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REGISTRATION RIGHTS AGREEMENT
dated as of November 3, 1998
between
APRIA HEALTHCARE GROUP INC.
and
RELATIONAL INVESTORS, LLC,
ON BEHALF OF THE ENTITIES NAMED HEREIN
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of November 3, 1998, between
Apria Healthcare Group Inc., a Delaware corporation (the "Company") and
Relational Investors, LLC, a Delaware limited liability company (together with
its affiliates, "Relational"), on behalf of each of the entities set forth on
Annex A to the Standby Purchase Agreement (as defined below) (collectively with
Relational, the "Investors") .
W I T N E S S E T H :
WHEREAS, the Company proposes to distribute to its stockholders rights
("Rights") to purchase approximately $50,000,000 aggregate principal amount of
its 10% Convertible Subordinated Debentures due 2004, with the exact aggregate
principal amount being equal to the number of shares of common stock outstanding
on the record date for distribution of the Rights (the "Debentures"). The
offering of the Debentures pursuant to the Rights is referred to herein as the
"Rights Offering";
WHEREAS, the parties hereto entered into a Standby Purchase Agreement
dated as of November 3, 1998 (the "Standby Purchase Agreement"), pursuant to
which the Investors agreed to subscribe to purchase all Debentures not purchased
by other holders of Rights;
WHEREAS, the Company hereby agrees to grant the Investors the
registration rights contained herein in consideration of their agreement to
purchase all Debentures not purchased by other holders of Rights; and
WHEREAS, the parties hereto deem it in their best interests and in the
best interests of the Company to provide for certain matters with respect to the
governance of the Company and desire to enter into this Agreement in order to
effectuate that purpose.
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NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, the parties hereto hereby agree as follows:
ARTICLE I. Certain Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
"affiliate" shall mean with respect to any Person, (a) any Person
which directly, or indirectly through one or more intermediaries, controls, or
is controlled by, or is under common control with, such Person, (b) any Person
who is a director or executive officer, (i) of such Person, (ii) of any
subsidiary of such Person, or (iii) of any Person described in the foregoing
clause (a), or (c) any spouse, parent, sibling, mother-in-law, father-in-law,
brother-in-law, sister-in-law, aunt, uncle, first cousin or direct descendant of
any Person described in the foregoing clause (b). For purposes of this
definition, "control" of a Person shall mean the power, direct or indirect, (i)
to vote or direct the voting of 50% or more of the outstanding shares of voting
Capital Stock of such Person, or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Agreement" shall mean this Agreement as in effect on the date hereof
and as hereafter from time to time amended, modified or supplemented in
accordance with the terms hereof.
"Closing Date" shall have the meaning specified in
the Standby Purchase Agreement.
"Common Stock" shall mean the Common Stock, par value $0.001 per
share, of the Company.
"Company" shall have the meaning assigned to such
term in the preamble.
"Company Securities" shall have the meaning assigned to such term in
Section 2.1(g).
"Credit Agreement" shall mean that Credit Agreement dated as of August
9, 1996, between the Company and certain of its subsidiaries, Bank of America,
National Trust and Savings Association, Nationsbank of Texas, N.A. and other
financial institutions from time to time party, as amended.
"Exchange Act" shall mean, as of any date, the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
"Holder Request" shall have the meaning assigned to such term in
Section 2.1(a).
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"initial shares" shall have the meaning assigned to such term in
Section 2.3(e).
"NASD" means the National Association of Securities Dealers, Inc., or
any successor regulatory body exercising similar functions.
"Person" shall mean an individual or a corporation, limited liability
company, association, partnership, joint venture, organization, business,
individual, trust, or any other entity or organization, including a government
or any subdivision or agency thereof.
"Public Offering" shall mean the sale of shares of Common Stock to the
public subsequent to the date hereof pursuant to a registration statement under
the Securities Act which has been declared effective by the SEC (other than a
registration statement on Form S-8 or any other successor form).
