EXHIBIT 1.1
4,000,000
LHC GROUP, INC.
COMMON STOCK, PAR VALUE $0.01 PER SHARE
UNDERWRITING AGREEMENT
____________________, 2005
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
As Representatives of the several Underwriters
c/o JEFFERIES & COMPANY, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. LHC Group, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several underwriters named in
Schedule A (the "UNDERWRITERS") an aggregate of 3,100,000 shares of its common
stock, par value $0.01 per share (the "COMMON STOCK"); and the stockholders of
the Company named in Schedule B (collectively, the "SELLING STOCKHOLDERS")
severally propose to sell to the Underwriters an aggregate of 900,000 shares of
Common Stock. The 3,100,000 shares of Common Stock to be sold by the Company and
the 900,000 shares of Common Stock to be sold by the Selling Stockholders are
collectively called the "FIRM Shares." In addition, the Selling Stockholders
have severally granted to the Underwriters an option to purchase up to an
additional 600,000 shares of Common Stock, with each Selling Stockholder selling
up to the amount set forth opposite such Selling Stockholder's name in Schedule
B, all as provided in Section 2. The additional 600,000 shares of Common Stock
to be sold by the Selling Stockholders pursuant to such option are collectively
called the "OPTIONAL SHARES." The Firm Shares and, if and to the extent such
option is exercised, the Optional Shares are collectively called the "OFFERED
SHARES." Jefferies & Company, Inc. ("JEFFERIES") and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
Incorporated have agreed to act as representatives of the several Underwriters
(in such capacity, the "REPRESENTATIVES") in connection with the offering and
sale of the Offered Shares.
The Company and the Underwriters agree that up to 200,000 of
the Firm Shares to be purchased by the Underwriters (the "DIRECTED SHARES")
shall be reserved for sale by the Underwriters to certain eligible directors,
officers and employees of the Company and persons having business relationships
with the Company (collectively, the "PARTICIPANTS"), as part of the distribution
of the Offered Shares by the Underwriters (the "DIRECTED SHARE PROGRAM") subject
to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. (the
"NASD") and all other applicable laws, rules and regulations. One of the
Underwriters (the "DESIGNATED UNDERWRITER") shall be selected to process the
sales to the Participants under the Directed Share Program. To the extent that
such Directed Shares are not orally confirmed for purchase by the Participants
by the end of the first
business day after the date of this Agreement, such Directed Shares may be
offered to the public as part of the public offering contemplated hereby.
The Company has prepared and filed with the Securities and
Exchange Commission (the "COMMISSION") a registration statement on Form S-1
(File No. 333-120792), which contains a form of prospectus to be used in
connection with the public offering and sale of the Offered Shares. Such
registration statement, as amended, including the financial statements, exhibits
and schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "SECURITIES ACT"),
including any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the Securities Act, is
called the "REGISTRATION STATEMENT." Any registration statement filed by the
Company pursuant to Rule 462(b) under the Securities Act is called the "RULE
462(b) REGISTRATION STATEMENT," and from and after the date and time of filing
of the Rule 462(b) Registration Statement the term "REGISTRATION STATEMENT"
shall include the Rule 462(b) Registration Statement. Such prospectus, in the
form first used by the Underwriters to confirm sales of the Offered Shares, is
called the "PROSPECTUS." All references in this Agreement to (i) the
Registration Statement, the Rule 462(b) Registration Statement, a preliminary
prospectus, the Prospectus or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis, and Retrieval system ("▇▇▇▇▇") and (ii)
the Prospectus shall be deemed to include the "ELECTRONIC PROSPECTUS" provided
for use in connection with the offering of the Offered Shares as contemplated by
Section 3(A) (j) of this Agreement.
The Company and each of the Selling Stockholders hereby
confirm their respective agreements with the Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SELLING STOCKHOLDERS.
A. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to each Underwriter as follows:
(a) Compliance with Registration Requirements. The
Registration Statement and any Rule 462(b) Registration Statement have been
declared effective by the Commission under the Securities Act. The Company has
complied to the Commission's satisfaction with all requests of the Commission
for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.
Each preliminary prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed
by electronic transmission pursuant to ▇▇▇▇▇ (except as may be
permitted by Regulation S-T under the Securities Act), was identical to
the copy thereof delivered to the Underwriters for use in connection
with the offer and sale of the Offered Shares. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time it became effective and
at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and 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. The Prospectus as amended or supplemented, as
of its date and at all subsequent
2
times, did not and will 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 light of the circumstances under which they were
made, not misleading. The representations and warranties set forth in
the two immediately preceding sentences do not apply to statements in
or omissions from the Registration Statement, any Rule 462(b)
Registration Statement, or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in reliance
upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by the Representatives expressly
for use therein, it being understood and agreed that the only such
information furnished by the Representatives to the Company consists of
the information described in Section 8(b) below. There are no contracts
or other documents required to be described in the Prospectus or to be
filed as exhibits to the Registration Statement that have not been
described or filed as required.
(b) Distribution of Offering Material By the Company. The
Company has not distributed and will not distribute, prior to the latest of
(i) the expiration or termination of the option granted to the several
Underwriters in Section 2, (ii) the completion of the Underwriters'
distribution of the Offered Shares and (iii) the expiration of 25 days after
the date of the Prospectus, any offering material in connection with the
offering and sale of the Offered Shares other than the offering materials used
in connection with the Directed Share Program, a preliminary prospectus, the
Prospectus or the Registration Statement.
(c) The Underwriting Agreement. This Agreement has been
duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(d) Authorization of the Firm Shares. The Firm Shares to
be purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.
(e) No Applicable Registration or Other Similar Rights.
There are no persons with registration or other similar rights to have any
equity or debt securities registered for sale under the Registration Statement
or included in the offering contemplated by this Agreement, other than the
Selling Stockholders with respect to the Offered Shares included in the
Registration Statement, except for such rights as have been duly waived.
(f) No Material Adverse Change. Except as otherwise
disclosed in the Prospectus, subsequent to the respective dates as of which
information is given in the Prospectus: (i) there has been no material adverse
change, or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in the
earnings, business, operations or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity (any such change is called a "MATERIAL
ADVERSE CHANGE"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation (including any
off balance sheet obligation), indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) except as set forth
in the Prospectus during the three year period ended December 31, 2004 there has
been no dividend or distribution of any kind declared, paid or made by the
Company or,
3
except for dividends paid to the Company or other subsidiaries, by any of their
respective subsidiaries on any class of capital stock or limited liability
company membership interest or unit or any repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock or limited
liability company membership interest or unit.
(g) Independent Accountants. Ernst & Young LLP, who have
expressed their opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are (i) an independent registered public accounting firm as required
by the Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (ii) in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X and (iii) a
registered public accounting firm as defined by the Public Company Accounting
Oversight Board (the "PCAOB") whose registration has not been suspended or
revoked and who has not requested such registration to be withdrawn.
(h) Preparation of the Financial Statements. The
financial statements filed with the Commission as a part of the Registration
Statement and included in the Prospectus present fairly in all material respects
the consolidated financial position of the Company and its subsidiaries as of
and at the dates indicated and the results of their operations and cash flows
for the periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods involved, except as may be expressly stated in the
related notes thereto. No other financial statements are required to be included
in the Registration Statement. The financial data set forth in the Prospectus
under the captions "Prospectus Summary--Summary Selected Consolidated Financial
and Other Data," "Selected Consolidated Financial Data" and "Capitalization"
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement. No
person who has been suspended or barred from being associated with a registered
public accounting firm, or who has failed to comply with any sanction pursuant
to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided
the preparation of, or audited, the financial statements, supporting schedules
or other financial data filed with the Commission as a part of the Registration
Statement and included in the Prospectus.
(i) Company's Accounting System. The Company makes and
keeps accurate books and records and maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(j) Incorporation and Good Standing of the Company and
its Subsidiaries. Each of the Company, its subsidiaries and its joint venture or
cooperative endeavor partners listed in Exhibit D attached hereto (collectively
the "Joint Ventures"), has been duly incorporated or organized and is validly
existing as a corporation, partnership or limited liability company, as
applicable, in good standing under the laws of the jurisdiction of its
incorporation or organization and has the power and authority (corporate or
other) to own, lease and operate its properties and to conduct its business as
described in the Prospectus and, in the case of the Company, to enter into and
perform its obligations under this Agreement. Each of the Company, its
subsidiaries and
4
Joint Ventures are duly qualified as a foreign corporation, partnership or
limited liability company, as applicable, to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business
except for those failures to be so qualified as would not, individually or in
the aggregate, result in a Material Adverse Change. All of the issued and
outstanding capital stock or other equity or ownership interest of each
subsidiary and Joint Venture has been duly authorized and validly issued, is
fully paid and nonassessable. Except as set forth in the Prospectus, all of the
issued and outstanding capital stock or other equity or ownership interest of
each subsidiary and Joint Venture owned by the Company is owned, directly or
through subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance or adverse claim and to the best of the Company's knowledge,
all of the issued and outstanding capital stock or other equity or ownership
interest of each subsidiary and Joint Venture not owned by the Company is owned
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
adverse claim. The Company does not own or control, directly or indirectly, any
corporation, partnership, limited liability company or other entity other than
the subsidiaries listed in Exhibit 21 to the Registration Statement or in
Exhibit D attached hereto.
(k) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Prospectus under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectus or upon exercise of outstanding options or key employee equity
participation units described in the Prospectus). The shares of Common Stock
(including the Offered Shares) conform in all material respects to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of Common Stock (including the Common Stock owned by Selling
Stockholders) have been duly authorized and validly issued, are fully paid and
nonassessable and have been issued in compliance with federal and state
securities laws. None of the outstanding shares of Common Stock was issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those described in the Prospectus. The
description of the Company's employee benefits plans, stock option, stock bonus
and other stock plans or arrangements, and the options or other rights granted
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(l) Stock Exchange Listing. The Offered Shares have been
approved for listing on the Nasdaq National Market, subject only to official
notice of issuance.
