1
Exhibit 1.1
ODYSSEY HEALTHCARE, INC.
(a Delaware corporation)
[ ] Shares of Common Stock
PURCHASE AGREEMENT
Dated: [ ] , 2001
2
Table of Contents
Page
----
PURCHASE
AGREEMENT.......................................................................
................1
SECTION 1. Representations and
Warranties...............................................................3
(a) Representations and Warranties by the
Company..............................................3
(i) Compliance with Registration
Requirements.....................................3
(ii) Independent
Accountants.......................................................4
(iii) Financial
Statements..........................................................4
(iv) No Material Adverse Change in
Business........................................5
(v) Good Standing of the
Company..................................................5
(vi) Good Standing of
Subsidiaries.................................................5
(vii)
Capitalization................................................................6
(viii) Authorization of
Agreement....................................................6
(ix) Authorization and Description of
Securities...................................6
(x) Absence of Defaults and
Conflicts.............................................6
(xi) Absence of Labor
Dispute......................................................7
(xii) Absence of
Proceedings........................................................7
(xiii) Accuracy of Contract Descriptions and
Exhibits................................8
(xiv) Possession of Intellectual
Property...........................................8
(xv) Absence of Further
Requirements...............................................8
(xvi) Possession of Licenses and
Permits............................................8
(xvii) Accounts
Receivable...........................................................9
(xviii) Compliance with Social Security Act and Other Federal
Enforcement
Initiatives.....................................................9
(xix) Regulatory
Filings...........................................................10
(xx) Title to
Property............................................................10
(xxi) Investment Company
Act.......................................................11
(xxii) Environmental
Laws...........................................................11
(xxiii) Registration
Rights..........................................................12
(xxiv)
Insurance....................................................................12
(xxv) Tax Returns and Payment of
Taxes.............................................12
(xxvi) No Stabilization or
Manipulation.............................................12
(xxvii) Certain
Transactions.........................................................13
(xxviii) Statistical and Market
Data..................................................13
(xxix) Accounting and Other
Controls................................................13
(xxx) Related
Transactions.........................................................13
(xxxi) Shareholder Rights
Plan......................................................13
(b) Officer's
Certificates....................................................................
13
SECTION 2. Sale and Delivery to Underwriters;
Closing..................................................13
(a) Initial
Securities......................................................................
..13
(b) Option
Securities......................................................................
...14
(c)
Payment.........................................................................
..........14
(d) Denominations;
Registration...............................................................15
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SECTION 3. Covenants of the
Company....................................................................15
(a) Compliance with Securities Regulations and Commission
Requests............................15
(b) Filing of
Amendments......................................................................
16
(c) Delivery of Registration
Statements.......................................................16
(d) Delivery of
Prospectus....................................................................16
(e) Continued Compliance with Securities
Laws.................................................16
(f) Blue Sky
Qualifications..................................................................
.17
(g) Rule
158.............................................................................
.....17
(h) Use of
Proceeds........................................................................
...17
(i)
Listing.........................................................................
..........17
(j) Restriction on Sale of
Securities.........................................................17
(k) Reporting
Requirements....................................................................
18
(l) Compliance with NASD
Rules................................................................18
SECTION 4. Payment of
Expenses........................................................................
.19
(a)
Expenses........................................................................
..........19
(b) Termination of
Agreement..................................................................19
SECTION 5. Conditions of Underwriters'
Obligations.....................................................20
(a) Effectiveness of Registration
Statement...................................................20
(b) Opinion of Counsel for
Company............................................................20
(c) Opinion of Counsel for
Underwriters.......................................................20
(d) Officers'
Certificate.....................................................................
21
(e) Accountant's Comfort
Letter...............................................................21
(f) Bring-down Comfort
Letter.................................................................21
(g) Approval of
Listing.......................................................................21
(h) No
Objection.......................................................................
.......21
(i) Lock-up
Agreements......................................................................
