Exhibit 1.1
$300,000,000
HUMANA INC.
%__ Senior Notes due 2006
UNDERWRITING AGREEMENT
----------------------
August __, 2001
X.X. Xxxxxx Securities Inc.
Xxxxxx Brothers Inc.,
As Representatives of the several
Underwriters named in Schedule 1,
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
Humana Inc., a Delaware corporation (the "Company"), proposes to sell
$300,000,000 in aggregate principal amount of the Company's __% Senior Notes due
2006 (the "Notes"). The Notes are to be issued pursuant to an Indenture (the
"Indenture") to be entered into between the Company and The Bank of New York, as
trustee (the "Trustee"). This is to confirm the agreement concerning the
purchase of the Notes from the Company by the Underwriters named in Schedule 1
hereto (the "Underwriters").
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to the Notes
has (i) been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act; and the Indenture shall have been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Copies of
such registration statement have been delivered by the Company to you as
the Representatives (the "Representatives") of the Underwriters. As used in
this Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective Date"
means the date of the Effective Time; "Preliminary
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Prospectus" means each prospectus included in such registration statement,
or amendments thereof, before it became effective under the Securities Act
and any prospectus filed with the Commission by the Company with the
consent of the Representatives, as provided herein, pursuant to Rule 424(a)
of the Rules and Regulations; "Registration Statement" means such
registration statement, as amended at the Effective Time, including any
documents incorporated by reference therein at such time and all
information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 5(a) hereof and deemed to be a part of the registration statement
as of the Effective Time pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final prospectus, as
first filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to and
include any documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the
date of such Preliminary Prospectus or the Prospectus, as the case may be,
and incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any annual report of the
Company filed with the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act after the Effective Time that is incorporated by reference in
the Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and any Preliminary
Prospectus, the Prospectus and any further amendments or supplements to the
Registration Statement, the Preliminary Prospectus or the Prospectus will,
when they become effective or are filed with the Commission, as the case
may be, conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations and do not and will not, as of
the applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable date thereof (as to any
Preliminary Prospectus, the Prospectus and any amendment or supplement
thereto) contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any Preliminary
Prospectus or Prospectus, in light of the circumstances under which they
were made); provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement, any
Preliminary Prospectus or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein; and the Indenture conforms in all material respects to
the requirements of the Trust Indenture Act and the applicable rules and
regulations thereunder.
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(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Exchange
Act and the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated
by reference in the Prospectus, when such documents become effective or are
filed with Commission, as the case may be, will conform in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(d) The Company and each of its subsidiaries (as defined in Section
15) have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, and except as would not result in a material adverse effect
on the business, properties, results of operations or financial condition
of the Company and its subsidiaries, taken as a whole (a "Material Adverse
Effect"), are duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged; and none of the subsidiaries of the
Company is a "significant subsidiary" (as such term is defined in Rule 405
of the Rules and Regulations) except for Humana Medical Plan, Inc., Humana
Health Plan, Inc., Humana Health Plan of Texas, Inc., Humana Health
Insurance Company of Florida, Inc., Employer Health Insurance Company and
Humana Military Healthcare Services, Inc. (collectively, the "Significant
Subsidiaries").
(e) The Company has an authorized capitalization as set forth in the
Prospectus in the column entitled "Actual" under the caption
"Capitalization", and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid
and non-assessable and conform in all material respects to the description
thereof contained in the Annual Report on Form 10-K for the fiscal year
ended December 31, 2000; and all of the issued shares of capital stock of
each subsidiary of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and (except for directors'
qualifying shares or as set forth on Schedule 3 hereto) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(f) The Company has all requisite power and authority to execute,
deliver and perform its obligations under the Indenture and the Notes; and
the Indenture has been duly authorized, and when duly executed by the
proper officers of the Company
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(assuming due execution and delivery by the Trustee) and delivered by the
Company will constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) or an implied covenant of
good faith and fair dealing; and the Notes have been duly authorized, and,
when duly executed, authenticated, issued and delivered as provided in the
Indenture, will be duly and validly issued and outstanding, and will
constitute valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with their terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) or an implied covenant of
good faith and fair dealing; and the Indenture, when executed and
delivered, and the Notes, when issued and delivered, will conform to the
descriptions thereof contained in the Prospectus.
