospective purchasers of the Securities;
(ix) the fees and expenses of the Company's accountants and the fees and
expenses of counsel (including local and special counsel) for the Company;
and (x) all other costs and expenses incident to the performance by the
Company of its obligations hereunder.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been filed
in the manner and within the time period required by Rule 424(b); the final
term sheet contemplated by Section 5(b) hereto and any other material
required to be filed by the Company pursuant to Rule 433(d) under the Act
shall have been filed with the Commission within the applicable time
periods prescribed for such filings by Rule 433; and no stop order
suspending the effectiveness of the Registration Statement or any notice
objecting to its use shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Holme Xxxxxxx & Xxxx
LLP, counsel for the Company, to have furnished to the Representatives
their opinion,
15
dated the Closing Date and addressed to the Representatives, substantially
in the form of Exhibit B-1.
(c) The Company shall have requested and caused each of Xxxxx Xxxxx,
with respect to Xxxxxx Healthcare of Michigan, Inc., Modrall, Sperling,
Xxxxx, Xxxxxx & Xxxx, P.A., with respect to Xxxxxx Healthcare of New
Mexico, Inc., Xxxxxxxx Xxxx LLP, with respect to Xxxxxx Healthcare of Ohio,
Inc., Xxxxxxx Xxxxx LLP, with respect to Xxxxxx Healthcare of Texas, Inc.,
Xxxxxx & XxXxxxxx, with respect to Xxxxxx Healthcare of Utah, Inc. and
Xxxxxx Xxxxxx Xxxxxxxx, with respect to Xxxxxx Healthcare of Washington,
Inc., to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, substantially in the
form of Exhibit B-2, subject to such firms' respective assumptions,
qualifications and limitations.
(d) The Company shall have requested and caused Xxxx Xxxxxxx, general
counsel for the Company, to have furnished to the Representatives his
opinion, dated the Closing Date and addressed to the Representatives,
substantially in the form of Exhibit B-3.
(e) The Company shall have requested and caused Xxxxxx, Xxxxxxxxxx &
Sutcliffe LLP to have furnished to the Representatives their opinion, dated
the Closing Date and addressed to the Representatives, substantially in the
form of Exhibit B-2.
(f) The Representatives shall have received from Xxxxx Xxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration
Statement, the Disclosure Package, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Disclosure Package,
the Final Prospectus and any supplements or amendments thereto, as well as
each electronic road show used in connection with the offering of the
Securities, and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use has been
issued and no proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Disclosure Package and the Final Prospectus (exclusive
of any supplement
16
thereto), there has been no Material Adverse Effect, except as set
forth in or contemplated in the Disclosure Package and the Final
Prospectus (exclusive of any supplement thereto).
(h) The Company shall have requested and caused Ernst & Young LLP to
have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters (which may refer to letters previously delivered to
one or more of the Representatives), dated respectively as of the Execution
Time and as of the Closing Date, in form and substance reasonably
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
respective applicable rules and regulations adopted by the Commission
thereunder and that they have performed a review of the unaudited interim
financial information of the Company for the three-month period ended March
31, 2007 and the three and six-month periods ended June 30, 2007 and as at
June 30, 2007 in accordance with Statement on Auditing Standards No. 100,
substantially in the form of Exhibit C.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (h) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), earnings,
business or properties of the Company and its Significant Subsidiaries
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Disclosure Package and the Final Prospectus (exclusive of any amendment or
supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof), the Disclosure
Package and the Final Prospectus (exclusive of any amendment or supplement
thereto).
(j) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(k) The shares of Common Stock issuable upon conversion of the
Securities shall have been listed and admitted and authorized for trading
on the New York Stock Exchange, and satisfactory evidence of such actions
shall have been provided to the Representatives.
(l) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
17
(m) Prior to the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A hereto
from each executive officer and director of the Company, each 5%
shareholder and each shareholder who is member of the Molina family, or
which holds shares of Common Stock on behalf of any member of the Molina
family, addressed to the Representatives.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx N.Y., on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Citigroup Global Markets Inc. and UBS Securities LLC on demand
for all expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Securities; provided, however, if this Agreement is terminated due
to a failure of the condition set forth in Section 6(e), the Company shall not
be obligated to reimburse any expenses of the Representatives or the
Underwriters.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Base
Prospectus, any Preliminary Prospectus or any other preliminary prospectus
supplement relating to the Securities, the Final Prospectus, or any Issuer
Free Writing Prospectus or the information contained in the final term
sheet required to be prepared and filed pursuant to Section 5(b) hereto, or
in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to
18
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but
only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Company
acknowledges that the statements set forth (i) in the last paragraph of the
cover page regarding delivery of the Securities and, under the heading
"Underwriting" or "Plan of Distribution", (ii) the list of Underwriters and
their respective participation in the sale of the Securities, (iii) the
sentences related to concessions and reallowances and (iv) the paragraph
related to stabilization, syndicate covering transactions and penalty bids
in any Preliminary Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus, the Final
Prospectus or any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right
to employ separate counsel (including local counsel), and the indemnifying
party shall bear the
19
reasonable fees, costs and expenses of such separate counsel if (i) the use
of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different from
or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties,
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.