..21
(j) Related
Transactions....................................................................
..22
(k) Conditions to Purchase of Option
Securities...............................................22
(i) Officers'
Certificate........................................................22
(ii) Opinion of Counsel for
Company...............................................22
(iii) Opinion of Counsel for
Underwriters..........................................22
(iv) Bring-down Comfort
Letter....................................................22
(l) Additional
Documents......................................................................2
2
(m) Termination of
Agreement..................................................................23
SECTION 6.
Indemnification.................................................................
............23
(a) Indemnification of
Underwriters...........................................................23
(b) Indemnification of Company, Directors and
Officers........................................24
(c) Actions against Parties;
Notification.....................................................24
(d) Settlement without Consent if Failure to
Reimburse........................................25
(e) Indemnification for Reserved
Securities...................................................25
SECTION 7.
Contribution....................................................................
............25
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SECTION 8. Representations, Warranties and Agreements to Survive
Delivery..............................27
SECTION 9. Termination of
Agreement....................................................................27
(a) Termination;
General......................................................................27
(b)
Liabilities.....................................................................
..........28
SECTION 10. Default by One or More of the
Underwriters.................................................28
SECTION 11.
Notices.........................................................................
...........29
SECTION 12.
Parties.........................................................................
...........29
SECTION 13. GOVERNING LAW AND
TIME.....................................................................29
SECTION 14. Effect of
Headings........................................................................
.29
SCHEDULES
Schedule A - List of
Underwriters.................................................................Sch
A-1
Schedule B - Pricing
Information..................................................................Sch
B-1
Schedule C - List of Persons subject to
Lock-up...................................................Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's
Counsel.....................................................A-1
Exhibit B - Form of Lock-up
Letter...................................................................B-1
Exhibit C - Siginificant Subsidiaries
...............................................................C-1
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ODYSSEY HEALTHCARE, INC.
(a Delaware corporation)
[ ] Shares of Common Stock
(Par Value $.001 Per Share)
PURCHASE AGREEMENT
[ ], 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
CIBC World Markets Corp.
▇▇ ▇▇▇▇▇ Securities Corporation
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Odyssey Healthcare, Inc., a Delaware corporation (the "Company"),
confirms its agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters named
in Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, CIBC World Markets Corp. and ▇▇ ▇▇▇▇▇
Securities Corporation are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.001 per share, of the
Company ("Common Stock") set forth in Schedule A hereto, and with respect to the
grant by the Company to the Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
[ ] additional shares of Common Stock to cover over-allotments, if any. The
aforesaid [ ] shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the [ ] shares of
Common Stock subject to the option described in
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Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities."
In connection with the execution and delivery of this Agreement and the
sale of the Securities hereunder, prior to or as of Closing Time (as hereinafter
defined), (i) the Company's certificate of incorporation and bylaws will be
amended and restated and the Company will file the amended and restated
certificate of incorporation with the Secretary of State of the State of
Delaware (the "Charter Amendments"); (ii) a one for two reverse stock split of
the Common Stock will be effected (the "Stock Split"); (iii) all of the
Company's preferred stock will convert into Common Stock (the "Conversion"); and
(iv) the existing stockholders agreement between the Company and a number of
existing stockholders will terminate (the "Termination"). The Charter
Amendments, the Stock Split, the Conversion and the Termination are hereinafter
collectively called the "Related Transactions."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to [ ] shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by such eligible employees and persons having
business relationships with the Company by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-51522) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information that was
used after such
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effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus." Such registration statement, including
the exhibits thereto and schedules thereto at the time it became effective and
including the Rule 430A Information is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus in the form
first furnished to the Underwriters for use in connection with the offering of
the Securities is herein called the "Prospectus." For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated or threatened by the
Commission, and any request on the part of the Commission for
additional information has been complied with or resolved.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the
Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Prospectus nor
any amendment or supplement thereto, at the time the Prospectus or any
