AMERIGROUP Corporation Registration Rights Agreement
Exhibit 4.2
AMERIGROUP Corporation
2.00% Convertible Senior Notes due 2012
March 28, 2007
Xxxxxxx, Xxxxx & Co.,
As representatives of the several Purchasers
named in Schedule I to the Purchase Agreement
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As representatives of the several Purchasers
named in Schedule I to the Purchase Agreement
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AMERIGROUP Corporation, a Delaware corporation (the “Company”), proposes to issue and sell to
the Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined
herein) its 2.00% Convertible Senior Notes due 2012 (the “Securities”). As an inducement to the
Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the Purchasers for the benefit of
Holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as
follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have the meanings ascribed to them
in the Purchase Agreement. As used in this Agreement, the following defined terms shall have the
following meanings:
“Affiliate” of any specified person means any other person which, directly or indirectly, is
in control of, is controlled by, or is under common control with such specified person. For
purposes of this definition, control of a person means the power, direct or indirect, to direct or
cause the direction of the management and policies of such person whether by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Closing Date” means the First Time of Delivery as defined in the Purchase Agreement.
“Commission” means the United States Securities and Exchange Commission, or any other federal
agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant
statute for the particular purpose.
“Common Stock” means the Company’s common stock, par value $0.01 per share.
“DTC” means The Depository Trust Company.
“Effective Failure” has the meaning assigned thereto in Section 7(b) hereof.
“Effectiveness Period” has the meaning assigned thereto in Section 2(b)(i) hereof.
“Effective Time” means the time at which the Commission declares the Shelf Registration
Statement effective or at which the Shelf Registration Statement otherwise becomes effective.
“XXXXX” has the meaning assigned thereto in Section 3(b) hereof.
“Electing Holder” has the meaning assigned thereto in Section 3(a)(iii) hereof.
“Exchange Act” means the United States Securities Exchange Act of 1934, as amended.
“Holder” means any person that is the record owner of Registrable Securities (and includes any
person that has a beneficial interest in any Registrable Security in book-entry form).
“Indemnified Person” has the meaning assigned thereto in Section 5(a).
“Indenture” means the Indenture, dated as of March 28, 2007, between the Company and The Bank
of New York, as amended and supplemented from time to time in accordance with its terms.
“Issuer Free Writing Prospectus” has the meaning set forth in Rule 433 under the Securities
Act.
“Liquidated Damages” has the meaning assigned thereto in Section 7(a) hereof.
“Managing Underwriters” means the investment banker or investment bankers and manager or
managers that shall administer an underwritten offering, if any, conducted pursuant to Section 6
hereof.
“NASD Rules” means the Rules of the National Association of Securities Dealers, Inc., as
amended from time to time.
“Notice and Questionnaire” means a Notice of Registration Statement and Selling Securityholder
Questionnaire substantially in the form of Appendix A hereto.
The term “person” means an individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
“Prospectus” means the prospectus (including, without limitation, any preliminary prospectus,
any final prospectus and any prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A under the Securities Act) included in the Shelf Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the offering of any
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portion
of the Registrable Securities covered by the Shelf Registration Statement and by all other
amendments and supplements to such prospectus, including all material incorporated by reference in
such prospectus and all documents filed after the date of such prospectus by the Company under the
Exchange Act and incorporated by reference therein.
“Purchase Agreement” means the purchase agreement, dated as of March 22, 2007, between the
Purchasers and the Company relating to the Securities.
“Purchasers” means the Purchasers named in Schedule I to the Purchase Agreement.
“Registrable Securities” means all or any portion of the Securities issued on the date hereof
(or pursuant to the exercise of the purchasers’ over-allotment option) under the Indenture in
registered form and the shares of common Stock issuable upon conversion of such Securities;
provided, however, that a security ceases to be a Registrable Security when it is no longer a
Restricted Security.
“Registration Default” has the meaning assigned thereto in Section 7(a) hereof.
“Restricted Security” means any Security or share of Common Stock issuable upon conversion
thereof except any such Security or share of Common Stock that (i) has been effectively registered
under the Securities Act and sold in a manner contemplated by the Shelf Registration Statement,
(ii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor
provision thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto) or (iii) has otherwise been transferred and a new Security or share of Common
Stock not subject to transfer restrictions under the Securities Act has been delivered by or on
behalf of the Company in accordance with Section 3.05 of the Indenture.
“Rules and Regulations” means the published rules and regulations of the Commission
promulgated under the Securities Act or the Exchange Act, as in effect at any relevant time.
“Securities Act” means the United States Securities Act of 1933, as amended.
“Shelf Registration” means a registration effected pursuant to Section 2 hereof.
“Shelf Registration Statement” means a “shelf” registration statement filed under the
Securities Act providing for the registration of, and the sale on a continuous or delayed basis by
the Holders of, the Registrable Securities pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission, filed by the Company pursuant to the provisions
of Section 2 of this Agreement, including the Prospectus contained therein, any amendments and
supplements to such registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such registration statement.
“Suspension Period” has the meaning assigned thereto in Section 2(c).
