EXHIBIT 1
DRAFT
3,000,000 SHARES
CENTENE CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
August [ ], 2003
XXXXXX BROTHERS INC.
XX XXXXX SECURITIES CORPORATION
XXXXXX XXXXXX PARTNERS LLC
XXXXXX, XXXXXXXX & COMPANY INCORPORATED
As Representatives of the
several underwriters named in Schedule 1 hereto
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Centene Corporation, a Delaware corporation (the "COMPANY"), proposes to
sell an aggregate of 3,000,000 shares (the "FIRM STOCK") of the Company's Common
Stock, par value $0.001 per share (the "COMMON STOCK"). In addition, the Company
proposes to grant to the Underwriters named in Schedule 1 hereto (the
"UNDERWRITERS") an option to purchase up to an additional 450,000 shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"OPTION STOCK"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "STOCK." This is to confirm the agreement
concerning the purchase of the Stock from the Company by the Underwriters.
SECTION 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 Stock 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 United States 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. Copies of such registration statement and each of the amendments
thereto 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 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 pursuant to Rule 424(a) of the Rules and
Regulations; "REGISTRATION STATEMENT" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
and deemed to be a part of the registration statement as of the Effective Time
pursuant to Rule 430A of the Rules and Regulations; and "PROSPECTUS" means the
prospectus in the form first used to confirm sales of Stock. If the Company has
filed an abbreviated registration statement to register additional shares of
Common Stock pursuant to Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION
STATEMENT" shall be deemed to include such Rule 462 Registration Statement.
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
United States 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 the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform in all 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 filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that no representation or
warranty is made as to information contained in or omitted from the Registration
Statement 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.
(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 Securities Act or
the Exchange Act, as applicable, 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 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 Securities Act
or the Exchange Act, as applicable, 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 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, 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 other than [ ] and [ ] is a "significant
subsidiary", as such term is defined in Rule 405 of the Rules and Regulations].
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(e) The Company has an authorized capitalization as set forth in the
Prospectus. All of the issued shares of capital stock of the Company have been
duly and validly authorized and issued, were issued in compliance with federal
and state securities laws, are fully paid and non-assessable and conform to the
description thereof contained in the Prospectus. All of the Company's options,
warrants and other rights to purchase or exchange any securities for shares of
the Company's capital stock have been duly and validly authorized and issued,
were issued in compliance with federal and state securities laws, and conform to
the description thereof contained in the Prospectus. 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 are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(f) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the descriptions thereof contained in the Prospectus. Upon payment
for and delivery of the Stock to be sold by the Company pursuant to this
Agreement, the Underwriters will acquire good and valid title to such Stock, in
each case free and clear of all liens, encumbrances, equities, preemptive
rights, subscription rights, other rights to purchase, voting or transfer
restrictions and other claims.
(g) This Agreement has been duly authorized, executed and delivered by the
Company.
(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and except for the
registration of the Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such securities
with the Stock registered pursuant to the Registration Statement other than as
described in the Registration Statement and as to which such rights are being
exercised in connection with the offering contemplated hereby or have been
waived in writing or notice of such rights has been given and such holders have
failed to exercise such right within the time required under the terms and
conditions of such rights in connection with the offering contemplated hereby.
Except as provided in the immediately preceding sentence, the holders of
outstanding shares of the Company's capital stock are not entitled to preemptive
or other rights to subscribe for the Stock. Except for (i) [ ] shares of Common
Stock granted to officers, directors and employees under the Company's Employee
Stock Purchase Plan; (ii) options to purchase [ ] shares of Common Stock to be
granted to officers, directors and employees under the Company's Stock Incentive
Plan; (iii) options to purchase [ ] shares of Common Stock
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granted outside the Company's Stock Incentive Plans; and (iv) warrants to
purchase [ ] shares of Common Stock, upon completion of the offering, no
options, warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are
outstanding.
(j) The Company has not sold or issued any shares of Common Stock during
the six-month period preceding the date of the Prospectus, including any sales
pursuant to Rule 144A under, or Regulations D or S of, the Securities Act other
than shares issued pursuant to employee benefit plans, qualified stock options
plans or other employee compensation plans or pursuant to outstanding options,
rights or warrants.
(k) 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 or contemplated 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 change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus.
(l) The consolidated financial statements (including the related notes and
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 applied on a consistent
basis throughout the periods involved.
(m) PriceWaterhouseCoopers LLP, who have certified certain financial
statements of the Company, whose report appears in the Prospectus or is
incorporated by reference therein and who have delivered the letters referred to
in Section 7(e) hereof, are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(n) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable 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 assets 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.
(o) 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 respective businesses and the value of their respective properties and
as is customary for companies engaged in similar businesses in similar
industries.
(p) 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 (collectively, the "INTELLECTUAL PROPERTY") necessary
for the conduct of their respective businesses and have no reason to believe
that the conduct of their
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respective businesses will conflict with, and have not received any notice of
any claim of conflict with, any such rights of others.
