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WELLPOINT HEALTH NETWORKS INC.
(a Delaware corporation)
1,400,000 Shares of Common Stock
FORM OF
INTERNATIONAL UNDERWRITING AGREEMENT
Dated: April __, 1998
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WELLPOINT HEALTH NETWORKS INC.
(a Delaware corporation)
1,400,000 Shares of Common Stock
(Par Value $.01 Per Share)
FORM OF INTERNATIONAL UNDERWRITING AGREEMENT
April __, 1998
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXX XXXXXX INC.
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
as U.S. Representatives of the several U.S. Underwriters
c/o Morgan Xxxxxxx & Co. International Limited
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
WellPoint Health Networks Inc., a Delaware corporation (the
"Company"), and the California HealthCare Foundation, a California non-profit
corporation (the "Selling Stockholder"), confirm their respective agreements
with Xxxxxx Xxxxxxx & Co. International Limited ("Xxxxxx Xxxxxxx") and each
of the other international underwriters named in Schedule A hereto
(collectively, the "International Managers," which term shall also include
any underwriter substituted as hereinafter provided in Section 10 hereof),
with respect to (i) the sale by the Selling Stockholder, and the purchase by
the International Managers, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.01 per share, of
the Company ("Common Stock") set forth in Schedule A hereto (the
"International Securities").
It is understood that the Company and the Selling Stockholder are
concurrently entering into an agreement dated the date hereof (the "U.S.
Underwriting Agreement") providing for the offering by the Selling
Stockholder of an aggregate of 5,600,000 shares of Common Stock (the "Initial
U.S. Securities") in the United States and Canada for which Xxxxxx Xxxxxxx &
Co. Incorporated, Xxxxx Xxxxxx Inc., Bear, Xxxxxxx & Co. Inc., and Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation (the "U.S. Underwriters") and the
grant by the Selling Stockholder to the U.S. Underwriters, acting severally
and not jointly, of an option to purchase all or any part of the U.S.
Underwriters' pro rata portion of up to 1,050,000 additional shares of Common
Stock solely
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to cover overallotments, if any (the "U.S. Option Securities"). The Initial
U.S. Securities and the U.S. Option Securities are hereinafter called the
"U.S. Securities." It is understood that the Selling Stockholder is not
obligated to sell and the International Managers are not obligated to
purchase, any International Securities unless all of the Initial U.S.
Securities are contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are
hereinafter collectively called the "Underwriters," the International
Securities and the Initial U.S. Securities are hereinafter collectively
called the "Initial Securities," and the International Securities and the
U.S. Securities are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing
for the coordination of certain transactions among the Underwriters under the
direction of Xxxxxx Xxxxxxx (in such capacity, the "Global Coordinator").
The Company and the Selling Stockholder understand that the
International Managers propose to make an offering of the International
Securities as soon as Xxxxxx Xxxxxxx xxxxx advisable after this Agreement has
been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-_______)
covering the registration of the Securities under the Securities Act of 1933,
as amended (the "1933 Act"), including the related preliminary prospectus or
prospectuses. Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the
Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act
Regulations, prepare and file a term sheet (a "Term Sheet") in accordance
with the provisions of Rule 434 and Rule 424(b). Two forms of prospectus are
to be used in connection with the offering and sale of the Securities: one
relating to the International Securities (the "Form of International
Prospectus") and one relating to the U.S. Securities (the "Form of U.S.
Prospectus"). The Form of International Prospectus is identical to the Form
of U.S. Prospectus, except for the front cover page and the inclusion in the
Form of International Prospectus of a section under the caption "Certain
United States Tax Considerations for Non-United States Holders." The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement
at the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of
Rule 434 is referred to as "Rule 434 Information." Each Form of
International Prospectus and Form of U.S. Prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
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statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein (including the exhibits to any
such documents) pursuant to Item 12 of Form S-3 under the 1933 Act, at the
time it became effective and including the Rule 430A Information and the Rule
434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and the final Form of U.S. Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the forms first furnished to the Underwriters for use
in connection with the offering of the Securities are herein called the
"International Prospectus" and the "U.S. Prospectus," respectively, and
collectively, the "Prospectuses." If Rule 434 is relied on, the terms
"International Prospectus" and "U.S. Prospectus" shall refer to the
preliminary International Prospectus dated March 31, 1998 and preliminary
U.S. Prospectus dated March 31, 1998, respectively, each together with the
applicable Term Sheet and all references in this Agreement to the date of
such Prospectuses shall mean the date of the applicable Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the International Prospectus, the U.S. Prospectus or
any Term Sheet or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated"
in the Registration Statement, any preliminary prospectus (including the Form
of U.S. Prospectus and Form of International Prospectus) or the Prospectuses
(or other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, any preliminary
prospectus (including the Form of U.S. Prospectus and Form of International
Prospectus) or the Prospectuses, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectuses shall be deemed to mean and
include the filing of any document under the Securities Exchange Act of 1934
(the "1934 Act") which is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectuses, as the case may
be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each International Manager as of the date hereof,
as of the Closing Time referred to in Section 2(c) hereof and agrees with
each International Manager, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and
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no stop order suspending the effectiveness of the Registration Statement
or any Rule 462(b) Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectuses nor any amendments or supplements
thereto, at the time the Prospectuses or any such amendment or supplement
was issued and at the Closing Time, included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any International Manager relating
to such International Manager through Xxxxxx Xxxxxxx expressly for use in
the Registration Statement or the Prospectuses.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement and
the Prospectuses, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read
together with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses
were issued and at the Closing Time, did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
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(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements included
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified;
said financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present fairly
in accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information
included in the Prospectuses present fairly the information shown
therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the state of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each subsidiary of the
Company listed on Schedule C hereto (the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
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required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to be
in good standing would not result in a Material Adverse Effect; except
as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. Other than the Subsidiaries,
the Company has no subsidiaries which either (i) are "Significant
Subsidiaries," as such term is defined under Regulation S-X under the
1933 Act, or (ii) are material to the Company's financial condition or
results of operations.
