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1,240,000 SHARES
HORIZON HEALTH CORPORATION
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
, 1997
2
, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
Certain stockholders of Horizon Health Corporation, a Delaware
corporation (the "COMPANY"), named in Schedule I hereto (the "SELLING
STOCKHOLDERS") severally propose to sell to the several Underwriters named in
Schedule II hereto (the "UNDERWRITERS") an aggregate of 1,240,000 shares of the
common stock, $.01 par value, of the Company (the "FIRM SHARES"), each Selling
Stockholder selling the amount set forth opposite such Selling Stockholder's
name under the column entitled "Number of Firm Shares To Be Sold" in Schedule I
hereto.
Certain of the Selling Stockholders specified in Schedule I
hereto also severally propose to sell to the several Underwriters not more than
an additional 186,000 shares of the common stock, $.01 par value (the
"ADDITIONAL SHARES") if and to the extent that you, as managers of the offering
("MANAGERS"), shall have determined to exercise, on behalf of the Underwriters,
the right to purchase such shares of common stock granted to the Underwriters
in Section 3 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "SHARES." The shares of common stock, $.01 par
value of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement, including a prospectus, relating
to the Shares. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
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1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to and agrees with each of the Underwriters
that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority
to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued and outstanding shares
of capital stock of each subsidiary of the Company and, in the case of
Florida Professional Psychological Services, Inc. ("FLORIDA PPS"), the
eighty percent (80%) of all the issued and outstanding shares of Florida
PPS capital stock owned by the Company, have been duly authorized and
validly issued, are
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fully paid and non-assessable and are owned directly by the Company,
free and clear of all liens, encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof incorporated by reference in
the Prospectus.
(g) The shares of Common Stock (including the Shares to be
sold by the Selling Stockholders) have been duly authorized and validly
issued and are fully paid and non-assessable, and the issuances of such
shares of Common Stock did not violate any preemptive or similar rights
at the time of their issuance.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(j) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus by the
Securities Act and the applicable rules and regulations of the
Commission thereunder and are not so described or any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement by the Securities Act and the
applicable rules and regulations of the Commission thereunder that are
not described or filed as required.
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(k) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(l) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(m) The Company and its subsidiaries (i) are in compliance
with any and all applicable federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(o) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings
by the Company and its subsidiaries, in each case except as described in
the Prospectus.
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(p) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by them in connection with the business now
operated by them, and neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in the
Prospectus, or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(r) The Company and its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses
in which they are engaged; neither the Company nor any of its
subsidiaries has been refused any insurance coverage sought or applied
for; and neither the Company nor any of its subsidiaries has any reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole, except as described in the
Prospectus.
(s) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
business, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole, except as described in the
Prospectus.
(t) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (3) access to assets is permitted only in
accordance with management's general or specific authorization; and (4)
the recorded accountability for assets is compared
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with the existing assets at reasonable intervals and appropriate action
is taken with respect to any difference.
(u) Neither the Company nor any of its subsidiaries has
engaged or is currently engaging in any activity, whether alone or in
concert with others, in violation of any federal, state or local law or
regulation connected in any way with the provision of healthcare
services or the billing for such services, directly or indirectly, to a
beneficiary or intermediary of any federal or state health or insurance
program, including those laws or regulations prohibiting fraudulent or
abusive practices.
(v) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
(w) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING
STOCKHOLDERS. Each of the Selling Stockholders, severally and not jointly,
represents and warrants to and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(b) 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 signed by such Selling
Stockholder and American Stock Transfer & Trust Company, as Custodian,
relating to the deposit of the Shares to be sold by such Selling
Stockholder (the "CUSTODY AGREEMENT") and the Power of Attorney
appointing certain individuals as such Selling Stockholder's
attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"POWER OF ATTORNEY") will not contravene any provision of applicable
law, or the certificate of incorporation or by-laws of such Selling
Stockholder (if such Selling Stockholder is a corporation), or the
certificate of limited partnership or agreement of limited partnership
of such Selling Stockholder (if such Selling Stockholder is a limited
partnership), or any agreement or other instrument binding upon such
Selling Stockholder or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such Selling Stockholder,
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance
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by such Selling Stockholder of its obligations under this Agreement or
the Custody Agreement or Power of Attorney of such Selling Stockholder,
except such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(c) Such Selling Stockholder has, and on the Closing Date will
have, valid title to the Shares to be sold by such Selling Stockholder
and the legal right and power, and all authorization and approval
required by law, to enter into this Agreement, the Custody Agreement and
the Power of Attorney and to sell, transfer and deliver the Shares to be
sold by such Selling Stockholder.