(m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or is in default (or,
with the giving of notice or lapse of time, would be in default) ("DEFAULT")
under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (each, an "EXISTING INSTRUMENT"), except for such Defaults as would not,
individually or in the aggregate, result in a Material Adverse Change. The
Company's execution, delivery and performance of this Agreement, consummation of
the transactions contemplated hereby and by the Prospectus and the issuance and
sale of the Offered Shares (i) have been duly authorized by all necessary
corporate action and will not result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary, (ii) will
5
not conflict with or constitute a breach of, or Default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, or require the
consent of any other party to, any Existing Instrument, and (iii) will not
result in any violation of any law, administrative regulation or administrative
or court decree applicable to the Company or any subsidiary. No consent,
approval, authorization or other order of, or registration or filing with, any
court or other governmental or regulatory authority or agency, is required for
the Company's execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby and by the Prospectus,
except such as have been or will be obtained or made by the Company and are or
will be in full force and effect under the Securities Act, applicable state
securities or blue sky laws and from the NASD.
(n) No Material Actions or Proceedings. There are no
legal or governmental actions, suits or proceedings pending or, to the best of
the Company's knowledge, threatened (i) against or that would reasonably be
expected to affect the Company or any of its subsidiaries, or (ii) which has as
the subject thereof any officer or director of, or property owned or leased by,
the Company or any of its subsidiaries where in any such case any such action,
suit or proceeding, if so determined adversely, would reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement. No material labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the Company's
knowledge, is threatened or imminent.
(o) Intellectual Property Rights. The Company and its
subsidiaries own or possess sufficient trademarks, trade names, patent rights,
copyrights, domain names, licenses, approvals, trade secrets and other similar
rights (collectively, "INTELLECTUAL PROPERTY RIGHTS") reasonably necessary to
conduct their businesses as now conducted; and the expected expiration of any of
such Intellectual Property Rights would not result in a Material Adverse Change.
Neither the Company nor any of its subsidiaries has received, or reasonably
expects that it will receive, any notice of infringement or conflict with
asserted Intellectual Property Rights of others. The Company is not a party to
or bound by any options, licenses or agreements with respect to the Intellectual
Property Rights of any other person or entity that are required to be set forth
in the Prospectus and are not described therein. None of the technology employed
by the Company has been obtained or is being used by the Company in violation of
any contractual obligation binding on the Company or, to the Company's
knowledge, any of its officers, directors or employees or otherwise in violation
of the rights of any persons.
(p) All Necessary Permits, etc. The Company and each
subsidiary possess such valid and current certificates, authorizations or
permits (including certificate of need approvals), consents, orders,
certifications (including certification under the Medicare and Medicaid
programs), issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct their respective businesses except for
those failures to possess such certificates, authorizations, permits, consents,
orders or certifications that would not, individually or in the aggregate,
result in a Material Adverse Change. Neither the Company nor any subsidiary has
received, or has any reason to believe that it will receive, any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Change. All of the hospice agencies operated by the
Company (collectively, the "FACILITIES") or its subsidiaries are eligible to
participate in the Medicare and available Medicaid programs.
(q) Title to Properties. Except as described in the
Prospectus, the Company and each of its subsidiaries has good and marketable
title to all of the real and personal property
6
and other assets reflected as owned in the financial statements referred to in
Section 1(A)(i) above (or elsewhere in the Prospectus), in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
adverse claims and other defects. The real property, improvements, equipment and
personal property held under lease by the Company or any subsidiary are held
under valid and enforceable leases, with such exceptions as are not material and
do not materially interfere with the use made or proposed to be made of such
real property, improvements, equipment or personal property by the Company or
such subsidiary.
(r) Tax Law Compliance. The Company and its consolidated
subsidiaries have filed all necessary federal, state and foreign income and
franchise tax returns and have paid all taxes required to be paid by any of them
and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them. The Company has made charges, accruals and reserves
in the applicable financial statements referred to in Section 1(A)(i) above in
accordance with generally accepted accounting principles in respect of all
federal, state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company or any of its consolidated subsidiaries
has not been finally determined.
(s) Company Not an "Investment Company". The Company has
been advised of the rules and requirements under the Investment Company Act of
1940, as amended (the "INVESTMENT COMPANY ACT"). The Company is not, and after
receipt of payment for the Offered Shares will not be, an "INVESTMENT COMPANY"
within the meaning of Investment Company Act and will conduct its business in a
manner so that it will not become subject to the Investment Company Act.
(t) Insurance. Each of the Company and its subsidiaries
are insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such deductibles and covering such risks as
are generally deemed adequate and customary for their businesses including, but
not limited to, policies covering real and personal property owned or leased by
the Company and its subsidiaries against theft, damage, destruction, acts of
vandalism. The Company does not believe that it or any subsidiary will not be
able (i) to renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar institutions as may be
necessary or appropriate to conduct its business as now conducted and at a cost
that would not result in a Material Adverse Change. Neither of the Company nor
any subsidiary has been denied any insurance coverage that it has sought or for
which it has applied.
(u) No Price Stabilization or Manipulation; Compliance
with Regulation M. The Company has not taken, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock or any other
"REFERENCE SECURITY" (as defined in Rule 100 of Regulation M under the Exchange
Act ("REGULATION M")) whether to facilitate the sale or resale of the Offered
Shares or otherwise, and has taken no action that would directly or indirectly
violate Regulation M. The Company acknowledges that the Underwriters may engage
in passive market making transactions in the Offered Shares on the Nasdaq
National Market in accordance with Regulation M.
(v) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or any
subsidiary or any other person required to be described in the Prospectus that
have not been described as required.
(w) No Unlawful Contributions or Other Payments. Neither
the Company nor any of its subsidiaries nor, to the Company's knowledge, any
employee or agent of the
7
Company or any subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation
of any law or of the character required to be disclosed in the Prospectus.
(x) Compliance with Environmental Laws. Except as
described in the Prospectus and except as would not, singly or in the aggregate,
result in a Material Adverse Change, (i) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign statute,
law, rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "HAZARDOUS MATERIALS") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "ENVIRONMENTAL LAWS"), (ii) the Company and
its subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (iii) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings relating to
any Environmental Law against the Company or any of its subsidiaries and (iv)
there are no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(y) ERISA Compliance. The Company and its subsidiaries
and any "EMPLOYEE BENEFIT PLAN" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or maintained by
the Company, its subsidiaries or their "ERISA AFFILIATES" (as defined below) are
in compliance in all material respects with ERISA. "ERISA AFFILIATE" means, with
respect to the Company or a subsidiary, any member of any group of organizations
described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the "CODE") of which the Company or such subsidiary is a member. No "REPORTABLE
EVENT" (as defined under ERISA) has occurred or is reasonably expected to occur
with respect to any "EMPLOYEE BENEFIT PLAN" established or maintained by the
Company, its subsidiaries or any of their ERISA Affiliates. No "EMPLOYEE BENEFIT
PLAN" established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such "EMPLOYEE BENEFIT PLAN" were terminated, would have
any "AMOUNT OF UNFUNDED BENEFIT LIABILITIES" (as defined under ERISA). Neither
the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "EMPLOYEE BENEFIT PLAN" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "EMPLOYEE BENEFIT PLAN"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act, that
would cause the loss of such qualification.
(z) Brokers. Except for underwriting commissions and
other amounts required to be paid to the Underwriters pursuant to this
Agreement, there is no broker, finder or
8
other party that is entitled to receive from the Company any brokerage or
finder's fee or other fee or commission as a result of any transactions
contemplated by this Agreement.
(aa) No Outstanding Loans or Other Extensions of Credit.
Neither the Company nor any of its subsidiaries has extended or maintained
credit, arranged for the extension of credit, or renewed any extension of
credit, in the form of a personal loan, to or for any director or executive
officer (or equivalent thereof) of the Company and/or such subsidiary except for
such extensions of credit as are (i) expressly permitted by Section 13(k) of the
Exchange Act or (ii) fully repaid, discharged, forgiven or otherwise no longer
outstanding or owing in any way on the date of this Agreement.
(bb) Compliance with Laws. Neither the Company, nor any of
its subsidiaries, have been advised, or have reason to believe, that they are
not conducting business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, except
where failure to be so in compliance would not result in a Material Adverse
Change. Neither the Company nor its subsidiaries, nor, to the knowledge of the
Company, any officer, director, stockholder, employee or independent contractor
of the Company or any of its subsidiaries or the Facilities operated by the
Company or any of its subsidiaries, has engaged, directly or indirectly, in (i)
any material activities that are prohibited under Medicare and Medicaid statutes
or any regulations promulgated pursuant to such statutes, or (ii) any material
activities that are prohibited under related state or local statutes or
regulations, including the following: (A) knowingly and willfully making or
causing to be made a false statement or representation of a material fact in
connection with the receipt of or claim for any benefit or payment under the
Medicare or Medicaid program or from any other third-party payor; or (B)
knowingly and willfully offering, paying, soliciting or receiving any
remuneration, in cash or in kind in return for (1) referring an individual to a
person for the furnishing or arranging for the furnishing of any item or service
for which payment may be made in whole or in part by Medicare or Medicaid or any
other third-party payor, or (2) purchasing, leasing or ordering or arranging
for, or recommending the purchasing, leasing or ordering of, any good, facility,
service, or item for which payment may be made in whole or in part by Medicare
or Medicaid or any other third-party payor.
(cc) Compliance with Federal Anti-Kickback Statute.
The Company, its subsidiaries and each of the Facilities operated by
the Company and its subsidiaries and, to the knowledge of the Company, each of
the licensed employees and contractors (other than contracted agencies) of the
Company and its subsidiaries in the exercise of their respective duties on
behalf of the Company, its subsidiaries or any such Facilities, is in compliance
in all material respects with all applicable statutes, laws, ordinances, rules
and regulations of any federal, state or local governmental authority with
respect to regulatory matters primarily relating to patient healthcare
(including without limitation Section 1128B(b) of the Social Security Act, as
amended, 42 U.S.C. Section 1320a-7(b) (Criminal Penalties Involving Medicare or
State Health Care Programs), commonly referred to as the "Federal Anti-Kickback
Statute," and the Social Security Act, as amended, Section 1877, 42 U.S.C
Section 1395nn (Prohibition Against Certain Referrals), commonly referred to as
the "▇▇▇▇▇ Statute" (collectively, "HEALTHCARE LAWS")). The Company and its
subsidiaries have maintained in all material respects all records required to be
maintained by the Joint Commission on Accreditation of Healthcare Organizations,
the Food and Drug Administration, Drug Enforcement Agency and State Boards of
Pharmacy and the federal and state Medicare and Medicaid programs as required by
the Healthcare Laws and, to the knowledge of the Company, there are no presently
existing
9
circumstances that would result or likely would result in material violations of
the Healthcare Laws.
