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EXHIBIT 10(a)
$200,000,000
11% SENIOR NOTES DUE 2005
of OXFORD HEALTH PLANS, INC.
PURCHASE AGREEMENT
May 7, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Oxford Health Plans, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation (the "INITIAL PURCHASER") an aggregate of $200,000,000 in
principal amount of its 11% Senior Notes Due 2005 (the "SERIES A SENIOR NOTES"),
subject to the terms and conditions set forth herein. The Series A Senior Notes
are to be issued pursuant to the provisions of an indenture (the "INDENTURE"),
to be dated as of May 13, 1998, between the Company and The Chase Manhattan
Bank, as trustee (the "TRUSTEE"). The Series A Senior Notes and the Series B
Senior Notes (as defined below) issuable in exchange therefor are collectively
referred to herein as the "SENIOR NOTES". Capitalized terms used but not defined
herein shall have the meanings given to such terms in the Indenture.
1. OFFERING MEMORANDUM. The Series A Senior Notes will be
offered and sold to the Initial Purchaser pursuant to one or more exemptions
from the registration requirements under the Securities Act of 1933, as amended
(the "ACT"). The Company has prepared a preliminary offering memorandum, dated
April 24, 1998 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final offering
memorandum, dated May 7, 1998 (the "OFFERING MEMORANDUM"), relating to the
Series A Senior Notes.
Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture, the Series A Senior Notes
(and all securities issued in exchange therefor or in substitution thereof)
shall bear the following legend:
"THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
ACQUIRING THIS SENIOR NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
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UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS SENIOR NOTE EXCEPT (A)
TO THE COMPANY, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 UNDER THE SECURITIES ACT, (D)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS SENIOR NOTE (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT
OF AN AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SENIOR
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR
NOTE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company, an aggregate principal amount of $200,000,000 of
Series A Senior Notes at a purchase price equal to 97% of the principal amount
thereof (the "PURCHASE PRICE").
3. TERMS OF OFFERING. The Initial Purchaser has advised the
Company that the Initial Purchaser will make offers (the "EXEMPT RESALES") of
the Series A Senior Notes purchased hereunder on the terms set forth in the
Offering Memorandum, as amended or supplemented, solely (i) to persons whom the
Initial Purchaser reasonably believes to be "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act) ("QIBS") in reliance upon Rule
144A under the Securities Act or (ii) in offshore transactions to certain
eligible persons to which the Initial Purchaser is permitted to offer and sell
the Series A Senior Notes in reliance upon Regulation S under the Securities Act
(each, a "REGULATION S PURCHASER") (such persons specified in clauses (i) and
(ii) being referred to herein as the "ELIGIBLE PURCHASERS"). The Initial
Purchaser will offer the Series A Senior Notes to Eligible Purchasers initially
at a price equal to 100% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A
Senior Notes will have the registration rights set forth in the registration
rights agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date, in substantially the form of Exhibit A hereto, for so long as such Series
A Senior Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein, (i)
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a registration statement under the Securities Act (the "EXCHANGE OFFER
REGISTRATION STATEMENT") relating to the Company's 11% Series B Senior Notes Due
2005 (the "SERIES B SENIOR NOTES"), to be offered in exchange for the Series A
Senior Notes (such offer to exchange being referred to as the "EXCHANGE OFFER"),
and (ii) if applicable, a shelf registration statement pursuant to Rule 415
under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with
the Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS")
relating to the resale by certain holders of the Series A Senior Notes and to
use its best efforts to cause such Registration Statements to be declared and
remain effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer.
This Agreement, the Indenture, the Senior Notes, the
Registration Rights Agreement, the Investment Agreement dated February 23, 1998
(the "INVESTMENT AGREEMENT") between the Company and TPG Oxford LLC ("TPG") and
the Term Loan Agreement to be dated May 13, 1998 (the "TERM LOAN AGREEMENT")
among the Company and the Initial Purchaser, as arranger, DLJ Capital Funding,
Inc., as syndication agent, and IBJ Xxxxxxxx Bank & Trust Company, as facility
manager, and the lenders named therein are hereinafter sometimes referred to
collectively as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price
for, the Series A Senior Notes shall be made at the offices of Xxxxxxxx &
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other location as
may be mutually acceptable. Such delivery and payment shall be made at 9:00 a.m.
New York City time, on May 13, 1998 or at such other time on the same date or
such other date as shall be agreed upon by the Initial Purchaser and the Company
in writing. The time and date of such delivery and the payment for the Series A
Senior Notes are herein called the "CLOSING DATE."
