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EXHIBIT 1.1
$
PACIFICARE HEALTH SYSTEMS, INC.
(a Delaware corporation)
% Senior Notes due
UNDERWRITING AGREEMENT
, 1998
BancAmerica Xxxxxxxxx Xxxxxxxx
as Representatives of the several Underwriters
000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
PacifiCare Health Systems, Inc., a Delaware corporation (the "Company"),
confirms its agreement with BancAmerica Xxxxxxxxx Xxxxxxxx and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters", which
term shall also include any Underwriter substituted as hereinafter provided in
Section 10 hereof), for whom BancAmerica Xxxxxxxxx Xxxxxxxx is acting as
representative (in such capacity, BancAmerica Xxxxxxxxx Xxxxxxxx shall
hereinafter be referred to as the "Representative"), with respect to the sale by
the Company and the purchase by the Underwriters, acting severally and not
jointly, of $ aggregate principal amount of the Company's % Senior Notes due
("Securities"). The Securities are to be issued pursuant to an indenture (the
"Indenture") between
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the Company, and Chase Manhattan Bank and Trust Company, National Association,
as trustee (the "Trustee").
Prior to the purchase and public offering of the Securities by the several
Underwriters, the Company and the Representative, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form of
Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Company and the Representative and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Securities
will be governed by this Agreement, as supplemented by the Pricing Agreement.
From and after the date of the execution and delivery of the Pricing Agreement,
this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (as amended to the date of this
Agreement, the "Registration Statement") on Form S-3 (No. 333- ) including a
prospectus relating to the registration of debt of the Company, including the
Securities,(the "Registration Statement") pursuant to the Securities Act of
1933, as amended (the "1933 Act") and has filed with, mailed for filing to, or
shall promptly hereafter file with or transmit to the Commission a final
prospectus supplement specifically relating to the Securities pursuant to Rule
424 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). The term "Basic Prospectus" means the prospectus (other than
the prospectus supplement specifically relating to the Securities) included in
the Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the final prospectus supplement specifically relating to the
Securities. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Securities, together with the Basic
Prospectus. The term "Material Subsidiaries" means those subsidiaries of the
Company named in Schedule B hereto. All references in this Agreement to
financial statements and schedules and other information which is "contained,"
"included" or "stated" in the Registration Statement, the Basic Prospectus, the
Prospectus or the preliminary prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement, the Basic Prospectus, the Prospectus or
the preliminary prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, the Basic
Prospectus, the Prospectus or the preliminary prospectus shall
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be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or the rules and regulations
of the Commission under the 1934 Act (the "1934 Act Regulations") which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems advisable after
the Pricing Agreement has been executed and delivered and the Statement of
Eligibility of the Trustee on form T-1 has been filed under the Trust Indenture
Act of 1939, as amended (the "1939 Act").
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SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter as of the date
hereof and as of the date of the Pricing Agreement (such latter date being
hereinafter referred to as the "Representation Date") as follows:
(i) At the time the Registration Statement became effective and at
the Representation Date, the Registration Statement complied and, at the
Representation Date, the Prospectus complied or will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Prospectus, at the
Representation Date and at Closing Time referred to in Section 2 hereof,
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representative expressly for use in the
Registration Statement or Prospectus.
(ii) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement are
independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iii) The financial statements included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries (each such subsidiary being
referred to herein individually as a "Subsidiary" and collectively as the
"Subsidiaries") as at the dates indicated and the results of their
operations for the periods specified; except as otherwise stated in the
Registration Statement, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis; the supporting schedules included in the Registration
Statement present fairly the information required to be stated therein;
and the Company's ratios of
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earnings to fixed charges (actual and, if any, pro forma) included in the
Prospectus have been calculated in compliance with Item 503(d) of
Regulation S-K of the Commission.
(iv) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business or
(B) there have been no transactions entered into by the Company or any of
its Subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its Subsidiaries
considered as one enterprise.
(v) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement and the
Pricing Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify would not have a material adverse effect
on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise.