(dd) Compliance with HIPPAA
To the extent that and for so long as (i) the Company or any of its
subsidiaries is a "covered entity" as defined in 45 C.F.R. Section 160.103, (ii)
the Company, its subsidiaries and/or their respective business and operations
are subject to or covered by the HIPAA Administrative Requirements codified at
45 C.F.R. Parts 160 and 162 (the "TRANSACTIONS RULE") and/or the HIPAA Security
and Privacy Requirements codified at 45 C.F.R. Parts 160 and 164 (the "PRIVACY
AND SECURITY RULES"), and/or (iii) the Company or any of its subsidiaries
sponsors any "group health plans" as defined in 45 C.F.R. Section 160.103, the
Company or any of its subsidiaries has: (x) completed, or will complete on or
before any applicable compliance date, thorough and detailed surveys, audits,
inventories, reviews, analyses and/or assessments, including risk assessments,
(collectively "ASSESSMENTS") of all areas of its business and operations subject
to HIPAA and/or that could be adversely affected by the failure of the Company
or any of its subsidiaries to be HIPAA Compliant (as defined below) to the
extent these Assessments are appropriate or required for the Company or any of
its subsidiaries to be HIPAA Compliant; (y) developed, or will develop on or
before any applicable compliance date, a detailed plan and time line for
becoming HIPAA Compliant (a "HIPAA COMPLIANCE PLAN"); and (z) implemented, or
will implement on or before any applicable compliance date, those provisions of
its HIPAA Compliance Plan necessary to ensure that the Company or any of its
subsidiaries is HIPAA Compliant. For purposes of this Agreement, "HIPAA
COMPLIANT" shall mean that the Company or any of is subsidiaries (1) is, or on
or before any applicable compliance date will be, in compliance in all material
respects with any and all of the applicable requirements of HIPAA, including all
requirements of the Transactions Rule and the Privacy and Security Rules and (2)
is not subject to, and could not reasonably be expected to become subject to,
any civil or criminal penalty or any investigation, claim or process that could
reasonably be expected to have a Material Adverse Effect.
(ee) Directed Share Program. (i) The Registration
Statement, the Prospectus and any Preliminary Prospectus comply, and any further
amendments or supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any Preliminary
Prospectus, as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program, and (ii) no authorization, approval,
consent, license, order, registration or qualification of or with any
government, governmental instrumentality or court, other than such as have been
obtained, is necessary under the securities laws. The Company has not offered,
or caused the Underwriters to offer, any Offered Shares to any person pursuant
to the Directed Share Program with the intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or supplier's level
or type of business with the Company or (ii) a trade journalist or publication
to write or publish favorable information about the Company or its products.
The Company acknowledges that the Underwriters and, for purposes of the
opinions to be delivered pursuant to Section 5 hereof, counsel to the Company
and counsel to the Underwriters, will rely upon the accuracy and truthfulness of
the foregoing representations and hereby consents to such reliance.
B. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS.
Each Selling Stockholder as to himself , herself or itself and not as to any
other Selling Stockholder represents, warrants and covenants to each Underwriter
as follows:
10
(a) The Underwriting Agreement. This Agreement has been
duly authorized, executed and delivered by or on behalf of such Selling
Stockholder and is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms, except as rights to indemnification
hereunder may be limited by applicable law and except as the enforcement hereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles.
(b) The Custody Agreement and Power of Attorney. Each of
the (i) Custody Agreement signed by such Selling Stockholder and SunTrust Bank,
as custodian (the "CUSTODIAN"), relating to the deposit of the Offered Shares to
be sold by such Selling Stockholder (the "CUSTODY AGREEMENT") and (ii) Power of
Attorney appointing certain individuals named therein as such Selling
Stockholder's attorneys-in-fact (each, an "ATTORNEY-IN-FACT") to the extent set
forth therein relating to the transactions contemplated hereby and by the
Prospectus (the "POWER OF ATTORNEY"), of such Selling Stockholder has been duly
authorized, executed and delivered by such Selling Stockholder and is a valid
and binding agreement of such Selling Stockholder, enforceable in accordance
with its terms, except as rights to indemnification thereunder may be limited by
applicable law and except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(c) Title to Offered Shares to be Sold. Such Selling
Stockholder has, and on the First Closing Date and each applicable Option
Closing Date (as defined below) will have, good and valid title to all of the
Offered Shares that may be sold by such Selling Stockholder pursuant to this
Agreement on such date and the legal right and power to sell, transfer and
deliver all of the Offered Shares that may be sold by such Selling Stockholder
pursuant to this Agreement and to comply with its other obligations hereunder
and thereunder.
(d) Delivery of the Offered Shares to be Sold. Delivery
of the Offered Shares that are sold by such Selling Stockholder pursuant to this
Agreement will pass good and valid title to such Offered Shares, free and clear
of any security interest, mortgage, pledge, lien, encumbrance or other adverse
claim.
(e) Non-Contravention; No Further Authorizations or
Approvals Required. The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations under, this
Agreement, the Custody Agreement and the Power of Attorney will not contravene
or conflict with, result in a breach of, or constitute a Default under, or
require the consent of any other party to, the charter or by-laws, or other
organizational documents, if any, of such Selling Stockholder or any other
agreement or instrument to which such Selling Stockholder is a party or by which
it is bound or under which it is entitled to any right or benefit, any provision
of applicable law or any judgment, order, decree or regulation applicable to
such Selling Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder. No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the consummation by such Selling Stockholder of the
transactions contemplated in this Agreement, except such as have been or, prior
to the First Closing Date, will be, obtained or made and are or will be in full
force and effect under the Securities Act, applicable state securities or blue
sky laws and from the NASD.
(f) No Registration, Pre-emptive, Co-Sale or Other
Similar Rights. Such Selling Stockholder (i) does not have any registration or
other similar rights to have any equity or
11
debt securities registered for sale by the Company under the Registration
Statement or included in the offering contemplated by this Agreement," (ii) does
not have any preemptive right, co-sale right or right of first refusal or other
similar right to purchase any of the Offered Shares that are to be sold by the
Company or any of the other Selling Stockholders to the Underwriters pursuant to
this Agreement, except for such rights as such Selling Stockholder has waived
prior to the date hereof and as have been described in the Registration
Statement and Prospectus, and (iii) does not own any warrants, options or
similar rights to acquire, and does not have any right or arrangement to
acquire, any capital stock, right, warrants, options or other securities from
the Company, other than those described in the Registration Statement and the
Prospectus.
(g) No Further Consents, etc. Except for such consents,
approvals and waivers that have been obtained by such Selling Stockholder on or
prior to the date of this Agreement, no consent, approval or waiver is required
under any instrument or agreement to which such Selling Stockholder is a party
or by which it is bound or under which it is entitled to any right or benefit,
in connection with the offering, sale or purchase by the Underwriters of any of
the Offered Shares that may be sold by such Selling Stockholder under this
Agreement or the consummation by such Selling Stockholder of any of the other
transactions contemplated hereby.
(h) Disclosure Made by Such Selling Stockholder in the
Prospectus. All information furnished by or on behalf of such Selling
Stockholder in writing expressly for use in the Registration Statement and
Prospectus is, and on the First Closing Date and the applicable Option Closing
Date will be, true, correct, and complete in all material respects, and does
not, and on the First Closing Date and the applicable Option Closing Date will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary to make such information not misleading. Such Selling
Stockholder confirms as accurate the number of shares of Common Stock set forth
opposite such Selling Stockholder's name in the Prospectus under the caption
"Principal and Selling Stockholders" (both prior to and after giving effect to
the sale of the Offered Shares).
(i) No Price Stabilization or Manipulation; Compliance
with Regulation M. Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Common Stock or
any other reference security, whether to facilitate the sale or resale of the
Offered Shares or otherwise, and has taken no action that would directly or
indirectly violate any provision of Regulation M.
(j) No Transfer Taxes or Other Fees. There are no
transfer taxes or other similar fees or charges under federal law or the laws of
any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the sale by the
Selling Stockholders of the Offered Shares.
(k) Distribution of Offering Materials by the Selling
Stockholders. The Selling Stockholders have not distributed and will not
distribute, prior to the latest of (i) the expiration or termination of the
option granted to the several Underwriters under Section 2, (ii) the completion
of the Underwriters' distribution of the Offered Shares, and (iii) the
expiration of 25 days after the date of the Prospectus, any offering material in
connection with the offering and sale of the Offered Shares other than a
preliminary prospectus, the Prospectus or the Registration Statement.
Such Selling Stockholder acknowledges that the Underwriters and, for
purposes of the opinion to be delivered pursuant to Section 5 hereof, counsel to
the Selling Stockholder and
12
counsel to the Underwriters, will rely upon the accuracy and truthfulness of the
foregoing representations and hereby consents to such reliance.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE OFFERED SHARES.
(a) The Firm Shares. Upon the terms herein set forth, (i)
the Company agrees to issue and sell to the several Underwriters an aggregate of
3,100,000 Firm Shares and (ii) the Selling Stockholders agree, severally and not
jointly, to sell to the several Underwriters an aggregate of 900,000 Firm
Shares, with each Selling Stockholder selling the number of Firm Shares set
forth opposite such Selling Stockholder's name on Schedule B. On the basis of
the representations, warranties and agreements herein contained, and upon the
terms but subject to the conditions herein set forth, the Underwriters agree,
severally and not jointly, to purchase from the Company and the Selling
Stockholders the respective number of Firm Shares set forth opposite their names
on Schedule A. The purchase price per Firm Share to be paid by the several
Underwriters to the Company and the Selling Stockholders shall be $[___] per
share.
