EXHIBIT 1
EXECUTION COPY
3,000,000 SHARES
CENTENE CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
August 7, 2003
XXXXXX BROTHERS INC.
XX XXXXX SECURITIES CORPORATION
XXXXXX XXXXXX PARTNERS LLC
XXXXXX, XXXXXXXX & COMPANY INCORPORATED
As Representatives of the
several underwriters named in Schedule 1 hereto
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Centene Corporation, a Delaware corporation (the "COMPANY"), proposes
to sell an aggregate of 3,000,000 shares (the "FIRM STOCK") of the Company's
Common Stock, par value $0.001 per share (the "COMMON STOCK"). In addition, the
Company proposes to grant to the Underwriters named in Schedule 1 hereto (the
"UNDERWRITERS") an option to purchase up to an additional 450,000 shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"OPTION STOCK"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "STOCK." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters.
SECTION 1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to the Stock
has (i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and the rules and
regulations (the "RULES AND REGULATIONS") of the United States Securities and
Exchange Commission (the "COMMISSION") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and each of the amendments
thereto have been delivered by the Company to you as the representatives (the
"REPRESENTATIVES") of the Underwriters. As used in this Agreement, "EFFECTIVE
TIME" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective
by the Commission; "EFFECTIVE DATE" means the date of the Effective Time;
"PRELIMINARY PROSPECTUS" means each prospectus included in such registration
statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission by the Company with
the consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "REGISTRATION STATEMENT" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part
of the registration statement as of the Effective Time pursuant to Rule 430A of
the Rules and Regulations; and "PROSPECTUS" means the prospectus in the form
first used to confirm sales of Stock. 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. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Securities Act, as of the date of such Preliminary Prospectus
or the Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed under the United States Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and incorporated
by reference in such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference to any amendment to the Registration Statement shall be
deemed to include any annual report of the Company filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act after the Effective Time
that is incorporated by reference in the Registration Statement. The Commission
has not issued any order preventing or suspending the use of any Preliminary
Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of the
applicable effective date (as to the Registration Statement and any amendment
thereto) and as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) 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; provided, however, that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents 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; and any
further documents so filed and incorporated by reference in the Prospectus, when
such documents become effective or are filed with Commission, as the case may
be, will conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder 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.
(d) The Company and each of its subsidiaries (as defined in
Section 15) have been duly incorporated and are validly existing as corporations
in good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified or in good standing
would not, singly or in the aggregate, have a material adverse effect on the
general affairs, management, consolidated financial position, stockholders'
equity, results of operations or business of the Company and its subsidiaries
taken as a whole (a "MATERIAL ADVERSE EFFECT"). The Company and each
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of its subsidiaries have all corporate power and authority necessary to own or
hold their respective properties and to conduct the businesses in which they are
engaged.
(e) The Company has an authorized capitalization as set forth in
the Prospectus. All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, were issued in compliance with
federal and state securities laws, are fully paid and non-assessable and conform
to the description thereof contained in the Prospectus. All of the Company's
options, warrants and other rights to purchase or exchange any securities for
shares of the Company's capital stock have been duly and validly authorized and
issued, were issued in compliance with federal and state securities laws, and
conform to the description thereof contained in the Prospectus. All of the
issued shares of capital stock or other equity interests of each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid
and non-assessable and, except as described in the Prospectus, are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) The shares of the Stock to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor in accordance with this Agreement,
will be duly and validly issued, fully paid and non-assessable; and the Stock
will conform to the descriptions thereof contained in the Prospectus. Upon
payment for and delivery of the Stock to be sold by the Company pursuant to this
Agreement, the Underwriters will acquire good and valid title to such Stock, in
each case free and clear of all liens, encumbrances, equities, preemptive
rights, subscription rights, other rights to purchase, voting or transfer
restrictions and other claims.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and except for the
registration of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(i) Except as provided in the Amended and Restated Shareholders'
Agreement dated September 23, 1998 among the Company and certain of its
stockholders, 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 Stock registered pursuant to the Registration Statement other than as
described in the Registration Statement and as to which such rights are being
exercised in connection with the offering contemplated hereby or have been
waived in writing or notice of such rights has been given and such holders have
failed to exercise such right within the time required under the terms and
conditions of such rights in connection with the offering contemplated hereby.
The holders of outstanding shares of the Company's capital stock are not
entitled
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to preemptive or other rights to subscribe for the Stock. Except as described in
the Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership interests
in the Company are outstanding.
(j) The Company has not sold or issued any shares of Common Stock
during the six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act
other than shares issued pursuant to employee benefit plans, stock options plans
or other employee compensation plans or pursuant to outstanding options, rights
or warrants.
(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since such date, there has not been any material change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change in or affecting the general affairs, management,
consolidated financial position, stockholders' equity, results of operations or
business of the Company and its subsidiaries taken as a whole, in each case
otherwise than as set forth or contemplated in the Prospectus.
(l) The consolidated financial statements (including the related
notes) filed as part of the Registration Statement or included or incorporated
by reference in the Prospectus present fairly in all material respects the
financial condition and results of operations of the entities purported to be
shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved.