(vi) Each Material Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
state or other jurisdiction of incorporation. Each Material Subsidiary is
duly qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or property
(owned, leased or licensed) or the nature of its business makes such
qualification necessary, except for such jurisdictions where the failure
to qualify would not have a material adverse effect on the assets or
properties, business, results of operations or financial condition of the
Company and its Subsidiaries considered as one enterprise. The Company
does not control, directly or indirectly, any corporation, partnership,
joint venture, association or
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other business organization other than the Subsidiaries. All of the issued
and outstanding capital stock of each Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(vii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization" (except
for subsequent issuances, if any, pursuant to reservations, agreements,
employee benefit plans, redemptions of the Company's Series A Cumulative
Convertible Preferred Stock or the exercise of convertible securities, in
each case as referred to in the Prospectus); and the shares of issued and
outstanding Common Stock have been duly authorized and validly issued and
are fully paid and non-assessable.
(viii) The Company and each of the Material Subsidiaries (a) has the
power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets and carry on its business and (b)
is in compliance with all Requirements of Law, except to the extent that
the failure to have the same or be in such compliance would not have a
material adverse effect on the Company and its Subsidiaries considered as
one enterprise. As used herein, the term "Requirements of Law" means any
law (statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority, in each case applicable to
or binding upon the Company or any of its Subsidiaries or any of its or
their property or to which the Company or any of its Subsidiaries or any
of its or their property is subject; and the term "Governmental Authority"
means any nation or government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory authority)
thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, and
any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
(ix) Neither the Company nor any Subsidiary is in violation of its
certificate or articles of incorporation, charter, by-laws or other
governing instruments or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in
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any contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any Subsidiary is a party or by which
it or any of them may be bound, or to which any of the property or assets
of the Company or any Subsidiary is subject except for any violation or
default which, individually or in the aggregate, would not have a material
adverse effect on the Company and its Subsidiaries considered as one
enterprise; and the execution, delivery and performance of this Agreement,
the Pricing Agreement, the Indenture and the Securities and the
consummation of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary corporate action and will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to, any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any Subsidiary is a party or by which
it or any of them may be bound, or to which any of the property or assets
of the Company or any Subsidiary is subject, nor will such action result
in any violation of the provisions of the certificate or articles of
incorporation, charter, by-laws or other governing instruments of the
Company or any Subsidiary or any applicable law, administrative regulation
or administrative or court decree, except for any such occurrence which,
individually or in the aggregate, would not have a material adverse effect
on the Company and its Subsidiaries considered as one enterprise;
(x) Neither the Company nor the Material Subsidiaries have any
collective bargaining agreements nor, to the knowledge of the Company, are
any union organizing activities taking place with respect to the Company
or the Material Subsidiaries.
(xi) There is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the Company
or any Subsidiary, which is required to be disclosed in the Registration
Statement or the Prospectus (other than as disclosed therein), or which
might materially and adversely affect the consummation of this Agreement;
and there are no contracts or documents of the Company or any Subsidiary
which are required to be filed as exhibits to the Registration Statement
or otherwise included by the
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1933 Act or by the 1933 Act Regulations which have not been so filed or
included.
(xii) The Company or its Subsidiaries own or are licensed or
otherwise have the right to use all of the patents, trademarks, service
marks, trade names, copyrights, contractual franchises, authorizations and
other rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other
Person. As use herein, the term "Person" means an individual, partnership,
corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, Joint Venture or Governmental
Authority.
(xiii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
offering, issuance or sale of the Securities hereunder, except such as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws or the qualification of the Indenture under the 1939 Act.
(xiv) This Agreement has been, and, at the Representation Date, the
Pricing Agreement will have been, duly executed and delivered by the
Company.
(xv) The Indenture has been duly authorized by the Company and, at
the Closing Time, will have been duly qualified under the 1939 Act and
duly executed and delivered by the Company and will constitute a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or by
general equitable principles.
(xvi) The Securities have been duly authorized and, at the Closing
Time, will have been duly executed by the Company and, when authenticated
in the manner provided for in the Indenture and delivered against payment
of the Purchase Price therefor specified in the Pricing Agreement, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general
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equitable principles, and will be in the form contemplated by, and
entitled to the benefits of, the Indenture.
(xvii) The Company has all requisite power and authority to enter
into this Agreement, including the Pricing Agreement, and to carry out the
provisions and conditions thereof.
