Cobalt Corporation
5,500,000 Shares
Common Stock
(No Par Value)
UNDERWRITING AGREEMENT
February 4, 2003
UNDERWRITING AGREEMENT
February 4, 2003
UBS Warburg LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
CIBC World Markets Corp.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
As Representatives of the Several Underwriters
c/o UBS Warburg LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Wisconsin United for Health Foundation, Inc., a non-profit charitable
public health foundation (the "Selling Stockholder"), proposes to sell to the
Underwriters named in Schedule A annexed hereto (the "Underwriters") an
aggregate of 5,500,000 shares (the "Firm Shares") of Common Stock, no par value
per share (the "Common Stock"), of Cobalt Corporation, a Wisconsin corporation
(the "Company"). In addition, solely for the purpose of covering
over-allotments, the Selling Stockholder proposes to grant to the Underwriters
the option to purchase from the Selling Stockholder up to an additional 825,000
shares of Common Stock (the "Additional Shares"). The Firm Shares and the
Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder (collectively,
the "Act"), with the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (File No. 333-101111) including a basic
prospectus relating to the Shares. One or more amendments to such registration
statement have been filed with the Commission. Such registration statement, as
so amended, has been declared by the Commission to be effective under the Act.
The Company will next file with the Commission, pursuant to Rule 424(b) under
the Act, the basic prospectus in final form and a final prospectus supplement to
the basic prospectus, describing the Shares and the offering thereof, in such
forms as have been provided to and approved by the Underwriters.
The term "Registration Statement" as used in this Agreement means the
registration statement, as amended at the time it became effective and as
amended prior to the execution of this Agreement, including (i) all financial
schedules and exhibits thereto and
(ii) all documents incorporated by reference or deemed to be incorporated by
reference therein. If an abbreviated registration statement is prepared and
filed with the Commission in accordance with Rule 462(b) under the Act (an
"Abbreviated Registration Statement"), the term "Registration Statement"
includes the Abbreviated Registration Statement. The term "Basic Prospectus" as
used in this Agreement means the basic prospectus dated as of January 27, 2003
and to be filed with the Commission pursuant to Rule 424(b) on February 4, 2003.
The term "Prepricing Prospectus" as used in this Agreement means any form of
preliminary prospectus used in connection with the marketing of the Shares
(including the preliminary prospectus supplement dated as of January 24, 2003
and filed with the Commission on January 24, 2003 pursuant to Rule 424 under the
Act and any basic prospectus (whether or not in preliminary form) used with any
such preliminary prospectus supplement in connection with the marketing of the
Shares, in each case as any of the foregoing may be supplemented by the Company.
The term "Prospectus Supplement" as used in this Agreement means any final
prospectus supplement specifically relating to the Shares, in the form filed
with, or transmitted for filing to, the Commission pursuant to Rule 424 under
the Act. The term "Prospectus" as used in this Agreement means the Basic
Prospectus together with the Prospectus Supplement except that if such Basic
Prospectus is supplemented on or prior to the date on which the Prospectus
Supplement was first filed pursuant to Rule 424, the term "Prospectus" shall
refer to the Basic Prospectus as so supplemented and as supplemented by the
Prospectus Supplement. Any reference herein to the registration statement, the
Registration Statement, the Basic Prospectus, any Prepricing Prospectus, any
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
(i) the documents incorporated by reference therein pursuant to Form S-3 (the
"Incorporated Documents") and (ii) the copy of the Registration Statement, the
Basic Prospectus, the Prepricing Prospectus, the Prospectus Supplement, the
Prospectus or the Incorporated Documents filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇"). Any
reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement, any Prepricing Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively, the "Exchange Act") after the
effective date of the Registration Statement, or the date of the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
The Company, the Selling Stockholder and the Underwriters agree as follows:
1. Sale and Purchase. Upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Selling
Stockholder agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Selling
Stockholder the respective number of Firm Shares set forth opposite the name of
such Underwriter in Schedule A annexed hereto, in each case at a purchase price
of $11.40 per Share. The Company and the Selling Stockholder are advised by you
that the Underwriters intend (i) to make a public offering of their respective
portions of
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the Firm Shares as soon after the effective date of the Registration Statement
as in your judgment is advisable and (ii) initially to offer the Firm Shares
upon the terms set forth in the Prospectus. You may from time to time increase
or decrease the public offering price after the initial public offering to such
extent as you may determine.
In addition, the Selling Stockholder hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Selling Stockholder all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
for the Firm Shares. This option may be exercised by you on behalf of the
several Underwriters at any time and from time to time on or before the 30th day
following the date hereof by written notice to the Company and the Selling
Stockholder. Such notice shall set forth the aggregate number of Additional
Shares as to which the option is being exercised and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the "additional time of purchase"); provided, however, that the additional
time of purchase shall not be earlier than the time of purchase (as defined
below) nor earlier than the second business day1 after the date on which the
option shall have been exercised nor later than the tenth business day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine solely to eliminate fractional
shares).
-----------------------------
1. As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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2. Payment and Delivery. Payment of the purchase price for the Firm Shares
shall be made to the Selling Stockholder by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on February 7, 2003 (unless another time shall be agreed to by you,
the Company and the Selling Stockholder or unless postponed in accordance with
the provisions of Section 8 hereof). The time at which such payment and delivery
are actually made is hereinafter called the "time of purchase." Electronic
transfer of the Firm Shares shall be made to you at the time of purchase in such
names and in such denominations as you shall specify.
Payment of the purchase price for the Additional Shares shall be made at
the additional time of purchase in the same manner and at the same office as the
payment for the Firm Shares. Electronic transfer of the Additional Shares shall
be made to you at the additional time of purchase in such names and in such
denominations as you shall specify.
Deliveries of the documents described in Section 6 below with respect to
the purchase of the Shares shall be made at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
1301 Avenue of the Americas, New York, New York at 9:00 A.M., New York City
time, on the date of the closing of the purchase of the Firm Shares or the
Additional Shares, as the case may be.
3. Representations and Warranties.
(i) The Company represents and warrants to each of the Underwriters that:
(a) The Company has not received nor has notice of any order of the
Commission preventing or suspending the use of the Basic Prospectus, any
Prepricing Prospectus, the Prospectus Supplement or the Prospectus, or
instituting proceedings for that purpose, and the Basic Prospectus, any
Prepricing Prospectus, the Prospectus Supplement and the Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements of the
Act; the Company is eligible to use Form S-3, and the offering of the Shares
complies with the requirements of Rule 415; the Registration Statement and the
Prospectus conform in all material respects with the provisions of the Act, and
the Registration Statement does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and the Prospectus does not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, provided,
however, that the Company makes no representation or warranty with respect to
any statement contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning the Underwriters and
furnished in writing by or on behalf of any Underwriter through you to the
Company expressly for use in the Registration Statement or the Prospectus; and
neither the Company nor any of its affiliates has distributed
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any offering material in connection with the offer or sale of the Shares other
than the Registration Statement, any Prepricing Prospectus, the Prospectus or
any other materials, if any, permitted by the Act;
(b) as of the date of this Agreement, the Company's capitalization is as
set forth in the section of the Registration Statement and the Prospectus
entitled "Capitalization" and, as of the time of purchase and the additional
time of purchase, as the case may be, the Company's capitalization shall be as
set forth in the section of the Registration Statement and the Prospectus
entitled "Capitalization" (except for the subsequent issuance of restricted
shares of Common Stock as disclosed in the Registration Statement and Prospectus
and subject, in each case, to the issuance of shares of Common Stock upon
exercise of stock options disclosed as outstanding in the Registration Statement
and the Prospectus); and all of the issued and outstanding shares of capital
stock of the Company (including the Shares) have been duly and validly
authorized and issued and are fully paid and non-assessable (except as described
in the Registration Statement and Prospectus), have been issued in compliance
with all federal and state securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Wisconsin, has filed its most recent
required annual report and has not filed articles of dissolution, and has the
requisite corporate power and authority to own, lease and operate its properties
and conduct its business as described in the Registration Statement and the
Prospectus;
(d) the Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the business, operations, prospects, properties, condition (financial or
otherwise) or results of operation of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect"); the Company
has no subsidiaries (as defined in the Act) other than as listed in Schedule B
hereto (the subsidiaries so listed being referred to herein as the
"Subsidiaries"); the Company owns (directly or, through another subsidiary,
indirectly) 100% of the outstanding capital stock of each of the Subsidiaries,
except that the Company, through a subsidiary, indirectly owns 50% of the
outstanding stock of Family Health Systems, Inc.; except as described in the
Registration Statement and the Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests in any of the
Subsidiaries are outstanding; except for the Subsidiaries or as described in the
Registration Statement and the Prospectus, the Company does not own, directly or
indirectly, any long-term debt or any equity interest in any firm, corporation,
partnership, joint venture, association or other entity, except for investment
securities purchased in the ordinary course of business and constituting less
than 5% of the outstanding
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equity interests of such firm, corporation, partnership, joint venture,
association or other entity; complete and correct copies of the charter and
bylaws or other organization documents of the Company and each of the
Subsidiaries and all amendments thereto have been made available to you; each of
the Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing (or, in Wisconsin, the equivalent of good standing)
under the laws of the jurisdiction of its incorporation, with the requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus; each of the Subsidiaries is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
ownership or leasing of the properties or the conduct of its business requires
such qualification, except where the failure to so qualify would not have a
Material Adverse Effect; all of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are fully paid
and non-assessable (except as described in the Registration Statement and