(m) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the Prospectus or
is incorporated by reference therein and who have delivered the letters referred
to in Section 7(e) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(n) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all material personal property owned by them, in each case free and
clear of all liens, encumbrances and defects, except such as are described in
the Prospectus, liens and encumbrances for taxes not yet due and payable, liens
and encumbrances arising in the ordinary course of business or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries; and all assets 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.
(o) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses in
similar industries.
(p) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx registrations,
copyrights and licenses (collectively, the "INTELLECTUAL PROPERTY") necessary
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for the conduct of their respective businesses and have no reason to believe
that the conduct of their respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such rights of others,
except where such conflict would not have a Material Adverse Effect.
(q) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others.
(r) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(s) There are no franchises, leases, contracts or other documents
which are required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act or by the Rules and Regulations
which have not been described in the Prospectus or are incorporated by reference
therein or filed as exhibits to the Registration Statement.
(t) The complete minute books of the Company have been made
available to the Representatives and counsel for the Underwriters.
(u) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders, members
or suppliers of the Company on the other hand, which is required to be described
in the Prospectus which is not so described.
(v) Neither the Company nor any of its subsidiaries owns any
"margin securities" as that term is defined in Regulations G and U of the Board
of Governors of the Federal Reserve System, and none of the proceeds of the sale
of the Stock will be used, directly or indirectly, for the purpose of purchasing
or carrying any margin security, for the purpose of reducing or restricting any
indebtedness that was originally incurred to purchase or carry any margin
security or for any other purpose that might cause any of the Stock to be
considered a "purpose credit" within the meanings of Regulation G, T, U or X of
such Board of Governors.
(w) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent, which might be expected to
have a Material Adverse Effect.
(x) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"), except where such non-compliance would not have a Material
Adverse Effect; no "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) to which the Company
contributes or which the Company maintains and that reasonably could be expected
to have a Material Adverse Effect; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to the
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "CODE") that has, or reasonably
could be expected to have, a Material Adverse Effect; and each "pension plan"
for which the Company would have any liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects and
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
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(y) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action designed
or intended to stabilize or manipulate the price of any security of the Company,
or that caused or resulted in, or that might in the future reasonably be
expected to cause or result in, stabilization or manipulation of the price of
any security of the Company. The Company acknowledges that the Underwriters may
engage in passive market making transactions in the Common Stock on the Nasdaq
National Market in accordance with Regulation M under the Exchange Act.
(z) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes shown to be due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does the
Company have any knowledge of any tax deficiency which, if determined adversely
to the Company or any of its subsidiaries, might have) a Material Adverse
Effect.
(aa) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be disclosed in
the Prospectus, the Company has not (i) issued or granted any securities, except
for issuances of shares of Common Stock upon exercises of options or pursuant to
the Company's 2002 Employee Stock Purchase Plan, (ii) incurred any liability or
obligation, direct or contingent, other than non-material liabilities and
obligations which were incurred in the ordinary course of business, (iii)
entered into any transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(bb) The Company and each of its subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals.
(cc) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material respect,
and no event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is a party or
by which it is bound or to which any of its properties or assets is subject or
(iii) is in violation in any material respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject, except where such violation would not have a Material
Adverse Effect. Neither the Company nor any of its subsidiaries has failed to
obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property
or to the conduct of its business, except where such failure would not have a
Material Adverse Effect.
(dd) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(ee) The Company and its subsidiaries possess such permits,
licenses, provider numbers, certificates, approvals (including certificate of
need approvals), consents, orders, certifications, accreditations and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by, and have
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made all declarations and filings with, the appropriate federal, state or local
regulatory agencies or bodies necessary to conduct the businesses now operated
by them, except where the failure to so declare or file would not, singly and in
the aggregate, have a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly and in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(ff) Neither the Company nor, to the knowledge of the Company, any
officer, director, stockholder, employee or other agent of the Company or any of
its subsidiaries has engaged, directly or indirectly, in any material activities
which are prohibited under (i) Medicaid statutes or any regulations promulgated
pursuant to such statutes, or (ii) related state or local statutes or
regulations, including rules of professional conduct.
(gg) Neither the Company nor any of its subsidiaries has failed to
file with applicable regulatory authorities any statement, report, information
or form required by any applicable law, regulation or order, except where the
failure to so file would not, singly and in the aggregate, have a Material
Adverse Effect. Except as described in the Prospectus and except for any
failures to be in compliance or deficiencies which would not, singly and in the
aggregate, have a Material Adverse Effect, all such filings or submissions were
in compliance with applicable laws when filed and no deficiencies have been
asserted by any regulatory commission, agency or authority with respect to any
such filings or submissions.
(hh) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect. The terms "HAZARDOUS WASTES", "TOXIC
WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection. There are no costs or
liabilities associated with the aforementioned which would, individually or in
the aggregate, have a Material Adverse Effect.
(ii) Neither the Company nor any subsidiary is, nor as of the First
Delivery Date will be, an "investment company" as defined in the Investment
Company Act of 1940, as amended.
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(jj) There are no contracts, agreements or understandings between
the Company and any person that would give rise to a valid claim against the
Company or any Underwriter for a brokerage commission, finder's fee or other
like payment in connection with this offering.
