EXHIBIT 1.3
CIGNA Corporation
Debt Securities
Underwriting Agreement
----------------------
[Date]
To the Representatives of the
several Underwriters named in
the respective Pricing Agreements
hereinafter described.
Dear Sirs:
From time to time CIGNA Corporation (the "Company") proposes to enter into
one or more Pricing Agreements (each a "Pricing Agreement") in the form of Annex
I hereto, with such additions and deletions as the parties thereto may
determine, and, subject to the terms and conditions stated herein and therein,
to issue and sell to the firms named in Schedule I to the applicable Pricing
Agreement (such firms constituting the "Underwriters" with respect to such
Pricing Agreement and the securities specified therein), certain of its
convertible subordinated debt securities, convertible into shares of common
stock, par value $1.00 per share ("Stock"), of the Company (the "Securities")
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Designated Securities"), less the principal amount of Designated
Securities covered by delayed delivery contracts ("Delayed Delivery Contracts"),
if any, as provided in Section 3 hereof and as may be specified in Schedule II
to such Pricing Agreement (with respect to such Pricing Agreement, any
Designated Securities to be covered by Delayed Delivery Contracts herein
sometimes referred to as "Contract Securities" and the Designated Securities to
be purchased by the Underwriters (after giving effect to the deduction, if any,
for Contract Securities) being herein sometimes referred to as "Underwriters'
Securities").
The terms and rights of any particular issuance of Designated Securities
shall be specified in the Pricing Agreement relating thereto and in or pursuant
to the indenture (the "Indenture") identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase any of the Securities. The obligation of
the Company to issue and sell any of the Securities and the obligation of any of
the Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of
such Designated Securities, the purchase price to the Underwriters of such
Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters, the principal
amount of such Designated Securities to be purchased by each Underwriter and
whether any of such Designated Securities shall be covered by Delayed Delivery
Contracts and the commission payable to the Underwriters with respect thereto
and shall set forth the date, time and manner of delivery of such Designated
Securities and payment therefor. The Pricing Agreement shall also specify (to
the extent not set forth in the Indenture and the registration statement and
prospectus with respect thereto) the terms of such Designated Securities. A
Pricing Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement (the "Initial Registration Statement") in
respect of the Securities and the shares of Stock issuable upon conversion
thereof has been filed with the Securities and Exchange Commission (the
"Commission") in the form heretofore delivered or to be delivered to the
Representatives and, excluding exhibits to the Initial Registration Statement
but including all documents incorporated by reference in the prospectus
contained therein, to the Representatives for each of the other Underwriters
and the Initial Registration Statement in such form has been declared
effective by the Commission and no stop order suspending the effectiveness of
the Initial Registration Statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement being hereinafter
called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement, including all exhibits thereto but excluding Form T-
1, each as amended at the time such part became effective, and any
registration statement filed pursuant to Rule 462(b) under the Securities Act
of 1933 (the "Rule 462(b) Registration Statement"), if any, being hereinafter
collectively called the "Registration Statement"; the prospectus relating to
the Securities and the shares of Stock issuable upon conversion thereof, in
the form in which it has most recently been filed with the Commission on or
prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to the applicable form under the Securities Act
of 1933, as amended (the "Act"), as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated therein by reference; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated Securities in the
form in which it is first filed with the Commission pursuant to Rule 424
under the Act, including any documents incorporated by reference therein as
of the date of such filing or mailing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and, when read together with the other information included or
incorporated by reference in the Prospectus, none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by reference
in the Prospectus, when such documents become effective or are filed with the
Commission, as the case may be, will conform in
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all material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to the Company by any Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date in
the case of the Registration Statement and any amendment thereto and as of
the applicable filing date in the case of the Prospectus and any supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(d) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated
by reference in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree which loss or interference is material and adverse to the Company
and its subsidiaries considered as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there
has not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations
of the Company and its subsidiaries considered as a whole, otherwise than as
set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business (1) so as to require such qualification
and (2) where the failure so to qualify would have a material adverse effect
upon the business of the Company and its subsidiaries considered as a whole;
and each of Insurance Company of North America, Connecticut General Life
Insurance Company and CIGNA Property and Casualty Insurance Company
(together, the "Principal Subsidiaries") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and each Principal Subsidiary has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, (1) so as to require such
qualification and (2) where the failure so to qualify would have a material
adverse effect upon the business of the Company and its subsidiaries