(viii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses under the
caption "Description of Capital Stock" (except for subsequent issuances, if
any, under the Company's 1994 Stock Option/Award Plan, Employee Stock
Option Plan or Employee Stock Purchase Plan). The shares of issued and
outstanding capital stock, including the Securities to be purchased by the
Underwriters from the Selling Stockholder, have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock, including the Securities to be
purchased by the Underwriters from the Selling Stockholder, was issued in
violation of the preemptive or other similar rights of any securityholder
of the Company.
(ix) AUTHORIZATION OF AGREEMENT. This Agreement and the U.S.
Underwriting Agreement have been duly authorized, executed and delivered by
the Company.
(x) ABSENCE OF MANIPULATION. None of the Company or its
subsidiaries or any of their respective officers and directors has
taken, or will 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 Securities.
(xi) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Common
Stock conforms to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder.
(xii) ABSENCE OF DEFAULTS AND CONFLICTS Neither the Company nor
any of its subsidiaries is in violation of its charter or bylaws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any
6
subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement
and the U.S. Underwriting Agreement and the consummation of the
transactions contemplated in this Agreement, the U.S. Underwriting
Agreement and the Registration Statement and compliance by the Company
with its obligations under this Agreement and the U.S. Underwriting
Agreement have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches,
defaults or Repayment Events or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
(xiii) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or
any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to result
in a Material Adverse Effect.
(xiv) ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in this Agreement and the
U.S. Underwriting Agreement or the performance by the Company of its
obligations hereunder or thereunder; the aggregate of all pending legal
or governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
7
(xv) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvi) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own, possess, or can acquire on reasonable terms, adequate
rights to use all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
for the conduct of the business now operated or to be operated by the
Company and its subsidiaries, as described in the Prospectuses, and
neither the Company nor any of its subsidiaries has received any notice
or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations under this Agreement and the International Underwriting
Agreement, in connection with the offering or sale of the Securities by
the Selling Stockholder under this Agreement and the U.S. Underwriting
Agreement, or the consummation of the transactions contemplated by this
Agreement and the U.S. Underwriting Agreement, except such as have been
already obtained or made or as may be required under the 1933 Act or the
1933 Act Regulations or state or foreign securities laws.
(xviii) XXXX-XXXXX LICENSE. Blue Cross of California has been
licensed in the State of California as a health care service plan under
the Xxxx-Xxxxx Health Care Service Plan Act of 1975, as amended (the
"Xxxx-Xxxxx Act"), and such license has not been modified since the
issuance thereof (other than modifications filed in the ordinary course
of business) in any respect that would materially and adversely affect
the ability of the Company to conduct its business in the manner
described in the Registration Statement. None of the Company's other
subsidiaries are required to be licensed under the Xxxx-Xxxxx Act.
(xix) BCBSA LICENSE. The Company is in full compliance with the
requirements of the Blue Cross License Agreement, dated as of August 4,
1997, between the Company and the Blue Cross and Blue Shield Association
(the "BCBSA") and the California Blue Cross License Addendum, dated as of
December 30, 1997, between the Company and the BCBSA, except in each case
where such noncompliance would not have a Material
8
Adverse Effect. Each of the Company's subsidiaries that is required by
the BCBSA as of the date hereof, or that will be required by the BCBSA
as of the Closing Time, to be a party to a Blue Cross Affiliate License
Agreement is in full compliance with the requirements of such agreement,
except in each case where such noncompliance would not have a Material
Adverse Effect.
(xx) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations, including, without limitation, under the Xxxx-Xxxxx Act
(collectively, "Governmental Licenses"), issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them and the Company and its subsidiaries are
in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to possess such Governmental Licenses
or to comply would not, singly or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xxi) TITLE TO PROPERTY. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them,
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectuses or (b) do not, singly or in the
aggregate, have a Material Adverse Effect and do not interfere in any
material respect with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the
Prospectuses, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any
such lease or sublease.
(xxii) MAINTENANCE OF INSURANCE. The Company and each of its
subsidiaries maintain insurance policies with respect to such insurable
properties, potential liabilities and occurrences that merit or require
catastrophic insurance in amounts deemed adequate in the reasonable opinion
of the management, or the Company and each of its subsidiaries maintain a
system or systems of self-insurance or assumption of risk which accords
with the practices of similar businesses; all such insurance policies are
in full force and effect; and, at
9
the time that each of the physicians and physicians groups with which
the Company or any of its subsidiaries has contracted entered into such
agreement, such physician or physician group represented that they had
professional liability and medical malpractice insurance in minimum
amounts which the Company believes to be adequate for such physicians
and physician groups generally.
(xxiii) COMPLIANCE WITH TAX LAWS. All material income, payroll and
sales tax returns required to be filed by the Company or any of its
subsidiaries, in any jurisdiction, have been so filed, and all material
taxes, including related withholding taxes, penalties and interest,
assessments and other charges due or claimed to be due from such entities
have been paid, other than those being contested in good faith and for
which adequate reserves have been provided or those currently payable
without penalty or interest.
(xxiv) COMPLIANCE WITH CUBA ACT. The Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xxv) INVESTMENT COMPANY ACT. The Company is not an "investment
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxvi) ENVIRONMENTAL LAWS. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent, decree
or judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each
in compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are no
events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
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(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING STOCKHOLDER. The Selling
Stockholder represents and warrants to each International Manager as of the date
hereof, as of the Closing Time and agrees with each International Manager, as
follows:
(i) ACCURATE DISCLOSURE. To the extent that any statements or
omissions made in the Registration Statement or Prospectuses, or any
amendment or supplement thereto, are made in reliance on, and in conformity
with, written information furnished to the Company by or on behalf of the
Selling Stockholder specifically for use in the preparation thereof, each
such part of the Registration Statement, when it became effective, 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 statement
therein not misleading, and each such part of either of the Prospectuses,
or of any amendments or supplements thereto, at the time it was issued and
as of the Closing Time, did not include nor will it include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; the Selling
Stockholder is not prompted to sell the Securities to be sold by the
Selling Stockholder hereunder by any material nonpublic information
concerning the Company or any subsidiary of the Company which is not set
forth in the Prospectuses. The Company and the Underwriters acknowledge
that the statements relating to such Selling Stockholder under the heading
"May 1996 Recapitalization" and "August 1997 Reincorporation" (but only
insofar as such paragraphs purport to describe agreements to which the
Selling Stockholder is a party) and "Selling Stockholder" in any Prospectus
constitute the only information furnished in writing by or on behalf of
such Selling Stockholder for inclusion in the Registration Statement or any
Prospectus.