(kk) The statistical and market-related data included in the
Prospectus and the Registration Statement are based on or derived from sources
which the Company believes to be reliable and accurate.
(ll) No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
SECTION 2. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 3,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. Each
Underwriter shall be obligated to purchase from the Company that number of
shares of the Firm Stock which represents the same proportion of the number of
shares of the Firm Stock to be sold by the Company as the number of shares of
the Firm Stock set forth opposite the name of such Underwriter in Schedule 1
represents of the total number of shares of the Firm Stock to be purchased by
all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 450,000 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 2 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $23.75
per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
SECTION 3. Offering of Stock by the Underwriters. Upon authorization by
the Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
SECTION 4. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the offices of Xxxxxxxx Chance US LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company shall deliver or cause
to be delivered certificates representing the Firm Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in such
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names and in such denominations as the Representatives shall request in writing
not less than two full business days prior to the First Delivery Date. For the
purpose of expediting the checking and packaging of the certificates for the
Firm Stock, the Company shall make the certificates representing the Firm Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "SECOND DELIVERY DATE" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "DELIVERY
DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
SECTION 5. Further Agreements of the Company. The Company covenants and
agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; to advise the
Representatives, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
9
(b) To furnish promptly to the Representatives and to counsel for
the Underwriters copies of the signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits); (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus and (iii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or sale of
the Stock or any other securities relating thereto and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
to amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their request, to file
such document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as the Representatives may from time
to time reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representative, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to Rule
424 of the Rules and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the consent of the
Representatives to the filing;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the Company
to its shareholders and all public reports and all reports and financial
statements furnished by the Company to the principal national securities
exchange upon which the Common Stock may be listed pursuant to requirements of
or agreements with such exchange or to the Commission pursuant to the Exchange
Act or any rule or regulation of the Commission thereunder, provided that the
above shall not apply to any material freely available to the Representatives on
the Internet;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided, however, that in connection
therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
10
(i) For a period of 90 days from the date of the Prospectus, not
to, directly or indirectly, (i) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Stock and shares issued pursuant
to employee benefit plans, stock option plans or other employee compensation
plans existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or sell or grant options, rights or warrants with respect
to any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans existing
on the date hereof), (ii) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, or (iii) file or cause to be
filed a registration statement on Form S-8 or other similar form with respect to
any shares of Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or any other securities of the Company, in each
case without the prior written consent of Xxxxxx Brothers Inc. and XX Xxxxx
Securities Corporation on behalf of the Underwriters, provided that the
foregoing limitation shall not apply to up to an aggregate of 1,000,000 shares
of Common Stock issued in connection with one or more acquisitions by the
Company of assets, equity interests or businesses of unaffiliated persons or
entities (whether by mergers, exchanges of equity interests or otherwise), or
with the entering into of one or more collaboration agreements with unaffiliated
entities to the extent that each person or entity receiving any shares of Common
Stock pursuant to any such acquisition or agreement shall enter into a letter
agreement with transfer restrictive terms (including a lock-up period continuing
for 90 days after the date of the Prospectus) equivalent to those set forth in
this Section 5(i); and to cause each executive officer and director of the
Company to furnish to the Representatives, prior to the First Delivery Date, a
letter or letters, substantially in the form of Exhibit A hereto, pursuant to
which each such person shall agree not to, directly or indirectly, (i) offer for
sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (ii) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 90 days from the date of the Prospectus,
without the prior written consent of Xxxxxx Brothers Inc. and XX Xxxxx
Securities Corporation on behalf of the Underwriters;
(j) To submit to the Nasdaq National Market prior to the First
Delivery Date a notification form for the listing of the Stock;
(k) To apply the net proceeds from the sale of the Stock as set
forth in the Prospectus;
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company" as
defined in the Investment Company Act of 1940, as amended and the rules and
regulations of the Commission thereunder;
(m) To endeavor to qualify the Stock for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, 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 or
to file a general consent to service of process in any jurisdiction;
(n) To maintain, at its expense, a registrar and transfer agent
for the Common Stock; and
11
(o) During the Prospectus Delivery Period, to file all documents
required to be filed with the Commission and the Nasdaq National Market pursuant
to Section 13, 14 or 15 of the Exchange Act in the manner and within the time
periods required by the Exchange Act.
SECTION 6. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) the costs of producing and distributing this Agreement, any
supplemental agreement among the Underwriters and any other related documents in
connection with the offering, purchase, sale and delivery of the stock; (e) the
filing fees incident to securing the review by the NASD of the terms of sale of
the Stock; (f) any applicable listing or other fees; (g) the fees and expenses
of qualifying the Stock under the securities laws of the several jurisdictions
as provided in Section 5(h) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the
Underwriters); (h) the costs and expenses of the Company, but not those of the
Underwriters and their counsel, relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of the Stock,
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 (the Underwriters have agreed to pay half of all
costs in connection with such aircraft); (i) the reasonable fees and expenses of
Stikeman Elliott LLP, special Canadian counsel to the Underwriters, associated
with the offering of any of the Stock in Canada; and (j) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement; provided, however, that, except as provided in this Section 6
and in Section 11, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Stock which they may sell and the expenses of advertising any offering of the
Stock made by the Underwriters.