considered as a whole;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully
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paid and non-assessable; the shares of Stock initially issuable upon
conversion of the Securities have been duly and validly authorized and
reserved for issuance and, when issued and delivered in accordance with the
provisions of the Securities and the Indenture referred to below, will be
duly and validly issued, fully paid and non-assessable and will conform to
the description of the Stock contained in the Prospectus; and all of the
issued shares of capital stock of each Principal Subsidiary have been duly
and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities, claims or
restrictions (except for restrictions on transfers contained in debt
instruments or provided under the insurance or insurance holding company laws
or regulations);
(g) The Securities have been duly authorized, and, when Designated
Securities are executed and authenticated pursuant to the Indenture and
issued and delivered against payment therefor pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Securities and, in the
case of any Contract Securities, pursuant to Delayed Delivery Contracts with
respect to such Contract Securities, such Designated Securities will have
been duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the benefits
provided by the Indenture, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights and to
general equity principles; the Indenture has been duly authorized and
qualified under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the Indenture
conforms and the Designated Securities will conform to the descriptions
thereof in the Prospectus as amended or supplemented;
(h) In the event any of the Securities are purchased pursuant to Delayed
Delivery Contracts, each of such Delayed Delivery Contracts has been duly
authorized by the Company and, when executed and delivered by the Company and
the purchaser named therein, will constitute a valid and legally binding
agreement of the Company enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and any
Delayed Delivery Contracts will conform to the description thereof in the
Prospectus;
(i) The issue and sale of the Securities by the Company, the compliance by
the Company with all of the provisions of the Securities, the Indenture, each
of the Delayed Delivery Contracts, if any, this Agreement and any Pricing
Agreement, and the consummation by the Company of the transactions herein and
therein contemplated will not result in a breach or violation of any of the
terms or provisions of, or constitute a default under, (i) any statute
(except that no representation is made with respect to state securities laws,
including similar insurance securities laws governing solicitation,
notification to regulators or qualification of securities for sale (together,
"State Securities" laws), or Blue Sky laws), (ii) any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound, (iii) any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties (except that no
representation is made with respect to State Securities or Blue Sky laws), or
(iv) the Company's Certificate of Incorporation, as amended, or By-Laws,
which, in the case of subclauses (i)-(iii), would have a material adverse
effect upon the business of the Company and its subsidiaries considered as a
whole; and no consent, approval, authorization or order of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the other transactions
contemplated
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by this Agreement or any Pricing Agreement or the Indenture or any Delayed
Delivery Contract, except such as have been, or will have been prior to the
Time of Delivery, obtained under the Act, the Exchange Act or the Trust
Indenture Act and such as may be required under State Securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by
the Underwriters;
(j) The Principal Subsidiaries which are engaged in the insurance business
are, in all respects material to the Company and its subsidiaries considered
as a whole, in compliance with, and conduct, in all respects material to the
Company and its subsidiaries considered as a whole, their respective
businesses in conformity with, all applicable state insurance laws and
regulations; the Company's subsidiaries which are engaged in providing other
financial services are, in all respects material to the Company and its
subsidiaries considered as a whole, in compliance with, and conduct, in all
respects material to the Company and its subsidiaries considered as a whole,
their respective businesses in conformity with, all applicable federal and
state securities laws and regulations (including the Investment Company Act
of 1940 and the Investment Advisers Act of 1940); and, except as set forth in
the Prospectus and to the best knowledge of the Company, no change in any of
such insurance or securities laws or regulations is pending which, if made
effective, would have a material adverse effect upon the operations of the
Company and its subsidiaries considered as a whole;
(k) Other than as set forth or contemplated in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, individually or in the aggregate, are
expected to have a material adverse effect (net of loss reserves established
therefor and giving effect to reinsurance, other than reinsurance deemed
unrecoverable by the Company) on the financial position, stockholders' equity
or results of operations of the Company and its subsidiaries considered as a
whole; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others; and
(l) Price Waterhouse, who have certified certain financial statements of
the Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder.
3. Upon the execution of the Pricing Agreement applicable to any Designated
Securities and authorization by the Representatives of the release of the
Underwriters' Securities, the several Underwriters propose to offer the
Underwriters' Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
The Company may specify in Schedule II to the Pricing Agreement applicable to
any Designated Securities that the Underwriters are authorized to solicit offers
to purchase Designated Securities from the Company pursuant to Delayed Delivery
Contracts, substantially in the form of Annex III attached hereto but with such
changes therein as the Representatives and the Company may authorize or approve.