(q) 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 on the general affairs, management, consolidated financial
position, stockholders' equity, results of operations, business or prospects of
the Company and its subsidiaries (a "MATERIAL ADVERSE EFFECT"); and to the best
of the Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(r) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
(s) There are no franchises, leases, 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 are incorporated by reference
therein or filed as exhibits to the Registration Statement.
(t) The minute books of each of the Company and its subsidiaries have been
made available to the Representatives and counsel for the Underwriters and such
books (i) contain a complete summary of all meetings and actions of the
directors and stockholders of the Company or such subsidiary, as the case may
be, since the time of its respective incorporation through the date of the
latest meeting of and action and (ii) accurately, in all material respects,
reflect all transactions referred to in such minutes.
(u) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders, customers or
suppliers of the Company on the other hand, which is required to be described in
the Prospectus which is not so described.
(v) Neither the Company nor any of its subsidiaries owns any "margin
securities" as that term is defined in Regulations G and U of the Board of
Governors of the Federal Reserve System, and none of the proceeds of the sale of
the Stock will be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or restricting any
indebtedness that was originally incurred to purchase or carry any margin
security or for any other purpose that might cause any of the Stock to be
considered a "purpose credit" within the meanings of Regulation G, T, U or X of
such Board of Governors.
(w) 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.
(x) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); 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 liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to the 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
nothing has occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
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(y) Neither the Company nor any of its officers, directors or affiliates
has taken or will take, directly or indirectly, any action designed or intended
to stabilize or manipulate the price of any security of the Company, or that
caused or resulted in, or that might in the future reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company. The Company acknowledges that the Underwriters may engage in
passive market making transactions in the Stock on the Nasdaq National Market in
accordance with Regulation M under the Exchange Act.
(z) 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.
(aa) 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, (ii)
incurred any liability or obligation, direct or contingent, other than
non-material 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.
(bb) The Company and each of its subsidiaries (i) makes and keeps accurate
books and records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements 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 its assets is
compared with existing assets at reasonable intervals.
(cc) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any material respect, and 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 material 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 material 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 material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business.
(dd) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on behalf of
the Company or any of its subsidiaries, has used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; made any direct or indirect unlawful payment to any foreign
or domestic government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of 1977; or
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(ee) The Company and its subsidiaries possess such permits, licenses,
provider numbers, certificates, approvals (including certificate of need
approvals), consents, orders, certifications, accreditations and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by, and have made
all declarations and filings with, the appropriate federal, state or local
regulatory agencies or bodies necessary to conduct the businesses now operated
by them, except where the failure to so declare or file would not, singly and in
the aggregate, have a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the
6
failure so to comply would not, singly and in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(ff) Neither the Company nor, to the knowledge of the Company, any
officer, director, stockholder, employee or other agent of the Company or any of
its subsidiaries has engaged, directly or indirectly, in any activities which
are prohibited under (i) Medicaid statutes or any regulations promulgated
pursuant to such statutes, or (ii) related state or local statutes or
regulations or any rules of professional conduct.
(gg) Neither the Company nor any of its subsidiaries has failed to file
with applicable regulatory authorities any statement, report, information or
form required by any applicable law, regulation or order, except where the
failure to so file would not, singly and in the aggregate, have a Material
Adverse Effect. Except as described in the Prospectus and except for any
failures to be in compliance or deficiencies which would not, singly and in the
aggregate, have a Material Adverse Effect, all such filings or submissions were
in compliance with applicable laws when filed and no deficiencies have been
asserted by any regulatory commission, agency or authority with respect to any
such filings or submissions.
(hh) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect. The terms "HAZARDOUS WASTES", "TOXIC
WASTES", "HAZARDOUS SUBSTANCES" and "MEDICAL WASTES" shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(ii) There are no costs or liabilities associated with all foreign,
federal, state local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS") (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, individually or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
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(jj) Neither the Company nor any subsidiary is, nor as of the First
Delivery Date will be, an "investment company" as defined in the Investment
Company Act of 1940, as amended.
(kk) There are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(ll) The statistical and market-related data included in the Prospectus
and the Registration Statement are based on or derived from sources which the
Company believes to be reliable and accurate.