SECTION 7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Stock, the
Registration Statement and the Prospectus, and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(c) Xxxx and Xxxx LLP shall have furnished to the Representatives
their written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and
12
substance reasonably satisfactory to the Representatives, the form of which is
attached hereto as Exhibit B.
(d) The Representatives shall have received from Xxxxxxxx Chance
US LLP, counsel for the Underwriters, such opinion or opinions, dated such
Delivery Date, with respect to the issuance and sale of the Stock, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(e) At the time of execution of this Agreement, the
Representatives shall have received from PricewaterhouseCoopers LLP a letter or
letters, in form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission and (ii)
stating, as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five days
prior to the date hereof), the conclusions and findings of such firm with
respect to the financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with registered
public offerings.
(f) With respect to the letter or letters of
PricewaterhouseCoopers LLP referred to in the preceding paragraph and delivered
to the Representatives concurrently with the execution of this Agreement (the
"INITIAL LETTERS"), the Company shall have furnished to the Representatives a
letter (the "BRING-DOWN LETTER") of such accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act and are
in compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more than
five days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letters.
(g) The Underwriters shall have received on the Delivery Date
opinions of Xxxxxxxxx Xxxxxxxx LLP, Ice Miller, Akin, Gump, Strauss, Xxxxx &
Xxxx, L.L.P., Xxxxxxx & Xxxxx LLP and Xxxxxxxx, Xxxxx & Xxxx as special
regulatory counsel for the Company, with respect to federal, Indiana, Texas,
Wisconsin and New Jersey law, the forms of which are attached hereto as Exhibits
C, D, E, F and G respectively. The opinions shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(h) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its President and Chief Executive
Officer or Senior Vice President, Chief Financial Officer and Treasurer of the
Company stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein; and the
conditions set forth in Sections 7(a) and 7(i) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of the
Effective Date, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit to
state a material fact required to
13
be stated therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus which has not been so set
forth.
(i) Neither the Company nor any of its subsidiaries shall have
sustained (i) since the date of the latest audited financial statements included
in the Prospectus or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (ii) since such date, there shall not have
been any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or the
Nasdaq National or Small Cap Market or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or materially limited or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or state authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such), including, without limitation, as a
result of terrorist activities after the date hereof, or any other calamity or
crisis as to make it, in the judgment of the Representatives, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner contemplated in
the Prospectus.
(k) The Company shall have submitted a notification form for the
listing of the Stock to the Nasdaq National Market and shall have provided all
additional materials and information, if any, requested by the Nasdaq National
Market in connection with such notification form.
(l) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of Xxxxxxxx Chance US LLP, counsel
for the Underwriters, is material or omits to state a fact which, in the
reasonable opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
14
SECTION 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its directors, officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of Stock), to which that
Underwriter, director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained (A) in any
Preliminary Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto or (B) in any materials or information provided
to investors by, or with the approval of, the Company in connection with the
marketing of the offering of the Stock, including any roadshow or investor
presentations made to investors by the Company (whether in person or
electronically) (the "MARKETING MATERIALS"), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Marketing
Materials, any material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful misconduct), (iv)
the inaccuracy of the representations made in the second sentence of Section
1(e) and the second and third sentences of Section 1(i) hereof, or (v) the
failure of the Company to obtain waivers from stockholders holding rights under
the Amended and Restated Shareholders' Agreement dated September 23, 1998 among
the Company and certain stockholders, to any such rights they may have
thereunder in connection with the transactions contemplated hereby, and shall
reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that (1) the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein which information consists solely of the information specified in
Section 8(e) and (2) the Company shall not be liable to any Underwriter under
the indemnity agreement in this Section 8(a) to the extent, but only to the
extent, that such loss, claim, damage, liability or expense of such Underwriter
results from the fact that such Underwriter sold Stock to a person and there was
not sent or given to such person, at or prior to the written confirmation of
such sale to such person, to the extent required by law, a copy of the
Prospectus dated the Effective Date (the "FINAL PROSPECTUS") and the loss,
claim, damage, liability or expense of such Underwriter results from an untrue
statement or omission of a material fact contained in the Preliminary Prospectus
previously delivered to such person which was corrected in the Final Prospectus,
unless the Company had not previously furnished copies of the Final Prospectus
in sufficient quantities to such Underwriter to permit delivery on a timely
basis. The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to any Underwriter or to any director, officer,
employee or controlling person of that Underwriter.
15
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its directors
and each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, which information is limited to the information set forth in Section
8(e), and shall reimburse the Company and any such director, officer or
controlling person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company under this Section 8 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and those Underwriters,
directors, officers, employees and controlling persons to be jointly represented
by separate counsel, and in that event the fees and expenses of such separate
counsel shall be paid by the Company. No indemnifying party shall (i) without
the prior written 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 pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to
16
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other from
the offering of the Stock or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative 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 contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 8(d), 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 8(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the shares of Stock
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise paid or
become liable to pay by reason of any 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 Underwriters' obligations to contribute as provided in
this Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Stock by the Underwriters set forth on the cover page of the Prospectus, the
concession and reallowance figures under the caption "Underwriting--Commissions
and Expenses" in the Prospectus and the discussion under the captions
"Underwriting--Stabilization, Short Positions and Penalty Bids" and "--Passive
Market Making" in the Prospectus are correct and constitute the only information
concerning such Underwriters furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the Registration Statement and
the Prospectus.
