EXHIBIT 1
3,000,000 Shares
TOTAL RENAL CARE HOLDINGS, INC.
Common Stock
UNDERWRITING AGREEMENT
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__________, 1996
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
UBS SECURITIES LLC
As representatives of the
several underwriters
named in Schedule I hereto
c/▇ ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Total Renal Care Holdings, Inc., a Delaware corporation (the
"Company"), and the stockholders of the Company named in Schedule II hereto
(collectively, the "Selling Stockholders"), severally propose to sell an
aggregate of 3,000,000 shares of Common Stock, par value $0.001 per share, of
the Company (the "Firm Shares"), to the several underwriters named in Schedule I
hereto (the "Underwriters"). The Firm Shares consist of 500,000 shares to be
issued and sold by the Company and 2,500,000 outstanding shares to be sold by
the Selling Stockholders.
Certain of the Selling Stockholders (as indicated in Schedule II
hereto) also propose to sell to the Underwriters not more than 450,000
additional shares of Common stock, par value $0.001 per share, of the Company
(the "Additional Shares"), if requested by the Underwriters as provided in
Section 2 hereof. The Firm Shares and the Additional Shares are herein
collectively referred to
as the "Shares." The shares of common stock of the Company to be outstanding
after giving effect to the sales contemplated hereby are hereinafter referred to
as the "Common Stock." The Company and the Selling Stockholders are hereinafter
collectively called the "Sellers."
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
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and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively called the
"Act"), a registration statement on Form S-3 (File no. 333- ) including a
prospectus relating to the Shares, which may be amended. The registration
statement as amended at the time when it becomes effective, including a
registration statement (if any) filed pursuant to Rule 462(b) under the Act
increasing the size of the offering registered under the Act and information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Act, is hereinafter
referred to as the "Registration Statement"; and the prospectus (including any
prospectus subject to completion meeting the requirements of Rule 434(b), under
the Act provided by the Company with any term sheet meeting the requirements of
Rule 434(b) as the prospectus provided to meet the requirements of Section 10(a)
of the Act) in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus." As used herein, the terms Registration
Statement and Prospectus shall be deemed to include documents incorporated by
reference therein.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
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representations and warranties contained in this Agreement, and subject to its
terms and conditions, (i) the Company agrees to issue and sell 500,000 Firm
Shares, (ii) each Selling Stockholder agrees, severally and not jointly, to sell
the number of Firm Shares set forth opposite such Selling Stockholder's name in
Schedule II hereto and (iii) each Underwriter agrees, severally and not jointly,
to purchase from each Seller at a price per share of $____ (the "Purchase
Price") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares, as you may determine) which bears the same proportion to the
total number of Firm
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Shares to be sold by such Seller as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule I hereto bears to the total number of
Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Selling Stockholders
indicated in Schedule II hereto agree to sell up to 450,000 Additional Shares at
the Purchase Price and (ii) the Underwriters shall have the right to purchase,
severally and not jointly, up to an aggregate of 450,000 Additional Shares from
the Selling Stockholders at the Purchase Price. Additional Shares may be
purchased solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. The Underwriters may exercise their right
to purchase Additional Shares in whole or in part from time to time by giving
written notice thereof to the Selling Stockholders within 30 days after the date
of this Agreement. You shall give any such notice on behalf of the Underwriters
and such notice shall specify the aggregate number of Additional Shares to be
purchased pursuant to such exercise and the date for payment and delivery
thereof. The date specified in any such notice shall be a business day (i) no
earlier than the Closing Date (as hereinafter defined), (ii) no later than ten
business days after such notice has been given and (iii) no earlier than two
business days after such notice has been given. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Selling Stockholders indicated in Schedule II hereto the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from such Selling Stockholders as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto bears to the total number of Firm Shares set forth opposite the name of
such Selling Stockholder in Schedule II hereto.
The Sellers hereby agree, severally and not jointly, and the Company
shall, concurrently with the execution of this Agreement, deliver an agreement
executed by (i) each of the directors and officers of the Company and (ii) each
person listed on Annex I hereto, pursuant to which each such person agrees, not
to offer,
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sell, contract to sell, grant any option to purchase, or otherwise dispose of
any common stock of the Company or any securities convertible into or
exercisable or exchangeable for such common stock or in any other manner
transfer all or a portion of the economic consequences associated with the
ownership of any such common stock, except to the Underwriters pursuant to this
Agreement, for a period of 120 days (which, to the extent applicable, shall also
be the "lock-up" period for purposes of Section 5.3 of the Shareholders
Agreement (the "Shareholders Agreement") dated as of August 11, 1994, as amended
on June 30, 1994) after the date of the Prospectus without the prior written
consent of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation. Notwithstanding
the foregoing, during such period the Company may (i) grant stock options or
securities pursuant to equity incentive plans approved by the Company's Board of
Directors, (ii) issue options or stock as consideration in connection with
acquisitions provided that the transferee of such options or stock is bound by
the provisions of this sentence and (iii) issue shares of its common stock upon
the exercise of an option or warrant or the conversion of a security outstanding
on the date hereof or issued in accordance with clause (i) or (ii) above.
3. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that
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the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the effective date of the Registration
Statement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
4. DELIVERY AND PAYMENT. Delivery to the Underwriters of and
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payment for the Firm Shares shall be made at 10:00 A.M., New York City time, on
the third or fourth business day (the "Closing Date") unless otherwise permitted
by the Commission pursuant to Rule 15c6-1 under the Securities Exchange Act of
1934, as amended (the "Exchange Act") following the date of the initial public
offering, at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. The Closing Date and the location of delivery of and the
form of payment for the Firm Shares may be varied by agreement between you and
the Sellers.
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Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of
and the form of payment for such Additional Shares may be varied by agreement
between you and the Selling Stockholders indicated in Schedule II hereto.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the respective Sellers, for the respective accounts of the
several Underwriters, against payment of the Purchase Price therefor by wire
transfer of federal or other immediately available funds to the respective
accounts of the Company and the Custodian (as hereafter defined) as shall be
specified in writing by the Company and the Custodian, as the case may be, no
later than the Business Day immediately preceding the Closing Date or Option
Closing Date, as the case may be.
5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
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(a) To use its best efforts to cause the Registration Statement
to become effective at the earliest possible time.
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when the Registration Statement has become effective
and when any post-effective amendment to it becomes effective, (ii) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional informa-
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tion, (iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, and (iv) of the happening of any
event during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or changes in
the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the Company
will make every reasonable effort to obtain the withdrawal or lifting of such
order at the earliest possible time.
(c) To furnish to you, without charge, four signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits and documents incorporated by reference, and to
furnish to you and each Underwriter designated by you such number of conformed
copies of the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request. The terms "supplement" and
"amendment" or "amend" as used in this Agreement shall include all documents
subsequently filed by the Company with the Commission pursuant to the Exchange
Act that are deemed to be incorporated by reference in the Prospectus.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or to
make any amendment or supplement to the Prospectus (including the issuance or
filing of any term sheet within the meaning of Rule 434) of which you shall not
previously have been advised or to which you shall reasonably object; and to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or supplement to the Prospectus
(including the issuance or filing of any term sheet within the meaning of Rule
434) which may be necessary or advisable in connection with the distribution of
the Shares by you, and to use its best efforts to cause the same to become
promptly effective.
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(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel for
the Underwriters a prospectus is required by law to be delivered in connection
with sales by an Underwriter or a dealer, to furnish to each Underwriter and
dealer as many copies of the Prospectus (and of any amendment or supplement to
the Prospectus) as such Underwriter or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event shall
occur as a result of which, in the opinion of counsel for the Underwriters it
becomes necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to amend or
supplement the Prospectus to comply with any law, forthwith to prepare and file
with the Commission an appropriate amendment or supplement to the Prospectus so
that the statements in the Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so delivered, be misleading, or so
that the Prospectus will comply with law, and to furnish to each Underwriter and
to such dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be obligated to
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file any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not already subject generally to
service of process or so qualified.
(h) To mail and make generally available to its stockholders as soon
as reasonably practicable an earnings statement covering a period of at least
twelve
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months after the effective date of the Registration Statement (but in no event
commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act, and to advise you in writing when such
statement has been so made available.
(i) During the period of five years after the date of this Agreement,
(i) to mail as soon as reasonably practicable after the end of each fiscal year
to the record holders of its Common Stock a financial report of the Company and
its subsidiaries on a consolidated basis (and a similar financial report of all
unconsolidated subsidiaries, if any), all such financial reports to include a
consolidated balance sheet, a consolidated statement of operations, a
consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
independent certified public accountants, and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(j) During the period referred to in paragraph (i), to furnish to you
as soon as available a copy of each report or other publicly available
information of the Company mailed to the holders of Common Stock or filed with
the Commission and such other publicly available information concerning the
Company and its subsidiaries as you may reasonably request.
(k) To pay all costs, expenses, fees and taxes incident to (i) the
preparation, printing, filing and distribution under the Act of the Registration
Statement (including financial statements and exhibits), each preliminary
prospectus and all amendments and supplements to any of them prior to or during
the period specified in paragraph (e), (ii) the printing and delivery of the
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Prospectus and all amendments or supplements to it during the period specified
in paragraph (e), (iii) the printing and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and all other agreements,
memoranda, correspondence and other documents printed and delivered to third
parties in connection with the offering of the Shares (including in each case
any reasonable disbursements of counsel for the Underwriters relating to such
printing and delivery), (iv) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of the several states
(including in each case the reasonable fees and disbursements of counsel for the
Underwriters relating to such registration or qualification and memoranda
relating thereto), (v) filings and clearance with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering, (vi) the
listing of the Shares on the Nasdaq Stock Market ("Nasdaq") National Market
System, (vii) furnishing such copies of the Registration Statement, the
Prospectus and all amendments and supplements thereto as may be requested for
use in connection with the offering or sale of the Shares by the Underwriters or
by dealers to whom Shares may be sold, (viii) any "qualified independent
underwriters" pursuant to Schedule E of the Bylaws of the NASD (including the
fees and disbursements of counsel to such qualified independent underwriters)
and (ix) the performance by the Sellers of their other obligations under this
Agreement.