(d) The Shares to be sold by such Selling Stockholder pursuant
to this Agreement have been duly authorized and are validly issued,
fully paid and non-assessable.
(e) The Custody Agreement and the Power of Attorney have been
duly authorized, executed and delivered by such Selling Stockholder and
are valid and binding agreements of such Selling Stockholder.
(f) Delivery of the Shares to be sold by such Selling
Stockholder pursuant to this Agreement will pass title to such Shares
free and clear of any security interests, claims, liens, equities and
other encumbrances.
(g) To the extent, but only to the extent, that any statements
or omissions made in the Registration Statement, the preliminary
prospectuses, the Prospectus or any amendment or supplement thereto are
made in reliance upon and in conformity with written information
relating to such Selling Stockholder furnished to the Company by such
Selling Stockholder expressly for use therein or filed by the Selling
Stockholder pursuant to the Exchange Act relating to the Company, (i)
the Registration Statement, when it became effective, did not contain
and, as supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph 2(g)
do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
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In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder agrees to deliver to you prior to or at
the Closing Date (as hereinafter defined) a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
3. AGREEMENTS TO SELL AND PURCHASE. Each Selling
Stockholder, severally and not jointly, hereby agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees, severally and not jointly, to purchase from such Selling Stockholder at
$ a share (the "PURCHASE PRICE") the number of Firm Shares (subject
to such adjustments to eliminate fractional shares as you may determine) that
bears the same proportion to the number of Firm Shares to be sold by such
Selling Stockholder as the number of Firm Shares set forth in Schedule II
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, each Selling
Stockholder, severally and not jointly, hereby agrees to sell to the
Underwriters the number of Additional Shares set forth opposite such Selling
Stockholder's name under the column entitled "Number of Additional Shares To Be
Sold" in Schedule I hereto, and the Underwriters shall have a one-time right to
purchase, severally and not jointly, up to 186,000 Additional Shares at the
Purchase Price. If you, on behalf of the Underwriters, elect to exercise such
option, you shall so notify the Company in writing not later than 30 days after
the date of this Agreement, which notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which such shares
are to be purchased. Such date may be the same as the Closing Date (as defined
below) but not earlier than the Closing Date nor later than ten business days
after the date of such notice. Additional Shares may be purchased as provided
in Section 5 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. If any Additional Shares are
to be purchased, each Underwriter agrees, severally and not jointly, to
purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the
number of Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
The Company and each Selling Stockholder hereby agree that,
without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on
behalf of the Underwriters, they will not, during the period ending 90 days
after the date of the Prospectus, (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock
or (ii) enter into any swap or other arrangement that transfers to another, in
whole
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or in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
hereunder, (B) the issuance by the Company of shares of Common Stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof which is disclosed in the Prospectus or (C) transactions by any
person other than the Company relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
offering of the Shares. In addition, each Selling Stockholder agrees that,
without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on
behalf of the Underwriters, it will not, during the period ending 90 days after
the date of the Prospectus, make any demand for, or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
4. TERMS OF PUBLIC OFFERING. The Selling Stockholders are
advised by you that the Underwriters propose to make a public offering of their
respective portions of the Shares as soon after the Registration Statement and
this Agreement have become effective as in your judgment is advisable. The
Selling Stockholders are further advised by you that the Shares are to be
offered to the public initially at $ a share (the "PUBLIC OFFERING PRICE")
and to certain dealers selected by you at a price that represents a concession
not in excess of $ a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in
excess of $ a share, to any Underwriter or to certain other dealers.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be
sold by each Selling Stockholder shall be made to such Selling Stockholder in
Federal or other same-day funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on , 1997(1),
or at such other time on the same or such other date, not later than
, 1997(2), as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Selling
Stockholders selling such Additional Shares in Federal or other same-day funds
immediately available in New York City against delivery of such Additional
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on the date specified in the notice described in Section 3
or at such other time on the same or on such other date, in any event not later
than ,1997(3), as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the "OPTION CLOSING DATE."