(b) The First Closing Date. Delivery of certificates for
the Firm Shares to be purchased by the Underwriters and payment therefor shall
be made at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 1290 Avenue of the Americas,
New York, New York (or such other place as may be agreed to by the Company and
the Representatives) at 9:00 a.m. New York time, on [_______, 2005] [insert date
four days after date of Agreement], or such other time and date not later than
1:30 p.m. New York time, on [_______, 2005] [insert date ten days after proposed
closing date] as the Representatives shall designate by notice to the Company
(the time and date of such closing are called the "FIRST CLOSING DATE"). The
Company and the Selling Stockholders hereby acknowledge that circumstances under
which the Representatives may provide notice to postpone the First Closing Date
as originally scheduled include, but are in no way limited to, any determination
by the Company, the Selling Stockholders or the Representatives to recirculate
to the public copies of an amended or supplemented Prospectus or a delay as
contemplated by the provisions of Section 10.
(c) The Optional Shares; Option Closing Date. In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Selling Stockholders grant an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 600,000 Optional
Shares from the Selling Stockholders at the purchase price per share to be paid
by the Underwriters for the Firm Shares. The option granted hereunder is for use
by the Underwriters solely in covering any over-allotments in connection with
the sale and distribution of the Firm Shares. The option granted hereunder may
be exercised at any time and from time to time in whole or in part upon notice
by the Representatives to the Selling Stockholders (with a copy to the Company),
which notice may be given at any time within 30 days from the date of this
Agreement. Such notice shall set forth (i) the aggregate number of Optional
Shares as to which the Underwriters are exercising the option, (ii) the names
and denominations in which the certificates for the Optional Shares are to be
registered and (iii) the time, date and place at which such certificates will be
delivered (which time and date may be simultaneous with, but not earlier than,
the First Closing Date; and in such case the term "FIRST CLOSING DATE" shall
refer to the time and date of delivery of certificates for the Firm Shares and
such Optional Shares). Such time and date of delivery, if subsequent to the
First Closing Date, is called an "OPTION CLOSING DATE" and shall be determined
by the Representatives and shall not be earlier than three nor later than five
full business days after delivery of such notice of exercise. If any Optional
Shares are to be purchased, (a) each Underwriter agrees, severally and not
jointly, to purchase the number of Optional Shares (subject to such adjustments
to eliminate fractional shares as the Representatives
13
may determine) that bears the same proportion to the total number of Optional
Shares to be purchased as the number of Firm Shares set forth on Schedule A
opposite the name of such Underwriter bears to the total number of Firm Shares
and (b) each Selling Stockholder agrees, severally and not jointly, to sell the
number of Optional Shares (subject to such adjustments to eliminate fractional
shares as the Representatives may determine) that bears the same proportion to
the total number of Optional Shares to be sold as the number of Optional Shares
set forth in Schedule B opposite the name of such Selling Stockholder bears to
the total number of Optional Shares. The Representatives may cancel the option
at any time prior to its expiration by giving written notice of such
cancellation to the Selling Stockholders (with a copy to the Company).
(d) Public Offering of the Offered Shares. The
Representatives hereby advise the Company and the Selling Stockholders that the
Underwriters intend to offer for sale to the public, initially on the terms set
forth in the Prospectus, their respective portions of the Offered Shares as soon
after this Agreement has been executed and the Registration Statement has been
declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
(e) Payment for the Offered Shares. Payment for the
Offered Shares to be sold by the Company shall be made at the First Closing Date
by wire transfer of immediately available funds to the order of the Company.
Payment for the Offered Shares to be sold by the Selling Stockholders shall be
made at the First Closing Date (and, if applicable, at each Option Closing Date)
by wire transfer of immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Shares and any Optional Shares the Underwriters have agreed to purchase.
Jefferies, individually and not as a Representative of the Underwriters, may
(but shall not be obligated to) make payment for any Offered Shares to be
purchased by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the applicable Option Closing Date,
as the case may be, for the account of such Underwriter, but any such payment
shall not relieve such Underwriter from any of its obligations under this
Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon the
sale or delivery of the Offered Shares to be sold by such Selling Stockholder to
the several Underwriters, or otherwise in connection with the performance of
such Selling Stockholder's obligations hereunder and (ii) the Custodian is
authorized to deduct for such payment any such amounts from the proceeds to such
Selling Stockholder hereunder and to hold such amounts for the account of such
Selling Stockholder with the Custodian under the Custody Agreement.
(f) Delivery of the Offered Shares. The Company and the
Selling Stockholders shall deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters certificates for
the Firm Shares to be sold by them at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. The Selling Stockholders shall also
deliver, or cause to be delivered, to the Representatives for the accounts of
the several Underwriters, certificates for the Optional Shares the Underwriters
have agreed to purchase from them at the First Closing Date or the applicable
Option Closing Date, as the case may be, against the irrevocable release of a
wire transfer of immediately available funds for the amount of the purchase
price therefor. The certificates, if any, for the Offered Shares shall be in
definitive form and registered in such names
14
and denominations as the Representatives shall have requested at least two full
business days prior to the First Closing Date (or the applicable Option Closing
Date, as the case may be) and shall be made available for inspection on the
business day preceding the First Closing Date (or the applicable Option Closing
Date, as the case may be) at a location in New York City as the Representatives
may designate. Time shall be of the essence, and delivery at the time and place
specified in this Agreement is a further condition to the obligations of the
Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later
than 12:00 p.m. on the second business day following the date the Offered Shares
are first released by the Underwriters for sale to the public, the Company shall
deliver or cause to be delivered, copies of the Prospectus in such quantities
and at such places as the Representatives shall request.
SECTION 3. ADDITIONAL COVENANTS OF THE COMPANY.
A. COVENANTS OF THE COMPANY. The Company further covenants and
agrees with each Underwriter as follows:
(a) Representatives' Review of Proposed Amendments and
Supplements. During the period beginning on the date hereof and ending on the
later of the First Closing Date or such date, as, in the opinion of counsel for
the Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "PROSPECTUS DELIVERY
PERIOD"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representatives reasonably object.
(b) Amendments and Supplements to the Prospectus and
Other Securities Act Matters. If, during the Prospectus Delivery Period, any
event shall occur or condition exist as a result of which it is 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 in the opinion of the Representatives or counsel for the
Underwriters it is otherwise necessary to amend or supplement the Prospectus to
comply with law, the Company agrees to promptly prepare (subject to Section
3(A)(a) hereof), file with the Commission and furnish at its own expense to the
Underwriters and to dealers, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will comply
with law. Neither the Representatives' consent to, or delivery of, any such
amendment or supplement shall constitute a waiver of any of the Company's
obligations under this Section 3(A)(b).
(c) Copies of any Amendments and Supplements to the
Prospectus. The Company agrees to furnish the Representatives, without charge,
during the Prospectus Delivery Period, as many copies of the Prospectus and any
amendments and supplements thereto as the Representatives may reasonably
request.
(d) Blue Sky Compliance. The Company shall cooperate with
the Representatives and counsel for the Underwriters to qualify or register the
Offered Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws of those jurisdictions designated by the
Representatives, shall comply with such laws and shall continue
15
such qualifications, registrations and exemptions in effect so long as required
for the distribution of the Offered Shares. The Company shall not be required to
qualify as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation. The
Company will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Offered
Shares for offering, sale or trading in any jurisdiction or any initiation or
threat of any proceeding for any such purpose, and in the event of the issuance
of any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(e) Use of Proceeds. The Company shall apply the net
proceeds from the sale of the Offered Shares sold by it in the manner described
under the caption "Use of Proceeds" in the Prospectus.
(f) Transfer Agent. The Company shall engage and
maintain, at its expense, a registrar and transfer agent for the Common Stock.
(g) Earnings Statement. As soon as practicable, the
Company will make generally available to its security holders and to the
Representatives an earnings statement (which need not be audited) covering the
twelve-month period ending June 30, 2006 that satisfies the provisions of
Section 11(a) of the Securities Act.
(h) Periodic Reporting Obligations. During the Prospectus
Delivery Period the Company shall file, on a timely basis, with the Commission
and the Nasdaq National Market all reports and documents required to be filed
under the Exchange Act. Additionally, the Company shall report the use of
proceeds from the issuance of the Offered Shares as may be required under Rule
463 under the Securities Act.
(i) Listing. The Company will use its best efforts to
effect and maintain the inclusion and quotation of the Offered Shares on the
Nasdaq National Market and to maintain the inclusion and quotation of the Common
Stock on the Nasdaq National Market.
(j) Company to Provide Copy of the Prospectus in Form
That May be Downloaded from the Internet. The Company shall cause to be prepared
and delivered, at its expense, within one business day from the effective date
of this Agreement, to Jefferies an "ELECTRONIC PROSPECTUS" to be used by the
Underwriters in connection with the offering and sale of the Offered Shares. As
used herein, the term "ELECTRONIC PROSPECTUS" means a form of Prospectus, and
any amendment or supplement thereto, that meets each of the following
conditions: (i) it shall be encoded in an electronic format, satisfactory to
Jefferies, that may be transmitted electronically by Jefferies and the other
Underwriters to offerees and purchasers of the Offered Shares for at least the
Prospectus Delivery Period; (ii) it shall disclose the same information as the
paper Prospectus and Prospectus filed pursuant to ▇▇▇▇▇, except to the extent
that graphic and image material cannot be disseminated electronically, in which
case such graphic and image material shall be replaced in the electronic
Prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to
Jefferies, that will allow investors to store and have continuously ready access
to the Prospectus at any future time, without charge to investors (other than
any fee charged for subscription to the Internet as a whole and for on-line
time). The Company hereby confirms that it has included or will include in the
Prospectus filed pursuant to ▇▇▇▇▇ or otherwise with the Commission and in the
Registration
16
Statement at the time is was declared effective an undertaking that, upon
receipt of a request by an investor or his or her representative within the
Prospectus Delivery Period, the Company either transmit or cause to be
transmitted promptly, without charge, a paper copy of the Prospectus.