amendment or supplement thereto was issued and at Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery), included
or will include an untrue statement of a material fact or omitted or
will omit to state a material fact
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or the
Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(ii) Independent Accountants. Ernst & Young LLP are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iii) Financial Statements. The financial statements included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein. The
selected financial and other data and the summary financial information
and data included in the Prospectus present fairly the information
shown therein and, in the cases of the selected financial data and the
summary financial data, has been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement. The pro forma financial information included in the
Prospectus presents fairly the information shown therein, has been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial information and has been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
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(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(v) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each significant
subsidiary of the Company set forth on Exhibit C attached hereto (each,
a "Significant Subsidiary") has been duly organized and is validly
existing as a corporation, limited liability company or limited
partnership in good standing under the laws of the jurisdiction of its
incorporation or organization, has corporate, partnership or other
organization power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation, limited liability
company or limited partnership to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; all of the
issued and outstanding capital stock or other ownership interests of
each subsidiary of the Company has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim, equity or charge
of any kind (collectively, "Liens"), except that the Company has a 66%
limited partnership interest and a 1% general partnership interest in
Hospice of Houston, L.P.; none of the outstanding shares of capital
stock or other ownership interests of any subsidiary of the Company was
issued in violation of the preemptive or similar
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rights of any securityholder of such subsidiary. The only subsidiaries
of the Company are the subsidiaries listed on Exhibit 21.1 to the
Registration Statement.
(vii) Capitalization. The authorized, issued and outstanding
capital stock of the Company as of June 30, 2001 (giving effect to the
Stock Split) was and at Closing Time will be as set forth in the
Prospectus under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus, pursuant to the exercise
of convertible securities, options or warrants referred to in the
Prospectus or pursuant to the option described in Section 2(b) hereof).
The shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company. The shares of issued and
outstanding capital stock of the Company have been issued in compliance
in all material respects with all federal and state securities laws.
Except as disclosed in the Prospectus, there are no outstanding options
or warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of the
Company's capital stock or any such options, warrants, rights,
convertible securities or obligations. The description of the Company's
stock option, equity-based compensation and stock purchase plans and
the options or other rights granted and exercised thereunder as set
forth in the Prospectus accurately and fairly describe in all material
respects the information required to be shown with respect to such
plans, arrangements, options and rights.
(viii) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued and fully paid and non-assessable;
the Common Stock conforms to all statements relating thereto contained
in the Prospectus and such description conforms to the rights set forth
in the instruments defining the same; no holder of the Securities will
be subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or bylaws or
other organizational
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documents or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in the
Registration Statement (including each of the Related Transactions, the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds"). Compliance by the Company with its
obligations hereunder has been duly authorized by all necessary
corporate action and does not or will not violate any provision of the
charter and bylaws or other organizational document of the Company or
any subsidiary and (except for such conflicts, breaches, defaults,
Liens or violations that would not result in a Material Adverse Effect)
does not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any Lien upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and Instruments
or violate any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any of its subsidiary's principal suppliers, which, in either case,
would result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body now pending (other than actions, suits or
proceedings under seal, or, to the knowledge of the Company, threatened
or under seal, against or affecting the Company or any subsidiary,
which is required to be disclosed in the Registration Statement (other
than as disclosed therein), or which would result in a Material Adverse
Effect, or which would materially and adversely affect the properties
or
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assets thereof or the consummation of the transactions contemplated in
this Agreement (including each of the Related Transactions) or the
performance by the Company of its obligations hereunder; the aggregate
of all pending legal or governmental proceedings to which the Company
or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation
incidental to the business, would not result in a Material Adverse
Effect.
(xiii) Accuracy of Contract Descriptions and Exhibits. All of
the descriptions of contracts or other documents contained in the
Registration Statement and the Prospectus are accurate descriptions of
such contracts or other documents in all material respects. There are
no contracts or documents which are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
thereto which have not been so described or filed.