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(1) Three business days or, in the event the offering is priced after 4:30
p.m. Eastern Time (and T+4 settlement is deemed to apply to secondary sales),
four business days after the date of the Underwriting Agreement.
(2) Insert date that is five additional business days after the date
inserted in accordance with note 1 above.
(3) Ten business days after expiration of overallotment option.
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Certificates for the Firm Shares and Additional Shares shall be
in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Selling Stockholders to sell the Shares to the Underwriters
and the several obligations of the Underwriters to purchase and pay for the
Shares on the Closing Date are subject to the condition that the Registration
Statement shall have become effective not later than 5:00 p.m. (New York City
time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date :
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment, impracticable
to market the Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, to the effect set forth in Section 6(a)(i) above and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company has
complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied hereunder on or before the Closing Date.
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The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P, outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction as set forth in such opinion;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
incorporated by reference in the Prospectus;
(iv) (A) all of the outstanding shares of capital stock
of the Company as of the date and as set forth under the caption
"Capitalization" in the Prospectus have been duly authorized and
validly issued and are fully paid and non-assessable and (B) the
Shares to be sold by the Selling Stockholders have been duly
authorized and are validly issued, fully paid and non-assessable,
and the issuance of such Shares did not violate any preemptive or
similar rights at the time of their issuance;
(v) all of the issued shares of capital stock of each
subsidiary of the Company, and in the case of Florida PPS, the
eighty percent (80%) of Florida PPS capital stock owned the
Company, have been duly and validly authorized and issued, are
fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or
claims;
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(vi) this Agreement has been duly authorized, executed
and delivered by the Company;
(vii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, to
such counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole,
or, to such counsel's knowledge, any judgment, order or decree of
any governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except such
as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Shares;
(viii) the statements (A)(i) in Item 1 of the Registration
Statement on Form 8-A regarding the description of capital stock
relating to the Common Stock as declared effective by the
Commission on March 13, 1995 (File No. 1-13626) and as
incorporated by reference into the Prospectus and (ii) in the
Prospectus under the captions "Management's Discussion and
Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources," but only with respect to the
description contained therein of the Commitment Letter with Texas
Commerce Bank, N.A. and Chase Securities, Inc. and "Underwriters"
but only with respect to the description contained therein of this
Agreement and the form of Lock-Up Letter attached hereto and (B)
in the Registration Statement in Item 15 insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(ix) to such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus by the Securities Act and the
applicable rules and regulations of the Commission thereunder and
are not so described or of any statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement by the Securities Act and
the applicable rules and regulations of the Commission thereunder
that are not described or filed as required;
(x) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus,
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will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended;
(xi) to such counsel's knowledge, the Company and its
subsidiaries (A) are in compliance with any and all applicable
Environmental Laws, (B) have received all permits, licenses or
other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (C) are in
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(xii) except as described in the Prospectus or as have
been waived at the Closing Date, there are no persons with
registration or similar rights to have any securities of the
Company registered pursuant to the Registration Statement or
otherwise registered by the Company under the Securities Act or
the Exchange Act pursuant to any agreement or instrument known to
such counsel after due inquiry to which the Company is a party;
and
(xiii) such counsel (A) is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for financial
statements and schedules as to which such counsel need not
express any opinion) complied when so filed as to form in all
material respects with the Exchange Act and the rules and
regulations of the Commission thereunder, (B) is of the opinion
that the Registration Statement and Prospectus (except for
financial statements and schedules and other financial and
statistical data included therein as to which such counsel need
not express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (C) has no reason to
believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel
need not express any belief) the Registration Statement and the
prospectus included therein at the time the Registration
Statement became effective 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 and (D) has no reason to believe that (except for
financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Prospectus contains any untrue statement of a
material fact or omits 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.