17
SECTION 9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Stock which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of shares of the Firm Stock set
opposite the name of each remaining non-defaulting Underwriter in Schedule 1
hereto bears to the total number of shares of the Firm Stock set opposite the
names of all the remaining non-defaulting Underwriters in Schedule 1 hereto;
provided, however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Stock on such Delivery Date if the total number
of shares of the Stock which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total number of shares
of the Stock to be purchased on such Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the number of shares of the Stock which it agreed to purchase on such Delivery
Date pursuant to the terms of Section 2. If the foregoing maximums are exceeded,
the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed upon
among them, all the Stock to be purchased on such Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the Representatives
do not elect to purchase the shares which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date, this Agreement
(or, with respect to the Second Delivery Date, the obligation of the
Underwriters to purchase, and of the Company to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term "UNDERWRITER" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule 1 hereto
who, pursuant to this Section 9, purchases Firm Stock which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
SECTION 10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(i) or 7(j), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
SECTION 11. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 by reason
of the default of one or more Underwriters, the Company shall not be obligated
to reimburse any defaulting Underwriter on account of those expenses.
18
SECTION 12. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) If to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, X.X. 00000, Attention: Syndicate Registration Department, Fax (212)
000-0000, with a copy, in the case of any notice pursuant to Section 8(c), to
the Director of Litigation, Office of the General Counsel, Xxxxxx Brothers Inc.,
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 and to XX Xxxxx Securities, 1221
Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, X.X. 00000, attention: Head of
Equity Capital Markets, Fax (000) 000-0000, with a copy to the Legal Department,
Fax (000) 000-0000;
(b) If to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: President and Chief Executive Officer;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. or XX Xxxxx
Securities Corporation on behalf of the Representatives;
SECTION 13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the directors,
officers and the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the Securities Act and (b) the indemnity agreement
of the Underwriters contained in Section 8(b) of this Agreement shall be deemed
to be for the benefit of directors of the Company, officers of the Company who
have signed the Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
SECTION 15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "BUSINESS DAY" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "SUBSIDIARY" has the meaning set forth in Rule 405 of the Rules
and Regulations.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
SECTION 17. Consent to Jurisdiction. Each party irrevocably agrees that
any legal suit, action or proceeding arising out of or based upon this Agreement
or the transactions contemplated hereby
19
("RELATED PROCEEDINGS") may be instituted in the federal courts of the United
States of America located in the City of New York or the courts of the State of
New York in each case located in the Borough of Manhattan in the City of New
York (collectively, the "SPECIFIED COURTS"), and irrevocably submits to the
exclusive jurisdiction (except for proceedings instituted in regard to the
enforcement of a judgment of any such court (a "RELATED JUDGMENT"), as to which
such jurisdiction is non-exclusive) of such courts in any such suit, action or
proceeding. The parties further agree that service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. The parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action or other proceeding in
the Specified Courts, and hereby further irrevocably and unconditionally waive
and agree not to plead or claim in any such court that any such lawsuit, action
or other proceeding brought in any such court has been brought in an
inconvenient forum. Each party not located in the United States hereby
irrevocably appoints CT Corporation System, which currently maintains a New York
City office at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of
America, as its agent to receive service of process or other legal summons for
purposes of any such action or proceeding that may be instituted in any state or
federal court in the City and State of New York.
SECTION 18. Waiver of Immunity. With respect to any Related Proceeding,
each party irrevocably waives, to the fullest extent permitted by applicable
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, service of process, attachment (both before and after judgment)
and execution to which it might otherwise be entitled in the Specified Courts,
and with respect to any Related Judgment, each party waives any such immunity in
the Specified Courts or any other court of competent jurisdiction, and will not
raise or claim or cause to be pleaded any such immunity at or in respect of any
such Related Proceeding or Related Judgment, including, without limitation, any
immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976,
as amended.
SECTION 19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 20. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
20
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
CENTENE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
______________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
Accepted:
XXXXXX BROTHERS INC.
XX XXXXX SECURITIES CORPORATION
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By: /s/ Xxxx Xxxx
________________________________
Authorized Representative
By XX Xxxxx Securities Corporation
By: /s/ Xxxx Xxxxxxxx
________________________________
Authorized Representative
21
SCHEDULE 1
Number of Firm
Underwriters Shares to be Purchased
------------ ----------------------
Xxxxxx Brothers Inc. 1,125,000
XX Xxxxx Securities Corporation 1,125,000
Xxxxxx Xxxxxx Partners LLC 600,000
Xxxxxx, Xxxxxxxx & Company Incorporated 150,000
---------
3,000,000
22
EXHIBIT A
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxx Partners LLC
Xxxxxx, Xxxxxxxx & Company Incorporated
As Representatives of the several
Underwriters named in Schedule 1
to the Underwriting Agreement,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned understands that you and certain other firms
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
providing for the purchase by you and such other firms (the "Underwriters") of
shares (the "Shares") of Common Stock, par value $.001 per share (the "Common
Stock"), of Centene Corporation, a Delaware corporation (the "Company"), and
that the Underwriters propose to reoffer the Shares to the public (the
"Offering").