(xviii) The Securities and the Indenture will conform in all
material respects to the respective statements relating thereto contained
in the Prospectus and will be in substantially the respective forms filed
or incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xix) The Securities rank and will rank on a parity with all
indebtedness of the Company outstanding under the Credit Facility (as
referred to in the Prospectus) that is outstanding on the date hereof or
that may be incurred hereafter.
(xx) The documents incorporated or deemed to be incorporated by reference
in the Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement and any amendments thereto become effective and at
the Closing Time, will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(xxi) The Company and each of its Subsidiaries has good and marketable
title to all properties and assets owned by it, free and clear of any
liens, encumbrances or restrictions and all of the leases and subleases of
the Company and its Subsidiaries and under which the Company or any
Subsidiary holds properties described in the Prospectus, are in full
force, except, in each case, such as (A) are described in the Prospectus
or (B) do not materially impair or interfere with the current use made of
such properties or (C) would not, individually or in the aggregate, have a
material adverse effect on the Company and its Subsidiaries considered as
one enterprise;
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(xxii) The Company and each of its Subsidiaries complies in all
material respects with all Environmental Laws (as defined below) except to
the extent that failure to comply with such Environmental Laws would not
have a material adverse effect on the Company and its Subsidiaries
considered as one enterprise. Except as disclosed in the Prospectus,
neither the Company nor any of its Subsidiaries is the subject of any
pending or, to the knowledge of the Company, threatened federal, state or
local investigation evaluating whether any remedial action by the Company
or any Subsidiary is needed to respond to a release of any Hazardous
Materials (as defined below) into the environment, resulting from the
Company's or any of its Subsidiaries' business operations or ownership or
possession of any of their properties or assets that might be expected to
have a material adverse effect on the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and
its Subsidiaries considered as one enterprise. As used herein, the term
"Environmental Laws" means any federal, state or local law or regulation
applicable to the Company's or any of its Subsidiaries' business
operations or ownership or possession of any of their properties or assets
relating to environmental matters, and "Hazardous Materials" means those
substances that are regulated by or form the basis of liability under any
Environmental Laws.
(b) Any certificate signed by any officer of the Company and delivered to
the Representative or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters: Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at the price set
forth in the Pricing Agreement, the aggregate principal amount of Securities set
forth in Schedule A opposite the name of such Underwriter (except as otherwise
provided in the Pricing Agreement), plus any additional principal amount of
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
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The initial public offering price of the Securities shall be a fixed price
to be determined by agreement between the Representative and the Company. The
interest rate on the Securities likewise shall be determined by agreement
between the Company and the Representative. The initial public offering price,
the interest rate and the purchase price, when so determined, shall be set forth
in the Pricing Agreement. In the event that such prices and interest rate have
not been agreed upon and the Pricing Agreement has not been executed and
delivered by the parties thereto by the close of business on the fourth business
day following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless otherwise
agreed to by the Company and the Representative.
(b) Payment of the purchase price for, and delivery of certificates for,
the Securities shall be made at the office of Konowiecki & Rank, 000 Xxxx Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx, or at such other place as shall be
agreed upon by the Representative and the Company, at 10:00 A.M. on the third
business day (unless postponed in accordance with the provisions of Section 10)
following the execution of the Pricing Agreement, or such other time not later
than five business days after such date as shall be agreed upon by the
Representative and the Company (such time and date of payment and delivery
being herein called "Closing Time"). Payment shall be made to the Company in
same day funds payable to the order of the Company, against delivery to the
Representative for the respective accounts of the Underwriters of the
Securities to be purchased by them. One or more global certificates representing
the Securities shall be delivered to The Depository Trust Company ("DTC").
Interests in the Underwriters' Securities will be represented by book entries on
the records of DTC as the Representative may request not less than two full
business days in advance of the Closing Date. The Company agrees to have the
global certificate(s), if any, available for inspection by the Representative
in New York, New York, not later than 1:00 p.m. Eastern Daylight Time on the
business day prior to the Closing Date.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) The Company will notify the Representative immediately (i) of
the effectiveness of the Registration Statement and any amendment thereto
(including any post-effective amendment), (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement
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or any amendment or supplement to the Prospectus or for additional
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will make
every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Company will give the Representative notice of its
intention to file or prepare any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Representative with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such Prospectus to which the Representative or
counsel for the Underwriters shall object.