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(d) The Underwriters shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P., counsel for the Selling
Stockholders, dated the Closing Date, to the effect that:
(i) such Selling Stockholder, if a corporation, has
been duly incorporated and is validly existing as a corporation
in good standing under the laws of the state of its
incorporation, or such Selling Stockholder, if a partnership, has
been duly formed and is validly existing as a partnership in good
standing under the laws of the state of its formation;
(ii) this Agreement has been duly authorized, executed
and delivered by or on behalf of each of the Selling
Stockholders;
(iii) the execution and delivery by each Selling
Stockholder of, and the performance by such Selling Stockholder
of its obligations under, this Agreement and the Custody
Agreement and Powers of Attorney of such Selling Stockholder will
not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of such Selling
Stockholder (if such Selling Stockholder is a corporation), or,
to such counsel's knowledge, any agreement or other instrument
binding upon such Selling Stockholder or, to such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such Selling
Stockholder, and to the knowledge of such counsel, no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
such Selling Stockholder of its obligations under this Agreement
or the Custody Agreement or Power of Attorney of such Selling
Stockholder, except such as may be required by the securities or
Blue Sky laws of the various states in connection with offer and
sale of the Shares;
(iv) each of the Selling Stockholders has valid title to
the Shares to be sold by such Selling Stockholder and the legal
right and power, and all authorization and approval required by
law, to enter into this Agreement and the Custody Agreement and
Power of Attorney of such Selling Stockholder and to sell,
transfer and deliver the Shares to be sold by such Selling
Stockholder;
(v) the Custody Agreement and the Power of Attorney of
each Selling Stockholder have been duly authorized, executed and
delivered by such Selling Stockholder and are valid and binding
agreements of such Selling Stockholder; and
(vi) delivery of the Shares to be sold by each Selling
Stockholder pursuant to this Agreement will pass title to such
Shares free and clear of any security interests, claims, liens,
equities and other encumbrances.
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(e) The Underwriters shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
6(c)(vi), 6(c)(viii) (but only as to the statements in the Prospectus
under "Underwriters" and the statements regarding the Company's capital
stock as incorporated into the Prospectus from Item 1 of the
Registration Statement on Form 8-A relating to the Common Stock as
declared effective by the Commission on March 13, 1995 (File No. 1-
13626)) and 6(c)(xii)(B)-(D) above.
With respect to Section 6(c)(xiii) above, ▇▇▇▇▇▇▇▇▇▇▇ &
Price, L.L.P. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. may state that their opinion
and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are
without independent check or verification, except as specified. With
respect to Section 6(d) above, ▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P. may rely upon
an opinion or opinions of counsel for any Selling Stockholders and, with
respect to factual matters and to the extent such counsel deems
appropriate, upon the representations of each Selling Stockholder
contained herein and in the Custody Agreement and Power of Attorney of
such Selling Stockholder and in other documents and instruments;
provided that (A) each such counsel for the Selling Stockholders is
satisfactory to your counsel, (B) a copy of each opinion so relied upon
is delivered to you and is in form and substance satisfactory to your
counsel, (C) copies of such Custody Agreements and Powers of Attorney
and of any such other documents and instruments shall be delivered to
you and shall be in form and substance satisfactory to your counsel and
(D) ▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P. shall state in their opinion that they
are justified in relying on each such other opinion.
The opinions of ▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P. described in Sections
6(c) and 6(d) above (and any opinions of counsel for any Selling
Stockholder referred to in the immediately preceding paragraph) shall be
rendered to the Underwriters at the request of the Company or one or
more of the Selling Stockholders, as the case may be, and shall so state
therein.
(f) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Price Waterhouse LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a "cut-
off date" not earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain stockholders, officers and
directors of the Company relating
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to sales and certain other dispositions of shares of Common Stock or
certain other securities, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date.
(h) The Shares to be sold by the Selling Stockholders are duly
approved for quotation on the Nasdaq National Market.