In consideration of the execution of the Underwriting
Agreement by the Underwriters, and for other good and valuable consideration,
the undersigned hereby irrevocably agrees that, without the prior written
consent of Xxxxxx Brothers Inc. and XX Xxxxx Securities Corporation, on behalf
of the Underwriters, the undersigned will not, directly or indirectly, (1) offer
for sale, sell, pledge, or otherwise dispose of (or enter into any transaction
or device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of Common
Stock (including, without limitation, shares of Common Stock that may be deemed
to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 90 days after the date of the final Prospectus
relating to the Offering.
The foregoing sentence shall not apply to bona fide gifts,
sales or other dispositions of shares of any class of the Company's capital
stock, in each case that are made exclusively between and among the undersigned
and members of the undersigned's family, or affiliates of the undersigned,
provided that it shall be a condition to any such transfer that (i) the
transferee/donee agrees to be bound by the terms of the lock-up letter agreement
(including, without limitation, the restrictions set forth in the preceding
sentence) to the same extent as if the transferee/donee were a party hereto,
(ii) no filing by any party (donor, donee, transferor or transferee) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be
required or shall be voluntarily made in connection with such transfer or
distribution, (iii) each party (donor, donee, transferor or transferee) shall
not be required by law (including without limitation the disclosure requirements
of the Securities Act of 1933, as amended, and the Exchange Act) to make, and
shall agree to not voluntarily make, any public announcement of the transfer
23
or disposition, and (iv) the undersigned notifies Xxxxxx Brothers' Equity
Capital Markets and XX Xxxxx Securities Corporation at least two business days
prior to the proposed transfer or disposition.
In furtherance of the foregoing, the Company and its Transfer
Agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it
does not intend to proceed with the Offering, if the Underwriting Agreement does
not become effective by October 31, 2003, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or
be terminated prior to payment for and delivery of the Shares, we will be
released from our obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the
Underwriters will proceed with the Offering in reliance on this Lock-Up Letter
Agreement.
Whether or not the Offering actually occurs depends on a
number of factors, including market conditions. Any Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
Dated: ____________________ By: ______________________________________
Name:
Title:
24
EXHIBIT B
FORM OF LEGAL OPINION OF COMPANY COUNSEL
1. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware and
has the corporate power and authority to own its property and to conduct its
business as described in the Prospectus. The Company is duly qualified and is in
good standing as a foreign corporation in the State of Missouri.
2. Each subsidiary of the Company identified in Exhibit 21 to the
Registration Statement (each a "Subsidiary") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, and has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus.
3. The Stock to be sold by the Company has been duly authorized
and, when issued and delivered to the Underwriters against payment therefore as
provided by the Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Stock will not be subject to any
preemptive or similar statutory rights under the Delaware General Corporation
Law statute or, to the knowledge of such counsel, similar contractual rights
granted by the Company.
4. The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
5. The execution, delivery and performance of the Underwriting
Agreement by the Company, the compliance by the Company with all the provisions
thereof and the consummation by the Company of the transactions contemplated
thereby will not (A) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of various states or
provinces or the National Association of Securities Dealers, Inc.), (B) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, the certificate of incorporation or by-laws of the Company or any
indenture, loan agreement, mortgage, lease or other agreement or instrument to
which the Company is a party filed as an exhibit to the Registration Statement,
or (C) violate or conflict with any applicable law, rule or regulation that in
the experience of such counsel is normally applicable in transactions of the
type contemplated by the Underwriting Agreement or any judgment, order or decree
specifically naming the Company or its property of which such counsel is aware.
6. The statements in the Prospectus under the caption
"Underwriting" (except for the statements therein under the subcaptions
"Stabilization, Short Positions and Penalty Bids" and "Passive Market Making,"
as to which we express no opinion), insofar as such statements constitute
matters of law or legal conclusions, are correct in all material respects.
7. To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company or any of its
subsidiaries that are required by the Securities Act or the Rules and
Regulations to be described in the Registration Statement or the Prospectus that
are not so described.
8. The Registration Statement has become effective under the
Securities Act, and to the knowledge of such counsel (A) no stop order
suspending its effectiveness has been issued and (B) no proceedings for that
purpose are pending before or threatened by the Commission.
25
9. To such counsel's knowledge, there are no contracts or other
documents that are required to be described in the Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by the Rules and
Regulations that have not been described or filed as exhibits to the
Registration Statement.
10. Except as specified in such opinion, to such counsel's
knowledge, 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 owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act.