(c) The Company will deliver to the Representative as many signed
copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated
by reference therein) as the Representative may reasonably request and
will also deliver to the Representative a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters.
(d) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for
the purposes contemplated by the 1933 Act or the 1934 Act or the
respective applicable rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary,
in the opinion of counsel for the Underwriters or of counsel for the
Company, to amend or supplement 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, the Company will forthwith amend
or supplement the Prospectus (in form and substance satisfactory to
counsel for the Underwriters) so that, as so amended or supplemented, the
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Prospectus will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Company will furnish to
the Underwriters a reasonable number of copies of such amendment or
supplement.
(f) The Company will endeavor, in cooperation with the Underwriters,
to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United
States as the Representative may designate; provided, however, that the
Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. In each jurisdiction in
which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement.
(g) Not later than the 50th day following the end of the first
fiscal quarter occurring after the first anniversary of the effective date
(as defined in Rule 158 under the 1933 Act), the Company will make
generally available to its security holders an earnings statement in
accordance with Section 11(a) of the 1933 Act and Rule 158 thereunder.
(h) The Company will use the net proceeds received by it from the
sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
(i) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, will file all
documents required to be filed with the Commission pursuant to Section 13,
14 or 15 of the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
(j) During a period of 90 days from the date of the Pricing
Agreement, the Company will not, without the Representative' prior
written consent, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any Securities or
securities similar to the Securities, or any securities convertible into
or exchangeable or exercisable for any Securities or any such similar
securities, except for
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Securities sold to the Underwriters pursuant to this Agreement.
SECTION 4. Payment of Expenses. The Company will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the reproduction of this Agreement, the Indenture
and the Pricing Agreement, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel and accountants, (v) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of a Blue Sky Survey and a Legal Investment Survey, if any, (vi) the
printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, of each preliminary
prospectus, and of the Prospectus and any amendments or supplements thereto,
(vii) the reproduction and delivery to the Underwriters of copies of a Blue Sky
Survey and any Legal Investment Survey, if any, (viii) the fees and expenses of
the Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities, (ix) any fees payable in
connection with the rating of the Securities; and (x) the fee of the National
Association of Securities Dealers, Inc.
("NASD"), if any.
If this Agreement is terminated by the Representative in accordance with
the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties of the Company herein contained, to the performance by the Company of
its obligations hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
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(b) At Closing Time the Representative shall have received:
(1) The opinion, dated as of Closing Time, of Xxxxxx Godward
LLP, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) The Company has all requisite corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Pricing Agreement, the
Indenture and the Securities.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing in
each jurisdiction in which the ownership of its property or
the conduct of its business requires such qualification and
where any statutory fines or penalties or any corporate
disability imposed for the failure to qualify would materially
and adversely affect the Company and its Subsidiaries
considered as one enterprise.
(iv) Each Material Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the state of its incorporation; has all
requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as
described in the Registration Statement and Prospectus; is
duly qualified as a foreign corporation to transact business
and is in good standing under the laws of each other
jurisdiction in which the ownership of its property and the
conduct of its business requires such qualification and where
any statutory fines or penalties or any corporate disability
imposed for the failure to qualify
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would materially and adversely affect the Company and its
Subsidiaries considered as one enterprise; all of the issued
and outstanding capital stock of each Subsidiary has been duly
authorized and validly issued, is fully paid and
non-assessable and is owned of record by the Company, directly
or through Subsidiaries, to such counsel's knowledge, free and
clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(v) This Agreement and the Pricing Agreement have each
been duly authorized, executed and delivered by the Company.
(vi) The Registration Statement is effective under the
1933 Act and no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and
to such counsel's knowledge, no proceedings for that purpose
have been initiated or threatened by the Commission.
(vii) At the time the Registration Statement became
effective, the Registration Statement (other than the
financial statements and supporting schedules and other
financial and statistical data included therein or derived
therefrom, as to which no opinion need be rendered) complied
as to form in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations.
(viii) To such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened which are
required to be disclosed in the Registration Statement other
than those disclosed therein.
(ix) The information in the Prospectus under
"Description of Notes", to the extent that it constitutes
matters of law, summaries of legal matters, documents or legal
proceedings, or legal conclusions, is accurate and fairly
presents, to the extent required by the 1933 Act and the 1933
Act Regulations, the matters referred to therein.