(b) One or more of the Series A Senior Notes in
definitive global form, registered in the name of Cede & Co., as nominee of the
Depository Trust Company ("DTC"), having an aggregate principal amount
corresponding to the aggregate principal amount of the Series A Senior Notes
(collectively, the "GLOBAL SENIOR NOTE"), shall be delivered by the Company to
the Initial Purchaser (or as the Initial Purchaser directs) in each case with
any transfer taxes thereon duly paid by the Company against payment by the
Initial Purchaser of the Purchase Price thereof by wire transfer in same day
funds to the order of the Company. The Global Senior Note shall be made
available to the Initial Purchaser for inspection not later than 9:30 a.m., New
York City time, on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY. The Company hereby agrees with
the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if
requested by the Initial Purchaser, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Series A Senior Notes for
offering or sale in any jurisdiction designated by the Initial Purchaser
pursuant to Section 5(e) hereof, or the initiation of any proceeding by any
state securities commission or any other federal or state regulatory authority
for such purpose and (ii) of the happening of any event during the period
referred to in Section 5(c) below that makes any statement of a material fact
made in the Preliminary Offering Memorandum or the Offering Memorandum untrue or
that requires any additions to or changes in the Preliminary Offering Memorandum
or the Offering Memorandum in order to make the statements therein not
misleading. The Company shall use its best efforts to prevent the issuance of
any stop order or order suspending the qualification or exemption of any Series
A Senior Notes under any state securities or Blue Sky laws and, if at any time
any state securities commission or other federal or state regulatory authority
shall issue an order suspending the qualification or exemption of any Series A
Senior Notes under any state securities or Blue Sky laws, the Company shall use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
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(b) To furnish the Initial Purchaser and those
persons identified by the Initial Purchaser to the Company as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchaser may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchaser's
compliance with its representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchaser in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel
for the Initial Purchaser an Offering Memorandum is required by law to be
delivered in connection with Exempt Resales by the Initial Purchaser and in
connection with market-making activities of the Initial Purchaser, (i) not to
make any amendment or supplement to the Offering Memorandum of which the Initial
Purchaser shall not previously have been advised or to which the Initial
Purchaser shall reasonably object after being so advised and (ii) to prepare
promptly upon the Initial Purchaser's reasonable request, any amendment or
supplement to the Offering Memorandum which may be necessary or advisable in
connection with such Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur or condition shall exist as a result of which, in
the opinion of counsel to the Initial Purchaser, it becomes necessary to amend
or supplement the Offering Memorandum in order to make the statements therein,
in the light of the circumstances when such Offering Memorandum is delivered to
an Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchaser, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, promptly to prepare an appropriate
amendment or supplement to such Offering Memorandum so that the statements
therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchaser and such other persons as the Initial Purchaser may designate such
number of copies thereof as the Initial Purchaser may reasonably request.
(e) Prior to the sale of all Series A Senior Notes
pursuant to Exempt Resales as contemplated hereby, to cooperate with the Initial
Purchaser and counsel to the Initial Purchaser in connection with the
registration or qualification of the Series A Senior Notes for offer and sale to
the Initial Purchaser and pursuant to Exempt Resales under the securities or
Blue Sky laws of such jurisdictions as the Initial Purchaser may request and to
continue such registration or qualification in effect so long as required for
Exempt Resales and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that the Company shall not be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters
relating to Exempt Resales, in any jurisdiction in which it is not now so
subject.
(f) So long as the Senior Notes are outstanding, (i)
to mail and make generally available as soon as practicable after the end of
each fiscal year to the record holders of the Senior Notes a financial report of
the Company and its subsidiaries on a consolidated basis (and a similar
financial report of all unconsolidated subsidiaries, if any), all such financial
reports to include a consolidated balance sheet, a consolidated statement of
operations, a consolidated statement of cash flows and a consolidated statement
of shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year, certified by
the Company's independent public accountants and (ii) to mail and make generally
available as soon as practicable after the end of each quarterly period (except
for the last quarterly period of each fiscal year) to such holders, a
consolidated balance sheet, a consolidated statement of operations and a
consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the
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end of and for such period, and for the period from the beginning of such year
to the close of such quarterly period, together with comparable information for
the corresponding periods of the preceding year.
(g) So long as the Senior Notes are outstanding, to
furnish to the Initial Purchaser as soon as available copies of all reports or
other communications furnished by the Company to its security holders or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed and such other publicly
available information concerning the Company and/or its subsidiaries as the
Initial Purchaser may reasonably request.
(h) So long as any of the Series A Senior Notes
remain outstanding and during any period in which the Company is not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), to make available to any holder of Series A Senior Notes in
connection with any sale thereof and any prospective purchaser of such Series A
Senior Notes from such holder, the information ("RULE 144A INFORMATION")
required by Rule 144A(d)(4) under the Securities Act.
