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EXHIBIT 1.1
HEALTHSPRING, INC.
[17,000,000] SHARES OF COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
----------
UNDERWRITING AGREEMENT
February [__], 2006
Goldman, Sachs & Co.
Citigroup Global Markets Inc., and
UBS Securities LLC
As
Representatives of the several Underwriters
named in
Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
UBS Securities LLC
299 Park Avenue
New York, New York 10171-0026
Ladies and Gentlemen:
HealthSpring, Inc., a Delaware corporation (the "Company"),
proposes,
subject to the terms and conditions stated herein, to issue and
sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of
[12,000,000] shares of Common Stock, par value $0.01 per share, of
the Company
("Stock") and the stockholders of the Company named in Schedule II
hereto (the
"Selling Stockholders") propose, subject to the terms and
conditions stated
herein, to sell to the Underwriters an aggregate of [5,000,000]
shares and, at
the election of the Underwriters, up to [2,550,000] additional
shares of Stock.
The aggregate of [17,000,000] shares to be sold by the Company and
the Selling
Stockholders is herein called the "Firm Shares" and the aggregate
of [2,550,000]
additional shares to be sold by the Selling Stockholders is herein
called the
"Optional Shares". The Firm Shares and the Optional Shares that the
Underwriters
elect to purchase pursuant to Section 2 hereof are herein
collectively called
the "Shares".
As part of the offering contemplated by this Agreement,
Citigroup
Global Markets Inc. has agreed to reserve out of the Shares set
forth opposite
its name on Schedule I to this Agreement, up to [600,000] shares,
for sale to
the Company's employees, officers, directors and certain other
friends and
business associates of the Company (collectively, "Participants"),
as set forth
in the Prospectus
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(as defined below) under the caption "Underwriting" (the "Directed
Share
Program"). The Shares to be sold by Citigroup Global Markets Inc.
pursuant to
the Directed Share Program (the "Directed Shares") will be sold by
Citigroup
Global Markets Inc. pursuant to this Agreement at the public
offering price. Any
Directed Shares not orally confirmed for purchase by any
Participants by 8:00
A.M. New York City time on the business day following the date on
which this
Agreement is executed will be offered to the public by ? as set
forth in the
Prospectus.
1. (a) The Company represents and warrants to, and agrees with,
each of
the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-128939)
(the "Initial Registration Statement") in respect of the Shares
has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore
delivered
to you, and,
excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in
such
form; other than a registration statement, if any, increasing the
size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as
amended
(the "Act"), which became effective upon filing, no other document
with
respect to the Initial Registration Statement has heretofore been
filed
with the Commission; and no stop order suspending the effectiveness
of
the Initial Registration Statement, any post-effective
amendment
thereto or the Rule 462(b) Registration Statement, if any, has
been
issued and no proceeding for that purpose has been initiated or, to
the
knowledge of the Company, threatened by the Commission (any
preliminary
prospectus included in the Initial Registration Statement or filed
with
the Commission
pursuant to Rule 424(a) of the rules and regulations of
the Commission under the Act is hereinafter called a
"Preliminary
Prospectus"; the various parts of the Initial Registration
Statement
and the Rule 462(b) Registration Statement, if any, including
all
exhibits thereto and including the information contained in the
form of
final prospectus filed with the Commission pursuant to Rule
424(b)
under the Act in accordance with Section 5(a) hereof and deemed
by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective, each
as
amended at the time such part of the Initial Registration
Statement
became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement";
the
Preliminary Prospectus relating to the Shares that was included in
the
Registration Statement immediately prior to the Applicable Time
(as
defined in Section 1(a)(iii) hereof) is hereinafter called the
"Pricing
Prospectus"; such final prospectus, in the form first filed
pursuant to
Rule 424(b) under the Act, is hereinafter called the "Prospectus";
and
any "issuer free writing prospectus" as defined in Rule 433 under
the
Act relating to the Shares is hereinafter called an "Issuer
Free
Writing
Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus or any Issuer Free Writing Prospectus has
been
issued by the Commission, and each Preliminary Prospectus, at the
time
of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the
Commission
thereunder, and did not contain an untrue statement of a material
fact
