EXHIBIT 1.1
HEALTHSPRING, INC.
[17,000,000] SHARES OF COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
----------
UNDERWRITING AGREEMENT
February [__], 2006
Xxxxxxx, Xxxxx & Co.
Citigroup Global Markets Inc., and
UBS Securities LLC
As Representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
HealthSpring, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
[12,000,000] shares of Common Stock, par value $0.01 per share, of the Company
("Stock") and the stockholders of the Company named in Schedule II hereto (the
"Selling Stockholders") propose, subject to the terms and conditions stated
herein, to sell to the Underwriters an aggregate of [5,000,000] shares and, at
the election of the Underwriters, up to [2,550,000] additional shares of Stock.
The aggregate of [17,000,000] shares to be sold by the Company and the Selling
Stockholders is herein called the "Firm Shares" and the aggregate of [2,550,000]
additional shares to be sold by the Selling Stockholders is herein called the
"Optional Shares". The Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively called
the "Shares".
As part of the offering contemplated by this Agreement, Citigroup
Global Markets Inc. has agreed to reserve out of the Shares set forth opposite
its name on Schedule I to this Agreement, up to [600,000] shares, for sale to
the Company's employees, officers, directors and certain other friends and
business associates of the Company (collectively, "Participants"), as set forth
in the Prospectus
(as defined below) under the caption "Underwriting" (the "Directed Share
Program"). The Shares to be sold by Citigroup Global Markets Inc. pursuant to
the Directed Share Program (the "Directed Shares") will be sold by Citigroup
Global Markets Inc. pursuant to this Agreement at the public offering price. Any
Directed Shares not orally confirmed for purchase by any Participants by 8:00
A.M. New York City time on the business day following the date on which this
Agreement is executed will be offered to the public by ? as set forth in the
Prospectus.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-128939)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; the
Preliminary Prospectus relating to the Shares that was included in the
Registration Statement immediately prior to the Applicable Time (as
defined in Section 1(a)(iii) hereof) is hereinafter called the "Pricing
Prospectus"; such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Prospectus"; and
any "issuer free writing prospectus" as defined in Rule 433 under the
Act relating to the Shares is hereinafter called an "Issuer Free
Writing Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus or any Issuer Free Writing Prospectus has been
issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance
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upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Representatives expressly for use
therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein to Items 7 and 11(m) of Form S-1;
(iii) For the purposes of this Agreement, the "Applicable
Time" is ___:___ __m (Eastern time) on the date of this Agreement; the
Pricing Prospectus as supplemented by the Issuer Free Writing
Prospectuses and other documents listed in Schedule III(a) hereto,
taken together (collectively, the "Pricing Disclosure Package") as of
the Applicable Time, did not include any 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, not misleading; and each Issuer Free Writing Prospectus
listed on Schedule III(a) or Schedule III(b) hereto does not conflict
with the information contained in the Registration Statement, the
Pricing Prospectus or the Prospectus and each such Issuer Free Writing
Prospectus, as supplemented by and taken together with the Pricing
Disclosure Package as of the Applicable Time, did not include any
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, not misleading; provided,
however, that this representation and warranty shall not apply to
statements or omissions made in an Issuer Free Writing Prospectus in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through the Representatives expressly
for use therein;
(iv) The Registration Statement conforms and the Prospectus
and any further amendments or supplements to the Registration Statement
and the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to each part of the Registration Statement 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 (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Representatives expressly for use therein or by
a Selling Stockholder expressly for use in the preparation of the
answers therein to Items 7 and 11(m) of Form S-1;
(v) The Company and its subsidiaries, when taken as a whole,
have not sustained since the date of the latest audited financial
statements included in the Pricing 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 Pricing Prospectus; and, since
the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, there has not been
any change in the capital stock (other than as a result of repurchases
of up to - shares of restricted stock by the Company pursuant to the
terms of restricted stock purchase agreements, as described in the
Pricing Prospectus) or long-term debt (other than any increase in
principal amount of up to $- of such long-term debt as a result of any
accrued interest added to the principal amount pursuant to the terms of
the Company's 15% senior subordinated notes) of the Company or
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any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Pricing Prospectus;
(vi) The Company and its subsidiaries have good and marketable
title 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 Pricing Prospectus or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Pricing Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction, except where the failure to be so
qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, prospects, management,
properties, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect"); and each subsidiary of the Company has been
duly incorporated or formed and is validly existing as a corporation or
other entity in good standing under the laws of its jurisdiction of
incorporation or formation, with power (corporate and other) and
authority to own its properties and conduct its business as described
in the Pricing Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction,
except where the failure to be so qualified would not, individually or
in the aggregate, have a Material Adverse Effect;
(viii) The Company has an authorized capitalization as set
forth in the Pricing Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and conform to the
description of the Stock contained in the Pricing Prospectus and 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 authorized and validly issued, conform in all
material respects to the description thereof contained in the
Prospectus and were issued in compliance with federal and state
securities laws; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except (i) for
directors' qualifying shares, (ii) pursuant to the Company's senior
credit facility and (iii) as otherwise set forth in the Pricing
Prospectus)
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are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims, except as set forth in the
Pricing Prospectus;
(ix) The unissued Shares 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 as provided
herein, will be duly and validly issued and fully paid and
non-assessable, will conform to the description of the Stock contained
in the Prospectus and will be free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and similar
rights; the shares of Stock to be sold by the Selling Stockholders
under this Agreement have been duly authorized and validly issued and
are fully paid and non-assessable;
(x) The issue and sale of the Shares to be sold by the Company
and the compliance by the Company with this Agreement and the
consummation of the transactions herein contemplated 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, except for such conflicts, breaches, violations or defaults
that would not, individually or in the aggregate, have a Material
Adverse Effect; nor will such action result in any violation of the
provisions of (a) the Certificate of Incorporation or By-laws of the
Company or (b) 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 (c) any law or
statute, except in the case of clause (b) and (c), for such violations
that would not, individually or in the aggregate, have a Material
Adverse Effect; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement, except the registration under the Act of the Shares and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Shares by the Underwriters;
(xi) Neither the Company nor any of its subsidiaries is (a) in
violation of its Certificate of Incorporation or By-laws or other
organizational or governing documents, (b) in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound or
