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EXHIBIT 1.1
MW&E DRAFT DATED JULY 27, 2000
ACCREDO HEALTH, INCORPORATED
2,000,000 SHARES
OPTION TO PURCHASE 300,000 SHARES
COMMON STOCK
UNDERWRITING AGREEMENT
_________, 2000
CHASE SECURITIES INC.
SUNTRUST EQUITABLE SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC, AND
FIRST UNION SECURITIES, INC.
Co-Managers
c/o Chase Securities Inc.
One Bush Street
San Francisco, CA 94104
Ladies and Gentlemen:
Accredo Health, Incorporated, a Delaware corporation (herein called the
Company), proposes to issue and sell 2,000,000 shares of its authorized but
unissued Common Stock, $0.01 par value (herein called the Common Stock) (said
2,000,000 shares of Common Stock being herein called the Underwritten Stock).
The Company proposes to grant to the Underwriters (as hereinafter defined) an
option to purchase up to 300,000 additional shares of Common Stock (herein
called the Option Stock and with the Underwritten Stock herein collectively
called the Stock). The Common Stock is more fully described in the Registration
Statement and the Prospectus hereinafter described.
The Company hereby confirms the agreements made with respect to the
purchase of the Stock by the several underwriters, for whom you are acting,
named in Schedule I hereto (herein collectively called the Underwriters, which
term shall also include any underwriter purchasing Stock pursuant to Section
3(b) hereof). You represent and warrant that you have been authorized
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by each of the other Underwriters to enter into this Agreement on its behalf and
to act for it in the manner herein provided.
1. REGISTRATION STATEMENT. The Company has filed with the
Securities and Exchange Commission (herein called the Commission) a registration
statement on Form S-3 (No. 333-________), including the related preliminary
prospectus, for the registration of the Stock under the Securities Act of 1933,
as amended (herein called the Securities Act). Copies of such registration
statement and of each amendment thereto, if any, including the related
preliminary prospectus (meeting the requirements of Rule 430A of the rules and
regulations of the Commission) heretofore filed by the Company with the
Commission have been delivered to you.
The term Registration Statement as used in this Agreement shall mean
such registration statement, including all documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act that were filed
under the Securities Exchange Act of 1934, as amended (herein called the
Exchange Act), and the rules and regulations of the Commission thereunder on or
before the date of this Agreement or the date of the Registration Statement, any
Preliminary Prospectus or the Prospectus, as the case may be, all exhibits and
financial statements and all information omitted therefrom in reliance upon Rule
430A and contained in the Prospectus referred to below, in the form in which it
became effective, any registration statement filed pursuant to Rule 462(b) of
the rules and regulations of the Commission with respect to the Stock (herein
called a Rule 462(b) registration statement), and, in the event of any amendment
thereto after the effective date of such registration statement (herein called
the Effective Date), the term Registration Statement shall also mean (from and
after the effectiveness of such amendment) such registration statement as so
amended (including any Rule 462(b) registration statement). The term Prospectus
as used in this Agreement shall mean the prospectus, including the documents
incorporated by reference therein, relating to the Stock first filed with the
Commission pursuant to Rule 424(b) and Rule 430A (or if no such filing is
required, as included in the Registration Statement) and, in the event of any
supplement or amendment to such prospectus after the Effective Date, shall also
mean (from and after the filing with the Commission of such supplement or of the
effectiveness of such amendment) such prospectus as so supplemented or amended.
The term Preliminary Prospectus as used in this Agreement shall mean each
preliminary prospectus, including the documents incorporated by reference
therein, included in such registration statement prior to the time it becomes
effective.
The Registration Statement, in the form delivered to you, has been
declared effective under the Securities Act, and no post-effective amendment to
the Registration Statement has been filed as of the date of this Agreement. No
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the Commission. The Company has caused
to be delivered to you copies of the Registration Statement and of each
Preliminary Prospectus and has consented to the use of such copies for the
purposes permitted by the Securities Act. No order preventing or suspending the
use of any Preliminary Prospectus has been issued by the Commission.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Underwriters as follows:
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(a) Each of the Company and its subsidiaries has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of incorporation, has full corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus and as being
conducted, and is duly qualified as a foreign corporation and in good standing
in all jurisdictions in which the character of the property owned or leased or
the nature of the business transacted by it makes qualification necessary
(except where the failure to be so qualified would not have a material adverse
effect on the business, properties, financial condition, results of operations
or prospects of the Company and its subsidiaries, taken as a whole). The Company
does not own or control, directly or indirectly, any corporation, association or
other entity other than the subsidiaries listed in Schedule II to this Agreement
and the joint ventures referred to in the Prospectus.
(b) Each of the Company and its subsidiaries has all
necessary consents, approvals, authorizations, orders, registrations,
qualifications, licenses and permits of and from all public, regulatory and
governmental agencies and bodies to own, lease and operate its properties and
conduct its business as now being conducted and as described in the Registration
Statement and the Prospectus, and no such consent, approval, authorization,
order, registration, qualification, license or permit contains a materially
burdensome restriction not disclosed in the Registration Statement and the
Prospectus.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been any
material adverse change in the business, properties, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business,
other than as disclosed in the Registration Statement and the Prospectus. Since
such dates, neither the Company nor any of its subsidiaries has entered into any
material transaction not referred to in the Registration Statement and the
Prospectus other than in the ordinary course of business.
(d) The Registration Statement and the Prospectus comply,
and on the Closing Date (as hereinafter defined) and any later date on which
Option Stock is to be purchased, the Registration Statement and the Prospectus
will comply, in all material respects, with the provisions of the Securities Act
and the Exchange Act and the rules and regulations of the Commission thereunder;
on the Effective Date, the Registration Statement did not contain any untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. On the Effective Date the Prospectus did not and, on the
Closing Date and any later date on which Option Stock is to be purchased, the
Registration Statement and the Prospectus will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. None of the representations and warranties in this
paragraph (d) shall apply to statements in, or omissions from, the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information herein or otherwise furnished in writing to the Company by or on
behalf of the Underwriters for use in the Registration Statement or the
Prospectus.
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(e) The authorized, issued and outstanding capital stock
and the outstanding long-term debt of the Company is as described in the
Prospectus as of the dates specified therein. Except as described in the
Prospectus, there are no outstanding warrants, options or other rights to
acquire any capital stock of the Company. All of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable, and conform to the description thereof contained in the
Prospectus. All of the issued shares of capital stock of each subsidiary of the
Company listed in Schedule II to this Agreement have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
security interests and claims whatsoever other than as described in the
Prospectus. The Stock will be, when issued and sold to the Underwriters as
provided herein duly and validly issued, fully paid and nonassessable and
conforms to the description thereof in the Prospectus. No further approval or
authority of the stockholders or the Board of Directors of the Company is
required for the issuance and sale of the Stock by the Company as contemplated
herein.