or omit to state a material fact required to be stated therein
or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided,
however, that this representation and warranty shall not apply to
any
statements or omissions made in reliance
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upon and in conformity with information furnished in writing to
the
Company by an Underwriter through the Representatives expressly for
use
therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein to Items 7 and 11(m) of Form
S-1;
(iii) For the purposes of this Agreement, the "Applicable
Time" is ___:___
__m (Eastern time) on the date of this Agreement; the
Pricing Prospectus as supplemented by the Issuer Free Writing
Prospectuses and other documents listed in Schedule III(a)
hereto,
taken together (collectively, the "Pricing Disclosure Package") as
of
the Applicable Time, did not include any untrue statement of a
material
fact or omit to state any material fact necessary in order to make
the
statements therein, in the light of the circumstances under which
they
were made, not misleading; and each Issuer Free Writing
Prospectus
listed on Schedule III(a) or Schedule III(b) hereto does not
conflict
with the information contained in the Registration Statement,
the
Pricing Prospectus or the Prospectus and each such Issuer Free
Writing
Prospectus, as supplemented by and taken together with the
Pricing
Disclosure Package as of the Applicable Time, did not include
any
untrue statement of a material fact or omit to state any material
fact
necessary in order to make the statements therein, in the light of
the
circumstances under which they were made, not misleading;
provided,
however, that this representation and warranty shall not apply
to
statements or omissions made in an Issuer Free Writing Prospectus
in
reliance upon and in conformity with information furnished in
writing
to the Company by an Underwriter through the Representatives
expressly
for use therein;
(iv) The Registration Statement conforms and the Prospectus
and any further amendments or supplements to the Registration
Statement
and the Prospectus will conform, in all material respects to
the
requirements of the Act and the rules and regulations of the
Commission
thereunder and do not and will not, as of the applicable effective
date
as to each part of the Registration Statement 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 (in the case of the Prospectus, in
the
light of the circumstances under which they were made) not
misleading;
provided, however, that this representation and warranty shall
not
apply to any statements or omissions made in reliance upon and
in
conformity with information furnished in writing to the Company by
an
Underwriter through the Representatives expressly for use therein
or by
a Selling Stockholder expressly for use in the preparation of
the
answers therein to Items 7 and 11(m) of Form S-1;
(v) The Company and its subsidiaries, when taken as a whole,
have not sustained since the date of the latest audited
financial
statements included in the Pricing 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 Pricing Prospectus; and,
since
the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, there has not
been
any change in the capital stock (other than as a result of
repurchases
of up to - shares of restricted stock by the Company pursuant to
the
terms of restricted stock purchase agreements, as described in
the
Pricing Prospectus) or long-term debt (other than any increase
in
principal amount of up to $- of such long-term debt as a result of
any
accrued interest added to the principal amount pursuant to the
terms of
the Company's 15% senior subordinated notes) of the Company or
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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, financial position,
stockholders' equity or results of operations of the Company and
its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Pricing Prospectus;
(vi) The Company and its subsidiaries have good and marketable
title to all real property and good and marketable title to all
material personal property owned by them, in each case free and
clear
of all liens, encumbrances and defects except such as are described
in
the Pricing Prospectus or such as do not materially affect the
value of
such property and do not interfere with the use made and proposed
to be
made of such property by the Company and its subsidiaries; and any
real
property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and
enforceable
leases with such exceptions as are not material and do not
materially
interfere
with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State
of Delaware, with corporate power and authority to own its
properties
and conduct its business as described in the Pricing Prospectus,
and
has been duly qualified as a foreign corporation for the
transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts
any
business so as to require such qualification, or is subject to
no
material liability or disability by reason of the failure to be