(l) To use its best efforts to maintain the listing of the Common
Stock on the New York Stock Exchange (or on another national securities exchange
or included in the Nasdaq National Market) for a period of five years after the
effective date of the Registration Statement.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
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represents and warrants to each Underwriter that:
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(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain and
each such part, as amended or supplemented, if applicable, will not contain any
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,
(iii) the Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act
and (iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph (b) do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) Any term sheet and prospectus subject to completion provided by
the Company to the Underwriters for use in connection with the offering and
sale of the Shares pursuant to Rule 434 under the Act together are not
materially different from the prospectus included in the Registration Statement
(exclusive of any information deemed a part thereof pursuant to Rule 434(d)).
(d) Each preliminary 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 Act, and each registration statement filed
pursuant to Rule 462(b) under the Act, if any, complied when so filed in all
material respects with the
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Act; and did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(e) Each of the Company and its subsidiaries as defined in Rule 405 of
Regulation C under the Act (each a "Subsidiary") has been duly incorporated or
formed, is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation or as a partnership duly formed and has the
corporate or partnership power and authority, as the case may be, to carry on
its business as it is currently being conducted and to own, lease and operate
its properties as described in the Registration Statement and Prospectus, and
each corporate Subsidiary is duly qualified and is in good standing as a foreign
corporation and each Subsidiary is authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification or authorization, except here the failure
to be so qualified and be in good standing could not, in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, properties, or financial or other condition of the Company and its
Subsidiaries, considered as a whole.
(f) Except as disclosed in the Prospectus, (i) all of the outstanding
shares of capital stock of each the Company's corporate Subsidiaries have been
duly authorized and validly issued and are fully paid and non-assessable and, in
the case of Total Renal Care, Inc., a California corporation ("TRC"), are wholly
owned by the Company or are otherwise owned directly indirectly by the Company,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature ("Liens") and (ii) all of the outstanding partnership
interests in each of the Company's partnership Subsidiaries have been duly
authorized by its respective partnership agreement and validly issued and the
partnership interests in such partnerships that are not owned by unaffiliated
third parties are owned directly or indirectly by the Company, free and clear of
any Liens, and any partnership capital contribution obligations of the Company
in each partnership Subsidiary have been satisfied.
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(g) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights; and the Shares to be issued and sold by the
Company hereunder have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(h) The authorized capital stock of the Company, including the Common
Stock, conforms as to legal matters to the description thereof contained in the
Prospectus.
(i) Neither the Company nor any of its Subsidiaries is in violation of
its respective charter, by-laws or partnership agreement, as the case may be, or
in default in any material respect, and no condition exists that with notice or
lapse of time or both would constitute a material default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other material
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of is Subsidiaries or their
respective property is bound except to the extent such violation or default, if
any, could not reasonably be expected to have a material adverse effect on the
business, operations, properties or financial or other condition of the Company
and its Subsidiaries, considered as a whole.
(j) The execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the consummation of
the transactions contemplated hereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the
securities or Blue Sky laws of the various states) and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
agreement, indenture or other instrument to
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which it or any of its subsidiaries is party or by which it or any of its
subsidiaries or their respective property is bound, or violate or conflict with
any laws, administrative regulations or rulings or court decrees applicable to
the Company, any of its subsidiaries or their respective property.
(k) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any of their respective property is
the subject, and, to the best of the Company's knowledge, no such proceedings
are threatened or contemplated. No contract or document of a character required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement is not so described or filed as
required.
(l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection
of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), nor any federal or
state law relating to discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages and hours laws, nor any
provisions of the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which in each case might result in any
material adverse change in the business, prospects, financial condition or
results of operation of the Company and its subsidiaries, taken as a whole.
(m) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease and operate its respective
properties and to conduct its business; the Company and each of its subsidiaries
has fulfilled and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit; and, except as
described in
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the Prospectus, such permits contain no restrictions that are materially
burdensome to the Company or any of its subsidiaries.
(n) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(o) Except as otherwise set forth in the prospectus or such as are not
material to the business, prospectus, financial condition or results of
operation of the Company and its Subsidiaries, taken as a whole, the Company
and each of its Subsidiaries has good and marketable title, free and clear of
all Liens, claims, encumbrances and restrictions except Liens for taxes not yet
due and payable, to all property and assets described in the Registration
Statement as being owned by it. All leases to which the Company or any of its
subsidiaries is a party are valid and binding and no default has occurred or is
continuing thereunder, which might result in any material adverse change in the
business, prospects, financial condition or results of operation of the Company
and its Subsidiaries taken as a whole, and the Company and its Subsidiaries
enjoy a peaceful and undisturbed possession under all such leases to which any
of them is a party as lessee with such exceptions as do not materially interfere
with the use made by the Company or such Subsidiary.
