COVENTRY HEALTH CARE, INC. Underwriting Agreement
Exhibit 1.1
EXECUTION
COPY
COVENTRY HEALTH CARE, INC.
5.450% Senior Notes Due 2021
June 2, 2011
Citigroup Global Markets Inc.
X.X. Xxxxxx Securities LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
As Representatives of the several
Underwriters named in Schedule I hereto
X.X. Xxxxxx Securities LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
As Representatives of the several
Underwriters named in Schedule I hereto
c/o X.X. Xxxxxx Securities LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Ladies and Gentlemen:
Coventry Health Care, Inc., a corporation organized under the laws of Delaware (the
“Company”), proposes to sell to the several underwriters named in Schedule I hereto (the
“Underwriters”), for whom you (the “Representatives”) are acting as representatives, the principal
amount of its securities identified in Schedule II hereto (the “Securities”), to be issued under an
Indenture dated as of March 20, 2007 (as supplemented, the “Indenture”) between the Company and The
Bank of New York Mellon Trust Company, N.A. (successor to The Bank of New York, N.A.), as
supplemented by the First Supplemental Indenture, dated as of August 27, 2007, between the Company
and Union Bank, National Association (as successor to Union Bank of California, N.A.), as trustee
(the “Trustee”), and as further supplemented by the Second Supplemental Indenture to be dated as of
June 7, 2011, between the Company and the Trustee. Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Exchange Act on or before the Effective Date of the Registration Statement or the
issue date of any Preliminary Prospectus or the Final Prospectus, as the case may be; and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of any Preliminary Prospectus or the Final Prospectus, as
the case may be, deemed to be incorporated therein by reference. Certain terms used herein are
defined in Section 20 hereof.
1. Representations and Warranties. The Company represents and warrants to, and agrees
with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under the Act and has
prepared and filed with the Commission an automatic shelf registration statement, as defined
in Rule 405, (the file number of which is set forth in Schedule II hereto) on Form S-3,
including a form of prospectus, for registration under the Act of the offering and sale of
the Securities. Such Registration Statement, including any amendments thereto filed prior
to the Execution Time, became effective upon filing. The Company may have filed with the
Commission, as part of an amendment to the Registration Statement or pursuant to Rule
424(b), one or more preliminary prospectuses relating to the Securities, each of which has
previously been furnished to you. The Company will file with the Commission a final
prospectus relating to the Securities in accordance with Rule 424(b). As filed, such final
prospectus shall contain all information required by the Act and the rules thereunder, and,
except to the extent the Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to the Execution Time or, to
the extent not completed at the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in any Preliminary Prospectus) as the
Company has advised you, prior to the Execution Time, will be included or made therein. The
Registration Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
(b) On each Effective Date, the Registration Statement did, and when the Final
Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined
herein), the Final Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; on each Effective Date and at the
Execution Time, the Registration Statement did not and will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; on the Effective Date and
on the Closing Date the Indenture did or will comply in all material respects with the
applicable requirements of the Trust Indenture Act and the rules thereunder; and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to (i) that part
of the Registration Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee or (ii) the
information contained in or omitted from the Registration Statement or the Final Prospectus
(or any supplement thereto) in reliance upon and in conformity with information furnished in
writing to the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Final Prospectus (or any
supplement thereto), it being understood and agreed that the
only such information furnished by or on behalf of any Underwriter consists of the
information described as such in Section 8 hereof.
(c) (i) The Disclosure Package, as of the Execution Time, and (ii) any electronic road
show, when taken together as a whole with the Disclosure Package, does
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not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to statements in or omissions from
the Disclosure Package based upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives specifically for use therein, it
being understood and agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 8 hereof.
(d) The documents incorporated by reference in the Disclosure Package or the Final
Prospectus, when they became effective or were filed with the Commission, as the case may
be, conformed in all material respects, to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission, and any further documents so
filed and incorporated by reference in the Final Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the Commission,
as the case may be, will conform, in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission.
(e) The documents incorporated by reference in the Disclosure Package or the Final
Prospectus did not, and any further documents incorporated by reference therein will not,
when filed with the Commission, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(f) (i) At the time of filing the Registration Statement, (ii) at the time of the most
recent amendment thereto (whether such amendment was by post-effective amendment,
incorporated report filed pursuant to Sections 13 or 15(d) of the Exchange Act or form of
prospectus), (iii) at the time the Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c)) made any offer relating to the Securities in
reliance on the exemption in Rule 163, and (iv) at the Execution Time (with such date being
used as the determination date for purposes of this clause (iv)), the Company was or is (as
the case may be) a Well-Known Seasoned Issuer. The Company agrees to pay the fees required
by the Commission relating to the Securities within the time required by Rule 456(b)(1)
without regard to the proviso therein and otherwise in accordance with Rules 456(b) and
457(r).