"Registrable Securities" shall mean the following:
(a) all shares of Common Stock (i) outstanding on the date hereof or
hereafter acquired by any Investor or its affiliates or (ii) issuable under
warrants, options or convertible securities outstanding on the date hereof
or hereafter issued to any Investor or its affiliates, including, without
limitation, the Debentures; and
(b) any shares of Common Stock issued or issuable by the Company in
respect of any shares of Common Stock referred to in the foregoing clause
(a) by way of a pay- in-kind dividend, stock dividend or stock split or in
connection with a combination or subdivision of shares, reclassification,
recapitalization, merger, consolidation or other reorganization of the
Company.
As to any particular Registrable Securities that have been issued,
such securities shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of under such registration statement, (ii) they shall have been distributed to
the public pursuant to Rule 144 under the Securities Act, (iii) they shall have
been otherwise transferred or disposed of by the Investors, (iv) the Company
shall have received a written opinion of counsel reasonably acceptable to the
Investors or no action advice from the SEC to the effect that such securities
may be sold by the Investors without the requirement of registration or
qualification under the Securities Act or (v) they shall have ceased to be
outstanding.
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"Registration Expenses" shall mean any and all out-of-pocket expenses
incident to the Company's performance of or compliance with Article III hereof,
including, without limitation, all SEC, stock exchange or NASD registration and
filing fees, all fees and expenses of complying with all applicable federal and
state securities laws and blue sky laws (including the reasonable fees and
disbursements of underwriters' counsel in connection with blue sky
qualifications and NASD filings), all fees and expenses of the transfer agent
and registrar for the Registrable Securities, all printing expenses, the fees
and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits and/or "cold comfort"
letters required by or incident to such performance and compliance, and the
reasonable fees and disbursements of one firm of counsel retained by each
Investor participating in the registration, but excluding underwriting discounts
and commissions and applicable transfer and documentary stamp taxes, if any,
which shall be borne by the seller of the securities in all cases.
"SEC" shall mean the Securities and Exchange
Commission.
"Securities Act" shall mean, as of any date, the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder.
ARTICLE II. Registration Rights.
Section II.1. Demand Registrations.
(a) At any time after the first anniversary of the Closing Date, and
until the later of (i) the fifth anniversary of the Closing Date and (ii) such
time as the Investors own less than 10.0% of the outstanding Common Stock of the
Company (assuming, for such purpose, the conversion of all outstanding
Debentures), one or more Investors (the "Requesting Investors") may request in
writing that the Company effect the registration under the Securities Act of all
or part of their Registrable Securities, specifying in the request the number
and types of Registrable Securities to be registered by each such holder and the
intended method of disposition thereof (such notice is hereinafter referred to
as a "Holder Request"). Upon receipt of such Holder Request, the Company will
promptly give written notice of such requested registration to all other holders
of Registrable Securities, which other holders shall have the right, subject to
the provisions of Section 2.1(h) hereof, to include the Registrable Securities
held by them in such registration and thereupon the Company will, as
expeditiously as possible, use its best efforts to effect the registration under
the Securities Act of:
(i) the Registrable Securities which the Company
has been so requested to register by the Requesting
Investors; and
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(ii) all other Registrable Securities which the Company has been
requested to register by any other holder thereof (the "Other Holders" and,
together with the Requesting Investors, the "Selling Holders") by written
request given to the Company within 30 calendar days after the giving of
such written notice by the Company.
all to the extent necessary to permit the disposition of the Registrable
Securities so to be registered pursuant to an Underwritten Offering or by such
other method of disposition as the Requesting Investors may specify in the
Holder Request; provided, however, that the Company shall not be obligated to
file a registration statement pursuant to any Holder Request under this Section
2.1(a);
(A) Unless the Company shall have received requests for such
registration with respect to Registrable Securities (i) constituting
at least 20% of the Registrable Securities (assuming, for the purpose
of calculating such percentage, the conversion of all outstanding
Debentures) and (ii) having a market value of at least $5.0 million;
or
(B) Within a period of 6 months after the effective date of any
other registration statement relating to any registration request
under this Section 2.1(a); or
(C) Within three (3) months of the effective date of any
registration statement for equity securities of the Company (other
than on Form S-8 or Form S-4 or any successor form).
(b) Notwithstanding the foregoing provisions of Section 2.1(a), and
except as provided in Section 2.1(h), the Company shall not be obligated to file
more than an aggregate of two (2) registration statements pursuant to this
Section 2.1.
