CVS CAREMARK CORPORATION $350,000,000 Floating Rate Senior Notes due September 10, 2010 Underwriting Agreement
Exhibit
1.1
EXECUTION
COPY
CVS
CAREMARK CORPORATION
$350,000,000
Floating Rate Senior Notes due September 10, 2010
|
September
5, 2008
|
▇▇▇▇▇▇
Brothers Inc.
Banc
of America Securities LLC
Deutsche
Bank Securities Inc.
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated and
Wachovia
Capital Markets, LLC
As Representatives of the several
Underwriters
named in Schedule I hereto
c/▇ ▇▇▇▇▇▇
Brothers Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and
Gentlemen:
CVS
Caremark Corporation, a Delaware corporation (the “Company”), proposes to issue
and sell $350,000,000 aggregate principal amount of its Floating Rate Senior
Notes due 2010 (the “Notes”) to the several
underwriters named on Schedule I hereto (the “Underwriters”), for which
▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, Banc of America
Securities LLC, Wachovia Capital Markets, LLC and Deutsche Bank Securities Inc.
are acting as representatives (the “Representatives”). The
Notes will (i) have terms and provisions which are summarized in the Disclosure
Package as of the Applicable Time and the Prospectus dated as of the date hereof
(each as defined in Section 1(a) hereof) and (ii) be issued pursuant to an
Indenture dated as of August 15, 2006 (the “Indenture”) between the
Company and The Bank of New York Trust Company, N.A., as Trustee (the “Trustee”). This
agreement (this “Agreement”) is to confirm the
agreement concerning the purchase of the Notes from the Company by the
Underwriters.
1. Representations, Warranties and
Agreements of the Company. The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) An
“automatic shelf registration statement” (as defined in Rule 405 under the
Securities Act of 1933, as amended (the “Securities Act”)) on Form S-3
in respect of the Notes (File No. 333-143110) (i) has been prepared by the
Company in conformity with the requirements of the Securities Act, and the rules
and regulations (the “Rules and
Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder, (ii)
has been filed with the Commission under the Securities Act not earlier than the
date that is three years prior to the Closing Date (as defined in Section 3
hereof) and (iii) upon its filing with the Commission, automatically became
and is effective under the Securities Act. Copies of such
registration statement and any amendment thereto (excluding exhibits to such
registration statement but including all documents incorporated by reference in
each prospectus contained therein) have been delivered by the Company to the
Representatives; and no other document with respect to such registration
statement or any such document incorporated by reference therein has heretofore
been filed or transmitted for filing with the Commission. For
purposes of this Agreement, the following terms have the specified
meanings:
“Applicable Time” means 4:00
p.m. (New York City time) on the date of this Agreement;
“Base Prospectus” means the
base prospectus filed as part of the Registration Statement, in the form in
which it has most recently been amended on or prior to the date hereof, relating
to the Notes;
“Disclosure Package” means, as
of the Applicable Time, the most recent Preliminary Prospectus, together with
each Issuer Free Writing Prospectus filed or used by the Company on or before
the Applicable Time and identified on Schedule II hereto, other than a road show
that is an Issuer Free Writing Prospectus under Rule 433 of the Rules and
Regulations;
“Effective Date” means any date
as of which any part of the Registration Statement or any post-effective
amendment thereto relating to the Notes became, or is deemed to have become,
effective under the Securities Act in accordance with the Rules and Regulations
(including pursuant to Rule 430B of the Rules and Regulations);
“Final Term Sheet” means the
term sheet prepared pursuant to Section 4(a) of the Agreement and substantially
in the form attached in Schedule III hereto;
“Issuer Free Writing
Prospectus” means each “free writing prospectus” (as defined in Rule 405
of the Rules and Regulations) prepared by or on behalf of the Company or used or
referred to by the Company in connection with the offering of the Notes,
including the Final Term Sheet;
“Preliminary Prospectus” means
any preliminary prospectus relating to the Notes, including the Base Prospectus
and any preliminary prospectus supplement thereto, included in the Registration
Statement or as filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations and provided to the Representatives for use by the
Underwriters;
“Prospectus” means the final
prospectus relating to the Notes, including the Base Prospectus and the final
prospectus supplement thereto relating to the Notes, as filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations and provided to
the Representatives for use by the Underwriters; and
“Registration Statement” means,
collectively, the various parts of the above-referenced registration statement,
each as amended as of the Effective Date for such part, including any
Preliminary Prospectus and the Prospectus, all exhibits to such registration
statement and all documents incorporated by reference therein.
Any
reference to the “most recent
Preliminary Prospectus” will be deemed to refer to the latest Preliminary
Prospectus included in the Registration Statement or filed pursuant to Rule
424(b) of the Rules and Regulations prior to or on the date hereof (including,
for purposes of this Agreement, any documents incorporated by reference therein
prior to or on the date of this Agreement). Any reference to any
Preliminary Prospectus or the Prospectus will be deemed to refer to and include
any documents incorporated by reference therein pursuant to Form S-3 under the
Securities Act as of the date of such Preliminary Prospectus or the Prospectus,
as the case may be. Any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus will be deemed to refer to and
include any document filed under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”),
after the date of such Preliminary Prospectus or the Prospectus, as the case may
be, and incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement will be deemed to include any annual report of the
Company on Form 10-K filed with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act after the Effective Date that is incorporated by
reference in the Registration Statement.
(b) The
Commission has not issued any order preventing or suspending the effectiveness
of the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus;
and no proceeding for any such purpose or pursuant to Section 8A of the
Securities Act against the Company or related to the offering has been
instituted or, to the Company’s knowledge, threatened by the
Commission. The Commission has not issued any order directed to any
document incorporated by
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reference
in the most recent Preliminary Prospectus or the Prospectus, and no proceeding
has been instituted or, to the Company’s knowledge, threatened by the Commission
with respect to any document incorporated by reference in the most recent
Preliminary Prospectus or the Prospectus. The Commission has not
notified the Company of any objection to the use of the form of the Registration
Statement.
(c) The
Company is a “well-known seasoned issuer” (as defined in Rule 405 of the Rules
and Regulations) and has not been, and continues not to be, an “ineligible
issuer” (as defined in Rule 405 of the Rules and Regulations), in each case at
all times relevant under the Securities Act in connection with the offering of
the Notes.