(c) is in violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over it or
its property or assets or has failed to obtain any 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 in the case of clause (b) or (c), for such violations
or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect;
(xii) The Stock has been approved for listing, subject to
official notice of issuance, on the New York Stock Exchange (the
"Exchange");
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(xiii) Except as described in the Pricing Prospectus, there
are no contracts, agreements or understandings between the Company and
any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to
any securities of the Company 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;
(xiv) The statements set forth in the Pricing Prospectus and
the Prospectus under the caption "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Stock, under the caption "Certain United States Tax Consequences to
Non-United States Holders", and under the caption "Underwriting",
insofar as such statements purport to describe the provisions of the
laws, agreements and documents referred to therein, are accurate
descriptions or summaries in all material respects;
(xv) Other than as set forth in the Pricing Prospectus, there
are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect or materially
interfere with the consummation of the transactions contemplated by
this Agreement; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(xvi) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds
thereof, will not be an "investment company", as such term is defined
in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(xvii) At the time of filing the Initial Registration
Statement the Company was not and is not an "ineligible issuer," as
defined under Rule 405 under the Act;
(xviii) KPMG LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xix) The Company and each of its subsidiaries have made and
keep books, records and accounts, which, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the
assets of the Company and its subsidiaries in all material respects;
the Company has devised and maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization, (ii) transactions are recorded as necessary to
permit preparation of financial statements of the Company in conformity
with generally accepted accounting principles and to maintain
accountability for assets of the Company, (iii) access to assets of the
Company is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for assets
of the Company is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
6
(xx) Since the date of the latest audited financial statements
included in the Pricing Prospectus, (a) the Company has not been
advised of (1) any significant deficiencies in the design or operation
of internal controls that could adversely affect the ability of the
Company and each of its subsidiaries to record, process, summarize and
report financial data, or any material weaknesses in internal controls
and (2) any fraud, whether or not material, that involves management or
other employees who have a significant role in the internal controls of
the Company and each of its subsidiaries, and (b) since that date,
there has been no change in the Company's internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over
financial reporting;
(xxi) The Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) of the Exchange Act) that
comply with the requirements of the Exchange Act; such disclosure
controls and procedures are effective;
(xxii) Since October 11, 2005, the Company has not, directly
or indirectly, including through any subsidiary: (i) extended credit,
arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or executive officer of
the Company, or to or for any family member or affiliate of any
director or executive officer of the Company; or (ii) made any material
modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company, or
any family member or affiliate of any director or executive officer,
which loan was outstanding on October 11, 2005;
(xxiii) The historical financial statements (including the
related notes and supporting schedules) filed as part of the
Registration Statement or included in the Pricing Prospectus comply as
to form in all material respects with the requirements of Regulation
S-X under the Securities Act and present fairly the financial
condition, results of operations and cash flows of the entities
purported to be shown thereby at the dates and for the periods
indicated and have been prepared in conformity with accounting
principles generally accepted in the United States applied on a
consistent basis throughout the periods involved (except as may
otherwise be indicated);
(xxiv) The Company and its subsidiaries carry, or are covered
by, insurance from insurers of recognized financial responsibility 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. All policies of insurance owned by
the Company or any of its subsidiaries are, to the best of the
Company's knowledge, in full force and effect in all material respects;
the Company and its subsidiaries are in compliance with the terms of
such policies in all material respects; and neither the Company nor any
of its subsidiaries has received written notice from any insurer, agent
of such insurer or the broker of the Company or any of its subsidiaries
that any material capital improvements or any other material
expenditures (other than premium payments) are required or necessary to
be made in order to continue such insurance. None of the Company or any
of its subsidiaries insures risk of loss through any captive insurance,
risk retention group, reciprocal group or by means of any fund or pool
of assets specifically set aside for contingent liabilities other than
in connection with the Company's insurance business activities or as
described in the Pricing Prospectus;
7
(xxv) 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 necessary 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;
(xxvi) There are no contracts or other documents of a
character required to be described in the Registration Statement or the
Pricing Prospectus or to be filed as exhibits to the Registration
Statement that are not described and filed as required;
(xxvii) No labor disturbance by the employees of the Company
or its subsidiaries exists or, to the knowledge of the Company, is
imminent that would individually or in the aggregate have a Material
Adverse Effect;
(xxviii) Except as would not, individually or in the
aggregate, have a Material Adverse Effect (i) the Company and each of
its subsidiaries are in compliance in all 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"); (ii) no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company or any of its subsidiaries
would have any liability; (iii) the Company and its subsidiaries have
not incurred and do not expect to incur liability under (a) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (b) Sections 412 or 4971 of the Internal Revenue Code of 1986,
as amended, including the regulations and published interpretations
thereunder (the "Code"); (iv) each "pension plan" for which the Company
and its subsidiaries would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified and nothing
has occurred, whether by action or by failure to act, which would cause
the loss of such qualification; and (v) the Company and each of its
subsidiaries have not incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for payment of premiums in the
ordinary course of business);
(xxix) The Company and each of its subsidiaries have filed all
federal, state, local and foreign income and franchise tax returns
required to be filed through the date hereof (except where the failure
to file such returns would not, individually or in the aggregate, have
a Material Adverse Effect), subject to permitted extensions, and have
paid all taxes due thereon, other than those being contested in good
faith and by appropriate proceedings for which reserves have been
established on the books and records of the Company and its
subsidiaries in accordance with generally accepted accounting
principles in the United States; and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries, nor
does the Company have any knowledge of any tax deficiency that has had
or would have, individually or in the aggregate, a Material Adverse
Effect;
(xxx) Since the date as of which information is given in the
Pricing Prospectus through the date hereof, and except as set forth in
the Pricing Prospectus, neither the Company nor any of its subsidiaries
has (i) issued or granted any securities, (ii) incurred any material
liability or obligation, direct or contingent, other than liabilities
and obligations which were incurred in the ordinary course of business,
(iii) entered into any material transaction not
8
in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock (except, in the case of clause (iv), to
the extent required in connection with the conversion of the Company's
convertible preferred stock).