(p) The Company and each of its Subsidiaries maintains reasonably
adequate insurance.
(q) Price Waterhouse LLP is, and during the fiscal years ending May
31, 1994 and 1993, KPMG Peat
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Marwick, LLP was, an independent public accountant with respect to the Company
as required by the Act.
(r) The financial statements, together with related schedules and
notes forming part of the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(s) The Company and each of its Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own, lease and operate its
respective properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus; the Company and each of its Subsidiaries has fulfilled and performed
all of its material obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such permit, subject in each case to such qualification as
may be set forth in the Prospectus; and, except as described in the Prospectus,
such permits contain no restrictions that are materially burdensome to the
Company or any of its Subsidiaries.
(t) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
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(u) Except as disclosed in the Prospectus or the Shareholders
Agreement, no holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the Company and
with respect to the offer of the Shares all such rights have been satisfied or
waived.
(v) The Company has filed a registration statement pursuant to Section
12(b) of the Exchange Act to register the Common Stock, has filed an application
to list the Shares on the New York Stock Exchange and has received notification
that the listing has been approved subject to notice of issuance of the Shares.
(w) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
7. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
----------------------------------------------------------
Selling Stockholder severally represents and warrants to each Underwriter that:
(a) Such Selling Stockholder is the lawful owner of the Shares to be
sold by such Selling Stockholder pursuant to this Agreement and has, and on the
Closing Date (and any Option Closing Date, if applicable) will have, good and
clear title to such Shares, free of all restrictions on transfer, Liens,
encumbrances, security interests and claims whatsoever.
(b) Upon delivery of and payment for such Shares pursuant to this
Agreement, good and clear title to such Shares will pass to the Underwriters,
free of all restrictions on transfer, Liens, encumbrances, security interests
and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date (and any
Option Closing Date, if applicable) will have, full legal right, power and
authority to enter into this Agreement and the Custody Agreement, if any,
between such Selling Stockholder and The Bank of New York, as Custodian (the
"Custody Agreement")and to sell, assign, transfer and deliver which Shares in
the manner provided herein and therein, and this Agreement and the Custody
Agreement, if any, have been duly authorized, executed and delivered by such
Selling Stockholder and each of this Agreement and the Custody Agreement is a
16
valid and binding agreement such Selling Stockholder enforceable in accordance
with its terms, except as rights to indemnity and contribution hereunder may be
limited by applicable law.
(d) The power of attorney signed by such Selling Stockholder
appointing ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇, or any one of
them, as his attorney-in-fact to the extent set forth therein with regard to the
transactions contemplated hereby and by the Registration Statement and the
Custody Agreement, if any, has been duly authorized, executed and delivered by
or on behalf of such Selling Stockholder and is a valid and binding instrument
of such Selling Stockholder enforceable in accordance with its terms, and,
pursuant to such power of attorney, such Selling Stockholder has authorized
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇. ▇. ▇▇▇▇, or any one of them, to
execute and deliver on his behalf this Agreement and any other document
necessary or desirable in connection with transactions contemplated hereby and
to deliver the Shares to be sold by such Selling Stockholder pursuant to this
Agreement.
(e) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares
pursuant to the distribution contemplated by this Agreement, and other than as
permitted by the Act, such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(f) The execution, delivery and performance of this Agreement by such
Selling Stockholder, compliance by such Selling Stockholder with all the
provisions thereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body (except
as such may be required under the Act, state securities laws or Blue Sky laws)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, organizational documents of such Selling
Stockholder, if not an individ-
17
ual, or any agreement, indenture or other instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or property of such
Selling Stockholder is bound, or violate or conflict with any laws,
administrative regulation or ruling or court decree applicable to such Selling
Stockholder or property of such Selling Stockholder.
(g) Such parts of the Registration Statement under the caption
"Principal and Selling Stockholders" which specifically relate to such Selling
Stockholder do not, and will not on the Closing Date (and any Option Closing
Date, if applicable), contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein in light of circumstances under which they were made, not
misleading.
(h) At any time during the period described in paragraph 5(e) hereof,
if there is any change in the information referred to in paragraph 7(g) above,
the Selling Stockholders will immediately notify you of such change.
8. INDEMNIFICATION. (a) The Company hereby 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 Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriters furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use therein.
(b) The Selling Shareholders hereby severally and not jointly agree to
indemnify and hold
18
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
-------- -------
such agreement of each Selling Stockholder to indemnify and hold harmless shall
be limited to losses, claims, damages, liabilities or judgments caused by any
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by or on behalf of such Selling
Stockholder expressly for use in the Registration Statement; provided, further,
-------- -------
that the aggregate liability of any Selling Stockholder pursuant to the
provisions of this paragraph shall be limited to an amount equal to the
aggregate purchase price received by such Selling Stockholder from the sale of
such Selling Stockholder's Shares hereunder.