(i) Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid all expenses incident to the performance of the obligations of the
Company under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and accountants of the Company in connection
with the sale and delivery of the Series A Senior Notes to the Initial Purchaser
and pursuant to Exempt Resales, and all other fees and expenses in connection
with the preparation, printing, filing and distribution of the Preliminary
Offering Memorandum, the Offering Memorandum and all amendments and supplements
to any of the foregoing (including financial statements), including the mailing
and delivering of copies thereof to the Initial Purchaser and persons designated
by it in the quantities specified herein; provided, however, that the Company
shall pay or cause to be paid the fees and expenses of counsel to the Initial
Purchaser only if the transactions contemplated by this Agreement have not been
consummated or if this Agreement is terminated through no fault of the Initial
Purchaser, (ii) all costs and expenses related to the transfer and delivery of
the Series A Senior Notes to the Initial Purchaser and pursuant to Exempt
Resales, including any transfer or other taxes payable thereon, (iii) all costs
of printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Series A Senior Notes, (iv) all expenses in connection with the
registration or qualification of the Series A Senior Notes for offer and sale
under the securities or Blue Sky laws of the several states and all costs of
printing or producing any preliminary and supplemental Blue Sky memoranda in
connection therewith (including the filing fees and fees and disbursements of
counsel for the Initial Purchaser in connection with such registration or
qualification and memoranda relating thereto), (v) the cost of printing
certificates representing the Series A Senior Notes, (vi) all expenses and
listing fees in connection with the application for quotation of the Series A
Senior Notes in the PORTAL market ("PORTAL") of National Association of
Securities Dealers, Inc. ("NASD"), (vii) the fees and expenses of the Trustee
and the Trustee's counsel in connection with the Indenture and the Senior Notes,
(viii) the costs and charges of any transfer agent, registrar and/or depositary
(including DTC), (ix) any fees charged by rating agencies for the rating of the
Senior Notes, (x) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration Rights Agreement, (xi)
the expenses of the Initial Purchaser in connection with the Company's
participation in the "road-show," and (xii) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section.
(j) To use its best efforts to effect and maintain
the inclusion of the Series A Senior Notes in PORTAL for so long as the Series A
Senior Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry"
transfer of the Senior Notes, and to comply with all of its agreements set forth
in the representation letters of the Company to
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DTC relating to the approval of the Senior Notes by DTC for "book-entry"
transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Company or
any warrants, rights or options to purchase or otherwise acquire debt securities
of the Company substantially similar to the Senior Notes (other than the Senior
Notes), without the prior written consent of the Initial Purchaser.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Securities
Act) that would be integrated with the sale of the Series A Senior Notes to the
Initial Purchaser or pursuant to Exempt Resales in a manner that would require
the registration of any such sale of the Series A Senior Notes under the
Securities Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Senior Notes.
(o) To cause the Exchange Offer to be made in the appropriate
form to permit Series B Senior Notes registered pursuant to the Securities Act
to be offered in exchange for the Series A Senior Notes and to comply with all
applicable federal and state securities laws in connection with the Exchange
Offer.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its best efforts (i) to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and (ii) to satisfy all conditions precedent to the delivery
of the Series A Senior Notes.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. As of the
date hereof, the Company represents and warrants to, and agrees with, the
Initial Purchaser that:
(a) The Preliminary Offering Memorandum and the
Offering Memorandum do not, and any supplement or amendment to them will not,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties contained in this paragraph (a)
shall not apply to statements in or omissions from the Preliminary Offering
Memorandum or the Offering Memorandum (or any supplement or amendment thereto)
based upon information relating to the Initial Purchaser furnished to the
Company in writing by the Initial Purchaser expressly for use therein. No stop
order preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act, has been issued.
(b) Each of the Company and its subsidiaries has been
duly incorporated, is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole, or
draw into question the validity of this Agreement or the other Operative
Documents (a "MATERIAL ADVERSE EFFECT").
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(c) All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights.
(d) The entities listed on Schedule A hereto are the
only subsidiaries, direct or indirect, of the Company. All of the outstanding
shares of capital stock of each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more subsidiaries
(except for the subsidiaries specified in the Term Loan Agreement), free and
clear of any security interest, claim, lien, encumbrance or adverse interest of
any nature (each, a "LIEN"), except pursuant to the Term Loan Agreement and the
Bridge Securities Purchase Agreement, dated as of February 6, 1998, between the
Company and Oxford Funding, Inc.
(e) This Agreement has been duly authorized, executed
and delivered by the Company.
(f) The Indenture has been duly authorized by the
Company and, on the Closing Date, will have been validly executed and delivered
by the Company. When the Indenture has been duly executed and delivered by the
Company, the Indenture will be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles. On the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "TIA" or "TRUST INDENTURE ACT"), and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder.
(g) The Series A Senior Notes have been duly
authorized and, on the Closing Date, will have been validly executed and
delivered by the Company. When the Series A Senior Notes have been issued,
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchaser in accordance with the
terms of this Agreement, the Series A Senior Notes will be entitled to the
benefits of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles. On the Closing Date, the Series A Senior Notes will conform
in all material respects as to legal matters to the description thereof
contained in the Offering Memorandum.
(h) On the Closing Date, the Series B Senior Notes
will have been duly authorized by the Company. When the Series B Senior Notes
are issued, executed and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, the Series B Senior Notes will be entitled to
the benefits of the Indenture and will be the valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(i) The Registration Rights Agreement has been duly
authorized by the Company and, on the Closing Date, will have been duly executed
and delivered by the Company. When the Registration Rights Agreement has been
duly executed and delivered, the Registration Rights Agreement will be a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles. On
the Closing Date, the Registration Rights Agreement will conform in all material
respects as to legal matters to the description thereof in the Offering
Memorandum.
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(j) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, in each case, where such
violation would have a Material Adverse Effect.