(xxxi) Neither the Company nor any of its subsidiaries, or to
the best knowledge of the Company and its subsidiaries, any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds, (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices Act
of 1977, or (iv) made any bribe, unlawful rebate, payoff, influence
payment, kickback or other unlawful payment;
(xxxii) (A) the Company and each of its subsidiaries are in
compliance with and not subject to liability under applicable
Environmental Laws (as defined below), (B) the Company and each of its
subsidiaries have made all filings and provided all notices required
under any applicable Environmental Law, and have and are in compliance
with all permits required under any applicable Environmental Laws and
each of them is in full force and effect and (C) no lien, charge,
encumbrance or restriction has been recorded under any Environmental
Law with respect to any assets, facility or property owned, operated,
leased or controlled by the Company or any of its subsidiaries, except
in the case of clauses (A), (B) and (C) as would not, individually or
in the aggregate, have a Material Adverse Effect; there is no civil,
criminal or administrative action, suit, demand, claim, hearing, notice
of violation, investigation, proceeding, notice or demand letter or
request for information pending or, to the knowledge of the Company or
any of its subsidiaries, threatened against the Company or any of its
subsidiaries under any Environmental Law; neither the Company nor any
of its subsidiaries has received notice that it has been identified as
a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law; and no property or facility of
the Company or any of its subsidiaries is (i) listed or proposed for
listing on the National Priorities List under CERCLA or (ii) listed in
the Comprehensive Environmental Response, Compensation, Liability
Information System List promulgated pursuant to CERCLA, or, to the
knowledge of the Company, on any comparable list maintained by any
state or local governmental authority;
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state and local laws or regulations,
codes, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder, relating to pollution, hazardous or
toxic substances, wastes or contaminants or protection of public or
employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or
threatened releases of hazardous materials into the environment
(including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), (ii) the manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials and (iii)
underground and above ground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom;
9
(xxxiii) The Company has not taken and will not take, directly
or indirectly, any action designed to or that has constituted or that
could reasonably be expected to cause or result in the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the shares of the Stock;
(xxxiv) The Company has not distributed and, prior to the
later to occur of any Time of Delivery (as defined in Section 4 hereof)
and completion of the distribution of the Stock, will not distribute
any offering material in connection with the offering and sale of the
Stock other than the Pricing Prospectus, the Prospectus and, subject to
compliance with Section 6(a) hereof, any Issuer Free Writing
Prospectus;
(xxxv) The Company and its subsidiaries have made all required
filings under applicable insurance holding company statutes, and have
received approvals of acquisition of control and/or affiliate
transactions, in each jurisdiction in which such filings or approvals
are required, except where the failure to have made such filings or
receive such approvals in any such jurisdiction would not, individually
or in the aggregate, have a Material Adverse Effect. Each of the
Company and its subsidiaries: (A) holds such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals
from insurance departments and other governmental or regulatory
authorities (each, an "Authorization") (including, without limitation,
insurance licenses from the insurance regulatory agencies of the
various states or other jurisdictions where it conducts business (the
"Insurance Licenses")), and has made all filings with and notices to,
all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, as are necessary to
own, lease, license and operate its respective properties and to
conduct its business in the manner described in the Pricing Prospectus,
except where the failure to have any Authorization or Insurance License
or to make any such filing or notice would not, individually or in the
aggregate, have a Material Adverse Effect, and (B) has fulfilled and
performed all obligations necessary to maintain such Authorizations and
Insurance Licenses, except where the failure to perform such
obligations would not, individually or in the aggregate, have a
Material Adverse Effect. Except as would not, individually or in the
aggregate, have a Material Adverse Effect (A) each such Authorization
and Insurance License is valid and in full force and effect and each of
the Company and its subsidiaries is in compliance with all the terms
and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and (B) no event has occurred (including, without limitation,
the receipt of any notice from any authority or governing body, the
execution, delivery and performance of this Agreement by the Company,
the sale and delivery of the Stock and the compliance by the Company
with all of the provisions hereof and the consummation by the Company
and its subsidiaries of the transactions contemplated in this
Agreement) which allows or, after notice or lapse of time of both,
would allow, revocation, suspension or termination of any such
Authorization or Insurance License or results or, after notice or lapse
of time or both, would result in any impairment of the rights of the
holder of any such Authorization or Insurance License. Except as
disclosed in the Pricing Prospectus, no insurance regulatory agency or
body has issued any order or decree impairing, restricting or
prohibiting the payment of dividends by any Company subsidiary to its
respective parent which would, individually or in the aggregate, have a
Material Adverse Effect;
(xxxvi) The statutory financial statements of the subsidiaries
of the Company that are insurance companies (the "Insurance
Subsidiaries"), from which certain ratios and other
10
statistical data filed as a part of the Registration Statement or
included in the Pricing Prospectus have been derived: (A) have for each
relevant period been prepared in conformity with statutory accounting
practices required or permitted by the National Association of
Insurance Commissioners and by the insurance laws of their respective
states of domicile, and the rules and regulations promulgated
thereunder, and such statutory accounting practices have been applied
on a consistent basis throughout the periods involved, except as may
otherwise be indicated therein or in the notes thereto; and (B) present
fairly in all material respects the statutory financial position of the
Insurance Subsidiaries as at the dates thereof, and the statutory basis
results of operations of the Insurance Subsidiaries for the periods
covered thereby;
(xxxvii) Neither the Company nor any of its Insurance
Subsidiaries has received any notice from any of the other parties to
any of its reinsurance treaties, contracts, agreements or arrangements
that such other party intends not to perform its obligations thereunder
and none of them has any reason to believe that any of the other
parties to such treaties, contracts, agreements or arrangements will be
unable to perform its obligations thereunder, except to the extent that
such nonperformance would not, individually or in the aggregate, have a
Material Adverse Effect. None of the Company or any of its subsidiaries
has entered into any "finite risk" insurance transaction or any other
retroactive loss financing arrangement;
(xxxviii) The Company has not received notice of any
investigation relating to brokers' commissions by any insurance
regulatory agency of any State;
(xxxix) The statistical and market and industry-related data
included in the Registration Statement, any Preliminary Prospectus and
the Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate or represent the Company's good
faith estimates that are made on the basis of data derived from such
sources; and
(xl) the Company has not offered, or caused the Underwriters
to offer, Shares to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (x) a customer or
supplier of the Company to alter the customer's or supplier's level or
type of business with the Company, or (y) a trade journalist or
publication to write or publish favorable information about the Company
or its products.