(ii) AUTHORIZATION OF AGREEMENTS. The Selling Stockholder has the
full right, power and authority to enter into this Agreement, the U.S.
Underwriting Agreement and to sell, transfer and deliver the Securities to
be sold by the Selling Stockholder hereunder. The execution and delivery
of this Agreement, the U.S. Underwriting Agreement and the sale and
delivery of the Securities to be sold by the Selling Stockholder and the
consummation of the transactions contemplated in this Agreement and the
U.S. Underwriting Agreement and compliance by the Selling Stockholder with
its obligations hereunder have been duly authorized by the Selling
Stockholder and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities to be sold by the Selling
Stockholder pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, license, lease or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder may be bound, or to which any of the property or assets
of the Selling Stockholder is subject, nor will such action result in any
violation of the provisions of the charter or by-laws or other
organizational instrument of the Selling Stockholder, if applicable, or any
applicable treaty, law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Selling Stockholder or any of its
properties.
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(iii) GOOD AND MARKETABLE TITLE. The Selling Stockholder has and
will at the Closing Time have good and marketable title to the Securities
to be sold by the Selling Stockholder hereunder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement, and the
U.S. Underwriting Agreement and the Voting Agreement and the Voting Trust
Agreement, each as defined in the Registration Statement; and upon delivery
of such Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any adverse
claim, each of the Underwriters will receive good and marketable title to
the Securities purchased by it from the Selling Stockholder, free and clear
of any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(iv) ABSENCE OF MANIPULATION. The 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 Securities.
(v) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by the Selling
Stockholder of its obligations under this Agreement or the U.S.
Underwriting Agreement, or in connection with the sale and delivery of
the Securities under this Agreement or the U.S. Underwriting Agreement
or the consummation of the transactions contemplated by this Agreement
and the U.S. Underwriting Agreement, except such as may have previously
been made or obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws.
(vi) RESTRICTION ON SALE OF SECURITIES. During a period of 90
days from the date of the Prospectuses, the Selling Stockholder will
not, without the prior written consent of the Global Coordinator, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file
any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any
such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise, provided, that the Global Coordinator shall give the Selling
Stockholder at least two business days' notice of any waiver of the
restriction on sales by the Company contained in Section 3(h) hereof and
the Selling Stockholder shall be deemed to have been granted a waiver of
this subsection 3(b)(vi) on the same terms as any such waiver granted to
the Company. The foregoing sentence shall not apply to the Securities
to be sold (w) hereunder or (x) under the U.S. Underwriting Agreement, or
(y) to any deposit or
12
withdrawal of Common Stock in or from the trust established pursuant to
the Voting Trust Agreement or (z) to the Company.
(vii) NO ASSOCIATION WITH NASD. Neither the Selling Stockholder
nor any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(m) of the By-laws of the National Association of
Securities Dealers, Inc.), any member firm of the National Association
of Securities Dealers, Inc.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the
International Managers or to counsel for the International Managers shall be
deemed a representation and warranty by the Company to each International
Manager as to the matters covered thereby; and any certificate signed by or on
behalf of the Selling Stockholder as such and delivered to the Global
Coordinator, the International Managers or to counsel for the International
Managers pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Selling Stockholder as to the matters covered
thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) INTERNATIONAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Stockholder agrees to sell to each International
Manager and each International Manager, severally and not jointly, agrees to
purchase from the Selling Stockholder, at the price per share set forth in
Schedule B, the number of International Securities set forth in Schedule A,
plus any additional number of International Securities which such
International Manager may become obligated to purchase pursuant to the
provisions of Section 10 hereof, subject, in each case, to such adjustments
among such International Managers as they in their sole discretion shall make
to eliminate any sales or purchases of fractional securities.
(b) PAYMENT. The closing of the purchase and sale of the Initial
Securities, including acknowledgment of the payment of the purchase price
therefor and delivery of certificates therefor, shall be made at the offices
of Xxxxxx & Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX
00000, or at such other place as shall be agreed upon by the U.S.
Representatives and the Company and the Selling Stockholder, at 7:00 A.M.
(California time) on the third business day (or the fourth business day, if
the pricing occurs after 4:30 P.M. (Eastern time) on any given business day)
after the date hereof (unless postponed in accordance with the provisions of
Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the U.S. Representatives and the Selling
Stockholder (such time and date of payment and delivery being herein called
"Closing Time"). Delivery of certificates for the Initial Securities shall
be made at the Closing Time at the office of Xxxxxx Xxxxxxx & Co.
Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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Payment shall be made to the Selling Stockholder by wire transfer
of immediately available funds to a bank account designated by the Selling
Stockholder not later than two business days preceding the Closing Time
against delivery to the International Managers for their respective accounts
of certificates for the Securities to be purchased by them. Xxxxxx Xxxxxxx,
individually and not as representative of the International Managers, may
(but shall not be obligated to) make payment of the purchase price for the
International Securities to be purchased by any International Manager whose
funds have not been received by the Closing Time but such payment shall not
relieve such International Manager from its obligations hereunder.
(c) DENOMINATIONS; REGISTRATION. Certificates for the International
Securities, shall be in such denominations and registered in such names as
the International Managers may request in writing at least one full business
day before the Closing Time. The certificates for the International
Securities, will be made available for examination and packaging by the
International Managers in The City of New York not later than 10:00 A.M.