(c) In case any action shall be brought against any Underwriter or any
person controlling such Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement thereto
and with respect to which indemnity may be sought against the Company or the
Selling Stockholders, such Underwriter shall promptly notify the Company and the
Selling Stockholders in writing and the Company and/or the Selling Stockholders
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses.
Any Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the employment of such counsel
shall have been specifically authorized in writing by the Company, (ii) the
Company and/or the Selling Stockholders shall have failed to assume the defense
and employ counsel or (iii) the named parties to any such
19
action (including any impleaded parties) include both such Underwriter or such
controlling person and the Company or any Selling Stockholder, as the case may
be, and such Underwriter or such controlling person shall have been advised by
such counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Company or the
Selling Stockholders, as the case may be (in which case the Company and the
Selling Stockholders shall not have the right to assume the defense of such
action on behalf of such Underwriter or such controlling person, it being
understood, however, that the Company and the Selling Stockholders shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all such
Underwriters and controlling persons, which firm shall be designated in writing
by ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation and that all such fees
and expenses shall be reimbursed as they are incurred). A Seller shall not be
liable for any settlement of any such action effected without the written
consent of such Seller but if settled with the written consent of such Seller,
such Seller agrees to indemnify and hold harmless any Underwriter and any such
controlling person from and against any loss or liability by reason of such
settlement subject in the case of the Selling Stockholders to the limits set
forth in subsection (b) above. Notwithstanding the immediately preceding
sentence, if in any case where the fees and expenses of counsel are at the
expense of the indemnifying party and an indemnified party shall have requested
the indemnifying party to reimburse the indemnified party for such fees and
expenses of counsel as incurred, such indemnifying party agrees that it shall be
liable for any settlement of any action effected without a written consent if
(i) such settlement is entered into more than ten business days after the
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
20
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, controlling such Selling Stockholder within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Sellers to each Underwriter but
only with reference to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary prospectus. In case
any action shall be brought against the Company, any of its directors, any such
officer or and person controlling the Company or any Selling Stockholder or any
person controlling such Selling Stockholder based on the Registration Statement,
the Prospectus or any preliminary prospectus and in respect of which indemnity
may be sought against any Underwriter, such Underwriter shall have the rights
and duties given to the Sellers (except that if any Seller shall have assumed
the defense thereof, such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
and the Company, its directors, any such officers and any person controlling the
Company and the Selling Stockholders and any person controlling such Selling
Stockholders shall have the rights and duties given to the Underwriter, by
Section 8(c) hereof.
(e) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion
21
as is appropriate to reflect the relative benefits received by the Sellers on
the one hand and the Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Sellers and the Underwriters in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Sellers and the Underwriters shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Sellers, and the total underwriting discounts and
commissions received by the Underwriters, bear to the total price to the public
of the Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Sellers and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) 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 in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, (a) no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount
22
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and (b) no Selling Stockholder shall be required to contribute any
amount in excess of the amount of the aggregate purchase price received by such
Selling Stockholder for the sale of such Selling Stockholder's Shares hereunder.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8(e) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint. The Selling Stockholders' obligations to contribute pursuant to this
Section 8(e) are several in proportion to the respective number of such Selling
Stockholder's Shares sold hereunder.
(f) Each Seller hereby designates the Company as its authorized agent,
upon which process may be served in any action, suit or proceeding which may be
instituted in any state or federal court in the State of New York by any
Underwriter or person controlling an Underwriter asserting a claim for
indemnification or contribution under or pursuant to this Section 8, and each
Seller will accept the jurisdiction of such court in such action, and waives, to
the fullest extent permitted by applicable law, any defense based upon lack of
personal jurisdiction or venue. A copy of any such process shall be sent or
given to such Seller, at the address for notices specified in Section 13 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
---------------------------------------
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M. (and in the case of any registration statement filed pursuant to
Rule 162(b) of the Act, not later than 10 P.M.), New York City
23
time, on the date of this Agreement or at such later date and time as you may
approve in writing, and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of the Company, (ii) since the date of the latest balance sheet
included in the Registration Statement and the Prospectus there shall not have
been any change, or any development involving a prospective material adverse
change, in the capital stock or in the long-term debt of the Company from that
set forth in the Registration Statement and Prospectus, (iii) the Company and
its subsidiaries shall have no liability or obligation, direct or contingent,
which is material to the Company and its subsidiaries, taken as a whole, other
than those reflected in the Registration Statement and the Prospectus and (iv)
on the Closing Date you shall have received a certificate dated the Closing
Date, signed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇, in their capacities as the
Chief Executive Officer and Chief Financial Officer of the Company, confirming
the matters set forth in paragraphs (a), (b), and (c) of this Section 8.
(d) All the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct on the Closing Date (and
any Option Closing Date) with the same force and effect as if made on and as of
the Closing Date (or any Option Closing Date).