(g) The Company has all requisite corporate power and authority to
enter into this Agreement; and this Agreement has been duly authorized,
executed and delivered by the Company.
(h) The execution, delivery and performance of this Agreement and the
Indenture by the Company and the consummation of the transactions
contemplated hereby and thereby, and the issuance and delivery of the Notes
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, agreement with any governmental or
regulatory authority to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its Significant
Subsidiaries is bound or to which any of the property or assets of the
Company or its Significant Subsidiaries is subject, or any other material
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation of
the provisions of (i) the charter or by-laws of the Company or any of its
subsidiaries or (ii) any statute or any order, rule or regulation of any
governmental agency or body or court having jurisdiction over the Company
or any of its subsidiaries or any of their properties or assets, except, in
the case of clause (ii), such violations as would not have a Material
Adverse Effect; and except for the registration of the Notes under the
Securities Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Trust Indenture Act and
applicable foreign or state securities or blue sky laws in connection with
the purchase and distribution of the Notes by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any
such governmental agency or body or court is required for the execution,
delivery and performance of this Agreement or the Indenture by the Company
and the
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consummation of the transactions contemplated hereby and thereby and the
issuance and sale of the Notes.
(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to include any securities other than the Notes in the securities
registered pursuant to the Registration Statement.
(j) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
in the Prospectus; and, since such date, there has not been any change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any Material Adverse Effect, otherwise than as set forth in
the Prospectus.
(k) The financial statements (including the related notes and any
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis throughout the periods
involved.
(l) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company, whose report is incorporated by reference in the
Prospectus and who have delivered the initial letter referred to in Section
7(g) hereof, are independent accountants as required by the Securities Act
and the Rules and Regulations during the periods covered by the financial
statements on which they reported and which are contained or incorporated
in the Prospectus.
(m) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and valid title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and all real property and
buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and its subsidiaries.
(n) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for
the conduct of their
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respective businesses and the value of their respective properties and as
is customary for companies engaged in similar businesses in similar
industries.
(o) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of others, except for
such claims as would not have a Material Adverse Effect.
(p) Other than as expressly set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, might have a Material
Adverse Effect; and to the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(q) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(r) There are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.
(s) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries, on the other hand, which is required to be described or
incorporated by reference in the Prospectus which is not so described or
incorporated by reference.
(t) No labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent which might be expected to
have a Material Adverse Effect.
(u) The Company and each of its subsidiaries are in compliance with
all applicable federal and state statutes, regulations, rules and orders
relating to the healthcare and insurance industries, in each case with such
exceptions as would not have a Material Adverse Effect.
(v) The Company is in compliance in all material respects with all
applicable provisions of the Employee Retirement Income Security Act of
1974, as amended,
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including the regulations and published interpretations thereunder
("ERISA"); to the best of the Company's knowledge no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as
defined in ERISA) for which the Company would have any material liability;
to the best of the Company's knowledge the Company has not incurred and
does not expect to incur any material liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and to the best of the Company's
knowledge nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(w) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, might have) a Material
Adverse Effect.
(x) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities except
for employee stock options and restricted stock awards, (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.
(y) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any respect, and
to the best of the Company's knowledge, no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the
due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject or (iii) is in
violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any license, permit, certificate, franchise
or other governmental authorization or permit necessary to the ownership of
its property or to the conduct of its business except, with respect to
clauses (ii) and (iii), such defaults or violations as would not have a
Material Adverse Effect.
(z) The Company and each of its subsidiaries (i) make and keep
accurate books and records and (ii) maintain internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's
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authorization, (B) transactions are recorded as necessary to permit
preparation of their respective financial statements in conformity with
generally accepted accounting principles in the United States and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for their respective assets is compared with
existing assets at reasonable intervals.
(aa) The Company and each of its subsidiaries are in compliance with
all applicable federal and state statutes, regulations, rules and orders
relating to the environmental protection or the protection of human health,
in each case with such exceptions as would not have a Material Adverse
Effect.
(ab) Neither the Company nor any subsidiary is an "investment company"
(as such term is used under the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and the rules and regulations of the
Commission thereunder).