(xiv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement (including each of the
Related Transactions), except such as have been already completed or
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities or blue sky laws.
(xvi) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, provider numbers,
certificates, approvals (including certificate of need approvals),
consents, orders, certifications
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(including certification under the Medicare and Medicaid programs),
accreditations (including, accreditation by the Joint Commission on
Accreditation of Healthcare Organizations) and other authorizations
(collectively, "Governmental Licenses") issued by, and have made all
declarations and filings with, the appropriate federal, state or local
regulatory agencies or bodies necessary to conduct the businesses now
operated by them, except where the failure to so declare or file would
not, singly and in the aggregate, have a Material Adverse Effect; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly and in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect. Except for any hospice agencies or inpatient
facilities under development as of the date hereof, all of the hospice
agencies and inpatient facilities (collectively, the "Facilities")
operated by the Company and its subsidiaries are eligible to
participate in the Medicare and Medicaid programs.
(xvii) Accounts Receivable. The accounts receivable of the
Company and its subsidiaries have been adjusted to reflect material
changes in the reimbursement policies of third party payors such as
Medicare, Medicaid, private insurance companies, health maintenance
organizations, preferred provider organizations, managed care systems
and other third party payors. The Company's accounts receivable, after
giving effect to the allowance for doubtful accounts, relating to such
third party payors do not exceed amounts the Company and its
subsidiaries are entitled to receive in any material respect.
(xviii) Compliance with Social Security Act and Other Federal
Enforcement Initiatives. Neither the Company nor, to the knowledge of
the Company, any officer, director, stockholder, employee or other
agent of the Company or any of its subsidiaries or the Facilities
operated by the Company or any of its subsidiaries, has engaged,
directly or indirectly, in any activities which are prohibited under
(A) Medicare and Medicaid statutes or any regulations promulgated
pursuant to such statutes, or (B) related state or local statutes or
regulations or any rules of professional conduct, including the
following: (i) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in connection with
the receipt of or claim for any benefit or payment under the Medicare
or Medicaid program or from any other third party payor; (ii) failing
to disclose knowledge by a claimant of the
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occurrence of any event affecting the initial or continued right to any
benefit or payment under the Medicare or Medicaid program or from any
other third party payor on its own behalf or on behalf of another, with
intent to secure such benefit or payment fraudulently; (iii) knowingly
and willfully offering, paying, soliciting or receiving any
remuneration, 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 or Medicaid or any other third party
payor, 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 or Medicaid or any other third party
payor; (iv) knowingly and willfully referring an individual to a person
or entity with which it has ownership or other financial arrangements
(where applicable federal or state law prohibits such referrals); and
(v) knowingly and willfully violating any enforcement initiative
instituted by any governmental agency (including the Office of the
Inspector General and the Department of Justice), except for any such
activities which would not, singly and in the aggregate, result in a
Material Adverse Effect.
(xix) Regulatory Filings. Neither the Company nor any of its
subsidiaries or any of the Facilities operated by the Company or any of
its subsidiaries has failed to file with applicable regulatory
authorities any statement, report, information or form required by any
applicable law, regulation or order, except where the failure to so
file would not, singly and in the aggregate, have a Material Adverse
Effect. Except as described in the Prospectus and except for any
failures to be in compliance or deficiencies which would not, singly
and in the aggregate, have a Material Adverse Effect, all such filings
or submissions were in compliance with applicable laws when filed and
no deficiencies have been asserted by any regulatory commission, agency
or authority with respect to any such filings or submissions.
(xx) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by them and good
title to all other properties owned by them, in each case, free and
clear of all Liens except such as (a) are described in the Prospectus
or (b) do not, singly and in the aggregate, materially affect the value
of such property and do not interfere with the use made and proposed to
be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company
and its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Prospectus, are in full force and effect, and neither the Company nor
any of its subsidiaries has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the
Company or any of its subsidiaries under any of the
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leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of
the leased or subleased premises under any such lease or sublease.