(x) To such counsel's knowledge, there are no contracts,
indentures, mortgages, loan
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agreement, notes, leases or other instruments required to be
filed as exhibits to the Registration Statement other than
those filed or incorporated by reference as exhibits thereto
and the descriptions thereof or references thereto contained
or incorporated in the Prospectus fairly present and summarize
such documents to the extent required by the 1933 Act and the
1933 Act Regulations.
(xi) No authorization, approval, consent or order of any
court or governmental authority or agency is required in
connection with the offering, issuance or sale of the
Securities contemplated herein and in the Prospectus, except
(a) as disclosed in the Registration Statement, or (b) such as
may be required under the 1933 Act or the 1933 Act Regulations
or state securities laws or from the NASD or the qualification
of the Indenture under the 1939 Act.
(xii) The execution, delivery and performance of this
Agreement, the Pricing Agreement, the Indenture, and the
global notes representing the Securities and the consummation
of the transactions contemplated herein and therein and
performance by the Company of its obligations hereunder and
thereunder (other than performance by the Company of its
obligations under the indemnification and contribution
sections of the Agreement, as to which such counsel need
express no opinion) do not violate any provision of the
Company's Certificate of Incorporation or Bylaws or the
charter or Bylaws of any Material Subsidiary, and will not
constitute a material default under those agreements
identified by the Company as being material to the businesses
of itself and its Subsidiaries as set forth on a schedule
attached to such counsel's opinion and do not violate or
contravene (a) any governmental statute, rule or regulation
applicable to the Company (other than state securities laws as
to which such counsel need not express an opinion) or (b) any
order, writ, judgement, injunction, decree, determination or
award which has been entered against the Company and of which
such counsel is aware, in each case the violation or
contravention of which would materially and adversely affect
the
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Company and its Subsidiaries considered as one enterprise.
(xiii) To the best of such counsel's knowledge, there
are no persons with registration or other similar rights to
have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the
1933 Act as a result of the filing of the Registration
Statement.
(xiv) The Indenture and the Securities have been duly
authorized, and the Indenture has been duly executed and
delivered by the Company and (assuming the due authorization,
execution and delivery thereof by the Trustee) the Indenture
constitutes and the Securities, when [executed by the Company
and], authenticated by the Trustee in the manner provided in
the Indenture and delivered against payment therefor specified
in the Pricing Agreement, will constitute the valid and
binding agreements of the Company enforceable against the
Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law relating to or
affecting creditors' rights generally or by general equitable
principles and limitations on the availability of equitable
remedies.
(xv) The Securities are in the form contemplated by the
Indenture.
(xvi) The Indenture has been duly qualified under the
0000 Xxx.
(xvii) The Securities conform in all material respects
to the description thereof contained in the Prospectus under
the caption "Description of Notes."
(xvii) The annual Report on Form 10-K for the fiscal
year ended December 31, 1997 and the Quarterly Report on Form
10-Q for the quarter ended March 31, 1998 filed by the Company
pursuant to the 1934 Act (other than the
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financial statements and supporting schedules and other
financial and statistical data included therein or derived
therefrom, as to which no opinion need be rendered) and
incorporated or deemed to be incorporated by reference in the
Prospectus complied as to form when so filed with the 1934 Act
and the 1934 Act Regulations.
In giving the opinion required by subsection (b)(1) of this Section, such
counsel shall additionally state that during the course of the preparation of
the Registration Statement such counsel participated in conferences with the
Underwriters, the Underwriters' counsel, and with officers and other
representatives of the Company, other counsel and its independent public
accountants at which the contents of the Registration Statement and Prospectus
were discussed, and while such counsel have not independently verified and are
not passing upon the accuracy, completeness or fairness of the statements made
in the Registration Statement and Prospectus, except as set forth in paragraph
(xvii) above, on the basis of the foregoing, nothing has come to their attention
that would lead them to believe that the Registration Statement (except for
financial statements and schedules, other financial information and statistical
data derived therefrom or included or incorporated by reference therein and that
part of the Registration Statement which constitutes the Trustee's Statement of
Eligibility and Qualification under the 1939 Act (Form T-1), as to which counsel
need not make a statement), at the time it became effective and on the
Representation Date contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus (except for financial
statements and schedules, other financial information and statistical data
derived therefrom or included or incorporated by reference therein, as to which
counsel need make no statement), as of its date or at Closing Time, contained an
untrue statement of a material fact or omitted 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.