(ac) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Preliminary Prospectus or the Prospectus has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
2. Purchase of the Notes by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell to the
several Underwriters and each of the Underwriters, severally and not jointly,
agrees to purchase from the Company, at a purchase price of __% of the principal
amount thereof, plus accrued interest, if any, from August ___, 2001, the
respective amount of the $300,000,000 aggregate principal amount of the Notes
set forth opposite that Underwriter's name in Schedule 1 hereto.
The Company shall not be obligated to deliver any of the Notes to be
delivered on the Delivery Date (as defined in Section 4), except upon payment
for all the Notes to be purchased on the Delivery Date as provided herein.
3. Offering of the Notes by the Underwriters. Upon authorization by
the Representatives of the release of the Notes, the several Underwriters
propose to offer the Notes for sale upon the terms and conditions set forth in
the Prospectus.
4. Delivery of and Payment for the Notes. Delivery of and payment
for the Notes shall be made at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx, at
10:00 A.M., New York City time, on August ___, 2001 or at such other date or
place as shall be determined by agreement between the Representatives and the
Company. This date and time are sometimes referred to as
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the "Delivery Date." On the Delivery Date, the Company shall deliver or cause to
be delivered the Notes evidenced by one or more global securities registered in
the name of Cede & Co. as nominee of the The Depository Trust Company ("DTC")
for the account of the Underwriters against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. The Company shall make the Notes available for inspection
by the Representatives in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus prior to the Delivery Date
except as permitted herein; to advise the Representatives, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish the Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Notes; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of
the qualification of the Notes for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its
reasonable best efforts to obtain its withdrawal;
(b) To furnish promptly to the Representatives and to Xxxxxxx Xxxxxxx
& Xxxxxxxx, counsel for the Underwriters, a signed or conformed copy of the
Registration Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all consents and
exhibits filed therewith;
(c) To deliver promptly and without charge to the Representatives
such number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statement as
originally filed with the Commission
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and each amendment thereto (in each case excluding exhibits other than this
Agreement, the Indenture and the computation of the ratio of earnings to
fixed charges), (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus and (iii) any document incorporated by
reference in the Prospectus (excluding exhibits thereto); and, if the
delivery of a prospectus is required at any time after the Effective Time
in connection with the offering or sale of the Notes or any other
securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the Exchange Act,
to notify the Representatives and, upon their reasonable request, to file
such document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy thereof to the
Representatives and Xxxxxxx Xxxxxxx & Xxxxxxxx, as counsel for the
Underwriters, and obtain the consent of the Representatives to the filing
(such consent not to be unreasonably withheld);
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the Company,
Rule 158);
(g) For so long as any of the Notes are outstanding, to furnish and
deliver without charge to the Representatives and the Trustee, copies of
all materials furnished or otherwise made available by the Company to its
shareholders and all public reports and all reports and financial
statements furnished by the Company to any national securities exchange
pursuant to the requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder (such materials, reports and financial statements
collectively, the "Reports"),
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provided, however, that the obligations of the Company shall be considered
satisfied for the purposes of this Section 5(g) so long as the Company
shall file such Reports electronically with the Commission pursuant to
Regulation S-T under the Rules and Regulations, and such Reports shall be
publicly available;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Notes for offering
and sale under the securities laws of such jurisdictions as the
Representatives may reasonably request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Notes; provided that, in connection therewith, the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(i) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, offer for sale, sell, grant any option to purchase,
issue or otherwise transfer or dispose of (or enter into any transaction or
device which is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any debt securities
of, or guaranteed by, any of the Company or its subsidiaries which are
substantially similar to the Notes (other than the Notes), in each case,
without the prior written consent of the Representatives;
(j) To apply the net proceeds from the sale of the Notes being sold by
the Company as set forth in the Prospectus;
(k) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company" (as
such term is used under the Investment Company Act and the rules and
regulations of the Commission thereunder); and
(l) To not take, directly or indirectly, any action which is designed
to stabilize or manipulate, or which constitutes or which might reasonably
be expected to cause or result in stabilization or manipulation, of the
price of any security of the Company in connection with the offering of the
Notes.