Such counsel shall state that, in connection with the preparation of
the Registration Statement and the Prospectus, they participated in conferences
with officers and representatives of the Company, counsel for the Underwriters
and the independent accountants of the Company, at which conferences such
counsel made inquiries of such persons and others and discussed the contents of
the Registration Statement and the Prospectus. Such counsel shall further state
that, while the limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such that they are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, subject to the foregoing and based on
such participation, inquiries and discussions: (A) the Registration Statement
(except for the financial statements, including the notes and schedule thereto,
and other financial and accounting data included therein, as to which such
counsel need not express any view), at the time it became effective (but after
giving effect to changes incorporated pursuant to Rule 430A under the Securities
Act), and the Prospectus (except as aforesaid), as of the date it was filed with
the Commission pursuant to Rule 424(b)(4) under the Securities Act, appeared on
their face to be appropriately responsive in all material respects to the
requirements of the Securities Act and the Rules and Regulations; and (B) no
facts have come to the attention of such counsel that cause such counsel to
believe that (1) the Registration Statement, at the time it became effective
(but after giving effect to changes incorporated pursuant to Rule 430A under the
Securities Act), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading (except that such counsel need not
express any view with respect to the financial statements, including the notes
and schedule thereto, or any other financial or accounting data included
therein) or (2) the Prospectus, as of the date it was filed with the Commission
pursuant to Rule 424(b)(4) under the Securities Act or as of the First Delivery
Date or the Second Delivery Date (as the case may be), contained or contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that such
counsel need not express any view with respect to the financial statements,
including the notes and schedule thereto, or any other financial or accounting
data included therein).
26
EXHIBIT C
FORM OF LEGAL OPINION OF FEDERAL REGULATORY COUNSEL
1. The statements in the Prospectus under the captions "Risk
Factors-Risks Related to Being a Regulated Entity," "Business-Medicaid Managed
Care Market" and "Business-Regulation," to the extent that such statements
constitute summaries of the legal matters, documents or proceedings referred to
therein, have been reviewed by such counsel and fairly summarize the matters
described therein in all material respects, it being understood that such
counsel need express no opinion as to the financial or statistical data
contained under such captions.
2. To the knowledge of such counsel, except for the matters
described on Schedule A thereto (which Schedule shall be consistent in all
material respects with the draft thereof provided to counsel for the
Underwriters prior to the date of the Underwriting Agreement), there are no
legal or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party that relate to the compliance by the Company
or any of the subsidiaries with statutes, regulations or licenses governing the
provision of healthcare products and services, and such counsel is not aware of
any material violations of any such statutes, regulations or licenses by the
Company or any of its subsidiaries. The Company is not and, after giving effect
to the offering and sale of the Stock to be sold by the Company 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.
3. The Company is in compliance in all material respects with all
presently applicable provisions of ERISA; no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or
4971 of the Code; and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
4. There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect.
Such opinions may be limited to matters of federal law.
27
EXHIBIT D
FORM OF LEGAL OPINION OF INDIANA REGULATORY COUNSEL
1. The statements in the Prospectus in the first paragraph under
the caption "Risk Factors-Risks Related to Being a Regulated Entity--Changes in
government regulations designed to protect providers and members rather than our
stockholders could force us to change how we operate and could harm our
business," the paragraph under the caption "Risk Factors-Risks Related to Being
a Regulated Entity--Regulations may decrease the profitability of our health
plans," the first paragraph under the caption "Risk Factors-Risks Related to
Being a Regulated Entity--Failure to comply with government regulations could
subject us to civil and criminal penalties," the paragraph under the caption
"Risk Factors-Risks Related to Being a Regulated Entity--If state regulators do
not approve payments of dividends and distributions by our subsidiaries to us,
we may not have sufficient funds to implement our business strategy," the second
paragraph under the caption "Risk Factors--Risks Related to Our
Business--Difficulties in executing our acquisition strategy could adversely
affect our business," the paragraph under the caption "Risk Factors--Risks
Related to Our Business--Claims relating to medical malpractice could cause us
to incur significant expenses," the paragraphs under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Regulatory Capital and Dividend Restrictions," the paragraphs
"Business-Regulation--Managed Care Organizations" and
"Business--Regulation--Medicaid," to the extent that such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
have been reviewed by such counsel and fairly summarize the matters described
therein in all material respects, it being understood that such counsel need
express no opinion as to the financial or statistical data contained under such
captions.
2. To the knowledge of counsel, there are no legal or
governmental proceedings pending or overtly threatened in writing against the
Company or any of the Subsidiaries is a party that relate to the compliance by
the Company or any of the Subsidiaries with statutes, regulations or licenses
governing the provision of managed care programs and services, and such counsel
is not aware of any material violations of any of such statutes, regulations,
licenses or certificates by the Company or any of the Subsidiaries.
Such opinions may be limited to matters of the laws of the State of
Indiana.
28
EXHIBIT E
FORM OF LEGAL OPINION OF TEXAS REGULATORY COUNSEL
The statements in the paragraphs of the Prospectus listed below,
insofar as such statements constitute summaries of matters of Texas law, fairly
summarize in all material respects such matters of law:
1. The first paragraph under the caption "Risk Factors-Risks Related to
Being a Regulated Entity--Changes in government regulations designed to protect
providers and members rather than our stockholders could force us to change how
we operate and could harm our business,"
2. The paragraph under the caption "Risk Factors-Risks Related to Being a
Regulated Entity--Regulations may decrease the profitability of our health
plans,"
3. The first paragraph under the caption "Risk Factors-Risks Related to
Being a Regulated Entity--Failure to comply with government regulations could
subject us to civil and criminal penalties,"
4. The paragraph under the caption "Risk Factors-Risks Related to Being a
Regulated Entity--If state regulators do not approve payments of dividends and
distributions by our subsidiaries to us, we may not have sufficient funds to
implement our business strategy,"
5. The second paragraph under the caption "Risk Factors--Risks Related to
Our Business--Difficulties in executing our acquisition strategy could adversely
affect our business,"
6. The paragraph under the caption "Risk Factors--Risks Related to Our
Business--Claims relating to medical malpractice could cause us to incur
significant expenses,"
7. The paragraphs under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Regulatory Capital and
Dividend Restrictions,"