In rendering such opinion, such counsel may state that they have relied on the
opinion of Konowiecki & Rank, as regular corporate counsel to the Company, or on
the opinions of local counsel and, with respect to the opinion rendered pursuant
to Section 5(b)(1)(xiv), such counsel may note that the Indenture and the
Securities designate the laws of the State of New York as the laws governing the
Indenture and the Securities and may state that their opinion is premised upon
the result that would
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obtain if a California court were to apply the internal laws of the State of
California (notwithstanding the designation of the laws of the State of New
York) to the interpretation and enforcement of the Indenture and Securities.
(2) The opinion, dated as of Closing Time, of Xxxxx, Xxxxx &
Xxxxx, counsel for the Underwriters, with respect to such matters as
the Underwriters shall require.
(c) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the
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Representative shall have received a certificate of the chief executive
officer or the chief financial officer of the Company and of the secretary
of the Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1 hereof are true and correct with the same force
and effect as though expressly made at and as of Closing Time, (iii) the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to Closing Time, and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(d) At the time of the execution of this Agreement, the
Representative shall have received from Ernst & Young LLP, independent
public accountants, a letter dated the date of such execution, in form and
substance satisfactory to the Representative, to the effect that (i) they
are independent public accountants with respect to the Company and its
subsidiaries within the meaning of the 1933 Act and the 1933 Act
Regulations; (ii) it is their opinion that the financial statements and
supporting schedules included in the Registration Statement and the
Prospectus and covered by their opinions therein comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations; (iii) based upon limited procedures set
forth in detail in such letter, nothing has come to their attention which
causes them to believe that (A) the unaudited financial statements and
supporting schedules of the Company and its subsidiaries included in the
Registration Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations or are not presented in conformity with
generally accepted accounting principles applied on a basis consistent
with that of the audited financial statements included in the Registration
Statement, or (B) the unaudited amounts of revenues, net income and net
income per share set forth under "Selected Consolidated Financial
Information" in the Prospectus were not determined on a basis consistent
with that used in determining the corresponding amounts in the audited
financial statements included in the Registration Statement and the
Prospectus; and (iv) in addition to the examination referred to in their
opinions and the limited procedures referred to in clause (iii) above,
they have carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and
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22
financial information which are included in the Registration Statement and
Prospectus and which are specified by the Representative, and have found
such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the Company
and its subsidiaries identified in such letter.
(e) At Closing Time the Representative shall have received from
Ernst & Young LLP, independent public accountants, a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (d) of this Section, except that
the specified date referred to shall be a date not more than five days
prior to Closing Time.
(f) At Closing Time, the Securities shall be rated at least Baa3 by
Xxxxx'x Investors Service Inc. and BBB by Standard & Poor's Corporation,
and the Company shall have delivered to the Representative a letter,
dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Representative, confirming that the Securities have
such ratings; and, since the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to the Securities or any
other debt or preferred stock of the Company by any nationally recognized
securities rating agency, and no such securities rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Securities or any of the
Company's other securities.