so
qualified in any such jurisdiction, except where the failure to be
so
qualified would not, individually or in the aggregate, have a
material
adverse effect on the general affairs, prospects, management,
properties, financial position, stockholders' equity or results
of
operations of the Company and its subsidiaries, taken as a whole
(a
"Material Adverse Effect"); and each subsidiary of the Company has
been
duly incorporated or formed and is validly existing as a
corporation or
other entity in good standing under the laws of its jurisdiction
of
incorporation or formation, with power (corporate and other)
and
authority to own its properties and conduct its business as
described
in the Pricing Prospectus, and has been duly qualified as a
foreign
corporation for the transaction of business and is in good
standing
under the laws of each other jurisdiction in which it owns or
leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by
reason of the failure to be so qualified in any such
jurisdiction,
except where the failure to be so qualified would not, individually
or
in the aggregate, have a Material Adverse Effect;
(viii) The Company has an authorized capitalization as set
forth in the Pricing Prospectus, and all of the issued shares
of
capital stock of the Company have been duly and validly authorized
and
issued and are fully paid and non-assessable and conform to the
description of the Stock contained in the Pricing Prospectus and
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 authorized and validly issued, conform in
all
material respects to the description thereof contained in the
Prospectus and were issued in compliance with federal and state
securities laws; and all of the issued shares of capital stock of
each
subsidiary of the Company have been duly and validly authorized
and
issued, are fully paid and non-assessable and (except (i) for
directors' qualifying shares, (ii) pursuant to the Company's
senior
credit facility and (iii) as otherwise set forth in the Pricing
Prospectus)
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are owned directly or indirectly by the Company, free and clear of
all
liens, encumbrances, equities or claims, except as set forth in
the
Pricing Prospectus;
(ix) The unissued Shares 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 as
provided
herein, will be
duly and validly issued and fully paid and
non-assessable, will conform to the description of the Stock
contained
in the Prospectus and will be free of statutory and contractual
preemptive rights, resale rights, rights of first refusal and
similar
rights; the shares of Stock to be sold by the Selling
Stockholders
under this Agreement have been duly authorized and validly issued
and
are fully paid and non-assessable;
(x) The issue and sale of the Shares to be sold by the Company
and the compliance by the Company with this Agreement and the
consummation of the transactions herein contemplated 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, except for such conflicts, breaches, violations or
defaults
that would not, individually or in the aggregate, have a
Material
Adverse Effect; nor will such action result in any violation of
the
provisions of (a) the Certificate of Incorporation or By-laws of
the
Company or (b) 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 (c) any law
or
statute, except in the case of clause (b) and (c), for such
violations
that would not, individually or in the aggregate, have a
Material
Adverse Effect; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental
agency or body is required for the issue and sale of the Shares or
the
consummation by the Company of the transactions contemplated by
this
Agreement, except the registration under the Act of the Shares and
such
consents, approvals, authorizations, registrations or
qualifications as
may be required under state securities or Blue Sky laws in
connection
with the purchase and distribution of the Shares by the
Underwriters;
(xi) Neither the Company nor any of its subsidiaries is (a) in
violation of its Certificate of Incorporation or By-laws or
other
organizational or governing documents, (b) in default in the
performance or observance of any material obligation,
agreement,
covenant or condition contained in any indenture, mortgage, deed
of
trust, loan agreement, lease or other agreement or instrument to
which
it is a party or by which it or any of its properties may be bound
or
(c) is in violation of any statute or any order, rule or regulation
of
any court or governmental agency or body having jurisdiction over
it or
its property or assets or has failed to obtain any license,
permit,
certificate, franchise or other governmental authorization or
permit
necessary to the ownership of its property or to the conduct of
its
business, except in the case of clause (b) or (c), for such
violations
or defaults that would not, individually or in the aggregate, have
a
Material Adverse Effect;
(xii) The Stock has been approved for listing, subject to