6. Expenses. The Company agrees to pay (a) the costs incident to
the authorization, issuance, sale and delivery of the Notes and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; (d) the costs of producing and distributing this Agreement and any
other related documents in connection with the offering, purchase, sale and
delivery of the Notes; (e) any applicable listing or similar fees; (f) the fees
and
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expenses of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel to the Company,
and of PricewaterhouseCoopers LLP; (g) if applicable, the fees and expenses of
qualifying the Notes under the securities laws of the several jurisdictions as
provided in Section 5(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel to the Underwriters); (h) the travel and other costs of "road show"
meetings with potential investors in the Notes; (i) the cost of "road show"
presentation materials; and (j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in Section 8 and in Section 11, the Underwriters shall
pay their own costs and expenses, including the costs and expenses of their
counsel, any transfer taxes on the Notes which they may sell and the expenses of
advertising any offering of the Notes made by the Underwriters.
7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on the Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission
in accordance with Section 5(a); no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or threatened
by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to the Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Underwriters, is material or omits to state a fact which,
in the opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) The Company shall have furnished to Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Underwriters, all documents and information that they may
reasonably request to enable them to pass upon all corporate proceedings
and other legal matters incident to the authorization, form and validity of
this Agreement, the Indenture, the Notes, the Registration Statement and
the Prospectus, and all other legal matters relating to this Agreement and
the transactions contemplated hereby.
(d) The Representatives shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion letter or letters,
dated as of the Delivery Date, with respect to the issuance and sale of the
Notes, the Registration Statement, the Prospectus and other related matters
as the Representatives may reasonably require.
13
(e) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel to the Company,
shall have furnished to the Representatives its written opinion letter,
addressed to the Underwriters and dated the Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect
that:
(i) The Company and each of its Significant Subsidiaries are
validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to
do business and each is in good standing as a foreign corporation in
each jurisdiction set forth on a schedule thereto, and has all power
and authority necessary to own or hold its respective properties and
conduct the businesses in which it is engaged;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus;
(iii) The Indenture and the Notes conform in all material
respects to the descriptions thereof contained in the Prospectus;
(iv) The Registration Statement was declared effective under
the Securities Act and the Indenture was qualified under the Trust
Indenture Act as of the date and time specified in such opinion; the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Rules and Regulations specified in such opinion
on the date specified therein; and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to
such counsel's knowledge, no proceeding for that purpose is pending or
threatened by the Commission;
(v) The Registration Statement and the Prospectus (other than
(a) the financial statements, notes and schedules thereto, (b) other
financial data included, or incorporated by reference, in the
Registration Statement or the Prospectus, (c) any document incorporated
by reference in the Registration Statement or the Prospectus and (d)
the Statement of Eligibility and Qualification of the Trustee under the
1939 Act (Form T-1), included therein, as to which we express no
opinion) appeared on their face to be responsive as to form in all
material respects to the requirements of the Securities Act and the
Rules and Regulations; the documents incorporated by reference in the
Prospectus and any further amendment or supplement to any such
incorporated document made by the Company prior to the Delivery Date
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
appeared on their face to be responsive as to form in all material
respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and the Rules and Regulations; and the Indenture
conforms in all material respects to the
14
requirements of the Trust Indenture Act and the applicable rules and
regulations thereunder;
(vi) To such counsel's knowledge, there are no contracts or
other documents which are required to be described in the Prospectus or
filed as exhibits to the Registration Statement by the Securities Act
or by the Rules and Regulations which have not been described or filed
as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company; the Indenture has been duly authorized, and
when duly executed by the proper officers of the Company (assuming due
execution and delivery by the Trustee) and delivered by the Company
will constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an implied
covenant of good faith and fair dealing; and the Notes have been duly
authorized, executed, issued and delivered by the Company, and, when
duly authenticated as provided in the Indenture, will be duly and
validly issued and outstanding, and will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture
and enforceable in accordance with their terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good faith
and fair dealing;
(viii) The issuance and sale of the Notes and the compliance by
the Company with all of the provisions of this Agreement and the
Indenture and the consummation of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument which the Company has filed with the Commission as an
exhibit to the Registration Statement or the documents incorporated by
reference therein and to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its Significant Subsidiaries or any statute or any order, rule or
regulation of the United States or the State of New York or the
Delaware General Corporation Law known to such counsel of any
governmental agency or body or court of the United States or the States
of New York or Delaware (in the case of Delaware, applying the Delaware
General Corporation Law) having jurisdiction over the Company or any of
its Significant Subsidiaries or any of their properties or assets; and,
except for the registration of
15
the Notes under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act or the Trust Indenture Act and applicable
foreign or state securities or blue sky laws in connection with the
purchase and distribution of the Notes by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with,
any such governmental agency or body or court of the United States or
the States of New York or Delaware (in the case of Delaware, applying
the Delaware General Corporation Law) is required for the execution,
delivery and performance of this Agreement or the Indenture by the
Company and the consummation of the transactions contemplated hereby
and thereby and the issuance and sale of the Notes; and
(ix) To such counsel's knowledge, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to include any
securities other than the Notes in the securities registered pursuant
to the Registration Statement.