(k) The execution, delivery and performance of this
Agreement and the other Operative Documents by the Company, compliance by the
Company with all provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (i) 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 the various states) and except for registration pursuant to
the Registration Rights Agreement and the Registration Rights Agreement dated as
of February 23, 1998 between the Company and TPG (the "TPG REGISTRATION RIGHTS
AGREEMENT"), (ii) constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of its subsidiaries
or any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective property is bound,
(iii) violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their respective
property, (iv) result in the imposition or creation of (or the obligation to
create or impose) a Lien under, any 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 or their respective property is bound, or (v) result in the
termination, suspension or revocation of any Authorization (as defined below) of
the Company or any of its subsidiaries or result in any other impairment of the
rights of the holder of any such Authorization, in each case, which would have a
Material Adverse Effect.
(l) All indebtedness of the Company that will be
repaid with the proceeds of the issuance and sale of the Series A Notes was
incurred for proper purposes and in good faith and the Company will be on the
Closing Date (after giving effect to the application of the proceeds from the
issuance of the Series A Senior Notes) solvent, and will have on the Closing
Date (after giving effect to the application of the proceeds from the issuance
of the Series A Senior Notes) sufficient capital for carrying on its business
and will be on the Closing Date (after giving effect to the application of the
proceeds from the issuance of the Series A Senior Notes) able to pay its debts
as they mature.
(m) There are no legal or governmental proceedings
pending or threatened to which the Company or any of its subsidiaries is or
could be a party or to which any of their respective property is or could be
subject, which might result, singly or in the aggregate, in a Material Adverse
Effect, except as disclosed in the Offering Memorandum.
(n) Neither the Company nor any of its subsidiaries
has violated any foreign federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
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(p) Each of the Company and its subsidiaries has such
permits, licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without limitation,
under any applicable Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect, and except as disclosed in the Offering Memorandum. Neither the Company
nor any of its subsidiaries has received any written notice from any
governmental or regulatory authorities that it may lose an Authorization or that
it may be restricted in any manner in which it currently conducts its business,
except as disclosed in the Offering Memorandum. The Company has not received
notice that any insurance regulatory authority has issued or commenced any
proceeding for the issuance of any order or decree impairing, restricting or
prohibiting the payment of dividends of any subsidiary to its parent other than
such restrictions that apply to all insurance companies regulated by such
regulatory authority.
(q) The accountants, KPMG Peat Marwick LLP, that have
certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum and the Offering Memorandum are independent
public accountants with respect to the Company, as required by the Securities
Act and the Exchange Act. The historical financial statements, together with
related schedules and notes, set forth in the Preliminary Offering Memorandum
and the Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-3 under the
Securities Act.
(r) The historical financial statements, together
with related schedules and notes forming part of the Offering Memorandum (and
any amendment or supplement thereto), present fairly in all material respects
the consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated in
the Offering Memorandum at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Offering Memorandum (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(s) All reinsurance treaties and arrangements to
which any subsidiary of the Company engaged in the business of insurance (an
"INSURANCE SUBSIDIARY") is party are in full force and effect and no Insurance
Subsidiary is in violation of or in default in the performance, observance or
fulfillment of, any obligation, agreement, covenant or condition contained
therein, which violation or default could reasonably be expected, either
individually or in the aggregate, to have a Material Adverse Effect; no
Insurance Subsidiary has received any notice from any of the other parties to
such treaties, contracts or agreements that such other party intends not to
perform such treaty and, to the best knowledge of the Company and the Insurance
Subsidiaries, the Company and Insurance Subsidiaries have no reason to believe
that any of the other parties to such treaties or arrangements will be unable to
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perform such treaty or arrangement except to the extent adequately and properly
reserved for in the consolidated financial statements of the Company included in
the Offering Memorandum. No insurance regulatory authority has required that the
Company make a capital contribution to a subsidiary which requirement will not
have been satisfied as of the Closing Date.
(t) The Company is not and, after giving effect to
the offering and sale of the Series A Senior Notes and the application of the
net proceeds thereof as described in the Offering Memorandum, will not be, an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.
(u) There are no contracts, agreements or
understandings between the Company and any person granting such person the right
to require the Company to include any securities of the Company with the Senior
Notes registered pursuant to any Registration Statement.
(v) Neither the Company nor any of its subsidiaries
nor any agent thereof acting on the behalf of them (other than the Initial
Purchaser, as to whom the Company makes no representation) has taken, and none
of them will take, any action that might cause this Agreement or the issuance or
sale of the Series A Senior Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System.
(w) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act (i) has imposed (or has informed the Company that it is
considering imposing) any condition (financial or otherwise) on the Company's
retaining any rating assigned to the Company or any securities of the Company or
(ii) has indicated to the Company that it is considering (a) the downgrading,
suspension, or withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so assigned or (b)
any change in the outlook for any rating of the Company or any securities of the
Company.
(x) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) except for the loans contemplated by the Term Loan Agreement and
the investment by TPG, there has not been any material adverse change or any
development involving a prospective material adverse change in the capital stock
or in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries has incurred any material
liability or obligation, direct or contingent.
(y) When the Series A Senior Notes are issued and
delivered pursuant to this Agreement, the Series A Senior Notes will not be of
the same class (within the meaning of Rule 144A under the Securities Act) as any
security of the Company that is listed on a national securities exchange
registered under Section 6 of the Exchange Act or that is quoted in a United
States automated interdealer quotation system.