(d) The
Registration Statement conformed on the Effective Date and conforms, and any
amendment to the Registration Statement filed after the date hereof will
conform, in all material respects, to the requirements of the Securities Act and
the Rules and Regulations. The most recent Preliminary Prospectus
conforms on the date hereof, and the Prospectus, and any amendment or supplement
thereto, will conform as of its date and as of the Closing Date, in all material
respects, to the requirements of the Securities Act and the Rules and
Regulations. The documents incorporated by reference in the most
recent Preliminary Prospectus or the Prospectus conformed, and any further
documents so incorporated will conform, when filed with the Commission, in all
material respects to the requirements of the Exchange Act or the Securities Act,
as applicable, and the Rules and Regulations; and no such documents have been
filed with the Commission since the close of business of the Commission on the
Business Day immediately prior to the date hereof.
(e) The
Registration Statement does not, as of the date hereof, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; provided, however, that no
representation or warranty is made as to information contained in or omitted
from the Registration Statement in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein (which information is
specified in Section 12 hereof).
(f) The
Disclosure Package did not, as of the Applicable Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, that no
representation or warranty is made as to information contained in or omitted
from the Disclosure Package in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein (which information is
specified in Section 12 hereof).
(g) The
Prospectus, and any amendment or supplement thereto, will not, as of its date
and on the Closing Date, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that no
representation or warranty is made as to information contained in or omitted
from the Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein (which information is specified
in Section 12 hereof).
(h) The
documents incorporated by reference in any Preliminary Prospectus or the
Prospectus did not, and any further documents incorporated by reference therein
will not, when filed with the Commission, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(i) The
Company has been duly incorporated and is an existing corporation in good
standing under the laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as described in the
most recent Preliminary Prospectus and the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material adverse effect on the
financial condition, business,
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properties,
results of operations or affairs of the Company and its subsidiaries taken as a
whole (a “Material Adverse
Effect”).
(j) Each
subsidiary of the Company that is material to the Company and its subsidiaries
taken as a whole (collectively, the “Significant Subsidiaries”) is
listed on Exhibit
A hereto, together with its jurisdiction of organization and the
beneficial ownership of the Company therein. Each Significant
Subsidiary has been duly organized and is an existing corporation or limited
liability company in good standing under the laws of the jurisdiction
of its formation, with corporate power and authority to own its properties and
conduct its business as described in the most recent Preliminary Prospectus and
the Prospectus; and each Significant Subsidiary of the Company is duly qualified
to do business as a foreign entity in good standing in all other jurisdictions
in which its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect; all of the issued and
outstanding capital stock or membership interests of each Significant Subsidiary
of the Company has been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each Significant Subsidiary owned by the
Company, directly or through subsidiaries, is owned, except to the extent set
forth in Schedule B hereto, free and clear of any mortgage, pledge, lien,
security interest, claim, encumbrance or defect of any kind.
(k) This
Agreement has been duly authorized, executed and delivered by the
Company.
(l) The
Indenture has been duly authorized by the Company and, assuming due
authorization by the Trustee, when duly executed and delivered by the Company
and the Trustee, will constitute a valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors’ rights
and remedies generally and by general principles of equity and concepts of
reasonableness (regardless of whether enforcement is sought in a proceeding at
law or in equity); and the Indenture conforms in all material respects to the
description thereof contained in the most recent Preliminary Prospectus and the
Prospectus.
(m) The
Notes have been duly authorized by the Company, and when executed, authenticated
and delivered and paid for as provided in this Agreement and the Indenture, the
Notes will have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditors’ rights and remedies generally and by general principles
of equity and concepts of reasonableness (regardless of whether enforcement is
sought in a proceeding at law or in equity); and the Notes conform in all
material respects to the description thereof contained in the Disclosure Package
and the Prospectus.
(n) The
execution, delivery and performance of the Indenture and this Agreement and the
issuance and sale of the Notes will not require the consent, approval,
authorization, or order of, or filing with, any governmental agency or body or
any court (except such as have been obtained or made and such as may be required
under state securities laws).
(o) The
execution, delivery and performance of the Indenture and this Agreement and the
issuance and sale of the Notes and compliance with the terms and provisions
thereof will not conflict with or result in a breach or violation of any of the
terms and provisions of, and do not and will not constitute a default (or an
event which with the giving of notice or the lapse of time or both would
constitute a default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material assets or properties of the
Company or any of its subsidiaries under (A) the charter, by-laws or other
organizational documents of the Company or any Significant Subsidiary, (B) any
statute, any rule, regulation, order or decree of any governmental or regulatory
agency or body or any court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their properties, assets or operations, or
(C) any indenture, mortgage, loan or credit agreement, note, lease, permit,
license or other agreement or instrument to which the Company or any subsidiary
is a party or by which the Company or any subsidiary is bound or to which any of
the properties, assets or
4
operations
of the Company or any subsidiary is subject, except, in the case of clauses (B)
and (C), for such breaches or violations which would not have a Material Adverse
Effect.
(p) The
Company and its subsidiaries have good and marketable title to all real
properties owned by them, in each case free and clear of any mortgage, pledge,
lien, security interest, claim or other encumbrance or defect; the Company and
its subsidiaries hold any leased real property under valid, subsisting and
enforceable leases or subleases with no exceptions that would materially
interfere with the use made or to be made thereof by them; neither the Company
nor any of its subsidiaries is in material default under any such lease or
sublease; and no material claim of any sort has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any such lease or sublease
or affecting or questioning the right of such entity to the continued possession
of the leased or subleased properties under any such lease or sublease, except
in each case as would not, individually or in the aggregate, have a Material
Adverse Effect.
(q) Except
as described in the most recent Preliminary Prospectus and the Prospectus, the
Company and its subsidiaries possess adequate certificates, authorizations,
licenses or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them, except as would not have
a Material Adverse Effect, and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization, license or permit that, individually or in the aggregate, could
have a Material Adverse Effect.
(r) The
Company and each of its subsidiaries have filed all tax returns required to be
filed, which returns are complete and correct in all material respects, and
neither the Company nor any of its subsidiaries is in default in the payment of
any taxes which were payable pursuant to said returns or any assessments with
respect thereto, in each case except as would not, individually or in the
aggregate, have a Material Adverse Effect.