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling Stockholder of
this Agreement and the Power of Attorney and the Custody Agreement
hereinafter referred to, and for the sale and delivery of the Shares to
be sold by such Selling Stockholder hereunder, have been obtained; and
such Selling Stockholder has full right, power and authority to enter
into this Agreement, the Power-of-Attorney and the Custody Agreement
and to sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder hereunder;
11
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder
with all of the provisions of this Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions herein
and therein contemplated 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 statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or
to which any of the property or assets of such Selling Stockholder is
subject, nor will such action result in any violation of the provisions
of the Partnership Agreement of such Selling Stockholder if such
Selling Stockholder is a partnership or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to
the Time of Delivery (as defined in Section 4 hereof) such Selling
Stockholder will have, good and valid title to the Shares to be sold by
such Selling Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares and
payment therefor pursuant hereto, good and valid title to such Shares,
free and clear of all liens, encumbrances, equities or claims, will
pass to the several Underwriters;
(iv) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus (the "Lock-Up Period"), not to offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or
otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the Shares, including but
not limited to any options or warrants to purchase shares of Stock or
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee stock option plans existing
on, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement), without your
prior written consent; provided, however, that if (1) during the last
17 days of the initial Lock-Up Period, the Company releases earnings
results or announces material news or a material event or (2) prior to
the expiration of the initial Lock-Up Period, the Company announces
that it will release earnings results during the 16-day period
following the last day of the initial Lock-Up Period, then in each case
the Lock-Up Period will be automatically extended until the expiration
of the 18-day period beginning on the date of release of the earnings
results or the announcement of the material news or material event, as
applicable, unless each of Xxxxxxx, Xxxxx & Co. and Citigroup Global
Markets Inc. waive, in writing, such extension; such Selling
Stockholder hereby acknowledges that the Company has agreed herein to
provide written notice of any event that would result in an extension
of the Lock-Up Period pursuant to the previous sentence to such Selling
Stockholder (in accordance with Section 12 herein) and agrees that any
such notice properly delivered will be deemed to have been given to,
and received by, the Selling Stockholder; such Selling Stockholder
hereby further agrees that, prior to engaging in any transaction or
taking any other action that is subject to the terms of this provision
during the period from the date hereof to and including the 34th day
following the expiration of the initial Lock-Up Period, it will give
notice thereof to the Company and will not consummate such transaction
or take any such action unless it has received written confirmation
from the Company that the Lock-Up Period (as such may have been
extended pursuant to the previous paragraph) has expired;
12
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, that, the representations and warranties set forth in this
Section 1(b)(vi) are limited to any such statement and omission;
(vii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as defined in Section 4 hereof) a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(viii) Certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder have been
placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the "Custody Agreement"), duly executed and delivered
by such Selling Stockholder to [NAME OF CUSTODIAN], as custodian (the
"Custodian"), and such Selling Stockholder has duly executed and
delivered a Power of Attorney, in the form heretofore furnished to you
(the "Power of Attorney"), appointing the persons indicated in Schedule
II hereto, and each of them, as such Selling Stockholder's
attorneys-in-fact (the "Attorneys-in-Fact") with authority to execute
and deliver this Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriters to the
Selling Stockholders as provided in Section 2 hereof, to authorize the
delivery of the Shares to be sold by such Selling Stockholder hereunder
and otherwise to act on behalf of such Selling Stockholder in
connection with the transactions contemplated by this Agreement and the
Custody Agreement; and
(ix) The Shares represented by the certificates held in
custody for such Selling Stockholder under the Custody Agreement are
subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Stockholder for such custody, and the
appointment by such Selling Stockholder of the Attorneys-in-Fact by the
Power of Attorney, are to that extent irrevocable; the obligations of
the Selling Stockholders hereunder shall not be terminated by operation
of law, whether by the death or incapacity of any individual Selling
Stockholder or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the termination of such estate
or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of
any other event;
13
if any individual Selling Stockholder or any such executor or trustee
should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation should
be dissolved, or if any other such event should occur, before the
delivery of the Shares hereunder, certificates representing the Shares
shall be delivered by or on behalf of the Selling Stockholders in
accordance with the terms and conditions of this Agreement and of the
Custody Agreements; and actions taken by the Attorneys-in-Fact pursuant
to the Powers of Attorney shall be as valid as if such death,
incapacity, termination, dissolution or other event had not occurred,
regardless of whether or not the Custodian, the Attorneys-in-Fact, or
any of them, shall have received notice of such death, incapacity,
termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Company and each of the Selling Stockholders agree, severally and not jointly,
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company and each of the Selling
Stockholders, at a purchase price per share of $[__], the number of Firm Shares
(to be adjusted by you so as to eliminate fractional shares) determined by
multiplying the aggregate number of Shares to be sold by the Company and each of
the Selling Stockholders as set forth opposite their respective names in
Schedule II hereto by a fraction, the numerator of which is the aggregate number
of Firm Shares to be purchased by such Underwriter as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the aggregate number of Firm Shares to be purchased by all of the Underwriters
from the Company and all of the Selling Stockholders hereunder and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, each of the Selling Stockholders
agrees, severally and not jointly, to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from each of
the Selling Stockholders, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to [2,550,000] Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares, provided that
the purchase price per Optional Share shall be reduced by an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Firm Shares but not payable on the Optional Shares. Any such election to
purchase Optional Shares shall be made in proportion to the maximum number of
Optional Shares to be sold by each Selling Stockholder as set forth in Schedule
II hereto. Any such election to purchase Optional Shares may be exercised only
by written notice from you to the Attorneys-in-Fact, given within a period of 30
calendar days after the date of this Agreement and setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by you but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless you, the
Company and the Attorneys-in-Fact otherwise agree in writing, earlier than two
or later than ten business days after the date of such notice.