(z) No form of general solicitation or general
advertising (as defined in Regulation D under the Securities Act) was used by
the Company or any of its respective representatives (other than the Initial
Purchaser, as to whom the Company make no representation) in connection with the
offer and sale of the Series A Senior Notes contemplated hereby, including, but
not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the
Series A Senior Notes have been issued and sold by the Company within the
six-month period immediately prior to the date
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hereof.
(aa) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(bb) The Company and its respective affiliates and
all persons acting on their behalf (other than the Initial Purchaser, as to whom
the Company makes no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S under the Securities Act
("REGULATION S") in connection with the offering of the Series A Senior Notes
outside the United States and, in connection therewith, the Offering Memorandum
will contain the disclosure required by Rule 902(h) under the Securities Act.
(cc) The Company is a "reporting issuer", as defined
in Rule 902 under the Securities Act.
(dd) The sale of the Series A Senior Notes pursuant
to Regulation S is not part of a plan or scheme to evade the registration
provisions of the Securities Act.
(ee) No registration under the Securities Act of the
Series A Senior Notes is required for the sale of the Series A Senior Notes to
the Initial Purchaser as contemplated hereby or for the Exempt Resales assuming
the accuracy of, and compliance with, the Initial Purchaser's representations
and warranties and agreements set forth in Section 7 hereof.
(ff) Each certificate signed by any officer of the
Company and delivered to the Initial Purchaser or counsel for the Initial
Purchaser shall be deemed to be a representation and warranty by the Company to
the Initial Purchaser as to the matters covered thereby.
The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchaser
will rely as to facts upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
7. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES. The
Initial Purchaser represents and warrants to, and agrees with, the Company that:
(a) The Initial Purchaser is a QIB, with such
knowledge and experience in financial and business matters as is necessary in
order to evaluate the merits and risks of an investment in the Series A Senior
Notes.
(b) The Initial Purchaser (A) is not acquiring the
Series A Senior Notes with a view to any distribution thereof or with any
present intention of offering or selling any of the Series A Senior Notes in a
transaction that would violate the Securities Act or the securities laws of any
state of the United States or any other applicable jurisdiction and (B) will be
reoffering and reselling the Series A Senior Notes only to (x) QIBs in reliance
on the exemption from the registration requirements of the Securities Act
provided by Rule 144A and (y) in offshore transactions in reliance upon Rule 903
of Regulation S.
(c) The Initial Purchaser agrees that no form of
general solicitation or general advertising (within the meaning of Regulation D
under the Securities Act) has been or will be used by the Initial Purchaser or
any of its representatives in connection with the offer and sale of the Series A
Senior Notes pursuant hereto, including, but not limited to, articles, notices
or other communications published in any newspaper, magazine or similar medium
or broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
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(d) The Initial Purchaser agrees that, in connection
with Exempt Resales, such Initial Purchaser will solicit offers to buy the
Series A Senior Notes only from, and will offer to sell the Series A Senior
Notes only to, Eligible Purchasers. The Initial Purchaser further agrees that it
will offer to sell the Series A Senior Notes only to, and will solicit offers to
buy the Series A Senior Notes only from (A) Eligible Purchasers that the Initial
Purchaser reasonably believes are QIBs and (B) Regulation S Purchasers, in each
case, that agree that (x) the Series A Senior Notes purchased by them may be
resold, pledged or otherwise transferred within the time period referred to
under Rule 144(k) (taking into account the provisions of Rule 144(d) under the
Securities Act, if applicable) under the Securities Act, as in effect on the
date of the transfer of such Series A Senior Notes, only (I) to the Company,
(II) to a person whom the seller reasonably believes is a QIB purchasing for its
own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A under the Securities Act, (III) in an offshore
transaction (as defined in Rule 902 under the Securities Act) meeting the
requirements of Rule 903 or 904 under the Securities Act, (IV) in a transaction
meeting the requirements of Rule 144 under the Securities Act, (V) in accordance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel acceptable to the Company) or (VI)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction, and (y) they will deliver to each person to whom
such Series A Senior Notes or an interest therein is transferred a notice
substantially to the effect of the foregoing.
(e) The Initial Purchaser and its affiliates or any
person acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Series A Senior Notes.
(f) The Initial Purchaser agrees that it has not
offered or sold and will not offer or sell the Series A Senior Notes in the
United States or to, or for the benefit or account of, a U.S. Person (other than
a distributor), in each case, as defined in Rule 902 under the Securities Act
(i) as part of its distribution at any time and (ii) otherwise until 40 days
after the later of the commencement of the offering of the Series A Senior Notes
pursuant hereto and the Closing Date, other than in accordance with Regulation S
or another exemption from the registration requirements of the Securities Act.
The Initial Purchaser agrees that, during such 40-day restricted period, it will
not cause any advertisement with respect to the Series A Senior Notes (including
any "tombstone" advertisement) to be published in any newspaper or periodical or
posted in any public place and will not issue any circular relating to the
Series A Senior Notes.