(s) Neither
the filing of the Registration Statement, the most recent Preliminary Prospectus
or the Prospectus nor the offer or sale of the Notes as contemplated by this
Agreement gives rise to any rights, other than those which have been duly waived
or satisfied, for or relating to the registration of any securities of the
Company.
(t) Except
as described in the most recent Preliminary Prospectus and the Prospectus
(A) neither the Company nor any of its Significant Subsidiaries is in
violation of its charter or by-laws, (B) neither the Company nor any of its
subsidiaries is in violation of any applicable law, ordinance, administrative or
governmental rule or regulation, or any order, decree or judgment of any court
or governmental agency or body having jurisdiction over the Company or any of
its subsidiaries and (C) no event of default or event that, but for the giving
of notice or the lapse of time or both, would constitute an event of default,
exists, or as a result of the consummation of the sale of the Notes will exist,
under any indenture, mortgage, loan agreement, note, lease, permit, license or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or to which any of the properties, assets or operations of the Company
or any such Subsidiary is subject, except, in the case of clauses (B) and (C),
for such violations and defaults that would not have a Material Adverse
Effect.
(u) Except
as described in the most recent Preliminary Prospectus and the Prospectus, there
are no pending actions, suits or proceedings against or, to the knowledge of the
Company, affecting the Company, any of its subsidiaries or any of their
respective properties, assets or operations that would have, individually or in
the aggregate, a Material Adverse Effect, or could materially and adversely
affect the ability of the Company to perform its obligations under this
Agreement, the Indenture or any other document governing the sale of the Notes;
and no such actions, suits or proceedings are, to the knowledge of the Company,
threatened.
(v) The
financial statements, together with the related schedules and notes included or
incorporated by reference in the most recent Preliminary Prospectus and the
Prospectus, present fairly, in all material respects, the respective financial
position of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown, and have
been prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis, except as disclosed
therein. The other financial and statistical information set forth in
the most recent Preliminary
5
Prospectus
and the Prospectus present fairly, in all material respects, the information
shown therein and have been, except as disclosed therein, compiled on a basis
consistent with that of the financial statements included or incorporated by
reference in the most recent Preliminary Prospectus and the
Prospectus.
(w) The
pro forma financial statements included or incorporated by reference in the most
recent Preliminary Prospectus include assumptions that provide a reasonable
basis for presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma adjustments
reflect the proper application of those adjustments to the historical financial
statement amounts in the pro forma financial statements included or incorporated
by reference in the most recent Preliminary Prospectus. The pro forma
financial statements included or incorporated by reference in the most recent
Preliminary Prospectus comply as to form in all material respects with the
applicable requirements of Regulation S-X under the Act.
(x) Since
the date of the latest audited financial statements of the Company included or
incorporated by reference in the Preliminary Prospectus and the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the financial condition,
business, properties or results of operations of the Company and its
subsidiaries taken as a whole.
(y) There
is no contract or document required to be described in the Registration
Statement, any Preliminary Prospectus or the Prospectus or to be filed as an
exhibit to the Registration Statement or to a document incorporated by reference
into the Registration Statement, any Preliminary Prospectus or the Prospectus
which is not described or filed as required.
(z) The
Company is not and, after giving effect to the offering and sale of the Notes
and the application of the proceeds thereof as described in the most recent
Preliminary Prospectus and the Prospectus will not be required to register as,
an “investment company” as defined in the Investment Company Act of 1940, as
amended.
(aa) Each
of the Company and its Significant Subsidiaries maintains a system of internal
accounting controls over financial reporting. The Company's internal
controls over financial reporting includes those policies and procedures that
pertain to the Company's ability to record, process, summarize and report a
system of internal accounting controls and procedures to provide reasonable
assurance, at an appropriate cost/benefit relationship, that the unauthorized
acquisition, use or disposition of assets are prevented or timely detected and
that transactions are authorized, recorded and reported properly to permit the
preparation of financial statements in accordance with generally accepted
accounting principles and receipts and expenditures are duly
authorized. The Company’s internal controls over financial reporting
were effective and provided such reasonable assurance for the preparation of
financial statements as of December 29, 2007 and, to the best of the Company’s
knowledge, there have been no changes in the Company’s internal controls over
financial reporting subsequent to December 29, 2007.
(bb) The
Company has made the evaluations of the Company’s disclosure controls and
procedures required under Rule 13a−15(b) under the Exchange Act and management’s
conclusions regarding the effectiveness of such disclosure controls and
procedures were included in the Company’s annual report on Form 10−K for the
fiscal year ended December 29, 2007.
For
purposes of this Section 1, as well as for Section 6 hereof, references to “the
most recent Preliminary Prospectus and the Prospectus” or “the Disclosure
Package and the Prospectus” are to each of the most recent Preliminary
Prospectus or the Disclosure Package, as the case may be, and the Prospectus as
separate or stand-alone documentation (and not the most recent Preliminary
Prospectus or the Disclosure Package, as the case may be, and the Prospectus
taken together), so that representations, warranties, agreements, conditions and
legal opinions will be made, given or measured independently in respect of each
of the most recent Preliminary Prospectus or the Disclosure Package, as the case
may be, and the Prospectus.
2. Purchase of the Notes by the
Underwriters. Subject to the terms and conditions and upon the
basis of the representations and warranties herein set forth, the Company agrees
to issue and sell to the
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Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at a price equal to 99.700% of the principal amount of the Notes,
plus, accrued interest, if any, from September 10, 2008 to the Closing Date, the
respective principal amount of the Notes set forth opposite such Underwriter’s
name in Schedule I hereto.
3. Delivery of and Payment for the
Notes. Delivery of the Notes will be made at the offices of
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or at
such place or places as mutually may be agreed upon by the Company and the
Underwriters, at 9:00 A.M., New York City time, on September 10, 2008 or on such
later date not more than seven Business Days after such date as may be
determined by the Representatives and the Company (the “Closing Date”).
Delivery
of the Notes will be made to the Representatives by or on behalf of the Company
against payment of the purchase price therefor by wire transfer of immediately
available funds. Delivery of the Notes will be made through the
facilities of The Depository Trust Company unless the Representatives will
otherwise instruct. Delivery of the Notes at the time and place
specified in this Agreement is a further condition to the obligations of each
Underwriter.