(mm) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
SECTION 2. Purchase of the Stock 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 sell 3,000,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. Each
Underwriter shall be obligated to purchase from the Company that number of
shares of the Firm Stock which represents the same proportion of the number of
shares of the Firm Stock to be sold by the Company as the number of shares of
the Firm Stock set forth opposite the name of such Underwriter in Schedule 1
represents of the total number of shares of the Firm Stock to be purchased by
all of the Underwriters pursuant to this Agreement. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option to purchase
up to 450,000 shares of Option Stock. Such option is granted for the purpose of
covering over-allotments in the sale of Firm Stock and is exercisable as
provided in Section 2 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be $[ ] per
share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
SECTION 3. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
SECTION 4. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the offices of Xxxxxxxx Chance US LLP, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on the
[third] full business day following the date of this Agreement 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 the "First
Delivery Date." On the First Delivery Date, the Company shall deliver or cause
to be delivered certificates representing the Firm Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
8
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. Upon delivery, the Firm Stock shall be registered in such
names and in such denominations as the Representatives shall request in writing
not less than two full business days prior to the First Delivery Date. For the
purpose of expediting the checking and packaging of the certificates for the
Firm Stock, the Company shall make the certificates representing the Firm Stock
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 First
Delivery Date.
The option granted in Section 2 will expire 30 days after the date of this
Agreement and may be exercised in whole or in part from time to time by written
notice being given to the Company by the Representatives. Such notice shall set
forth the aggregate number of shares of Option Stock as to which the option is
being exercised, the names in which the shares of Option Stock are to be
registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "SECOND DELIVERY DATE" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "DELIVERY
DATE".
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter 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. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock 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 such Second Delivery Date.
SECTION 5. Further Agreements of the Company. The Company covenants and 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 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 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
Stock 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
9
suspending the use of any Preliminary Prospectus or the Prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel for
the Underwriters a signed 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 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 and each amendment thereto (in each case excluding exhibits); (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 Stock 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, to notify the Representatives and, upon their 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
judgment of the Company or the Representative, 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 counsel
for the Underwriters and obtain the consent of the Representatives to the
filing;
(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 a period of five years following the Effective Date, to furnish to
the Representatives copies of all materials furnished by the Company to its
shareholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to 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;
(h) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify the Stock for offering and sale under the
securities laws of such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided, however, 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;
10
(i) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, (i) offer for sale, sell, pledge or otherwise 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 shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding options,
warrants or rights), or sell or grant options, rights or warrants with respect
to any shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans existing
on the date hereof), (ii) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, or (iii) file or cause to be
filed a registration statement on Form S-8 or other similar form with respect to
any shares of Common Stock or securities convertible, exercisable or
exchangeable into Common Stock or any other securities of the Company, in each
case without the prior written consent of Xxxxxx Brothers Inc. and XX Xxxxx
Securities Corporation on behalf of the Underwriters; and to cause each
stockholder and optionholder listed on Schedule 2 hereto, each officer and
director of the Company to furnish to the Representatives, prior to the First
Delivery Date, a letter or letters, substantially in the form of Exhibit A
hereto, pursuant to which each such person shall agree not to, directly or
indirectly, (i) offer for sale, sell, pledge or otherwise 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 shares
of Common Stock or securities convertible into or exchangeable for Common Stock
or (ii) enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period of 90 days from the
date of the Prospectus, without the prior written consent of Xxxxxx Brothers
Inc. and XX Xxxxx Securities Corporation on behalf of the Underwriters;
(j) To apply for the inclusion of the Stock on the Nasdaq National Market
System, and to use its best efforts to effect that quotation, subject only to
official notice of issuance, prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock as set forth in
the Prospectus;
(l) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended and the rules and regulations of
the Commission thereunder;
(m) To endeavor to qualify the Stock for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, provided, however, that the Company shall not be obligated to qualify
as a foreign corporation in any jurisdiction in which it is not so qualified or
to file a general consent to service of process in any jurisdiction;
(n) The Company shall engage and maintain, at its expense, a registrar and
transfer agent for the Common Stock; and
(o) During the Prospectus Delivery Period, the Company shall file all
documents required to be filed with the Commission and the Nasdaq National
Market pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and
within the time periods required by the Exchange Act.
11
SECTION 6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock 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, any supplemental agreement
among the Underwriters and any other related documents in connection with the
offering, purchase, sale and delivery of the stock; (e) the filing fees incident
to securing the review by the NASD of the terms of sale of the Stock; (f) any
applicable listing or other fees; (g) the fees and expenses of qualifying the
Stock under the securities laws of the several jurisdictions as provided in
Section 5(h) and of preparing, printing and distributing a Blue Sky Memorandum
and a Canadian "wrapper" (including related fees and expenses of counsel to the
Underwriters); (h) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the offering of the Stock, including, without limitation, expenses associated
with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show and (i) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement; provided, however, that, except as provided in
this Section 6 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 Stock which they may sell and the expenses of advertising any offering of
the Stock made by the Underwriters.
SECTION 7. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company contained
herein, to the performance by the Company of its respective 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) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(c) Xxxx and Xxxx, LLP shall have furnished to the Representatives their
written opinion, as counsel to the Company, addressed to the Underwriters and
dated such Delivery Date, in form and substance reasonably satisfactory to the
Representatives, the form of which is attached hereto as Exhibit B.