(d) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending the same) (collectively
"Losses") to which the Company and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and by the Underwriters on
the other from the offering of the Securities; provided, however, that in
no case shall any Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Underwriters severally
shall contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and of the Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Final Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company on the one hand or the
Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro
rata allocation or
20
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an Underwriter within
the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of
the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of
this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule II hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate principal amount of Securities set forth in Schedule II hereto,
the remaining Underwriters shall have the right to purchase all, but shall not
be under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter or the
Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such
delivery and payment (i) trading in the Company's Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as
21
contemplated by any Preliminary Prospectus or the Final Prospectus (exclusive of
any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel, and UBS Securities LLC (fax no.: (000) 000-0000), and confirmed
to the General Counsel at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department; or, if sent to the Company, will be mailed, delivered or
telefaxed to Xxxxxx Healthcare, Inc. General Counsel (fax no.: (000) 000-0000)
and confirmed to the General Counsel, Xxxxxx Healthcare, Inc., at 0000 Xxxx Xxxx
Xxxx., Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000, attention of the Legal
Department.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. No fiduciary duty. The Company hereby acknowledges that (a) the
purchase and sale of the Securities pursuant to this Agreement is an
arm's-length commercial transaction between the Company, on the one hand, and
the Underwriters and any affiliate through which it may be acting, on the other,
(b) the Underwriters are acting as principal and not as an agent or fiduciary of
the Company and (c) the Company's engagement of the Underwriters in connection
with the offering and the process leading up to the offering is as independent
contractors and not in any other capacity. Furthermore, the Company agrees that
it is solely responsible for making its own judgments in connection with the
offering (irrespective of whether any of the Underwriters has advised or is
currently advising the Company on related or other matters). The Company agrees
that it will not claim that the Underwriters have rendered advisory services of
any nature or respect, or owe an agency, fiduciary or similar duty to the
Company, in connection with such transaction or the process leading thereto.
15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the
Underwriters, or any of them, with respect to the subject matter hereof.
22
16. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
17. Waiver of Jury Trial. The Company hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
18. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
20. Definitions. The terms that follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Base Prospectus" shall mean the base prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Execution Time.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Disclosure Package" shall mean (i) the Base Prospectus, (ii) the
Preliminary Prospectus used most recently prior to the Execution Time,
(iii) the Issuer Free Writing Prospectuses, if any, identified in Schedule
III hereto, (iv) the final term sheet prepared and filed pursuant to
Section 5(b) hereto, if any, and (v) any other Free Writing Prospectus that
the parties hereto shall hereafter expressly agree in writing to treat as
part of the Disclosure Package.
"Effective Date" shall mean each date and time that the Registration
Statement and any post-effective amendment or amendments thereto and any
Rule 462(b) Registration Statement became or becomes effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
23
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Base Prospectus.
"Free Writing Prospectus" shall mean a free writing prospectus, as
defined in Rule 405.
"Issuer Free Writing Prospectus" shall mean an issuer free writing
prospectus, as defined in Rule 433.
"Preliminary Prospectus" shall mean any preliminary prospectus
supplement to the Base Prospectus referred to in paragraph 1(a) above which
is used prior to the filing of the Final Prospectus, together with the Base
Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus supplement relating to the Securities that is
filed with the Commission pursuant to Rule 424(b) and deemed part of such
registration statement pursuant to Rule 430B, as amended on each Effective
Date and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be.
"Rule 158", "Rule 163", "Rule 164", "Rule 172", "Rule 405", "Rule
415", "Rule 424", "Rule 430B", and "Rule 433" and "Rule 462" refer to such
rules under the Act.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
"Significant Subsidiary" means any Subsidiary of the Company which had
(a) revenues (directly and together with its Subsidiaries, but excluding
intercompany revenues) for the most recent fiscal year of the Company that
were at least five percent (5%) of the Company's consolidated revenues for
such fiscal year or (b) total assets (directly and together with its
Subsidiaries) as of the last day of the most recent fiscal year of the
Company that were at least five (5%) of the Company's consolidated total
assets as of such date.