(xxi) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus, will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly and in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries (nor any of the Facilities owned, leased or
operated by the Company or any of its subsidiaries), is in violation of
any federal, state, local or foreign law, statute, rule, regulation,
standard, guide, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health or safety, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), natural resources or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling, release or threatened release of
Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries and each of the Facilities owned, leased
or operated by the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries or any of the Facilities owned, leased or operated by the
Company or any of its subsidiaries, and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries or any of the Facilities
operated by the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
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(xxiii) Registration Rights. Except as described in the
Registration Statement or the Prospectus, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or, except as
described in the Registration Statement or the Prospectus, otherwise
registered by the Company under the 1933 Act.
(xxiv) Insurance. The Company and each of its subsidiaries and
each of the Facilities owned, leased or operated by the Company or any
of its 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; and
the Company does not have any reason to believe that it or any of its
subsidiaries or any of the Facilities owned, leased or operated by the
Company or any of its subsidiaries will not be able to renew their
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue their operations, except where the failure to renew or
maintain such coverage would not result in a Material Adverse Effect.
(xxv) Tax Returns and Payment of Taxes. The Company and its
subsidiaries have timely filed all federal, state, local and foreign
tax returns that are required to be filed or have duly requested
extensions thereof and all such tax returns are true, correct and
complete, except to the extent that any failure to file or request an
extension, or any incorrectness, would not result in a Material Adverse
Effect. The Company and its subsidiaries have timely paid all taxes
shown as due on such filed tax returns (including any related
assessments, fines or penalties), except to the extent that any such
taxes are being contested in good faith and by appropriate proceedings,
or to the extent that any failure to pay would not result in a Material
Adverse Effect; and adequate charges, accruals and reserves have been
provided for in the financial statements referred to in Section
1(a)(iii) above in accordance with GAAP in respect of all federal,
state, local and foreign taxes for all periods as to which the tax
liability of the Company or any subsidiary has not been finally
determined or remains open to examination by applicable taxing
authorities. Neither the Company nor any of its subsidiaries is a
"United States real property holding corporation" within the meaning of
Section 897(c)(2) of the Internal Revenue Code of 1986, as amended (the
"Code").
(xxvi) No Stabilization or Manipulation. Neither the Company
nor any of any of its subsidiaries nor, to the best of its knowledge,
any of its directors, officers or affiliates has taken or will take,
directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or
manipulation of the price of the Securities in violation of Regulation
M under the Securities Exchange Act of 1934, as amended (the "1934
Act").
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(xxvii) Certain Transactions. Except as disclosed in the
Prospectus, there are no outstanding loans, advances, or guarantees of
indebtedness by the Company to or for the benefit of any of the
executive officers or directors of the Company or any of the members of
the families of any of them that would be required to be so disclosed
under the 1933 Act, the 1933 Act Regulations or Form S-1.
(xxviii) Statistical and Market Data. The statistical and
market-related data included in the Prospectus are derived from sources
which the Company reasonably and in good faith believes to be accurate,
reasonable and reliable.
(xxix) Accounting and Other Controls. The Company has
established a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions were, are and will
be executed in accordance with management's general or specific
authorization; (ii) transactions were, are and will be recorded as
necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets; (iii) access to
assets was, is and will be permitted only in accordance with a
management's general or specific authorizations; and (iv) the recorded
accountability for assets was, is and will be compared with existing
assets at reasonable intervals and appropriate action was, is and will
be taken with respect to any differences.
(xxx) Related Transactions. The Charter Amendments and the
Stock Split have been duly and validly authorized by all necessary
corporate action of the Company's stockholders and board of directors.