(g) The Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Senior Notes by it to any distributor, dealer
or person receiving a selling concession, fee or other remuneration during the
40-day restricted period referred to in Rule 903(c)(2) under the Securities Act,
it will send to such distributor, dealer or person receiving a selling
concession, fee or other remuneration a confirmation or notice to substantially
the following effect: "The Senior Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered and sold within the United States or to, or for the account
or benefit of, U.S. persons (i) as part of your distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the Offering and
the Closing Date, except in either case in accordance with Regulation S under
the Securities Act (or Rule 144A), and in connection with any subsequent sale by
you of the Series A Senior Notes covered hereby in reliance on Regulation S
during the period referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration, you must deliver a
notice to substantially the foregoing effect. Terms used above have the meanings
assigned to them in Regulation S."
(h) The Series A Senior Notes offered and sold by the
Initial Purchaser pursuant hereto in reliance on Regulation S have been and will
be offered and sold only in offshore transactions.
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(i) The sale of the Series A Senior Notes offered and
sold by the Initial Purchaser pursuant hereto in reliance on Regulation S is not
part of a plan or scheme to evade the registration provisions of the Securities
Act.
The Initial Purchaser acknowledges that the Company
and, for purposes of the opinions to be delivered to the Initial Purchaser
pursuant to Section 9 hereof, counsel to the Company and counsel to the Initial
Purchaser will rely upon the accuracy and truth of the foregoing representations
and such Initial Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless
the Initial Purchaser, its directors, its officers and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Offering Memorandum (or any amendment or supplement thereto), the
Preliminary Offering Memorandum or any Rule 144A Information provided by the
Company to any holder or prospective purchaser of Series A Senior Notes pursuant
to Section 5(h) or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to the
Initial Purchaser furnished in writing to the Company by the Initial Purchaser;
provided, however, that the foregoing indemnity agreement shall not inure to the
benefit of the Initial Purchaser if it failed to deliver a Final Offering
Memorandum (as then amended or supplemented, provided by the Company to the
Initial Purchaser in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the Closing Date) to the person asserting any
losses, claims, damages and liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such material misstatement or
omission or alleged material misstatement or omission was cured in the Final
Offering Memorandum.
(b) The Initial Purchaser agrees to indemnify and
hold harmless the Company, its directors and officers and each person, if any,
who controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) the Company, to the same extent as the foregoing
indemnity from the Company to the Initial Purchaser but only with reference to
information relating to the Initial Purchaser furnished in writing to the
Company by the Initial Purchaser expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum. The only such information is in the
third, sixth, ninth and tenth paragraphs and the fourth sentence of the seventh
paragraph of the "Plan of Distribution" section.
(c) In case any action shall be commenced involving
any person in respect of which indemnity may be sought pursuant to Section 8(a)
or 8(b) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchaser shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as
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provided below, shall be at the expense of the Initial Purchaser). Any
indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation, in the case of the parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action (i)
effected with the prior written consent of the indemnifying party or (ii)
effected without its written consent if the settlement is entered into more than
ninety days after the indemnifying party shall have received a request from the
indemnified party for reimbursement for the fees and expenses of counsel (in any
case where such fees and expenses are at the expense of the indemnifying party)
and, prior to the date of such settlement, the indemnifying party shall have
failed to comply with such reimbursement request. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent the indemnification provided for in
this Section 8 is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchaser on the other hand from the
offering of the Series A Senior Notes or (ii) if the allocation provided by
clause 8(d)(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
8(d)(i) above but also the relative fault of the Company, on the one hand, and
the Initial Purchaser, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Initial Purchaser, on
the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Series A Senior Notes (after underwriting
discounts and commissions, but before deducting expenses) received by the
Company, and the total discounts and commissions received by the Initial
Purchaser bear to the total price to investors of the Series A Senior Notes, in
each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company, on the one hand, and the Initial
Purchaser, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or the Initial Purchaser, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
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The Company and the Initial Purchaser agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchaser shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
the Initial Purchaser exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The
obligations of the Initial Purchaser to purchase the Series A Senior Notes under
this Agreement are subject to the satisfaction of each of the following
conditions:
(a) All the representations and warranties of the
Company contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not
have occurred any downgrading, suspension or withdrawal of, nor shall any notice
have been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for a
possible change that does not indicate the direction of the possible change in,
any rating of the Company or any securities of the Company (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain
direction), by any "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act,
(ii) there shall not have occurred any change, nor shall any notice have been
given of any potential or intended change, in the outlook for any rating of the
Company or any securities of the Company by any such rating organization, and
(iii) no such rating organization shall have given notice that it has assigned
(or is considering assigning) a lower rating to the Senior Notes than that on
which the Senior Notes were marketed.
(c) The execution and delivery by the Company of the
Term Loan Agreement providing for a new $150 million senior secured term loan
and the drawdown of $150 million in term loans shall have been consummated in
accordance with the Term Loan Agreement.
(d) The investment of $350 million by TPG in the
Company shall have been consummated in accordance with the Investment Agreement.
(e) The purchase of $10 million of common stock of
the Company by Xx. Xxxxxx X. Xxxxxx shall have been consummated.