If so specified, the Underwriters will endeavor to make such arrangements, and
as compensation therefor the Company will pay to the Representatives, for the
accounts of the Underwriters, at the Time of Delivery, such commission, if any,
as may be set forth in such Pricing Agreement. Delayed Delivery Contracts, if
any, are to be with investors of the types described in the Prospectus and
subject to other conditions therein set forth. The Underwriters will not have
any responsibility in respect of the validity or performance of any Delayed
Delivery Contracts.
The principal amount of Contract Securities to be deducted from the principal
amount of Designated Securities to be purchased by each Underwriter as set forth
in Schedule I to the Pricing Agreement applicable
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to such Designated Securities shall be, in each case, the principal amount of
Contract Securities which the Company has been advised by the Representatives
have been attributed to such Underwriter, provided that, if the Company has not
been so advised, the amount of Contract Securities to be so deducted shall be,
in each case, that proportion of Contract Securities which the principal amount
of Designated Securities to be purchased by such Underwriter under such Pricing
Agreement bears to the total principal amount of the Designated Securities
(rounded as the Representatives may determine). The total principal amount of
Underwriters' Securities to be purchased by all the Underwriters pursuant to
such Pricing Agreement shall be the total principal amount of Designated
Securities set forth in Schedule I to such Pricing Agreement less the principal
amount of the Contract Securities. The Company will deliver to the
Representatives not later than 3:30 p.m., New York time, on the third business
day preceding the Time of Delivery specified in the applicable Pricing Agreement
(or such other time and date as the Representatives and the Company may agree
upon in writing) a written notice setting forth the principal amount of Contract
Securities.
4. Underwriters' Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior notice
to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company or by wire
transfer to a bank account specified by the Company, in the funds specified in
such Pricing Agreement, all at the place and time and date specified in such
Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "Time of Delivery" for such Securities.
Concurrently with the delivery of and payment for the Underwriters'
Securities, the Company will deliver to the Representatives for the accounts of
the Underwriters a check payable to the order of the party designated in the
Pricing Agreement relating to such Securities in the amount of any compensation
payable by the Company to the Underwriters in respect of any Delayed Delivery
Contracts as provided in Section 3 hereof and in the Pricing Agreement relating
to such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) Except as otherwise required by law, to make no further amendment or
any supplement to the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities which shall
be reasonably disapproved by the Representatives for such Securities promptly
after reasonable notice thereof; to advise the Representatives promptly of
any such amendment or supplement after such Time of Delivery and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Securities, and during such same
period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or become effective or any supplement to the Prospectus or any
amended Prospectus has been filed or mailed for filing with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of such Securities or the
shares of Stock issuable upon conversion of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information relating to the
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Registration Statement or the offering of the Securities; and, in the event
of the issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as the Representatives
may reasonably request to qualify such Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under the
State Securities and Blue Sky laws of such jurisdictions as the
Representatives may reasonably request and to comply with such laws so as to
permit the continuance of sales and dealing therein in such jurisdictions for
as long as may be necessary to complete the distribution of such Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 12:00 Noon, New York City time, on the New York Business Day
next succeeding the date of each Pricing Agreement and from time to time, to
furnish the Underwriter with copies of the Prospectus in New York City as
amended or supplemented in such quantities as the Representatives may
reasonably request; provided, however, that if the delivery of a prospectus
is required at any time in connection with the offering or sale of the
Securities and the shares of Stock issuable upon conversion of the Securities
and if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made when such Prospectus was delivered, not misleading, or, if for
any other reason it shall be necessary during such same time period to amend
or supplement the Prospectus or to file under the Exchange Act any document
(other than quarterly reports on Form 10-Q or annual reports on Form 10-K or
11-K) incorporated by reference in the Prospectus in order to comply with the
Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance;
provided that in case any Underwriter is required to deliver a prospectus in
connection with sales of Designated Securities and the shares of Stock
issuable upon conversion of the Designated Securities at any time nine months
or more after the Time of Delivery with respect to such Designated
Securities, upon the request of the Representatives but at the expense of
such Underwriter, the Company agrees to prepare and deliver to such
Underwriter as many copies as the Representatives may request of an amended
or supplemented Prospectus complying with Section 10 of the Act;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement, an earning statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including at the option of the Company Rule 158);
(e) During the period beginning from the date of the Pricing Agreement for
such Designated Securities and continuing to and including the earlier of (i)
the termination of trading restrictions for such Designated Securities, as
notified to the Company by the Representatives and (ii) the Time of Delivery
for such Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company which mature more
than one year after such Time of Delivery and which are substantially similar
to such Designated Securities, without the prior written consent of the
Representatives;
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(f) To reserve and keep available at all times, free of preemptive rights,
shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of Stock upon conversion of the Designated
Securities;
(g) To use its best efforts to list the shares of Stock issuable upon