(g) (i) At the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the meaning of Rule
164(h)(2)) of the Securities and (ii) as of the Execution Time (with such date being used as
the determination date for purposes of this clause (ii)), the Company was not and is not an
Ineligible Issuer (as defined in Rule 405), without taking account of any determination by
the Commission pursuant to Rule 405 that it is not necessary that the Company be considered
an Ineligible Issuer.
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(h) Each Issuer Free Writing Prospectus and the final term sheet prepared and filed
pursuant to Section 5(b) hereto does not include any information that conflicts with the
information contained in the Registration Statement, including any document incorporated
therein by reference and any prospectus deemed to be a part thereof that has not been
superseded or modified; and each Issuer Free Writing Prospectus, as supplemented by and
taken together with the Disclosure Package as of the Execution Time, did not include any
untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made,
not misleading. The foregoing sentence does not apply to statements in or omissions from
any Issuer Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information furnished by or on
behalf of any Underwriter consists of the information described as such in Section 8 hereof.
(i) The Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the Disclosure
Package and the Final Prospectus, will not be an “investment company” as defined in the
Investment Company Act of 1940, as amended.
(j) The Company is subject to, and in compliance in all material respects with, the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(k) The Company has not paid or agreed to pay to any person any compensation for
soliciting another to purchase any securities of the Company (except as contemplated by this
Agreement).
(l) The Company and its subsidiaries have not taken, directly or indirectly, any action
designed to cause or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in the stabilization or manipulation of the
price of any security of the Company, to facilitate the sale or resale of the Securities or
that is otherwise prohibited by Regulation M under the Act.
(m) Each of the Company and its subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own or lease, as the case
may be, and to operate its properties and conduct its business as described in the
Disclosure Package and the Final Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction which
requires such qualification; except where the failure to be so qualified or to be in good
standing would not reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), prospects, results of operations, business or properties of the
Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).
(n) All the outstanding shares of capital stock of the Company and each subsidiary of
the Company have been duly and validly authorized and issued and are fully paid and
nonassessable. Except as otherwise set forth in the Disclosure Package
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and the Final
Prospectus, all outstanding shares of capital stock of the subsidiaries are owned by the
Company either directly or through wholly owned subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens or encumbrances.
(o) The Company’s authorized equity capitalization is as set forth in the Disclosure
Package and the Final Prospectus.
(p) The statements in any Preliminary Prospectus and the Final Prospectus under the
headings “Description of Notes” and “Certain United States Federal Income Tax Consequences”
and the first, second, seventh, eighth, ninth and tenth paragraphs set forth under the
heading “Underwriting” fairly summarize the matters therein described.
(q) This Agreement has been duly authorized, executed and delivered by the Company; the
Indenture has been duly authorized and, assuming due authorization, execution and delivery
thereof by the Trustee, when executed and delivered by the Company, will constitute a legal,
valid and binding instrument enforceable against the Company in accordance with its terms
(subject, as to the enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors’ rights generally from time to time
in effect and to general principles of equity); and the Securities have been duly
authorized, and, when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement, will
have been duly executed and delivered by the Company and will constitute the legal, valid
and binding obligations of the Company entitled to the benefits of the Indenture (subject,
as to the enforcement of remedies, to applicable bankruptcy, insolvency, moratorium or other
laws affecting creditors’ rights generally from time to time in effect and to general
principles of equity).
(r) The Indenture (i) has been duly qualified under the Trust Indenture Act, (ii)
complies as to form with the requirements of the Trust Indenture Act and (iii) conforms to
the description thereof in the Disclosure Package and the Final Prospectus.
(s) The Company has all requisite corporate power and authority, has taken all
requisite corporate action, and has received and is in compliance with all governmental,
judicial and other authorizations, approvals and orders necessary to enter into and perform
its obligations under this Agreement, the Indenture and the Securities. No consent,
approval, authorization, filing with or order of any court or governmental agency or body is
required in connection with the transactions contemplated herein, except such as have been
obtained under the Act and the Trust Indenture Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated herein and in the Disclosure
Package and the Final Prospectus.
(t) Neither the execution and delivery of this Agreement nor the Indenture, the issue
and sale of the Securities, nor the consummation of any other of the transactions herein
contemplated, nor the fulfillment of the terms hereof or thereof will conflict with, result
in a breach or violation or imposition of any lien, charge or encumbrance upon any
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property
or asset of the Company or any of its subsidiaries pursuant to, (i) the certificate of
incorporation or by-laws (or the applicable organizational or governing documents, as the
case may be) of the Company or any of its subsidiaries; (ii) the terms of any indenture,
contract (including Governmental Licenses, as such term is defined below), lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which the Company or any of its subsidiaries is a party or bound
or to which its or their property is subject; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any of its or their
properties, except in the case of clauses (ii) and (iii) for such breaches, violations,
liens, charges or encumbrances that would not reasonably be expected to have a Material
Adverse Effect.