(Eastern time) on the business day prior to the Closing Time.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
International Manager as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUEST. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the U.S. Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectuses or any amended Prospectuses shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectuses or for additional
information, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of any prospectus transmitted for filing
under Rule 424(b) was received for filing by the Commission and, in the event
that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Company will give the International
Managers notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectuses
included in the Registration Statement at the time it became effective or to
the Prospectuses, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the International Managers with copies of any such
documents a reasonable amount of time prior to
14
such proposed filing or use, as the case may be, and will not file or use any
such document to which the International Managers or counsel for the
International Managers shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the International Managers and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
International Managers, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the International Managers. The copies of the
Registration Statement and each amendment thereto furnished to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act. The Company will furnish to each International Manager,
without charge, during the period when the International Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the International Prospectus (as amended or supplemented) as such
International Manager may reasonably request. The International Prospectus
and any amendments or supplements thereto furnished to the International
Managers will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted
by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement, the U.S. Underwriting Agreement
and the Prospectuses. If at any time when a prospectus is required by the
1933 Act to be delivered in connection with sales of the Securities, any
event shall occur or condition shall exist as a result of which it is
necessary, in the reasonable opinion of counsel for the International
Managers or for the Company, to amend the Registration Statement or amend or
supplement the Prospectuses in order that the Prospectuses will not include
any untrue statements of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light
of the circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the reasonable opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectuses in order to comply with the requirements of the 1933 Act or the
1933 Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b) of the 1933 Act, such amendment or
supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the Underwriters such number of
copies of such amendment or supplement as the Underwriters may reasonably
request.
15
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the International Managers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the U.S. Representatives may
designate and to maintain such qualifications in effect for a period of not
less than one year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement; provided, however, that
the Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. In each jurisdiction in which the Securities have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect for a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of the Global Coordinator, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap
or transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold under
this Agreement and the International Underwriting Agreement, (B) any shares
of Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectuses, (C) any shares of Common Stock issued or
options to purchase Common Stock granted pursuant to the Company's 1994 Stock
Option/Award Plan, Employee Stock Option Plan, Employee Stock Purchase Plan
or any other existing employee benefit plans of the Company referred to in
the Prospectuses (as well as the filing of any registration statement on Form
S-8 (or similar form) for the purpose of registering under the 1933 Act
shares of Common Stock issued in connection with any such plan), (D) any
shares of Common Stock issued pursuant to any dividend reinvestment plan, (E)
the issuance by the Company of up to 50,000 shares of Common Stock pursuant
to a restricted stock plan for agents and brokers which market the products
of the Company or any of its Subsidiaries (as well as the filing of any
registration statement on Form S-3 (or similar form) for the purpose of
registering under the 1933 Act shares of Common Stock issued in connection
with any such plan) and cash-settled stock
16
appreciation rights that the Company may issue to agents or brokers, (F)
the issuance of Securities in connection with the acquisition of a business
or (G) the purchase of Securities from the Selling Stockholder.
(i) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay or cause to be paid all expenses
incident to the performance of its or the Selling Stockholder's obligations
under this Agreement, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation,
printing and delivery to the Underwriters of this Agreement, the U.S.
Underwriting Agreement, any Agreement among Underwriters, the Intersyndicate
Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to
the Underwriters, including any stock or other transfer taxes and any stamp
or other duties payable upon the sale or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the qualification of
the Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Preliminary Blue Sky Survey, the Final
Blue Sky Survey and any supplements thereto, (vi) the printing and delivery
to the Underwriters of copies of each preliminary prospectus, any Term Sheets
and of the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of the
Preliminary Blue Sky Survey, the Final Blue Sky Survey and any supplements
thereto, (viii) the fees and expenses of any transfer agent or registrar for
the Securities, (ix) the filing fees incident to the review by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale
of the Securities and (x) the fees and expenses incurred in connection with
the listing of the Securities on the New York Stock Exchange. The Selling
Stockholder will pay or cause to be paid the fees and expenses of its
counsel, agents and advisors for which it is responsible under the terms of
the Registration Rights Agreement between the Selling Stockholder and the
Company.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
International Managers in accordance with the provisions of Section 5 or
Section 9(a)(i) hereof, the Company shall reimburse the International
Managers for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the International Managers. If this
Agreement is terminated by the International Managers in accordance with the
provisions of Section 11 hereof, the Selling Stockholder shall reimburse the
International Managers for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers.
17
(c) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and the Selling Stockholder may make for
the sharing of such costs and expenses.
SECTION 5. CONDITIONS OF INTERNATIONAL MANAGERS' OBLIGATIONS. The
obligations of the several International Managers hereunder are subject to
the accuracy of the representations and warranties of the Company and the
Selling Stockholder contained in Section 1 hereof or in certificates of any
officer of the Company or any subsidiary of the Company or on behalf of the
Selling Stockholder delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder,
and to the following further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
International Managers. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b) (or
a post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A) or,
if the Company has elected to rely upon Rule 434, a Term Sheet shall have
been filed with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the International
Managers shall have received the favorable opinion, dated as of Closing Time,
of Xxxxxx, Xxxx & Xxxxxxxx, LLP counsel for the Company, in form and
substance satisfactory to counsel for the International Managers, together
with signed or reproduced copies of such letter for each of the other
International Managers to the effect set forth in Exhibit A hereto and to
such further effect as counsel to the International Managers may reasonably
request.
(c) OPINION OF GENERAL COUNSEL FOR THE COMPANY. At Closing Time, the
International Managers shall have received the favorable opinion, dated as of
Closing Time, of Xxxxxx X. Xxxxxx, Esq., general counsel for the Company, in
form and substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the
other International Managers to the effect set forth in Exhibit B hereto and
to such further effect as counsel to the International Managers may
reasonably request.
(d) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDER. At Closing Time,
the International Managers shall have received the favorable opinion, dated
as of Closing Time, of Xxxxxx, Xxxxxx & Xxxxx LLP, counsel for the Selling
Stockholder, in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced copies of such
letter for each of the other International Managers to the effect set forth
in Exhibit C hereto and to such further effect as counsel to the
International Managers may reasonably request.
18
(e) OPINION OF COUNSEL FOR INTERNATIONAL MANAGERS. At Closing Time,
the International Managers shall have received the favorable opinion, dated
as of Closing Time, of Xxxxxx & Xxxxxxx, counsel for the International
Managers, together with signed or reproduced copies of such letter for each
of the other International Managers with respect to the matters set forth in
clauses (i) (solely with respect to the Company), (ii) (solely with respect
to the Company), (v) through (vii), inclusive, (ix) (solely as to the
information in the Prospectus under "Description of Capital Stock--Common
Stock") and the penultimate paragraph of Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the laws of the States of New York and California
and the federal securities laws of the United States, upon the opinions of
counsel satisfactory to the International Managers. Such counsel may also
state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.