Prospectus), have been issued in compliance with all applicable securities laws
and were not issued in violation of any preemptive right, resale right, right of
first refusal or similar right; and the subsidiaries other than those identified
in Section 6(a)(ix) below as "Material Subsidiaries" do not own any assets,
possess any liabilities, hold any licenses, franchises or rights, conduct any
operations or generate any revenues, expenses, income, losses or cash flows that
are material to the Company and its Subsidiaries taken as a whole;
(e) neither the Company nor any of the Subsidiaries is in breach or
violation of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would result in any breach or violation of, or constitute
a default under) (each such breach, violation, default or event, a "Default
Event"), (i) its charter, bylaws or other organizational documents, (ii) any
obligation, agreement, covenant or condition contained in any license, permit,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their properties is bound or affected, (iii) any
federal, state, local or foreign law, regulation or rule or (iv) any decree,
judgment or order applicable to the Company, any of the Subsidiaries or any of
their respective properties, other than, in the case of clause (ii) or (iii),
such Default Events as would not, individually or in the aggregate, have a
Material Adverse Effect; and the execution, delivery and performance of this
Agreement, including the sale of the Shares and the consummation by the Company
of the other transactions contemplated hereby, does not constitute and will not
result in a Default Event (w) under any provisions of the charter, bylaws or
other organizational documents of the Company or any of the Subsidiaries, (x)
under any provision of any license, permit, indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Company or any of the
Subsidiaries or by which any of them or their respective properties may be bound
or affected, (y) under any federal, state, local or foreign law, regulation or
rule or (z) under any decree, judgment or order applicable to the
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Company, any of the Subsidiaries or any of their respective properties, except,
in the case of clause (x), for such Default Events as would not, individually or
in the aggregate, have a Material Adverse Effect;
(f) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company;
(g) the capital stock of the Company, including the Shares, conforms in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus; and the certificates for the Shares are in due and
proper form, and the holders of the Shares will not be subject to personal
liability by reason of being such holders (except as described in the
Registration Statement and Prospectus);
(h) no approval, authorization, consent or order of or filing with any
national, state, local or other governmental or regulatory commission, board,
body, authority or agency is required to be obtained or made by the Company or
any of the Subsidiaries in connection with the sale of the Shares or the
consummation by the Company of the other transactions contemplated hereby, other
than registration of the offer and sale of the Shares under the Act, which has
been or will be effected, and any necessary qualification under the securities
or blue sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters, and such other approvals, authorizations, consents,
orders or filings as have been obtained prior to the date hereof;
(i) except as set forth in the Registration Statement and the Prospectus
(i) no person has the right, contractual or otherwise, to cause the Company to
issue or sell to it any shares of Common Stock or shares of any other capital
stock or other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other rights to
purchase any shares of Common Stock or shares of any other capital stock or
other equity interests of the Company, and (iii) no person has the right to act
as an underwriter, or as a financial advisor to the Company, in connection with
the offer and sale of the Shares, in the case of each of the foregoing clauses
(i), (ii) and (iii), whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise; and no person has the right, contractual or otherwise, to cause the
Company to register under the Act any shares of Common Stock or shares of any
other capital stock or other equity interests of the Company, or to include any
such shares or interests in the Registration Statement or the offering
contemplated thereby whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise, except for such rights as have been complied with or waived;
(j) Ernst & Young LLP, whose report on the consolidated financial
statements of the Company and the Subsidiaries is filed with the Commission as
part of the
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Registration Statement and the Prospectus, are independent public accountants as
required by the Act;
(k) the Company and each of the Subsidiaries has all necessary licenses,
permits, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation or
rule (collectively, "Permits"), and has obtained all necessary authorizations,
consents and approvals from other persons (collectively, "Approvals"), in order
to conduct its business as described in the Registration Statement and the
Prospectus, other than such Permits and Approvals the failure of which to obtain
would not, individually or in the aggregate, have a Material Adverse Effect; and
neither the Company nor any of the Subsidiaries is in violation of, or in
default under, any such Permit or Approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment applicable to
the Company or any of the Subsidiaries the effect of which would, individually
or in the aggregate, have a Material Adverse Effect; and neither the Company nor
any Subsidiary has received notice of proceedings relating to the revocation or
modification of any Permit or Approval except to the extent that any such
revocation or modification would not, individually or in the aggregate, have a
Material Adverse Effect;
(l) all legal or governmental proceedings, contracts, leases or documents
of a character required to be described in the Registration Statement or the
Prospectus or any document incorporated by reference therein or to be filed as
an exhibit to the Registration Statement or any document incorporated by
reference therein have been so described or filed as required;
(m) there are no actions, suits, claims, investigations or proceedings
pending or, to the knowledge of the Company, threatened to which the Company or
any of the Subsidiaries or any of their respective directors or officers is a
party or of which any of their respective properties is subject at law or in
equity, or before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency which, if adversely
decided, would result in a judgment, decree or order having a Material Adverse
Effect or prevent consummation of the transactions contemplated hereby;
(n) the financial statements, together with the related schedules and
notes, included in the Registration Statement and the Prospectus present fairly
the consolidated financial position of the Company and the Subsidiaries as of
the dates indicated and the consolidated results of operations and cash flows of
the Company and the Subsidiaries for the periods specified and have been
prepared in compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis during
the periods involved; any pro forma financial statements or data included in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of Regulation S-X of the
Act, and the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements; the other financial and
statistical data set forth in the Registration Statement and
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the Prospectus are accurately presented and prepared on a basis consistent with
such financial statements and books and records of the Company; and there are no
financial statements (historical or pro forma) that are required to be included
in the Registration Statement and the Prospectus that are not included as
required;
(o) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been (i) any
material adverse change, or any development involving a prospective material
adverse change, in the business, operations, properties, condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries taken as
a whole, (ii) any transaction which is material to the Company and the
Subsidiaries taken as a whole, (iii) any obligation, direct or contingent, which
is material to the Company and the Subsidiaries taken as a whole, incurred by
the Company or any of the Subsidiaries, (iv) any change in the capital stock or
outstanding indebtedness of the Company or any of the Subsidiaries (other than
pursuant to the exercise of stock options described in the Registration
Statement and the Prospectus as outstanding, the issuance of restricted shares
of Common Stock (as disclosed in the Registration Statement and Prospectus) or
the grant of stock options under stock option plans described in the
Registration Statement and the Prospectus) or (v) any dividend or distribution
of any kind declared, paid or made on the capital stock of the Company; neither
the Company nor any of the Subsidiaries has any material contingent obligation
which is not disclosed in the Registration Statement and the Prospectus;
(p) the Company has obtained for the benefit of the Underwriters the
agreement (a "Lock-Up Agreement"), in the form set forth as Exhibit A hereto, of
each of its executive officers and directors and of the Selling Stockholder;
(q) the Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(r) any statistical and market-related data included in the Prospectus are
based on or derived from sources that the Company believes to be reliable and
accurate, and the Company has obtained the written consent to the use of such
data from such sources to the extent required;
(s) neither the Company nor any of the Subsidiaries nor any of their
respective affiliates (other than the Selling Stockholder) has taken, directly
or indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares nor, to the Company's knowledge,
has the Selling Stockholder taken any such action;
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(t) the Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act, and
none of such documents, when they were filed with the Commission, contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Registration Statement
and/or the Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act, as
applicable, and will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein not
misleading;
(u) the Company and each of the Subsidiaries maintain insurance of the
types and in amounts reasonably adequate for their respective businesses,
including, but not limited to, insurance covering real and personal property
owned or leased by the Company and each of the Subsidiaries against theft,
damage, destruction, acts of vandalism and other risks customarily insured
against, all of which insurance is in full force and effect;
(v) neither the Company nor any of the Subsidiaries has sustained since the
date of the latest financial statements included in the Prospectus any losses or
interferences 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, other than any losses or interferences
which would not, individually or in the aggregate, have a Material Adverse
Effect;
(w) the Company and each of the Subsidiaries have good title to all real
and personal property owned by them as described in the Registration Statement
and the Prospectus, free and clear of all liens, encumbrances and defects except
such as are described in the Registration Statement and the Prospectus or such
as would not, individually or in the aggregate, have a Material Adverse Effect;
and any real property and buildings held under lease by the Company or any of
the Subsidiaries are held by it under valid, subsisting and enforceable leases
with such exceptions as do not materially interfere with the use made and
proposed to be made of such property and buildings by the Company or any of the
Subsidiaries, as the case may be;
(x) the Company and each of the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
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(y) all tax returns required to be filed by the Company and each of the
Subsidiaries have been filed, other than those filings being contested in good
faith, and all taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or pursuant to
any assessment received by the Company or any of the Subsidiaries have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided;
(z) the Company and the Subsidiaries own, possess, license or have other
rights to use all patents, trademarks, service marks, trade names, copyrights,
trade secrets, information, proprietary rights and processes ("Intellectual
Property") necessary for their business as described in the Registration
Statement and the Prospectus, without any conflict with or infringement of the