(xxxi) Stockholder Rights Plan. The Rights under the Company's
Stockholder Rights Plan to which holders of the Securities will be
entitled have been duly authorized.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to ▇▇▇▇▇▇▇ ▇▇▇▇▇, the
Representatives or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
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Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional [ ] shares of Common Stock, at
the price per share set forth in Schedule B, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to Closing Time, as hereinafter defined. If the option is exercised
as to all or any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase that proportion of the total
number of Option Securities then being purchased which the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter bears
to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other
place as shall be agreed upon by the Representatives and the Company, at 9:00
A.M. (
New York City time) on the third (fourth, if the pricing occurs after 4:30
P.M. (
New York City time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
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Payment shall be made to the Company by wire transfer of immediately
available funds to the bank account designated by the Company against delivery
to the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by Closing Time
or the relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of
New York not later than 10:00 A.M. (Eastern time)
on the business day prior to Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A, and will notify the Representatives immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps as it deems necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
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20
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectus. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend
the Registration Statement or amend or
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supplement the Prospectus in order to comply with the requirements of the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations, the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply with
such requirements, and the Company will furnish to the Underwriters such number
of copies of such amendment or supplement as the Underwriters may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other domestic
jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and will
file with the Nasdaq National Market all documents and notices required by the
Nasdaq National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities
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convertible into or exercisable or exchangeable for or repayable with Common
Stock or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
the transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold hereunder,
(B) any shares of Common Stock issued by the Company upon the exercise of an
option or warrant or the conversion of a security outstanding on the date hereof
and referred to in the Prospectus; (C) any shares of Common Stock issued or
options to purchase shares of Common Stock granted pursuant to existing employee
benefit plans of the Company or other employee or non-employee director
compensation arrangements or agreements referred to in the Prospectus; (D) any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock issued by the Company in connection with any
acquisition by the Company; (E) any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock issued by the
Company in connection with any business arrangement or agreement in furtherance
of the Company's business; and (F) the sale and issuance of shares of Common
Stock to new directors of the Company in connection with their election or
appointment to the board of directors of the Company; provided that, in the case
of clauses (D), (E) and (F), each recipient of such securities, prior to such
issuance by the Company, signs an agreement substantially in the form of Exhibit
B hereto.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted if and as required by the
NASD or the NASD rules from sale, transfer, assignment, pledge or hypothecation
for a period of three months following the date of this Agreement. The
Underwriters will notify the Company as to which persons will need to be so
restricted. At the request of the Underwriters, the Company will direct the
transfer agent to place a stop transfer restriction upon such securities for
such period of time. Should the Company release, or seek to release, from such
restrictions any of the Reserved Securities, the Company agrees to reimburse the
Underwriters for any reasonable expenses (including, without limitation, legal
expenses) they incur in connection with such release.
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SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
expenses for (i) the preparation, printing and filing of the Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, and of the Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the filing
fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the terms of the sale
of the Securities, (x) the fees and expenses incurred in connection with the
inclusion of the Securities in the Nasdaq National Market and (xi) all costs and
expenses of the Underwriters, including the reasonable fees and disbursements of
counsel for the Underwriters, in connection with matters related to the Reserved
Securities which are designated by the Company for sale to employees and others
having a business relationship with the Company. Except as provided in this
Section 4 and as otherwise provided in this Agreement, the Company shall not be
required to pay for any of the Underwriters' expenses.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
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SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A hereto and to such further effect as counsel to
the Underwriters may reasonably request. In giving such opinion, such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
laws of the States of Texas and
New York and the federal law of the United
States and the General Corporation Law of the State of Delaware, upon the
opinions of counsel reasonably satisfactory to the Representatives. In giving
such opinion, such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Debevoise & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (ii), (v), (vi) (solely as
to preemptive or other similar rights arising by operation of law or under the
charter or by-laws of the Company), (viii) through (x), inclusive, (xi), (xiv)
(solely as to the information in the Prospectus under "Description of Capital
Stock-Common Stock") and the penultimate paragraph of Exhibit A hereto. In
giving such opinion, such counsel may state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
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(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the Chief Executive Officer and Chief Financial
Officer of the Company, dated as of Closing Time, to the effect that (i) there
has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied under this Agreement at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Ernst & Young LLP a
letter dated such date, in form and substance reasonably satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Ernst & Young LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
(h) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule C hereto.