4. Covenants of the
Company. The Company covenants and agrees with each
Underwriter that:
(a) The
Company (i) will prepare the Prospectus in a form approved by the
Representatives and file the Prospectus pursuant to Rule 424(b) of the Rules and
Regulations within the time period prescribed by such Rule; (ii) will not file
any amendment or supplement to the Registration Statement or the Prospectus or
file any document under the Exchange Act (except for filings of annual reports
on Form 10-K and quarterly reports on Form 10-Q under the Exchange Act and any
filings relating to the Agreement and Plan of Merger (the “Merger Agreement”), dated
August 12, 2008, among Longs Drug Stores Corporation (“Longs”), Blue MergerSub Corp.
and the Company, and the tender offer by the Company for Longs’ common stock,
including the transactions contemplated therein) before the termination of the
offering of the Notes by the Underwriters if such document would be deemed to be
incorporated by reference into the Prospectus, which filing is not consented to
by the Representatives after reasonable notice thereof (such consent not to be
unreasonably withheld or delayed); (iii) will advise the Representatives,
promptly after it receives notice thereof, of the time when any amendment or
supplement to the Registration Statement, the most recent Preliminary Prospectus
or the Prospectus has been filed and will furnish the Representatives with
copies thereof; (iv) will prepare the Final Term Sheet, substantially in the
form of Schedule III hereto and approved by the Representatives and file the
Final Term Sheet pursuant to Rule 433(d) of the Rules and Regulations within the
time period prescribed by such Rule; (v) will advise the Representatives
promptly after it receives notice thereof, of the issuance by the Commission or
any state or other regulatory body of any stop order or any order suspending the
effectiveness of the Registration Statement, suspending or preventing the use of
any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus
or suspending the qualification of the Notes for offering or sale in any
jurisdiction, of the initiation or threatening of any proceedings for any such
purpose or pursuant to Section 8A of the Securities Act, of receipt by the
Company from the Commission of any notice of objection to the use of the
Registration Statement or any post-effective amendment thereto or of any request
by the Commission for the amending or supplementing of the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus or for
additional information; and (vi) will use its reasonable best efforts to prevent
the issuance of any stop order or other such order or any such notice of
objection and, if a stop order or other such order is issued or any such notice
of objection is received, to obtain as soon as possible the lifting or
withdrawal thereof.
(b) The
Company will furnish to each of the Underwriters and to counsel for the
Underwriters such number of conformed copies of the Registration Statement, as
originally filed and each amendment thereto (excluding exhibits other than this
Agreement), any Preliminary Prospectus, the Final Term Sheet and any other
Issuer Free Writing Prospectus, the Prospectus and all amendments and
supplements to any of such documents (including any document filed under the
Exchange Act and deemed to be incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus), in each case as soon
as available and in such quantities as the Representatives may from time to time
reasonably request.
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(c) During
the period in which the Prospectus relating to the Notes (or in lieu thereof,
the notice referred to in Rule 173(a) of the Rules and Regulations) is required
to be delivered under the Securities Act, the Company will comply with all
requirements imposed upon it by the Securities Act and by the Rules and
Regulations, as from time to time in force, so far as is necessary to permit the
continuance of sales of or dealings in the Notes as contemplated by the
provisions of this Agreement and by the Prospectus. If during such
period any event occurs as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, or if during
such period it is necessary to amend the Registration Statement or amend or
supplement the Prospectus or file any document to comply with the Securities
Act, the Company will promptly notify the Representatives and will, subject to
Section 4(a) hereof, amend the Registration Statement, or amend or
supplement the Prospectus, as the case may be, or file any document (in each
case, at the expense of the Company) so as to correct such statement or omission
or to effect such compliance, and will furnish without charge to each
Underwriter as many written and electronic copies of any such amendment or
supplement as the Representatives may from time to time reasonably
request. Neither the Representatives’ consent to nor its delivery to
offerees or investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6 of this
Agreement.
(d) As
soon as practicable, the Company will make generally available to its security
holders and the Underwriters an earnings statement satisfying the requirements
of Section 11(a) of the Securities Act and Rule 158 of the Rules and
Regulations.
(e) The
Company agrees, whether or not this Agreement becomes effective or is terminated
or the sale of the Notes to the Underwriters is consummated, to pay all fees,
expenses, costs and charges in connection with: (i) the preparation,
printing, filing, registration, delivery and shipping of the Registration
Statement (including any exhibits thereto), any Preliminary Prospectus, any
Issuer Free Writing Prospectus, the Prospectus and any amendments or supplements
thereto; (ii) the printing, producing, copying and delivering of this Agreement,
the Indenture, closing documents (including any compilations thereof) and any
other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering, purchase, sale and delivery of the
Notes; (iii) the services of the Company’s independent registered public
accounting firm; (iv) the services of the Company’s counsel; (v) the
qualification of the Notes under the securities laws of the several
jurisdictions as provided in Section 4(i) hereof; (vi) any rating of the
Notes by rating agencies; (vii) the services of the Trustee and any agent
of the Trustee (including the fees and disbursements of counsel for the
Trustee); (viii) any “road show” or other investor presentations relating to the
offering of the Notes (including, without limitation, for meetings and travel);
and (ix) otherwise incident to the performance of its obligations hereunder for
which provision is not otherwise made in this Section 4(e). It is
understood, however, that, except as provided in this Section 4(e) or
Sections 7 and 9 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees and expenses of counsel to the Underwriters and any
advertising expenses incurred in connection with the offering of the
Notes. If the sale of the Notes provided for herein is not
consummated by reason of acts of the Company or changes in circumstances of the
Company pursuant to Section 9 of this Agreement which prevent this
Agreement from becoming effective, or by reason of any failure, refusal or
inability on the part of the Company to perform any agreement on its part to be
performed or because any other condition of the Underwriters’ obligations
hereunder is not fulfilled or if the Underwriters decline to purchase the Notes
for any reason permitted under this Agreement (other than by reason of a default
by any of the Underwriters pursuant to Section 8 or if the Underwriters
terminate this Agreement under Section 9 of this Agreement upon the occurrence
of any event specified in clause (iii), (iv), (vi), (vii) or (viii) of Section
6(d)), the Company will reimburse the Underwriters for all reasonable
out-of-pocket disbursements (including fees and expenses of counsel to the
Underwriters) incurred by the Underwriters in connection with any investigation
or preparation made by them in respect of the marketing of the Notes or in
contemplation of the performance by them of their obligations
hereunder.