8. The paragraphs "Business-Regulation--Managed Care Organizations"
9. The paragraphs under the caption "Business--Regulation--Medicaid."
To the knowledge of such counsel, except for the matters described on
Schedule A thereto (which Schedule shall be consistent in all material respects
with the draft thereof provided to counsel for the Underwriters prior to the
date of the Underwriting Agreement), there are no legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party that relate to the compliance by the Company or any of
the subsidiaries with statutes, regulations or licenses governing the provision
of healthcare products and services, and such counsel is not aware of any
material violations of any such statutes, regulations or licenses by the Company
or any of its subsidiaries.
Such opinions may be limited to matters of the laws of the State of
Texas.
29
EXHIBIT F
FORM OF LEGAL OPINION OF WISCONSIN REGULATORY COUNSEL
1. The statements in the Prospectus in (a) the first paragraph
under the caption "Risk Factors-Risks Related to Being a Regulated
Entity--Changes in government regulations designed to protect providers and
members rather than our stockholders could force us to change how we operate and
could harm our business," (b) the paragraph under the caption "Risk
Factors-Risks Related to Being a Regulated Entity--Regulations may decrease the
profitability of our health plans," (c) the first paragraph under the caption
"Risk Factors-Risks Related to Being a Regulated Entity--Failure to comply with
government regulations could subject us to civil and criminal penalties," (d)
the paragraph under the caption "Risk Factors-Risks Related to Being a Regulated
Entity--If state regulators do not approve payments of dividends and
distributions by our subsidiaries to us, we may not have sufficient funds to
implement our business strategy," (e) the second paragraph under the caption
"Risk Factors--Risks Related to Our Business--Difficulties in executing our
acquisition strategy could adversely affect our business," (f) the paragraph
under the caption "Risk Factors--Risks Related to Our Business--Claims relating
to medical malpractice could cause us to incur significant expenses," (g) the
paragraphs under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Regulatory Capital and Dividend
Restrictions," (h) the paragraphs "Business-Regulation--Managed Care
Organizations" and (i) the paragraphs under the caption
"Business--Regulation--Medicaid," to the extent that such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
have been reviewed by such counsel and fairly summarize the matters described
therein in all material respects, it being understood that such counsel need
express no opinion as to the financial or statistical data contained under such
captions.
2. To the knowledge of counsel, there are no legal or
governmental proceedings pending or threatened to which the Company or any of
the Subsidiaries is a party that relate to the compliance by the Company or any
of the Subsidiaries with statutes, regulations or licenses governing the
provision of managed care programs and services, and such counsel is not aware
of any material violations of any of such statutes, regulations or licenses by
the Company or any of Managed Health Services Insurance Corp.
Such opinions may be limited to matters of the laws of the State of
Wisconsin.
30
EXHIBIT G
FORM OF LEGAL OPINION OF NEW JERSEY REGULATORY COUNSEL
1. The statements in the Prospectus in the first paragraph under
the caption "Risk Factors-Risks Related to Being a Regulated Entity--Changes in
government regulations designed to protect providers and members rather than our
stockholders could force us to change how we operate and could harm our
business," the paragraph under the caption "Risk Factors-Risks Related to Being
a Regulated Entity--Regulations may decrease the profitability of our health
plans," the first paragraph under the caption "Risk Factors-Risks Related to
Being a Regulated Entity--Failure to comply with government regulations could
subject us to civil and criminal penalties," the paragraph under the caption
"Risk Factors-Risks Related to Being a Regulated Entity--If state regulators do
not approve payments of dividends and distributions by our subsidiaries to us,
we may not have sufficient funds to implement our business strategy," the second
paragraph under the caption "Risk Factors--Risks Related to Our
Business--Difficulties in executing our acquisition strategy could adversely
affect our business," the paragraph under the caption "Risk Factors--Risks
Related to Our Business--Claims relating to medical malpractice could cause us
to incur significant expenses," the paragraphs under the caption "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Regulatory Capital and Dividend Restrictions," the paragraphs
"Business-Regulation--Managed Care Organizations: and
"Business--Regulation--Medicaid," to the extent that such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
have been reviewed by such counsel and fairly summarize the matters described
therein in all material respects, it being understood that such counsel need
express no opinion as to the financial or statistical data contained under such
captions.
2. To the best of such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened to which the Company or any of
the Subsidiaries is a party that relate to the compliance by the Company or any
of the Subsidiaries with statutes, regulations or licenses governing the
provision of managed care programs and services, and such counsel is not aware
of any material violations of any of such statutes, regulations or licenses by
the Company or any of the Subsidiaries.
Such opinions may be limited to matters of the laws of the State of New
Jersey.
31