(d) The Representatives shall have received from Xxxxxxxx Chance US LLP,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives may
12
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(e) At the time of execution of this Agreement, the Representatives shall
have received from PriceWaterhouseCoopers LLP a letter or letters, in form and
substance satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
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 and (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.
(f) With respect to the letter or letters of PriceWaterhouseCoopers LLP
referred to in the preceding paragraph and delivered to the Representatives
concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the
Company shall have furnished to the Representatives a letter (the "BRING-DOWN
LETTER") of such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public 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 letters and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letters.
(g) The Underwriters shall have received on the Delivery Date opinions of
Xxxxxxxxx Xxxxxxxx LLP, Ice Miller, Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.,
Xxxxxxx & Xxxxx LLP and Xxxxxxxx, Xxxxx & Xxxx as special regulatory counsel for
the Company, with respect to federal, Indiana, Texas, Wisconsin and New Jersey
law, the forms of which are attached hereto as Exhibits C, D, E, F and G
respectively. The opinions shall be rendered to the Underwriters at the request
of the Company and shall so state therein.
(h) The Company shall have furnished to the Representatives a certificate,
dated such Delivery Date, of its President and Chief Executive Officer or Senior
Vice President, Chief Financial Officer and Treasurer of the Company stating
that:
(i) The representations, warranties and agreements of the Company in
Section 1 are true and correct as of such Delivery Date; the Company has
complied with all its agreements contained herein; and the conditions set
forth in Sections 7(a) and 7(i) 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 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 which has not been so set forth.
(i) Neither the Company nor any of its subsidiaries shall have sustained
(i) since the date of the latest audited financial statements included in the
Prospectus or incorporated by reference in the
13
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the 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, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated 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 Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(j) 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 the Nasdaq
National or Small Cap Market 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 materially limited or the settlement of such
trading generally shall have been materially disrupted 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), including, without limitation, as a result of terrorist
activities after the date hereof, or any other calamity or crisis as to make it,
in the judgment of the Representatives, impracticable or inadvisable to proceed
with the public offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the Prospectus.
(k) The Nasdaq National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance.
(l) No Underwriter shall have discovered and disclosed to the Company on
or prior to such 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 reasonable opinion of Xxxxxxxx Chance US LLP, counsel for the
Underwriters, is material or omits to state a fact which, in the reasonable
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
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 counsel for the Underwriters.
SECTION 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 Stock), 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
14
fact contained (A) in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (B) in any materials
or information provided to investors by, or with the approval of, the Company in
connection with the marketing of the offering of the Stock, including any
roadshow or investor presentations made to investors by the Company (whether in
person or electronically) (the "MARKETING MATERIALS"), (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 Marketing Materials, 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 Stock 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 gross
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, 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). The foregoing indemnity agreement is in addition to any
liability which 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 officers and employees, each of its directors 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 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, 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, 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, which information
is limited to the information set forth in Section 8(e), and shall reimburse the
Company and any such director, officer 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 which 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
15
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 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, directors, 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 Stock
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
Stock 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 shares of the Stock purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the shares of the Stock under this Agreement, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to 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
16
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 8(d) 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 8(d), 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 8(d), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the shares
of Stock underwritten by it and distributed to the public were 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 8(d) 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 Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing 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.]
SECTION 9. Defaulting Underwriters.
If, on either 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 Stock which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of shares of the Firm Stock set opposite
the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears
to the total number of shares of the Firm Stock 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 Stock on such Delivery Date if the total number of shares
of the Stock which the defaulting Underwriter or Underwriters agreed but failed
to purchase on such date exceeds 9.09% of the total number of shares of the
Stock to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such 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 Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Company to sell, the Option Stock) 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 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
Firm Stock which a defaulting Underwriter agreed but failed to purchase.
17
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 Stock 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.
SECTION 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 Firm Stock if, prior to that time, any
of the events described in Sections 7(i) or 7(j), shall have occurred or if the
Underwriters shall decline to purchase the Stock for any reason permitted under
this Agreement.
SECTION 11. Reimbursement of Underwriters' Expenses. If the Company shall fail
to tender the Stock 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 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
Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 9 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.
SECTION 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 Xxxxxx Brothers Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
X.X. 00000, Attention: Syndicate Registration Department, 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., 000 Xxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 and to XX Xxxxx Securities, 1221 Avenue
of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, X.X. 00000, attention: [_____________];
(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: President and Chief Executive Officer;
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 Xxxxxx Brothers Inc. or XX Xxxxx
Securities Corporation on behalf of the Representatives;
SECTION 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 directors, officers
and 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
18
in this Agreement is intended or shall be construed to give any person, other
than the persons referred to in this Section 13, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
SECTION 14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Stock 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.
SECTION 15. Definition of the Terms "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.
SECTION 16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York.