In rendering such opinion letter, such counsel may state that its
opinion is limited to matters governed by the federal laws of the
United States of America, the laws of the State of New York and the
General Corporation Law of the State of Delaware and that such counsel
is not admitted in any state other than the State of New York. Such
counsel shall also have furnished to the Representatives a written
statement, addressed to the Underwriters and dated the Delivery Date,
in form and substance satisfactory to the Representatives, to the
effect that (v) such counsel has from time to time in the past
represented the Company in connection with certain transactions and
limited other legal matters (although the Company is also represented
by its General Counsel and, with respect to other matters, by other
outside counsel) and has acted as counsel to the Company in connection
with the preparation of the Registration Statement, (w) in the course
of the preparation by the Company and such counsel of the Registration
Statement and the Prospectus (other than the documents incorporated by
reference therein), such counsel participated in conferences with
certain of the officers of, and the independent accountants for, the
Company, at which the Registration Statement and the Prospectus were
discussed; (x) between the effective date of the Registration Statement
and the time of delivery of this letter such counsel participated in
additional conferences with certain officers and representatives of the
Company at which the contents of the Registration Statement and the
Prospectus were discussed to a limited extent; (y) given the
limitations inherent in the independent verification of factual matters
and the character of determinations involved in the registration
process, such counsel is not passing upon and does not assume any
responsibility for the
16
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except for the statements made
in the Prospectus referred to in clauses (iii) and (vi) of this Section
7(e); and (z) subject to the foregoing and on the basis of the
information such counsel gained in the course of the performance of the
services referred to above, including information obtained from
officers and other representatives of the Company, (A) no facts have
come to the attention of such counsel that cause them to believe that
the Registration Statement (including the documents incorporated by
reference therein), at the time the Registration Statement became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus
(including the documents incorporated by reference therein) as of its
date and the Delivery Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
and (B) that such counsel expresses no view or belief with respect to
financial statements, notes, or schedules thereto, or other financial
data included (or incorporated by reference) in the Registration
Statement, the Prospectus or the Prospectus Supplement or the Form T-1
filed as an exhibit to the Registration Statement.
(f) Xxxxx X. Xxxxxx, Assistant General Counsel to the Company, shall
have furnished to the Representatives its written opinion letter, addressed
to the Underwriters and dated the Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) Each of the Company and each of its Significant
Subsidiaries have been duly incorporated, and each of the Company's
Significant Subsidiaries is validly existing as a corporation in good
standing under the laws of its respective jurisdictions of
incorporation, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its respective
ownership or lease of property or the conduct of its respective
businesses requires such qualification and has all power and authority
necessary to own or hold its respective properties and conduct the
businesses in which its is engaged;
(ii) All of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Annual Report on Form 10-K for the fiscal year ended December 31, 2000;
and all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully
paid, non-assessable and (except for directors' qualifying shares or as
set forth on Schedule 3 hereto) are owned directly or
17
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(iii) To such counsel's knowledge and other than as expressly
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, might have a Material Adverse
Effect; and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(iv) The issuance and sale of the Notes and the compliance by
the Company with all of the provisions of this Agreement and the
Indenture and the consummation of the transactions contemplated hereby
and thereby will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement to which the
Company or any of its Significant Subsidiaries is a party or by which
the Company or any of its Significant Subsidiaries is bound or to which
any of the property or assets of the Company or any of its Significant
Subsidiaries is subject, or other material agreement or instrument
known to such counsel to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject; and
(v) The statements contained or incorporated by reference in
the Prospectus under the captions "Business--Government Regulation" and
"Business--Health Care Reform," insofar as they describe federal and
state statutes, rules, regulations and orders, constitute a fair
summary thereof in all material respects.