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(j) Related Transactions. Prior to or as of Closing Time, each of the
Related Transactions shall have occurred.
(k) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company and any subsidiary of the Company shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the Representatives
shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Chief Executive Officer and Chief Financial Officer of
the Company confirming that the certificate delivered at Closing Time
pursuant to Section 5(d) hereof remains true and correct as of such
Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Debevoise & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst & Young
LLP, in form and substance reasonably satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(e) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than two days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents,
certificates and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to the Representatives and counsel for the Underwriters
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(m) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after Closing Time, the obligations of the
several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the prior written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇
▇▇▇▇▇), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
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provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense (x) to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and (y) with respect to any preliminary prospectus to the extent that
it shall be proved that any such loss, liability, claim, damage or expense of
such Underwriter resulted solely from the fact that such Underwriter, in
contravention of a requirement of this Agreement or applicable law, sold
Securities to a person to whom such Underwriter failed to send or give, at or
prior to Closing Time, a copy of the Prospectus (if applicable, as amended or
supplemented) if the Company has previously furnished copies thereof
(sufficiently in advance of Closing Time to allow for distribution by Closing
Time) to such Underwriter and the loss, liability, claim, damage or expense of
such Underwriter resulted from an untrue statement or alleged untrue statement
or omission or alleged omission of a material fact contained in or omitted (or
allegedly omitted) from the preliminary prospectus that was corrected or
included in the Prospectus (if applicable, as amended or supplemented) prior to
Closing Time.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice promptly to each indemnifying party of any action commenced against
it in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party, and any delay in such notification, shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the
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indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees, promptly upon a
request in writing, to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of employees and others having a business
relationship with the Company to pay for and accept delivery of Reserved
Securities which, by the end of the first business day following the date of
this Agreement, were subject to a properly confirmed agreement to purchase.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses,
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liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities pursuant to this Agreement or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection
with the statements or omissions, which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, bear to the aggregate initial
public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required
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31
to pay by reason of any such untrue or alleged untrue statement or omission or
alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the Nasdaq
National Market, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the
27
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Commission, the NASD or any other governmental authority, or (iv) if a banking
moratorium has been declared by either federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery, shall terminate without liability
on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representatives or (ii) the Company shall
have the right to postpone Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
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SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center,
New York,
New York 10281-1201, attention of Syndicate
Operations, with a copy to Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇; notices to the Company shall be directed
to it at ▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Chief Financial Officer, with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., 3700
▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, attention of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the each of the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK. SPECIFIED
TIMES OF DAY REFER TO
NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
(Remainder of page intentionally left blank)
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Company in accordance with its terms.
Very truly yours,
ODYSSEY HEALTHCARE, INC.
By:
-----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
CIBC WORLD MARKETS CORP.
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:
----------------------------------------
Name:
Title: Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
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SCHEDULE A
Number of
Name of Underwriter
Initial Securities
-------------------
------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
CIBC World Markets Corp................................................
▇▇ ▇▇▇▇▇ Securities Corporation........................................
-------------
Total..................................................................
=============
Sch A-1
36
SCHEDULE B
ODYSSEY HEALTHCARE, INC.
[ ] Shares of Common Stock
(Par Value $.001 Per Share)
1. The public offering price per share for the Securities, determined
as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the public
offering price set forth above less $[ ] per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
37
SCHEDULE C
List of persons and entities
subject to lock-up
Sch C-1
38
Exhibit A
FORM OF OPINION OF ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
A-1
39
Form of lock-up from directors, officers or other stockholders pursuant to
Section 5(i)
Exhibit B
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
CIBC World Markets Corp.