(f) Until
termination of the offering of the Notes, the Company will timely file all
reports, documents and amendments to previously filed documents required to be
filed by it pursuant to Section 12, 13(a), 13(c), 14 or 15(d) of the Exchange
Act.
8
(g) The
Company will apply the net proceeds from the sale of the Notes as set forth in
the most recent Preliminary Prospectus and the Prospectus under the caption “Use
of Proceeds.”
(h) The
Company will pay the required Commission filing fees relating to the Notes
within the time period required by Rule 456(b)(1) of the Rules and Regulations
without regard to the proviso therein and otherwise in accordance with Rules
456(b) and 457(r) of the Rules and Regulations.
(i) The
Company will use reasonable best efforts to arrange for the qualification of the
Notes and the determination of their eligibility for investment under the blue
sky laws of such jurisdictions as the Representatives designate and will
continue such qualifications in effect so long as required for the distribution
of the Notes by the Underwriters, provided that the Company will not be required
to qualify as a foreign corporation or to file a general consent to service of
process or subject itself to taxation in any such state.
5. Free Writing
Prospectuses.
(a) The
Company represents and warrants to, and agrees with, each Underwriter that (i)
the Company has not made, and will not make, any offer relating to the Notes
that would constitute an Issuer Free Writing Prospectus without the prior
consent of the Representatives (which consent being deemed to have been given
with respect to (A) the Final Term Sheet prepared and filed pursuant to Section
4(a) hereof and (B) any other Issuer Free Writing Prospectus identified on
Schedule II hereto); (ii) each Issuer Free Writing Prospectus conformed or will
conform in all material respects to the requirements of the Securities Act and
the Rules and Regulations on the date of first use, and the Company has complied
with any filing requirements applicable to such Issuer Free Writing Prospectus
pursuant to Rule 433 of the Rules and Regulations; (iii) each Issuer Free
Writing Prospectus will not, as of its issue date and through the time the Notes
are delivered pursuant to Section 3 hereof, include any information that
conflicts with the information contained in the Registration Statement, the most
recent Preliminary Prospectus and the Prospectus; and (iv) each Issuer Free
Writing Prospectus, when considered together with the information contained in
the most recent Preliminary Prospectus, did not, as of the Applicable Time, does
not, as of the date hereof, and will not, as of the Closing Date, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) Each
Underwriter represents and warrants to, and agrees with, the Company and each
other Underwriter that it has not made, and will not make any offer relating to
the Notes that would constitute a “free writing prospectus” (as defined in
Rule 405 of the Rules and Regulations) required to be filed with the
Commission, without the prior consent of the Company and the
Representatives.
(c) The
Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free
Writing Prospectus would conflict with the information in the Registration
Statement, the most recent Preliminary Prospectus or the Prospectus or would
include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will give prompt
notice thereof to the Representatives and, if requested by the Representatives,
will prepare and furnish without charge to each Underwriter an Issuer Free
Writing Prospectus or other document which will correct such conflict, statement
or omission.
6. Conditions of Underwriters’
Obligations. The obligations of the Underwriters hereunder are
subject to the accuracy, as of the date hereof and the Closing Date (as if made
at the Closing Date), of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) The
Prospectus shall have been filed with the Commission in a timely fashion in
accordance with Section 4(a) hereof; all filings (including, without
limitation, the Final Term Sheet) required by Rule 424(b) or Rule 433 of the
Rules and Regulations shall have been made within the time periods prescribed by
such Rules, and no such filings will have been made without the consent of the
Representatives (such consent not to be unreasonably withheld or delayed); no
stop order suspending the effectiveness of the Registration Statement
9
or any
amendment or supplement thereto, preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus, or suspending the qualification of the Notes for offering
or sale in any jurisdiction shall have been issued; no proceedings for the
issuance of any such order shall have been initiated or threatened pursuant to
Section 8A of the Securities Act; no notice of objection of the Commission to
use the Registration Statement or any post-effective amendment thereto shall
have been received by the Company; and any request of the Commission for
additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been disclosed to the Representatives and
complied with to the Representatives’ reasonable satisfaction.
(b) The
Representatives shall have received a letter, dated the date of this Agreement,
of Ernst & Young LLP (“E&Y”) or KPMG LLP (“KPMG”), as applicable,
addressed to the Underwriters, confirming that they are independent public
accountants within the meaning of the Securities Act and the applicable
published rules and regulations thereunder (“Rules and Regulations”) and to the
effect that:
(i) in
their opinion the financial statements and schedules examined by them and
included or incorporated by reference in the most recent Preliminary Prospectus
or the Prospectus, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the related
published Rules and Regulations;
(ii) they
have performed the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information as described in
Statement of Auditing Standards No. 100, Interim Financial Information, on
the unaudited financial statements included or incorporated by reference in the
most recent Preliminary Prospectus or the Prospectus;
(iii) on
the basis of the review referred to in clause (ii) above, a reading of the
latest available interim financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial and accounting
matters and other specified procedures, nothing came to their attention that
caused them to believe that:
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(A)
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the
unaudited financial statements included or incorporated by reference in
the most recent Preliminary Prospectus or the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the related published Rules and
Regulations or any material modifications should be made to such unaudited
financial statements for them to be in conformity with generally accepted
accounting principles;
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|
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(B)
|
at
the date of the latest available balance sheet read by such accountants,
and at a subsequent specified date not more than three business days prior
to the date of this Agreement, there was any decrease in stockholders’
equity or change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available balance sheet read by
such accountants, there was any decrease in consolidated net current
assets or total assets, as compared with amounts shown on the latest
balance sheet included or incorporated by reference in the most recent
Preliminary Prospectus or the Prospectus;
or
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(C)
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for
the period from the closing date of the latest income statement included
or incorporated by reference in the most recent Preliminary Prospectus or
the Prospectus to the closing date of the latest available income
statement read by such accountants there were any decreases, as compared
with the corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income statement
included or incorporated by reference in the most recent Preliminary
Prospectus or the Prospectus, in consolidated net sales, net operating
income, the total or per share amounts of net earnings or in
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10
| the ratio of earnings to fixed charges, or any increases or decreases, as the case may be, in other items specified by the Representatives; |
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(D)
|
except
in all cases set forth in clauses (B) and (C) above for changes, increases
or decreases which the most recent Preliminary Prospectus or the
Prospectus discloses have occurred or may occur or which are described in
such letter;
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(iv) the
pro forma financial statements, together with related notes, included or
incorporated by reference in the most recent Preliminary Prospectus or the
Prospectus are consistent with the historical statements, except for the pro
forma adjustments specified therein, and give effect to assumptions made on a
reasonable basis and present fairly the historical and proposed transactions
contemplated hereby and by the most recent Preliminary Prospectus or the
Prospectus, and nothing came to their attention that caused them to believe that
the pro forma financial information included or incorporated by reference in the
most recent Preliminary Prospectus or the Prospectus does not comply as to form
in all material respects with the accounting requirements of the Securities Act
and the related published Rules and Regulations or has not been properly
compiled and that the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements; and
(v) they
have compared specified dollar amounts (or percentages derived from such dollar
amounts), numerical data and other financial information contained in the most
recent Preliminary Prospectus or the Prospectus (in each case to the extent that
such dollar amounts, percentages, numerical data and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company’s accounting system
or are derived directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found such dollar
amounts, percentages, numerical data and other financial information to be in
agreement with such results except as otherwise specified in such
letter.