The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the Option
Closing Date of such documents as you may reasonably request with respect to
the good standing of the Company, the due authorization and issuance of the
Additional Shares and other matters related to the issuance of the Additional
Shares.
7. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of
the Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and to furnish to you in New York City, without charge, prior
to 10:00 a.m. New York City time on the business day next succeeding the date
of this Agreement and during the period mentioned in Section 7(c) below, as
many copies of the Prospectus and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the Commission
within the applicable period specified in Rule 424(b) under the Securities Act
any prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by an
Underwriter or dealer, 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 counsel
for the Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers (whose
names and addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will
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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.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending November 30, 1998 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
8. EXPENSES. Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated:
(a) the Company agrees to pay or cause to be paid all expenses
incident to the performance of their obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's
counsel, the Company's accountants in connection with the registration
and delivery of the Shares under the Securities Act and all other fees
or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all
printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer
and sale under state securities laws as provided in Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and
in connection with the Blue Sky or Legal Investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all costs and expenses incident to listing for
quotation the Shares on the Nasdaq National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the costs
and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering
of the Shares, including, without limitation, expenses associated with
the production of road show slides and graphics, fees and expenses of
any consultants engaged in connection with the road show presentations
with the prior approval of the Company, travel and lodging expenses of
the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with
the road show, and (ix) all other costs and expenses incident to the
performance of the
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obligations of the Company hereunder for which provision is not
otherwise made in this Section; and
(b) each Selling Stockholder agrees to pay or cause to be paid
all costs and expenses incident to the performance of such Selling
Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of
counsel for such Selling Stockholder and (ii) all expenses and taxes
incident to the sale and delivery of the Shares to be sold by such
Selling Stockholder to the Underwriters hereunder.
It is understood, however, that except as provided in this
Section, Section 9 entitled "Indemnity and Contribution," and the last
paragraph of Section 11 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
The provisions of this Section 8 shall not supersede or otherwise
affect any agreement that the Selling Stockholders may otherwise have for the
allocation of such expenses among themselves.
9. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, however, that the foregoing indemnity agreement 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 or
liabilities purchased Shares, or any person controlling such Underwriter, if 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
Shares to such person, and if the Prospectus (as so amended or supplemented)
would
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have cured the defect giving rise to such losses, claims, damages or
liabilities, unless such failure is the result of noncompliance by the Company
with Section 7(a) hereof.
(b) Each Selling Stockholder agrees, severally and not
jointly, to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), 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, but only with
reference to information relating to such Selling Stockholder furnished in
writing by or on behalf of such Selling Stockholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto. Notwithstanding any provision of this
Agreement to the contrary, in no event shall any of the Selling Stockholders be
required to pay an amount in indemnification under this Section 9(b) or Section
9(c) hereof, or contribution under Section 9(f) hereof, in excess of the
aggregate net proceeds such Selling Stockholder received from the sale of
Shares pursuant to this Agreement; provided, however, that the foregoing
indemnity agreement 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 or liabilities purchased Shares, or any person
controlling such Underwriter, if 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 Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 7(a) hereof.
(c) Each Selling Stockholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), 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, but only with
reference to information relating to such Selling Stockholder furnished in
writing by or on behalf of such Selling
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Stockholder expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
Notwithstanding any provision of this Agreement to the contrary, in no event
shall any of the Selling Stockholders be required to pay an amount in
indemnification under this Section 9(c) or Section 9(b) hereof, or contribution
under Section 9(f) hereof, in excess of the aggregate net proceeds such Selling
Stockholder received from the sale of Shares pursuant to this Agreement.