(u) Other than as disclosed in the Registration Statement, the Disclosure Package and
the Final Prospectus, there are no contracts, agreements or understandings between the
Company, on the one hand, and any person, on the other hand, granting such person the right
to require the Company to file a registration statement under the Act with respect to any
securities of the Company owned or to be owned by such person or to require the Company to
include such securities in any securities being registered pursuant to any other
registration statement filed by the Company under the Act.
(v) The consolidated historical financial statements, including the notes thereto, and
schedules of the Company and its consolidated subsidiaries included or incorporated by
reference in any Preliminary Prospectus, the Final Prospectus and the Registration Statement
present fairly in all material respects the financial condition, results of operations and
cash flows of the Company as of the dates and for the periods indicated, comply as to form
in all material respects with the applicable accounting requirements of the Act and have
been prepared in conformity with generally accepted accounting principles in the United
States applied on a consistent basis throughout the periods involved (except as otherwise
noted therein). The other financial data set forth in any Preliminary Prospectus, the Final
Prospectus and the Registration Statement fairly present, on the basis stated in any
Preliminary Prospectus, the Final Prospectus and the Registration Statement, the information
included therein.
(w) Since the date as of which information is given in any Preliminary Prospectus
through the date hereof, and except as may otherwise be disclosed in the Disclosure Package
and the Final Prospectus, neither the Company nor any of its subsidiaries has (i) issued or
granted any securities, (ii) incurred any liability or obligation, direct or contingent,
other than liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(x) Neither the Company nor any of its subsidiaries has sustained, since the date of
the latest audited financial statements included in the Disclosure Package and the Final
Prospectus, any loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or
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governmental action, order or decree, or otherwise other than as set forth or contemplated
in the Disclosure Package and the Final Prospectus or that would reasonably be expected to
have a Material Adverse Effect; and since such date, there has not been any Material Adverse
Effect or any change in the authorized and outstanding capital stock (other than with
respect to stock repurchases made under the Company’s stock repurchase program) or material
increase in the long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse change, in or
affecting the general affairs, management or stockholder’s equity of the Company or any of
its subsidiaries, otherwise than as set forth or contemplated in the Disclosure Package and
the Final Prospectus.
(y) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its subsidiaries, or its
or their officers or property is pending or, to the best knowledge of the Company,
threatened that (i) would reasonably be expected to have a material adverse effect on the
performance of this Agreement or the Indenture, or the consummation of any of the
transactions contemplated hereby or thereby; or (ii) would reasonably be
expected to have a Material Adverse Effect, except in the case of this clause (ii) as
set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive
of any amendment or supplement thereto).
(z) Each of the Company and its subsidiaries owns or leases all such properties as are
necessary to the conduct of its operations as presently conducted, except as would not
reasonably be expected to have a Material Adverse Effect.
(aa) Neither the Company nor any of its subsidiaries is in violation or default of (i)
any provision of its charter or bylaws; (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to which its property
is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over such person or any of its properties, as applicable,
except in the case of each of clauses (ii) and (iii) for such violations or defaults that
would not reasonably be expected to have a Material Adverse Effect.
(bb) Ernst & Young LLP, who have certified certain financial statements of the Company
and its consolidated subsidiaries and delivered their report with respect to the audited
consolidated financial statements and schedules included or incorporated by reference in the
Disclosure Package and the Final Prospectus, are independent registered public accountants
with respect to the Company within the meaning of the Act and the applicable published rules
and regulations thereunder and the Public Company Accounting Oversight Board.
(cc) Each of the Company and its subsidiaries has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested extensions thereof (except
in any case in which the failure so to file would not reasonably be expected to have a
Material Adverse Effect) and has paid all taxes required to be paid by it and any
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other
assessment, fine or penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty (i) that is currently being
contested in good faith and for which adequate reserves have been established in accordance
with generally accepted accounting principles or (ii) as would not reasonably be expected to
have a Material Adverse Effect.
(dd) The Company and its subsidiaries possess such licenses, certificates, permits,
consents, provider agreements and other authorizations (collectively, “Governmental
Licenses”), and have made all necessary filings and disclosures, required by any federal,
state or local regulatory authorities necessary to conduct their respective lines of
business, including benefit plans, products and services pertaining to Medicare, Medicaid
and the Federal Employee Health Benefits Plan, 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, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; all of the Governmental Licenses of the Company 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 reasonably be expected to
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, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to result in a
Material Adverse Effect.
(ee) The Company has established and maintains disclosure controls and procedures (as
such term is defined in Rule 13a-14 under the Exchange Act), which (i) are designed to
ensure that material information relating to the Company, including its consolidated
subsidiaries, is made known to its principal executive officer and its principal financial
officer or persons performing similar functions by others within the Company, particularly
during the periods in which the periodic reports required under the Exchange Act are being
prepared; (ii) have been evaluated for effectiveness as of a date within 90 days prior to
the filing of its most recent annual or quarterly report filed with the Commission; and
(iii) are effective in all material respects to perform the functions for which they were
established.