conversion of the Designated Securities on the New York Stock Exchange; and
(h) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of each Pricing
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities and the shares of Stock issuable upon conversion
of the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and (except as otherwise provided in Section 5(c)
hereof) amendments and supplements thereto and the mailing and delivering of
copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any indenture, any Delayed Delivery Contracts, any Blue Sky and Legal
Investment Memoranda and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under state securities laws
as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and Legal Investment Memoranda; (iv) any fees
charged by securities rating services for rating the Securities; (v) any filing
fees incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of
preparing the Securities; (vii) the fees and expenses of any Trustee and any
agent of any Trustee and the fees and disbursements of counsel for any Trustee
in connection with the Indenture and the Securities; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder and under
any Delayed Delivery Contracts which are not otherwise specifically provided for
in this Section. It is understood, however, that, except as provided in this
Section, Section 8 and Section 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under the
Pricing Agreement relating to such Designated Securities shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of the Company in or incorporated by
reference in such Pricing Agreement are, at and as of the Time of Delivery for
such Designated Securities, true and correct, the condition that the Company
shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission relating to the
Registration Statement or the offering of the Securities shall have been
complied with to the Representatives' reasonable satisfaction;
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(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, or other counsel
satisfactory to the Representatives, shall have furnished to the
Representatives such opinion or opinions, dated such Time of Delivery for
such Designated Securities, with respect to the incorporation of the Company,
the validity of the Indenture, the Designated Securities, the shares of Stock
issuable upon conversion of the Designated Securities, the Delayed Delivery
Contracts, if any, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters;
(c) Xxxxxx X. Xxxxxx, Esq., Executive Vice President and General Counsel
of the Company, or other counsel satisfactory to the Representatives, shall
have furnished to the Representatives his written opinion, dated such Time of
Delivery for such Designated Securities, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the Prospectus, as amended or supplemented, to
the extent owned or conducted by the Company itself rather than by
subsidiaries of the Company;
(ii) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
jurisdiction other than its jurisdiction of incorporation in which it owns
or leases properties, or conducts any business, (1) so as to require such
qualification and (2) where the failure so to qualify would have a
material adverse effect upon the business of the Company and its
subsidiaries considered as a whole (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel,
provided that such counsel shall state that he believes that both you and
he are justified in relying upon such opinions, and in respect of matters
of fact upon certificates of officers of the Company);
(iii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented; all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable; and the shares of Stock initially
issuable upon conversion of the Designated Securities have been duly and
validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Designated Securities
and the Indenture will be duly and validly issued and fully paid and non-
assessable, and will conform to the description of the Stock contained in
the Prospectus;
(iv) Each Principal Subsidiary of the Company is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, (1) so as to require such qualification and (2) where the
failure so to qualify would have a material adverse effect upon the
business of the Company and its subsidiaries considered as a whole (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel, provided that such counsel shall state
that he believes that both you and he are justified in relying upon such
opinions, and in respect of matters of fact upon certificates of officers
of the Company or the Principal Subsidiaries);
(v) All of the issued shares of capital stock of each Principal
Subsidiary are owned of record directly or indirectly by the Company; free
and clear of all liens, encumbrances, equities, claims or
9
restrictions known to counsel (except for restrictions on transfers
contained in debt instruments or provided under insurance or insurance
holding company laws or regulations);
(vi) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and delivered by
the Company;
(vii) In the event any of the Designated Securities are to be
purchased pursuant to Delayed Delivery Contracts, each of such Delayed
Delivery Contracts has been duly authorized, executed and delivered by the
Company and, assuming such Contract has been duly executed and delivered
by the purchaser named therein, constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and any Delayed Delivery Contracts conform to the
description thereof in the Prospectus as amended or supplemented;
(viii) The Designated Securities have been duly authorized; the
Underwriters' Securities have been duly authorized, and when duly
executed, authenticated, issued and delivered pursuant to the terms hereof
and of the Indenture against payment therefor as contemplated herein, will
constitute valid and legally binding obligations of the Company entitled
to the benefits provided by the Indenture, and the Contract Securities, if
any, when executed, authenticated, issued and delivered pursuant to the
Indenture and Delayed Delivery Contracts, if any, against payment therefor
as contemplated therein, will constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Designated Securities and the Indenture
conform to the descriptions thereof in the Prospectus as amended or
supplemented;
(ix) The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and legally binding instrument of the
Company, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditor's rights and to general equity
principles; and the Indenture has been duly qualified under the Trust
Indenture Act;
(x) To the best of such counsel's knowledge there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, other than as set forth or contemplated
in the Prospectus and other than proceedings which individually and in the
aggregate are not expected to be material to the Company and its
subsidiaries considered as a whole, after taking into account loss
reserves established therefor and the effects of reinsurance (other than