rights of others, and the Company and the Subsidiaries have taken all reasonable
steps necessary to secure interests in such Intellectual Property; the Company
is not aware of any options, licenses or agreements of any kind relating to the
Intellectual Property of the Company or the Subsidiaries that are outstanding
and which are required to be described in the Registration Statement and the
Prospectus; except as described in the Registration Statement and the
Prospectus, neither the Company nor any of the Subsidiaries is a party to or
bound by any options, licenses or agreements with respect to the Intellectual
Property of any other person or entity which are required to be described in the
Registration Statement and the Prospectus; and to the Company's knowledge,
neither the Company nor any of the Subsidiaries has violated, infringed or
conflicted with, or, by conducting its business as described the Registration
Statement and the Prospectus would violate, infringe or conflict with, any of
the Intellectual Property of any other person or entity;
(aa) the Company and, as applicable, each of Blue Cross & Blue Shield
United of Wisconsin ("BCBSUW"), Compcare Health Services Insurance Corporation
("CompcareBlue") and United Government Services, LLC ("UGS") is in full
compliance in all material respects with the requirements of the Blue Cross
License Agreement dated as of March 23, 2001, as amended, the Blue Shield
License Agreement dated as of March 23, 2001, as amended, the Wisconsin Blue
Cross/Blue Shield License Addendum dated as of March 23, 2001, the three Blue
Cross Controlled Affiliate License Agreements dated as of March 23, 2001, as
amended, and the three Blue Shield Controlled Affiliate License Agreements dated
as of March 23, 2001, as amended (the "BCBSA License Agreements"), between each
of the Company, the Blue Cross Blue Shield Association (the "BCBSA"), and, as
applicable, BCBSUW, CompcareBlue and UGS; and each of the Company and each
Subsidiary that is required by the BCBSA as of the date hereof, or that will be
required by the BCBSA as of the time of purchase or the additional time of
purchase, to be a party to a BCBSA License Agreement is a party as required and
is in full compliance with the requirements of such agreement, and no event has
occurred which with notice, lapse of time or both would result in any breach or
violation of, or constitute a default or give rise to a termination right under,
any of the BCBSA License Agreements;
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(bb) neither the Company nor any of the Subsidiaries has sent or received
any notice of termination of any of the BCBSA License Agreements or of any of
the contracts or agreements referred to or described in, or filed as an exhibit
to, the Registration Statement, and no such termination has been threatened by
the Company or any of the Subsidiaries or any other party to any such contract
or agreement;
(cc) none of the Company or any of the Subsidiaries has violated any
federal, state, local or foreign law or regulation relating to discrimination in
the hiring, promotion or pay of employees or any applicable wages and hours
laws, nor any provisions of the Employee Retirement Income Security Act of 1976,
as amended, or the rules and regulations promulgated thereunder or any similar
act or law which would, individually or in the aggregate, result in a Material
Adverse Effect; and
(dd) the Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on The New York Stock Exchange (the "NYSE"), and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the NYSE, nor has the Company received any
notification that the Commission or the NYSE is contemplating terminating such
registration or listing.
(ii) The Selling Stockholder represents and warrants to each of the
Underwriters that:
(a) the Selling Stockholder is the lawful beneficial owner of the Shares,
and immediately preceding the sale and delivery of, and payment for, such
Shares, the trustee (the "Trustee") under the Voting Trust and Divestiture
Agreement ("Voting Trust Agreement") dated March 23, 2001, pursuant to which the
Shares are held by such Trustee in the voting trust (the "Voting Trust"), has
and, at the time of delivery thereof, will have good and marketable title to the
Shares, free and clear of all liens, encumbrances and defects, except for such
restrictions as (i) are set forth in the Voting Trust Agreement and the
Registration Rights Agreement (as defined therein) and which shall terminate as
to the Shares upon delivery of the Shares to the Underwriters in accordance with
the terms hereof, and (ii) are generally applicable to holders of Common Stock
and described in the Registration Statement and the Prospectus;
(b) the Selling Stockholder has the legal right and power, and all
authorizations and approvals required by law or otherwise, to enter into this
Agreement and to sell and to cause to be transferred and delivered all of the
Shares pursuant to this Agreement and to comply with its other obligations
hereunder; and no approval, authorization, consent or order of any court or
filing with any national, state, local or other governmental or regulatory
commission, board, body, authority or agency is required to be obtained or made
by the Selling Stockholder in connection with the sale of the Shares or for the
consummation by the Selling Stockholder of the transactions contemplated hereby,
other than registration of the offer and sale of the Shares under the Act and
any necessary qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters;
12
(c) this Agreement has been duly authorized, executed and delivered by or
on behalf of the Selling Stockholder and is a legal, valid and binding agreement
of the Selling Stockholder, enforceable in accordance with its terms;
(d) simultaneously with the execution and delivery of this Agreement, the
Selling Stockholder has executed and delivered, and the Trustee has executed and
acknowledged and accepted, a Letter of Instruction (the "Letter of Instruction")
dated the date hereof from the Selling Stockholder to the Trustee, authorizing
and directing the Trustee to take all necessary action to cause the certificates
representing the Shares to be transferred and delivered from the Voting Trust to
Continental Stock Transfer & Trust Co., transfer agent of the Company, for
cancellation of such certificates and, upon receipt by the Selling Stockholder
of payment of the purchase price for the Shares, for transfer of the Shares to
the Underwriters as provided in this Agreement; the Selling Stockholder agrees
that the Shares are subject to the interest of the Underwriters, that the
arrangements and the instructions made and conferred for transfer, delivery and
sale are to that extent irrevocable and that the obligations of the Selling
Stockholder hereunder shall not be terminated, except as provided in this
Agreement or in the Letter of Instruction;
(e) the execution, delivery and performance of this Agreement, the sale of
the Shares by the Selling Stockholder and the consummation of the transactions
contemplated hereby and in the Letter of Instruction and the fulfillment of the
terms hereof and thereof by the Selling Stockholder does not and will not
constitute a Default Event under any provisions of the charter or bylaws and/or
other organizational documents of the Selling Stockholder or under any provision
of any license, permit, indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Selling Stockholder is a party or by which
it or its properties may be bound or affected, or under any federal, state,
local or foreign law, regulation or rule or any decree, judgment or order
applicable to the Selling Stockholder (assuming, upon the expiration of 40 days
after the time of purchase or additional time of purchase, as the case may be,
the Underwriters' ownership of Common Stock does not conflict with the ownership
limitations described in the Registration Statement and Prospectus), except for
such Default Events as would not, individually or in the aggregate, have an
adverse effect on the ability of the Selling Stockholder to consummate the
transactions contemplated hereby;
(f) the Selling Stockholder has caused the Trustee under the Voting Trust
Agreement to duly endorse certificates evidencing the Shares in blank, and upon
sale and delivery of, and payment for, such Shares, assuming each Underwriter
acquires its interest in the Shares it is purchasing from the Selling
Stockholder without notice of any adverse claim (within the meaning of Section
8-105 of the New York Uniform Commercial Code (the
13
"UCC")), (i) each Underwriter will acquire valid and marketable title to such
Shares free and clear of all liens, encumbrances and defects and (ii) each
Underwriter that has purchased such Shares delivered at the time of purchase or
the additional time of purchase, as the case may be, to Depository Trust Company
("DTC") or other securities intermediary by making payment therefor as provided
herein, and that has had such Shares credited to the securities account or
accounts of such Underwriters maintained with DTC or such other securities
intermediary, will have acquired a security entitlement (within the meaning of
Section 8-102(a)(17) of the UCC) to such Shares, and no action based on an
adverse claim (within the meaning of Section 8-102(a)(1) of the UCC) may be
asserted against such Underwriter with respect to such Shares;
(g) neither the Selling Stockholder nor any person or entity that directly
or indirectly controls, is controlled by or is under common control with the
Selling Stockholder (such person or entity hereinafter referred to as a "Selling
Stockholder Affiliate"), excluding the Company as to which the Selling
Stockholder does not represent or warrant, has taken, directly or indirectly,
any action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares;
(h) neither the Selling Stockholder nor a Selling Stockholder Affiliate,
excluding the Company as to which the Selling Stockholder does not represent or
warrant, has distributed any offering material in connection with the offer or
sale of the Shares other than the Registration Statement, the Preliminary
Prospectus Supplement, or the Prospectus or any other materials, if any,
permitted by the Act;
(i) the sale of the Shares pursuant to this Agreement is not prompted by
any information concerning the Company or any of the Subsidiaries which is not
set forth in the Prospectus;
(j) each Prepricing Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act; when the Registration
Statement became effective, the Registration Statement conformed in all material
respects with the provisions of the Act 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 not misleading, and as of
its date, the Prospectus conformed in all material respects with the provisions
of the Act 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 light of the circumstances under which they were made,
not misleading; provided, however, that this representation and warranty shall
only apply to those statements contained in the Registration Statement and
Prospectus specified in Exhibit B hereto (the "Selling Stockholder
Information");
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(k) there are no private or governmental actions, suits, claims,
investigations or proceedings pending or, to the knowledge of the Selling
Stockholder, threatened to which the Selling Stockholder or any of its
respective officers is a party or to which any of its properties is subject, at
law or in equity or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority or agency, which
would prevent consummation of the transactions contemplated hereby in the manner
contemplated hereby, including the offer and sale of the Shares at the time of
purchase and the additional time of purchase; and
(l) with no duty to investigate except as it relates to the Selling
Stockholder Information, the Selling Stockholder has no actual knowledge that
the representations and warranties of the Company contained in this Section 3
are not true and correct and is familiar with the Registration Statement and
Prospectus and has no actual knowledge that the Registration Statement or
Prospectus contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Each certificate signed by an officer of the Company or by or on behalf of
the Selling Stockholder and delivered to the Underwriters or counsel for the
Underwriters pursuant to this Agreement at the time of purchase or the
additional time of purchase shall be deemed to be a representation and warranty
by the Company or the Selling Stockholder, as the case may be, to the
Underwriters as to the matters covered by such certificate. The Company and the
Selling Stockholder acknowledge that the Underwriters and, for purposes of the
opinions to be delivered to the Underwriters pursuant to Section 6 hereof,
counsel to the Company, counsel to the Selling Stockholder and counsel to the
Underwriters will rely upon the accuracy and truth of the foregoing
representations, and the Company and the Selling Stockholder hereby consent to
such reliance.