(ff) Based on the Company’s evaluation of the Company’s internal controls and
procedures, the Company is not aware of (i) any significant deficiency in the design or
operation of internal controls which could adversely affect the Company’s ability to record,
process, summarize and report financial data or any material weaknesses in internal controls
or (ii) any fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal controls.
(gg) Since the date of the most recent evaluation of such internal controls and
procedures, there have been no significant changes in internal controls of, or in other
factors related to, the Company that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and material weaknesses.
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(hh) The statements in each of the Preliminary Prospectus and the Final Prospectus,
under the headings “Risk Factors—We conduct business in a heavily regulated industry and
changes in laws or regulations or government investigations could adversely affect our
business and results of operations,” “Risk Factors—We face periodic reviews, audits and
investigations under our contracts with federal and state government agencies which could
have adverse findings that may negatively affect our business,” “Business—Government
Regulation,” and “Legal Proceedings,” and the statements in each of the
Preliminary Prospectus and the Final Prospectus under the headings “Risk Factors—Risks
Related to Our Business—We conduct business in a heavily regulated industry and changes in
laws or regulations or government investigations could adversely affect our business and
results of operations” and “Risk Factors—Risks Related to Our Business—We face periodic
reviews, audits and investigations under our contracts with federal and state government
agencies which could have adverse findings that may negatively affect our business,” insofar
as such statements summarize legal matters, agreements, documents or proceedings discussed
therein, are accurate in all material respects and fair summaries of such legal matters,
agreements, documents or proceedings.
(ii) Exhibit A hereto sets forth each direct or indirect subsidiary of the Company with
revenues for the fiscal year ended December 31, 2010, or assets at December 31, 2010, in
excess of 4% of the consolidated revenues or total assets of the Company, as the case may
be.
(jj) There is and has been no failure on the part of the Company and any of its
directors or officers, in their capacities as such, to comply in all material respects with
the U.S. Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection
therewith.
Any certificate signed by any officer of the Company and delivered to the Representatives or
counsel for the Underwriters in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the
purchase price set forth in Schedule II hereto the principal amount of the Securities set forth
opposite such Underwriter’s name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities shall be made on
the date and at the time specified in Schedule II hereto or at such time on such later date not
more than three Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the Securities being
herein called the “Closing Date”). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the order of the Company by
wire transfer payable in same-day funds to an account specified by the
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Company. Delivery of the
Securities shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
4. Offering by Underwriters. It is understood that the several Underwriters propose
to offer the Securities for sale to the public as set forth in the Final Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement to the Final Prospectus or
any Preliminary Prospectus unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to which you
reasonably object. The Company will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed in a form approved by the Representatives with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely filing. The
Company will promptly advise the Representatives (i) when the Final Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule
424(b), (ii) when, prior to termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become effective, (iii) of any request
by the Commission or its staff for any amendment of the Registration Statement or for any
supplement to the Final Prospectus or for any additional information, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the Registration
Statement or of any notice objecting to its use or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such purpose. The
Company will use its reasonable best efforts to prevent the issuance of any such stop order
or the occurrence of any such suspension or objection to the use of the Registration
Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as
possible the withdrawal of such stop order or relief from such occurrence or objection,
including, if necessary, by filing an amendment to the Registration Statement or a new
registration statement and using its reasonable best efforts to have such amendment or new
registration statement declared effective as soon as practicable.
(b) To prepare a final term sheet, containing solely a description of final terms of
the Securities and the offering thereof, in the form approved by you and attached as
Schedule IV hereto and to file such term sheet pursuant to Rule 433(d) within the time
required by such Rule.
(c) If, at any time prior to the filing of the Final Prospectus pursuant to Rule
424(b), any event occurs as a result of which the Disclosure Package would include any
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they were made or the
circumstances then prevailing not misleading, the Company will (i) notify promptly the
Representatives so that any use of the Disclosure Package may cease until it is amended
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or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or
omission; and (iii) supply any amendment or supplement to you in such quantities as you may
reasonably request.
(d) If, at any time when a prospectus relating to the Securities is required to be
delivered under the Act (including in circumstances where such requirement may be satisfied
pursuant to Rule 172), any event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the circumstances
under which they were made at such time not misleading, or if it shall be necessary to amend
the Registration Statement, file a new registration statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder,
including in connection with use or delivery of the Final Prospectus, the Company promptly
will (i) notify the Representatives of any such event, (ii) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment
or supplement or new registration statement which will correct such statement or omission or
effect such compliance, (iii) use its best efforts to have any amendment to the Registration
Statement or new registration statement declared effective as soon as practicable in order
to avoid any disruption in use of the Final Prospectus and (iv) supply any supplemented
Final Prospectus to you in such quantities as you may reasonably request.