reinsurance deemed unrecoverable by the Company); and to the best of such
counsel's knowledge no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xi) The issue and sale of the Designated Securities by the Company,
its compliance with all of the provisions of the Designated Securities,
the Indenture, each Delayed Delivery Contract, if any, this Agreement and
the Pricing Agreement with respect to the Designated Securities and its
consummation of the transactions herein and therein contemplated will not
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, (i) any insurance or insurance holding company
laws or regulations (other than State Securities or Blue Sky laws or
regulations, as to which such counsel need express no opinion), (ii) any
indenture, mortgage, deed
10
of trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound, (iii) any order,
rule or regulation known to such counsel (other than as aforesaid) of any
court or governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or any of their properties, or (iv) the
Company's Certificate of Incorporation, as amended, or By-Laws, which, in
the case of subclauses (i)-(iii), would have a material adverse effect
upon the business of the Company and its subsidiaries considered as a
whole;
(xii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the issue and sale of the
Designated Securities or the consummation by the Company of the other
transactions contemplated by this Agreement, such Pricing Agreement, the
Indenture or any such Delayed Delivery Contract, except such as have been
obtained under the Act, the Exchange Act and the Trust Indenture Act, such
as may be required under the Act or Blue Sky laws in connection with the
shares of Stock issuable upon conversion of the Designated Securities and
such as may be required under State Securities or Blue Sky laws in
connection with the purchase and distribution of the Designated Securities
by the Underwriters (as to which such counsel need express no opinion);
(xiii) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made by
the Company prior to the Time of Delivery for the Designated Securities
(except the financial statements and schedules and other financial and
statistical data contained therein and the documents incorporated by
reference therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the
Act and the Trust Indenture Act and the applicable rules and regulations
of the Commission thereunder; and such counsel's examination of the
Registration Statement and the Prospectus as amended or supplemented did
not disclose to him any information which gives him reason to believe that
the Registration Statement (except the financial statements and schedules
and other financial and statistical data contained therein, as to which
such counsel need express no opinion), at the time the Registration
Statement became effective, contained an untrue statement of a material
fact or omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or that the
Prospectus as amended or supplemented (except as aforesaid), on its date
and at the Time of Delivery, contained an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided such counsel may state that in passing
upon the form of the Registration Statement and the Prospectus, he is not
passing upon, and does not assume responsibility for, the correctness and
completeness of the statements made therein by the Company, except insofar
as such statements are contained under the heading "Description of Debt
Securities";
(xiv) The documents incorporated by reference in the Prospectus as
amended or supplemented (except the financial statements and related
schedules and other financial and statistical data contained therein, as
to which such counsel need express no opinion), when they were filed with
the Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and such counsel has no reason to believe that any
of such documents, when they were so filed, contained an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they are made when such documents were so filed, not
misleading; and
11
(xv) Such counsel does not know of any contracts or other documents of
a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the Prospectus
as amended or supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which are not filed
or incorporated by reference or described as required;
(d) On the date of the Pricing Agreement for such Designated Securities
and at the Time of Delivery for such Designated Securities, Price Waterhouse,
the independent certified public accountants of the Company who have
certified the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement, shall
have furnished to the Representatives a letter, dated the effective date of
the Registration Statement or the date of the most recent report filed by the
Company with the Commission containing financial statements and incorporated
by reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of Delivery,
respectively, each in form and substance satisfactory to the Representatives,
to the effect set forth in Annex II hereto and, with respect to such letter
dated such Time of Delivery, as to such other matters as the Representatives
may reasonably request;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus as amended or supplemented any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented, and (ii) since the
respective dates as of which information is given in the Prospectus as
amended or supplemented there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries otherwise, in any
such case described in Clause (i) or (ii), than as set forth or contemplated
in the Prospectus as amended or supplemented, the effect of which, in any
such case described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus as amended or supplemented;
(f) Subsequent to the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission
for purposes of Rule 436(g) (2) under the Act; and (ii) no such organization
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities or the Company's financial strength or claims paying ability;
(g) Subsequent to the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following: (i)
a suspension or material limitation in trading in securities generally on the
New York Stock Exchange; (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in the case of Clause (iii)
in the judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Underwriters'
Securities on the terms and in the manner contemplated in the Prospectus as
amended or supplemented;
12
(h) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities its
certificates satisfactory to the Representatives, executed on its behalf by
officers of the Company satisfactory to you, as to the accuracy of the
representations and warranties of the Company herein at and as of such Time
of Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, as to the
matters set forth in subsections (a) and (e) of this Section, and as to such
other matters as the Representatives may reasonably request; and
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of each Pricing Agreement.