(c) If the Company proposes to effect a registration requested
pursuant to this Section 2.1 by the filing of a registration statement on Form
S-3 (or any successor short-form registration statement), the Company will
comply with any request by the managing underwriter to effect such registration
on another permitted form if such managing underwriter advises the Company that,
in its opinion, the use of another form of registration statement is of material
importance to the success of such proposed offering, provided that the
incremental additional cost of using such other form is borne by the Requesting
Holder.
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(d) A registration requested pursuant to this Section 2.1 shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective and remained effective in compliance with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement until such time as
all of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement (unless the failure to so dispose of such
Registrable Securities shall be caused solely by reason of a failure on the part
of the Selling Holders); provided that such period need not exceed 60 days; (ii)
if after it has become effective, such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court for any reason not attributable solely to the
Selling Holders or (iii) if the conditions to closing specified in the
underwriting agreement, if any, entered into in connection with such
registration are not satisfied or waived, other than solely by reason of a
failure on the part of the Selling Holders.
(e) The Company will pay all Registration Expenses in connection with
each of the registrations of Registrable Securities effected by it pursuant to
this Section 2.1.
(f) Subject to any existing commitments of the Company, the Requesting
Investors shall have the right to select the investment bank (or investment
banks) that shall manage the offering (collectively, the "managing underwriter")
involving a registration under this Section 2.1; provided that such managing
underwriter is reasonably acceptable to the Company.
(g) Whenever a requested registration pursuant to this Section 2.1
involves a firm commitment underwriting (an "Underwritten Offering"), the only
shares that may be included in such Underwritten Offering are (i) Registrable
Securities, and (ii) securities of the Company which are not Registrable
Securities, but which are includable by the holders thereof upon exercise
"demand" or "piggyback" registration rights similar to those applicable to
Registrable Securities pursuant to Sections 2.1 or 2.2 or securities offered for
sale by the Company ("Company Securities").
(h) If a registration pursuant to this Section 2.1 involves an
Underwritten Offering and the managing underwriter shall advise the Company
that, in its judgment, the number of shares proposed to be included in such
Underwritten Offering exceeds the number which can be sold in such offering so
as to be reasonably likely to have an adverse effect on the price, timing or
distribution of the securities offered in such offering, then the Company will
promptly so advise each holder of Registrable Securities and Company Securities
that has requested registration, and the Company Securities, if any, shall first
be excluded from such Underwritten Offering to the extent necessary to meet such
limitation; and if further exclusions are necessary to meet such limitation,
Registrable Securities requested to be registered pursuant to Section 2.1(a)(i)
or Section 2.1(a)(ii) shall be excluded pro rata, based on the respective
numbers of shares of Common Stock as to which registration shall have been
requested by such Persons. If the number of Registrable Securities requested to
be registered pursuant to Section 2.1(a)(i), but that are excluded from
registration pursuant to this Section 2.1(h), is equal or greater to 25% of the
total number of Registrable Securities requested to be so registered, then such
registration by the Company shall not count as a registration for the purposes
of Section 2.1(b) only.
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(i) It is hereby further agreed that with respect to any registration
requested pursuant to this Section 2.1 the Company may defer the filing or
effectiveness of any registration statement related thereto (or cause sales to
cease under any previously filed registration statement) for a reasonable period
of time not to exceed 120 days after such request if (A) the Company is, at such
time, working on an underwritten public offering of Common Stock and is advised
by its managing underwriter(s) that such offering would in its or their opinion
be adversely affected by such filing or (B) the Company determines, in its good
faith and reasonable judgment, that any such filing or the offering of any
Registrable Securities would materially impede, delay or interfere with any
material proposed financing, offer or sale of securities, acquisition, corporate
reorganization or other significant transaction involving the Company; provided
that, with respect to clause (B), the Company gives the Requesting Investors
written notice of such determination; and provided further, however, with
respect to both clauses (A) and (B), the Company shall not be entitled to
postpone such filing or effectiveness (or to cause sales under an existing
registration statement to cease) if, within the preceding 12 months, it had
effected two postponements pursuant to this paragraph (i) and, following such
postponements, the Registrable Securities to be sold pursuant to the postponed
registration statements were not sold (for any reason).