SECTION 17. Consent to Jurisdiction. Each party irrevocably agrees that any
legal suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated hereby ("RELATED PROCEEDINGS") may be instituted
in the federal courts of the United States of America located in the City of New
York or the courts of the State of New York in each case located in the Borough
of Manhattan in the City of New York (collectively, the "SPECIFIED COURTS"), and
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any such court (a
"RELATED JUDGMENT"), as to which such jurisdiction is non-exclusive) of such
courts in any such suit, action or proceeding. The parties further agree that
service of any process, summons, notice or document by mail to such party's
address set forth above shall be effective service of process for any lawsuit,
action or other proceeding brought in any such court. The parties hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any lawsuit, action or other proceeding in the Specified Courts, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such lawsuit, action or other proceeding brought in any
such court has been brought in an inconvenient forum. Each party not located in
the United States hereby irrevocably appoints CT Corporation System, which
currently maintains a New York City office at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive service of process
or other legal summons for purposes of any such action or proceeding that may be
instituted in any state or federal court in the City and State of New York.
SECTION 18. Waiver of Immunity. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all
immunity (whether on the basis of sovereignty or otherwise) from jurisdiction,
service of process, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in the Specified Courts, and with respect
to any Related Judgment, each party waives any such immunity in the Specified
Courts or any other court of competent jurisdiction, and will not raise or claim
or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding or Related Judgment, including, without limitation, any immunity
pursuant to the United States Foreign Sovereign Immunities Act of 1976, as
amended.
SECTION 19. 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.
19
SECTION 20. 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.
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,
Centene Corporation
By:
--------------------------------
Name:
Title:
Accepted:
Xxxxxx Brothers Inc.
XX Xxxxx Securities Corporation
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By:
--------------------------------
Authorized Representative
By XX Xxxxx Securities Corporation
By:
--------------------------------
Authorized Representative
20
SCHEDULE 1
Number of Firm
Underwriters Shares to be Purchased
------------ ----------------------
Xxxxxx Brothers Inc.
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxx Partners LLC
21
SCHEDULE 2
Name of Shareholders / Optionholders
22
EXHIBIT A
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.
XX Xxxxx Securities Corporation
Xxxxxx Xxxxxx Partners LLC
As Representatives of the several
Underwriters named in Schedule 1
to the Underwriting Agreement,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The undersigned understands that you and certain other firms
propose to enter into an Underwriting Agreement (the "Underwriting Agreement")
providing for the purchase by you and such other firms (the "Underwriters") of
shares (the "Shares") of Common Stock, par value $.001 per share (the "Common
Stock"), of Centene Corporation, a Delaware corporation (the "Company"), and
that the Underwriters propose to reoffer the Shares to the public (the
"Offering").
In consideration of the execution of the Underwriting
Agreement by the Underwriters, and for other good and valuable consideration,
the undersigned hereby irrevocably agrees that, without the prior written
consent of Xxxxxx Brothers Inc. and XX Xxxxx Securities Corporation, on behalf
of the Underwriters, the undersigned will not, directly or indirectly, (1) offer
for sale, sell, pledge, or otherwise dispose of (or enter into any transaction
or device that is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any shares of Common
Stock (including, without limitation, shares of Common Stock that may be deemed
to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission and shares of Common Stock
that may be issued upon exercise of any option or warrant) or securities
convertible into or exchangeable for Common Stock (other than the Shares) owned
by the undersigned on the date of execution of this Lock-Up Letter Agreement or
on the date of the completion of the Offering, or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 90 days after the date of the final Prospectus
relating to the Offering.
The foregoing sentence shall not apply to bona fide gifts,
sales or other dispositions of shares of any class of the Company's capital
stock, in each case that are made exclusively between and among the undersigned
and members of the undersigned's family, or affiliates of the undersigned,
provided that it shall be a condition to any such transfer that (i) the
transferee/donee agrees to be bound by the terms of the lock-up letter agreement
(including, without limitation, the restrictions set forth in the preceding
sentence) to the same extent as if the transferee/donee were a party hereto,
(ii) no filing by any party (donor, donee, transferor or transferee) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be
required or shall be voluntarily made in connection with such transfer or
distribution, (iii) each party (donor, donee, transferor or transferee) shall
not be required by law (including without limitation the disclosure requirements
of the Securities Act of 1933, as amended, and the Exchange Act) to make, and
shall agree to not voluntarily make, any public announcement of the transfer
23
or disposition, and (iv) the undersigned notifies Xxxxxx Brothers' Equity
Capital Markets and XX Xxxxx Securities Corporation at least two business days
prior to the proposed transfer or disposition.
In furtherance of the foregoing, the Company and its Transfer
Agent are hereby authorized to decline to make any transfer of securities if
such transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it
does not intend to proceed with the Offering, if the Underwriting Agreement does
not become effective by October 31, 2003, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall terminate or
be terminated prior to payment for and delivery of the Shares, we will be
released from our obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the
Underwriters will proceed with the Offering in reliance on this Lock-Up Letter
Agreement.