(g) At the time of execution of this Agreement, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, in form and
substance reasonably satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the qualification
of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date hereof), the conclusions and findings of
such firm with respect to the financial information and other matters
ordinarily covered by accountants' "comfort letters" to underwriters in
connection with registered public offerings.
18
(h) With respect to the letter of PricewaterhouseCoopers LLP referred
to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "initial letter"),
the Company shall have furnished to the Representatives a letter (the
"bring-down letter") of such accountants, addressed to the Underwriters and
dated the Delivery Date (i) confirming that they are independent
accountants within the meaning of the Securities Act and are in compliance
with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set forth
in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated the Delivery Date, of its President and Chief Executive
Officer and its Senior Vice President and Chief Financial Officer stating
that:
(i) The representations, warranties and agreements of the Company in
Section 1 are that are qualified as to materiality are true and correct as
of the Delivery Date and the representations, warranties and agreements of
the Company in Section 1 that are not qualified as to materiality are true
and correct in all material respects as of the Delivery Date; the Company
has complied with all its agreements contained herein; and the conditions
set forth in Section 7(a) and (j) have been fulfilled; and
(ii) They have carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of
the Preliminary Prospectus or Prospectus, in light of the circumstances
under which they were made) not misleading, and (B) since the Effective
Date no event has occurred which should have been set forth in a supplement
or amendment to the Registration Statement or the Prospectus.
(j) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
in the Prospectus or (ii) since such date there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change,
19
in or affecting the business, properties, results of operations, financial
condition or prospects of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth in the Prospectus, the effect of which,
in any such case described in clause (i) or (ii), is, in the judgment of
the Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Notes being delivered on the Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization",
as that term is defined by the Commission for purposes of Rule 436(g)(2) of
the Rules and Regulations and (ii) except for a negative outlook by Xxxxx'x
Investors Service, Inc. and Standard & Poor's Ratings Services, a division
of the XxXxxx-Xxxx Companies, Inc., no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities.
(l) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of the Representatives, impracticable or inadvisable to proceed with the
public offering or delivery of the Notes being delivered on the Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(m) No default or event which, with notice or lapse of time or both,
would constitute such a default shall have occurred and be continuing, or
would result from the transactions contemplated hereby to occur prior to,
concurrently with or immediately following the consummation of the offering
of the Notes under the Indenture.
(n) The Company and the Trustee shall have entered into the
Indenture, and the Underwriters shall have received counterparts, conformed
as executed, thereof, and the Notes shall have been duly executed and
delivered by the Company and authenticated by the Trustee.
20
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its directors, officers and employees and each person, if any, who controls
any Underwriter within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the Notes), to which
that Underwriter, director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, or
in any Blue Sky Application any material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii) any act
or failure to act or any alleged act or failure to act by any Underwriter
in connection with, or relating in any manner to, the Notes or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon
matters covered by clause (i) or (ii) above (provided that the Company
shall not be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any
such acts or failures to act undertaken or omitted to be taken by such
Underwriter through its negligence or willful misconduct), and shall
reimburse each Underwriter and each such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any such amendment or supplement, (x) in reliance
upon and in conformity with written information concerning such Underwriter
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein which information consists
solely of the information specified in Section 8(e) or (y) if such untrue
statement or omission made in the Preliminary Prospectus was corrected in
the Prospectus and such Underwriter failed to send or give a copy of the
Prospectus to the person asserting such loss, claim, damage or liability.