Section II.2. Piggyback Registrations.
(a) If the Company at any time proposes to register any of its equity
or debt securities under the Securities Act (other than a registration on Form
S-4 or S-8 or any successor or similar forms thereto), whether or not for sale
for its own account, on a form and in a manner that would permit registration of
Registrable Securities for sale to the public under the Securities Act, it will
give written notice to all the holders of Registrable Securities promptly of its
intention to do so, describing such securities and specifying the form and
manner and the other relevant facts involved in such proposed registration
(including, without limitation, (x) whether or not such registration will be in
connection with an underwritten offering of Registrable Securities and, if so,
the identity of the managing underwriter and whether such offering will be
pursuant to a "best efforts" or "firm commitment" underwriting and (y) the range
of prices (net of any underwriting commissions, discounts and the like) at which
the Registrable Securities are reasonably expected to be sold) if such
disclosure is reasonably acceptable to the managing underwriter. Upon the
written request of any such holder delivered to the Company within 30 calendar
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder and the
intended method of disposition thereof), the Company will use its best efforts
to effect the registration under the Securities Act of all the Registrable
Securities that the Company has been so requested to register; provided,
however, that:
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(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to
each holder of Registrable Securities who made a request as provided herein
and thereupon the Company shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not
from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of the holders of the
Registrable Securities to request that such registration be effected as a
registration under Section 2.1; and
(ii) If such registration involves an Underwritten Offering, all
holders of Registrable Securities requesting some or all of their
Registrable Securities to be included in the Company's registration must
sell that portion of their Registrable Securities to the underwriters on
the same terms and conditions as apply to the Company and the other holders
participating therein; provided that prior to the effective date of the
registration statement filed in connection with such registration,
immediately upon notification to the Company from the managing underwriter
of the price at which such securities are to be sold, if such price is
below the range of prices which the Company indicated to all holders of
Registrable Securities in accordance with Section 2.2(a)(y), the Company
shall so advise such holders participating in the Underwritten Offering
(the "Participating Holders") of such price, and such Participating Holder
shall then have the right to withdraw its request to have its Registrable
Securities included in such registration statement.
No registration effected under this Section 2.2 shall. relieve the Company of
its obligation to effect registration upon request under Section 2.1.
(b) The Company shall not be obligated to effect any registration of
Registrable Securities under this Section 2.2 incidental to the registration of
any of its securities (on Form ▇-▇, ▇▇▇▇ ▇-▇ or any successor or similar form)
in connection with mergers, acquisitions, exchange offers, dividend reinvestment
plans or stock option or other employee benefit plans.
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(c) The Registration Expenses incurred in connection with each
registration of Registrable Securities requested pursuant to this Section 2.2
shall be paid by the Company.
(d) If a registration pursuant to this Section 2.2 involves an
Underwritten Offering and the managing underwriter advises the Company that, in
its opinion, the number of securities proposed to be included in such
registration exceeds the number which can be sold in such offering so as to be
reasonably likely to have an adverse effect on the price, timing or distribution
of the securities offered in such offering, the Company will include in such
registration (A) first, the Company Securities being registered for issuance by
the Company or pursuant to "demand" registration rights and/or any Registrable
Securities being registered pursuant to Section 2.1 (in accordance with the
priorities set forth in Section 2.1, if applicable), and (B) second, the number
of Registrable Securities requested to be included in such registration pursuant
to this Section 2.2 and/or Company Securities requested to be included in such
registration pursuant to "piggyback" registration rights on a pro rata basis,
based upon the respective number of shares of Common Stock as to which
registration shall have been requested by all such persons.
(e) In connection with any Underwritten Offering with respect to which
holders of Registrable Securities shall have requested registration pursuant to
this Section 2.2, the Company shall have the right to select the managing
underwriter with respect to the offering; provided that such managing
underwriter is reasonably acceptable to each Investor if Registrable Securities
of such Investor are being registered in connection therewith.
Section II.3. Registration Procedures.