(f) OFFICERS' CERTIFICATE. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information
is given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the
International Managers shall have received a certificate of the President or
a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of Closing
Time, (iii) the Company has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or, to such
person's knowledge, are contemplated by the Commission.
(g) CERTIFICATE OF SELLING STOCKHOLDER. At Closing Time, the
International Managers shall have received a certificate of an officer of the
Selling Stockholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of the Selling Stockholder contained in
Section 1(b) hereof are true and correct in all respects with the same force
and effect as though expressly made at and as of Closing Time and (ii) the
Selling Stockholder has complied in all material respects with all agreements
and all conditions on its part to be performed under this Agreement at or
prior to Closing Time.
(h) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the International Managers shall have received from Coopers &
Xxxxxxx L.L.P. a letter dated such date, in form and substance satisfactory
to the International Managers, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectuses.
19
(i) BRING-DOWN COMFORT LETTER. At Closing Time, the International
Managers shall have received from Coopers & Xxxxxxx L.L.P. a letter, dated as
of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (h) of this Section, except that the
specified date referred to shall be a date not more than three business days
prior to Closing Time.
(j) LOCK-UP AGREEMENTS. At the date of this Agreement, the
International Managers shall have received an agreement substantially in the
form of Exhibit D hereto signed by each of the persons listed on Schedule D
hereto.
(k) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of Delivery
counsel for the International Managers shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Stockholder in connection with the sale of the Securities as herein
contemplated shall be satisfactory in form and substance to the International
Managers and counsel for the International Managers.
(l) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the International Managers by notice to
the Company at any time at or prior to Closing Time and such termination
shall be without liability of any party to any other party except as provided
in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company and the Selling
Stockholder, jointly and severally, agree to indemnify and hold harmless each
International Manager and each person, if any, who controls any International
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
20
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company and the Selling Stockholder; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxx
Xxxxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission to the extent that any such
expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any International Manager through Xxxxxx Xxxxxxx expressly for use
in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto) and (B) the foregoing indemnity agreement with respect to any untrue
statement contained in or omission from a preliminary prospectus shall not
inure to the benefit of the International Manager from whom the person
asserting any such losses, liabilities, claims, damages or expenses purchased
International Securities, or any person controlling such International
Manager, if (i) the Company and the Selling Stockholder shall sustain the
burden of proving that a copy of the International Prospectus (as then
amended or supplemented, if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of the
International Managers to such person at or prior to the written confirmation
of the sale of such International Securities to such person, (ii) the Company
shall have delivered the International Prospectus (as then supplemented or
amended) to the International Managers on a timely basis and in the requisite
quantity to permit the International Managers to send or deliver such
International Prospectus to such person at or prior to such written
confirmation of the sale of such International Securities and (iii) the
untrue statement contained in or omission from such preliminary prospectus
was corrected in the International Prospectus (or the International
Prospectus as amended or supplemented).
In making a claim for indemnification under this Section 6 or for
contribution under Section 7 hereof by the Company or the Selling
Stockholder, and subject to the further provisions of this paragraph, the
indemnified parties may proceed against either (i) both the Company and the
Selling Stockholder jointly or (ii) the Company only, but may not proceed
solely against the Selling Stockholder. In the event that the indemnified
parties are entitled to seek indemnity or contribution hereunder against any
loss, liability, claim, damage and expense incurred as contemplated by
21
clauses (a)(i), (a)(ii) or (a)(iii) of this Section 6, including, without
limitation, a final judgment from a trial court then, as a precondition to
any indemnified party obtaining indemnification or contribution from the
Selling Stockholder, the indemnified parties shall first obtain a final
judgment from a trial court that such indemnified parties are entitled to
indemnity or contribution under this Agreement with respect to such loss,
liability, claim, damage or expense (the "Final Judgment") from the Company
and the Selling Stockholder and shall seek to satisfy such Final Judgment in
full from the Company by making a written demand upon the Company for such
satisfaction. Only in the event such Final Judgment shall remain unsatisfied
in whole or in part 30 days following the date of receipt by the Company of
such demand shall any party entitled to indemnification hereunder have the
right to take action to satisfy such Final Judgment by making demand directly
on the Selling Stockholder (but only if and to the extent the Company has not
already satisfied such Final Judgment, whether by settlement, release or
otherwise). The indemnified parties shall, however, be relieved of their
obligation to first obtain a Final Judgment, to seek to obtain payment from
the Company with respect to such Final Judgment or, having sought such
payment, to wait such 30 days after failure by the Company to immediately
satisfy any such Final Judgment if (i) the Company files a petition for
relief under the United States Bankruptcy Code (the "Bankruptcy Code") and
such order remains unstayed and in effect for 60 days, (ii) an order for
relief is entered against the Company in an involuntary case under the
Bankruptcy Code and such order remains unstayed and in effect for 60 days,
(iii) the Company makes an assignment for the benefit of its creditors, or
(iv) any court orders or approves the appointment of a receiver or custodian
for the Company or a substantial portion of its assets and such order remains
unstayed and in effect for 60 days.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
STOCKHOLDER. Each International Manager severally agrees to indemnify and
hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, and the Selling Stockholder and each person, if any, who controls the
Selling Stockholder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information relating
to such International Underwriters furnished to the Company by such
International Manager through Xxxxxx Xxxxxxx expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it
is not materially prejudiced as a result thereof and in any event shall not
relieve it from any liability which
22
it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim, (ii) is accompanied or preceded by
reimbursement of expenses of each such indemnified party pursuant to clause
(a)(iii) of this Section 6 and (iii) 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.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall have received notice of the terms of such settlement at least 30 days
prior to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. The provisions
of this Section shall not affect any agreement among the Company and the
Selling Stockholder with respect to indemnification.