(k) Agreement Not to Offer or Sell Additional Common
Stock. During the period commencing on the date hereof and ending on the 180th
day following the date of the Prospectus (the "LOCK-UP PERIOD"), the Company
will not, without the prior written consent of Jefferies (which consent may be
withheld at the sole discretion of Jefferies), directly or indirectly, sell,
offer, contract or grant any option to sell, pledge, transfer or establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of or transfer, or announce the offering of,
or file any registration statement under the Securities Act in respect of, any
Common Stock, options or warrants to acquire Common Stock or securities
exchangeable or exercisable for or convertible into Common Stock (other than as
contemplated by this Agreement with respect to the Offered Shares); provided,
however, that the Company may issue shares of its Common Stock or options to
purchase its Common Stock, or Common Stock upon exercise of options, pursuant to
any stock option, stock bonus or other stock plan or arrangement described in
the Prospectus, but only if the holders of such shares, options, or shares
issued upon exercise of such options, agree in writing not to sell, offer,
dispose of or otherwise transfer any such shares or options during such Lock-up
Period without the prior written consent of Jefferies (which consent may be
withheld at the sole discretion of Jefferies). In addition, the Company agrees
that the 180 day period shall be extended if (i) during the last 17 days of the
180 day period the Company issues an earnings release or material news or a
material event relating to it occurs or (ii) prior to the expiration of the 180
day period, the Company announces that it will release earnings results during
the 16 day period beginning on the last day of the 180 day period. The period of
such extension shall be 18 days, beginning upon the issuance of the earnings
release or the occurrence of the material news or material event.
(l) Investment Limitation. The Company shall not invest,
or otherwise use the proceeds received by the Company from its sale of the
Offered Shares in such a manner as would require the Company or any of its
subsidiaries to register as an investment company under the Investment Company
Act.
(m) No Stabilization or Manipulation; Compliance with
Regulation M. The Company will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of the Common Stock or any other
reference security, whether to facilitate the sale or resale of the Offered
Shares or otherwise, and the Company will, and shall cause each of its
affiliates to, comply with all applicable provisions of Regulation M. If the
limitations of Rule 102 of Regulation M ("RULE 102") do not apply with respect
to the Offered Shares or any other reference security pursuant to any exception
set forth in Section (d) of Rule 102, then promptly upon notice from the
Representatives (or, if later, at the time stated in the notice), the Company
will, and shall cause each of its affiliates to, comply with Rule 102 as though
such exception were not available but the other provisions of Rule 102 (as
interpreted by the Commission) did apply.
(n) Existing Lock-Up Agreement. The Company will enforce
all existing agreements between the Company or any of its security holders and
the Underwriters that prohibit the sale, transfer, assignment, pledge or
hypothecation of any of the Company's securities in connection with the
Company's initial public offering. In addition, the Company will direct the
transfer agent to place stop transfer restrictions upon any such securities of
the Company that are bound by such existing "lock-up" agreements for the
duration of the periods contemplated in such agreements.
17
B. COVENANTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder further covenants and agrees with each Underwriter:
(a) Agreement Not to Offer or Sell Additional Common
Stock. Such Selling Stockholder will not, without the prior written consent of
Jefferies (which consent may be withheld in its sole discretion), directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of any Common Stock, options or warrants to acquire Common
Stock, or securities exchangeable or exercisable for or convertible into Common
Stock currently or hereafter owned either of record or beneficially (as defined
in Rule 13d-3 under Securities Exchange Act of 1934, as amended) by the
undersigned, or publicly announce the undersigned's intention to do any of the
foregoing, for a period commencing on the date hereof and continuing through the
close of trading on the last day of the Lock-up Period. In addition, each
Selling Stockholder agrees that the 180 day period shall be extended if (i)
during the last 17 days of the 180 day period the Company issues an earnings
release or material news or a material event relating to the Company occurs or
(ii) prior to the expiration of the 180 day period, the Company announces that
it will release earnings results during the 16 day period beginning on the last
day of the 180 day period. The period of such extension shall be 18 days,
beginning upon the issuance of the earnings release or the occurrence of the
material news or material event.
(b) No Stabilization or Manipulation; Compliance with
Regulation M. Such Selling Stockholder will not take, directly or indirectly,
any action designed to or that might be reasonably expected to cause or result
in stabilization or manipulation of the price of the Common Stock or any other
reference security, whether to facilitate the sale or resale of the Offered
Shares or otherwise, and such Selling Stockholder will, and shall cause each of
its affiliates to, comply with all applicable provisions of Regulation M. If the
limitations of Rule 102 do not apply with respect to the Offered Shares or any
other reference security pursuant to any exception set forth in Section (d) of
Rule 102, then promptly upon notice from the Representatives (or, if later, at
the time stated in the notice), such Selling Stockholder will, and shall cause
each of its affiliates to, comply with Rule 102 as though such exception were
not available but the other provisions of Rule 102 (as interpreted by the
Commission) did apply.
(c) Delivery of Forms W-8 and W-9. To deliver to the
Representatives prior to the First Closing Date a properly completed and
executed United States Treasury Department Form W-8 (if the Selling Stockholder
is a non-United States person) or Form W-9 (if the Selling Stockholder is a
United States Person).
C. WAIVER OF COVENANTS. Jefferies, on behalf of the several
Underwriters, may, in its sole discretion, waive in writing the performance by
the Company or any Selling Stockholder of any one or more of the foregoing
covenants or extend the time for their performance.
SECTION 4. PAYMENT OF EXPENSES. The Company agrees to pay all
costs, fees and expenses incurred in connection with the performance of its and
the Selling Stockholders' obligations hereunder (other than any commissions and
discounts payable to the Underwriters upon the sale of the Offered Shares being
sold by such Selling Stockholders) and in connection with the transactions
contemplated hereby , including without limitation (i) all expenses incident to
the issuance and delivery of the Offered Shares (including all printing and
engraving costs), (ii) all fees and expenses of the registrar and transfer agent
of the Common Stock, (iii) subject to Section 2(e) of this Agreement, all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Offered Shares to the Underwriters, (iv) all fees and expenses
of
18
the Company's counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Offered Shares for
offer and sale under the state securities or blue sky laws and, if requested by
the Representatives, preparing and printing a "BLUE SKY SURVEY" or memorandum,
and any supplements thereto, advising the Underwriters of such qualifications,
registrations, determinations and exemptions, (vii) the filing fees incident to,
and the reasonable fees and expenses of counsel for the Underwriters in
connection with, the NASD's review and approval of the Underwriters'
participation in the offering and distribution of the Offered Shares, (viii) the
fees and expenses associated with including the Offered Shares on the Nasdaq
National Market, and (ix) all other fees, costs and expenses referred to in Item
13 of Part II of the Registration Statement, (x) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Directed Share Program
and (xi) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the Offered Shares to prospective investors and the Underwriters' sales forces,
including, without limitation, expenses associated with the production of road
show slides and graphics, fees and expenses of any consultants, which
consultants are engaged with the consent of the Company in connection with the
road show presentations, travel, lodging and other expenses incurred by the
officers of the Company and any such consultants and the Underwriters, and the
cost of any aircraft chartered in connection with the road show. Except as
provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements
of their counsel.
Subject to Section 2(e) of this Agreement, the Company further agrees
with each Underwriter to pay (directly or by reimbursement) all fees and
expenses incident to the performance of the Selling Stockholders' obligations
under this Agreement that are not otherwise specifically provided for herein,
including but not limited to (i) fees and expenses of counsel and other advisors
for such Selling Stockholders, and (ii) fees and expenses of the Custodian.
This Section 4 shall not affect or modify any separate, valid agreement
relating to the allocation of payment of expenses between the Company, on the
one hand, and the Selling Stockholders, on the other hand.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Offered
Shares as provided herein on the First Closing Date and, with respect to the
Optional Shares, each Option Closing Date, shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders set forth in Sections 1(A) and 1(B) hereof as of the date hereof
and as of the First Closing Date as though then made and, with respect to the
Optional Shares, as of each Option Closing Date as though then made, to the
timely performance by the Company and the Selling Stockholders of their
respective covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Ernst & Young LLP, the independent
registered public accounting firm of the Company, (i) a letter dated the date
hereof addressed to the Underwriters, in form and
19
substance satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountant's "comfort letters" to
underwriters, delivered according to Statement of Auditing Standards No. 72 (or
any successor bulletin), with respect to the audited and unaudited financial
statements and certain financial information contained in the Registration
Statement and the Prospectus (and the Representatives shall have received an
additional conformed copy of such accountants' letter for each of the several
Underwriters), and (ii) confirming that they are (A) independent registered
public accounting firm as required by the Securities Act and the Exchange Act,
(B) in compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X and (C) a registered public
accounting firm as defined by the PCAOB whose registration has not been
suspended or revoked and who has not requested such registration to be
withdrawn.
(b) Compliance with Registration Requirements; No Stop
Order; No Objection from NASD. For the period from and after effectiveness of
this Agreement and prior to the First Closing Date and, with respect to the
Optional Shares, each Option Closing Date:
(i) the Company shall have filed the Prospectus
with the Commission (including the information previously omitted
pursuant to Rule 430A under the Securities Act) in the manner and
within the time period required by Rule 424(b) under the Securities
Act; or the Company shall have filed a post-effective amendment to the
Registration Statement containing the information previously omitted
pursuant to such Rule 430A, and such post-effective amendment shall
have become effective;
(ii) no stop order suspending the effectiveness
of the Registration Statement, any Rule 462(b) Registration Statement,
or any post-effective amendment to the Registration Statement, shall be
in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
(iii) the NASD shall have raised no objection to
the fairness and reasonableness of the underwriting terms and
arrangements.
(c) No Material Adverse Change. For the period from and
after the date of this Agreement and prior to the First Closing Date and, with
respect to the Optional Shares, each Option Closing Date in the judgment of the
Representatives there shall not have occurred any Material Adverse Change;
(d) Opinion of Counsel for the Company. On each of the
First Closing Date and each Option Closing Date the Representatives shall have
received the opinion of ▇▇▇▇▇▇ & Bird LLP, counsel for the Company, dated as of
such Closing Date, the form of which is attached as Exhibit A-1, and the opinion
of the ▇▇▇▇▇▇▇▇▇ Law Firm, counsel for the Company, the form of which is
attached as Exhibit A-2 (and the Representatives shall have received an
additional two conformed copies of such counsel's legal opinion for each of the
several Underwriters).