14
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Representatives may request upon at least forty-eight hours' prior
notice to the Company and the Selling Stockholders shall be delivered by or on
behalf of the Company and the Selling Stockholders to the Representatives,
through the facilities of the Depository Trust Company ("DTC"), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company and the Custodian, as their interests may
appear, to the Representatives at least forty-eight hours in advance. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of Xxxxxxx, Xxxxx
& Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Designated Office"). The
time and date of such delivery and payment shall be, with respect to the Firm
Shares, 9:30 a.m., New York time, on February [__], 2006, or such other time and
date as the Representatives, the Company and the Selling Stockholders may agree
upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York
time, on the date specified by the Representatives in the written notice given
by the Representatives of the Underwriters' election to purchase such Optional
Shares, or such other time and date as the Representatives and the Selling
Stockholders may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and date
for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof, will be delivered at the offices
of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be held at the
Closing Location at 5:30 p.m., New York City time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and 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.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the 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 Act; to make no further
amendment or any supplement to the Registration Statement or the Prospectus
which shall be disapproved by you promptly after reasonable notice thereof; to
advise you, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any amendment or supplement to the Prospectus has been filed and to furnish you
with copies
15
thereof to file promptly all material required to be filed by the Company with
the Commission pursuant to Rule 433(d) under the Act; to advise you, 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 other prospectus in respect of the Shares, of the suspension of
the qualification of the Shares 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 other prospectus or suspending any such
qualification, to promptly use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you 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 Shares, provided 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;
(c) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus in New
York City in such quantities as you may reasonably request, and, if the delivery
of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
the Act) is required at any time prior to the expiration of nine months after
the time of issue of the Prospectus in connection with the offering or sale of
the Shares 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 (or in lieu thereof, the notice
referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus in order to comply with the Act, to notify you and
upon your request to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many written and electronic copies as you may
from time to time reasonably request of an amended Prospectus or a supplement to
the Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus (or
in lieu thereof, the notice referred to in Rule 173(a) under the Act) in
connection with sales of any of the Shares at any time nine months or more after
the time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(e) During the initial Lock-Up Period, not to offer, sell, contract to
sell, pledge, grant any option to purchase, make any short sale or otherwise
dispose of, except as provided hereunder, any
16
securities of the Company that are substantially similar to the Shares,
including but not limited to any options or warrants to purchase shares of Stock
or any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee equity incentive or stock option
plans or restricted stock purchase agreements existing on the date of this
Agreement or otherwise described in the Prospectus, or upon the conversion or
exchange of convertible or exchangeable securities outstanding as of, the date
of this Agreement), without your prior written consent; provided, however, that
if (1) during the last 17 days of the initial Lock-Up Period, the Company
releases earnings results or announces material news or a material event or (2)
prior to the expiration of the initial Lock-Up Period, the Company announces
that it will release earnings results during the 16-day period following the
last day of the initial Lock-Up Period, then in each case the Lock-Up Period
will be automatically extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the announcement of
the material news or material event, as applicable, unless each of Xxxxxxx,
Xxxxx & Co. and Citigroup Global Markets Inc. waive, in writing, such extension;
the Company will provide the Representatives and any co-managers and each
stockholder subject to the Lock-Up Period pursuant to the lockup letters
described in Section 1(b)(iv) and 7(j) with prior notice of any such
announcement that gives rise to an extension of the Lock-up Period;
(f) During a period of three years from the effective date of the
Registration Statement, provided that the Company is required to file such
reports (described in this Section 5 (f)), to furnish to its stockholders as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement), to make
available to its stockholders consolidated summary financial information of the
Company and its subsidiaries for such quarter in reasonable detail; provided,
however, that the Company may satisfy the requirements of this subsection 5(f)
by making any such reports, communications or information generally available on
its web site or by filing such information with the Commission via XXXXX;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission); provided, however, that the
Company may satisfy the requirements of this subsection 5(g) by making any such
reports, communications or information generally available on its web site or by
filing such information with the Commission via XXXXX;
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Pricing Prospectus
under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance, the
Shares on the Exchange;
17
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
and
(l) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if any,
operated by such Underwriter for the purpose of facilitating the on-line
offering of the Shares (the "License"); provided, however, that the License
shall be used solely for the purpose described above, is granted without any fee
and may not be assigned or transferred.