official notice of issuance, on the New York Stock Exchange
(the
"Exchange");
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(xiii) Except as described in the Pricing Prospectus, 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;
(xiv) The statements set forth in the Pricing Prospectus and
the Prospectus under the caption "Description of Capital
Stock",
insofar as they purport to constitute a summary of the terms of
the
Stock, under the caption "Certain United States Tax Consequences
to
Non-United States Holders", and under the caption
"Underwriting",
insofar as such statements purport to describe the provisions of
the
laws, agreements and documents referred to therein, are
accurate
descriptions or summaries in all material respects;
(xv) Other than as set forth in the Pricing Prospectus, there
are no legal or governmental proceedings pending to which the
Company
or any of its subsidiaries is a party or of which any property of
the
Company or any of its subsidiaries is the subject which, if
determined
adversely to the Company or any of its subsidiaries, would
individually
or in the aggregate have a Material Adverse Effect or
materially
interfere with the consummation of the transactions contemplated
by
this Agreement; and, to the best of the Company's knowledge, no
such
proceedings are threatened or contemplated by governmental
authorities
or threatened by others;
(xvi) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of proceeds
thereof, will not be an "investment company", as such term is
defined
in the Investment Company Act of 1940, as amended (the
"Investment
Company Act");
(xvii) At the time of filing the Initial Registration
Statement the Company was not and is not an "ineligible issuer,"
as
defined under Rule 405 under the Act;
(xviii) KPMG LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent
public
accountants as required by the Act and the rules and regulations of
the
Commission thereunder;
(xix) The Company and each of its subsidiaries have made and
keep books, records and accounts, which, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
the
assets of the Company and its subsidiaries in all material
respects;
the Company has devised and maintains a system of internal
accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general
or
specific authorization, (ii) transactions are recorded as necessary
to
permit preparation of financial statements of the Company in
conformity
with generally accepted accounting principles and to maintain
accountability for assets of the Company, (iii) access to assets of
the
Company is permitted only in accordance with management's general
or
specific authorization, and (iv) the recorded accountability for
assets
of the Company is compared with the existing assets at
reasonable
intervals and appropriate action is taken with respect to any
differences.
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(xx) Since the date of the latest audited financial statements
included in the Pricing Prospectus, (a) the Company has not
been
advised of (1) any significant deficiencies in the design or
operation
of internal controls that could adversely affect the ability of
the
Company and each of its subsidiaries to record, process, summarize
and
report financial data, or any material weaknesses in internal
controls
and (2) any fraud, whether or not material, that involves
management or
other employees who
have a significant role in the internal controls of
the Company and each of its subsidiaries, and (b) since that
date,
there has been no change in the Company's internal control over
financial reporting that has materially affected, or is
reasonably
likely to materially affect, the Company's internal control
over
financial reporting;
(xxi) The Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) of the Exchange Act)
that
comply with the requirements of the Exchange Act; such
disclosure
controls and procedures are effective;
(xxii) Since October 11, 2005, the Company has not, directly
or
indirectly, including through any subsidiary: (i) extended
credit,
arranged to extend credit, or renewed any extension of credit, in
the
form of a personal loan, to or for any director or executive
officer of
the Company, or to or for any family member or affiliate of any
director or executive officer of the Company; or (ii) made any
material
modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company,
or
any family member or affiliate of any director or executive
officer,
which loan was outstanding on October 11, 2005;
(xxiii) The historical financial statements (including the
related notes and supporting schedules) filed as part of the
Registration Statement or included in the Pricing Prospectus comply
as
to form in all material respects with the requirements of
Regulation
S-X under the Securities Act and present fairly the financial
condition, results of operations and cash flows of the entities
purported to be shown thereby at the dates and for the periods
indicated and have been prepared in conformity with accounting