(e) Opinion of Counsel for the Underwriters. On each of
the First Closing Date and each Option Closing Date the Representatives shall
have received the opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the
Underwriters, in form and substance satisfactory to the Underwriters, dated as
of such Closing Date.
(f) Officers' Certificate. On each of the First Closing
Date and each Option Closing Date the Representatives shall have received a
written certificate executed by the Chief Executive Officer of the Company and
the Chief Financial Officer of the Company, dated as of
20
such Closing Date, to the effect set forth in subsection (b)(ii) of this Section
5, and further to the effect that:
(i) for the period from and after the date of
this Agreement and prior to such Closing Date, there has not occurred
any Material Adverse Change;
(ii) the representations, warranties and
covenants of the Company set forth in Section 1(A) of this Agreement
are true and correct with the same force and effect as though expressly
made on and as of such Closing Date; and
(iii) the Company has complied with all the
agreements hereunder and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date.
(g) Bring-down Comfort Letter. On each of the First
Closing Date and each Option Closing Date the Representatives shall have
received from Ernst & Young LLP, independent registered public accounting firm
of the Company, a letter dated such date, in form and substance satisfactory to
the Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or the
applicable Option Closing Date, as the case may be (and the Representatives
shall have received an additional conformed copy of such accountants' letter for
each of the several Underwriters). (h) Opinion of Counsel for the Selling
Stockholders. On each of the First Closing Date and each Option Closing Date the
Representatives shall have received the opinion of ▇▇▇▇▇▇▇▇▇ Law Firm, counsel
for the Selling Stockholders, dated as of such Closing Date, the form of which
is attached as Exhibit B (and the Representatives shall have received an
additional conformed copy of such counsel's legal opinion for each of the
several Underwriters).
(i) Selling Stockholders' Certificate. On each of the
First Closing Date and each Option Closing Date the Representatives shall
receive a written certificate executed by the Attorney-in-Fact of each Selling
Stockholder, dated as of such Closing Date, to the effect that:
(i) the representations, warranties and
covenants of such Selling Stockholder set forth in Section 1(B) of this
Agreement are true and correct with the same force and effect as though
expressly made by such Selling Stockholder on and as of such Closing
Date; and
(ii) such Selling Stockholder has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date.
(j) Selling Stockholders' Documents. On the date hereof,
the Company and the Selling Stockholders shall have furnished to the
Representatives true and complete copies of the Powers of Attorney and Custody
Agreements executed by each of the Selling Stockholders and such further
information, certificates and documents as the Representatives may reasonably
request.
(k) Lock-Up Agreement from Certain Securityholders of the
Company Other Than Selling Stockholders. On or prior to the date hereof, the
Company shall have furnished to
21
the Representatives an agreement in the form of Exhibit C hereto from each
officer, director and stockholder of the Company and such agreement shall be in
full force and effect on each of the First Closing Date and each Option Closing
Date.
(l) Additional Documents. On or before each of the First
Closing Date and each Option Closing Date, the Representatives and counsel for
the Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Offered Shares as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Shares, at any time prior to the applicable Option Closing Date, which
termination shall be without liability on the part of any party to any other
party, except that Section 4, Section 6, Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If this
Agreement is terminated by the Representatives pursuant to Section 5, ▇▇▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ (▇), (▇▇) or (v), Section 11 or Section 17, or if the sale
to the Underwriters of the Offered Shares on the First Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company or the Selling Stockholders to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Representatives
and the other Underwriters (or such Underwriters as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Offered Shares, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
SECTION 7. EFFECTIVENESS OF THIS AGREEMENT. This Agreement shall
not become effective until the later of (i) the execution of this Agreement by
the parties hereto and (ii) notification by the Commission to the Company and
the Representatives of the effectiveness of the Registration Statement under the
Securities Act. Prior to such effectiveness, this Agreement may be terminated by
any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company or the
Selling Stockholders to any Underwriter, except that the Company and the Selling
Stockholders shall be obligated to reimburse the expenses of the Representatives
and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter
to the Company or the Selling Stockholders, or (c) of any party hereto to any
other party except that the provisions of Section 8 and Section 9 shall at all
times be effective and shall survive such termination.
SECTION 8. INDEMNIFICATION.
(a) Indemnification of the Underwriters. The Company
agrees to indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in
22
settlement of any litigation), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (A) (i) upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A
under the Securities Act, 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 (ii) upon any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and to reimburse each Underwriter and each such controlling person
for any and all expenses (including the fees and disbursements of counsel chosen
by Jefferies) as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the
Representatives expressly for use in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), it being
understood and agreed that the only such information furnished by the
Representatives to the Company consists of the information described in
subsection (c) below and provided, further, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Offered Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Offered Shares to such person, and if
the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage, liability or expense. The indemnity
agreement set forth in this Section 8(a) shall be in addition to any liabilities
that the Company and the Selling Stockholders may otherwise have.
(b) Indemnification of the Underwriters by the Selling
Stockholders. Each of the Selling Stockholders, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter, its officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Underwriter or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation), insofar as such loss,
claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based (A) (i) any untrue statement or
alleged untrue statement made by the Selling Stockholder in Section 1(B) of this
Agreement; or (ii) upon any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement
thereto) under the caption "Principal and Selling Stockholders" insofar as such
information relates to the Selling Stockholder, or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and to reimburse each Underwriter and each such controlling person
for any and all expenses (including the fees and disbursements of counsel chosen
by Jefferies) as such expenses are reasonably incurred by such Underwriter or
such
23
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that with respect to any preliminary prospectus, the
foregoing indemnity agreement shall not inure to the benefit of any Underwriter
from whom the person asserting any loss, claim, damage, liability or expense
purchased Offered Shares, or any person controlling such Underwriter, if copies
of the Prospectus were timely delivered to the Underwriter pursuant to Section 2
and a copy of the Prospectus (as then amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required by law so
to have been delivered, at or prior to the written confirmation of the sale of
the Offered Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The indemnity agreement set forth in this Section
8(b) shall be in addition to any liabilities that the Company and the Selling
Stockholders may otherwise have. In no event shall the liability of any Selling
Stockholder pursuant to this Section or Section 9 of this Agreement exceed the
net proceeds received by such Selling Stockholder with respect to the sale of
the Offered Shares.
(c) Indemnification of the Company, its Directors and
Officers and the Selling Stockholders. Each Underwriter agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of its directors,
each of its officers who signed the Registration Statement, the Selling
Stockholders and each person, if any, who controls the Company or any Selling
Stockholder within the meaning of the Securities Act or the Exchange Act,
against any loss, claim, damage, liability or expense, as incurred, to which the
Company, or any such director, officer, Selling Stockholder or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Underwriter), insofar as such loss, claim, damage,
liability or expense (or actions in respect thereof as contemplated below)
arises out of or is based upon any untrue or alleged untrue statement of a
material fact contained in the Registration Statement, any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto), or arises
out of or is based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any preliminary prospectus, the
Prospectus (or any amendment or supplement thereto), in reliance upon and in
conformity with written information furnished to the Company and the Selling
Stockholders by the Representatives expressly for use therein; and to reimburse
the Company, or any such director, officer, Selling Stockholder or controlling
person for any legal and other expense reasonably incurred by the Company, or
any such director, officer, Selling Stockholder or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action. Each of the Company and
each of the Selling Stockholders, hereby acknowledges that the only information
that the Underwriters have furnished to the Company and the Selling Stockholders
expressly for use in the Registration Statement, any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) are the statements set
forth in the table in the first, third, and 11th through 16th paragraphs under
the caption "Underwriting" in the Prospectus. The indemnity agreement set forth
in this Section 8(c) shall be in addition to any liabilities that each
Underwriter may otherwise have.
(d) Notifications and Other Indemnification Procedures.
Promptly after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party under this Section
8, notify the indemnifying party in writing of the
24
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
indemnification, except to the extent that the indemnifying party shall have
been materially prejudiced by such failure. In case any such action is brought
against any indemnified party and such indemnified party seeks or intends to
seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice delivered
to the indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that a conflict may
arise between the positions of the indemnifying party and the indemnified party
in conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such
indemnifying party's election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed separate
counsel in accordance with the proviso to the preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel (together with local counsel),
approved by the indemnifying party, representing the indemnified parties who are
parties to such action) or (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action, in which
case the fees and expenses of counsel shall be at the expense of the
indemnifying party.
(e) Settlements. The indemnifying party under this
Section 8 shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of separate counsel as
contemplated by Section 8(d) hereof, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(f) Indemnification for Directed Shares. In connection
with the offer and sale of the Directed Shares, the Company agrees, promptly
upon a request in writing, to indemnify and hold harmless the Underwriters from
and against any and all losses, liabilities,
25
claims, damages and expenses incurred by them as a result of the failure of the
Participants to pay for and accept delivery of Directed Shares that, by the end
of the first business day following the date of this Agreement, were subject to
a properly confirmed agreement to purchase. The Company agrees to indemnify and
hold harmless the Designated Underwriter, its officer and employees, and each
person, if any, who controls the Designated Underwriter within the meaning of
the Securities Act or the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Designated Underwriter or such
controlling person may become subject, which is (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in any
material prepared by or with the consent of the Company for distribution to
Participants in connection with the Directed Share Program 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; (ii)
caused by the failure of any Participant to pay for and accept delivery of
Directed Shares that such Participant agreed to purchase; or (iii) related to,
arising out of, or in connection with the Directed Share Program. The indemnity
agreement set forth in this paragraph shall be in addition to any liabilities
that the Company may otherwise have.