SECTION 7. CONTRIBUTION. Subject to the last paragraph of Section 6(a)
hereof, if the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party
in respect of any losses, liabilities, claims, damages or expenses referred
to therein, then each indemnifying party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Stockholder on the one hand and the International Managers on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
and the Selling Stockholder on the one hand and of the International Managers
on the other hand in connection
23
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the International Managers on the other hand
in connection with the offering of the Securities pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Securities pursuant to this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholder and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet bear to the aggregate public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholder on
the one hand and the International Managers on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company or
the Selling Stockholder or by the International Managers and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
The Company, the Selling Stockholder and the International Managers
agree that it would not be just and equitable if contribution pursuant to
this Section 7 were determined by pro rata allocation (even if the
International Managers 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 above in this Section 7. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 7 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by
it and distributed to the public were offered to the public exceeds the
amount of any damages which such International Manager has otherwise been
required to pay by reason of any 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 0000 Xxx) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
24
For purposes of this Section 7, each person, if any, who controls
an International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company or the Selling Stockholder within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights
to contribution as the Company or the Selling Stockholder, as the case may
be. The International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of
International Securities set forth opposite their respective names in
Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among
the Company and the Selling Stockholder with respect to contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Stockholder submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company or the Selling
Stockholder, and shall survive delivery of the International Securities to
the International Managers.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The International Managers may terminate
this Agreement, by notice to the Company and the Selling Stockholder, at any
time at or prior to Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial
markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the International
Managers, impracticable to market the International Securities or to enforce
contracts for the sale of the International Securities, or (iii) if trading
in any securities of the Company has been suspended or materially limited by
the Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq
National Market has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal or New York authorities.
25
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL MANAGERS. If
one or more of the International Managers fail at Closing Time to purchase
the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the International Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if,
however, the International Managers shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of the
non-defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement shall
terminate without liability on the part of any non-defaulting International
Manager.
No action taken pursuant to this Section shall relieve any
defaulting International Managers from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement either (i) the International Managers or (ii)
the Company and the Selling Stockholder shall have the right to postpone
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectuses or in any
other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for an International Manager under
this Section 10.
SECTION 11. DEFAULT BY THE SELLING STOCKHOLDER. If the Selling
Stockholder shall fail at Closing Time to sell and deliver the number of
International Securities which the Selling Stockholder is obligated to sell
hereunder, then the International Managers may, at their option, by notice
from the International Managers to the Company and the Selling Stockholder
terminate this Agreement without any liability on the fault of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8
shall remain in full force and effect. No action taken pursuant to this
Section 11 shall relieve the Selling Stockholder so defaulting from
liability, if any, in respect of such default.
26
In the event of a default by the Selling Stockholder as referred to
in this Section 11, each of the International Managers and the Company shall
have the right to postpone Closing Time for a period not exceeding seven days
in order to effect any required change in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the International Managers, c/o
the Global Coordinator at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention
of Syndicate Operations (with a copy, which shall not constitute notice, to
Xxxxxx & Xxxxxxx, 000 X. Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000-0000, attention of Xxxx Xxxxx, Esq.); notices to the Company shall be
directed to it at 00000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
attention of Xxxxxx X. Xxxxxx, Esq., General Counsel (with a copy, which
shall not constitute notice, to Xxxxxx, Xxxx & Xxxxxxxx LLP, Xxx Xxxxxxxxxx
Xxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, attention of Xxxxxxx
X. Xxxxxx, Esq.); and notices to the Selling Stockholder shall be directed to
California HealthCare Foundation, c/o Munger, Xxxxxx & Xxxxx, 000 X. Xxxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, attention of Xxxx X.
Xxxxxx, Esq.
SECTION 13. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the International Managers, the Company and the Selling
Stockholder and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm
or corporation, other than the International Managers, the Company and the
Selling Stockholder and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the International
Managers, the Company and the Selling Stockholder and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Securities from any International Manager
shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME EXCEPT AS EXPRESSLY NOTED
OTHERWISE.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and to the Selling
Stockholder a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the International
Managers, the Company and the Selling Stockholder in accordance with its
terms.
Very truly yours,
WELLPOINT HEALTH NETWORKS INC.
By
-------------------------------------
Name:
Title:
CALIFORNIA HEALTHCARE FOUNDATION
By
-------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXX XXXXXX INC.
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
By: XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
By
-------------------------------------------
Name:
Title:
28
SCHEDULE A
NUMBER OF
INTERNATIONAL
NAME OF INTERNATIONAL MANAGER SECURITIES
----------------------------- -------------
Xxxxxx Xxxxxxx & Co. Incorporated. . . . . . . . . . . . . .
Xxxxx Xxxxxx Inc.. . . . . . . . . . . . . . . . . . . . . .
Bear, Xxxxxxx & Co. Inc. . . . . . . . . . . . . . . . . . .
Xxxxxxxxx, Lufkin & Xxxxxxxx.Securities Corporation. . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400,000
-------------
-------------
SCH A-1
SCHEDULE B
WELLPOINT HEALTH NETWORKS INC.
1,400,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The public offering price per share for the International
Securities, determined as provided in said Section 2, shall be $_______.
2. The purchase price per share for the International Securities
to be paid by the several International Managers shall be $______, being an
amount equal to the public offering price set forth above less $.____ per
share.
SCH B-1
SCHEDULE C
List of subsidiaries
1. Blue Cross of California
2. BC Life & Health Insurance Company
3. UNICARE Insurance Company
4. UNICARE Life & Health Insurance Company
5. UNICARE of Texas Health Plans, Inc.
SCH C-1
SCHEDULE D
List of persons and entities subject to lock-up
Xxxxxxx X. Xxxxxxxxx
D. Xxxx Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxx, Esq.
S. Xxxxxx XxXxxxx
SCH D-1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company and each of its Subsidiaries (a) has been duly
organized and (b) is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation.
(ii) The Company and each of its Subsidiaries has corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement.
(iii) The Company and each of its Subsidiaries, other than
UNICARE Insurance Company ("UIC") and UNICARE Life & Health Insurance Company
("UL&H"), is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify would not have a Material
Adverse Effect (such jurisdictions to be listed opposite the name of each of
the Company and the Subsidiaries other than UIC and UL&H on Exhibit 1
hereto). Each of UIC and UL&H is duly qualified as a foreign corporation to
transact business and is in good standing in such jurisdictions as are listed
opposite its name on Exhibit 1 hereto.