(e) You shall have received on the Closing Data an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, outside counsel for the Company, to the effect that:
24
i) the Shares to be sold by the Company hereunder have been
duly authorized, and when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will have been validly issued
and will be fully paid and non-assessable, and to such counsel's knowledge after
due inquiry the issuance of such Shares is not subject to any preemptive or
similar rights;
ii) this Agreement has been duly authorized, executed and
delivered by the Company;
iii) the authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof contained
in the Prospectus;
iv) such counsel has been advised by the Commission by telephone
that the Registration Statement has become effective under the Act, and to such
counsel's knowledge after due inquiry no stop order suspending its effectiveness
has been issued and no proceedings for that purpose are pending before or
contemplated by the Commission;
v) the statements under the caption "Description of Capital
Stock" in the Prospectus and Item 15 of Part II of the Registration Statement
insofar as such statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
vi) the execution, delivery and performance of this Agreement by
the Company, compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any California or Federal
court, regulatory body, administrative agency or other governmental body (except
as such may be required under the Act or other securities or Blue Sky laws) and
will not conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws, as the case may be, of the
Company or TRC;
25
vii) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended; and
viii)(1) Each document which was filed pursuant to the Exchange Act
and is incorporated by reference in the Registration Statement and the
Prospectus (except for financial statements, schedules and other financial data
as to which no opinion need be expressed) complied when so filed as to form in
all material respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (2) the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for financial data,
as aforesaid) comply as to form in all material respects with the Act, and (3)
such counsel believes that (except for financial data, as aforesaid) the
Registration Statement (including the documents incorporated by reference
therein) and the prospectus included therein at the time the Registration
Statement became effective did not contain any 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, and that the Prospectus
(including the documents incorporated by reference therein), as amended or
supplemented, if applicable (except for financial statements, as aforesaid) does
not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In giving the opinion specified in (vi) above, such counsel may rely
upon an opinion or opinions of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, regulatory counsel for
the Company rendered pursuant to paragraph (h) below. In giving such opinion
with respect to the matters covered by clause (viii) such counsel may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto and documents incorporated therein by reference and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for
26
the Underwriters), dated the Closing Date, of counsels to each of the Selling
Stockholders named in Schedule II hereto, to the effect that:
i) this Agreement has been duly authorized, executed and
delivered by such Selling Stockholder;
ii) the execution, delivery and performance of this Agreement by
such Selling Stockholder, compliance by such Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of any
California or Federal court, regulatory body, administrative agency or other
governmental body (except as such may be required under the Act or other
securities or Blue Sky laws) and will not conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the charter, by-laws
or partnership agreement, as the case may be, of such Selling Stockholder;
iii) except as disclosed in the Prospectus or the Shareholders
Agreement, no such Selling Stockholder has any right to require registration of
shares of Common Stock or any other security of the Company and with respect to
the offer of the Shares all such rights have been satisfied or waived;
iv) the Custody Agreement has been duly authorized, executed and
delivered by such Selling Stockholder and is a valid and binding agreement of
such Selling Stockholder;
v) such Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any approval imposed by
the applicable state securities and Blue Sky laws) to sell, assign, transfer and
deliver the Shares to be sold by him in the manner provided in this Agreement
and the Custody Agreement;
vi) such Selling Stockholder will be, immediately prior to the
closing on the Closing Date or any Option Closing Date, as the case may be, the
sole registered owner of the Shares to be sold by such Selling Stockholder at
such time pursuant to this Agreement; upon
27
delivery and payment for such Shares, and assuming the Underwriters acquired
such Shares in good faith and without notice of any adverse claim, each of the
Underwriters will be the owner of such Shares free of any adverse claim; and
vii) the power of attorney signed by such Selling Stockholder
appointing ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇, or any one of
them, as his attorney-in-fact to the extent set forth therein with regard to the
transactions contemplated hereby and by the Registration Statement has been duly
authorized, executed and delivered by or on behalf of such Selling Stockholder
and is a valid and binding instrument of such Selling Stockholder, and pursuant
to such power of attorney, such Selling Stockholder has authorized ▇▇▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇, or any one of them, to execute and
deliver on his behalf this Agreement and any other document necessary or
desirable in connection with the transactions contemplated hereby and to deliver
the Shares to be sold by such Selling Stockholder pursuant to this Agreement.