Whether or not the Offering actually occurs depends on a
number of factors, including market conditions. Any Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Letter
Agreement and that, upon request, the undersigned will execute any additional
documents necessary in connection with the enforcement hereof. Any obligations
of the undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
Dated: By:
------------- ------------------------------
Name:
Title:
24
EXHIBIT B
FORM OF LEGAL OPINION OF COMPANY COUNSEL
1. The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware and has the
corporate power and authority to own its property and to conduct its business as
described in the Prospectus. The Company is duly qualified and is in good
standing as a foreign corporation in the State of Missouri.
2. Each subsidiary of the Company identified in Exhibit 21 to the
Registration Statement (each a "Subsidiary") has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, and has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus.
3. All of the issued shares of capital stock of each Subsidiary have
been duly authorized and validly issued, are fully paid and non-assessable, and
are owned of record by the Company or another Subsidiary free and clear of any
contractual liens, encumbrances or claims known to such counsel, except as
disclosed in the Prospectus.
4. All the outstanding shares of Common Stock have been duly authorized
and validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar statutory rights under the Delaware General Corporation
Law statute or, to the knowledge of such counsel, similar contractual rights
granted by the Company. In providing this opinion, such counsel may rely upon an
opinion letter of Xxxxxxx & Xxxxx LLP with respect to certain issues arising
under the Wisconsin Business Corporation Law, a copy of which opinion shall be
delivered to the Underwriters on the First Delivery Date or the Second Delivery
Date (as the case may be).
5. The Stock to be sold by the Company have been duly authorized and,
when issued and delivered to the Underwriters against payment therefore as
provided by the Underwriting Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Stock will not be subject to any
preemptive or similar statutory rights under the Delaware General Corporation
Law statute or, to the knowledge of such counsel, similar contractual rights
granted by the Company.
6. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
7. The execution, delivery and performance of the Underwriting
Agreement by the Company, the compliance by the Company with all the provisions
thereof and the consummation by the Company of the transactions contemplated
thereby will not (A) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of various states or
provinces or the National Association of Securities Dealers, Inc.), (B) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, the certificate of incorporation or by-laws of the Company or any
indenture, loan agreement, mortgage, lease or other agreement or instrument to
which the Company is a party filed as an exhibit to the Registration Statement,
or (C) violate or conflict with any applicable law, rule or regulation that in
the experience of such counsel is normally applicable in transactions of the
type contemplated by the Underwriting Agreement or any judgment, order or decree
specifically naming the Company or its property of which such counsel is aware.
25
8. The statements in the Prospectus under the captions "Description of
Capital Stock" and [_______], insofar as such statements constitute matters of
law or legal conclusions, are correct in all material respects.
9. Such counsel does not know of any legal or governmental proceedings
pending or threatened against the Company or any of the Subsidiaries that are
required by the Securities Act or the rule and regulation thereunder to be
described in the Registration Statement or the Prospectus that are not so
described.
10. The Registration Statement has become effective under the
Securities Act, and to the knowledge of such counsel (A) no stop order
suspending its effectiveness has been issued and (B) no proceedings for that
purpose are pending before or threatened by the Commission.
11. To the best of 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;
12. Except as described in the Prospectus, to the best of 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 file a registration statement under the Securities Act with respect
to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act;
Such counsel shall state that, in connection with the preparation of
the Registration Statement and the Prospectus, they participated in conferences
with officers and representatives of the Company, counsel for the Underwriters
and the independent accountants of the Company, at which conferences such
counsel made inquiries of such persons and others and discussed the contents of
the Registration Statement and the Prospectus. Such counsel shall further state
that, while the limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such that they are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, subject to the foregoing and based on
such participation, inquiries and discussions: (A) the Registration Statement
(except for the financial statements, including the notes and schedule thereto,
and other financial and accounting data included therein, as to which such
counsel need not express any view), at the time it became effective (but after
giving effect to changes incorporated pursuant to Rule 430A under the Securities
Act), and the Prospectus (except as aforesaid), as of the date it was filed with
the Commission pursuant to Rule 424(b)(4) under the Securities Act, appeared on
their face to be appropriately responsive in all material respects to the
requirements of the Securities Act and the rules and regulations thereunder; and
(B) no facts have come to the attention of such counsel that cause such counsel
to believe that (1) the Registration Statement, at the time it became effective
(but after giving effect to changes incorporated pursuant to Rule 430A under the
Securities Act), contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading (except that such counsel need not
express any view with respect to the financial statements, including the notes
and schedule thereto, or any other financial or accounting data included
therein) or (2) the Prospectus, as of the date it was filed with the Commission
pursuant to Rule 424(b)(4) under the Securities Act or as of the First Delivery
Date or the Second Delivery Date (as the case may be), contained as of its date,
or contains as of the date of such opinion, any untrue statement of a material
fact or omits to state any material fact necessary in order to
26
make the statements therein, in the light of the circumstances under which they
were made, not misleading (except that such counsel need not express any view
with respect to the financial statements, including the notes and schedule
thereto, or any other financial or accounting data included therein).