“Trust Indenture Act” means the Trust Indenture Act of 1939, or any successor thereto, and the
rules, regulations and forms promulgated thereunder, as the same shall be amended from time to
time.
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The term “underwriter” means any underwriter of Registrable Securities in connection with an
offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a percentage of the “principal amount”
of Registrable Securities or to a percentage of Registrable Securities, Common Stock constituting
Registrable Securities shall be treated as representing the principal amount of Securities that was
surrendered for conversion or exchange in order to receive such number of shares of Common Stock.
2. Shelf Registration.
(a) The Company shall use its commercially reasonable efforts to cause a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by the Holders from time to
time in accordance with the methods of distribution elected by such Holders and set forth in such
Shelf Registration Statement to be declared effective under the Securities Act no later than 180
calendar days following the Closing Date; provided, however, that the Company may, upon written
notice to all Holders, postpone having the Shelf Registration Statement declared effective for a
reasonable period not to exceed 90 days if the Company possesses material non-public information,
the disclosure of which would have a material adverse effect on the Company and its subsidiaries
taken as a whole; provided, further, however, that (i) no Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the Prospectus forming a part
thereof for resales of Registrable Securities unless such Holder is an Electing Holder and (ii) no
distribution of Registrable Securities pursuant to such Shelf Registration Statement shall take the
form of an underwritten offering without the Company’s prior written agreement.
(b) The Company shall use its commercially reasonable efforts:
(i) to keep the Shelf Registration Statement continuously effective under the
Securities Act in order to permit the Prospectus forming a part thereof to be usable by
Holders until the earliest of (1) the sale of all Registrable Securities registered under
the Shelf Registration Statement; (2) the expiration of the period referred to in Rule
144(k) of the Securities Act, or any successor provision, with respect to all Registrable
Securities held by Persons that are not Affiliates of the Company; and (3) two years from
the Effective Time (such period being referred to herein as the “Effectiveness Period”);
(ii) after the Effective Time of the Shelf Registration Statement, subject to Section
3(a)(ii) hereof, promptly upon the request of any Holder of Registrable Securities that is
not then an Electing Holder, to take any action reasonably necessary to enable such Holder
to use the Prospectus forming a part thereof for resales of Registrable Securities,
including, without limitation, any action necessary to identify such Holder as a selling
securityholder in the Shelf Registration Statement; and
(iii) if at any time the Securities, pursuant to Article 12.12 of the Indenture, are
convertible into securities other than Common Stock, to cause, or to cause any successor
under the Indenture to cause, such securities to be included in the Shelf Registration
Statement no later than the later of (A) 180 calendar days following the
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Closing Date and
(B) the date on which the Securities are convertible into such securities.
The Company shall be deemed not to have used its commercially reasonable efforts to keep the Shelf
Registration Statement effective during the requisite period if the Company voluntarily takes any
action that would result in Holders of Registrable Securities covered thereby not being able to
offer and sell any of such Registrable Securities during that period, unless such action is (A)
required by applicable law and the Company thereafter promptly complies with the requirements of
Section 3(j) hereof or (B) permitted pursuant to Section 2(c) below.
(c) The Company may suspend the use of the Prospectus, without incurring any obligation to pay
Liquidated Damages, for a period not to exceed 45 days in any 90-day period or an aggregate of 90
days in any 12-month period (each a “Suspension Period”) if the Board of Directors of the Company
shall have determined in good faith that because of valid business reasons (not including avoidance
of the Company’s obligations hereunder), including the acquisition or divestiture of assets,
pending corporate developments, public filings with the Commission and similar events, it is in the
best interests of the Company to suspend such use, and prior to suspending such use the Company
provides the Holders with written notice of such suspension, which notice need not specify the
nature of the event giving rise to such suspension.
3. Registration Procedures. In connection with the Shelf Registration Statement, the
following provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the Effective Time of the Shelf Registration
Statement, the Company shall mail the Notice and Questionnaire to the Holders of Registrable
Securities. No Holder shall be entitled to be named as a selling securityholder in the Shelf
Registration Statement as of the Effective Time, and no Holder shall be entitled to use the
Prospectus forming a part thereof for resales of Registrable Securities at any time, unless such
Holder has returned a completed and signed Notice and Questionnaire to the Company by the date five
business days prior to such Effective Time; provided, however, Holders of Registrable Securities
shall have at least 20 calendar days from the date on which the Notice and Questionnaire is first
mailed to such Holders to return a completed and signed Notice and Questionnaire to the Company.