(g) At Closing Time counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Securities as herein contemplated shall be satisfactory in form and
substance to the Representative and counsel for the Underwriters.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Representative by notice to the Company at any time at or prior to Closing
Time, and such
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23
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the Prospectus or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by BancAmerica Xxxxxxxxx Xxxxxxxx), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the
23
24
extent arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representative expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto); provided, further that with respect to any
untrue statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, this indemnity agreement shall not inure to the benefit
of any Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased the Notes concerned to the extent that any such
loss claim, damage or liability of such Underwriter results from the fact that a
copy of the Prospectus, excluding documents incorporated by reference therein,
was not sent or given to such person at or prior to the written confirmation of
the sale of such Notes to such person as required by the 1933 Act, if the untrue
statement or omission concerned has been corrected in the Prospectus and
delivery of such Prospectus would have avoided such liability.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto) or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Representative expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in
24
25
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior consent of the indemnified
parties (which consent shall not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and one or more of the Underwriters, as incurred, in
such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial public offering price
appearing thereon and the Company is responsible for the balance; provided,
however, that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits (as described in the preceding
sentence), but also the relative fault of the Company on the one hand and the
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of the Company and the Underwriters shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact
or the
25
26
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
consideration referred to above. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or expenses (or
actions in respect thereof) referred to above shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such claim. The Underwriters'
obligation to contribute are several in proportion to their respective
obligations and not joint. For purposes of this Section 7, any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company will
have the same rights to contribution as the Company, subject in each case to the
provisions hereof. No party will be liable for contribution with respect to any
action or claim settled without its written consent. For purposes of this
Section, each person, if any, who controls an Underwriter within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as such
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act shall have the same
rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) The Representative may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
26
27
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which is such as to make it,
in the judgment of the Representative, impracticable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) if trading in
the Common Stock of the Company has been suspended by the Commission, or if
trading generally on either the American Stock Exchange or the New York Stock
Exchange has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by either
of said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or California authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof. Notwithstanding any such termination, the
provisions of Sections 6 and 7 shall remain in effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time to purchase the Securities which it
or they are obligated to purchase under this Agreement and the Pricing Agreement
(the "Defaulted Securities"), the Representative shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Securities, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear
to the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Securities, this Agreement shall terminate
27
28
without liability on the part of any non-defaulting Underwriter or the
Company except as set forth in Section 4.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representative or the Company shall have the right
to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative at BancAmerica Xxxxxxxxx
Xxxxxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention:
Syndicate Manager, notices to the Company shall be directed to it at 0000 Xxxx
Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Xxxx X. Xxxxx, President
and Chief Executive Officer.
SECTION 12. Parties. This Agreement and the Pricing Agreement shall each
inure to the benefit of and be binding upon the Underwriters and the Company and
their respective successors. Nothing expressed or mentioned in this Agreement or
the Pricing Agreement is intended or shall be construed to give any person, firm
or corporation, other than the Underwriters and the Company and their respective
successors and the controlling persons, officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or the
Pricing Agreement or any provision herein or therein contained. This Agreement
and the Pricing Agreement and all conditions and provisions hereof and thereof
are intended to be for the sole and exclusive benefit of the Underwriters and
the Company and their respective successors, and said controlling persons,
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
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SECTION 13. Governing Law and Time. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Specified times of day refer to New York City time.
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30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
PacifiCare Health Systems, Inc.
By
-----------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
BancAmerica Xxxxxxxxx Xxxxxxxx
By
------------------------------
Name:
Title:
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
31
SCHEDULE A
Aggregate
Principal Amount
Name of Underwriter of Securities
------------------- ----------------
BancAmerica Xxxxxxxxx Xxxxxxxx.................. $
Chase Securities Inc. .......................... $
Citicorp Securities, Inc. ...................... $
SBC Warburg Dillon Read Inc..................... $
-----------
Total........................................... $
===========
2
32
$
PacifiCare Health Systems, Inc.
(a Delaware corporation)
% Senior Notes due
PRICING AGREEMENT
, 1998
BancAmerica Xxxxxxxxx Xxxxxxxx
as Representative of the several Underwriters
named in the within-mentioned Purchase Agreement
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Reference is made to the Underwriting Agreement dated , 1998 (the
"Underwriting Agreement") relating to the purchase by the several Underwriters
named in Schedule A thereto, for whom BancAmerica Xxxxxxxxx Xxxxxxxx is acting
as representative (the "Representative"), of the above % Senior Notes due (the
"Securities") of PacifiCare Health Systems, Inc., a Delaware corporation (the
"Company").
Pursuant to Section 2 of the Underwriting Agreement, the Company agrees
with each Underwriter as follows:
1. The initial public offering price of the Securities shall be %
of the principal amount thereof, plus accrued interest, if any, from the
date of settlement.
2. The purchase price to be paid by the Underwriters for the
Securities shall be % of the principal amount thereof.
3. The interest rate on the Securities shall be % per annum.
4. The semi-annual interest payment dates shall be and
beginning on 1998.
5. The maturity date shall be .
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a
33
binding agreement between the Underwriters and the Company in accordance with
its terms.
Very truly yours,
PacifiCare Health Systems, Inc.
By
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
BancAmerica Xxxxxxxxx Xxxxxxxx
By
-------------------------
Name:
Title:
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
2