4. Certain Covenants.
(i) The Company hereby agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect so long as required for the distribution of the Shares,
provided that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threat of any proceeding for
such purpose;
15
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the purposes
contemplated by the Act; and in case any Underwriter is required to deliver a
prospectus after the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will prepare promptly
upon request such amendment or amendments to the Registration Statement and such
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to confirm such advice
in writing, (i) when the Registration Statement has become effective and when
any post-effective amendment thereto becomes effective and (ii) if Rule 430A
under the Act is used, when the Prospectus is filed with the Commission pursuant
to Rule 424(b) under the Act (which the Company agrees to file in a timely
manner under such Rules);
(d) to advise you promptly, confirming such advice in writing (if requested
by you), of any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information with
respect thereto, or of notice of institution of proceedings for, or the entry of
a stop order suspending the effectiveness of the Registration Statement and, if
the Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; and to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus and to
file no such amendment or supplement to which you shall object in writing;
(e) if necessary or appropriate, to file a registration statement pursuant
to Rule 462(b) under the Act;
(f) to furnish to you and, upon request, to each of the other Underwriters
for a period of five years from the date of this Agreement (i) copies of any
reports or other communications which the Company shall send to its stockholders
or shall from time to time publish or publicly disseminate, (ii) copies of all
annual, quarterly and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms, as may be designated by the
Commission, (iii) copies of documents or reports filed with any national
securities exchange on which any class of securities of the Company is listed,
and (iv) such other information as you may reasonably request regarding the
Company or any of the Subsidiaries, in each case as soon as reasonably
practicable after such reports, communications, documents or information become
available (provided that any document or report filed with the Commission via
the ▇▇▇▇▇ system and any press release promptly posted on the Company's website
do not otherwise need to be delivered to each Underwriter);
16
(g) to advise the Underwriters promptly of the happening of any event known
to the Company within the time during which a Prospectus relating to the Shares
is required to be delivered under the Act which would require the making of any
change in the Prospectus then being used so that the Prospectus would not
include an untrue statement of material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading, and, during such time, to prepare and
furnish, at the Company's expense, to the Underwriters promptly such amendments
or supplements to such Prospectus as may be necessary to reflect any such change
and to furnish you a copy of such proposed amendment or supplement before filing
any such amendment or supplement with the Commission;
(h) to make generally available to its security holders, and to deliver to
you, an earnings statement of the Company (which will satisfy the provisions of
Section 11(a) of the Act) covering a period of twelve months beginning after the
effective date of the Registration Statement (as defined in Rule 158(c) of the
Act) and ending not later than 15 months thereafter;
(i) to furnish to you five conformed copies of the Registration Statement,
as initially filed with the Commission, and of all amendments thereto (including
all exhibits thereto) and sufficient additional conformed copies (other than
exhibits) for distribution of a copy to each of the other Underwriters;
(j) to furnish to you as early as reasonably practicable prior to the time
of purchase and the additional time of purchase, as the case may be, but not
later than two business days prior thereto, a copy of the latest available
unaudited interim consolidated financial statements, if any, of the Company and
the Subsidiaries which have been read by the Company's independent certified
public accountants, as stated in their letter to be furnished pursuant to
Section 6(d) hereof;
(k) to pay all costs, expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Prepricing
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the registration, sale
and delivery of the Shares, (iii) the printing of this Agreement, any Agreement
Among Underwriters, any dealer agreements, any Powers of Attorney and any
closing documents (including compilations thereof) and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters and
(except closing documents) to dealers (including costs of mailing and shipment),
(iv) the qualification of the Shares for offering and sale under state laws and
the determination of their eligibility for investment under state law as
aforesaid (including associated filing fees and the reasonable legal fees and
disbursements of counsel for the Underwriters) and the printing and furnishing
of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares
17
for quotation on the Nasdaq National Market ("NASDAQ") and any registration
thereof under the Exchange Act, (vi) review of the public offering of the Shares
by NASD Regulation, Inc. (including associated filing fees and the reasonable
legal fees and disbursements of counsel for the Underwriters), (vii) the costs
and expenses of the Company relating to presentations or meetings undertaken in
connection with the marketing of the offer and sale of the Shares to prospective
investors and the Representatives' sales forces, including, without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations, travel, lodging and other expenses incurred by the officers of
the Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show and (viii) the performance of the other
obligations of the Company hereunder;
(l) for so long as the delivery of the Prospectus is required in connection
with the offer or sale of the Shares, to furnish to you a reasonable period of
time before filing with the Commission, a copy of any document proposed to be
filed pursuant to Section 13, 14 or 15(d) of the Exchange Act and to not make
any filing to which you reasonably object;
(m) to not take, directly or indirectly, any action designed to or which
may constitute or which might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the Shares;
and to not distribute any offering material in connection with the offer or sale
of the Shares other than the Registration Statement, the Prospectus or any other
materials, if any, permitted by the Act;
(n) not to sell, offer or agree to sell, contract to sell, hypothecate,
pledge, grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock or warrants or other rights to
purchase Common Stock or any such securities or any other securities of the
Company that are substantially similar to Common Stock, or file or cause to be
declared effective a registration statement under the Act relating to the offer
and sale of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or other rights to purchase Common
Stock or any other securities of the Company that are substantially similar to
Common Stock, for a period of 90 days after the date hereof (the "Lock-up
Period"), without the prior written consent of UBS Warburg, except for (i) the
registration of the Shares and the sales to the Underwriters pursuant to this
Agreement, (ii) issuances of Common Stock upon the exercise of options or
warrants disclosed as outstanding in the Registration Statement and the
Prospectus and (iii) the issuance of employee stock options not exercisable
during the Lock-up Period or restricted shares of Common Stock with restrictions
not lapsing during the Lock-up Period, in either case pursuant to plans
described in the Registration Statement and the Prospectus and the filing and
effectiveness of a registration statement on Form S-8 under the Act with respect
to shares issued pursuant to such stock options;
18
(o) subject to Section 4(m) hereof, to file promptly all reports and any
definitive proxy or information statement required to be filed by the Company
with the Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares, and to promptly
notify you of such filing; and
(p) not to release or purport to release any person from any Lock-Up
Agreement without the prior written consent of UBS Warburg.
(ii) The Selling Stockholder hereby agrees:
(a) to execute and deliver to the Underwriters a letter in the form
contemplated by Section 3(i)(p);
(b) in order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, to deliver to the
Underwriters, prior to the time of purchase, a properly completed and executed
United States Treasury Department Form W-8 (if the Selling Stockholder is a
non-United States person) or Form W-9 (if the Selling Stockholder is a United
States Person), or other applicable form or statement specified by Treasury
Department regulations in lieu thereof;
(c) neither the Selling Stockholder nor a Selling Stockholder Affiliate,
excluding the Company as to which the Selling Stockholder makes no undertaking
hereby, will take, directly or indirectly, any action designed to or which will
constitute or which may reasonably be expected to cause or result, under the
Exchange Act or otherwise, in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Shares; and
(d) to pay, or otherwise cause to be paid, all costs, expenses, fees and
taxes incident to the offer and sale of the Shares being sold by the Selling
Stockholder to the Underwriters, including, but not limited to, (A) any fees and
expenses of counsel for the Selling Stockholder and (B) all federal and other
taxes, if any, on the transfer and sale of the Shares being sold by the Selling
Stockholder.