(e) As soon as practicable, the Company will make generally available to its security
holders and to the Representatives an earnings statement or statements of the Company and
its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158.
(f) The Company will furnish to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement (including exhibits thereto) and
to each other Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the
Act (including in circumstances where such requirement may be satisfied pursuant to Rule
172), as many copies of each Preliminary Prospectus, the Final Prospectus and each Issuer
Free Writing Prospectus and any supplement thereto as the Representatives may reasonably
request. The Company will pay the expenses of printing or other production of all documents
relating to the offering.
(g) The Company will arrange, if necessary, for the qualification of the Securities for
sale under the blue sky laws of such jurisdictions as the Representatives may reasonably
request and will maintain such qualifications in effect so long as required
for the distribution of the Securities; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not now so qualified or
to take any action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction where it is not
now so subject.
11
(h) The Company agrees that, unless it has or shall have obtained the prior written
consent of the Representatives, and each Underwriter, severally and not jointly, agrees with
the Company that, unless it has or shall have obtained, as the case may be, the prior
written consent of the Company, it has not made and will not make any offer relating to the
Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus” (as defined in Rule 405) required to be filed by the
Company with the Commission or retained by the Company under Rule 433, other than a free
writing prospectus containing the information contained in the final term sheet prepared and
filed pursuant to Section 5(b) hereto; provided that the prior written consent of the
parties hereto shall be deemed to have been given in respect of the Free Writing
Prospectuses included in Schedule III hereto and any electronic road show. Any such free
writing prospectus consented to by the Representatives or the Company is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has
treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be,
with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing
Prospectus, including in respect of timely filing with the Commission, legending and record
keeping.
(i) The Company will not, without the prior written consent of Citigroup Global Markets
Inc., X.X. Xxxxxx Securities LLC and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company or any person in
privity with the Company or any affiliate of the Company), directly or indirectly, including
the filing (or participation in the filing) of a registration statement with the Commission
in respect of, or establish or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the Exchange Act, any debt
securities issued or guaranteed by the Company (other than the Securities) or publicly
announce an intention to effect any such transaction, until the Business Day set forth on
Schedule II hereto.
(j) The Company will not take, directly or indirectly, any action designed to or that
would constitute or that might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(k) The Company agrees to pay the costs and expenses relating to the following matters:
(i) the preparation, printing or reproduction and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto), each
Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus, and
each amendment or supplement to any of them; (ii) the printing (or reproduction) and
delivery (including postage, air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary Prospectus, the Final Prospectus
and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them,
as may, in each case, be reasonably
12
requested for use in connection with the offering and
sale of the Securities; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp or transfer taxes in
connection with the original issuance and sale of the Securities; (iv) the printing (or
reproduction) and delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) the registration of the Securities under the Exchange Act;
(vi) any registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing fees and the reasonable
fees and expenses of counsel for the Underwriters relating to such registration and
qualification); (vii) any filings required to be made with the NASD, Inc. (including filing
fees and the reasonable fees and expenses of counsel for the Underwriters relating to such
filings); (viii) the transportation and other expenses incurred by or on behalf of Company
representatives in connection with presentations to prospective purchasers of the
Securities; (ix) the fees and expenses of the Company’s accountants and the fees and
expenses of counsel (including local and special counsel) for the Company; and (x) all other
costs and expenses incident to the performance by the Company of its obligations hereunder.
6. Conditions to the Obligations of the Underwriters. The obligations of the
Underwriters to purchase the Securities shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the Execution Time and the Closing
Date, to the accuracy of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations hereunder and to the
following additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been filed in the manner and
within the time period required by Rule 424(b); the final term sheet contemplated by Section
5(b) hereto, and any other material required to be filed by the Company pursuant to Rule
433(d), shall have been filed with the Commission within the applicable time periods
prescribed for such filings by Rule 433; and no stop order
suspending the effectiveness of the Registration Statement or any notice objecting to
its use shall have been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Bass, Xxxxx & Xxxx PLC, counsel for the
Company, to have furnished to the Representatives their opinion, dated the Closing Date and
addressed to the Representatives, substantially in the form of Annex I hereto.
(c) Xxxxxx Xxxxxxxxx, Executive Vice President and General Counsel for the Company,
shall have furnished to the Representatives his opinion, dated the Closing Date and
addressed to the Representatives, substantially in the form of Annex II hereto.
(d) The Representatives shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed
to the Representatives, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Disclosure Package, the Final Prospectus
13
(together with any supplement thereto) and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a certificate of the
Company, signed by the Chairman of the Board or the Chief Executive Officer and the
principal financial or accounting officer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the Registration
Statement, the Disclosure Package, the Final Prospectus and any supplements or amendments
thereto, as well as any electronic road show used in connection with the offering of the
Securities, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are
true and correct on and as of the Closing Date with the same effect as if made on
the Closing Date and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement
or any notice objecting to its use has been issued and no proceedings for that
purpose have been instituted or, to the Company’s knowledge, threatened; and
(iii) since the date of the most recent financial statements included in the
Disclosure Package and the Final Prospectus (exclusive of any supplement thereto),
there has been no Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Disclosure Package and the Final Prospectus (exclusive of any
supplement thereto).