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectuses under the caption
"Description of Capital Stock" (except for subsequent issuances, if any,
under the Company's 1994 Stock Option/Award Plan, Employee Stock Option Plan
or Employee Stock Purchase Plan); all of the shares of issued and outstanding
capital stock of the Company, including the Securities to be purchased by the
Underwriters from the Selling Stockholder, have been duly authorized and
validly issued and are fully paid and nonassessable and the shares of issued
and outstanding capital stock of each Subsidiary of the Company are owned,
directly or through subsidiaries, by the Company and have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(v) The U.S. Underwriting Agreement and the International
Underwriting Agreement have been duly authorized, executed and delivered by
the Company.
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectuses pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the
A-1
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or threatened by the Commission.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectuses, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectuses, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which such counsel need express no opinion) complied
as to form in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations.
(viii) The documents incorporated by reference in the
Prospectuses (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no
opinion), when they were filed with the Commission, complied as to form in
all material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder.
(ix) The capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectuses under the
caption "Description of Capital Stock," and the form of certificate used to
evidence the Common Stock is in due and proper form and complies in all
material respects with all applicable statutory requirements and the
requirements of the New York Stock Exchange.
(x) There are no legal or governmental proceedings pending or,
to the knowledge of such counsel, threatened to which the Company or any of
its Subsidiaries is or may become a party or to which any of the properties
of the Company or any of its Subsidiaries is or may become subject that are
required to be described in the Registration Statement or the Prospectuses
and are not so disclosed therein and described as required, or any statute or
regulation that is required to be described in the Registration Statement or
the Prospectuses and is not so disclosed therein and described as required;
all pending legal or governmental proceedings to which the Company or any of
its Subsidiaries is a party or to which any of their property is subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the businesses, are, considered in the
aggregate, not material.
(xi) To the knowledge of such counsel, there are no contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be filed as exhibits to the Registration Statement which have not
been so filed.
(xii) The information in the Prospectuses under the captions
"May 1996 Recapitalization," "August 1997 Reincorporation," "Selling
Stockholder" and "Certain United States Tax Consequences to Non-United States
Holders" and the information under the caption "May 1996 Recapitalization and
August 1997 Reincorporation" in the Company's Form 10-K which is incorporated
by reference into the
A-2
Prospectuses to the extent that it constitutes matters of law, summaries of
legal matters, documents or proceedings or legal conclusions, has been
reviewed by such counsel and is correct in all material respects.
(xiii) No authorization, approval, consent or order of any court
or governmental authority or agency is required in connection with the sale
to the Underwriters of the Securities, except such as may be required under
the 1933 Act, the 1934 Act or the respective rules and regulations of the
Commission thereunder or state or foreign securities laws (on which such
counsel expresses no opinion) and the filing of an amendment to the Company's
Health Care Services Plan application with the California Department of
Corporations (which filing has been made); and the execution, delivery and
performance of the U.S. Underwriting Agreement and the International
Underwriting Agreement, and the consummation of the transactions contemplated
thereby by the Company, will not conflict with or constitute a material
breach of or material default, or cause an acceleration of any obligation
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
Subsidiaries pursuant to, any instrument included as an exhibit to the
Registration Statement to which the Company or any of its Subsidiaries is a
party or by which any of them may be bound, or to which any of the property
or assets of the Company or any of its Subsidiaries is subject, nor will such
action result in any violation of the provisions of the charter or bylaws of
the Company or any of its Subsidiaries, or any applicable law, administrative
regulation or administrative or court decree.
(xiv) Neither the Company nor any of its Subsidiaries is (a) in
violation of its articles or certificate of incorporation or bylaws; or (b)
to the knowledge of such counsel, in violation of or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any instrument included as an exhibit to the Registration
Statement to which the Company or any of its Subsidiaries is a party or by
which any of them may be bound, or to which any of the property or assets of
the Company or any of its Subsidiaries is subject, or any applicable law,
administrative regulation or administrative or court order or decree, which
violation or default would have a Material Adverse Effect on the Company and
its subsidiaries considered as one enterprise, as the case may be. The
applicable law, administrative regulations and administrative and court
orders and decrees referred to in clause (b) above are those that a lawyer
exercising customary professional diligence would reasonably recognize as
being directly applicable to the Company, the Subsidiaries or the transaction
contemplated by the U.S. Underwriting Agreement and the International
Underwriting Agreement.
(xv) To the knowledge of such counsel, the Company and its
Subsidiaries possess such certificates necessary to conduct the business now
operated by them. The opinion of such counsel for purposes of this paragraph
is limited to certificates the failure of which to possess would have a
Material Adverse Effect on the Company and its Subsidiaries considered as one
enterprise.
(xvi) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
A-3
Nothing has come to the attention of such counsel that would lead
such counsel to believe that the Registration Statement or any amendment
thereto, including the Rule 430A Information and Rule 434 Information (if
applicable), (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need make no statement), at the time such
Registration Statement or any such amendment became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectuses or any amendment or supplement thereto
(except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to
which such counsel need make no statement), at the time the Prospectuses were
issued, at the time any such amended or supplemented prospectuses were issued
or at the Closing Time, included or include an untrue statement of a material
fact or omitted or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely, as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. Such opinion
shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating
to legal opinions, including, without limitation, the Legal Opinion Accord of
the ABA Section of Business Law (1991).
X-0
XXXXXXX 0
XXXXX XX XXXXXXX
NAME OF ENTITY INCORPORATION QUALIFICATIONS
-------------- ------------- -------------------
WellPoint Health Networks Inc. Delaware California
SUBSIDIARIES
Blue Cross of California California None
UNICARE Insurance Company California Texas, Utah
UNICARE Life & Health Insurance Delaware California, Florida,
Company Georgia, Illinois,
Massachusetts,
New Jersey,
New York, Ohio,
Texas and Virginia
UNICARE of Texas Health Plans, Inc. Texas None
A-1
Exhibit B
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY TO BE
DELIVERED PURSUANT TO SECTION 5(c)
(i) The statements under the captions "Item 1. Business--
Government Regulation" and "Item 3. Legal Proceedings" of the Company's
Annual Report on Form 10-K, which is incorporated by reference into the
Prospectus, insofar as such statements constitute summaries of the legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents and
proceedings and fairly summarize, in all material respects, the matters
referred to therein.
(ii) Each of the Company, Blue Cross of California, WellPoint
Dental Plan and WellPoint Pharmacy Plan has been duly qualified and licensed
in the State of California as a health care service plan under the Xxxx-Xxxxx
Act, and none of the Company's other subsidiaries are required to be licensed
under the Xxxx-Xxxxx Act.