(ii) After the Effective Time of the Shelf Registration Statement, the Company shall,
upon the request of any Holder of Registrable Securities that is not then an Electing
Holder, promptly send a Notice and Questionnaire to such Holder and thereafter the Company
will, within 30 days after the date such completed and signed Notice and Questionnaire has
been delivered to the Company, file a supplement to the Prospectus relating to the Shelf
Registration Statement, or, if required, file a post-effective amendment or a new Shelf
Registration Statement in order to permit resales of such Holder’s Registrable Securities;
provided, however, if the Company receives the Notice
and Questionnaire during a Suspension Period, or the Company initiates a Suspension Period
within 30 days after receipt of the applicable Notice and Questionnaire, then the Company
will make the required filing within 30 days after the end of the Suspension Period;
provided, further, however, in no event, will the Company be required to file more than one
supplement to the Prospectus per 30-day period in order to name as a selling
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securityholder
any Holder that has provided the Company with a completed Notice and Questionnaire after the
deadline set forth in Section 3(a)(i) hereof to be included as a selling securityholder in
the initial Prospectus. If the Company files a post-effective amendment or a new Shelf
Registration Statement pursuant to the requirements of this Section 3(a)(ii), then it will
use reasonable efforts to cause the post-effective amendment or new Shelf Registration
Statement to become effective under the Securities Act as promptly as practicable, but in
any event by the 90th day after the filing date required by this Section 3(a)(ii); provided,
however, if a post-effective amendment or a new Shelf Registration Statement is required in
order to permit resales by Holders seeking to include Registrable Securities in the Shelf
Registration Statement after the Effective Time of the initial Shelf Registration Statement,
the Company will not be required to file more than one post-effective amendment or new Shelf
Registration Statement for such purpose in any 90-day period. For the avoidance of doubt
the Company shall not be required to take any action to name such Holder as a selling
securityholder in the Shelf Registration Statement or to enable such Holder to use the
Prospectus forming a part thereof for resales of Registrable Securities until such Holder
has returned a completed and signed Notice and Questionnaire to the Company.
(iii) The term “Electing Holder” shall mean any Holder of Registrable Securities that
has returned a completed and signed Notice and Questionnaire to the Company in accordance
with Section 3(a)(i) or 3(a)(ii) hereof.
(iv) Each Electing Holder agrees to furnish promptly to the Company all information
required to be disclosed in order to make information previously furnished to the Company by
the Holder not materially misleading and any other information regarding such Holder and the
distribution of such Holder’s Registrable Securities as the Company may from time to time
reasonably request in writing.
(b) Unless such document is available on the Electronic Data Gathering Analysis and Retrieval
System of the Commission (“XXXXX”), the Company shall furnish to each Electing Holder upon request,
promptly after the Effective Time, a copy of the Shelf Registration Statement initially filed with
the Commission, and shall furnish to such Holders upon request, prior to the filing thereof with
the Commission, copies of each amendment thereto and each amendment or supplement, if any, to the
Prospectus included therein, and shall use its commercially reasonable efforts to reflect in each
such document, at the Effective Time or when so filed with the Commission, as the case may be, such
comments as such Holders and their respective counsel reasonably may propose.
(c) The Company shall promptly take such action as may be necessary so that (i) each of the
Shelf Registration Statement and any amendment thereto and the Prospectus forming a part thereof
and any amendment or supplement thereto (and each report or other document incorporated therein by
reference in each case) complies in all material respects with
the Securities Act and the Exchange Act and the respective rules and regulations thereunder,
(ii) each of the Shelf Registration Statement and any amendment thereto does not, when it becomes
effective, 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 and (iii) each of
the Prospectus forming a part of the Shelf Registration Statement, and any amendment or supplement
to such Prospectus, does not at any time during the Effectiveness
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Period include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company shall not be required to take such action in respect of the
Shelf Registration Statement or any amendment thereto or of the Prospectus or any amendment or
supplement to the Prospectus during any Suspension Period.
(d) The Company shall promptly advise each Electing Holder, and shall confirm such advice in
writing if so requested by any such Electing Holder:
(i) when a Shelf Registration Statement and any amendment thereto has become effective
and the case of effectiveness of the initial Shelf Registration Statement (not including any
post-effective amendments thereto) by making a public announcement thereof by release made
to Reuters Economic Services and Bloomberg Business News;
(ii) of the issuance by the Commission of any stop order suspending the effectiveness
of the Shelf Registration Statement or the initiation of any proceedings for such purpose;
(iii) of the receipt by the Company of any notification with respect to the suspension
of the qualification of the securities included in the Shelf Registration Statement for sale
in any jurisdiction or the initiation of any proceeding for such purpose; and
(iv) of the occurrence of any event or the existence of any state of facts that
requires the making of any changes in the Shelf Registration Statement or the Prospectus
included therein so that, as of such date, such Shelf Registration Statement and Prospectus
do not contain an untrue statement of a material fact and do not omit to state a material
fact required to be stated therein or necessary to make the statements therein (in the case
of the Prospectus, in light of the circumstances under which they were made) not misleading
(which advice shall be accompanied by an instruction to such Holders to suspend the use of
the Prospectus until the requisite changes have been made); provided, however, that no
notice by the Company shall be required pursuant to this clause (iv) in the event that the
Company either promptly files a Prospectus supplement to update the Prospectus or a Form 8-K
or other appropriate report that is incorporated by reference into the Shelf Registration
Statement, which, in either case, contains the requisite information that results in such
Shelf Registration Statement no longer containing any untrue statement of material fact or
omitting to state a material fact necessary to make the statements therein not misleading).