"Subsidiary" of an entity means a corporation, partnership, joint
venture, limited liability company or other business entity which is
organized under the laws of a political subdivision of the United States of
which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled directly, or indirectly through
one or more intermediaries, or both, by such entity. Unless otherwise
specified, all references herein to a
24
"Subsidiary," the "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Company.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
Xxxxxx Healthcare, Inc.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
Citigroup Global Markets Inc.
UBS Securities LLC
By: Citigroup Global Markets Inc.
By: /s/ Xxxxxxx Xxxxxxxx Jr.
---------------------------------
Name: Xxxxxxx Xxxxxxxx Jr.
-------------------------------
Title: Managing Director
------------------------------
By: UBS Securities LLC
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxx
-------------------------------
Title: Executive Director
------------------------------
By: /s/ M. Xxxxxx XxXxx
---------------------------------
Name: M. Xxxxxx XxXxx
-------------------------------
Title: Managing Director
------------------------------
For themselves and the other several Underwriters named in Schedule II to the
foregoing Agreement.
26
ANNEX A
Significant Subsidiaries of Xxxxxx Healthcare, Inc.
Xxxxxx Healthcare of California
Xxxxxx Healthcare of California Partner Plan, Inc.
Xxxxxx Healthcare of Michigan, Inc.
Xxxxxx Healthcare of New Mexico, Inc.
Xxxxxx Healthcare of Ohio, Inc.
Xxxxxx Healthcare of Texas, Inc.
Xxxxxx Healthcare of Utah, Inc.
Xxxxxx Healthcare of Washington, Inc.
SCHEDULE I
Underwriting Agreement dated October 4, 2007.
Registration Statement No. 333-123783
Representatives: Citigroup Global Markets Inc. and UBS Securities LLC.
Title, Purchase Price and Description of Securities:
Title: 3.75% Convertible Senior Notes due 2014
Principal amount of Underwritten Securities: $175,000,000
Purchase price (include accrued interest or amortization, if any):
$169,750,000
Sinking fund provisions: None
Redemption provisions: None
Other provisions: None
Principal Amount of Option Securities: $25,000,000
Other provisions: None
Closing Date, Time and Location: October 11, 2007 at 10:00 a.m. at Xxxxx Xxxx &
Xxxxxxxx, New York, N.Y.
Type of Offering: Non-Delayed
Date referred to in Section 5(i) after which the Company may offer or sell
securities issued by the Company without the consent of Citigroup Global Markets
Inc. and UBS Securities LLC: January 3, 2008
Modification of items to be covered by the letter from Ernst & Young LLP
delivered pursuant to Section 6(h) at the Execution Time: None
SCHEDULE II
PRINCIPAL AMOUNT OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------------
Citigroup Global Markets Inc. ....... $ 78,750,000
UBS Securities LLC .................. $ 78,750,000
Bear, Xxxxxxx & Co. Inc. ............ $ 17,500,000
---------------
Total ............................ $ 175,000,000
===============
SCHEDULE III
Schedule of Free Writing Prospectuses included in the Disclosure Package
I. Final Term Sheet dated October 4, 2007
SCHEDULE IV
Pricing Term Sheet dated October 4, 2007 Filed pursuant to Rule433
Registration File No. 333-123783
Supplementing the Preliminary
Prospectus Supplement dated
October 3, 2007 and Prospectus
dated November 23, 2005
$175,000,000
3.75% CONVERTIBLE SENIOR NOTES
XXXXXX HEALTHCARE, INC.
In connection with the pricing of our 3.75% Convertible Senior Notes, we
increased the aggregate principal amount of the Notes being offered from
$150,000,000 to $175,000,000.
FINAL PRICING TERMS
THE ISSUER Xxxxxx Healthcare, Inc. (NYSE: MOH).
SECURITIES OFFERED 3.75% Convertible Senior Notes due 2014.
AGGREGATE PRINCIPAL
AMOUNT OFFERED $175,000,000.
OVER-ALLOTMENT OPTION $25,000,000.
MATURITY DATE October 1, 2014.
INTEREST 3.75% per annum, accruing from the settlement date.
INTEREST PAYMENT DATES Each October 1 and April 1, beginning April 1, 2008.
RECORD DATES Each September 15 and March 15 beginning on March 15, 2008.
PRICE TO PUBLIC 100%.