In giving the opinion specified in (ii) above, such counsel may rely
upon an opinion or opinions of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, regulatory counsel for
the Company rendered pursuant to paragraph (h) below.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel of the Company, to the effect that:
i) the Company is duly incorporated, validly existing and in
good standing as a corporation under the laws of the State of Delaware and has
the corporate power and authority required to carry on its business as it is
currently being conducted and to own, lease and operate its properties;
ii) each Subsidiary of the Company has been duly incorporated or
formed, is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation or as a partnership duly formed and has the
corporate or partnership power and authority, as the case may be, to carry on
its business
28
as it is currently being conducted and to own, lease and operate its properties,
and, to such counsel's knowledge after due inquiry, each corporate Subsidiary is
duly qualified and is in good standing as a foreign corporation and each
Subsidiary is authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification or authorization, except where the failure to be so qualified or
authorized and be in good standing could not, in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
properties, or financial or other condition of the Company and its Subsidiaries,
considered as a whole;
iii) except as disclosed in the Prospectus,(i) all of the
outstanding shares of capital stock of each of the Company's corporate
Subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable and to such counsel's knowledge after due inquiry, in the case of
TRC, are wholly owned by the Company or are otherwise, owned directly or
indirectly by the Company, free and clear of any Liens and (ii) all of the
outstanding partnership interests in each of the Company's partnership
Subsidiaries have been duly authorized by its respective partnership agreement
and validly issued and to such counsel's knowledge after due inquiry the
partnership interests in such partnerships that are not owned by unaffiliated
third parties are owned directly or indirectly by the Company, free and clear of
any Liens and, to such counsel's knowledge, any partnership capital contribution
obligations of the Company in each partnership Subsidiary have been satisfied;
iv) all the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights;
v) neither the Company nor any of its Subsidiaries is in
violation of its respective charter, by-laws or partnership agreement, as the
case may be, and, to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its Subsidiaries is in default in any-material
respect, and no condition exists that with notice or lapse of time or both would
constitute a material default, in the perfor-
29
▇▇▇▇▇ of any material obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other agreement,
indenture or instrument to which the Company or any of its' Subsidiaries is a
party or by which it or any of its Subsidiaries or their respective property is
bound except to the extent such violation or default, if any, could not
reasonably be expected to have a material adverse effect on the business,
operations, properties or financial or other condition of the Company and its
Subsidiaries, considered as a whole;
vi) the execution, delivery and performance of this Agreement,
compliance by the Company with all the provisions hereof and the consummation of
the transactions contemplated hereby will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under any agreement,
indenture or other instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or their respective
properties are bound, or violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Company or any of its
subsidiaries or their respective properties, except to the extent such
violation, conflict, breach or default, if any, could not reasonably be expected
to have a material adverse effect on the business, operations, properties or
financial or other condition of the Company and its Subsidiaries, considered as
a whole;
vii) after due inquiry, such counsel does not know of any legal
or governmental proceeding pending or threatened to which the Company or any of
its Subsidiaries is a party or to which any of their respective property is
subject which is required to be described in the Registration Statement or the
Prospectus and is not so described, or of any contract or other document which
is required to be described in the Registration Statement or the Prospectus or
is required to be filed as an exhibit to the Registration Statement which is not
described or filed as required;
viii) other than as set forth in the Shareholders Agreement or
otherwise described in the Prospectus, to the best of such counsel's knowledge,
after due inquiry, no holder of any security of the
30
Company has any right to require registration of shares of Common Stock or any
other security of the Company;
ix) to the best of such counsel's knowledge, after due inquiry,
all leases to which the Company or any of its subsidiaries is a party are valid
and binding and no default has occurred or is continuing thereunder, which might
result in any material adverse change in the business, prospects, financial
condition or results of operation of the Company and its subsidiaries taken as a
whole, and the Company and its subsidiaries enjoy peaceful and undisturbed
possession under all such leases to which any of them is a party as lessee with
such exceptions as do not materially interfere with the use made by the Company
or such subsidiary;
x) each of the Facilities has such licenses, certifications and
authorizations of governmental or regulatory authorities which are required in
connection with the provision by the Facilities of dialysis services under
applicable licensure, Medicare or Medicaid laws in the manner described in the
Prospectus and which are required to be held by the Facilities as providers of
dialysis services under the Medicare or Medicaid programs; and
xi)(1) Each document filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and the Prospectus
(except for financial statements, schedules and other financial data as to which
no opinion need be expressed) complied when so filed as to form in all material
respects with the Exchange Act and the applicable rules and regulations of the
Commission thereunder, (2) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for financial statements, schedules and
other financial data as to which no opinion need be expressed) comply as to form
in all material respects with the Act, and (3) such counsel believes that
(except for financial data, as aforesaid) the Registration Statement (including
the documents incorporated by reference therein) and the prospectus included
therein at the time the Registration Statement became effective did not contain
any 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, and that the Prospectus (including the documents incorporated by
refer-
31
ence therein), as amended or supplemented, if applicable (except for financial
statements, as aforesaid) does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
In giving the opinions specified in (vi), (vii) and (x) above, such
counsel may rely upon an opinion or opinions of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇,
regulatory counsel for the Company rendered pursuant to paragraph (h) below. In
giving such opinion with respect to the matters covered by clause (xi) such
counsel may state that such counsel's opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein by
reference and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and to our counsel), dated the Closing Date, of ▇▇▇▇▇▇▇▇▇,
Will & ▇▇▇▇▇, regulatory counsel for the Company, to the effect that:
i) the statements under the captions "Risk Factors--
Dependence on Medicare, Medicaid and Other Sources of Reimbursement",
"--Operations Subject to Government Regulation", "Business--Operations--
Medicare Reimbursement" and "Business--Governmental Regulation" in the
Prospectus, insofar as such statements constitute a summary of legal
matters, documents or proceedings referred to therein, are fair summaries
in all material respects of the information called for with respect to such
legal matters, documents and proceedings; and
ii) the execution, delivery and performance of this
Agreement by the Company will not require any consent, approval,
authorization or order of any court, regulatory body, administrative agency
or other governmental body in connection with the provision by the dialysis
facilities owned by the Company or its Subsidiaries (the "Facilities") of
dialysis services under applicable licensure, Medicare and Medicaid laws in
the manner described
32
in the Prospectus or which could affect the status of the Facilities as
providers of dialysis services under the Medicare or Medicaid programs
other than presently effective actions, consents disclosures or filings
that have already been made on or prior to the date hereof.