(a) If and whenever the Company is required to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in Section 2.1 or 2.2, the Company will, as expeditiously as possible:
(i) Prepare and, in any event within 60 calendar days after the
end of the period within which requests for registration may be given to
the Company, file with the SEC a registration statement with respect to
such Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective, provided that the
Company may discontinue any registration of its securities that is being
effected pursuant to Section 2.2 at any time prior to the effective date of
the registration statement relating thereto.
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(ii) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep
such registration statement effective for a period as may be requested by
any Investor (if Registrable Securities of such Investor are being
registered) not exceeding sixty days and to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the seller or
sellers thereof set forth in such registration statement, provided that
before filing a registration statement or prospectus relating to the sale
of Registrable Securities, or any amendments or supplements thereto, the
Company will furnish to counsel and to each holder of Registrable
Securities covered by such registration statement or prospectus, copies of
all documents proposed to be filed, which documents will be subject to the
review of such counsel, and the Company will give reasonable consideration
in good faith to any comments of such counsel.
(iii) Furnish to each holder of Registrable Securities covered by
the registration statement and to each underwriter, if any, of such
Registrable Securities, such number of copies of a prospectus and
preliminary prospectus for delivery in conformity with the requirements of
the Securities Act, and such other documents, as such Person may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities.
(iv) Use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each seller shall
reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition of the Registrable Securities owned by such seller, in such
jurisdictions, except that the Company shall not for any such purpose be
required (A) to qualify to do business as a foreign corporation in any
jurisdiction where, but for the requirements of this Section 2.3(a)(iv), it
is not then so qualified, or (B) to subject itself to taxation in any such
jurisdiction, or (C) to take any action which would subject it to general
or unlimited service of process in any such jurisdiction where it is not
then so subject.
(v) Use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities.
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(vi) Immediately notify each seller of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 2.3(a)(ii), if the
Company becomes aware that the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing, and, at the request of any such seller,
deliver a reasonable number of copies of an amended or supplemented
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not
include an untrue statement of a material fact or omit to state material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(vii) Otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make generally available to
its security holders, in each case as soon as praticable, but not later
than 45 calendar days after the close of the period covered thereby (90
calendar days in case the period covered corresponds to a fiscal year of
the Company), an earnings statement of the Company which will satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder.
(viii) Use its reasonable best efforts in cooperation with the
underwriters to list such Registrable Securities on whatever national
securities exchange such securities are then listed.
(ix) In the event the offering is an Underwritten Offering, use
its reasonable best efforts to obtain a "cold comfort" letter from the
independent public accountants for the Company in customary form and
covering such matters of the type customarily covered by such letters and
as the underwriters and any Investor may reasonably request (if Registrable
Securities of such Investor are being registered), in order to effect an
underwritten public offering of such Registrable Securities.
(x) Execute and deliver all instruments and documents (including
in an Underwritten Offering an underwriting agreement in customary form,
including, without limitation, indemnities to the effect and to the extent
provided in Section 2.4) and take such other actions and obtain such
certificates and opinions as the underwriters and any Investor may
reasonably request (if Registrable Securities of such Investor are being
registered) in order to effect an underwritten public offering of such
Registrable Securities.
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(xi) Make available for inspection by the seller of such
Registrable Securities covered by such registration statement, by any
underwriter participating in any disposition to be effected pursuant to
such registration statement and by any attorney, accountant or other agent
retained by any such seller or any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties
of the Company, and cause all of the Company's officers, directors and
employees to supply all information reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with such
registration statement.
(xii) Obtain for delivery to the underwriter or agent an opinion
or opinions from counsel for the Company in customary form and in form and
scope reasonably satisfactory to such underwriter or agent and their
counsel.
(xiii) Provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date
later that the effective date of such registration.
(b) Each holder of Registrable Securities will, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 2.1(i) or Section 2.3(a)(vi), forthwith discontinue disposition of the
Registrable Securities pursuant to any registration statement and prospectus
covering such Registrable Securities until, as applicable, (i) such holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 2.3(a)(vi) or (ii) sales are permitted to resume under Section 2.1(i).