5. Reimbursement of Underwriters' Expenses. If the Shares are not delivered
for any reason other than the termination of this Agreement pursuant to the last
paragraph of Section 8 hereof, the default by the Selling Stockholder of its
obligations hereunder or the default by one or more of the Underwriters in its
or their respective obligations hereunder, the Company, in addition to paying
the amounts described in Section 4(i)(l) hereof, agrees to reimburse the
Underwriters for all of their reasonable out-of-pocket expenses, including the
fees and disbursements of their counsel.
19
If the Shares are not delivered for any reason other than the termination
of this Agreement pursuant to the last paragraph of Section 8 hereof, the
default by the Company of its obligations hereunder or the default by one or
more of the Underwriters in its or their respective obligations hereunder, the
Selling Stockholder agrees to reimburse the Underwriters for all of their
reasonable out-of-pocket expenses, including the fees and disbursements of their
counsel.
6. Conditions of Underwriters' Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholder on the date
hereof and at the time of purchase (as if made at the time of purchase), and the
several obligations of the Underwriters at the additional time of purchase are
subject to the accuracy of the representations and warranties on the part of the
Company and the Selling Stockholder on the date hereof and at the time of
purchase (unless previously waived) and at the additional time of purchase (as
if made at the time of purchase and the additional time of purchase, as the case
may be), the performance by the Company and the Selling Stockholder of their
respective obligations hereunder and to the following additional conditions
precedent:
(a) You shall have received, at the time of purchase and at the additional
time of purchase, as the case may be, an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for
the Company, addressed to the Underwriters, and dated the time of purchase or
the additional time of purchase, as the case may be, with reproduced copies for
each of the other Underwriters and in form reasonably satisfactory to the
Underwriters, stating that:
(i) the Company is validly existing as a corporation under the laws of
the State of Wisconsin, has filed its most recent required annual report
and has not filed articles of dissolution, and has the requisite corporate
power and authority to own, lease and operate its properties and conduct
its business as described in the Registration Statement and the Prospectus,
to execute and deliver this Agreement and to perform its obligations as
herein contemplated;
(ii) each of BCBSUW, CompcareBlue, Valley Health Plan, Inc., HMO-W,
Incorporated, Unity Health Plans Insurance Corporation, United Wisconsin
Insurance Company, United Heartland Life Insurance Company and Claim
Management Services, Inc. (collectively, the "Material Insurance
Subsidiaries") is validly existing as a corporation under the laws of the
State of Wisconsin, has filed its most recent required annual report and
has not filed articles of dissolution, has the requisite corporate power
and authority to own, lease and operate its properties and conduct its
business as described in the Registration Statement and Prospectus, and has
all licenses and permits required under the laws of the State of Wisconsin
necessary for the transaction of its business in the manner described in
the Registration Statement and Prospectus, and, to such counsel's
knowledge, there are no investigations or
20
proceedings pending or threatened which may result in the revocation or
suspension of such licenses or permits;
(iii) each of Government Health Services, LLC, TrustSolutions, LLC and
United Government Services, LLC (collectively, the "UGS Entities") is
validly existing as a limited liability company under the laws of the State
of Wisconsin, has filed its most recent required annual report and has not
filed articles of dissolution, and has the requisite power and authority as
a limited liability company to own, lease and operate its properties and
conduct its business as described in the Registration Statement and
Prospectus;
(iv) each of the Company and each of the UGS Entities is duly
qualified to do business as a foreign entity and is in good standing in
each jurisdiction in which such qualification is necessary, except where
the failure to so qualify would not have a Material Adverse Effect;
(v) to such counsel's knowledge, each of the Material Insurance
Subsidiaries holds all licenses and permits in jurisdictions outside the
State of Wisconsin which are necessary for the conduct of their respective
businesses in the manner now conducted as described in the Registration
Statement and Prospectus, except where the failure to so qualify would not
have a Material Adverse Effect, and to such counsel's knowledge, there are
no investigations or proceedings pending or threatened which may result in
the revocation or suspension of such licenses or permits;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) the Company has authorized and outstanding shares of capital
stock as set forth in the Registration Statement and the Prospectus; the
outstanding shares of capital stock of the Company (including the Shares)
(A) have been duly and validly authorized and issued and are fully paid and
non-assessable (except as described in the Registration Statement and
Prospectus), (B) are free of preemptive rights, resale rights, rights of
first refusal and similar rights under the Wisconsin Business Corporation
Law (the "WBCL") or the charter or bylaws or other organizational documents
of the Company or any contract, commitment or instrument described in or
filed as an exhibit to the Registration Statement or otherwise known to
such counsel and (C) to such counsel's knowledge, were issued in compliance
with all applicable federal and state securities laws; the holders of the
Shares will not be subject to personal liability by reason of being such
holders (except as described in the Registration Statement and Prospectus);
and the certificates for the Shares are
21
in due and proper form pursuant to the Bylaws of the Company and conform to
the requirements of the WBCL and the NYSE;
(viii) (A) all of the outstanding shares of capital stock of each of
the Material Insurance Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable (except for the same exceptions
applicable to the capital stock of the Company as described in the
Registration Statement and Prospectus), and (B) all of the outstanding
membership interests of each of the UGS Entities have been duly authorized
and validly issued and are fully paid and non-assessable; the foregoing
shares of capital stock and membership interests are owned of record by the
Company; except as described in the Registration Statement and Prospectus,
such capital stock and membership interests are not subject to any
perfected security interest or, to such counsel's knowledge, any other
encumbrance or adverse claim and, to such counsel's knowledge, have been
issued and sold in compliance with all applicable federal and state
securities laws; to such counsel's knowledge, except as described in the
Registration Statement and Prospectus, no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to
convert any obligation into shares of capital stock or ownership interests
in any of the Material Insurance Subsidiaries or any of the UGS Entities
(collectively, the "Material Subsidiaries") are outstanding;
(ix) the capital stock of the Company, including the Shares, conforms
in all material respects to the description thereof contained in the
Registration Statement and Prospectus;
(x) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Act;
(xi) the Registration Statement has become effective under the Act,
and to such counsel's knowledge no stop order with respect to the
effectiveness thereof has been issued and no stop order proceedings with
respect thereto are pending or threatened under the Act; and any required
filing of the Prospectus and any supplement thereto pursuant to Rule 424
under the Act has been made in the manner and within the time period
required by such Rule 424;
(xii) no approval, authorization, consent or order of or filing with
any national, state or local governmental or regulatory commission, board,
body, authority or agency is required in connection with the execution and
delivery of this Agreement by the Company and the sale of the Shares and
consummation by the Company of the other transactions contemplated hereby
22
other than those that have been obtained under the Act, and other than any
necessary qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by the
Underwriters or any necessary approval of the Corporate Financing
Department of NASD Regulation, Inc., as to which such qualification and
approval such counsel need express no opinion;
(xiii) the execution, delivery and performance of this Agreement by
the Company, including the consummation of the transactions contemplated
hereby and by the Registration Statement, do not constitute, and will not
result in, a Default Event pursuant to (A) any provision of the charter or
bylaws or other organizational documents of the Company or any of the
Material Subsidiaries, (B) any provision of any license, permit, franchise,
authorization, indenture, mortgage, deed of trust, note, bank loan or
credit agreement or other evidence of indebtedness, or any lease, contract
or other agreement or instrument filed as an exhibit to the Registration
Statement or otherwise known to such counsel to be applicable to the
Company or any of the Material Subsidiaries, or to which, to such counsel's
knowledge, the Company or any of the Material Subsidiaries is a party or by
which any of them, to such counsel's knowledge, may be bound or affected,
or to which any of the property or assets of the Company or any of the
Material Subsidiaries, to such counsel's knowledge, is subject or may be
bound or affected, (C) any federal, state, local or foreign law, regulation
or rule or (D) any decree, judgment or order known by such counsel to be
applicable to the Company or any of the Material Subsidiaries other than,
in the case of clause (B), such Default Events as would not, individually
or in the aggregate, have a Material Adverse Effect;
(xiv) to such counsel's knowledge, (A) neither the Company nor any of
the Subsidiaries is in violation of its charter or bylaws or other
organizational documents and (B) no Default Event exists under any license,
permit, franchise, authorization, indenture, mortgage, deed of trust, note,
bank loan or credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the Company or
any of the Subsidiaries is or was a party or by which it or its properties
may be bound or affected, and (C) neither the Company nor any of the
Subsidiaries is in violation of any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company or any of the Subsidiaries, other than, in the case of clause (B)
or (C), such Default Events as would not, individually or in the aggregate,
have a Material Adverse Effect;
(xv) to such counsel's knowledge, there are no contracts, licenses,
agreements, leases or documents of a character which are required to be
filed
23
as exhibits to the Registration Statement or to be summarized or described
in the Prospectus which have not been so filed, summarized or described;
(xvi) to such counsel's knowledge, there are no actions, suits,
claims, investigations or proceedings pending or threatened to which the
Company or any of the Subsidiaries is subject or of which any of their
respective properties is subject, whether at law, in equity or before or by
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency, which are required to be described in the
Prospectus but are not so described;
(xvii) the Incorporated Documents complied as to form, at the time
such documents were filed with the Commission, with the requirements of the
Exchange Act.