PROCEEDS TO THE ISSUER 97.00%.
NYSE CLOSING PRICE OF THE
ISSUER'S COMMON STOCK ON
OCTOBER 4, 2007 $34.51 per share.
CONVERSION PREMIUM 36% above reference price.
CONVERSION PRICE $46.93 (approximately) per share of common stock, subject to
adjustment.
FREE CONVERTIBILITY PERIOD At the option of the holder, holders may convert their notes,
in multiples of $1,000 in principal amount, at any time on or
after July 1, 2014 through the scheduled trading day
immediately preceding the maturity date.
CONVERSION RATE 21.3067 shares of common stock per $1,000 principal amount
of notes, subject to adjustment.
TRADE DATE October 5, 2007.
SETTLEMENT DATE October 11, 2007.
CUSIP 60855R AA8
JOINT BOOKRUNNING MANAGERS Citigroup Global Markets Inc. and UBS Securities LLC
CO-MANAGER Bear, Xxxxxxx & Co. Inc.
USE OF PROCEEDS: The issuer intends to use the net proceeds of the offering to
repay amounts outstanding under its revolving credit
facility, fund its acquisition of Mercy CarePlus in
placeStateMissouri, continue to pursue its acquisition and
expansion strategy, and for general corporate purposes
including working capital.
ADJUSTMENT TO CONVERSION
RATE UPON FUNDAMENTAL CHANGE The number of additional shares to be added to the conversion
rate will be determined by reference to the table below and
is based on the conversion date and the "applicable price" in
connection with such transaction. The "applicable price" in
connection with a make-whole change of control means:
o If the consideration (excluding cash payment for fractional
shares or pursuant to statutory appraisal rights) paid to
holders of the issuer's common stock in connection with such
transaction consists exclusively of cash, the amount of such
cash per share of the issuer's common stock; and
o In all other cases, the average of the closing sale prices
per share of the issuer's common stock for the five
consecutive trading days immediately preceding the related
conversion date.
The applicable prices set forth in the first row of the table
below (i.e., the column headers), will be adjusted as of any
date on which the conversion rate of the Notes is adjusted.
The adjusted applicable prices will equal the applicable
prices in effect immediately prior to such adjustment
multiplied by a fraction, the numerator of which is the
conversion rate in effect immediately prior to the adjustment
giving rise to the applicable price adjustment and the
denominator of which is the conversion rate as so adjusted.
The increase of the additional shares to the conversion rate
will be subject to adjustment in the same manner as the
conversion rate.
* The deal was upsized from an original size of $150,000,000 with an
over-allotment option of $22,500,000.
APPLICABLE PRICE
CONVERSION DATE $34.51 $38.00 $41.50 $45.00 $48.50 $52.00 $55.50 $60.00 $70.00 $80.00 $100.00 $120.00
------ ------ ------ ------ ------ ------- ------ ------ ------ ------ ------ ------
OCTOBER 5, 2007 7.6704 6.8816 5.9458 5.2060 4.6113 4.1259 3.7243 3.3017 2.6201 2.1594 1.5796 1.2285
OCTOBER 1, 2008 7.6704 6.6085 5.6459 4.8930 4.2944 3.8114 3.4162 3.0054 2.3559 1.9276 1.4017 1.0896
OCTOBER 1, 2009 7.6704 6.3145 5.3140 4.5413 3.9354 3.4533 3.0645 2.6669 2.0548 1.6645 1.2013 0.9335
OCTOBER 1, 2010 7.6704 5.9936 4.9394 4.1377 3.5197 3.0371 2.6555 2.2738 1.7081 1.3646 0.9759 0.7590
OCTOBER 1, 2011 7.6704 5.6428 4.5090 3.6631 3.0259 2.5411 2.1683 1.8078 1.3038 1.0205 0.7228 0.5640
OCTOBER 1, 2012 7.6704 5.2646 4.0048 3.0879 2.4199 1.9320 1.5739 1.2470 0.8353 0.6348 0.4486 0.3536
OCTOBER 1, 2013 7.6704 5.0091 3.3773 2.3207 1.5955 1.1084 0.7869 0.5322 0.2887 0.2103 0.1537 0.1233
OCTOBER 1, 2014 7.6704 5.0091 2.7897 0.9155 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000
The exact applicable price and conversion date may not be set forth in the table
above, in which case:
1. if the actual applicable price is between two applicable price amounts
in the table or the conversion date is between two dates in the table,
the increase in the conversion rate will be determined by
straight-line interpolation between the numbers set forth for the
higher and lower applicable price amounts, and/or the two dates, based
on a 365- or 366-day year, as applicable;
2. if the actual applicable price is in excess of $120.00 per share
(subject to adjustment), the issuer will not increase the conversion
rate applicable to the converted Note; and
3. if the actual applicable price is less than $34.51 per share (the last
bid price of the issuer's common stock on the date of the prospectus
supplement) (subject to adjustment), the issuer will not increase the
conversion rate applicable to the converted Note.