(c) The
Representatives shall have received a letter, addressed to the Underwriters,
dated the Closing Date, of E&Y or KPMG, as applicable, which meets the
requirements of subsection (b) of this Section, except that the specified date
referred to in such subsection will be a date not more than three days prior to
the Closing Date for the purposes of this subsection.
(d) Subsequent
to the execution and delivery of this Agreement, there shall not have occurred
(i) any change, or any development involving a prospective change, in the
condition (financial or other), business, properties or results of operations of
the Company and its subsidiaries, taken as a whole, which, in the judgment of
the Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the offering or the sale of and
payment for the Notes; (ii) any downgrading in the rating of any debt
securities of the Company by any “nationally recognized statistical rating
organization” (as defined for purposes of Rule 436(g) under the Securities
Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Company (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any change in
U.S. or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of the
Representatives, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the Notes, whether in the primary market or in
respect of dealings in the secondary market; (iv) any material suspension
or material limitation of trading in securities generally on the New York Stock
Exchange or any setting of minimum prices for trading on such exchange; (v) any
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market; (vi) any banking moratorium declared by U.S.
Federal or New York authorities; (vii) any major disruption of settlements
of securities or clearance services in the United States; or (viii) any
attack on the United States, outbreak or escalation of major hostilities or act
of terrorism involving the United States, any declaration of war by Congress or
any other substantial national or international calamity or emergency if, in the
judgment of the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the offering or sale of and payment
for the Notes.
11
(e) The
Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for
the Company, an opinion and 10b-5 letter, addressed to the Underwriters, dated
the Closing Date substantially in the form of Exhibits B and C
hereto, respectively.
(f) The
Representatives shall have received from ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel and
Secretary of the Company, an opinion, addressed to the Underwriters, dated the
Closing Date substantially in the form of Exhibit D
hereto.
(g) The
Representatives shall have received from ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the
Underwriters, such opinion or opinions, addressed to the Underwriters, dated the
Closing Date and in form and substance satisfactory to the Representatives, with
respect to the Notes, Indenture, Registration Statement, Prospectus and
Disclosure Package and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters.
(h) The
Representatives shall have received a certificate, dated the Closing Date, of
the President or any Vice President and the principal financial or accounting
officer of the Company in which such officers, to the best of their knowledge
after reasonable investigation, shall state that (i) the representations and
warranties of the Company in this Agreement are true and correct, (ii) the
Company has complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied hereunder at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for any such purpose have been initiated or
threatened and (iii) subsequent to the dates of the most recent financial
statements in the most recent Preliminary Prospectus and the Prospectus, there
has been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries, taken as a whole, other than those set forth in or contemplated by
the most recent Preliminary Prospectus and the Prospectus or as described in
such certificate.
The
Company will furnish the Underwriters with such conformed copies of such
opinions, certificates, letters and documents as the Underwriters reasonably
request. The Representatives may in their sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
7. Indemnification and
Contribution.
(a) The
Company will indemnify and hold harmless each Underwriter, its partners,
members, directors and officers and affiliates and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities
Act, from and against any loss, claim, damage or liability (or any action in
respect thereof), joint or several, to which such Underwriter or such person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage or liability (or action in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or the Disclosure Package, each as amended or supplemented, any
Issuer Free Writing Prospectus or any “issuer information” filed or required to
be filed pursuant to Rule 433(d) of the Rules and Regulations, or
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Preliminary Prospectus, Free Writing Prospectus, the Prospectus
and the Disclosure Package, in the light of the circumstances under which they
were made) not misleading, and will reimburse each Underwriter for any legal or
other expenses as reasonably incurred by such Underwriter in connection with
investigating, preparing to defend or defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action, notwithstanding the possibility that payments for such expenses might
later be held to be improper, in which case such payments will be promptly
refunded; provided,
however, that the
Company will not be liable under this Section 7(a) in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein (which information is specified in
Section 12 hereof). The
12
foregoing
indemnity agreement shall not inure to the benefit of any Underwriter if (i)
such loss, claim, damage or liability (or action in respect thereof) arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus, (ii) the Company
informed the Representatives of such untrue statement or alleged untrue
statement or omission or alleged omission prior to the Applicable Time, (iii)
such untrue statement or alleged untrue statement or omission or alleged
omission was corrected in an amended or supplemented Preliminary Prospectus (or,
where permitted by law, an Issuer Free Writing Prospectus) and such corrected
Preliminary Prospectus (or Issuer Free Writing Prospectus) was provided to the
Underwriters such that the Underwriters had a reasonably sufficient amount of
time prior to the Applicable Time to deliver such corrected Preliminary
Prospectus (or Issuer Free Writing Prospectus) to the persons to whom the
Underwriters are selling the Notes, (iv) the timely delivery of such corrected
Preliminary Prospectus (or Issuer Free Writing Prospectus) to such person prior
to the Applicable Time would have constituted a complete defense to the losses,
claims, damages and liabilities asserted by such person and (v) such corrected
Preliminary Prospectus (or Issuer Free Writing Prospectus) was not sent or given
by or on behalf of such Underwriter to such person prior to the Applicable
Time.