(xviii) the Company is not and, after giving effect to the offer and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
(xix) the statements identified in the pages from the Registration
Statement and the Prospectus attached hereto as Exhibit C, to the extent
they are descriptions of contracts, agreements or other legal documents or
of legal proceedings, or refer to statements of law or legal conclusions,
are in all material respects accurate descriptions or summaries of the
matters they purport to describe; and
(xx) no person has the right, pursuant to the terms of any contract,
agreement or other instrument described in or filed as an exhibit to the
Registration Statement or otherwise known to such counsel to have any
securities issued by the Company and owned by them registered pursuant to
the Act, included in the Registration Statement or sold in the offering
contemplated thereby, whether as a result of the filing or effectiveness of
the Registration Statement or the transactions contemplated by this
Agreement or otherwise, except for such rights as have been complied with
or waived;
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Selling Stockholder, representatives of the
independent public accountants of the Company and representatives of the
Underwriters at which the contents of the Registration Statement and
Prospectus were discussed and, although such counsel is not passing upon
and does not assume responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
Prospectus
24
(except as and to the extent stated in subparagraphs (vii), (ix) and (xix)
above), on the basis of the foregoing nothing has come to the attention of
such counsel that causes them to believe that the Registration Statement or
any amendment thereto at the time such Registration Statement or amendment
became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus or
any supplement thereto at the date of such Prospectus or such supplement,
and at all times up to and including the time of purchase or additional
time of purchase, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and schedules and other financial or statistical data
included in the Registration Statement or Prospectus).
Such counsel may assume, for purposes of its opinion, that no investor
(whether an individual or entity), nor any group of investors acting in
concert, will acquire such number of the Shares as shall (a) violate the
ownership restrictions contained in the Company's Amended and Restated
Articles of Incorporation or (b) require prior approval from the insurance
regulatory agency of any state.
(b) You shall have received, at the time of purchase and at the additional
time of purchase, as the case may be, the opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, S.C.,
counsel to the Selling Stockholder, addressed to the Underwriters, and dated the
time of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form reasonably
satisfactory to the Underwriters, stating that:
(i) the Selling Stockholder is validly existing as a non-stock
corporation under the laws of the State of Wisconsin, has filed its most
recent required annual report and has not filed articles of dissolution,
and has the requisite corporate power and authority to own, lease and
operate its properties as currently owned, leased and operated and to
conduct its business as currently conducted;
(ii) this Agreement has been duly executed and delivered by or on
behalf of the Selling Stockholder;
(iii) the Selling Stockholder has full legal right and power, and has
obtained any authorization, approval or consent required by law (other than
those imposed by the Act and the securities or blue sky laws of certain
jurisdictions), to sell and cause to be assigned, transferred and delivered
the Shares in the manner provided in this Agreement;
25
(iv) the execution, delivery and performance of this Agreement by the
Selling Stockholder and the consummation by the Selling Stockholder of the
transactions contemplated hereby do not constitute, and will not result in,
a Default Event under any provisions of the charter or bylaws of the
Selling Stockholder; and
(v) assuming each Underwriter acquires its interest in the Shares
without notice of any adverse claim (within the meaning of Section 8-105 of
the UCC), each Underwriter that has purchased Shares delivered at the time
of purchase or at the additional time of purchase, as the case may be, to
DTC or other securities intermediary by making payment therefor as provided
herein, and that has had such Shares credited to the securities account or
accounts of such Underwriters maintained with DTC or such other securities
intermediary, will have acquired a security entitlement (within the meaning
of Section 8-102(a)(17) of the UCC) to such Shares, and no action based on
an adverse claim (within the meaning of Section 8-102(a)(1) of the UCC) may
be asserted against such Underwriter with respect to such Shares.
(c) You shall have received at the time of purchase and at the additional
time of purchase, as the case may be, the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP,
counsel for the Underwriters, dated the time of purchase or the additional time
of purchase, as the case may be, with respect to the Registration Statement, the
Prospectus (together with any supplement thereto) and other related matters as
the Underwriters may require.
(d) You shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement and the time of purchase and additional
time of purchase, as the case may be, and addressed to the Underwriters (with
reproduced copies for each of the Underwriters) in the forms heretofore approved
by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters.
(e) No amendment or supplement to the Registration Statement or Prospectus,
or document which upon filing with the Commission would be incorporated by
reference therein, shall at any time have been filed to which you have objected
in writing.
(f) The Registration Statement shall have become effective not later than
5:30 PM New York City time on the date of this Agreement and, if Rule 430A under
the Act is used, the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act at or before 5:30 PM New York City time on
the second full business day after the date of this Agreement.
(g) Prior to the time of purchase or the additional time of purchase, as
the case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the
26
Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications thereof,
if any, shall 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 are made,
not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and adverse change or any development involving a prospective material and
adverse change (other than as specifically described in the Registration
Statement and Prospectus), in the business, properties, condition (financial or
otherwise) or results of operations of the Company and the Subsidiaries, taken
as a whole, shall occur or become known and (ii) no transaction which is
material to the Company shall have been entered into by the Company or any of
the Subsidiaries.
(i) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate signed by two of the
Company's executive officers to the effect that the representations and
warranties of the Company as set forth in this Agreement are true and correct as
of each such date as if made on each such date, that the Company has performed
such of its obligations under this Agreement as are to be performed at or before
the time of purchase and at or before the additional time of purchase, as the
case may be, and the conditions set forth in Sections 6(g) and 6(h) hereof have
been met.
(j) The Selling Stockholder will, at the time of purchase or additional
time of purchase, as the case may be, deliver to you a certificate signed on
behalf of the Selling Stockholder to the effect that the representations and
warranties of the Selling Stockholder as set forth in this Agreement are true
and correct as of each date as if made on each such date, that the Selling
Stockholder has performed such of its obligations under this Agreement as are to
be performed at or before the time of purchase and at or before the additional
time of purchase as the case may be, and the conditions set forth in clauses
(ii) and (iii) of Section 6(g) hereof, insofar as it relates to Selling
Stockholder Information, have been met.
(k) You shall have received the letters referred to in Section 3(i)(p)
hereof.
(l) The Company and the Selling Stockholder, but in the case of the Selling
Stockholder only to the extent of the Selling Stockholder Information, shall
have furnished to you such other documents and certificates as to the accuracy
and completeness of any statement in the Registration Statement and the
Prospectus as of the time of purchase and the additional time of purchase, as
the case may be, as you may reasonably request.
27
(m) The Shares shall be approved for listing on the NYSE.
(n) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or inclusion on a
watchlist or (ii) any watch, review or possible change that does not indicate an
improvement, in the rating accorded any securities of or guaranteed by the
Company or any Subsidiary by any "nationally recognized statistical rating
organization", as that term is defined in Rule 436(g)(2) under the Act.
7. Effective Date of Agreement; Termination. This Agreement shall become
effective when the parties hereto have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be subject to
termination in the absolute discretion of UBS Warburg LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., acting jointly on behalf of the Underwriters, if (x) since the time
of execution of this Agreement or the earlier respective dates as of which
information is given in the Registration Statement and Prospectus, there has
been any material adverse change, or any development involving a prospective
material adverse change, in the properties, management, financial condition,
stockholders' equity or results of operations of the Company and the
Subsidiaries taken as a whole, which would, in the judgment of UBS Warburg LLC
and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., acting jointly, make it impracticable or
inadvisable to proceed with the offering or delivery of the Shares on the terms
and in the manner contemplated by the Prospectus, (y) there shall have occurred
any downgrading, or any notice shall have been given of (i) any intended or
potential downgrading or inclusion on a watchlist or (ii) any watch, review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization", as that term is defined
in Rule 436(g)(2) under the Act or (z) at any time since the time of execution
of this Agreement and prior to the time of purchase or, with respect to the
purchase of any Additional Shares, the additional time of purchase, (i) trading
in securities on the NYSE, the American Stock Exchange or Nasdaq shall have been
suspended or limitations or minimum prices shall have been established on the
NYSE, the American Stock Exchange or Nasdaq, (ii) a general moratorium on
commercial banking activities shall have been declared by either Federal or New
York State authorities or there shall have occurred a material disruption in
commercial banking or securities settlement or clearance services in the United
States or (iii) there is an outbreak or escalation of hostilities or one or more
acts of terrorism involving the United States or the declaration by the United
States of a national emergency or war or an occurrence of any other calamity or
crisis or any change in financial, political or economic conditions in the
United States or elsewhere, if the effect of any such event, in the judgment of
UBS Warburg LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., acting jointly, makes it
impracticable or inadvisable to proceed with the offering or the delivery of the
Shares on the terms and in the manner contemplated by the Prospectus.