(f) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have
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occurred any change or any development involving a prospective change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) except as
contemplated by (c), (d) and (e) above, there shall not have been any change or
any development involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries, and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the result of which, in any such case
described in clause 9(f)(i), 9(f)(ii) or 9(f)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Series A Senior Notes on the terms and in the manner contemplated in the
Offering Memorandum.
(g) You shall have received on the Closing Date a
certificate, dated the Closing Date, signed by the President and the Chief
Financial Officer of the Company, confirming the matters set forth in Sections
6(x), 9(a) and 9(b) and stating that the Company has complied with all the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied on or prior to the Closing Date.
(h) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchaser), dated the
Closing Date, of Xxxxxxxx & Xxxxxxxx, counsel for the Company, to the effect
that:
(i) each of the Company and its subsidiaries
incorporated in New York or Delaware has been duly
incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction of
incorporation and has the power and authority under
its Certificate of Incorporation and the corporation
law of its jurisdiction of incorporation to carry on
its business as described in the Offering Memorandum
and to own, lease and operate its properties;
(ii) all the shares being issued to TPG on
the closing date have been duly authorized and
validly issued and are fully paid;
(iii) all of the outstanding shares of
capital stock of each of the Company's subsidiaries
incorporated in New York or Delaware have been duly
authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company;
(iv) the Series A Senior Notes have been
duly authorized and, when executed and authenticated
in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial
Purchaser in accordance with the terms of this
Agreement, will be entitled to the benefits of the
Indenture and will be valid and legally binding
obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or
affecting creditors' rights and to general equity
principles;
(v) the Indenture has been duly authorized,
executed and delivered by the Company and is a valid
and legally binding agreement of the Company
enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency
fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or
affecting creditors' rights and to general equity
principles;
(vi) this Agreement has been duly
authorized, executed and delivered by the Company;
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(vii) The Registration Rights Agreement has
been duly authorized, executed and delivered by the
Company and is a valid and legally binding agreement
of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to
general equity principles; provided, however, that
such counsel need not express any opinion as to
Section 8 of the Registration Rights Agreement;
(viii) the Series B Senior Notes have been
duly authorized;
(ix) such counsel is of the opinion ascribed
to it in the Offering Memorandum under the caption
"Certain Income Tax Considerations";
(x) the execution, delivery and performance
of this Agreement and the other Operative Documents
by the Company, the compliance by the Company with
all provisions hereof and thereof and the
consummation of the transactions contemplated hereby
and thereby will not (i) require any consent,
approval, authorization or other order of, or
qualification with, any court or governmental body or
agency (except such as have been obtained or as may
be required under the insurance or health laws of
various states in connection with the enforcement of
remedies under the Term Loan Agreement and except for
registration pursuant to the Registration Rights
Agreement and the TPG Registration Rights Agreement),
(ii) constitute a breach of any of the terms or
provisions of, or a default under, the charter or
by-laws of the Company or any of its subsidiaries or
any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the
Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a
party or by which the Company or any of its
subsidiaries or their respective property is bound of
which it is aware, (iii) violate or conflict with any
applicable law or any rule, regulation, judgment,
order or decree of any court or any Federal
governmental body or agency of the United States or
any governmental body or agency of the State of New
York having jurisdiction over the Company, any of its
subsidiaries or their respective property, or (iv)
result in the termination, suspension or revocation
of any State of New York Authorization of the Company
or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such
State of New York Authorization; provided, however,
that for the purposes of this paragraph, such counsel
need express no opinion with respect to Federal or
state securities laws, other antifraud laws and
fraudulent transfer laws; provided, further, that
insofar as performance by the Company of its
obligations under this Agreement and the other
Operative Documents is concerned, such counsel need
express no opinion as to bankruptcy, insolvency,
reorganization, moratorium and similar laws or
general applicability relating to or affecting
creditors' rights;
(xi) the Company is not and, after giving
effect to the offering and sale of the Series A
Senior Notes and the application of the net proceeds
thereof as described in the Offering Memorandum, will
not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as
amended;
(xii) to the best of such counsel's
knowledge after due inquiry, there are no contracts,
agreements or understandings, other than the
Registration
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Rights Agreement and the TPG Registration Rights
Agreement, 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 to require the
Company to include such securities with the Senior
Notes registered pursuant to any Registration
Statement;
(xiii) the Indenture complies as to form in
all material respects with the requirements of the
TIA, and the rules and regulations of the Commission
applicable to an indenture which is qualified
thereunder; it is not necessary in connection with
the offer, sale and delivery of the Series A Senior
Notes to the Initial Purchaser in the manner
contemplated by this Agreement or in connection with
the Exempt Resales to qualify the Indenture under the
TIA;
(xiv) no registration under the Securities
Act of the Series A Senior Notes is required for the
sale of the Series A Senior Notes to the Initial
Purchaser as contemplated by this Agreement or for
the Exempt Resales assuming that (i) the Initial
Purchaser is a QIB, (ii) the accuracy of, and
compliance with, the Initial Purchaser's
representations and agreements contained in Section 7
of this Agreement, and (iii) the accuracy of the
representations of the Company set forth in Sections
5(h) and 6(bb), (cc) and (dd) of this Agreement; and
(xv) nothing that came to such counsel's
attention in the course of their review of the
Offering Memorandum has caused such counsel to
believe that, as of the date of the Offering
Memorandum or as of the Closing Date, the Offering
Memorandum, as amended or supplemented, if applicable
(except for the financial statements and other
financial data included therein, as to which such
counsel need not express any belief) contained any
untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
The opinions of Xxxxxxxx & Xxxxxxxx described in Section 9(h)
above shall be rendered to you at the request of the Company and shall so state
therein. Xxxxxxx X. Xxxx, General Counsel of the Company, may give the opinions
set forth in Sections 9(h)(iii), 9(h)(x)(ii) and 9(h)(x)(iv) in lieu of Xxxxxxxx
& Xxxxxxxx. In expressing their belief with respect to the matters covered by
Section 9(h)(xv), Xxxxxxxx & Xxxxxxxx may state that their belief is based upon
their participation in the preparation of the Offering Memorandum and any
amendments or supplements thereto and review and discussion of the contents
thereof, but are without independent check or verification except as specified.