8. (a) The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon 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 each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement or
the Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
of Designated Securities through the Representatives expressly for use therein;
and provided, further, that the Company shall not be liable to any Underwriter
under the indemnity agreement in this subsection (a) with respect to any
Preliminary Prospectus to the extent that such loss, claim, damage or liability
of such Underwriter results from the fact that such Underwriter sold Securities
to a person to whom there was not sent or given, at or prior to written
confirmation of such sale, a copy of the Prospectus as then amended or
supplemented (excluding documents incorporated by reference) if the Company had
previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon 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, in each 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 any preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by
13
the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related
to such proceeding. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be
liable for the reasonable fees and expenses of more than one separate counsel
for all such indemnified parties. Such counsel shall be designated in
writing by the Representatives in the case of parties indemnified pursuant to
subsection (a) above and by the Company in the case of parties indemnified
pursuant to subsection (b) above. The indemnifying party shall not be liable
for any settlement of any such action, suit or proceeding effected without
its written consent, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect not only (i) the relative
benefits received by the Company on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or other action in
respect thereof) relates but also (ii) the relative fault of the Company on
the one hand and the Underwriters of the Designated Securities on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other 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 underwriting discounts and commissions received by the Underwriters of
the Designated Securities. 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 on the one hand
or 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 Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) 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 which does not take
account of the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
14
referred to above in 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 such action or claim. Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Designated Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 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 Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Underwriters' Securities which it has agreed to purchase at a Time of
Delivery under the Pricing Agreement relating to such Securities, the
Representatives may in their discretion arrange for themselves or another
party or other parties to purchase such Underwriters' Securities on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such
Underwriters' Securities, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Underwriters'
Securities on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Underwriters' Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Underwriters' Securities, the Representatives or the Company shall have the
right to postpone the Time of Delivery for such Underwriters' Securities for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as
used in this Agreement and the Pricing Agreement with respect to such
Designated Securities shall include any person substituted under this Section
with like effect as if such person had originally been a party to such
Pricing Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Underwriters' Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Underwriters' Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the principal amount of
Underwriters' Securities which such Underwriter agreed to purchase under the
pricing agreement relating to such Designated Securities and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share (based
on the principal amount of Designated Securities which such Underwriter
agreed to purchase under such Pricing Agreement) of the Underwriters'
Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
15
(c) If, after giving effect to any arrangements for the purchase of the
Underwriters' Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Underwriters' Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Underwriters' Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating
to such Designated Securities shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, except for the
expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof, but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Underwriter or any controlling person of any Underwriter, or the Company, or any
officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Sections 6 and 8 hereof, but, if for any other reason
Underwriters' Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters shall be sufficient in all respects if delivered or sent by
overnight or registered mail or facsimile to the address or facsimile number of
the Representatives as set forth in the Pricing Agreement; and if to the Company
shall be sufficient in all respects if delivered or sent by overnight or
registered mail to the address or facsimile number of the Company set forth in
the Registration Statement, Attention: Corporate Secretary; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by overnight or registered mail or facsimile to such
Underwriter at its address or facsimile number set forth in its Underwriters'
Questionnaire, or facsimile constituting such Questionnaire, which address or
facsimile number will be supplied to the Company by the Representatives upon
request.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective
16
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement.