(b) Each
Underwriter severally, but not jointly, will indemnify and hold harmless the
Company, its directors, officers and affiliates and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
against any loss, claim, damage or liability (or any action in respect thereof)
to which the Company or such person may become subject, under the Securities Act
or otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, the Disclosure Package,
each as amended or supplemented, or any Issuer Free Writing Prospectus, or (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating, preparing to defend or
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action notwithstanding the possibility
that payments for such expenses might later be held to be improper, in which
case such payments will be promptly refunded; provided, however, that such
indemnification or reimbursement will be available in each such case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives, specifically for use therein (which information is
specified in Section 12 hereof).
(c) Promptly
after receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under subsection (a) or (b)
above, notify the indemnifying party of the commencement thereof; but the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have under subsection (a) or (b) above, except to the extent that it
has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided further that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party otherwise than under subsection (a) or (b)
above. In case any such action is brought against any indemnified
party and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action 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 (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
13
(d) If
the indemnification provided for in this Section is unavailable or insufficient
to hold harmless an indemnified party under subsection (a) or (b) above, then
the indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Notes or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities as
well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total discounts and commissions received by the Underwriters from the
Company under this Agreement. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Underwriters
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), the
Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Notes purchased by it were resold
exceeds the amount of any damages which the Underwriters has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. The Underwriters’ obligations in this subsection
(d) to contribute are several in proportion to their respective purchase
obligations and not joint. 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.
(e) The
obligations of the Company under this Section shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Underwriters under this Section shall be in addition to any
liability which the Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act or the
Exchange Act.
8. Substitution of
Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Notes hereunder and the aggregate principal amount
of the Notes that such defaulting Underwriter or Underwriters agreed but failed
to purchase does not exceed 10% of the total principal amount of the Notes, the
Representatives may make arrangements satisfactory to the Company for the
purchase of such Notes by other persons, including any of the Underwriters, but
if no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments, hereunder, to purchase the Notes that such defaulting Underwriter
or Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters so default and the aggregate principal amount of the Notes with
respect to which such default or defaults occur exceeds 10% of the total
principal amount of the Notes and arrangements satisfactory to the
Representatives and the Company for the purchase of such Notes by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Company,
except as provided in Section 7. As used in this Agreement, the term
“Underwriter” includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from
liability for its default.
9. Termination. Until
the Closing Date, this Agreement may be terminated by the Representatives on
behalf of the Underwriters by giving notice as hereinafter provided to the
Company if (i) the Company will have failed, refused or been unable, at or prior
to the Closing Date, to perform any agreement on its part to be performed
hereunder, (ii) any of the events described in Sections 6(d) of this Agreement,
shall have occurred, or (iii) any other condition to the Underwriters’
obligations hereunder is not fulfilled. Any termination of
14
this
Agreement pursuant to this Section 9 will be without liability on the part
of the Company or any Underwriter, except as otherwise provided in
Sections 4(e) and 7 hereof.
Any notice
referred to above may be given at the address specified in Section 11 of
this Agreement in writing or by telegraph or telephone, and if by telegraph or
telephone, will be immediately confirmed in writing.
10. Survival of Certain
Provisions. The agreements contained in Section 7 of this
Agreement and the representations, warranties and agreements of the Company
contained in Sections 1 and 4 of this Agreement will survive the delivery
of the Notes to the Underwriters hereunder and will remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
11. Notices. Except as
otherwise provided in the Agreement, (a) whenever notice is required by the
provisions of this Agreement to be given to the Company, such notice will be in
writing by mail, telex or facsimile transmission addressed to the Company at ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: General Counsel, and (b) whenever notice is required by the
provisions of this Agreement to be given to the several Underwriters, such
notice will be in writing by mail, telex or facsimile transmission addressed to
the Representatives in care of ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: Debt Capital Markets, Consumer Retail Group (with a copy
to the General Counsel at the same address). The Company shall be
entitled to act and rely upon any request, consent, notice or agreement given or
made on behalf of the Underwriters by ▇▇▇▇▇▇ Brothers Inc., on behalf of the
Representatives.
12. Information Furnished by
Underwriters. The Underwriters severally confirm that the
names of each of the Underwriters under the caption “Underwriting” in the most
recent Preliminary Prospectus and the Prospectus, the concession and reallowance
figures appearing in the third paragraph under the caption “Underwriting” in the
most recent Preliminary Prospectus and the Prospectus, and the statements in the
first two paragraphs of the subsection entitled “Price Stabilization, Short
Positions and Penalty Bids” and the first paragraph of the subsection entitled
“Electronic Distributions” under the caption “Underwriting” in the most recent
Preliminary Prospectus and the Prospectus, constitute the only written
information furnished to the Company by the Representatives on behalf of the
Underwriters, referred to in Sections 1(e), 1(f), 1(g), 7(a) and 7(b) of
this Agreement.
13. Nature of
Relationship. The Company acknowledges and agrees that in
connection with the offering and the sale of the Notes or any other services the
Underwriters may be deemed to be providing hereunder, notwithstanding any
preexisting relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the
Company and any other person, on the one hand, and the Underwriters, on the
other hand, exists; (ii) the Underwriters are not acting as advisors, experts or
otherwise, to the Company, including, without limitation, with respect to the
determination of the public offering price of the Notes, and such relationship
between the Company, on the one hand, and the Underwriters, on the other hand,
is entirely and solely a commercial relationship, based on arms-length
negotiations; (iii) any duties and obligations
that the Underwriters may have to the Company shall be limited to those duties
and obligations specifically stated herein; and (iv) the Underwriters and their
respective affiliates may have interests that differ from those of the
Company. The Company hereby waives any claims that the Company may
have against the Underwriters with respect to any breach of fiduciary duty in
connection with this offering.
14. Parties. This
Agreement will inure to the benefit of and be binding upon the several
Underwriters, the Company and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except as specifically provided in Section 7 of this
Agreement. Nothing in this Agreement will be construed to give any
person, other than the persons referred to in this paragraph, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
15
15. Definition of “Business
Day”. For purposes of this Agreement, “Business Day” means any day on
which the New York Stock Exchange is open for trading, other than any day on
which commercial banks are authorized or required to be closed in New York
City.