▇▇ ▇▇▇▇▇ Securities Corporation
as Representatives of the several
Underwriters to be named in the
within-mentioned
Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by Odyssey Healthcare, Inc.
Dear Sirs:
The undersigned, a [a warrant holder][an option holder] [a stockholder] [and an
officer and/or director] of Odyssey Healthcare, Inc., a Delaware corporation
(the "Company"), understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), CIBC World Markets Corp. and ▇▇
▇▇▇▇▇ Securities Corporation propose to enter into a
Purchase Agreement (the
"
Purchase Agreement") with the Company providing for the public offering of
shares (the "Securities") of the Company's common stock, par value $.001 per
share (the "Common Stock"). In recognition of the benefit that such an offering
will confer upon the undersigned as a [warrant holder][an option holder][a
stockholder] [and an officer and/or director] of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of 180 days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) except for the exercise of
warrants or options to purchase Common Stock, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for or repayable with
Common Stock, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any
B-1
40
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise.
▇▇▇▇▇▇▇ ▇▇▇▇▇'▇ consent, however, is not required for the following transfers:
(a) a bona fide gift or gifts made by the undersigned, provided that the donee
of such shares of Common Stock or securities convertible into or exchangeable or
exercisable for any shares of Common Stock agree in writing to be bound by the
terms of this letter agreement prior to such gift, (b) a distribution to
partners or stockholders of the undersigned (and to any direct or indirect
partner or stockholder thereof), provided that the ultimate distributes of such
shares of Common Stock or securities convertible into or exchangeable or
exercisable for any shares of Common Stock agree in writing to be bound by the
terms of this letter agreement prior to such to such distribution, (c)
transfers, without consideration, of shares of Common Stock or securities
convertible into or exchangeable or exercisable for any shares of Common Stock
to (i) affiliates of the undersigned, (ii) family members of the undersigned, or
(iii) one or more trusts established for the benefit of one or more family
members of the undersigned, provided that the transferee of such shares of
Common Stock or securities convertible into or exchangeable or exercisable for
any shares of Common Stock agree in writing to be bound by the terms of this
letter agreement prior to such transfer, or (d) transactions relating to shares
of Common Stock or other securities of the Company acquired in open market
transactions after the completion of the public offering.
In addition, the undersigned agrees that the Company may, and the undersigned
will, (i) with respect to any shares of Common Stock for which the undersigned
is the record holder, cause the transfer agent for the Company to note stop
transfer instructions with respect to such shares of Common Stock on the
transfer books and records of the Company for transfers that would constitute a
violation or breach of this letter agreement and (ii) with respect to any shares
of Common Stock for which the undersigned is the beneficial holder but not the
record holder, cause the record holder of such shares of Common Stock to cause
the transfer agent for the Company to note stop transfer instructions with
respect to such shares of Common Stock on the transfer books and records of the
Company for transfers that would constitute a breach of this letter agreement.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to enter into this letter agreement, and that, upon request,
the undersigned will execute any additional documents reasonably necessary or
desirable in connection with the enforcement hereof. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors, and assigns of the undersigned.
B-2
41
This letter agreement shall terminate if the public offering of the Securities
is not consummated on or prior to December 31, 2001 or if the Company earlier
withdraws the registration statement relating to the Securities.
Very truly yours,
Signature:
---------------------------
Print Name:
--------------------------
42
Exhibit C
SIGNIFICANT SUBSIDIARIES
PURSUANT TO SECTION 1(a)(vi)
Odyssey HealthCare of Pennsylvania, Inc.
Odyssey HealthCare of New Orleans, Inc.
HNT Hospice of North Texas, Inc.
Odyssey HealthCare of Phoenix, Inc.
Odyssey HealthCare of Las Vegas, Inc.
Odyssey HealthCare of Milwaukee, Inc.
Odyssey HealthCare of Northern California, Inc.
Odyssey HealthCare of Kansas City, Inc.
Odyssey HealthCare of Little Rock
C-1