(f) The Company has filed an additional listing
application to list the Stock on the Nasdaq National Market, and has received
notification that such listing has been approved, subject to official notice of
issuance and sale.
(g) The Company and each of its subsidiaries are
conducting business in compliance with all applicable statutes, ordinances,
orders, judgments, decrees, laws, rules and regulations of the jurisdictions in
which they are conducting business, including, without limitation, all
applicable local, state and federal environmental regulations, other than the
application of Health Care Laws addressed separately under Section 2(q) below
and except where the failure to be in compliance would not have a material
adverse effect on the business, properties, financial condition, results of
operations or prospects of the Company and its subsidiaries taken as a whole.
(h) The Company and each of its subsidiaries maintain
insurance of the types and in the amounts generally as are consistent with
industry practices for their business, including, but not limited to,
professional liability insurance and insurance covering real and personal
property owned or leased by the Company or any of its subsidiaries against
theft, loss, damage, destruction, acts of vandalism, all of which insurance is
in full force and effect.
(i) The Company is not aware that (A) any executive
officer, key employee or significant group of employees of the Company or any of
its subsidiaries (the loss of whom would have a material adverse effect on the
Company) plans to terminate employment with the Company or any of its
subsidiaries or (B) any such executive officer or key employee is subject to any
non-competition, non-disclosure, confidentiality, employment, consulting or
similar agreement that would be violated by the present or proposed business
activities of the Company or any of its subsidiaries.
(j) The issuance and sale of the Stock to be sold by the
Company and the compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated will not
conflict with or result in a material breach or violation of any of the terms or
provisions of, or constitute a material default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
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Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or By-laws,
each as amended to date, of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issuance
and sale of the Stock or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Securities Act
of the Stock and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Stock by the Underwriters.
(k) Neither the Company nor any of its subsidiaries is in
violation of its Certificate or Articles of Incorporation, respectively, or
By-laws. Neither the Company nor any of its subsidiaries is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound other than any defaults that singly or in the
aggregate will not have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries.
(l) The statements set forth in the Prospectus under the
caption "Description of Capital Stock," insofar as they purport to constitute a
summary of the terms of the Stock, are an accurate description of such terms in
all material respects.
(m) Other than as described in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and, to the best of
the Company's knowledge, other than as described in the Prospectus, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(n) The Company is not and, after giving effect to the
offering and sale of the Stock, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(o) Ernst & Young LLP, who have certified certain
financial statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act and the rules and regulations of
the Commission thereunder. The historical financial statements of the Company
(including the related notes) contained in or incorporated by reference in the
Prospectus comply as to form in all material respects with the requirements
applicable to a registration statement on Form S-3 under the Securities Act;
such historical financial statements have been prepared in accordance with
United States generally accepted accounting principles consistently applied
throughout the periods covered thereby and fairly
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present in all material respects the financial position of the Company at the
respective dates indicated and the results of their operations and in the case
of the Company, its cash flows for the respective periods indicated. The
financial information contained in or incorporated by reference in the
Prospectus and relating to the Company is derived from the accounting records of
the Company and its subsidiaries and fairly presents in all material respects
the information purported to be shown thereby. The pro forma financial
statements incorporated by reference in the Prospectus have been prepared on a
basis consistent with the historical financial statements incorporated by
reference in the Prospectus (except for the pro forma adjustments specified
therein), include all material adjustments to the historical financial
statements required by Rule 11-02 of Regulation S-X under the Securities Act and
the Exchange Act to reflect the transactions described in the Registration
Statement, the Prospectus or in the documents incorporated therein by reference,
are based on assumptions made on a reasonable basis and fairly present in all
material respects such transactions described in the Registration Statement, the
Prospectus or in the documents incorporated therein by reference. The other
historical financial and statistical information and data included in the
Registration Statement, the Prospectus or in the documents incorporated therein
by reference fairly presents, in all material respects, the information
purported to be shown thereby.
(p) Except as disclosed in the Prospectus, the Company
and each of its subsidiaries own or possess (or otherwise have rights to the use
of) the patents, patent licenses, trademarks, trade names, service marks,
service names, copyrights and other intellectual property rights (collectively,
the "Intellectual Property") necessary to carry on the Company's business as
presently conducted and as proposed in the Prospectus to be conducted, without
any conflict with the rights of others, except for such conflicts as do not and
will not have a material adverse effect on the financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole; neither the Company nor its subsidiaries have received any notice of
infringement or violation or conflict with (and knows of no such infringement or
conflict with) asserted rights of others with respect to any Intellectual
Property or any trade secrets, proprietary information, inventions, know-how,
processes and procedures owned, used by or licensed to the Company or any
subsidiary which, singly or in the aggregate, if the subject of any unfavorable
decision, ruling or finding, would have a material adverse effect on the
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole.
(q) The Company and its subsidiaries have endeavored in
good faith to conduct their businesses and structure their relationships with
respect to the establishment of joint ventures and management agreements in
compliance with applicable governmental laws and regulations relating to (i)
licensure of pharmacies, (ii) fee-splitting between health care providers and
other entities, (iii) payment for health care services (including without
limitation the rules of participation for the Medicare program and comparable
provisions of state and federal law pertaining to the Medicaid program), (iv)
the federal and state fraud and abuse laws and regulations thereunder (42 U.S.C.
ss. 1320a-7b et seq.), and (v) the Stark law and regulations thereunder (42
U.S.C. ss. 1395nn et seq.) (collectively, the "Health Care Laws"). To the
Company's best knowledge, its and its corporate subsidiaries' operations, joint
ventures and management agreements are in compliance with all Health Care Laws.
Further, the Company has not been notified or advised by any governmental agent
or authority that it is under investigation with respect to any violation or
alleged violation of any of the Health Care Laws.
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(r) The conditions for use of Form S-3, as set forth in
the General Instructions thereto, have been satisfied by the Company.
3. PURCHASE OF THE STOCK BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell 2,000,000 shares of the Underwritten Stock to the several
Underwriters and each of the Underwriters agrees to purchase from the Company
the respective aggregate number of shares of Underwritten Stock set forth
opposite its name in Schedule I. The price at which such shares of Underwritten
Stock shall be sold by the Company and purchased by the several Underwriters
shall be $______ per share. In making this Agreement, each Underwriter is
contracting severally and not jointly; except as provided in paragraphs (b) and
(c) of this Section 3, the agreement of each Underwriter is to purchase only the
respective number of shares of the Underwritten Stock specified in Schedule I.