principles generally accepted in the United States applied on a
consistent basis throughout the periods involved (except as may
otherwise be indicated);
(xxiv) The Company and its subsidiaries carry, or are covered
by,
insurance from insurers of recognized financial responsibility
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. All policies of insurance owned
by
the Company or any of its subsidiaries are, to the best of the
Company's knowledge, in full force and effect in all material
respects;
the Company and its subsidiaries are in compliance with the terms
of
such policies in all material respects; and neither the Company nor
any
of its subsidiaries has received written notice from any insurer,
agent
of such insurer or the broker of the Company or any of its
subsidiaries
that any material capital improvements or any other material
expenditures (other than premium payments) are required or
necessary to
be made in order to continue such insurance. None of the Company or
any
of its subsidiaries insures risk of loss through any captive
insurance,
risk retention group, reciprocal group or by means of any fund or
pool
of assets specifically set aside for contingent liabilities other
than
in connection with the Company's insurance business activities or
as
described in the Pricing Prospectus;
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(xxv) 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 mark registrations, copyrights and licenses necessary for
the
conduct of their respective businesses and have no reason to
believe
that the conduct of their respective businesses will conflict with,
and
have not received any notice of any claim of conflict with, any
such
rights of others;
(xxvi) There are no contracts or other documents of a
character required to be described in the Registration Statement or
the
Pricing Prospectus or to be filed as exhibits to the
Registration
Statement that are not described and filed as required;
(xxvii) No labor disturbance by the employees of the Company
or its subsidiaries exists or, to the knowledge of the Company,
is
imminent that would individually or in the aggregate have a
Material
Adverse Effect;
(xxviii) Except as would not, individually or in the
aggregate, have a Material Adverse Effect (i) the Company and each
of
its subsidiaries are in compliance in all 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"); (ii) no "reportable event"
(as
defined in ERISA) has occurred with respect to any "pension plan"
(as
defined in ERISA) for which the Company or any of its
subsidiaries
would have any liability; (iii) the Company and its subsidiaries
have
not incurred and do not expect to incur liability under (a) Title
IV of
ERISA with respect to termination of, or withdrawal from, any
"pension
plan" or (b) Sections 412 or 4971 of the Internal Revenue Code of
1986,
as amended, including the regulations and published
interpretations
thereunder (the "Code"); (iv) each "pension plan" for which the
Company
and its subsidiaries would have any liability that is intended to
be
qualified under Section 401(a) of the Code is so qualified and
nothing
has occurred, whether by action or by failure to act, which would
cause
the loss of such qualification; and (v) the Company and each of
its
subsidiaries have not incurred any unpaid liability to the
Pension
Benefit Guaranty Corporation (other than for payment of premiums in
the
ordinary course of business);
(xxix) The Company and each of its subsidiaries have filed all
federal, state, local and foreign income and franchise tax
returns
required to be filed through the date hereof (except where the
failure
to file such returns would not, individually or in the aggregate,
have
a Material Adverse Effect), subject to permitted extensions, and
have
paid all taxes due thereon, other than those being contested in
good
faith and by appropriate proceedings for which reserves have
been
established on the books and records of the Company and its
subsidiaries in accordance with generally accepted accounting
principles in the United States; and no tax deficiency has been
determined adversely to the Company or any of its subsidiaries,
nor
does the Company have any knowledge of any tax deficiency that has
had
or would have, individually or in the aggregate, a Material
Adverse
Effect;
(xxx) Since the date as of which information is given in the
Pricing Prospectus through the date hereof, and except as set forth
in
the Pricing Prospectus, neither the Company nor any of its
subsidiaries
has (i) issued or granted any securities, (ii) incurred any
material
liability or obligation, direct or contingent, other than
liabilities
and obligations which were incurred in the ordinary course of
business,
(iii) entered into any material transaction not
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in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock (except, in the case of clause (iv),
to
the extent required in connection with the conversion of the
Company's
convertible preferred stock).