27
EXHIBIT C
FORM OF LEGAL OPINION OF FEDERAL REGULATORY COUNSEL
1. The statements in the Prospectus under the captions "Risk
Factors-Risks Related to Being a Regulated Entity," "Business-Medicaid Managed
Care Market" and "Business-Regulation," to the extent that such statements
constitute summaries of the legal matters, documents or proceedings referred to
therein, have been reviewed by such counsel and fairly summarize the matters
described therein in all material respects, it being understood that such
counsel need express no opinion as to the financial or statistical data
contained under such captions.
2. To the knowledge of such counsel, except for the matters described
on Schedule A thereto (which Schedule shall be consistent in all material
respects with the draft thereof provided to counsel for the Underwriters prior
to the date of the Underwriting Agreement), there are no legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party that relate to the compliance by the Company or any of
the subsidiaries with statutes, regulations or licenses governing the provision
of healthcare products and services, and such counsel is not aware of any
material violations of any such statutes, regulations or licenses by the Company
or any of its subsidiaries. The Company is not and, after giving effect to the
offering and sale of the Stock to be sold by the Company and the application of
the proceeds thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
3. The Company is in compliance in all material respects with all
presently applicable provisions of ERISA; 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 liability; the Company has not incurred and
does not expect to incur 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 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 nothing has occurred, whether by
action or by failure to act, which would cause the loss of such qualification.
4. There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or could not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a Material
Adverse Effect; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect.
Such opinions may be limited to matters of federal law.
28
EXHIBIT D
FORM OF LEGAL OPINION OF INDIANA REGULATORY COUNSEL
1. The statements in the Prospectus in the first paragraph under the
caption "Risk Factors - Risks Related to Being a Regulated Entity -- Changes in
government regulations designed to protect providers and members rather than our
stockholders could force us to change how we operate and could harm our
business," the paragraph under the caption "Risk Factors - Risks Related to
Being a Regulated Entity -- Regulations may decrease the profitability of our
health plans," the first paragraph under the caption "Risk Factors - Risks
Related to Being a Regulated Entity -- Failure to comply with government
regulations could subject us to civil and criminal penalties," the paragraph
under the caption "Risk Factors - Risks Related to Being a Regulated Entity --
If state regulators do not approve payments of dividends and distributions by
our subsidiaries to us, we may not have sufficient funds to implement our
business strategy," the second paragraph under the caption "Risk Factors --
Risks Related to Our Business -- Difficulties in executing our acquisition
strategy could adversely affect our business," the paragraph under the caption
"Risk Factors -- Risks Related to Our Business -- Claims relating to medical
malpractice could cause us to incur significant expenses," the paragraphs under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Regulatory Capital and Dividend Restrictions," the
paragraphs "Business - Regulation -- Managed Care Organizations" and "Business
-- Regulation -- Medicaid," to the extent that such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
have been reviewed by such counsel and fairly summarize the matters described
therein in all material respects, it being understood that such counsel need
express no opinion as to the financial or statistical data contained under such
captions.
2. To the knowledge of counsel, there are no legal or governmental
proceedings pending or overtly threatened in writing against the Company or any
of the Subsidiaries is a party that relate to the compliance by the Company or
any of the Subsidiaries with statutes, regulations or licenses governing the
provision of managed care programs and services, and such counsel is not aware
of any material violations of any of such statutes, regulations, licenses or
certificates by the Company or any of the Subsidiaries.
Such opinions may be limited to matters of the laws of the State of
Indiana.
29
EXHIBIT E
FORM OF LEGAL OPINION OF TEXAS REGULATORY COUNSEL
The statements in the paragraphs of the Prospectus listed below,
insofar as such statements constitute summaries of matters of Texas law, fairly
summarize in all material respects such matters of law:
1. The first paragraph under the caption "Risk Factors - Risks Related to Being
a Regulated Entity -- Changes in government regulations designed to protect
providers and members rather than our stockholders could force us to change how
we operate and could harm our business,"
2. The paragraph under the caption "Risk Factors - Risks Related to Being a
Regulated Entity -- Regulations may decrease the profitability of our health
plans,"
3. The first paragraph under the caption "Risk Factors - Risks Related to Being
a Regulated Entity -- Failure to comply with government regulations could
subject us to civil and criminal penalties,"
4. The paragraph under the caption "Risk Factors - Risks Related to Being a
Regulated Entity -- If state regulators do not approve payments of dividends and
distributions by our subsidiaries to us, we may not have sufficient funds to
implement our business strategy,"
5. The second paragraph under the caption "Risk Factors -- Risks Related to Our
Business -- Difficulties in executing our acquisition strategy could adversely
affect our business,"
6. The paragraph under the caption "Risk Factors -- Risks Related to Our
Business -- Claims relating to medical malpractice could cause us to incur
significant expenses,"
7. The paragraphs under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Regulatory Capital and Dividend
Restrictions,"