(f) The Company shall have requested and caused Ernst & Young LLP to have furnished to
the Representatives, at the Execution Time and at the Closing Date, letters, (which may
refer to letters previously delivered to one or more of the Representatives), dated
respectively as of the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable rules and
regulations adopted by the Commission thereunder and stating, as of the respective date of
each such letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the Preliminary
Prospectus or the Final Prospectus, as the case may be, as of a date not more than three
days prior to the date of such letter), their conclusions and findings with respect to the
financial information and other matters ordinarily covered by accountants’ “comfort letters”
to underwriters in connection with registered public offerings.
References to the Final Prospectus in this paragraph (f) include any supplement thereto
at the date of the letter.
14
(g) Subsequent to the Execution Time or, if earlier, the dates as of which information
is given in the Registration Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any amendment or supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to in paragraph (f) of
this Section 6 or (ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), results of operations, business or
properties of the Company and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or contemplated in
the Disclosure Package and the Final Prospectus (exclusive of any amendment or supplement
thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as contemplated by
the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and
the Final Prospectus (exclusive of any amendment or supplement thereto).
(h) Subsequent to the Execution Time, there shall not have been any decrease in the
rating of any of the Company’s debt securities by any “nationally recognized statistical
rating organization” (as defined for purposes of Rule 436(g)) or any notice
given of any intended or potential decrease in any such rating or of a possible change
in any such rating that does not indicate the direction of the possible change.
(i) The Company and the Trustee shall have executed the Indenture and the
Representatives shall have received original copies thereof, duly executed by the Company
and the Trustee.
(j) Prior to the Closing Date, the Company shall have furnished to the Representatives
such further information, certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as
provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere
in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000, on the Closing Date.
7. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the Underwriters set
forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
15
default by any of
the Underwriters, the Company will reimburse the Underwriters severally through Citigroup Global
Markets Inc., X.X. Xxxxxx Securities LLC and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated on
demand for all expenses (including reasonable fees and disbursements of counsel) that shall have
been incurred by them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement
of a material fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any Preliminary Prospectus
or any other preliminary prospectus relating to the Securities, the Final Prospectus, any
Issuer Free Writing Prospectus or the information contained in the final term sheet required
to be prepared and filed pursuant to Section 5(b) hereto, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to the Company
by or on behalf of any Underwriter through the Representatives specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of either the Act or
the Exchange Act, against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material fact contained
in the registration statement for the registration of the Securities as originally filed or
in any amendment thereof, or in any Preliminary Prospectus or any other preliminary
prospectus relating to the Securities, the Final Prospectus, any Issuer Free Writing
Prospectus, or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred
16
by them in connection with investigating
or defending any such loss, claim, damage, liability or action; but only with reference to
written information relating to such Underwriter furnished to the Company by or on behalf of
such Underwriter through the Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges that the
statements set forth (i) in the last paragraph of the cover page regarding delivery of the
Securities and under the heading “Underwriting”, (ii) the list of Underwriters and their
respective participation in the sale of the Securities, (iii) the sentences related to
concessions and
reallowances and (iv) the paragraph(s) related to stabilization, syndicate covering
transactions and penalty bids in any Preliminary Prospectus and the Final Prospectus
constitute the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus, the Final Prospectus or any Issuer
Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of
the commencement of any action, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section 8, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the indemnifying
party (i) will not relieve it from liability under paragraph (a) or (b) above to the extent
it is not materially prejudiced as a result thereof and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying
party’s expense to represent the indemnified party in any action for which indemnification
is sought (in which case the indemnifying party shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to
appoint counsel to represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the actual or potential defendants
in, or targets of, any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the indemnified party to employ separate counsel
at the expense of the indemnifying party. No indemnifying party shall, without the written
consent of each indemnified party, effect the settlement or compromise of or, consent to the
entry of any judgment with respect to, any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential party to such claim or
action) unless
17
such settlement, compromise or consent (i) includes an unconditional release
of each indemnified party from all liability arising out of such claim, action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of any indemnified party.
(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any
reason, the Company and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending the same) (collectively “Losses”) to
which the Company and one or more of the Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the one hand and
by the Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Underwriters severally
shall contribute in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information provided by
the Company on the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter, and each person
who controls the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).