(b) If for any reason one or more of the Underwriters
shall fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 8 or 9 hereof) to
purchase and pay for the number of shares of the Stock agreed to be purchased by
such Underwriter or Underwriters, such defaulting Underwriter(s) shall
immediately give notice thereof to you and to the Company, and the
non-defaulting Underwriters shall have the right within 24 hours after the
receipt by you of such notice to purchase, or procure one or more other
Underwriters to purchase, in such proportions as may be agreed upon between you
and such purchasing Underwriter or Underwriters and upon the terms herein set
forth, all or any part of the shares of the Stock which such defaulting
Underwriter or Underwriters agreed to purchase. If the non-defaulting
Underwriters fail so to make such arrangements with respect to all such shares,
the number of shares of the Stock which each non-defaulting Underwriter is
otherwise obligated to purchase under this Agreement shall be automatically
increased on a pro rata basis to absorb the remaining shares which the
defaulting Underwriter or Underwriters agreed to purchase; provided, however,
that the non-defaulting Underwriters shall not be obligated to purchase the
shares and portion which the defaulting Underwriter or Underwriters agreed to
purchase if the aggregate number of such shares of the Stock exceeds 10% of the
total number of shares of the Stock which all Underwriters agreed to purchase
hereunder. If the total number of shares of the Stock which the defaulting
Underwriter or Underwriters agreed to purchase shall not be purchased or
absorbed in accordance with the two preceding sentences, the Company shall have
the right, within 24 hours next succeeding the 24-hour period referred to above,
to make arrangements with other underwriters or purchasers satisfactory to you
for the purchase of such shares on the terms herein set forth. In any such case,
either you or the Company shall have the right to postpone the Closing Date
determined as provided in Section 5 hereof for not more than seven business days
after the date originally fixed as the Closing Date pursuant to said Section 5
in order that any necessary changes in the Registration Statement, the
Prospectus or any other documents or arrangements may be made. If neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
24-hour periods stated above for the purchase of all the shares of the Stock
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph (b), and no action taken hereunder, shall
relieve any
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defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the several Underwriters to purchase,
severally and not jointly, up to 300,000 shares in the aggregate of the Option
Stock from the Company at the same price per share as the Underwriters shall pay
for the Underwritten Stock. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Stock by the Underwriters and
may be exercised in whole or in part at any time (but not more than once) on or
before the thirtieth day after the date of this Agreement upon written or
telegraphic notice by you to the Company setting forth the aggregate number of
shares of the Option Stock as to which the several Underwriters are exercising
the option. Delivery of certificates for the shares of Option Stock, and payment
therefor, shall be made as provided in Section 5 hereof. The number of shares of
the Option Stock to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Stock to be purchased by
the several Underwriters as such Underwriter is purchasing of the Underwritten
Stock, as adjusted by you in such manner as you deem advisable to avoid
fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the public offering by the Underwriters
of the Stock to be purchased by them shall be as set forth in the Prospectus.
The Underwriters may from time to time change the public offering price after
the closing of the public offering and increase or decrease the concessions and
discounts to dealers as they may determine, subject to compliance by the
Underwriters with applicable laws, rules and regulations relating thereto.
(b) The information set forth in the second sentence of
the second paragraph on the outside front prospectus cover page and under the
caption "Underwriting" in the Registration Statement, any Preliminary Prospectus
and the Prospectus relating to the Stock filed by the Company (insofar as such
information relates to the Underwriters) constitutes the only information
furnished by the Underwriters in writing to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus, and the Prospectus, and on
behalf of the respective Underwriters you represent and warrant to the Company
that the statements made therein are correct.
5. DELIVERY OF AND PAYMENT FOR THE STOCK.
(a) Delivery of certificates for the shares of the
Underwritten Stock and the Option Stock (if the option granted by Section 3(c)
hereof shall have been exercised not later than 7:00 a.m., San Francisco time,
on the date two business days preceding the Closing Date), and payment therefor,
shall be made at the office of Chase Securities Inc., One Bush Street, San
Francisco, California 94104, at 7:00 a.m., San Francisco time, on the fourth
business day after the date of this Agreement, or at such time on such other
day, not later than seven full business days after such fourth business day, as
shall be agreed upon in writing by the Company and you. The date and hour of
such delivery and payment (which may be postponed as provided in Section 3(b)
hereof) are herein called the Closing Date.
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(b) If the option granted by Section 3(c) hereof shall be
exercised after 7:00 a.m., San Francisco time, on the date two business days
preceding the Closing Date, delivery of certificates for the shares of Option
Stock, and payment therefor, shall be made at the office of Chase Securities
Inc., One Bush Street, San Francisco, California 94104 at 7:00 a.m., San
Francisco time, on the third business day after the exercise of such option.
(c) Payment for the Stock purchased from the Company
shall be made to the Company or its order by, at the Company's option, wire
transfer or one or more certified or official bank check or checks in same day
funds. The Company must notify the Underwriters at least three business days
preceding the Closing Date and at least one business day preceding the purchase
of the Option Stock of its election, and if it elects to receive payment by wire
transfer, such notification shall include the appropriate wire instructions.
Such payment shall be made upon delivery of certificates for the Stock (or by
electronic delivery through the facilities of the Depository Trust Company) to
you for the respective accounts of the several Underwriters against receipt
therefor signed by you. If certificates for the Stock are to be delivered, such
certificates shall be registered in such name or names and shall be in such
denominations as you may request at least one business day before the Closing
Date, in the case of Underwritten Stock, and at least one business day prior to
the purchase thereof, in the case of the Option Stock. Such certificates will be
made available to the Underwriters for inspection, checking and packaging at the
offices of Lewco Securities Corporation, 2 Broadway, New York, New York 10004 on
the business day prior to the Closing Date or, in the case of the Option Stock,
by 3:00 p.m., New York time, on the business day preceding the date of purchase.
Time shall be of the essence and delivery at the time and place specified above
is a further condition to the obligations of the Underwriters.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later date on which Option Stock is
purchased for the account of such Underwriter. Any such payment by you shall not
relieve such Underwriter from any of its obligations hereunder.
6. FURTHER AGREEMENTS OF THE COMPANY. The Company covenants and
agrees as follows:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) a Prospectus containing information previously
omitted at the time of effectiveness of the Registration Statement in reliance
on Rule 430A; provided, however, that the Company shall not file such Prospectus
under Rule 424(b) or any amendment to the Registration Statement or supplement
to the Prospectus of which you shall not previously have been advised and
furnished with a copy or to which you shall have reasonably objected in writing
or which is not in compliance with the Securities Act or the rules and
regulations of the Commission. The Company will provide evidence satisfactory to
the Underwriters of the timely filing of the Prospectus filed under Rule 424(b).
(b) The Company will promptly notify each Underwriter in
the event of (i) the request by the Commission for amendment of the Registration
Statement or for any supplement to the Prospectus or for any additional
information, (ii) the issuance by the Commission of any
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stop order suspending the effectiveness of the Registration Statement, (iii) the
institution or notice of intended institution of any action or proceeding for
that purpose, (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification of the Stock for sale in any
jurisdiction, or (v) the receipt by the Company of notice of the initiation or
threatening of any proceeding for such purpose. The Company will make every
reasonable effort to prevent the issuance of such a stop order and, if such an
order shall at any time be issued, to obtain the withdrawal thereof at the
earliest possible moment.