(e) The Company shall use its commercially reasonable efforts to prevent the issuance, and if
issued to obtain the withdrawal at the earliest possible time, of any order
suspending the effectiveness of the Shelf Registration Statement or, if any such order of
suspension is made effective during or results in any Suspension Period, at the earliest
practicable moment after the end of such Suspension Period.
(f) The Company shall furnish to each Electing Holder upon written request of such Holder,
without charge, at least one copy of the Shelf Registration Statement and all post-effective
amendments thereto, and, if such documents are not available on XXXXX, all reports,
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schedules,
other documents and exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement.
(g) The Company shall, during the Effectiveness Period, deliver to each Electing Holder,
without charge, as many copies of the Prospectus (including each preliminary Prospectus) included
in the Shelf Registration Statement and any amendment or supplement thereto as such Electing Holder
may reasonably request in writing; and the Company consents (except during the periods specified in
Section 2(c) above or during the continuance of any event or the existence of any state of facts
described in Section 3(d)(ii), (iii) or (iv) above) to the use of the Prospectus and any amendment
or supplement thereto by each of the Electing Holders in connection with the offering and sale of
the Registrable Securities covered by the Prospectus and any amendment or supplement thereto during
the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to the Shelf Registration
Statement, the Company shall use its commercially reasonable efforts to (i) register or qualify or
cooperate with the Electing Holders and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and sale under the
securities or “blue sky” laws of such jurisdictions within the United States as any Electing Holder
may reasonably request in writing, (ii) keep such registrations or qualifications in effect and
comply with such laws so as to permit the continuance of offers and sales in such jurisdictions for
so long as may be necessary to enable any Electing Holder or underwriter, if any, to complete its
distribution of Registrable Securities pursuant to the Shelf Registration Statement, (iii) take any
and all other actions reasonably necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities, and (iv) obtain the consent or approval of each
governmental agency or authority, whether federal, state or local, which may be required to effect
the Shelf Registration or the offering or sale in connection therewith or to enable the selling
securityholders to offer, or to consummate the disposition of, their Registrable Securities;
provided, however, that in no event shall the Company be obligated to (A) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not otherwise be
required to so qualify but for this Section 3(h), (B) file any general consent to service of
process in any jurisdiction where it is not as of the date hereof so subject or (C) take any action
which would subject it to taxation in any such jurisdiction where it is not then so subject.
(i) Unless any Registrable Securities shall be in book-entry or global certificate only form,
the Company shall use its commercially reasonable efforts to cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing Registrable Securities
to be sold pursuant to the Shelf Registration Statement, which certificates, if so required by any
securities exchange upon which any Registrable Securities are listed, shall be penned, lithographed
or engraved, or produced by any combination of such methods, on steel engraved borders, and which
certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Electing Holders may request in connection
with the sale of Registrable Securities pursuant to the Shelf Registration Statement.
(j) Upon the occurrence of any event or the existence of any state of facts contemplated by
paragraph 3(d)(iv) above, the Company shall promptly prepare a post-effective amendment to any
Shelf Registration Statement or an amendment or supplement to the related Prospectus or file any
other required document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue statement
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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, not misleading; provided, however, that the Company shall
not be required to take such action in respect of the Shelf Registration Statement or any amendment
thereto or of the Prospectus or any amendment or supplement to the Prospectus during any Suspension
Period. If the Company notifies the Electing Holders of the occurrence of any event or the
existence of any state of facts contemplated by Section 2(c) or paragraph 3(d)(iv) above, the
Electing Holder shall suspend the use of the Prospectus until the requisite changes to the
Prospectus have been made and shall keep confidential such communications received by it from the
Company.
(k) Not later than the Effective Time of the Shelf Registration Statement, the Company shall
provide a CUSIP number for the Registrable Securities that are debt securities.
(l) The Company shall use its commercially reasonable efforts to comply with all applicable
Rules and Regulations, and to make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after (i) the effective date (as
defined in Rule 158(c) under the Securities Act) of the Shelf Registration Statement, (ii) the
effective date of each post-effective amendment to the Shelf Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an Annual Report on Form 10-K that is
incorporated by reference in the Shelf Registration Statement, an earning statement of the Company
and its subsidiaries complying with Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder (including, at the option of the Company, Rule 158).
(m) Not later than the Effective Time of the Shelf Registration Statement, the Company shall
use its commercially reasonable efforts to cause the Indenture to be qualified under the Trust
Indenture Act; in connection with such qualification, the Company shall cooperate with the Trustee
under the Indenture and the Holders (as defined in the Indenture) to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance with the terms of
the Trust Indenture Act; and the Company shall execute, and shall use all reasonable efforts to
cause the Trustee to execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner. In the event that any such amendment or modification referred to
in this Section 3(m) involves the appointment of a new trustee under the Indenture, the Company
shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.