18
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase
and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the performance of its or
their obligations under this Agreement, the remaining Underwriters shall be obligated severally to
take up and pay for (in the respective proportions which the principal amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate principal amount of
Securities set forth opposite the names of all the remaining Underwriters) the Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate principal amount of Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the
event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the Representatives shall determine
in order that the required changes in the Registration Statement and the Final Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company prior to delivery of and payment
for the Securities, if at any time prior to such delivery and payment (i) trading in the Company’s
common stock shall have been suspended by the Commission or the New York Stock Exchange or trading
in securities generally on the New York Stock Exchange shall have been suspended or limited or
minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there shall have occurred
any outbreak or escalation of hostilities, declaration by the United States of a national emergency
or war, or other calamity or crisis the effect of which on financial markets is such as to make it,
in the judgment of the Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by any Preliminary Prospectus or the Final Prospectus
(exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or
any of the officers, directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7
and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and effective only on
receipt, and, if sent to the Representatives, will be mailed, delivered or telefaxed to (i)
Citigroup Global Markets Inc. General Counsel (fax no.: (000) 000-0000) and confirmed to the
General Counsel, Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
19
New York, 10013,
Attention: General Counsel, (ii) X.X. Xxxxxx Securities LLC, High Grade Syndicate Desk (fax no.:
(000) 000-0000) and confirmed to X.X. Xxxxxx Securities LLC, Attention: High Grade Syndicate Desk
— 3rd Floor, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (iii) Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, Xxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: High
Grade DCM Transaction Management/Legal, or, if sent to the Company, will be mailed, delivered or
telefaxed to (000) 000-0000 and confirmed to it at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000,
attention of the General Counsel.
13. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and their respective successors and the officers, directors, employees, agents and
controlling persons referred to in Section 8 hereof, and no other person will have any right or
obligation hereunder.
14. No Fiduciary Duty. The Company hereby acknowledges that (a) the purchase and sale
of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the
Company, on the one hand, and the Underwriters and any affiliate through which it may be acting, on
the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the
Company and (c) the Company’s engagement of the Underwriters in connection with the
offering and the process leading up to the offering is as independent contractors and not in any
other capacity. Any review by the Underwriters of the Company, the transactions contemplated
hereby or other matters relating to such transactions will be performed solely for the benefit of
the Underwriters and shall not be on behalf of the Company. The Company agrees that it will not
claim that the Underwriters have rendered advisory services of any nature or respect, or owe an
agency, fiduciary or similar duty to the Company, in connection with such transaction or the
process leading thereto.
15. Integration. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of them, with respect to
the subject matter hereof.
16. Applicable Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be performed within the
State of New York.
17. Waiver of Jury Trial. The Company and the Underwriters hereby irrevocably waive,
to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
18. Counterparts. This Agreement may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.
19. Headings. The section headings used herein are for convenience only and shall not
affect the construction hereof.
20. Definitions. The terms that follow, when used in this Agreement, shall have the
meanings indicated.
20
“Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or
a day on which banking institutions or trust companies are authorized or obligated by law to
close in New York City.
“Commission” shall mean the Securities and Exchange Commission.
“Disclosure Package” shall mean (i) the Preliminary Prospectus used most recently prior
to the Execution Time, (ii) the Issuer Free Writing Prospectuses, if any, identified in
Schedule III hereto, (iii) the final term sheet prepared and filed pursuant to Section 5(b)
hereto, if any, and (iv) any other Free Writing Prospectus that the parties hereto shall
hereafter expressly agree in writing to treat as part of the Disclosure Package.
“Effective Date” shall mean each date and time that the Registration Statement and any
post-effective amendment or amendments thereto became or becomes effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean June 2, 2011, 4:35 p.m., the date and time that this
Agreement is executed and delivered by the parties hereto.
“Final Prospectus” shall mean the prospectus relating to the Securities that was first
filed pursuant to Rule 424(b) after the Execution Time.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as
defined in Rule 433.
“Preliminary Prospectus” shall mean any preliminary prospectus referred to in paragraph
1(a) above which is used prior to the filing of the Final Prospectus.
“Registration Statement” shall mean the registration statement referred to in paragraph
1(a) above, including exhibits and financial statements and any prospectus relating to the
Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such
registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the
event any post-effective amendment thereto becomes effective prior to the Closing Date,
shall also mean such registration statement as so amended.
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”, “Rule 424”,
“Rule 430B”, “Rule 433” and “Rule 436” refer to such rules under the Act.
“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission promulgated thereunder.
“Well-Known Seasoned Issuer” shall mean a well-known seasoned issuer, as defined in
Rule 405.
21
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall
represent a binding agreement among the Company and the several Underwriters.