6. (a) The Company represents and agrees that, without the prior
consent of the Representatives, it has not made and will not make any offer
relating to the Shares that would constitute a "free writing prospectus" as
defined in Rule 405 under the Act; each Underwriter represents and agrees that,
without the prior consent of the Company and the Representatives, it has not
made and will not make any offer relating to the Shares that would constitute a
free writing prospectus; any such free writing prospectus the use of which has
been consented to by the Company and the Representatives is listed on Schedule
III(a) or Schedule III(b) hereto;
(b) Each Selling Stockholder represents and agrees that it has not made
and will not make any offer relating to the Shares that would constitute a "free
writing prospectus" as defined in Rule 405 under the Act.
(c) The Company has complied and will comply with the requirements of
Rule 433 under the Act applicable to any Issuer Free Writing Prospectus,
including timely filing with the Commission or retention where required and
legending; the Company represents that it has satisfied and agrees that it will
satisfy the conditions under Rule 433 under the Act to avoid a requirement to
file with the Commission any electronic road show;
(d) The Company agrees that if at any time following issuance of an
Issuer Free Writing Prospectus any event occurred or occurs as a result of which
such Issuer Free Writing Prospectus would conflict with the information in the
Registration Statement, the Pricing Prospectus or the Prospectus or 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 light of the
circumstances then prevailing, not misleading, the Company will give prompt
notice thereof to the Representatives and, if requested by the Representatives,
will prepare and furnish without charge to each Underwriter an Issuer Free
Writing Prospectus or other document which will correct such conflict, statement
or omission; provided, however, that this representation and warranty shall not
apply to any statements or omissions in an Issuer Free Writing Prospectus made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through the Representatives expressly for use therein.
7. (a) The Company agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel
18
and accountants and one counsel for the Selling Stockholders in connection with
the registration of the Shares under the Act and all other expenses in
connection with the preparation, printing, reproduction and filing of the
Registration Statement, any Preliminary Prospectus, any Issuer Free Writing
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing any Agreement among Underwriters, this
Agreement, the Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares; (iii) all expenses in connection with
the qualification of the Shares for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) all fees and
expenses in connection with listing the Shares on the Exchange; (v) the filing
fees incident to, and the reasonable fees and disbursements of counsel for the
Underwriters in connection with any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Shares; (vi) the
cost of preparing stock certificates; (vii) the cost and charges of any transfer
agent or registrar, (viii) the fees and expenses of the Attorneys in Fact and
the Custodian; (ix) all expenses (other than taxes and underwriting discounts)
incident to the sale and delivery of the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder; (x) reasonable fees and disbursements
of counsel for the Underwriters incurred in connection with the Directed Share
Program; (xi) all costs and expenses incurred by the Underwriters in connection
with the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of copies of the Directed Share
Program material; (xii) all stamp duties, similar taxes or duties or other
taxes, if any, incurred by the Underwriters in connection with the Directed
Share Program; and (xiii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that the Company shall
bear, and the Selling Stockholders shall not be required to pay or to reimburse
the Company for, the cost of any other matters not directly relating to the sale
and purchase of the Shares pursuant to this Agreement, and that, except as
provided in this Section, and Sections 9 and 12 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make. Notwithstanding the foregoing,
in respect of any employee of any Underwriter traveling on a private jet used in
connection with any investor presentation or "road show" related to the offering
contemplated by this Agreement, each applicable Underwriter will reimburse the
Company for the cost of such employee's flight at the full-fare rate for a first
class ticket on a commercial flight between the points traveled on such dates.
(b) The Selling Stockholders covenant and agree with the several
Underwriters (i) that they will pay or cause to be paid all taxes incident to
the sale and delivery of the Shares to be sold by such Selling Stockholder to
the Underwriters hereunder, and (ii) the underwriting discount associated with
the Shares to be sold by such Selling Stockholder hereunder shall be deducted
from the Selling Stockholders' proceeds from the sale of such Shares.
8. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
19
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; all material required to be filed by the Company pursuant
to Rule 433(d) under the Act shall have been filed with the Commission within
the applicable time period prescribed for such filing by Rule 433 under the Act;
if the Company has elected to rely upon Rule 462(b) under the Act, the Rule
462(b) Registration Statement shall have become effective by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement; 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; no stop order suspending or preventing the use of
the Prospectus or any Issuer Free Writing Prospectus shall have been initiated
or threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Underwriters, shall have furnished to you such written opinion or opinions,
dated such Time of Delivery, in form and substance satisfactory to you, with
respect to certain legal matters relating to this Agreement and such other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Bass, Xxxxx & Xxxx PLC, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect set forth in Annex II (a) hereto;
(d) The respective counsel for each of the Selling Stockholders, as
indicated in Schedule II hereto, each shall have furnished to you their written
opinion with respect to each of the Selling Stockholders for whom they are
acting as counsel, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect set forth in Annex II(b) hereto;
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, KPMG LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex I hereto;
(f) At the First Time of Delivery, the chief executive officer and
chief financial officer of the Company shall have furnished to you an officer's
certificate, dated as of the First Time of Delivery, substantially in the form
set forth in Annex III hereto;
(g) (i) The Company and its subsidiaries, when taken as a whole, shall
not have sustained since the date of the latest audited financial statements
included in the Pricing 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 Pricing Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock (other than
as a result of repurchases of up to - shares of restricted stock by the Company
pursuant to the terms of restricted stock purchase agreements, as described in
the Pricing Prospectus) or long-term debt (other than any increase in principal
amount of up to $- of such long-
20
term debt as a result of any accrued interest added to the principal amount
pursuant to the terms of the Company's 15% senior subordinated notes) 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, taken as a whole, otherwise than as set forth or contemplated in
the Pricing 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 Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(h) On or after the Applicable Time (i) no downgrading shall have
occurred in the rating accorded the Company's financial strength or claims
paying ability by any "nationally recognized statistical rating organization",
as that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act, and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its rating of
the Company's financial strength or claims paying ability;
(i) On or after the Applicable Time there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the Exchange; (ii) a suspension or material limitation
in trading in the Company's securities on the Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or (v) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(j) The Shares at such Time of Delivery shall have been duly listed,
subject to notice of issuance, on the Exchange;
(k) The Company shall have obtained and delivered to the Underwriters
executed copies of an agreement from each of the Company's directors and
officers, the Selling Stockholders and the other stockholders of the Company set
forth on Schedule IV hereto, substantially to the effect set forth in Subsection
1(b)(iv) hereof in form and substance satisfactory to you;
(l) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(m) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and duly authorized representatives of the Selling Stockholders,
respectively, satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholders, respectively, herein at
and as of such Time of Delivery, as to the performance by the Company and the
Selling Stockholders of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery,
21
and as to such other matters as you may reasonably request, and the Company
shall have furnished or caused to be furnished certificates as to the matters
set forth in subsections (a) and (g) of this Section;
9. (a) (i) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, any Issuer Free Writing Prospectus or any
"issuer information" filed or required to be filed pursuant to Rule 433(d) under
the Act, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration Statement, any
Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use
therein.