(c) If a registration pursuant to or described in Section 2.1 or 2.2
involves an Underwritten Offering, each holder of Registrable Securities agrees,
whether or not such holder's Registrable Securities are included in such
registration, not to effect any public sale or distribution, including any sale
pursuant to Rule 144 under the Securities Act, of any Registrable Securities, or
of any security convertible into or exchangeable or exercisable for any
Registrable Securities (other than as part of such Underwritten Offering),
without the consent of the managing underwriter, during a period commencing
seven calendar days before and ending 90 calendar days (or such lesser, number
as the managing underwriter shall designate) after the effective date of such
registration.
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(d) If a registration pursuant to or described in Section 2.1 or 2.2
involves an Underwritten Offering, any holder of Registrable Securities
requesting to be included in such registration may elect, in writing, prior to
the effective date of the registration statement filed in connection with such
registration, not to register such securities in connection with such
registration, unless such holder has agreed with the Company or the managing
underwriter to limit its rights under this Section 2.3; provided, however, that
if a holder of Registrable Securities that has requested a registration pursuant
to Section 2.1 withdraws its request after a registration statement has been
filed in response to such request, the Investors shall be deemed to have used
one of the two (2) demand registrations provided for under Section 2.1 unless
such holder reimburses the Company for all of its costs in connection with
preparing and filing such registration statement.
(e) It is understood that in any Underwritten Offering in addition to
any shares of stock (the "initial shares") the underwriters have committed to
purchase, the underwriting agreement may grant the underwriters an option to
purchase up to a number of additional shares of stock (the "option shares")
equal to 15% of the initial shares (or such other maximum amount as the NASD may
then permit), solely to cover overallotments. Option shares to be sold shall be
allocated in accordance with the provisions of Sections 2.1(h) and 2.2(d), as
applicable.
Section II.4. Indemnification.
(a) In the event of any registration of any securities of the Company
under the Securities Act pursuant to Section 2.1 or 2.2, the Company will, and
it hereby agrees to, indemnify and hold harmless, to the extent permitted by
law, each seller of any Registrable Securities covered by such registration
statement, each affiliate of such seller and their respective directors,
officers, employees and agents or general and limited partners (and directors,
officers, employees and agents thereof) and, if such seller is a portfolio or
investment fund, its investment advisors or agents, each other Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who controls such seller or any underwriter within
the meaning of the Securities Act, as follows:
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(i) against any and all loss, liability, claim, damage or expense
whatsoever, promptly after submission for payment, arising out of or
resulting from any untrue statement or alleged untrue statement of a
material fact contained in any registration statement (or any amendment or
supplement thereto), including any information included therein pursuant to
Rule 430A under the Securities Act (the "Rule 430A Information") if
applicable, 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 an untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus
or 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 light of the circumstances under which they were
made, not misleading, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in a
registration statement (or any amendment thereto), including the Rule 430A
Information, which were not made in reliance upon and in conformity with
written information furnished to the Company by the Investors expressly for
use in a registration statement (or any amendment thereto);
(ii) against any and all loss, liability, claim, damage or
expense whatsoever, promptly after submission for payment, to the extent of
the aggregate amount paid in settlement of any litigation, or 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
any such settlement is effected with the written consent of the Company
(which shall not be unreasonably withheld); and
(iii) against any and all expense whatsoever, promptly after
submission for payment (including, subject to Section 2.4(c) hereof, the
reasonable fees and disbursements of counsel for the indemnified parties),
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 of any such alleged untrue statement
or omission, to the extent that any such expense is not paid under (i) or
(ii) above; provided, however, that this indemnity agreement shall not
apply to any loss, liability, claim, damage or expense 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 indemnified party expressly for
use in the registration statement (or any amendment thereto), including the
Rule 430A Information, or any preliminary prospectus or prospectus (or any
amendment or supplement thereto).
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(b) Each indemnified party 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 or expense described in the indemnity
contained in subsection (a)(i) of this Section, promptly after submission for
payment, 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 prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
indemnified party expressly for use in the registration statement (or any
amendment thereto) or such preliminary prospectus or prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable 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 shall not relieve such indemnifying party from any liability
except to the extent the indemnifying party is materially prejudiced thereby. An
indemnifying party may participate at its own expense in the defense of any such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action, with counsel chosen by it
and approved by the indemnified parties in such action, unless such indemnified
parties reasonably object to such assumption on the ground that there may be
legal defenses available to them which are different from, conflicting with or
in addition to those available to such indemnifying party. Absent any such
difference or conflict, if an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel retained for
local procedural and practice matters) 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 could be sought under
this Section 2.4 (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, (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, (iii) does not impugn the reputation of any
indemnified party and (iv) does not restrict any indemnified party from engaging
in any activity.