28
If you elect to terminate this Agreement as provided in this Section 7, you
shall promptly notify the Company, the Selling Stockholder and each other
Underwriter.
If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company or the
Selling Stockholder shall be unable or unwilling, or shall fail for any reason,
to comply with any of the terms of this Agreement, neither the Company nor the
Selling Stockholder shall be under any obligation or liability under this
Agreement (except to the extent provided in Sections 4(i)(k), 5 and 9 hereof),
and the Underwriters shall be under no obligation or liability to the Company or
the Selling Stockholder under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections 6 and 7
hereof, if any Underwriter shall default in its obligation to purchase and pay
for the Firm Shares to be purchased by it hereunder (otherwise than pursuant to
the provisions of Section 7 hereof) and if the number of Firm Shares which all
Underwriters so defaulting shall have agreed but failed to purchase and pay for
does not exceed 10% of the total number of Firm Shares, the non-defaulting
Underwriters shall purchase and pay for (in addition to the aggregate number of
Firm Shares they are obligated to purchase pursuant to Section 1 hereof) the
number of Firm Shares agreed to be purchased by all such defaulting
Underwriters, as hereinafter provided. Such Shares shall be purchased and paid
for by such non-defaulting Underwriter or Underwriters in such amount or amounts
as you may designate with the consent of each Underwriter so designated or, in
the event no such designation is made, such Shares shall be purchased and paid
for by all non-defaulting Underwriters pro rata in proportion to the aggregate
number of Firm Shares set opposite the names of such non-defaulting Underwriters
in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Selling Stockholder agrees with the non-defaulting Underwriters
that it will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the Underwriters or
by the Company for a defaulting Underwriter or Underwriters in accordance with
the foregoing provision, the Company or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary changes in the Registration Statement and Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 8 with like effect as if such
substituted Underwriter had originally been named in Schedule A.
29
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the non-defaulting
Underwriters nor the Company shall make arrangements within the five business
day period stated above for the purchase of all the Shares which the defaulting
Underwriter or Underwriters agreed to purchase hereunder, this Agreement shall
terminate without further act or deed and without any liability on the part of
the Company or the Selling Stockholder to any non-defaulting Underwriter (except
to the extent provided in Sections 4(i)(k) and 9 hereof) and without any
liability on the part of any non-defaulting Underwriter to the Company or the
Selling Stockholder (except to the extent provided in Section 9 hereof). Nothing
in this paragraph, and no action taken hereunder, shall relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
9. Indemnity and Contribution.
(a) Subject to the terms, conditions and limitations contained in this
Section 9, the Company and the Selling Stockholder jointly and severally agree
to indemnify, defend and hold harmless each Underwriter, its partners, directors
and officers, and any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all of the foregoing persons from and against any loss, damage,
expense, liability or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the common law or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 9 being deemed to include any
Prepricing Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished by or on behalf of any Underwriter through you to the
Company expressly for use with reference to such Underwriter in such
Registration Statement or such Prospectus or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or such
Prospectus or necessary to make such information not misleading, (ii) any untrue
statement or alleged untrue statement made by the Company or the Selling
Stockholder in Section 3 hereof or the failure by the Company to perform when
and as required any agreement or covenant contained herein or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
audio or visual materials provided by the
30
Company or the Selling Stockholder or based upon written information furnished
by or on behalf of the Company or the Selling Stockholder including, without
limitation, slides, videos, films, tape recordings, used in connection with the
marketing of the Shares; provided, that with respect to any untrue statement or
omission of a material fact made in any Prepricing Prospectus, the indemnity
agreement contained in this Section 9(a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased the securities concerned, to the extent that any such loss,
claim, damage or liability of such Underwriter occurs under the circumstance
where it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (w) the Company had previously furnished
copies of the Prospectus to the Underwriters, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus Supplement
was corrected in the Prospectus and (z) there was not sent or given to such
person, at or prior to the written confirmation of the sale of such securities
to such person, a copy of the Prospectus.
In making a claim for indemnification or contribution under this Section 9
by any indemnified party against the Company or the Selling Stockholder, and
subject to the further provisions of this paragraph, any such indemnified party:
(i) may proceed, with respect to a claim for indemnification or contribution
based on or arising out of the Selling Stockholder Information, against either
the Company or the Selling Stockholder and (ii) may proceed, with respect to a
claim for indemnification or contribution not based on or arising out of the
Selling Stockholder Information, against the Company only, or against both the
Company and the Selling Stockholder jointly, but may not proceed solely against
the Selling Stockholder. Except with respect to a claim for indemnification or
contribution based on or arising out of the Selling Stockholder Information (as
to which the following restrictions shall not apply), in the event that an
indemnified party is entitled to seek indemnity or contribution hereunder
against any loss, liability, claim, damage and expense incurred as contemplated
by this Section 9(a), as a precondition to any indemnified party obtaining
indemnification or contribution from the Selling Stockholder, any such
indemnified party shall first: (a) (i) obtain a final judgment from a trial
court of competent jurisdiction that such indemnified party is entitled to
indemnity or contribution under this Agreement with respect to such loss,
liability, claim, damage or expense (the "Final Judgment") from the Company and
the Selling Stockholder and (ii) seek to satisfy such Final Judgment in full
from the Company by making a written demand upon the Company for such
satisfaction and pursuing appropriate legal actions to satisfy the Final
Judgment, or (b) obtain a final determination from a trial court of competent
jurisdiction that such indemnity or contribution is unenforceable against the
Company (a "Final Determination"). If such Final Determination has been
obtained, or such Final Judgment shall remain unsatisfied in whole or in part 30
days following the date of receipt by the Company of such demand, such
indemnified party shall have the right to make demand directly on the Selling
Stockholder (but, in the case of a Final Judgment, only if and to the extent the
Company has not already satisfied such Final Judgment). Such indemnified
31
party shall, however, be relieved of its obligation to first obtain a Final
Determination or, in the case of a Final Judgment, to first seek to obtain
payment from the Company with respect to such Final Judgment as required by this
Section 9, if (w) the Company files a petition for relief under the United
States Bankruptcy Code (the "Bankruptcy Code") and such order remains unstayed
and in effect for 60 days, (x) an order for relief is entered against the
Company in an involuntary case under the Bankruptcy Code and such order remains
unstayed and in effect for 60 days, (y) the Company makes an assignment for the
benefit of its creditors, or (z) any court orders or approves the appointment of
a receiver or custodian for the Company or a substantial portion of its assets
and such order remains unstayed and in effect for 60 days.
If any action, suit or proceeding (together, a "Proceeding") is brought
against an Underwriter or any such person in respect of which indemnity may be
sought against the Company or the Selling Stockholder pursuant to the foregoing
paragraph, such Underwriter or such person shall promptly notify the Company and
Selling Stockholder in writing of the institution of such Proceeding and the
Company or the Selling Stockholder, as the case may be, shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify the Company or the Selling Stockholder
shall not relieve the Company or Selling Stockholder from any liability which
the Company or Selling Stockholder may have to any Underwriter or any such
person or otherwise. Such Underwriter or such person shall have the right to
employ its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in writing by
the Company in connection with the defense of such Proceeding or the Company
shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to defend such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the Company or the Selling Stockholder (in which case
the Company shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but the Company and/or the Selling
Stockholder may employ counsel and participate in the defense thereof at its own
expense), in any of which events such fees and expenses shall be borne by the
Company or the Selling Stockholder, as the case may be, and paid as incurred (it
being understood, however, that the Company or the Selling Stockholder shall not
be liable for the expenses of more than one separate counsel (in addition to any
local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). The Company or the Selling Stockholder shall not be liable for any
settlement of any Proceeding effected without its written consent, but if
settled with the written consent of the Company or the Selling Stockholder, the
Company or the Selling Stockholder, having given such consent, agrees to
indemnify and hold harmless any Underwriter and any such person from and against
any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if
32
at any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then such indemnifying party agrees
that it shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30 days'
prior notice of its intention to settle. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Company, the Selling Stockholder, their respective directors and
officers, and any person who controls the Company or the Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly and severally, the Company, the Selling
Stockholder or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with information
furnished in writing by or on behalf of such Underwriter through you to the
Company expressly for use with reference to such Underwriter in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Company, the Selling Stockholder
or any such person in respect of which indemnity may be sought against any
Underwriter pursuant to the foregoing paragraph, the Company, the Selling
Stockholder or such person shall promptly notify such Underwriter in writing of
the institution of such Proceeding and such Underwriter shall assume the defense
of such Proceeding, including the employment of counsel reasonably satisfactory
to such indemnified party and payment of all fees and expenses; provided,
however, that the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the Company,
the Selling Stockholder or any such person or otherwise. The Company, the
Selling Stockholder
33
or such person shall have the right to employ their or its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company, the Selling Stockholder or such person unless the employment of
such counsel shall have been authorized in writing by such Underwriter in
connection with the defense of such Proceeding or such Underwriter shall not
have, within a reasonable period of time in light of the circumstances, employed
counsel to defend such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to or in conflict with those available to
such Underwriter (in which case such Underwriter shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties, but such Underwriter may employ counsel and participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense of
such Underwriter), in any of which events such fees and expenses shall be borne
by such Underwriter and paid as incurred (it being understood, however, that
such Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company, the Selling
Stockholder and any such person from and against any loss or liability by reason
of such settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding.