(c) The Company will (i) on or before the date hereof,
and with respect to documents filed after the date hereof, on or before the
Closing Date, deliver to you a signed copy of the Registration Statement as
originally filed and of each amendment thereto filed prior to the time the
Registration Statement becomes effective and, promptly upon the filing thereof,
a signed copy of each post-effective amendment, if any, to the Registration
Statement (together with, in each case, all exhibits thereto unless previously
furnished to you) and will also deliver to you, for distribution to the
Underwriters, a sufficient number of additional conformed copies of each of the
foregoing (but without exhibits) so that a sufficient number of copies of each
may be distributed to each Underwriter, (ii) as promptly as possible deliver to
you and send to the several Underwriters, at such office or offices as you may
designate, as many copies of the Prospectus as you may reasonably request, and
(iii) thereafter from time to time during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, likewise send to
the Underwriters as many additional copies of the Prospectus and as many copies
of any supplement to the Prospectus and of any amended prospectus, filed by the
Company with the Commission, as you may reasonably request for the purposes
contemplated by the Securities Act.
(d) If at any time during the period in which a
prospectus is required by law to be delivered by an Underwriter or dealer, any
event relating to or affecting the Company, or of which the Company shall be
advised in writing by you, shall occur as a result of which it is necessary, in
the opinion of counsel for the Company or of counsel for the Underwriters, to
supplement or amend the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser of the Stock, the Company will forthwith prepare and
file with the Commission, at its own expense, a supplement to the Prospectus or
an amended prospectus so that the Prospectus as so supplemented or amended will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances existing at the time such Prospectus is delivered to such
purchaser, not misleading. In addition, upon your written request, the Company
will at its own expense prepare and file with the Commission any amendments or
supplements to the Registration Statement or Prospectus which, in the opinion of
counsel to the Underwriters, may be necessary or advisable in connection with
the distribution of the Stock by the Underwriters. The Company authorizes the
Underwriters and all dealers to whom any of the Stock may be sold by the several
Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
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(e) Prior to the filing thereof with the Commission, the
Company will submit to you, for your information, a copy of any post-effective
amendment to the Registration Statement and any supplement or amendment to the
Prospectus proposed to be filed.
(f) The Company will cooperate, when and as requested by
you, in the qualification of the Stock for offer and sale under the securities
or blue sky laws of such jurisdictions as you may designate and, during the
period in which a prospectus is required by law to be delivered by an
Underwriter or dealer, in keeping such qualifications in good standing under
said securities or blue sky laws; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation in any jurisdiction in which it is not so qualified. The
Company will, from time to time, prepare and file such statements, reports, and
other documents as are or may be required to continue such qualifications in
effect for so long a period as you may reasonably request for distribution of
the Stock.
(g) During a period of five years commencing with the
date hereof so long as the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act the Company will furnish to you, and to
each Underwriter who may so request in writing, copies of all periodic and
special reports furnished to stockholders of the Company and upon request copies
of all information, documents and reports filed with the Commission.
(h) Not later than the 45th day following the end of the
fiscal quarter first occurring after the first anniversary of the Effective
Date, the Company will make generally available to its security holders an
earnings statement in accordance with Section 11(a) of the Securities Act and
Rule 158 thereunder.
(i) Whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, the Company agrees to
pay all costs and expenses incident to the performance of its obligations under
this Agreement, including all costs and expenses incident to (i) the
preparation, printing and filing with the Commission and the National
Association of Securities Dealers, Inc. ("NASD") of the Registration Statement,
any Preliminary Prospectus and the Prospectus (other than, except as provided
for in paragraph 0) below and unless expressly provided for elsewhere herein,
fees and disbursements of Underwriters' counsel, fees and expenses incurred by
the Underwriters in connection with the preparation of the Registration
Statement, the Preliminary Prospectus and the Prospectus and any advertising or
marketing expenses incurred in connection with the offering by the
Underwriters), (ii) the furnishing to the Underwriters of copies of any
Preliminary Prospectus, and of the several documents required by paragraph (c)
of this Section 6 to be so furnished, (iii) the preparation, printing and filing
of all supplements and amendments to the Prospectus referred to in paragraph (d)
of this Section 6 (other than, except as provided for in paragraph (j) below and
unless expressly provided for elsewhere herein, fees and disbursements of
Underwriters' counsel and fees and expenses incurred by the Underwriters in
connection with the preparation of any such supplement or amendment), (iv) the
furnishing to you and the Underwriters of the reports and information referred
to in paragraph (g) of this Section 6 and (vi) the printing and issuance of
stock certificates, including the transfer agent's fees.
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(j) The Company agrees to reimburse you, for the account
of the several Underwriters, for blue sky fees and related disbursements
(including, without limitation, filing fees, and reasonable counsel fees and
disbursements) paid by or for the account of the Underwriters or their counsel
in qualifying the Stock under state securities or blue sky laws and in the
review of the offering by the NASD.
(k) The Company hereby agrees that, without the prior
written consent of Chase Securities Inc. on behalf of the Underwriters, the
Company will not, directly or indirectly, offer, sell, pledge, contract to sell
(including any short sale), grant any option to purchase or otherwise dispose of
any shares of Common Stock or enter into any short sale (whether or not against
the box) or any purchase, sale or grant of any right (including without
limitation, any put or call option) with respect to any security (other than a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from the Common Stock for a period continuing
until 90 days after the effective date of the registration statement relating to
the public offering of the Stock. The foregoing sentence shall not apply to (A)
the Stock to be sold to the Underwriters pursuant to this Agreement, (B) shares
of Common Stock issued by the Company upon the exercise of options granted or
other awards under the stock option plans of the Company (the "Option Plans"),
all as described in the Preliminary Prospectus, and (C) options to purchase
Common Stock or other awards of (or relating to) Common Stock granted under the
Option Plans.
(l) The Company is familiar with the Investment Company
Act of 1940, as amended, and has in the past conducted its affairs, and will in
the future conduct its affairs, in such a manner to ensure that the Company was
not and will not be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder.