(ii) The Company agrees to indemnify and hold harmless Citigroup
Global Markets Inc., the directors, officers, employees and agents of Citigroup
Global Markets Inc. and each person, who controls Citigroup Global Markets Inc.
within the meaning of either the Act or the Exchange Act (the "Citigroup
Entities") against any losses, claims, damages or liabilities to which it may
become subject, under the Act or otherwise, insofar as such losses, claims
damages or liabilities (or actions in respect thereof) (i) arising out of any
untrue statement or alleged untrue statement of a material fact contained in any
prospectus wrapper or other material prepared by or with the consent of the
Company for distribution to Participants in connection with the offering of the
Directed Shares or arising out of or based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) caused by the failure of any
Participant to pay for and accept delivery of Directed Shares which have been
properly confirmed for purchase by any Participant by the end of the first
business day after the date of the Underwriting Agreement; or (iii) related to,
or arising out of or in connection with, the offering of the Directed Shares,
except that this clause (iii) shall not apply to the extent that such loss,
claim, damage or liability is finally judicially determined to have resulted
primarily from the gross negligence or willful misconduct of the Citigroup
Entities.
(b) Each of the Selling Stockholders, severally and not jointly, will
indemnify and hold harmless each Underwriter, its partners, directors and
officers, and any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or any such person may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, any Preliminary Prospectus, the Pricing
Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer
Free Writing Prospectus or any
22
"issuer information" filed or required to be filed pursuant to Rule 433(d) under
the Act, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Pricing
Prospectus, any Issuer Free Writing Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Selling
Stockholder expressly for use therein; and will reimburse each Underwriter or
any such person for any legal or other expenses reasonably incurred by such
Underwriter or any such person in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that such
Selling Stockholder shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus
or the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives
expressly for use therein; and provided further, that the liability of a Selling
Shareholder pursuant to this subsection (b) shall not exceed the product of the
number of Shares sold by such Selling Shareholder (including Optional Shares)
and the initial public offering price of the Shares as set forth in the
Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus,
or any amendment or supplement thereto, or any Issuer Free Writing Prospectus,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Preliminary
Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Company and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof (each such notice to the indemnifying party,
a "Notice"); but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of
23
the indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party. The Company shall not be required to indemnify the Underwriters for any
amount paid or payable by the Underwriters in the settlement of any action,
proceeding or investigation without the written consent of the Company, which
consent shall not be unreasonably withheld. Notwithstanding anything contained
herein to the contrary, if indemnity may be sought pursuant to Section 9(a)(ii)
hereof, then the indemnifying party shall be liable for the reasonable fees and
expenses of not more than one separate law firm (in addition to any local
counsel) for the Citigroup Entities for the defense of any losses, claims,
damages and liabilities arising out of the Directed Share Program.
(e) If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
Notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault (including, without limitation, the failure by the
indemnified party to provide Notice) of the Company and the Selling Stockholders
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Stockholders
bear to the total underwriting discounts and commissions received by the
Underwriters, 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, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, each of the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection (e)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to
24
above in this subsection (e). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include 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 subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section 9 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act and each broker-dealer affiliate of any
Underwriter; and the obligations of the Underwriters under this Section 9 shall
be in addition to any liability which the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each officer and
director of the Company (including any person who, with his or her consent, is
named in the Registration Statement as about to become a director of the
Company) and to each person, if any, who controls the Company or any Selling
Stockholder within the meaning of the Act.
10. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Stockholders shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to
25
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company the
Selling Stockholders as provided in subsection (a) above, the aggregate number
of such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all of the Shares to be purchased at such Time of Delivery, or if the
Company and the Selling Stockholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Shares
of a defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Selling Stockholders to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholders, except for the expenses
to be borne by the Company and the Selling Stockholders and the Underwriters as
provided in Section 7 hereof and the indemnity and contribution agreements in
Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
12. If this Agreement shall be terminated pursuant to Section 10
hereof, neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 7 and 9 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company and each of
the Selling Stockholders pro rata (based on the number of Shares to be sold by
the Company and such Selling Stockholder hereunder), will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and the Selling Stockholders shall then
be under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 7 and 9 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by the Representatives on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
26
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of (i) Xxxxxxx,
Xxxxx & Co., 0 Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department (facsimile number (000) 000-0000), (ii) Citigroup Global
Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General
Counsel, and (iii) UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attention: Syndicate Department; if to any Selling Stockholder shall
be delivered or sent by mail, telex or facsimile transmission to counsel for
such Selling Stockholder at its address set forth in Schedule II hereto; and 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: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 9(d) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company or the Selling Stockholders by you on
request; provided, however, that notices under subsection 5(e) shall be in
writing, and (a) if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives at (i) Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Control Room,
(ii) Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: General Counsel, and (iii) UBS Securities LLC, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Syndicate Department, and (b)
if to the Selling Stockholders, at the address listed for each Selling
Stockholder on Schedule II, attached hereto. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and, to
the extent provided in Sections 9 and 11 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
15. The Company and each of the Selling Stockholders acknowledge and
agree that (i) the purchase and sale of the Shares pursuant to this Agreement,
including the determination of the public offering price of the Shares and any
related discounts and commissions, is an arm's-length commercial transaction
between the Company and the Selling Stockholders, on the one hand, and the
several Underwriters, on the other, (ii) in connection therewith and with the
process leading to such transaction each Underwriter is acting solely as a
principal and not the agent or fiduciary of the Company, the Selling
Stockholders, or their respective stockholders, creditors, employees or any
other party, (iii) no Underwriter has assumed an advisory or fiduciary
responsibility in favor of the Company or any Selling Stockholders with respect
to the offering contemplated hereby or the process leading thereto (irrespective
of whether such Underwriter has advised or is currently advising the Company of
any Selling Stockholder on other matters) or any other obligation to the Company
or any Selling Stockholder except the obligations expressly set forth in this
Agreement, and (iv) the Company and each of the Selling Stockholders has
consulted its own legal and financial advisors to the extent it deemed
appropriate. The Company and each of the Selling Stockholders severally agree
that each will not claim that the Underwriters, or any of them, has rendered
advisory services of any nature or respect, or owes a fiduciary or similar duty
to the Company or such Selling Stockholder, in connection with such transaction
or the process leading thereto.
27
16. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
18. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
19. Notwithstanding anything herein to the contrary, the Company and
the Selling Stockholders are authorized to disclose to any persons the U.S.
federal and state income tax treatment and tax structure of the potential
transaction and all materials of any kind (including tax opinions and other tax
analyses) provided to the Company and the Selling Stockholders relating to that
treatment and structure, without the Underwriters imposing any limitation of any
kind. However, any information relating to the tax treatment and tax structure
shall remain confidential (and the foregoing sentence shall not apply) to the
extent necessary to enable any person to comply with securities laws. For this
purpose, "tax structure" is limited to any facts that may be relevant to that
treatment.
20. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of
them, with respect to the subject matter hereof.
21. The Company and each of the Underwriters hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel and the Custodian, if any counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Selling Stockholders
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
28
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
HEALTHSPRING, INC.
By: ....................................
Name:
Title:
Underwriting Agreement
GTCR FUND VIII, L.P.
By: GTCR Partners VIII, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its: General Partner
By:
-------------------------------------
Name: Xxxxxx X. Xxxxx
Its: Principal
GTCR FUND VIII/B, L.P.
By: GTCR Partners VIII, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its: General Partner
By:
-------------------------------------
Name: Xxxxxx X. Xxxxx
Its: Principal
GTCR CO INVEST II, L.P.
By: GTCR Xxxxxx Xxxxxx XX, L.L.C.
Its: General Partner
By:
-------------------------------------
Name: Xxxxxx X. Xxxxx
Its: Principal
Underwriting Agreement
Accepted as of the date hereof
XXXXXXX, XXXXX & CO.
By:.....................................
(Xxxxxxx, Sachs & Co.)
CITIGROUP GLOBAL MARKETS INC.
By:.....................................
Name:
Title:
UBS SECURITIES LLC
By:.....................................
Name:
Title:
By:.....................................
Name:
Title:
On behalf of each of the Underwriters
Underwriting Agreement
SCHEDULE I
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
--------------- ---------------
The Company...........................................
The Selling Stockholder(s) (1):
GTCR FUND VIII, L.P.............................
X/X XXXX XXXXXX XXXXXX XX, X.X.X.
0000 XXXXX XXXXX
XXXXXXX, XX 00000
GTCR FUND VIII/B, L.P.
C/O GTCR XXXXXX XXXXXX XX, L.L.C.
0000 XXXXX XXXXX
XXXXXXX, XX 00000
GTCR CO-INVEST II, L.P..........................
X/X XXXX XXXXXX XXXXXX XX, X.X.X.
0000 XXXXX XXXXX
XXXXXXX, XX 00000
--------------- ---------------
Total........................................
=============== ===============
-------------
(1) The Selling Stockholders are represented by Xxxxxxxx & Xxxxx, LLP, 000
Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxxx, P.C.
and Xxxxxxx X. Fine, Esq., Telephone: (000) 000-0000, Facsimile: (000) 000-0000,
and each Selling Stockholder has appointed [NAMES OF ATTORNEYS-IN-FACT (NOT LESS
THAN TWO)], and each of them, as the Attorneys-in-Fact for such Selling
Stockholder.
SCHEDULE III
(a) Materials other than the Pricing Prospectus that comprise the
Pricing Disclosure Package:
(b) Issuer Free Writing Prospectuses not included in the Pricing
Disclosure Package:
SCHEDULE IV
Xxxxxx Xxxx
ANNEX I
FORM OF COMFORT LETTER
ANNEX II
FORMS OF OPINIONS
ANNEX III
FORM OF CHIEF EXECUTIVE OFFICER & CHIEF FINANCIAL OFFICER CERTIFICATE