Notwithstanding the foregoing, in no event will the issuer increase the
conversion rate as described above to the extent the increase will cause the
conversion rate to exceed 28.9771 per $1,000 principal amount of Notes, subject
to adjustment in the same manner as the conversion rate as set forth under "--
Conversion Rate Adjustments" in the prospectus supplement for the offering.
If any information contained in this term sheet is inconsistent with information
contained in the prospectus or preliminary prospectus supplement relating to the
Notes, the terms of this term sheet shall govern.
THE ISSUER HAS FILED A REGISTRATION STATEMENT (INCLUDING A PROSPECTUS, WITH THE
SEC FOR THE OFFERING TO WHICH THIS COMMUNICATION RELATES. BEFORE YOU INVEST, YOU
SHOULD READ THE PROSPECTUS IN THAT REGISTRATION STATEMENT AND OTHER DOCUMENTS
THE ISSUER HAS FILED WITH THE SEC FOR MORE COMPLETE INFORMATION ABOUT THE ISSUER
AND THIS OFFERING. YOU MAY GET THESE DOCUMENTS FOR FREE BY VISITING XXXXX ON THE
SEC WEB SITE AT XXX.XXX.XXX. ALTERNATIVELY, COPIES MAY BE OBTAINED FROM CITI,
BROOKLYN ARMY TERMINAL, ADDRESSSTREET140 00XX XXXXXX, 0XX XXXXX,
XXXXXXXXXXXXXXXXX, XXXXXXX POSTALCODE11220, (000) 000-0000.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO
THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES
WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA
BLOOMBERG OR ANOTHER EMAIL SYSTEM.
EXHIBIT A
Form of Lock-Up Agreement
[LETTERHEAD OF EXECUTIVE OFFICER, DIRECTOR, XXXXXX FAMILY MEMBER OR
OTHER MAJOR STOCKHOLDER OF XXXXXX HEALTHCARE, INC.]
Xxxxxx Healthcare, Inc.
Public Offering of Convertible Securities
September ___, 2007
Citigroup Global Markets Inc.
UBS Securities, LLC
Bear, Xxxxxxx & Co. Inc.
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Xxxxxx
Healthcare, Inc., a Delaware corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering (the "Offering") of Convertible Senior Notes (the
"Convertible Notes") of the Company. The Convertible Notes will be convertible
into shares of the common stock, $0.001 par value (the "Common Stock"), of the
Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc. and UBS Securities LLC, offer, sell,
contract to sell, pledge or otherwise dispose of, (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise) by the undersigned or any affiliate of the
undersigned or any person in privity with the undersigned or any affiliate of
the undersigned), directly or indirectly, including the filing (or participation
in the filing) of a registration statement with the Securities and Exchange
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder
with respect to, any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital stock, or
publicly announce an intention to effect any such transaction, for a period
commencing on the effectiveness of the Underwriting Agreement and continuing
through the close of trading on the earlier of (i) the date 90 days after the
date of the Underwriting Agreement or (ii) the date of any termination of the
Underwriting Agreement; provided, however, if the Offering is not consummated by
December 31, 2007, this agreement shall terminate on such date; provided,
further, however, the undersigned shall be permitted, without obtaining consent,
to (a) exercise options to purchase Common Stock, which options are outstanding
on the date hereof, but not sell during the period covered by this agreement the
shares of Common Stock so purchased, (b) purchase Common Stock pursuant to the
Company's 2002 Employee Stock Purchase Plan, (c) sell Common Stock pursuant to a
Rule 10b5-1 plan of the undersigned, (d) make bona fide gifts of Common Stock,
transfer or sell Common Stock to and among trusts, limited liability companies
and limited partnerships, and distribute Common Stock from trusts to
beneficiaries of such trusts, in each case for the direct or indirect benefit of
the undersigned or members of the undersigned's immediately family, in each case
so long as the transferees are bound or agree in writing to be bound by the
terms of this agreement.
Yours very truly,
----------------------------------------
PRINTED NAME OF HOLDER
BY:
------------------------------------
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PRINTED NAME AND TITLE OF PERSON SIGNING