SECTION 9. CONTRIBUTION. If the indemnification provided for in
Section 8 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Offered Shares pursuant to this Agreement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders, on
the one hand, and the Underwriters, on the other hand, in connection with the
offering of the Offered Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Offered Shares pursuant to this Agreement (before deducting expenses)
received by the Company and the Selling Stockholders, and the total underwriting
discount received by the Underwriters, in each case as set forth on the front
cover page of the Prospectus bear to the aggregate initial public offering price
of the Offered Shares as set forth on such cover. The relative fault of the
Company and the Selling Stockholders, on the one hand, and the Underwriters, on
the other hand, shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Stockholders, on the one hand, or the Underwriters, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and expenses referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(d), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
Section 8(d) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall
26
be required with respect to any action for which notice has been given under
Section 8(d) for purposes of indemnification.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 9
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 this Section 9.
Notwithstanding the provisions of this Section 9, (i) no Underwriter
shall be required to contribute any amount in excess of the underwriting
commissions received by such Underwriter in connection with the Offered Shares
underwritten by it and distributed to the public, and (ii) no Selling
Stockholder shall be required to contribute any amount in excess of the
aggregate net proceeds received by such Selling Stockholder from the sale of
securities sold by such Selling Stockholder pursuant to this Agreement. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are several, and not joint,
in proportion to their respective underwriting commitments as set forth opposite
their names in Schedule A. For purposes of this Section 9, each officer and
employee of an Underwriter and each person, if any, who controls an Underwriter
within the meaning of the Securities Act and the Exchange Act shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company with the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as the
Company.
SECTION 10. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS. If,
on the First Closing Date or the applicable Option Closing Date, as the case may
be, any one or more of the several Underwriters shall fail or refuse to purchase
Offered Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Offered Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Offered Shares to be purchased on such date, the
Representatives may make arrangements satisfactory to the Company for the
purchase of such Offered Shares by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
other Underwriters shall be obligated, severally, in the proportions that the
number of Firm Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Shares set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Offered Shares which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase on such date. If, on
the First Closing Date or the applicable Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Offered
Shares and the aggregate number of Offered Shares with respect to which such
default occurs exceeds 10% of the aggregate number of Offered Shares to be
purchased on such date, and arrangements satisfactory to the Representatives and
the Company for the purchase of such Offered Shares are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party to any other party except that the provisions of Section 4, Section 6,
Section 8 and Section 9 shall at all times be effective and shall survive such
termination. In any such case either the Representatives or the Company shall
have the right to postpone the First Closing Date or the applicable Option
Closing Date, as the case may be, but in no event for longer than seven
27
days in order that the required changes, if any, to the Registration Statement
and the Prospectus or any other documents or arrangements may be effected.
As used in this Agreement, the term "UNDERWRITER" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
10. Any action taken under this Section 10 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
SECTION 11. TERMINATION OF THIS AGREEMENT. Prior to the First
Closing Date this Agreement may be terminated by the Representatives by notice
given to the Company and the Selling Stockholders if at any time (i) trading or
quotation in any of the Company's securities shall have been suspended or
limited by the Commission or by the Nasdaq National Market, or trading in
securities generally on either the Nasdaq Stock Market or the New York Stock
Exchange shall have been suspended or limited, or minimum or maximum prices
shall have been generally established on any of such stock exchanges by the
Commission or the NASD; (ii) a general banking moratorium shall have been
declared by any of federal, New York or Delaware authorities; (iii) there shall
have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable to market the
Offered Shares in the manner and on the terms described in the Prospectus or to
enforce contracts for the sale of securities; (iv) in the judgment of the
Representatives there shall have occurred any Material Adverse Change; or (v)
the Company shall have sustained a loss by strike, fire, flood, earthquake,
accident or other calamity of such character as in the judgment of the
Representatives may interfere materially with the conduct of the business and
operations of the Company regardless of whether or not such loss shall have been
insured. Any termination pursuant to this Section 11 shall be without liability
on the part of (a) the Company or the Selling Stockholders to any Underwriter,
except that the Company and the Selling Stockholders shall be obligated to
reimburse the expenses of the Representatives and the Underwriters pursuant to
Sections 4 and 6 hereof, (b) any Underwriter to the Company or the Selling
Stockholders, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Selling Stockholders, as
the case may be, and will survive delivery of and payment for the Offered Shares
sold hereunder and any termination of this Agreement.
SECTION 13. NOTICES. All communications hereunder shall be in
writing and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:
If to the Representatives:
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
28
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Company:
LHC Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇ & Bird LLP
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
If to the Selling Stockholders:
SunTrust Bank
[address]
Facsimile: [___]
Attention: [___]
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and personal representatives, and no
other person will have any right or obligation hereunder. The term "SUCCESSORS"
shall not include any purchaser of the Offered Shares as such from any of the
Underwriters merely by reason of such purchase.
SECTION 15. PARTIAL UNENFORCEABILITY THE INVALIDITY OR
UNENFORCEABILITY OF ANY SECTION, PARAGRAPH OR PROVISION OF THIS AGREEMENT SHALL
NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER SECTION, PARAGRAPH OR
PROVISION HEREOF. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there
29
shall be deemed to be made such minor changes (and only such minor changes) as
are necessary to make it valid and enforceable.
SECTION 16. GOVERNING LAW PROVISIONS. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York applicable to agreements made and to be performed in such state. Any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("RELATED PROCEEDINGS") may be instituted
in the federal courts of the United States of America located in the Borough of
Manhattan in the City of New York or the courts of the State of New York in each
case located in the Borough of Manhattan in the City of New York (collectively,
the "SPECIFIED COURTS"), and each party irrevocably submits to the exclusive
jurisdiction (except for proceedings instituted in regard to the enforcement of
a judgment of any such court (a "RELATED JUDGMENT"), as to which such
jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. Service of any process, summons, notice or document by mail to such
party's address set forth above shall be effective service of process for any
suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of
any suit, action or other proceeding in the Specified Courts and irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such suit, action or other proceeding brought in any such court has been brought
in an inconvenient forum.
SECTION 17. FAILURE OF ONE OR MORE OF THE SELLING STOCKHOLDERS TO
SELL AND DELIVER OFFERED SHARES. If one or more of the Selling Stockholders
shall fail to sell and deliver to the Underwriters the Offered Shares to be sold
and delivered by such Selling Stockholders at the First Closing Date pursuant to
this Agreement and the remaining Selling Stockholders do not exercise the right
hereby granted to increase, pro rata or otherwise, the number of Offered Shares
to be sold by them hereunder to the number of Offered Shares to be sold by all
Selling Stockholders as set forth on Schedule B, then the Underwriters may at
their option, by written notice from the Representatives to the Company and the
Selling Stockholders, either (i) terminate this Agreement without any liability
on the part of any Underwriter or, except as provided in Sections 4, 6, 8 and 9
hereof, the Company or the other Selling Stockholders, or (ii) purchase the
shares that the Company and other Selling Stockholders have agreed to sell and
deliver in accordance with the terms hereof. If one or more of the Selling
Stockholders shall fail to sell and deliver to the Underwriters the Offered
Shares to be sold and delivered by such Selling Stockholders pursuant to this
Agreement at the First Closing Date or the applicable Option Closing Date, then
the Underwriters shall have the right, by written notice from the
Representatives to the Company and the Selling Stockholders, to postpone the
First 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, to the Registration Statement and the Prospectus or any other documents
or arrangements may be effected.
SECTION 18. GENERAL PROVISIONS. This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be
executed in two or more counterparts, each one of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by
all of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to
benefit. The Table of Contents and the Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
30
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.
31
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company and the Custodian the enclosed
copies hereof, whereupon this instrument, along with all counterparts hereof,
shall become a binding agreement in accordance with its terms.
Very truly yours,
LHC GROUP INC.
By:
--------------------------------
Name:
Title:
SELLING STOCKHOLDERS
By:
--------------------------------
Name:
Attorney-in-fact:
The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in New York, New York as of the date first above written.
▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By ▇▇▇▇▇▇▇▇▇ & COMPANY, INC.
By:
-----------------------------
Name:
Title:
32
SCHEDULE A
NUMBER OF
FIRM SHARES
UNDERWRITERS TO BE PURCHASED
▇▇▇▇▇▇▇▇▇ & Company, Inc. ................................
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated......................
Total............................................ 4,000,000
=========
SCHEDULE B
NUMBER OF MAXIMUM NUMBER
FIRM SHARES OF OPTIONAL SHARES
SELLING SHAREHOLDER TO BE SOLD TO BE SOLD
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 271,750 181,166
▇▇▇▇▇ ▇. ▇▇▇▇▇ 10,618 7,079
▇▇▇▇▇▇▇ ▇▇▇▇ 82,154 54,770
▇▇▇▇▇ ▇▇▇▇▇▇▇ 82,154 54,770
▇▇▇▇▇▇ ▇▇▇▇▇▇ 82,575 55,051
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 44,613 29,742
▇▇▇▇▇▇ ▇▇▇▇▇▇ 42,025 28,016
▇▇▇▇ ▇. ▇▇▇▇▇▇ 41,461 27,640
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 44,613 29,742
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 7,506 5,005
The Catalyst Fund, Ltd. 72,511 48,341
Southwest/Catalyst Capital, Ltd. 72,511 48,341
▇▇▇▇ ▇▇▇▇▇ 17,054 11,369
Beta Homecare 28,080 18,720
▇▇▇▇▇ ▇▇▇▇▇▇▇ 187 125
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 94 62
▇▇▇▇▇ ▇▇▇▇ 47 31
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 47 31
TOTAL 900,000 600,000
EXHIBIT A-1
The final opinion in draft form should be attached as Exhibit A at the time this
Agreement is executed.
Opinion of counsel for the Company to be delivered pursuant to Section
5(d) of the Underwriting Agreement.
References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the laws of
the State of Delaware, with corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(ii) The authorized, issued and outstanding
capital stock of the Company (including the Common Stock conforms in
all material respects to the descriptions thereof set forth in the
Prospectus. All of the outstanding Common Stock (including the Common
Stock owned by the Selling Stockholders) has been duly authorized and
validly issued, is fully paid and nonassessable. The form of
certificate used to evidence the Common Stock is in due and proper form
and complies with all applicable requirements of the charter and
by-laws of the Company and the General Corporation Law of the State of
Delaware.