8. The paragraphs "Business - Regulation -- Managed Care Organizations"
9. The paragraphs under the caption "Business -- Regulation -- Medicaid."
To the knowledge of such counsel, except for the matters described on
Schedule A thereto (which Schedule shall be consistent in all material respects
with the draft thereof provided to counsel for the Underwriters prior to the
date of the Underwriting Agreement), there are no legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party that relate to the compliance by the Company or any of
the subsidiaries with statutes, regulations or licenses governing the provision
of healthcare products and services, and such counsel is not aware of any
material violations of any such statutes, regulations or licenses by the Company
or any of its subsidiaries.
Such opinions may be limited to matters of the laws of the State of
Texas.
30
EXHIBIT F
FORM OF LEGAL OPINION OF WISCONSIN REGULATORY COUNSEL
1. The statements in the Prospectus in (a) the first paragraph under
the caption "Risk Factors - Risks Related to Being a Regulated Entity -- Changes
in government regulations designed to protect providers and members rather than
our stockholders could force us to change how we operate and could harm our
business," (b) the paragraph under the caption "Risk Factors - Risks Related to
Being a Regulated Entity -- Regulations may decrease the profitability of our
health plans," (c) the first paragraph under the caption "Risk Factors - Risks
Related to Being a Regulated Entity -- Failure to comply with government
regulations could subject us to civil and criminal penalties," (d) the paragraph
under the caption "Risk Factors - Risks Related to Being a Regulated Entity --
If state regulators do not approve payments of dividends and distributions by
our subsidiaries to us, we may not have sufficient funds to implement our
business strategy," (e) the second paragraph under the caption "Risk Factors --
Risks Related to Our Business -- Difficulties in executing our acquisition
strategy could adversely affect our business," (f) the paragraph under the
caption "Risk Factors -- Risks Related to Our Business -- Claims relating to
medical malpractice could cause us to incur significant expenses," (g) the
paragraphs under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Regulatory Capital and Dividend
Restrictions," (h) the paragraphs "Business - Regulation -- Managed Care
Organizations" and (i) the paragraphs under the caption "Business -- Regulation
-- Medicaid," to the extent that such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, have been reviewed
by such counsel and fairly summarize the matters described therein in all
material respects, it being understood that such counsel need express no opinion
as to the financial or statistical data contained under such captions.
2. To the knowledge of counsel, there are no legal or governmental
proceedings pending or threatened to which the Company or any of the
Subsidiaries is a party that relate to the compliance by the Company or any of
the Subsidiaries with statutes, regulations or licenses governing the provision
of managed care programs and services, and such counsel is not aware of any
material violations of any of such statutes, regulations or licenses by the
Company or any of Managed Health Services Insurance Corp.
Such opinions may be limited to matters of the laws of the State of
Wisconsin.
31
EXHIBIT G
FORM OF LEGAL OPINION OF NEW JERSEY REGULATORY COUNSEL
APPENDIX III
1. The statements in the Prospectus in the first paragraph under the caption
"Risk Factors - Risks Related to Being a Regulated Entity -- Changes in
government regulations designed to protect providers and members rather than our
stockholders could force us to change how we operate and could harm our
business," the paragraph under the caption "Risk Factors - Risks Related to
Being a Regulated Entity -- Regulations may decrease the profitability of our
health plans," the first paragraph under the caption "Risk Factors - Risks
Related to Being a Regulated Entity -- Failure to comply with government
regulations could subject us to civil and criminal penalties," the paragraph
under the caption "Risk Factors - Risks Related to Being a Regulated Entity --
If state regulators do not approve payments of dividends and distributions by
our subsidiaries to us, we may not have sufficient funds to implement our
business strategy," the second paragraph under the caption "Risk Factors --
Risks Related to Our Business -- Difficulties in executing our acquisition
strategy could adversely affect our business," the paragraph under the caption
"Risk Factors -- Risks Related to Our Business -- Claims relating to medical
malpractice could cause us to incur significant expenses," the paragraphs under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Regulatory Capital and Dividend Restrictions," the
paragraphs "Business - Regulation -- Managed Care Organizations: and "Business
-- Regulation -- Medicaid," to the extent that such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
have been reviewed by such counsel and fairly summarize the matters described
therein in all material respects, it being understood that such counsel need
express no opinion as to the financial or statistical data contained under such
captions.
2. To the best of such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened to which the Company or any of the
Subsidiaries is a party that relate to the compliance by the Company or any of
the Subsidiaries with statutes, regulations or licenses governing the provision
of managed care programs and services, and such counsel is not aware of any
material violations of any of such statutes, regulations or licenses by the
Company or any of the Subsidiaries.
Such opinions may be limited to matters of the laws of the State of New
Jersey.