(m) The Company will apply the net proceeds of the sale
of the Stock sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Prospectus.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless
each Underwriter and each person (including each partner or officer thereof) who
controls any Underwriter within the meaning of Section 15 of the Securities Act
from and against any and all losses, claims, damages or liabilities, joint or
several, to which such indemnified parties or any of them may
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<PAGE> 13
become subject under the Securities Act, the Exchange Act, or the common law or
otherwise, and the Company agrees to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceeding which may be brought
against, the respective indemnified parties, in each case to the extent the same
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (including
the Prospectus constituting a part thereof and any Rule 462(b) registration
statement) or any post-effective amendment thereto (including any Rule 462(b)
registration statement), or 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, or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) or the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that (1) the indemnity agreements of the Company
contained in this paragraph (a) shall not apply to any such losses, claims,
damages, liabilities or expenses if such statement or omission was made in the
second sentence of the second paragraph on the outside front prospectus cover
page or under the caption "Underwriting" in any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment thereof or
supplement thereto and (2) the indemnity agreement contained in this paragraph
(a) with respect to any Preliminary Prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims, damages,
liabilities or expenses purchased the Stock which is the subject thereof (or to
the benefit of any person controlling such Underwriter) if at or prior to the
written confirmation of the sale of such Stock a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
(excluding the documents incorporated therein by reference) and the untrue
statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented) unless the failure is the result of noncompliance by the Company
with paragraph (c) of Section 6 hereof. The indemnity agreements of the Company
contained in this paragraph (a) and the representations and warranties of the
Company contained in Section 2 hereof shall remain operative and in full force
and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and
hold harmless the Company, each of its officers who signs the Registration
Statement on his own behalf or pursuant to a power of attorney, each of its
directors, each other Underwriter and each person (including each partner or
officer thereof) who controls the Company or any such other Underwriter within
the meaning of Section 15 of the Securities Act, from and against any and all
losses, claims, damages or liabilities, joint or several, to which such
indemnified parties or any of them may become subject under the Securities Act,
the Exchange Act, or the common law or otherwise and to reimburse each of them
for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding
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<PAGE> 14
which may be brought against, the respective indemnified parties, in each case
to the extent the same arises out of or is based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (including the Prospectus constituting a part thereof and any Rule
462(b) registration statement) or any post-effective amendment thereto
(including any Rule 462(b) registration statement) or 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 or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto) or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, if such statement or omission was
made in the second sentence of the second paragraph on the outside front
prospectus cover page and under the caption "Underwriting" in any Preliminary
Prospectus or the Registration Statement or the Prospectus or any such amendment
thereof or supplement thereto. The indemnity agreement of each Underwriter
contained in this paragraph (b) and the representation and warranty in Section
4(b) shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(c) Each party indemnified under the provision of
paragraphs (a) and (b) of this Section 7 agrees that, upon the service of a
summons or other initial legal process upon it in any action or suit instituted
against it or upon its receipt of written notification of the commencement of
any investigation or inquiry of, or proceeding against, it in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (herein called the Notice) of
such service or notification to the party or parties from whom indemnification
may be sought hereunder. No indemnification provided for in such paragraphs
shall be available to any party who shall fail so to give the Notice if the
party to whom such Notice was not given was unaware of the action, suit,
investigation, inquiry or proceeding to which the Notice would have related and
was prejudiced by the failure to give the Notice, but the omission so to notify
such indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying party shall be entitled at its own
expense to participate in the defense of any action, suit or proceeding against,
or investigation or inquiry of, an indemnified party. Any indemnifying party
shall be entitled, if it so elects within a reasonable time after receipt of the
Notice by giving written notice (herein called the Notice of Defense) to the
indemnified party, to assume (alone or in conjunction with any other
indemnifying party or parties) the entire defense of such action, suit,
investigation, inquiry or proceeding, in which event such defense shall be
conducted, at the expense of the indemnifying party or parties, by counsel
chosen by such indemnifying party or parties and reasonably satisfactory to the
indemnified party or parties; provided, however, that (i) if the indemnified
party or parties reasonably determine that there may be a conflict between the
positions of the indemnifying party or parties and of the indemnified party or
parties in conducting the defense of such action, suit, investigation, inquiry
or proceeding or that there may be legal defenses available to such indemnified
party or parties different from or in addition to those available to the
indemnifying party or parties, then counsel for the indemnified party or parties
shall be entitled to conduct the defense to the extent reasonably determined by
such counsel to be
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<PAGE> 15
necessary to protect the interests of the indemnified party or parties and (ii)
in any event, the indemnified party or parties shall be entitled to have counsel
chosen by such indemnified party or parties participate in, but not conduct, the
defense. If, within a reasonable time after receipt of the Notice, an
indemnifying party gives a Notice of Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable under
paragraphs (a) through (c) of this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party or parties in connection with the
defense of the action, suit, investigation, inquiry or proceeding, except that
(A) the indemnifying party or parties shall bear the legal and other expenses
incurred in connection with the conduct of the defense as referred to in clause
(i) of the proviso to the preceding sentence (provided that the indemnifying
party or parties shall be liable for the expenses of one counsel for all
indemnified parties, except where it would be inappropriate under the applicable
standards of professional conduct for all of the indemnified parties to be
represented by the same counsel, in which case the indemnifying party or parties
shall also be liable for the expense of separate counsel) and (B) the
indemnifying party or parties shall bear such other expenses as it or they have
authorized to be incurred by the indemnified party or parties. If, within a
reasonable time after receipt of the Notice, no Notice of Defense has been
given, the indemnifying party or parties shall be responsible for any legal or
other expenses incurred by the indemnified party or parties in connection with
the defense of the action, suit, investigation, inquiry or proceeding.
(d) If the indemnification provided for in this Section 7
is unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 7, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 7 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Stock 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 each indemnifying party in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Underwriters shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Stock received by
the Company and the total underwriting discount received by the Underwriters, as
set forth in the table on the cover page of the Prospectus, bear to the
aggregate public offering price of the Stock. Relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by each indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be 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 into account
the equitable considerations referred to in the first sentence of this paragraph
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities, or actions in respect thereof, referred to in the first
sentence of this paragraph (d) shall be deemed to
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<PAGE> 16
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). Notwithstanding the provisions of this paragraph
(d), no Underwriter shall be required to contribute any amount in excess of the
underwriting discount applicable to the Stock purchased by such Underwriter. 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 in this paragraph (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect of which contribution may be sought, it will promptly give written
notice of such service to the party or parties from whom contribution may be
sought, but the omission so to notify such party or parties of any such service
shall not relieve the party from whom contribution may be sought from any
obligation it may have hereunder or otherwise (except as specifically provided
in paragraph (c) of this Section 7).
(e) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnification could have been sought hereunder by such
indemnified party (including with respect to indemnification by the Company
whether or not such Underwriter or any person who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) unless such
settlement includes an unconditional release of such indemnified party from all
liability on all claims that are the subject matter of such proceeding.