(xxxi) Neither the Company nor any of its subsidiaries, or to
the best knowledge of the Company and its subsidiaries, any
director,
officer, agent, employee or other person associated with or acting
on
behalf of the Company or any of its subsidiaries, has (i) used
any
corporate funds for any unlawful contribution, gift, entertainment
or
other unlawful expense relating to political activity; (ii) made
any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds, (iii)
violated or
is in violation of any provision of the Foreign Corrupt Practices
Act
of 1977, or (iv) made any bribe, unlawful rebate, payoff,
influence
payment, kickback or other unlawful payment;
(xxxii) (A) the Company and each of its subsidiaries are in
compliance with and not subject to liability under applicable
Environmental Laws (as defined below), (B) the Company and each of
its
subsidiaries have made all filings and provided all notices
required
under any applicable Environmental Law, and have and are in
compliance
with all permits required under any applicable Environmental Laws
and
each of them is in full force and effect and (C) no lien,
charge,
encumbrance or restriction has been recorded under any
Environmental
Law with respect to any assets, facility or property owned,
operated,
leased or controlled by the Company or any of its subsidiaries,
except
in the case of clauses (A), (B) and (C) as would not, individually
or
in the aggregate, have a Material Adverse Effect; there is no
civil,
criminal or administrative action, suit, demand, claim, hearing,
notice
of violation, investigation, proceeding, notice or demand letter
or
request for information pending or, to the knowledge of the Company
or
any of its subsidiaries, threatened against the Company or any of
its
subsidiaries under any Environmental Law; neither the Company nor
any
of its subsidiaries has received notice that it has been identified
as
a potentially responsible party under the Comprehensive
Environmental
Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law; and no property or
facility of
the Company or any of its subsidiaries is (i) listed or proposed
for
listing on the National Priorities List under CERCLA or (ii) listed
in
the Comprehensive Environmental Response, Compensation,
Liability
Information System List promulgated pursuant to CERCLA, or, to
the
knowledge of the Company, on any comparable list maintained by
any
state or local governmental authority;
For purposes of this Agreement, "Environmental Laws" means the
common
law and all applicable federal, state and local laws or
regulations,
codes, orders, decrees, judgments or injunctions issued,
promulgated,
approved or entered thereunder, relating to pollution, hazardous
or
toxic substances, wastes or contaminants or protection of public
or
employee health and safety or the environment, including,
without
limitation, laws relating to (i) emissions, discharges, releases
or
threatened releases of hazardous materials into the environment
(including, without limitation, ambient air, surface water,
ground
water, land surface or subsurface strata), (ii) the
manufacture,
processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials and
(iii)
underground and above ground storage tanks and related piping,
and
emissions, discharges, releases or threatened releases
therefrom;
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<PAGE>
(xxxiii) The Company has not taken and will not take, directly
or indirectly, any action designed to or that has constituted or
that
could reasonably be expected to cause or result in the
stabilization or
manipulation of the price of any security of the Company to
facilitate
the sale or resale of the shares of the Stock;
(xxxiv) The Company has not distributed and, prior to the
later to occur of any Time of Delivery (as defined in Section 4
hereof)
and completion of the distribution of the Stock, will not
distribute
any offering material in connection with the offering and sale of
the
Stock other than the Pricing Prospectus, the Prospectus and,
subject to
compliance with Section 6(a) hereof, any Issuer Free Writing
Prospectus;
(xxxv) The
Company and its subsidiaries have made all required
filings under applicable insurance holding company statutes, and
have
received approvals of acquisition of control and/or affiliate
transactions, in each jurisdiction in which such filings or
approvals
are required, except where the failure to have made such filings
or
receive such approvals in any such jurisdiction would not,
individually
or in the aggregate, have a Material Adverse Effect. Each of
the
Company and its subsidiaries: (A) holds such permits, licenses,
consents, exemptions, franchises, authorizations and other
approvals
from insurance departments and other governmental or regulatory