Very truly yours, COVENTRY HEALTH CARE, INC. |
||||
By: | /s/ Xxxxx X. Xxxxx | |||
Name: | Xxxxx X. Xxxxx | |||
Title: | Executive Vice President, Chief Financial Officer and Treasurer |
The foregoing Agreement is hereby confirmed and accepted as of the date first written above. X.X. XXXXXX SECURITIES LLC CITIGROUP GLOBAL MARKETS INC. XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED |
||||
By: | X.X. XXXXXX SECURITIES LLC, | |||
as Authorized Representative | ||||
By: | /s/ Xxxxx Xxxxxx | |||
Name: | Xxxxx Xxxxxx | |||
Title: | Executive Director | |||
By: | CITIGROUP GLOBAL MARKETS INC., | |||
as Authorized Representative | ||||
By: | /s/ Xxxxx X. Xxxxxxxxx | |||
Name: | Xxxxx X. Xxxxxxxxx | |||
Title: | Managing Director | |||
By: | XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX | |||
INCORPORATED, as Authorized Representative |
||||
By: | /s/ Xxxxxx X. Xxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxx | |||
Title: | Director |
SCHEDULE I
Principal Amount | ||||
of Securities to | ||||
Underwriters | be Purchased | |||
Citigroup Global Markets Inc. |
$ | 132,000,000 | ||
X.X. Xxxxxx Securities LLC. |
$ | 132,000,000 | ||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated |
$ | 132,000,000 | ||
Barclays Capital Inc. |
$ | 60,000,000 | ||
Xxxxx Fargo Securities, LLC |
$ | 60,000,000 | ||
Xxxxxxx, Xxxxx & Co. |
$ | 28,000,000 | ||
UBS Securities LLC |
$ | 28,000,000 | ||
U.S. Bancorp Investments, Inc. |
$ | 28,000,000 | ||
Total |
$ | 600,000,000 | ||
SCHEDULE II
Underwriting Agreement dated:
June 2, 2011 |
Registration Statement No.:
333-174653 |
Representatives:
Citigroup Global Markets Inc. X.X. Xxxxxx Securities LLC Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated |
Title, Purchase Price and Description of Securities:
Title: 5.450% Senior Notes due 2021 | ||
Principal amount: $600,000,000 | ||
Purchase price (include accrued interest or amortization, if any): 99.150% |
||
Sinking fund provisions: None | ||
Redemption provisions: As set forth on the Final Term Sheet, dated June 2, 2011 | ||
Other provisions: As set forth on the Final Term Sheet, dated June 2, 2011 |
Closing Date, Time and Location:
June 7, 2011 at 10:00 a.m. at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 |
Type of Offering:
Non-delayed |
Date referred to in Section 5(i) after which the Company may offer or sell debt securities issued
or guaranteed by the Company without the consent of the Representatives:
June 7, 2011 |
Modification of items to be covered by the letter from Ernst & Young LLP delivered pursuant to
Section 6(f) at the Execution Time:
None |
SCHEDULE III
SCHEDULE OF FREE WRITING PROSPECTUSES
INCLUDED IN THE DISCLOSURE PACKAGE
INCLUDED IN THE DISCLOSURE PACKAGE
• | Final Term Sheet, dated June 2, 2011, relating to the Securities, as filed pursuant to Rule 433 and attached as Schedule IV hereto. |
SCHEDULE IV
FORM OF FINAL TERM SHEET
COVENTRY HEALTH CARE, INC.
5.450% SENIOR NOTES DUE 2021
5.450% SENIOR NOTES DUE 2021
Issuer:
|
Coventry Health Care, Inc. | |
Principal Amount:
|
$600,000,000 | |
Security Type:
|
Senior Notes | |
Legal Format:
|
SEC Registered | |
Trade Date:
|
June 2, 2011 | |
Settlement Date:
|
June 7, 2011 (T+3) | |
Maturity Date:
|
June 15, 2021 | |
Issue Price:
|
99.800% of principal amount | |
Coupon:
|
5.450% | |
Yield:
|
5.476% | |
Benchmark Treasury:
|
3.125% due May 15, 2021 | |
Benchmark Treasury Price /
Yield:
|
100-27 / 3.026% | |
Spread to Benchmark Treasury:
|
+245 basis points | |
Interest Payment Dates:
|
Semi-annually on June 15 and December 15, commencing on December 15, 2011 | |
Optional Redemption Provisions:
|
Prior to March 15, 2021, in whole or in part at the greater of (i) 100% of the principal amount of the Notes and (ii) the discounted present value of the Notes at a discount rate of Treasury plus 37.5 basis points. On or after March 15, 2021, at 100% of the principal amount of the Notes. | |
CUSIP / ISIN:
|
222862 AJ3 / US222862AJ30 | |
Underwriters:
|
Citigroup Global Markets Inc. | |
X.X. Xxxxxx Securities LLC | ||
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated | ||
Barclays Capital Inc. | ||
Xxxxx Fargo Securities, LLC | ||
Xxxxxxx, Xxxxx & Co. | ||
UBS Securities LLC | ||
U.S. Bancorp Investments, Inc. | ||
Expected Ratings:
|
Xxxxx’x: Ba1 / S&P: BBB- / Fitch: BBB- | |
A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. |
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
Citigroup Global Markets Inc. toll-free at 877-858-5407, X.X. Xxxxxx Securities LLC collect
at 000-000-0000, or Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated toll-free at 1-800-294-1322.