(d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the
directors of the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company or any Selling
Stockholder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), 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, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
(e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 9(a), 9(b), 9(c) or 9(d), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against whom
such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have
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mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for (i) the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Underwriters and all persons, if any, who control
any Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, (ii) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Company, its
directors, its officers who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either such Section and
(iii) the fees and expenses of more than one separate firm (in addition to any
local counsel) for all Selling Stockholders and all persons, if any, who
control any Selling Stockholder within the meaning of either such Section, and
that all such fees and expenses shall be reimbursed as they are incurred. In
the case of any such separate firm for the Underwriters and such control
persons of any Underwriters, such firm shall be designated in writing by ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated. In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company, such
firm shall be designated in writing by the Company. In the case of any such
separate firm for the Selling Stockholders and such control persons of any
Selling Stockholders, such firm shall be designated in writing by the persons
named as attorneys-in-fact for the Selling Stockholders under the Powers of
Attorney. The indemnifying party 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 from and against any loss or
liability 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
counsel as contemplated by the second and third sentences of this paragraph,
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 of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(f) To the extent the indemnification provided for in Section
9(a), 9(b), 9(c) or 9(d) is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such
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proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause 9(f)(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 9(f)(i) above but also the relative fault of the
indemnifying party or parties on the one hand and of the indemnified party or
parties on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Selling Stockholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by each Selling Stockholder and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. 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
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
the Company or the Selling Stockholders one the one hand or by 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 Underwriters' respective obligations to contribute pursuant to this Section
9 are several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
(g) The Company, the Selling Stockholders and the Underwriters
agree that it would not be just or 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
that does not take account of the equitable considerations referred to in
Section 9(f) hereof. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 9 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements of the
Company and the Selling Stockholders
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contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation
made by or on behalf of any Underwriter or any person controlling any
Underwriter, any Selling Stockholder or any person controlling any Selling
Stockholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
10. TERMINATION. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 10(a)(i) through 10(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Shares that it has or they have agreed to purchase hereunder on such date, and
the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
number of Firm Shares set forth opposite their respective names in Schedule II
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 you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you, the Company and the Selling Stockholders for
the purchase of such Firm Shares are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter, the Company or the Selling Stockholders. In any
such case either you or the relevant Selling Stockholders shall have the right
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to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. If,
on the Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Additional Shares to be purchased, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of any Selling
Stockholder to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason any Selling Stockholder shall be unable to
perform its obligations under this Agreement, the Selling Stockholders will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
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Very truly yours,
HORIZON HEALTH CORPORATION
By:
--------------------------------
Name:
Title:
The Selling Stockholders
named in Schedule I hereto,
acting severally
By:
--------------------------------
Attorney-in-Fact
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule II hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
----------------------------
Name:
Title:
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SCHEDULE I
NUMBER OF
NUMBER OF ADDITIONAL
FIRM SHARES SHARES
SELLING STOCKHOLDER TO BE SOLD TO BE SOLD
-------------------------------------------------------------------- ---------- --------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 100,000 50,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 425,000 0
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 0 60,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 42,515 41,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 0 30,000
▇▇▇▇ ▇. ▇▇▇▇▇ 38,205 5,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 185,314 0
NME Management Services, Inc. 172,636 0
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 100,000 0
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 100,000 0
Argentum Capital Partners, L.P. 53,275 0
▇▇▇▇▇▇ Daily 4,400 0
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 10,655 0
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 8,000 0
Total . . . . . . . . . 1,240,000 186,000
========== ========
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SCHEDULE II
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
-------------------------------------------------------------------------------------- ----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
[NAMES OF OTHER UNDERWRITERS]
-------------
Total . . . . . . . . . . . . . . . . . . 1,240,000
=============
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EXHIBIT A
[FORM OF LOCK-UP LETTER]
October _____, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") proposes to enter into an Underwriting
Agreement (the "UNDERWRITING AGREEMENT") with Horizon Health Corporation, a
Delaware corporation (the "COMPANY"), and the Selling Stockholders named on
Schedule I thereto, providing for the public offering (the "PUBLIC OFFERING")
by the several Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and BancAmerica ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (the "UNDERWRITERS"), of 1,240,000 shares (the "SHARES") of the
common stock, $.01 par value of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (a) the sale of any Shares to the Underwriters pursuant to
the Underwriting Agreement, (b) the issuance by the Company of shares of Common
Stock upon the exercise of an option or warrant or the conversion of a security
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outstanding on the date hereof which is disclosed in the Prospectus, or (c)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering. In
addition, the undersigned agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Selling Stockholders and the Underwriters.
Very truly yours,
------------------------------
(Name)
------------------------------
(Address)
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