(iii) The Company is in full compliance with the requirements of
the Blue Cross License Agreement, dated as of August 4, 1997, between the
Company and the Blue Cross and Blue Shield Association (the "BCBSA") and the
California Blue Cross License Addendum, dated as of December 30, 1997,
between the Company and the BCBSA, except in each case where such
noncompliance would not have a Material Adverse Effect. Each of the
Company's subsidiaries that is required by the BCBSA as of the date of such
opinion to be a party to a Blue Cross Affiliate License Agreement is in full
compliance with the requirements of such agreement, except in each case where
such noncompliance would not have a Material Adverse Effect.
(iv) To such counsel's knowledge, none of the Company and its
subsidiaries have received any notice or correspondence (i) relating to the
loss or threatened loss by the Company or any of its subsidiaries of any
material permit, license, franchise or authorization by any applicable
managed health care or insurance regulatory agency or body or (ii) asserting
that the Company or any of its subsidiaries is not in substantial compliance
with any applicable regulation relating to the operation or conduct of
managed health care or insurance businesses (the "HMO Regulations") or
threatening the taking of any action against the Company or any of its
subsidiaries under any HMO Regulation, except where such noncompliance or the
taking of such action, if adversely determined, would not have a material
adverse effect on the business, operations or financial condition of the
Company and its subsidiaries, taken as a whole.
B-1
Exhibit C
FORM OF OPINION OF COUNSEL FOR THE SELLING STOCKHOLDER
TO BE DELIVERED PURSUANT TO SECTION 5(d)
(i) No filing with, or consent, approval, authorization,
license, order, registration, qualification or decree of, any court or
governmental authority or agency (other than the issuance of the order of the
Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state
securities laws, as to which we need express no opinion), is necessary or
required to be obtained by the Selling Stockholder for the performance by the
Selling Stockholder of its obligations under the U.S. Underwriting Agreement,
the International Underwriting Agreement or in connection with the offer,
sale or delivery of the Securities.
(ii) The U.S. Underwriting Agreement and the International
Underwriting Agreement have been duly authorized, executed and delivered by
or on behalf of the Selling Stockholder.
(iii) The execution, delivery and performance of the U.S. Underwriting
Agreement, the International Underwriting Agreement and the sale and delivery
of the Securities and the consummation of the transactions contemplated in
the U.S. Underwriting Agreement and the International Underwriting Agreement
and compliance by the Selling Stockholder with its obligations under the U.S.
Underwriting Agreement and the International Underwriting Agreement have been
duly authorized by all necessary action on the part of the Selling
Stockholder and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with, constitute a breach of, or
default under or result in the creation or imposition of any tax, lien,
charge or encumbrance upon the Securities pursuant to, the terms of any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
license, lease or other instrument or agreement known to such counsel and to
which the Selling Stockholder is a party or by which it may be bound, or to
which any of the property or assets of the Selling Stockholder may be subject
nor will such action result in any violation of the provisions of the charter
or by-laws of the Selling Stockholder, if applicable, or any law,
administrative regulation, judgment, order or decree known to us to be
applicable to the Selling Stockholder of any court, regulatory body,
administrative agency or governmental body or arbitrator having jurisdiction
over the Selling Stockholder or any of its properties.
(iv) To the best of such counsel's knowledge, the Selling Stockholder has
valid and marketable title to the Securities to be sold by the Selling
Stockholder pursuant to the U.S. Underwriting Agreement and the International
Underwriting Agreement, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind, other than as
disclosed in the Registration Statement, and has full right, power and
authority to sell, transfer and deliver such Securities pursuant to the U.S.
Underwriting Agreement and the International Underwriting Agreement. By
delivery of a certificate or certificates therefor the Selling Stockholder
will transfer to the Underwriters who have purchased such Securities pursuant
to the U.S. Underwriting Agreement and the International Underwriting
Agreement (without notice of any defect in the title
D-1
of the Selling Stockholder and who are otherwise bona fide purchasers for
purposes of the Uniform Commercial Code) valid and marketable title to such
Securities, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind.
D-2
[FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(l)]
Exhibit D
April __, 1998
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXX XXXXXX INC.
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
c/o MORGAN XXXXXXX & CO., INTERNATIONAL LIMITED
[address to come]
Re: PROPOSED PUBLIC OFFERING BY WELLPOINT HEALTH NETWORKS INC.
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of
WellPoint Health Networks Inc., a California corporation (the "Company"),
understands that Xxxxxx Xxxxxxx & Co. International Limited ("Xxxxxx
Xxxxxxx"), Xxxxx Xxxxxx Inc., Bear, Xxxxxxx International Limited and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International propose(s) to enter into an
International Underwriting Agreement (the "International Underwriting
Agreement") with the Company and the Selling Stockholder providing for the
public offering of shares (the "Securities") of the Company's common stock,
par value $.01 per share (the "Common Stock"). In recognition of the benefit
that such an offering will confer upon the undersigned as a stockholder and
an officer and/or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the undersigned agrees with each underwriter to be named in the International
Underwriting Agreement that, during a period of 90 days from the date of the
Underwriting Agreement provided that such person continues to be an officer
of the Company during such period, the undersigned will not, without the
prior written consent of Xxxxxx Xxxxxxx, as global coordinator for the
offering and on behalf of the International Managers, directly or indirectly,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any shares of
the Company's Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock, whether now owned or hereafter acquired by
the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file any registration statement under
the Securities Act of 1933, as amended, with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities,
in cash or otherwise.
D-1
Notwithstanding the provisions of the preceding sentence, the
undersigned shall be permitted to sell, transfer or otherwise dispose of
shares of Common Stock to: (1) the undersigned's spouse, children, spouses of
children, siblings and spouses of siblings, provided that any such transferee
shall have agreed in writing to be subject to the terms of this letter; and
(2) any trust or charitable foundation established by the undersigned and/or
one or more of the persons listed in the foregoing clause (1), provided that
any such trust or charitable foundation and their respective beneficiaries
shall have agreed in writing to be subject to the terms of this letter.
Very truly yours,
Signature:
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Print Name:
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D-2