(n) In the event of an underwritten offering conducted pursuant to Section 6 hereof, the
Company shall, if requested by Electing Holders in writing, promptly include or incorporate in
a Prospectus supplement or post-effective amendment to the Shelf Registration Statement such
information as the Managing Underwriters of such offering reasonably agree should be included
therein and to which the Company does not reasonably object and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as practicable after it is notified
of the matters to be included or incorporated in such Prospectus supplement or post-effective
amendment; provided, that in no event shall the Company be required to make any such filings during
any Suspension Period.
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(o) The Company shall enter into such customary agreements (including an underwriting
agreement in customary form in the event of an underwritten offering conducted pursuant to Section
6 hereof to which the Company has agreed) and take all other appropriate action in order to
expedite and facilitate the registration and disposition of the Registrable Securities, and in
connection therewith, if an underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set forth in Section 5
hereof with respect to all parties to be indemnified pursuant to Section 5 hereof.
(p) The Company shall:
(i)(A) make reasonably available for inspection during normal business hours by the
Electing Holders, any underwriter participating in any disposition pursuant to the Shelf
Registration Statement, and any attorney, accountant or other agent retained by such
Electing Holders or any such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and (B) cause the
Company’s officers, directors and employees to supply all information reasonably requested
by such Electing Holders or any such underwriter, attorney, accountant or agent in
connection with the Shelf Registration Statement, in each case, as is customary for similar
due diligence examinations; provided, however, that such persons shall first agree in
writing with the Company that (X) all records, information and documents that are designated
by the Company, in good faith, as confidential shall be kept confidential by such Electing
Holders and any such underwriter, attorney, accountant or agent, unless such disclosure is
required to be made in connection with a court proceeding or required by law, or such
records, information or documents become available to the public generally or through a
third party without an accompanying obligation of confidentiality, (y) they shall use such
records, information and documents solely for the purposes of exercising rights under this
Agreement and they shall not engage in trading any securities of the Company until the
Company makes such material non-public information publicly available; and provided further
that, if the foregoing inspection and information gathering would otherwise disrupt the
Company’s conduct of its business, such inspection and information gathering shall, to the
greatest extent possible, be coordinated on behalf of the Electing Holders and the other
parties entitled thereto by one counsel designated by and on behalf of the Electing Holders
and other parties;
(ii) in connection with any underwritten offering conducted pursuant to Section 6
hereof to which the Company has agreed, make such representations and warranties to the
Electing Holders participating in such underwritten offering and to the
Managing Underwriters, in form, substance and scope as are customarily made by the Company
to underwriters in primary underwritten offerings of equity and convertible debt securities
and covering matters substantially similar to, those set forth in the Purchase Agreement;
(iii) in connection with any underwritten offering conducted pursuant to Section 6
hereof to which the Company has agreed, the Company shall use its commercially reasonable
efforts to obtain opinions and letters of counsel to the Company (which counsel and opinions
(in form, scope and substance) shall be
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reasonably satisfactory to the Managing
Underwriters) addressed to each Electing Holder participating in such underwritten offering
and the underwriters, covering such matters as are customarily covered in opinions requested
in primary underwritten offerings of equity and convertible debt securities and such other
matters as may be reasonably requested by such Managing Underwriter (it being agreed that
the matters to be covered by such opinions and letters shall include, without limitation, a
statement by such counsel that nothing came to the attention of such counsel in the course
of their review of the Shelf Registration Statement and the Prospectus, including the
documents incorporated by reference therein (other than the financial statements or other
financial data therein, as to which such counsel need express no opinion or belief) that has
caused such counsel to believe that, as of the date of the opinion and as of the Effective
Time of the Shelf Registration Statement or most recent post-effective amendment thereto, as
the case may be, the Shelf Registration Statement or such post-effective amendment
containing any untrue statement of a material fact or the omission of any material fact
required to be stated therein or necessary to make the statements therein not misleading;
(iv) in connection with any underwritten offering conducted pursuant to Section 6
hereof to which the Company has agreed, the Company shall use its commercially reasonable
efforts to obtain “cold comfort” letters and updates thereof from the independent public
accountants of the Company (and, if necessary, from the independent public accountants of
any subsidiary of the Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the Shelf Registration
Statement), addressed to each Electing Holder participating in such underwritten offering
(if such Electing Holder has provided such letter, representations or documentation, if any,
required for such cold comfort letter to be so addressed) and the underwriters, in customary
form and covering matters of the type customarily covered in “cold comfort” letters in
connection with primary underwritten offerings;
(v) in connection with any underwritten offering conducted pursuant to Section 6 hereof
to which the Company has agreed, deliver such documents and certificates as may be
reasonably requested by the Electing Holders participating in such underwritten offering
they hold a majority in principal amount of the Registrable Securities being sold in such
and the Managing Underwriters, if any, including, without limitation, certificates to
evidence compliance with Section 3(j) hereof and with any conditions contained in the
underwriting agreement or other agreements entered into by the Company.
(q) The Company will use its commercially reasonable efforts to cause the Common Stock
issuable upon conversion of the Securities to be listed on the New York Stock Exchange or other
stock exchange or trading system on which the Common Stock primarily trades on or prior to the
Effective Time of the Shelf Registration Statement hereunder.