(c) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under subsections (a) and (b) of this Section 9 in respect
of any losses, damages, expenses, liabilities or claims referred to therein,
then each applicable 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, damages, expenses, liabilities or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Stockholder on the one hand and the
Underwriters on the other hand
34
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholder on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Selling
Stockholder and the total underwriting discounts and commissions received by the
Underwriters, bear to the aggregate public offering price of the Shares. The
relative fault of the Company and Selling Stockholder on the one hand and of the
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company and Selling Stockholder on the one hand or by the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Company, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in subsection (c) of this
Section 9. Notwithstanding the provisions of this Section 9, in no case shall
any Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by such Underwriter and
distributed to the public were offered to the public exceeds the amount of any
damage which such Underwriter has otherwise been required to pay by reason of
such untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 9 are several in proportion
to their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Company and the Selling
Stockholder contained in this Agreement shall remain in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, its
partners, directors or officers or any person (including each partner, officer
or director of such person) who controls any
35
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, or by or on behalf of the Company or the Selling Stockholder or
their respective directors or officers or any person who controls any of the
foregoing within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company, the Selling Stockholder and
each Underwriter agree promptly to notify each other of the commencement of any
Proceeding against it and against any of the officers or directors of the
Company in connection with the issuance and sale of the Shares, or in connection
with the Registration Statement or Prospectus.
10. Notices. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to UBS
Warburg LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, Attention: Syndicate
Department, and to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: General Counsel; if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇. 53203-2896, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, President and General Counsel; and if to the Selling Stockholder,
shall be sufficient in all respects if delivered or sent to the Selling
Stockholder at the offices of the Selling Stockholder at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇▇.
11. Information Furnished by the Underwriters. The statements set forth in
the last paragraph on the cover page of the Prospectus and the statements set
forth in the fifth, eighth, ninth and tenth paragraphs under the caption
"Underwriting" in the Prospectus Supplement constitute the only information
furnished by or on behalf of the Underwriters as such information is referred to
in Sections 3 and 9 hereof.
12. Governing Law; Construction. This Agreement and any claim, counterclaim
or dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New York. The
section headings in this Agreement have been inserted as a matter of convenience
of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and you, the Company
and the Selling Stockholder consent to the jurisdiction of such courts and
personal service with respect thereto. The Company and the Selling Stockholder
hereby consent to personal jurisdiction, service and venue in any court in which
any Claim arising out of or in any way relating to this Agreement is brought by
any third party against an Underwriter or any indemnified party. Each
Underwriter, the Company and
36
the Selling Stockholder (on their own behalf and, to the extent permitted by
applicable law, on behalf of their respective stockholders and affiliates)
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. The Company and the Selling Stockholder agree that a
final judgment in any such action, proceeding or counterclaim brought in any
such court shall be conclusive and binding thereupon, and may be enforced in any
other courts in the jurisdiction to which the Company or the Selling Stockholder
is or may be subject, by suit upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and is
made solely for the benefit of the Underwriters, the Company, the Selling
Stockholder and, to the extent provided in Section 9 hereof, the controlling
persons, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one or
more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Company and the Selling Stockholder and their successors and
assigns and any successor or assign of any substantial portion of the Company's,
the Selling Stockholders and any of the Underwriters' respective businesses
and/or assets.
17. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned subsidiary of
UBS AG, is not a bank and is separate from any affiliated bank, including any
U.S. branch or agency of UBS Warburg LLC. Because UBS Warburg LLC is a
separately incorporated entity, it is solely responsible for its own contractual
obligations and commitments, including obligations with respect to sales and
purchases of securities. Securities sold, offered or recommended by UBS Warburg
LLC are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending relationships with
issuers of securities underwritten or privately placed by UBS Warburg LLC. To
the extent required under the securities laws, prospectuses and other disclosure
documents for securities underwritten or privately placed by UBS Warburg LLC
will disclose the existence of any such lending relationships and whether the
proceeds of the issue will be used to repay debts owed to affiliates of UBS
Warburg LLC.
37
If the foregoing correctly sets forth the understanding among the Company,
the Selling Stockholder and the Underwriters, please so indicate in the space
provided below for the purpose, whereupon this letter and your acceptance shall
constitute a binding agreement among the Company, the Selling Stockholder and
the several Underwriters.
Very truly yours,
COBALT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name:
Title:
WISCONSIN UNITED FOR HEALTH
FOUNDATION, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary/Treasurer
Accepted and agreed to as of the date
first above written:
UBS Warburg LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
CIBC World Markets Corp.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated
As Representatives of the
Several Underwriters
By: UBS WARBURG LLC
By: /s/ M. ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: M. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate Director
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
SCHEDULE A
Underwriter Firm Shares
----------- -----------------
UBS Warburg LLC........................................ 2,045,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc............................... 2,045,000
CIBC World Markets Corp................................ 1,090,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. Incorporated..................... 270,000
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co., LLC............................ 50,000
-----------------
Total........................................... 5,500,000
=================
1
SCHEDULE B
Subsidiaries of Cobalt
----------------------
Blue Cross & Blue Shield United of Wisconsin--a Wisconsin stock insurance
corporation Claim Management Services, Inc.
Government Health Services, LLC
United Government Services, LLC--a Wisconsin limited liability company
TrustSolutions, LLC
Compcare Health Services Insurance Corporation--a Wisconsin stock
insurance corporation
CC Holdings, LLC--a Wisconsin limited liability company
Meridian Resource Company, LLC--a Wisconsin limited liability
company
United Wisconsin Proservices, Inc.--a Wisconsin corporation
Comprehensive Receivables Group, Inc.--a Michigan corporation
Michigan Healthcare Collections, Inc.--a Michigan
corporation, a subsidiary of CRG
Family Health Systems, Inc.--a Wisconsin for-profit stock corporation
United Wisconsin Insurance Company--a Wisconsin stock insurance
corporation
Meridian Marketing Services, Inc.--a Wisconsin corporation
Valley Health Plan, Inc.--a Wisconsin stock insurance corporation
HMO-W, Incorporated--a Wisconsin corporation
Unity Health Plans Insurance Corporation--a Wisconsin corporation, a
subsidiary of HMO-W
Hometown Insurance Services, Inc.--a Wisconsin corporation, a subsidiary
of HMO-W
United Heartland Life Insurance Company--a Wisconsin stock life insurance
company
1
EXHIBIT A
Cobalt Corporation
Common Stock
(no Par Value)
February __, 2003
UBS Warburg LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
As Representatives of the Several Underwriters
c/o UBS Warburg LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection with
the proposed Underwriting Agreement (the "Underwriting Agreement") to be entered
into by and among Cobalt Corporation (the "Company"), Wisconsin United for
Health Foundation, Inc. and you, as Representatives of the several Underwriters,
with respect to the public offering (the "Offering") of common stock of the
Company (the "Common Stock").
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that from the date hereof through and including the 90th day
after the date of the final prospectus relating to the Offering, the undersigned
will not, directly or indirectly, without the prior written consent of UBS
Warburg LLC, (i) sell, offer to sell, contract to sell, hypothecate, pledge,
grant any option to purchase or otherwise dispose of, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder
with respect to, any Common Stock of the Company or any securities convertible
into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock or any such security, except for the exercise of
any stock option by the undersigned, (ii) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock, whether any such transaction is to be settled by delivery
of Common Stock or such other
1
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the sale of any Common Stock to the Underwriters pursuant
to the Underwriting Agreement; (b) bona fide gifts, provided the recipient or
recipients thereof agree in writing to be bound by the terms of this Lock-Up
Letter Agreement; or (c) in connection with the simultaneous sale of all of the
Common Stock of the Company (by means of a merger, consolidation or otherwise).
In addition, the undersigned hereby waives any rights the undersigned may
have to require registration of Common Stock in connection with the filing of a
registration statement relating to the Offering. The undersigned further agrees
that, from the date hereof through and including the 90th day after the date of
the final prospectus relating to the Offering, the undersigned will not,
directly or indirectly, without the prior written consent of UBS Warburg LLC,
make any demand for, or exercise any right with respect to, the registration of
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock.
This Lock-Up Letter Agreement shall be terminated and the undersigned shall
be released from the undersigned's obligations hereunder (i) upon the date the
Company notifies you in writing that it does not intend to proceed with the
Offering, (ii) upon the date the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) upon the date the Underwriting Agreement is terminated, for any reason,
prior to the time of purchase (as defined in the Underwriting Agreement).
Yours very truly,
------------------------------------
Name:
2
EXHIBIT B
[GRAPHIC OMITTED]
1
EXHIBIT C
[GRAPHIC OMITTED]