(i) The Initial Purchaser shall have received on the
Closing Date an opinion, dated the Closing Date, of Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel for the Initial Purchaser, in form and substance reasonably satisfactory
to the Initial Purchaser.
(j) The Initial Purchaser shall have received, at the
time this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchaser from KPMG Peat Marwick LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchaser
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(k) The Series A Senior Notes shall have been
approved by the NASD for trading and duly listed in PORTAL.
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(l) The Initial Purchaser shall have received a
counterpart, conformed as executed, of the Indenture which shall have been
entered into by the Company and the Trustee.
(m) The Company shall have executed the Registration
Rights Agreement and the Initial Purchaser shall have received an original copy
thereof, duly executed by the Company.
(n) The Company shall not have failed at or prior to
the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company at or
prior to the Closing Date.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by the Initial Purchaser by written notice to the Company if
any of the following has occurred: (i) any outbreak or escalation of hostilities
or other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchaser's judgment, is material and adverse and, in the Initial
Purchaser's judgment, makes it impracticable to market the Series A Senior Notes
on the terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or limitation on prices for securities or other instruments on
such exchange or the Nasdaq National Market, (iii) the suspension of trading of
any securities of the Company on any exchange or in the over-the-counter market,
(iv) the enactment, publication, decree or other promulgation of any federal or
state statute, regulation, rule or order of any court or other governmental
authority which in the Initial Purchaser's opinion materially and adversely
affects, or will materially and adversely affect, the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal government or agency in respect of the monetary or fiscal affairs of
the United States which in your opinion has a material adverse effect on the
financial markets in the United States.
11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Oxford
Health Plans, Inc., 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000,
Attention: General Counsel, and (ii) if to the Initial Purchaser, Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the Initial
Purchaser set forth in or made pursuant to this Agreement shall remain operative
and in full force and effect, and will survive delivery of and payment for the
Series A Senior Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchaser, the officers
or directors of the Initial Purchaser, any person controlling the Initial
Purchaser, the Company, the officers or directors of the Company, or any person
controlling the Company, (ii) acceptance of the Series A Senior Notes and
payment for them hereunder and (iii) termination of this Agreement.
If for any reason other than a breach or default by the
Initial Purchaser under this Agreement the Series A Senior Notes are not
delivered by or on behalf of the Company as provided herein, the Company agrees
to reimburse the Initial Purchaser for all reasonable out-of-pocket expenses
incurred by them. Notwithstanding any termination of this Agreement, the Company
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Company also agrees to reimburse the Initial Purchaser and its
officers, directors and each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act for
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any and all reasonable fees and expenses (including without limitation the fees
and expenses of counsel) incurred by them in connection with enforcing their
rights under this Agreement (including without limitation its rights under
Section 8).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Initial Purchaser, their respective directors and officers, any controlling
persons referred to herein, and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Series A Senior Notes from
the Initial Purchaser merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company and the Initial Purchaser.
Very truly yours,
OXFORD HEALTH PLANS, INC.
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: EVP, General Counsel
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
--------------------------
Name:
Title:
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SCHEDULE A
SUBSIDIARIES
Oxford Health Plans (NY), Inc.
Oxford Health Plans (NJ), Inc.
Oxford Health Plans (CT), Inc.
Oxford Health Plans (NH), Inc.
Oxford Health Plans (FL), Inc.
Oxford Health Plans (IL), Inc.
Oxford Health Plans (PA), Inc.
Oxford Health Insurance, Inc.
Oxford Health Plans (Bermuda) Inc.
Oxford Illinois Holdings, Inc.
Compass PPA, Inc.
Oaktree Health Plans, Inc.
Oxford SE Holdings, Inc.
Direct Script, Inc.
Oxford On-Call, Inc.
Oxford Aviation, Inc.
Oxford Health Plans Ireland Limited
Oxford Health Centers, Inc.
Oxford Specialty Holdings, Inc.
Oxford Specialty Management, Inc.
Specialty Management Company (NY) IPA, Inc.
Specialty Management Company (NJ) IPA, Inc.
Specialty Management Company (CT) IPA, Inc.
Specialty Management Company (PA) IPA, Inc.
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EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