(r) In the event that any broker-dealer registered under the Exchange Act shall be an
"affiliate” (as defined in Rule 2720(b)(1) of the NASD Rules (or any successor provision thereto))
of the Company or has a “conflict of interest” (as defined in Rule 2720(b)(7) of the NASD Rules (or
any successor provision thereto)) and such broker-dealer shall underwrite,
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participate as a member
of an underwriting syndicate or selling group or assist in the distribution of any Registrable
Securities covered by the Shelf Registration Statement, whether as a Holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such broker-dealer in complying with the
requirements of the NASD Rules, including, without limitation, by (A) engaging a “qualified
independent underwriter” (as defined in Rule 2720(b)(15) of the NASD Rules (or any successor
provision thereto)) to participate in the preparation of the registration statement relating to
such Registrable Securities, to exercise usual standards of due diligence in respect thereto and to
recommend the public offering price of such Registrable Securities, (B) indemnifying such qualified
independent underwriter to the extent of the indemnification of underwriters provided in Section 5
hereof, and (C) providing such information to such broker-dealer as may be required in order for
such broker-dealer to comply with the requirements of the NASD Rules.
(s) The Company shall use its commercially reasonable efforts to take all other steps
necessary to effect the registration, offering and sale of the Registrable Securities covered by
the Shelf Registration Statement contemplated hereby.
4. Registration Expenses. Except as otherwise provided in Section 3, the Company shall bear
all fees and expenses incurred in connection with the performance of its obligations under Sections
2, 3 and 6 hereof and shall bear or reimburse the Electing Holders for the reasonable fees and
disbursements, not to exceed $25,000, of a single counsel selected by a plurality of all Electing
Holders who own an aggregate of not less than 25% of the Registrable Securities covered by the
Shelf Registration Statement to act as counsel therefore in connection therewith. Each Electing
Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Electing Holder’s Registrable Securities pursuant to the Shelf
Registration Statement.
5. Indemnification and Contribution.
(a) Indemnification by the Company. Upon the registration of the Registrable Securities
pursuant to Section 2 hereof, the Company shall indemnify and hold harmless each Electing Holder
and each underwriter, selling agent or other securities professional, if any, which facilitates the
disposition of Registrable Securities, and each of their respective officers and directors and each
person who controls such Electing Holder, underwriter, selling agent or other securities
professional within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (each such person being sometimes referred to as an “Indemnified Person”) against any losses,
claims, damages or liabilities, joint or several, to which such Indemnified
Person may become subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any Shelf Registration
Statement under which such Registrable Securities were registered under the Securities Act, or any
Prospectus or any Issuer Free Writing Prospectus contained therein or furnished by the Company to
any Indemnified Person, or any amendment 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 the Company hereby agrees to reimburse
such Indemnified Person for any legal or other expenses reasonably incurred by them in connection
with investigating or
12
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in such Shelf
Registration Statement, Prospectus or Issuer Free Writing Prospectus, or amendment or supplement,
in reliance upon and in conformity with written information furnished to the Company by such
Indemnified Person expressly for use therein; and provided further, that the Company shall not be
liable pursuant to this Section 5 to the extent that it shall have been established that the sale
or transfer giving rise to such loss, claim, damage or liability shall have occurred during a
Suspension Period.
(b) Indemnification by the Electing Holders and any Agents and Underwriters. Each Electing
Holder agrees, as a consequence of the inclusion of any of such Electing Holder’s Registrable
Securities in such Shelf Registration Statement, and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of Registrable Securities shall
agree, as a consequence of facilitating such disposition of Registrable Securities, severally and
not jointly, to (i) indemnify and hold harmless the Company, its directors, officers who sign any
Shelf Registration Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which the Company or such other persons may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such Shelf Registration Statement, Prospectus or Issuer Free
Writing Prospectus, or any amendment or supplement, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the Company by or on behalf
of such Electing Holder, underwriter, selling agent or other securities professional expressly for
use therein, and (ii) reimburse the Company and such other persons for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 5, notify such indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under the indemnification provisions of or contemplated by
subsection (a) or (b) above. In case any such action shall be brought against any indemnified
party and it shall notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall wish, jointly with
any other indemnifying party similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof, such indemnifying
party shall not be liable to such indemnified party under this Section
13
5 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such indemnified party,
in connection with the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with respect to, any pending
or threatened action or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and (ii) does not include
a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) Contribution. If the indemnification provided for in this Section 5 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of
any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and indemnified party
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by such indemnifying party or by such indemnified party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata allocation (even if the
Electing Holders or any underwriters, selling agents or other securities professionals or all of
them 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 in this Section 5(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the Electing Holders
and any underwriters, selling agents or other securities
professionals in this Section 5(d) to contribute shall be several in proportion to the percentage
of principal amount of Registrable Securities registered or underwritten, as the case may be, by
them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no event will any (i) Electing
Holder be required to undertake liability to any person under this Section 5 for any amounts in
excess of the dollar amount of the proceeds to be received by such Holder from the sale of such
Holder’s Registrable Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Shelf Registration Statement under which such Registrable Securities are
to be registered under the Securities Act and (ii) underwriter, selling agent or other securities
professional be required to undertake liability to any person hereunder for any amounts in excess
of the discount, commission or other compensation payable to such
14
underwriter, selling agent or
other securities professional with respect to the Registrable Securities underwritten by it and
distributed to the public.