8. TERMINATION. This Agreement may be terminated by you at any
time prior to the Closing Date by giving written notice to the Company if after
the date of this Agreement trading in the Common Stock shall have been
suspended, or if there shall have occurred (i) the engagement in hostilities or
an escalation of major hostilities by the United States or the declaration of
war or a national emergency by the United States on or after the date hereof,
(ii) any outbreak of hostilities or other national or international calamity or
crisis or change in economic or political conditions if the effect of such
outbreak, calamity, crisis or change in economic or political conditions in the
financial markets of the United States would, in the Underwriters' reasonable
judgment, make the offering or delivery of the Stock impracticable, (iii)
suspension of trading in securities generally or a material adverse decline in
value of securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market, or limitations on prices (other than
limitations on hours or numbers of days of trading) for securities on either
such exchange or system, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of, or
commencement of any proceeding or investigation by, any court, legislative body,
agency or other governmental authority which in the Underwriters' reasonable
opinion materially and adversely affects or will materially or adversely affect
the business or operations of the Company, (v) declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in
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<PAGE> 17
respect of its monetary or fiscal affairs which in the Underwriters' reasonable
opinion has a material adverse effect on the securities markets in the United
States. If this Agreement shall be terminated pursuant to this Section 8, there
shall be no liability of the Company to the Underwriters and no liability of the
Underwriters to the Company; provided, however, that in the event of any such
termination the Company agrees to indemnify and hold harmless the Underwriters
from all costs or expenses incident to the performance of the obligations of the
Company under this Agreement, to the extent provided for in paragraphs (i) and
(j) of Section 6 hereof.
9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters to purchase and pay for the Stock shall be subject to
the accuracy of the representations and warranties on the part of the Company
and the performance by the Company of all its obligations to be performed
hereunder at or prior to the Closing Date and, solely with respect to the Option
Stock, on any later date on which Option Stock is to be purchased, as the case
may be, and to the following further conditions:
(a) The Registration Statement shall have become
effective; and no stop order suspending the effectiveness thereof shall have
been issued and no proceedings therefor shall be pending or threatened by the
Commission.
(b) The legality and sufficiency of the sale of the Stock
hereunder and the validity and form of the certificates representing the Stock,
all corporate proceedings and other legal matters incident to the foregoing, and
the form of the Registration Statement and of the Prospectus (except as to the
financial statements contained therein), shall have been approved at or prior to
the Closing Date by McDermott, Will & Emery, counsel for the Underwriters,
provided that such approval is not unreasonably withheld.
(c) You shall have received from Alston & Bird LLP,
counsel for the Company, an opinion, addressed to the Underwriters and dated the
Closing Date, covering the matters set forth in Annex A hereto, and if Option
Stock is purchased at any date after the Closing Date, additional opinions from
each such counsel, addressed to the Underwriters and dated such later date,
confirming that the statements expressed as of the Closing Date in such opinions
remain valid as of such later date.
(d) You shall be satisfied that (i) as of the Effective
Date, the statements made in the Registration Statement and the Prospectus were
true and correct and neither the Registration Statement nor the Prospectus
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein, respectively, not misleading, (ii) since
the Effective Date, no event has occurred which should have been set forth in a
supplement or amendment to the Prospectus which has not been set forth in such a
supplement or amendment filed with the Commission, (iii) since the respective
dates as of which information is given in the Registration Statement in the form
in which it originally became effective and the Prospectus contained therein,
there has not been any material adverse change or any development involving a
prospective material adverse change in or affecting the business, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, and, since such dates, except in the ordinary
course of business, neither the Company nor any of its subsidiaries has entered
into any
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<PAGE> 18
material transaction not referred to in the Registration Statement in the form
in which it originally became effective and the Prospectus contained therein and
which would be required to be disclosed therein (iv) neither the Company nor any
of its subsidiaries has any material contingent obligations which are not
disclosed in the Registration Statement and the Prospectus, (v) there are not
any pending or known threatened legal proceedings to which the Company or any of
its subsidiaries is a party or of which property of the Company or any of its
subsidiaries is the subject which are required to be disclosed in the
Registration Statement and the Prospectus and which are not disclosed as
required, (vi) there are not any franchises, contracts, leases or other
documents which are required to be filed as exhibits to the Registration
Statement which have not been filed as required, (vii) the representations and
warranties of the Company herein are true and correct in all material respects
as of the Closing Date and on any later date on which Option Stock is to be
purchased, as the case may be, and (viii) there has not been any material change
in the market for securities in general or in political, financial or economic
conditions and which renders it impracticable in your reasonable judgment to
make a public offering of the Stock, or a material adverse change in market
levels for securities in general (or those of companies in particular) or
financial or economic conditions which render it inadvisable to proceed.
(e) You shall have received on the Closing Date and on
any later date on which Option Stock is purchased a certificate, dated the
Closing Date or such later date, as the case may be, and signed by the President
and the Chief Financial Officer of the Company, in their capacities as such
officers, stating that the respective signers of said certificate have carefully
examined the Registration Statement in the form in which it originally became
effective and the Prospectus contained therein and any supplements or amendments
thereto, and that the statements included in clauses (i) through (vii) of
paragraph (d) of this Section 9 are true and correct.
(f) You shall have received from Ernst & Young LLP, a
letter or letters, addressed to the Underwriters and dated the Closing Date and
any later date on which Option Stock is purchased, confirming that they are
independent public accountants with respect to the Company within the meaning of
the Securities Act and the applicable published rules and regulations thereunder
and, based upon the procedures described in their letter delivered to you
concurrently with the execution of this Agreement (herein called the Original
Letter), but carried out to a date not more than three business days prior to
the Closing Date or such later date on which Option Stock is purchased, (i)
confirming, to the extent true, that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later date, as
the case may be, and (ii) setting forth any revisions and additions to the
statements and conclusions set forth in the Original Letter which are necessary
to reflect any changes in the facts described in the Original Letter since the
date of the Original Letter or to reflect the availability of more recent
financial statements, data or information. The letters shall not disclose any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries, taken as a whole,
which, in your sole judgment, makes it impractical or inadvisable to proceed
with the public offering of the Stock or the purchase of the Option Stock as
contemplated by the Prospectus.
(g) You shall have received a copy of the letter from
Ernst & Young LLP to the Company stating that their review of the Company's
system of internal accounting controls, to
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<PAGE> 19
the extent they deemed necessary in establishing the scope of their examination
of the Company's financial statements as at June 30, 2000, did not disclose any
weakness in internal controls that they considered to be material weaknesses.
(h) Prior to the Closing Date, the Stock to be issued and
sold by the Company shall have been duly authorized for listing by the Nasdaq
National Market upon official notice of issuance.