authorities (each, an "Authorization") (including, without
limitation,
insurance licenses from the insurance regulatory agencies of
the
various states or other jurisdictions where it conducts business
(the
"Insurance Licenses")), and has made all filings with and notices
to,
all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, as are necessary
to
own, lease, license and operate its respective properties and
to
conduct its business in the manner described in the Pricing
Prospectus,
except where the failure to have any Authorization or Insurance
License
or to make any such filing or notice would not, individually or in
the
aggregate, have
a Material Adverse Effect, and (B) has fulfilled and
performed all obligations necessary to maintain such Authorizations
and
Insurance Licenses, except where the failure to perform such
obligations would not, individually or in the aggregate, have a
Material Adverse Effect. Except as would not, individually or in
the
aggregate, have a Material Adverse Effect (A) each such
Authorization
and Insurance License 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 (B) no
event has occurred (including, without limitation,
the receipt of any notice from any authority or governing body,
the
execution, delivery and performance of this Agreement by the
Company,
the sale and delivery of the Stock and the compliance by the
Company
with all of the provisions hereof and the consummation by the
Company
and its subsidiaries of the transactions contemplated in this
Agreement) which allows or, after notice or lapse of time of
both,
would allow, revocation, suspension or termination of any such
Authorization or Insurance License or results or, after notice or
lapse
of time or both, would result in any impairment of the rights of
the
holder of any such Authorization or Insurance License. Except
as
disclosed in the Pricing Prospectus, no insurance regulatory agency
or
body has issued any order or decree impairing, restricting or
prohibiting the payment of dividends by any Company subsidiary to
its
respective parent which would, individually or in the aggregate,
have a
Material Adverse Effect;
(xxxvi) The statutory financial statements of the subsidiaries
of the Company that are insurance companies (the "Insurance
Subsidiaries"), from which certain ratios and other
10
<PAGE>
statistical data filed as a part of the Registration Statement
or
included in the Pricing Prospectus have been derived: (A) have for
each
relevant period been prepared in conformity with statutory
accounting
practices required or permitted by the National Association of
Insurance Commissioners and by the insurance laws of their
respective
states of domicile, and the rules and regulations promulgated
thereunder, and such statutory accounting practices have been
applied
on a consistent basis throughout the periods involved, except as
may
otherwise be indicated therein or in the notes thereto; and (B)
present
fairly in all material respects the statutory financial position of
the
Insurance Subsidiaries as at the dates thereof, and the statutory
basis
results of operations of the Insurance Subsidiaries for the
periods
covered thereby;
(xxxvii) Neither the Company nor any of its Insurance
Subsidiaries has received any notice from any of the other parties
to
any of its reinsurance treaties, contracts, agreements or
arrangements
that such other party intends not to perform its obligations
thereunder
and none of them has any reason to believe that any of the
other
parties to such treaties, contracts, agreements or arrangements
will be
unable to perform its obligations thereunder, except to the extent
that
such nonperformance would not, individually or in the aggregate,
have a
Material Adverse Effect. None of the Company or any of its
subsidiaries
has entered into any "finite risk" insurance transaction or any
other
retroactive loss financing arrangement;
(xxxviii) The Company has not received notice of any
investigation relating
to brokers' commissions by any insurance
regulatory agency of any State;
(xxxix) The statistical and market and industry-related data
included in the Registration Statement, any Preliminary Prospectus
and
the Prospectus are based on or derived from sources which the
Company
believes to be reliable and accurate or represent the Company's
good
faith estimates that are made on the basis of data derived from
such
sources; and
(xl) the Company has not offered, or caused the Underwriters
to offer, Shares to any person pursuant to the Directed Share
Program
with the specific intent to unlawfully influence (x) a customer
or
supplier of the Company to alter the customer's or supplier's level
or
type of business with the Company, or (y) a trade journalist or
publication to write or publish favorable information about the
Company
or its products.