(f) The obligations of the Company under this Section 5 shall be in addition to any liability
which the Company may otherwise have to any Indemnified Person and the obligations of any
Indemnified Person under this Section 5 shall be in addition to any liability which such
Indemnified Person may otherwise have to the Company. The remedies provided in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity.
6. Underwritten Offering. Upon receipt of the Company’s prior written consent, any Holder of
Registrable Securities who desires to do so may sell Registrable Securities (in whole or in part)
in an underwritten offering; provided that (i) the Electing Holders of at least 33-1/3% in
aggregate principal amount of the Registrable Securities then covered by the Shelf Registration
Statement shall request such an offering and (ii) at least such aggregate principal amount of such
Registrable Securities shall be included in such offering; and provided further that the Company
shall not be obligated to cooperate with more than one underwritten offering during the
Effectiveness Period. Upon receipt of such a request, the Company shall provide all Holders of
Registrable Securities written notice of the request, which notice shall inform such Holders that
they have the opportunity to participate in the offering. In any such underwritten offering, the
investment banker or bankers and manager or managers that will administer the offering will be
selected by, and the underwriting arrangements with respect thereto (including the size of the
offering) will be approved by, the holders of a majority of the Registrable Securities to be
included in such offering; provided, however, that such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company. No Holder may
participate in any underwritten offering contemplated hereby unless (a) such Holder agrees to sell
such Holder’s Registrable Securities to be included in the underwritten offering in accordance with
any approved underwriting arrangements, (b) such Holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements, and (c) if such
Holder is not then an Electing Holder, such Holder returns a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(ii) hereof within a reasonable amount
of time before such underwritten offering. The Holders participating in any underwritten offering
shall be responsible for any underwriting discounts and commissions and fees and, subject to
Section 4 hereof, expenses of their own
counsel. The Company shall pay all expenses customarily borne by issuers in an underwritten
offering, including but not limited to filing fees, the fees and disbursements of its counsel and
independent public accountants and any printing expenses incurred in connection with such
underwritten offering. Notwithstanding the foregoing or the provisions of Section 3(n) hereof,
upon receipt of a request from the Managing Underwriter or a representative of holders of a
majority of the Registrable Securities to be included in an underwritten offering to prepare and
file an amendment or supplement to the Shelf Registration Statement and Prospectus in connection
with an underwritten offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Board of Directors of the Company shall have determined in good faith that
the Company has a bona fide business reason for such delay. For the avoidance of doubt, the
determination by the Company to consent to an underwritten offering shall be in the Company’s sole
discretion.
15
7. Liquidated Damages.
(a) Notwithstanding any postponement of effectiveness permitted by Section 2(a) hereof, if on
or prior to the 180th day following the Closing Date, a Shelf Registration Statement is not
declared effective by the Commission (each, a “Registration Default”), the Company shall be
required to pay liquidated damages (“Liquidated Damages”), from and including the day following
such Registration Default until such Shelf Registration Statement is either so filed or so filed
and subsequently declared effective or the expiration of the Effectiveness Period, as applicable,
at a rate per annum equal to an additional one-quarter of one percent (0.25%) of the principal
amount of Registrable Securities, to and including the 90th day following such Registration Default
and one-half of one percent (0.50%) thereof from and after the 91st day following such Registration
Default until the earlier of (1) the time such Shelf Registration Statement is declared effective
or (2) the expiration of the Effectiveness Period; provided, however, no Liquidated Damages shall
accrue under this Section 7(a) during any Suspension Period.
(b) In the event that (i) the Shelf Registration Statement ceases to be effective, (ii) the
Company suspends the use of the Prospectus pursuant to Section 2(c) or 3(j) hereof, (iii) the
Holders are not authorized to use the Prospectus pursuant to Section 3(g) hereto or (iv) the
Holders are otherwise prevented or restricted by the Company from effecting sales pursuant to the
Shelf Registration Statement (an “Effective Failure”) for more than 45 days, whether or not
consecutive, in any 90-day period, or for more than 90 days, whether or not consecutive, during any
12-month period, then the Company shall pay Liquidated Damages at a rate per annum equal to an
additional one-quarter of one percent (0.25%) of the principal amount of Registrable Securities
from the 46th day of the applicable 90-day period or one-half of one percent (0.50%) of the
principal amount of Registrable Securities from the 91st day of the applicable 12-month period, as
the case may be, that any such Effective Failure has existed until the earlier of (1) the time the
Holders of Registrable Securities are again able to make sales under the Shelf Registration
Statement or (2) the expiration of the Effectiveness Period; provided, however, no Liquidated
Damages shall accrue under this Section 7(b) (A) with respect to the Registrable Securities of any
Holder that is not an Electing Holder or (B) during any Suspension Period.