The opinions of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsels for the Selling
Stockholders, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, described in
paragraphs (e), (f), (g) and (h) above shall be rendered to you at the
request of the Company and shall so state therein.
(i) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, counsel for the
Underwriters, as to the matters referred to in clauses (i), (ii), (iv), (v)
(but only with respect to the statements under the captions "Description of
Capital Stock" and "Underwriting") and (ix) of the foregoing paragraph (e).
In giving such opinion with respect to the matters covered by clause (ix)
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto (other than the
documents incorporated by reference) and review and discussion of the
contents thereof (including documents incorporated by reference), but are
without independent check or verification except as specified.
(j) You shall have received letters on and as of the Closing Date, in
form and substance satisfactory to you, from Price Waterhouse, LLP and KPMG Peat
Marwick, LLP, independent public accountants, with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus and substantially in the form and substance of the
letter delivered to you by such accountants on the date of this Agreement.
(k) The Company shall not have failed at or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be
33
performed or complied with by the Company at or priority the Closing Date.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
10. Effective Date of Agreement and Termination. This Agreement shall
-------------------------------------------
become effective upon the later of (i) execution of this Agreement and (ii) when
notification of the effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and its Subsidiaries, taken as a whole,
or the earnings, affairs, or business prospects of the Company and its
Subsidiaries, taken as a whole, whether or not arising in the ordinary course of
business, which would, in your judgment, make it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) any
outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions the effect of which on the
financial markets of the United States or elsewhere, in your judgment, is
material and adverse and would, in your judgment, make it impracticable to
market the Shares on the terms.and in the manner contemplated in the Prospectus,
(iii) the suspension or material limitation of trading in securities on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market or
limitation on prices for securities on any such exchange or the National Market
System, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority that in your opinion materially and adversely affects,
34
or will materially and adversely affect, the business or operations of the
Company and its Subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares the or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
--------
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date or on an Option Closing Date, as the case may be, any
Underwriter or Underwriters shall fail or refuse to purchase Firm Shares, or
Additional Shares, as the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to which such default
occurs is more than one-tenth of the aggregate number of Shares to be purchased
on such date by all Underwriters and arrangements satisfactory to you and the
applicable Sellers for purchase of such Shares are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of
35
any non-defaulting Underwriter and the applicable Sellers. In any such case
which does not result in termination of this Agreement, either you or the
Sellers shall have the right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and the Prospectus or any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Stockholders. Each Selling Stockholder
--------------------------------------
severally agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes with respect to
the Shares to be sold by such Selling Stockholder; and
(b) To take all reasonable actions in cooperation with the Company and
the Underwriters to cause the Registration Statement to become effective at the
earliest possible time, to do and perform all things to be done and performed
under this Agreement prior to the Closing Date (and any Option Closing Date, if
applicable) and to satisfy all conditions precedent to the delivery of the
Shares pursuant to this Agreement.
12. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if; to the Company, to TOTAL RENAL
CARE HOLDINGS, INC., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, and (b) if to any Underwriter or to you, to you c/▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Selling Stockholders, the Company, its
officers and directors and of the several Underwriters set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive
36
delivery of and payment for the Shares, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter or
by or on behalf of the Sellers, the officers or directors of the Company or any
controlling person of the Sellers, (ii) acceptance of the Shares and payment for
them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the Sellers agree to reimburse
the several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Sellers, the
Underwriters, any controlling persons referred to herein and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any rights under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
37
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
TOTAL RENAL CARE
HOLDINGS, INC.
By:
----------------------------
Title:
THE SELLING STOCKHOLDERS NAMED
IN SCHEDULE II HERETO
By:
----------------------------
Attorney-in-fact
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
UBS SECURITIES LLC
Acting severally on behalf of themselves
and the several Underwriters named in
Schedule I hereto
By ▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By
----------------------------
Title:
SCHEDULE I
----------
UNDERWRITERS SHARES
------------ ------
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
UBS Securities LLC
---------
3,000,000
=========
SCHEDULE II
-----------
SELLING STOCKHOLDERS
--------------------
ADDITIONAL
FIRM SHARES SHARES
----------- ----------
ANNEX I
-------
REQUIRED LOCK-UPS
-----------------
▇▇▇▇▇▇ M.G. Chaltiel
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
National Medical Enterprises, Inc.
DLJ Merchant Banking Partners, L.P.
DLJ International Partners, C.V.
DLJ Offshore Partners, C.V.
DLJ First ESC, LLC
DLJ Merchant Banking Funding, Inc.