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(d) The Company and each seller of Registrable Securities shall
provide for the foregoing indemnity (with appropriate modifications) in any
underwriting agreement with respect to any registration or other qualification
of securities under any federal or state law or regulation of any governmental
authority.
Section II.5. Contributions. In order to provide for just and
equitable contribution in circumstances under which the indemnity contemplated
by Section 2.4 is for any reason not available or insufficient for any reason to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities referred to therein, the parties required to indemnify by the terms
thereof shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company, any seller of Registrable Securities and one or more of the
underwriters, except to the extent that contribution is not permitted under
Section 11(f) of the Securities Act. In determining the amounts which the
respective parties shall contribute, there shall be considered the relative
benefits received by each party from the offering of the Registrable Securities
by taking into account the portion of the proceeds of the offering realized by
each, and the relative fault of each party by taking into account the parties'
relative knowledge and access to information concerning the matter with respect
to which the claim was asserted, the opportunity to correct and prevent any
statement or omission and any other equitable considerations appropriate under
the circumstances. The Company and each Person selling securities agree with
each other that no seller of Registrable Securities shall be required to
contribute any amount in excess of the amount such seller would have been
required to pay to an indemnified party if the indemnity under Section 2.4 were
available. The Company and each such seller agree with each other and the
underwriters of the Registrable Securities, if requested by such underwriters,
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the underwriters were
treated as one entity for such purpose) or for the underwriters' portion of such
contribution to exceed the percentage that the underwriting discount bears to
the public offering price of the Registrable Securities. For purposes of this
Section 2.5, each Person, if any, who controls an underwriter within the meaning
of Section 15 of the Securities Act shall have the same rights to contribution
as such underwriter, and each director and each officer of the Company who
signed the registration statement, and each Person, if any, who controls the
Company or a seller of Registrable Securities within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the Company
or a seller of Registrable Securities, as the case may be.
18
Section II.6. Rule 144. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder (or, if the Company is not required to file such reports, it
will, upon the request of any holder of Registrable Securities, make publicly
available other information), and it will take such further action as any holder
of Registrable Securities may reasonably request, all to the extent required
from time to time to enable such holder to sell shares of Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any holder of Registrable Securities,
the Company will deliver to such holder a written statement as to whether it has
complied with such requirements,
ARTICLE III. Termination.
Section III.1. Termination. Except as specifically provided elsewhere
in this Agreement, this Agreement shall terminate with respect to any Investor
when such Investor no longer owns any Registrable Securities.
ARTICLE IV. Miscellaneous.
Section IV.1. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
personally to the recipient, one day after being sent to the recipient by
reputable overnight express courier service (charges prepaid), five days after
being mailed to the recipient (postage prepaid) or upon confirmation if
transmitted by any standard form of telecommunication. Notices shall be directed
as follows:
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To Relational Investors, LLC:
Relational Investors, LLC
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
To the Company:
Apria Healthcare Group Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Section IV.2. Parties. This Agreement shall each inure to the benefit
of and be binding upon the Investors 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
Investors and the Company and their respective successors and the controlling
persons and officers and directors 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 Investors 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 Debentures from any Investor shall be deemed to be a successor by
reason merely of such purchase.
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Section IV.3. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of California applicable to agreements made and to
be performed in said state.
Section IV.4. Miscellaneous.
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company and each of the Investors, or in the case of a waiver,
by the party against whom the waiver is to be effective. No failure or delay by
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. In the event that any one or more of the provisions contained in this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
(b) No party to this Agreement may assign any of its rights or
obligations under this Agreement without the prior written consent of the other
parties hereto except that the Investors may without such consent assign their
rights hereunder to one or more of their respective affiliates.
(c) This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which shall constitute one and
the same agreement.
(d) The heading references herein are for convenience purposes only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
APRIA HEALTHCARE GROUP INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Chief Executive Officer
RELATIONAL INVESTORS, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Authorized Signatory