(b)
Each of the Selling Stockholders severally represents and
warrants
to, and agrees with, each of the Underwriters and the Company
that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by such Selling
Stockholder of
this Agreement and the Power of Attorney and the Custody
Agreement
hereinafter referred to, and for the sale and delivery of the
Shares to
be sold by such Selling Stockholder hereunder, have been obtained;
and
such Selling Stockholder has full right, power and authority to
enter
into this Agreement, the Power-of-Attorney and the Custody
Agreement
and to sell, assign, transfer and deliver the Shares to be sold by
such
Selling Stockholder hereunder;
11
<PAGE>
(ii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling
Stockholder
with all of the
provisions of this Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions
herein
and therein contemplated 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 statute, indenture, mortgage, deed of trust,
loan
agreement or other agreement or instrument to which such
Selling
Stockholder is a party or by which such Selling Stockholder is
bound or
to which any of the property or assets of such Selling Stockholder
is
subject, nor will such action result in any violation of the
provisions
of the Partnership Agreement of such Selling Stockholder if
such
Selling Stockholder is a partnership or any statute or any order,
rule
or regulation of any court or governmental agency or body
having
jurisdiction over such Selling Stockholder or the property of
such
Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to
the Time of Delivery (as defined in Section 4 hereof) such
Selling
Stockholder will have, good and valid title to the Shares to be
sold by
such Selling
Stockholder hereunder, free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares
and
payment therefor pursuant hereto, good and valid title to such
Shares,
free and clear of all liens, encumbrances, equities or claims,
will
pass to the several Underwriters;
(iv) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of
the
Prospectus (the "Lock-Up Period"), not to offer, sell, contract
to
sell, pledge, grant any option to purchase, make any short sale
or
otherwise dispose of, except as provided hereunder, any securities
of
the Company that are substantially similar to the Shares, including
but
not limited to any options or warrants to purchase shares of Stock
or
any securities that are convertible into or exchangeable for, or
that
represent the right to receive, Stock or any such substantially
similar
securities (other than pursuant to employee stock option plans
existing
on, or upon the conversion or exchange of convertible or
exchangeable
securities outstanding as of, the date of this Agreement), without
your
prior written consent; provided, however, that if (1) during the
last
17 days of the initial Lock-Up Period, the Company releases
earnings
results or announces material news or a material event or (2) prior
to
the
expiration of the initial Lock-Up Period, the Company announces
that it will release earnings results during the 16-day period
following the last day of the initial Lock-Up Period, then in each
case
the Lock-Up Period will be automatically extended until the
expiration
of the 18-day period beginning on the date of release of the
earnings
results or the announcement of the material news or material event,
as
applicable, unless each of Goldman, Sachs & Co. and Citigroup
Global
Markets Inc. waive, in writing, such extension; such Selling
Stockholder hereby acknowledges that the Company has agreed herein
to
provide written notice of any event that would result in an
extension
of the Lock-Up Period pursuant to the previous sentence to such
Selling
Stockholder (in accordance with Section 12 herein) and agrees that
any
such notice properly delivered will be deemed to have been given
to,
and received by, the Selling Stockholder; such Selling
Stockholder
hereby further agrees that, prior to engaging in any transaction
or
taking any other action that is subject to the terms of this
provision
during the period from the date hereof to and including the 34th
day
following the expiration of the initial Lock-Up Period, it will
give
notice thereof to the Company and will not consummate such
transaction
or take any such action unless it has received written
confirmation
from the Company that the Lock-Up Period (as such may have been
extended pursuant to the previous paragraph) has expired;
12
<PAGE>
(v) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which
has
constituted or which might reasonably be expected to cause or
result in
stabilization or manipulation of the price of any security of
the
Company to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the
Prospectus
or any amendment or supplement thereto are made in reliance upon
and in
conformity with written information furnished to the Company by
such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus
and
any further amendments or supplements to the Registration Statement
and
the Prospectus, when they become effective or are filed with
the
Commission, as the case may be, will conform in all material
respects
to the requirements of the Act and the rules and regulations of
the
Commission thereunder and will not contain any untrue statement of
a
material fact or omit to state any material fact required to be
stated
therein or
necessary to make the statem