(i) On or prior to the Closing Date, you shall have
received from all stockholders named in Schedule III hereto agreements, in form
reasonably satisfactory to Chase Securities Inc., stating that without the prior
written consent of Chase Securities Inc. on behalf of the Underwriters, such
person or entity will not, directly or indirectly offer, sell, pledge, contract
to sell (including any short sale), grant any option to purchase or otherwise
dispose of any shares of Common Stock (including, without limitation, shares of
Common Stock which may be deemed to be beneficially owned by the parties to such
agreements in accordance with the rules and regulations of the Securities and
Exchange Commission and shares of Common Stock which may be issued upon exercise
of a stock option or warrant or conversion of any convertible securities) or
enter into any short sale (whether or not against the box) or any purchase, sale
or grant of any right (including without limitation, any put or call option)
with respect to any security (other than a broad-based market basket or index)
that includes, relates to or derives any significant part of its value from the
Common Stock for a period continuing until 90 days after the effective date of
the registration statement relating to the public offering.
The lock-up agreement described above shall not apply to transfers (i)
in connection with the public offering of the Stock to the extent that the
stockholder is a selling stockholder in the such offering, (ii) by gift, will or
intestacy, (iii) in the event the stockholder is an individual, to his or her
immediate family or to a trust the beneficiaries of which are exclusively the
stockholder and/or a member or members of his or her immediate family, (iv) as a
distribution to partners, members or shareholders of the stockholder, or (v) to
an affiliate of the stockholder; provided, however, that in the case of
transfers under clauses (ii), (iii), (iv) and (v), it shall be a condition to
the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding the Stock subject to the provisions of the
lock-up agreement, and there shall be no further transfer of such Stock except
in accordance with the lock-up agreement.
All the agreements, opinions, certificates and letters mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if you and McDermott, Will & Emery, counsel for the
Underwriters, shall be satisfied that they comply in form and scope, which
satisfaction shall not be unreasonably withheld or delayed.
In case any of the conditions specified in this Section 9 shall not be
fulfilled, this Agreement may be terminated by you by giving notice to the
Company. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that (i) in the event of such termination, the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement to the
extent provided for in paragraphs (i) and (j) of Section 6 hereof, and (ii) if
this Agreement is terminated by you because of any refusal, inability or failure
on the part of the Company to
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<PAGE> 20
perform any agreement of the Company herein, to fulfill any of the conditions
herein, or to comply with any provision hereof that is applicable to the
Company, other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) that shall
have been incurred by them in connection with the transactions contemplated
hereby.
10. CONDITIONS OF THE OBLIGATION OF THE COMPANY. The obligation of
the Company to deliver the Stock shall be subject to the conditions that (a) the
Registration Statement shall have become effective and (b) no stop order
suspending the effectiveness thereof shall be in effect and no proceedings
therefor shall be pending or threatened by the Commission.
In case either of the conditions specified in this Section 10 shall not
be fulfilled, this Agreement may be terminated by the Company by giving notice
to you. Any such termination shall be without liability of the Company to the
Underwriters and without liability of the Underwriters to the Company; provided,
however, that in the event of any such termination the Company agrees to
indemnify and hold harmless the Underwriters from all costs or expenses incident
to the performance of the obligations of the Company under this Agreement to the
extent provided for in paragraphs (i) and (j) of Section 6 hereof.
11. REIMBURSEMENT OF CERTAIN EXPENSES. In addition to its other
obligations under Section 7 of this Agreement, the Company hereby agrees to
reimburse on a quarterly basis the Underwriters for all reasonable legal and
other expenses incurred in connection with investigating or defending any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
paragraph (a) of Section 7 of this Agreement, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the obligations
under this Section 11 and the possibility that such payments might later be held
to be improper; provided, however, that (i) to the extent any such payment is
ultimately held to be improper, the persons receiving such payments shall
promptly refund them and (ii) such persons shall provide to the Company, upon
request, reasonable assurances of their ability to effect any refund, when and
if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 7 hereof, the several parties (in addition
to the Company and the several Underwriters) indemnified under the provisions of
said Section 7, and their respective personal representatives, successors and
assigns. Nothing in this Agreement is intended or shall be construed to give to
any other person, firm or corporation any legal or equitable remedy or claim
under or in respect of this Agreement or any provision herein contained. The
term "successors and assigns" as herein used shall not include any purchaser, as
such purchaser, of any of the Stock from any of the several Underwriters.
13. NOTICES. Except as otherwise provided herein, all
communications hereunder shall be in writing and, if to the Underwriters, shall
be mailed, sent via overnight courier, sent by facsimile or delivered to Chase
Securities Inc., One Bush Street, San Francisco, California 94104; and if to the
Company, shall be mailed, sent via overnight courier, sent by facsimile or
delivered to it at its office, 1640 Century Center Parkway, Suite 101, Memphis,
TN 38134, Attention: David D. Stevens. Any notice sent in accordance with the
provisions of this Section
20
<PAGE> 21
13 shall be deemed to have been received on the date which is: (i) three (3)
business days after the date of proper posting, if sent by certified U.S. mail,
postage prepaid, return receipt requested; or (ii) the date on which sent, if
sent by facsimile transmission, with confirmation and with the original to be
sent by certified U.S. mail; or (iii) the next business day if sent by overnight
delivery by a national courier service.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and effect
regardless of (a) any termination of this Agreement, (b) any investigation made
by or on behalf of any Underwriter or controlling person thereof, or by or on
behalf of the Company or their respective directors or officers, and (c)
delivery and payment for the Stock under this Agreement; provided, however, that
if this Agreement is terminated prior to the Closing Date, the provisions of
paragraph (k) of Section 6 hereof shall be of no further force or effect.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California.
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
ACCREDO HEALTH, INCORPORATED
By
------------------------------------
Name:
Title:
<PAGE> 22
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
CHASE SECURITIES INC.
SUNTRUST EQUITABLE SECURITIES LLC
BANC OF AMERICA SECURITIES LLC, AND
FIRST UNION SECURITIES, INC.
By Chase Securities Inc.
By:
---------------------------------------
Managing Director
Acting as a duly authorized representative on behalf of the several
Underwriters, including themselves, named in Schedule I hereto.
22
<PAGE> 23
SCHEDULE 1
UNDERWRITERS
<TABLE>
<CAPTION>
NUMBER OF SHARES TO BE
UNDERWRITERS PURCHASED
----------------------
<S> <C>
Chase Securities Inc.
SunTrust Equitable Securities Corporation
Banc Of America Securities LLC
First Union Securities, Inc.
Total
--------------
</TABLE>
<PAGE> 24
SCHEDULE II
SUBSIDIARIES
Southern Health Systems, Inc.
Nova Factor, Inc.
Hemophilia Health Services, Inc.
AHI Pharmacies, Inc.
Sunrise Health Management, Inc.