(c) Any amounts to be paid as Liquidated Damages pursuant to paragraphs (a) or (b) of this
Section 7 shall be paid in cash semi-annually in arrears, with the first semi-annual
payment due on the first Interest Payment Date (as defined in the Indenture), as applicable,
following the date of such Registration Default or Effective Failure, as applicable. Such
Liquidated Damages will accrue (1) in respect of the applicable Registrable Securities at the rates
set forth in paragraphs (a) or (b) of this Section 7, as applicable, on the principal amount of
such Registrable Securities.
(d) Except as provided in Section 8(b) hereof, the Liquidated Damages as set forth in this
Section 7 shall be the exclusive monetary remedy available to the Holders of Registrable Securities
for such Registration Default or Effective Failure. In no event shall the Company be required to
pay Liquidated Damages in excess of the applicable maximum amount of one-half of one percent
(0.50%) set forth above, regardless of whether one or multiple Registration Defaults or Effective
Failures exist. In no event shall Holders who have converted Securities into Common Stock be
entitled to receive any Liquidated Damages with respect to such Common Stock or the issue price of
the Securities converted. The Liquidated Damages provided for
16
herein are in addition to any
“Additional Interest” (as defined in the Indenture) which may be payable in respect of the
Securities.
8. Miscellaneous.
(a) Other Registration Rights. The Company may grant registration rights that would permit
any person that is a third party the right to piggy-back on any Shelf Registration Statement,
provided that if the Managing Underwriter of any underwritten offering conducted pursuant to
Section 6 hereof notifies the Company and the Electing Holders that the total amount of securities
which the Electing Holders and the holders of such piggy-back rights intend to include in any Shelf
Registration Statement is so large as to materially threaten the success of such offering
(including the price at which such securities can be sold), then the amount, number or kind of
securities to be offered for the account of holders of such piggy-back rights will be reduced to
the extent necessary to reduce the total amount of securities to be included in such offering to
the amount, number and kind recommended by the Managing Underwriter prior to any reduction in the
amount of Registrable Securities to be included in such Shelf Registration Statement.
(b) Specific Performance. The parties hereto acknowledge that there would be no adequate
remedy at law if the Company fails to perform any of its obligations hereunder and that the
Purchasers and the Holders from time to time may be irreparably harmed by any such failure, and
accordingly agree that the Purchasers and such Holders, in addition to any other remedy to which
they may be entitled at law or in equity and without limiting the remedies available to the
Electing Holders under Section 7 hereof, shall be entitled to compel specific performance of the
obligations of the Company under this Registration Rights Agreement in accordance with the terms
and conditions of this Registration Rights Agreement, in any court of the United States or any
State thereof having jurisdiction.
(c) Amendments and Waivers. This Agreement, including this Section 8(c), may be amended, and
waivers or consents to departures from the provisions hereof may be given, only by a written
instrument duly executed by the Company and the holders of a majority in aggregate principal amount
of Registrable Securities then outstanding. Each Holder of Registrable Securities outstanding at
the time of any such amendment, waiver or consent or
thereafter shall be bound by any amendment, waiver or consent effected pursuant to this Section
8(c), whether or not any notice, writing or marking indicating such amendment, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.
(d) Notices. All notices and other communications provided for or permitted hereunder shall
be given as provided in the Indenture; provided, that the Company may deliver notices and other
communications provided for or permitted hereunder to any Electing Holder to its address as set
forth in its Notice and Questionnaire.
(e) Parties in Interest. The parties to this Agreement intend that all Holders of Registrable
Securities shall be entitled to receive the benefits of this Agreement and that any Electing Holder
shall be bound by the terms and provisions of this Agreement by reason of such election with
respect to the Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and
shall be enforceable by the respective successors and assigns of the parties
17
hereto and any Holder
from time to time of the Registrable Securities to the aforesaid extent. In the event that any
transferee of any Holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall,
without any further writing or action of any kind, be entitled to receive the benefits of and, if
an Electing Holder, be conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement to the aforesaid extent.
(f) Counterparts. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
(h) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(i) Severability. In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
(j) Survival. The respective indemnities, agreements, representations, warranties and other
provisions set forth in this Agreement or made pursuant hereto shall remain in full force and
effect, regardless of any investigation (or any statement as to the results thereof) made by or on
behalf of any Electing Holder, any director, officer or partner of such Holder, any agent or
underwriter, any director, officer or partner of such agent or underwriter, or any controlling
person of any of the foregoing, and shall survive the transfer and registration of the Registrable
Securities of such Holder.
18
Please confirm that the foregoing correctly sets forth the agreement between the Company and
you.
| Very truly yours, AMERIGROUP Corporation |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: Xxxxx X. Xxxxxx | ||||
| Title: Executive Vice President and Chief Financial Officer | ||||
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx, Xxxxx & Co.
By:
|
/s/ Xxxxxxx Sachs | |||
| (Xxxxxxx, Xxxxx & Co.) | ||||
| On behalf of each of the Purchasers |