The
21
foregoing indemnity agreement is in addition to any liability that the
Company may otherwise have to any Underwriter or to any director, officer,
employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its directors, officers and employees, and each
person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof, to which the Company or
any such director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained
(A) in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (B) in any Blue
Sky Application or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer, employee or controlling person for any legal or other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability that any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure; and, provided further,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
22
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Representatives shall have the right to employ counsel to
represent jointly the Representatives and those other Underwriters and
their respective officers, employees and controlling persons who may be
subject to liability arising out of any claim in respect of which indemnity
may be sought by the Underwriters against the Company under this Section 8
if, in the reasonable judgment of the Representatives, it is advisable for
the Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall be paid by
the Company. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled
with the consent of the indemnifying party or if there be a final judgment
of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss
or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Notes or (ii) if
the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Underwriters on the other with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Notes purchased under this Agreement
(before deducting expenses) received by the Company, on the one hand, and
the total underwriting discounts and commissions received by the
Underwriters with respect to the Notes purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the
Notes under this Agreement, in each case as set
23
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section were to be
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above
in this Section shall be deemed to include, for purposes of this Section,
any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the Notes underwritten by it and distributed to the
public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Notes by the
Underwriters set forth in the last paragraph on the cover page of, and the
fifth, ninth and eleventh paragraphs under the caption "Underwriting" in,
the Prospectus are correct and constitute the only information concerning
such Underwriters furnished in writing to the Company by or on behalf of
the Underwriters specifically for inclusion in the Registration Statement
and the Prospectus.
9. Defaulting Underwriters.
If, on the Delivery Date, any Underwriter defaults in the performance
of its obligations under this Agreement, the remaining non-defaulting
Underwriters shall be obligated to purchase the Notes which the defaulting
Underwriter agreed but failed to purchase on the Delivery Date in the respective
proportions which the aggregate principal amount of Notes set opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total aggregate principal amount of Notes set opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Notes on the Delivery Date if the total aggregate principal
amount of Notes which the defaulting Underwriter or
24
Underwriters agreed but failed to purchase on such date exceeds 9.09% of the
total aggregate principal amount of Notes to be purchased on the Delivery Date,
and any remaining non-defaulting Underwriter shall not be obligated to purchase
more than 110% of the aggregate principal amount of Notes which it agreed to
purchase on the Delivery Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Notes to be purchased on the Delivery
Date. If the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase Notes which the defaulting Underwriter
or Underwriters agreed but failed to purchase on the Delivery Date, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company, except that the Company will continue to be liable
for the payment of expenses of the non-defaulting Underwriters to the extent set
forth in Sections 6 and 11. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 9, purchases the Notes which a defaulting Underwriter agreed but failed
to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Notes of a defaulting
or withdrawing Underwriter, either the Representatives or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may
be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Notes if, prior to that time,
any of the events described in Sections 7(j), 7(k) and 7(l), shall have occurred
or if the Underwriters shall decline to purchase the Notes for any reason
permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the Company shall
fail to tender the Notes for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
documented out-of-pocket expenses (including fees and disbursements of counsel)
incurred by the Underwriters in connection with this Agreement and the proposed
purchase of the Notes, and upon demand the Company shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 10 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
25
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to:
(i) X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Legal Department (Fax: 000-000-0000); and
(ii) Xxxxxx Brothers Inc., Three World Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Debt Capital Markets, Healthcare
Group (Fax: 000-000-0000), with a copy, in the case of any notice
pursuant to Section 8(c), to the Director of Litigation, Office of the
General Counsel, Xxxxxx Brothers Inc., 3 World Financial Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; or
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Senior Vice President and Chief
Financial Officer (Fax: 000-000-0000), with a copy to Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx Xxxxxx (Fax: 000-000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by either Representative.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Securities Act and (B) the indemnity agreement of the Underwriters contained
in Section 8(b) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on
26
behalf on them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Notes and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
15. Definitions of "Business Day" and "Subsidiary". For purposes of
this Agreement, (a) "business day" means each Monday, Tuesday, Wednesday,
Thursday or Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close and (b)
"subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations.
16. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
27
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
Humana Inc.
By
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
Accepted:
X.X. Xxxxxx Securities Inc.
By
---------------------------
Authorized Representative
Xxxxxx Brothers Inc.
By
---------------------------
Authorized Representative
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
28
SCHEDULE 1
Underwriters Principal Amount of Notes
------------ -------------------------
X.X. Xxxxxx Securities Inc...................... $
---------
Xxxxxx Brothers Inc............................. $
---------
Banc of America Securities LLC.................. $
---------
Xxxxxxx Xxxxx Barney Inc........................ $
---------
Wachovia Securities, Inc........................ $
---------
Scotia Capital (USA) Inc........................ $
---------
U.S. Bancorp Xxxxx Xxxxxxx Inc.................. $
---------
Total......................................... $
=========
------------------------------