Children's Hemophilia Services
<PAGE> 25
SCHEDULE III
LOCK-UP AGREEMENTS
<PAGE> 26
ANNEX A
MATTERS TO BE COVERED IN THE OPINION OF
ALSTON & BIRD LLP COUNSEL FOR THE COMPANY
(i) The Company was duly incorporated and is validly existing as a
corporation and is in good standing under the laws of the State of Delaware, and
is qualified to transact business as a foreign corporation in the State of
California and the State of Tennessee. The Company has the corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement. Each of the Company's corporate subsidiaries is
validly existing as a corporation and is in good standing under the laws of the
State of Tennessee, other than Sunrise Health Management, Inc. which is
incorporated in Georgia, and each is qualified to transact business as a foreign
corporation in those states identified on Schedule A hereto. Each of the Company
and its subsidiaries is duly qualified to do business in each jurisdiction in
which it owns or leases property or in which the conduct of its business
requires such qualification (as such properties and business are described in
the Registration Statement). Each of the Company's corporate subsidiaries has
the corporate power and the corporate authority to own or lease and operate its
properties and to conduct its business as described in the Registration
Statement. All the issued and outstanding capital stock of each of the
subsidiaries of the Company listed in Schedule II to the Underwriting Agreement
has been duly authorized and validly issued and is fully paid and
non-assessable, and to such counsel's knowledge, except as disclosed in the
Prospectus, is owned by the Company free and clear of all liens, encumbrances
and security interests, and to such counsel's knowledge, no options, warrants or
other rights to purchase, agreements or other obligations to issue or other
rights to convert any obligations into shares of capital stock or ownership
interests in such subsidiaries are outstanding.
(ii) The authorized capital stock of the Company consists of
300,000 shares of Series A Cumulative Preferred Stock, none of which are
outstanding, 5,000,000 shares of preferred stock, $1.00 par value, none of which
are outstanding, 2,500,000 shares of Non-Voting Common Stock, $.01 par value,
none of which are outstanding, and 30,000,000 shares of Common Stock, $.01 par
value, of which there are __________ shares outstanding as of the date hereof
(including the Underwritten Stock); such authorized capital stock has been duly
authorized; all of the outstanding shares of such capital stock (including the
Underwritten Stock) have been validly issued and are fully paid and
non-assessable; and, no preemptive rights of, or rights of first and last
refusal in favor of, stockholders exist with respect to the Stock, or the issue
and sale thereof, pursuant to the Certificate of Incorporation or Bylaws of the
Company and, to such counsel's knowledge, there are no contractual preemptive
rights, rights of first refusal or rights of co-sale that have not been waived
with respect to the issue and sale of the Stock.
(iii) The descriptions of statutes and regulations under the
captions "Risk Factors - Government Regulation" and "Business - Government
Regulation" in the Registration Statement accurately summarize and fairly
present in all material respects the matters therein described.
(iv) The Registration Statement and the Prospectus (except as to
the financial statements and schedules and other financial and statistical data
contained or incorporated by
<PAGE> 27
reference therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Securities Act,
the Exchange Act and the applicable rules and regulations of the Commission
thereunder.
(v) The information required to be set forth in the Registration
Statement in answer to Items 9 and 10 (insofar as it relates to such counsel) of
Form S-3 is, to such counsel's knowledge, accurately set forth therein in all
material respects or no response is required with respect to such Items.
(vi) Such counsel does not know of any franchises, contracts,
leases, documents or legal or governmental proceedings, pending or threatened,
which in the opinion of such counsel are of a character required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement, which are not described and filed as required.
(vii) The Underwriting Agreement was duly authorized, executed and
delivered by the Company.
(viii) the issuance and sale by the Company of the shares of Stock
sold by the Company and the consummation of the transactions as contemplated by
the Underwriting Agreement do not conflict with or result in any breach of, or a
default under, the Certificate of Incorporation or Bylaws of the Company or any
of its subsidiaries listed in Schedule II to the Underwriting Agreement or any
agreement or instrument listed as an exhibit to the Registration Statement or
any of the documents incorporated by reference therein pursuant to Item 601 of
Regulation S-K promulgated under the Securities Act to which the Company or any
of its subsidiaries is a party or any applicable law or regulation, or insofar
as know to such counsel, any judicial or administrative order, writ, injunction
or decree to which the Company or its subsidiaries are subject.
(ix) All holders of securities of the Company who, to such
counsel's knowledge, have rights to the registration of shares of Common Stock,
or other securities, because of the filing of the Registration Statement by the
Company have waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the Registration
Statement.
(x) No consent, approval, authorization or order of any court or
governmental agency or body is required for the issuance or sale of the Stock or
the consummation of the transactions contemplated in the Underwriting Agreement,
except such as have been obtained under the Securities Act and such as may be
required under state securities or "blue sky" laws, or under the securities laws
of any country other than the United States of America, in connection with the
purchase and distribution of the Stock by the Underwriters.
<PAGE> 28
(xi) Neither the Company nor any of its subsidiaries is, or will be
as a result of the consummation of the transactions contemplated by the
Underwriting Agreement, an "investment company" or an entity "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
----------------------
Such counsel has participated in conferences with officials and other
representatives of the Company, the Representatives, Underwriters' Counsel and
the independent certified public accountants of the Company, at which such
conferences the contents of the Registration Statement and Prospectus and
related matters were discussed. Although such counsel has not independently
verified the accuracy or the completeness of the statements therein, based on
such counsel's participation in these conferences, such counsel's review of
corporate documents furnished to such counsel by the Company, such counsel's
understanding of applicable law and the experience such counsel has gained in
their practice thereunder, nothing has come to the attention of such counsel
which leads such counsel to believe that the Registration Statement (except as
to the financial statements and schedules and other financial and statistical
data contained or incorporated by reference therein, as to which such counsel
need not express any opinion or belief) at the Effective Date contained any
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 (except as to the financial statements and schedules and
other financial and statistical data contained or incorporated by reference
therein, as to which such counsel need not express any opinion or belief) as of
its date or at the Closing Date (or any later date on which the Option Stock is
purchased), contained or contains any untrue statement of a material fact or
omitted or omits 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.
Counsel rendering the foregoing opinion may rely as to questions of law
not involving the laws of the United States or the provisions of the Delaware
General Corporation Law, upon opinions of local counsel satisfactory in form and
scope to counsel for the Underwriters, and as to questions of fact, upon
representations or certificates of officers of the Company and of government
officials. Copies of any opinions so relied upon shall be delivered to the
Representatives and to counsel for the Underwriters and the foregoing opinion
shall also state that counsel knows of no reason the Underwriters are not
entitled to rely upon the opinions of such local counsel.
<PAGE> 29
SCHEDULE A
Hemophilia Health Services, Inc. is qualified to transact business as a foreign
corporation in the following States;
California
Oklahoma
Nova Factor, Inc. is qualified to transact business as a foreign corporation in
the following states:
Florida
Georgia
Maryland
California
Texas
Alabama
Illinois
Montana
AHI Pharmacies, Inc. is qualified to transact business as a foreign corporation
in the following states:
Florida
California
North Carolina