16. Governing
Law. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
17. Headings. The
headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
18. Counterparts. This
Agreement may be signed in one or more counterparts, each of which will
constitute an original and all of which together will constitute one and the
same agreement.
16
Please
confirm, by signing and returning to us two counterparts of this Agreement, that
the foregoing correctly sets forth the Agreement between the Company and the
several Underwriters.
|
Very
truly yours,
|
|||
|
CVS
Caremark Corporation
|
|||
|
By:
|
|||
|
Name:
|
|||
|
Title:
|
|||
Confirmed
and accepted as of
the date
first above mentioned
|
▇▇▇▇▇▇
Brothers Inc.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Banc
of America Securities LLC
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Deutsche
Bank Securities Inc.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
Wachovia
Capital Markets, LLC
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
As
Representatives and on behalf of the several Underwriters
named in
Schedule I hereto
SCHEDULE
I
|
Underwriters
|
Principal
Amount of the
Notes
to be purchased
|
|
▇▇▇▇▇▇
Brothers Inc.
|
$70,000,000
|
|
Banc
of America Securities LLC
|
46,666,667
|
|
Deutsche
Bank Securities Inc
|
46,666,667
|
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated
|
46,666,667
|
|
Wachovia
Capital Markets, LLC
|
46,666,667
|
|
BNY
Mellon Capital Markets, LLC
|
23,333,333
|
|
SunTrust
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
|
23,333,333
|
|
U.S.
Bancorp Investments, Inc
|
23,333,333
|
|
▇▇▇▇▇
Fargo Securities, LLC
|
23,333,333
|
|
Total
|
$350,000,000
|
ISSUER FREE WRITING
PROSPECTUSES
|
|
·
|
Final
Term Sheet, dated September 5, 2008, relating to the Notes, as filed
pursuant to Rule 433 under the Securities Act and attached as Schedule III
hereto.
|
SCHEDULE
III
FINAL
TERM SHEET
Dated
September 5, 2008
CVS
CAREMARK CORPORATION
|
Issuer:
|
CVS
Caremark Corporation (“CVS Caremark”)
|
|
|
Description
of Securities:
|
$350,000,000
Floating Rate Senior Notes due September 10, 2010
(“Notes”)
|
|
|
Security
Type:
|
Senior
Notes
|
|
|
Legal
Format:
|
SEC
Registered (Registration No. 333-143110)
|
|
|
Settlement
Date:
|
September
10, 2008 (T+3)
|
|
|
Maturity
Date:
|
September
10, 2010
|
|
|
Issue
Price:
|
100.000%
of principal amount
|
|
|
Coupon:
|
3-Month
LIBOR (Reuters Screen LIBOR01) plus 1.50% per annum
|
|
|
Benchmark:
|
3-Month
LIBOR
|
|
|
LIBOR
Determination Date:
|
Second
London banking day immediately preceding the first day of the relevant
three-month interest period
|
|
|
Interest
Payment Dates:
|
Quarterly
on March 10, June 10, September 10, and December 10, beginning on December
10, 2008
|
|
|
Interest
Determination Dates:
|
Two
London banking days prior to the first day of the relevant interest
period
|
|
|
Day
Count/Business Day Convention:
|
Actual
/ 360; Modified Following, Adjusted
|
|
|
Change
of Control:
|
Upon
the occurrence of both (i) a change of control of CVS Caremark and (ii) a
downgrade of the notes below an investment grade rating by each of Fitch
Ratings, ▇▇▇▇▇’▇ Investors Service, Inc. and Standard & Poor’s Ratings
Services within a specified period, CVS Caremark will be required to make
an offer to purchase the notes at a price equal to 101% of their principal
amount, plus accrued and unpaid interest to the date of
repurchase. See “Description of the Notes – Change of Control”
on page S-15 of the Preliminary Prospectus Supplement dated September 5,
2008.
|
|
|
Denominations:
|
$2,000
and integral multiples of $1,000 thereof
|
|
|
Gross
Proceeds:
|
$350,000,000
|
|
|
Use
of Proceeds:
|
If
the tender offer relating to the proposed acquisition of Longs Drug Stores
Corporation (the “Acquisition”) is successful, CVS Caremark will use the
net proceeds from the offering to fund a portion of the
Acquisition. CVS Caremark intends to finance the remaining
approximately $2.65 billion needed for the Acquisition with borrowings
under a $1.5 billion bridge loan facility (the outstanding commitment
amount of which will be reduced by the amount of net proceeds from the
offering), together with commercial
paper.
|
| As a result, if the Acquisition is consummated, CVS Caremark’s total debt after giving effect to the offering will increase by an additional $2.65 million. If the Acquisition is not completed, CVS Caremark will use the net proceeds from the offering for general corporate purposes. | ||
|
Underwriting
Discounts and Commissions:
|
0.300%
|
|
|
Net
Proceeds to Issuer:
|
$348,950,000
|
|
|
Underwriters:
|
▇▇▇▇▇▇
Brothers (bookrunner)
|
|
|
Banc
of America Securities LLC (bookrunner)
|
||
|
Deutsche
Bank Securities (bookrunner)
|
||
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ (bookrunner)
|
||
|
Wachovia
Securities (bookrunner)
|
||
|
BNY
Mellon Capital Markets, LLC
|
||
|
SunTrust
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||
|
U.S.
Bancorp Investments, Inc.
|
||
|
▇▇▇▇▇
Fargo Securities
|
||
|
CUSIP
Number:
|
126650
BM1
|
|
|
Debt Ratings*:
|
Baa2
/ BBB+ / BBB+ (▇▇▇▇▇’▇ / S&P /
Fitch)
|
*Note: A securities rating is
not a recommendation to buy, sell or hold securities and may be subject to
revision or withdrawal at any time.
The
issuer has filed a registration statement (including a prospectus) with the U.S.
Securities and Exchange Commission (SEC) for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement, and other documents the issuer has
filed with the SEC for more complete information about the issuer and this
offering. You may get these documents for free by visiting ▇▇▇▇▇ on
the SEC website at ▇▇▇.▇▇▇.▇▇▇. Alternatively,
you may obtain a copy of the prospectus from ▇▇▇▇▇▇ Brothers Inc. by calling
▇-▇▇▇-▇▇▇-▇▇▇▇.