(iii) No stockholder of the Company or any other
person has any preemptive right, right of first refusal or other
similar right to subscribe for or purchase securities of the Company
arising (i) by operation of the charter or by-laws of the Company or
the General Corporation Law of the State of Delaware or (ii) to the
knowledge of such counsel, otherwise.
(iv) The Underwriting Agreement has been duly
authorized, executed and delivered by the Company.
(v) The Firm Shares to be purchased by the
Underwriters from the Company have been duly authorized for issuance
and sale pursuant to the Underwriting Agreement and, when issued and
delivered by the Company pursuant to the Underwriting Agreement against
payment of the consideration set forth therein, will be validly issued,
fully paid and nonassessable.
(vi) Each of The Registration Statement and the
Rule 462(b) Registration Statement, if any, has been declared effective
by the Commission under the Securities Act. To the best knowledge of
such counsel, no stop order suspending the effectiveness of either of
the Registration Statement or the Rule 462(b) Registration Statement,
if any, has been issued under the Securities Act and no proceedings for
such purpose have been instituted or are pending or are contemplated or
threatened by the Commission. Any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424(b) under the Securities Act
has been made in the manner and within the time period required by such
Rule 424(b).
A-1
(vii) The Registration Statement, including any
Rule 462(b) Registration Statement, the Prospectus, and each amendment
or supplement to the Registration Statement and the Prospectus, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or in exhibits to
or excluded from the Registration Statement, as to which no opinion
need be rendered) complied as to form in all material respects with the
applicable requirements of the Securities Act.
(viii) The Offered Shares have been approved for
inclusion and quotation on the Nasdaq National Market.
(ix) The statements (i) in the Prospectus under
the captions "Description of Capital Stock," "Shares Eligible for
Future Sale," and "Federal Income Tax Consequences to Non-U.S. Holders
of Common Stock," insofar as such statements purport to describe
certain provisions of the agreements, statutes, regulations or the
subject legal proceedings referred to therein, are accurate
descriptions or summaries in all material respects.
(x) To the knowledge of such counsel, there are
no legal or governmental actions, suits or proceedings pending or
threatened which are required to be disclosed in the Registration
Statement, other than those disclosed therein.
(xi) To the knowledge of such counsel, there are
no Existing Instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto; and the descriptions thereof and
references thereto are accurate in all material respects.
(xii) The execution and delivery of the
Underwriting Agreement by the Company, the performance by the Company
of its obligations thereunder (other than performance by the Company of
its obligations under the indemnification section of the Underwriting
Agreement, as to which no opinion need be rendered) and the issuance
and sale of the offered securities (i) have been duly authorized by all
necessary corporate action on the part of the Company; (ii) will not
result in any violation of the provisions of the charter or by-laws of
the Company; (iii) will not constitute a breach of, or Default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any agreement or instrument filed as an
exhibit to the Registration Statement; (iv) will not result in any
violation of any federal or state law or, to the knowledge of such
counsel any administrative regulation or administrative or court
decree, applicable to the Company or its subsidiaries; or (v) will not
require any consents, approvals or authorizations to be obtained by the
Company, or any registrations, declarations or filings to be made by
the Company, in each case, under any federal statute, rule or
regulation applicable to the Company that have not been obtained or
made.
(xiii) The Company is not, and after receipt of
payment for the Offered Shares will not be, an "investment company"
within the meaning of Investment Company Act.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives
of the Company, representatives of the independent
A-2
public or certified public accountants for the Company and with
representatives of the Underwriters at which the contents of the
Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although
such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
(other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their
attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the
Registration Statement or such amendments became effective, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its
date or at the First Closing Date or the applicable Option Closing
Date, as the case may be, contained an untrue statement of a material
fact or omitted 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 (it being understood that such counsel
need express no belief as to the financial statements or schedules or
other financial or statistical data derived therefrom, included in
the Registration Statement or the Prospectus or any amendments or
supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, or the federal law of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion (which shall be dated the First Closing Date or the applicable Option
Closing Date, as the case may be, shall be satisfactory in form and substance to
the Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representatives) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
A-3
EXHIBIT A-2
The final opinion in draft form should be attached as Exhibit B at the time this
Agreement is executed.
(xiv) The Company is qualified to do business in
the State of Louisiana.
(xv) The statements (i) in the Prospectus under
the captions "Business -- Strategic Relationships," "Business -- Joint
Ventures," "Business -- Reimbursement," "Business -- Government
Regulations," "Certain Relationships and Related Transactions," insofar
as such statements purport to describe certain provisions of the
agreements, statutes, regulations or the subject legal proceedings
referred to therein, are accurate descriptions or summaries in all
material respects.
(xvi) Each subsidiary of the Company is a
corporation, partnership or limited liability company, as applicable,
duly incorporated or organized under the laws of the state of its
incorporation or organization, with power and authority (corporate or
other) to own, lease and operate its properties and to conduct its
business as described in the Prospectus. Each subsidiary of the Company
is validly existing and in good standing under the laws of the state of
its incorporation or organization.
(xvii) All of the issued and outstanding capital
stock or other equity or ownership interests of each subsidiary of the
Company have been duly authorized and validly issued, is fully paid and
non-assessable and all of the outstanding shares of capital stock or
other equity or ownership interests of such subsidiaries owned by the
Company were owned of record on that date by the Company, directly or
through subsidiaries free and clear of any security interest, mortgage,
pledge, line, encumbrance or adverse claim.
(xviii) The execution and delivery of the
Underwriting Agreement by the Company, the performance by the Company
of its obligations thereunder (other than performance by the Company of
its obligations under the indemnification section of the Underwriting
Agreement, as to which no opinion need be rendered) and the issuance
and sale of the offered securities will not result in any violation of
the provisions of the charter or by-laws of any subsidiary of the
Company.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public or certified public accountants for
the Company and with representatives of the Underwriters at which the contents
of the Registration Statement and the Prospectus, and any supplements or
amendments thereto, and related matters were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (other than as specified above), and
any supplements or amendments thereto, on the basis of the foregoing, nothing
has come to their attention which would lead them to believe that either the
Registration Statement or any amendments thereto, at the time the Registration
Statement or such amendments became effective, contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of its date or at the First Closing Date or the applicable Option
Closing Date, as the case may be, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
A-1
they were made, not misleading (it being understood that such counsel need
express no belief as to the financial and statistical data derived therefrom,
included in the Registration Statement or the Prospectus or any amendments or
supplements thereto).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware or the federal law of the United
States, to the extent they deem proper and as specified in such opinion, upon
the opinion (which shall be dated the First Closing Date or the applicable
Option Closing Date, as the case may be, shall be satisfactory in form and
substance to the Underwriters, shall expressly state that the Underwriters may
rely on such opinion as if it were addressed to them and shall be furnished to
the Representatives) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
A-2
EXHIBIT B
The final opinion in draft form should be attached as Exhibit B at the time this
Agreement is executed.
The opinion of such counsel pursuant to Section 5(h) shall be rendered
to the Representatives at the request of the Company and shall so state therein.
References to the Prospectus in this Exhibit B include any supplements thereto
at the Closing Date.
(i) The Underwriting Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Stockholder.
(ii) The execution and delivery by or on behalf
of such Selling Stockholder, and the performance by such Selling
Stockholder of its obligations under, the Underwriting Agreement (other
than performance by such Selling Stockholder of its obligations under
the indemnification section of the Underwriting Agreement, as to which
no opinion need be rendered) and its Custody Agreement and its Power of
Attorney (i) have been duly authorized by all necessary corporate
action on the part of such Selling Stockholder; (ii) will not result in
any violation of the provisions of the charter or by-laws of the
Company or any subsidiary; (iii) to the best knowledge of such counsel,
will not constitute a breach of, or default under, any other agreement
or instrument to which such Selling Stockholder is a party or by which
it is bound, (iv) will not result in any violation of any federal or
state law, or to the best knowledge of such counsel any administrative
regulation or administrative or court decree, applicable to such
Selling Stockholder or (v) will not require any consents, approvals or
authorizations to be obtained by such Selling Stockholder, or any
registrations, declarations or filings to be made by such Selling
Stockholder, in each case, under any federal or state statute, rule or
regulation applicable to such Selling Stockholder that have not been
obtained or made.
(iii) Such Selling Stockholder was the record
owner on such date in the stock records of the Company of such Common
Stock.
(iv) Each of the Custody Agreement and Power of
Attorney of such Selling Stockholder has been duly authorized, executed
and delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with
its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles.
(v) Assuming that each of Underwriters does not
have "notice" of any "adverse claim" (each within the meaning of
Section 8-105 of the New York UCC) with respect to the Common Stock to
be purchased from such Selling Stockholder, upon physical delivery by
or on behalf of such Selling Stockholder of the certificates evidencing
the Common Stock listed on Schedule B hereto (the "Delivered Shares")
to Jefferies & Company, Inc. ("Jefferies") in the State of New York,
with stock powers duly indorsed to Jefferies or in blank and
registration of transfer by the issuer thereof, and payment therefor in
accordance with the terms of the Underwriting Agreement, Jefferies will
become "protected purchasers" (as defined in Section 8-303(a) of the
New York
1
UCC) of the Delivered Shares, and acquire the Delivered Shares free of
any "adverse claim" (as defined in Section 8-102(a)(1) of the New York
UCC).
(vi) To counsel's knowledge, no consent,
approval, authorization or other order of, or registration or filing
with, any court or governmental authority or agency, is required for
the consummation by such Selling Stockholder of the transactions
contemplated in the Underwriting Agreement, except as required under
the Securities Act, applicable state securities or blue sky laws, and
from the NASD.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the laws of the
State of Louisiana or the federal law of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion (which shall be
dated the First Closing Date or the applicable Option Closing Date, as the case
may be, shall be satisfactory in form and substance to the Underwriters, shall
expressly state that the Underwriters may rely on such opinion as if it were
addressed to them and shall be furnished to the Representatives) of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters; provided, however, that such
counsel shall further state that they believe that they and the Underwriters are
justified in relying upon such opinion of other counsel, and (B) as to matters
of fact, to the extent they deem proper, on certificates of the Selling
Stockholders and public officials.
2