17
15. This Agreement and each Pricing Agreement shall be construed in
accordance with the laws of the State of New York.
16. This Agreement (including the documents referred to herein) constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to subject matter hereof.
17. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
CIGNA Corporation
By:.................................
Name:
Title:
18
ANNEX I
Pricing Agreement
-----------------
[Name of Representatives,]
[Name of Co-Representative(s),]
As representatives of the several
Underwriters named in Schedule I hereto.
[c/o Representatives,]
[Address of Representatives].
............, 199....
Dear Sirs:
CIGNA Corporation (the "Company") proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated [Date] (the
"Underwriting Agreement"), to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities"). Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and warranty
in Section 2 of the Underwriting Agreement which makes reference to the
Prospectus shall be deemed to be a representation and warranty as of the date of
the Underwriting Agreement in relation to the Prospectus (as therein defined),
and also a representation and warranty as of the date of this Pricing Agreement
in relation to the Prospectus as amended or supplemented relating to the
Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of each of the Underwriters of the Designated Securities pursuant
to Section 12 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth in Schedule II
hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the Underwriting
Agreement incorporated herein by reference, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II hereto, the
principal amount of Designated Securities set forth opposite the name of such
Underwriter in Schedule I hereto, less the principal amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as may be specified in
such Schedule II.
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that
19
your acceptance of this letter on behalf of each of the Underwriters may be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination, upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
CIGNA Corporation
By:....................................
Accepted as of the date hereof:
.................................................
(Name of Representative Partnership)
[Name of Representative Corporation]
By:..............................................
(Title)
.................................................
(Name of Co-Representative Partnership)
[Name of Co-Representative Corporation]
By:..............................................
(Title)
On behalf of each of the Underwriters
20
SCHEDULE I
Principal Amount of
Designated Securities
Underwriter to be Purchased
----------- ---------------------
[Name of Representatives]..................... $
[Name(s) of any Co-Representatives]...........
[Name(s) of other Underwriters]...............
---------------------
Total..................................... $
=====================
21
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] Convertible Subordinated [Notes]
[Debentures] due
Aggregate Principal Amount:
$
Price to Public:
___% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization,
if any, from to ]
Purchase Price by Underwriters:
___% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization,
if any from to ]
Method of and Specified Funds for Payment of Purchase Price:
[By certified or official bank check of checks, payable to the order of the
Company in [New York] Clearing House funds]
[By wire transfer to a bank account specified by the Company in next day
funds]
Indenture:
Indenture, dated as of ____________, between the Company and Marine Midland
Bank as Trustee
Time of Delivery:
[Time and date], 199_.
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
22
Securities Exchange:
[Securities to be listed on the [New York] Stock Exchange]
Delayed Delivery:
[None] [Underwriters' commission shall be % of the principal amount of
Designated Securities for which Delayed Delivery Contracts have been entered
into. Such commission shall be payable to the order of .]
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the amount
of $ or an integral multiple thereof, ]
[on or after, at the following redemption prices
(expressed in percentages of principal amount). If [redeemed on or before
, %, and if] redeemed during the 12-month period
beginning ,
Year Redemption Price
---- ----------------
and thereafter at 100% of their principal amount, together in each case with
accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at the
election of the Company, at a redemption price equal to the principal amount
thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
23
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire $ principal amount of Designated Securities on in
each of the years through at 100% of their principal amount plus
accrued interest][, together with [cumulative] [non-cumulative] redemptions at
the option of the Company to retire an additional $
principal amount of Designated Securities in the years through at 100%
of their principal amount plus accrued interest.]
[If Securities are Extendable Debt Securities, insert--
Extendable Provisions:
Securities are repayable on , [insert date years], at the
option of the holders, at their principal amount with accrued interest. Initial
annual interest rate will be %, and thereafter annual interest rate
will be adjusted on , and to a rate not less than
% of the effective annual interest rate on U.S. Treasury obligations with
year maturities as of the [insert date 15 days prior to maturity date] prior to
such [insert maturity date].]
[If Securities are Floating Rate Debt Securities, insert--
Floating Rate Provisions:
Initial annual interest rate will be % through [and
thereafter will be adjusted [monthly] [on each , ,
and ] [to an annual rate of % above the average rate for
-year [month] [securities] [certificates of deposit] by and [insert
names of banks].] [and the annual interest rate [thereafter] [from
through ] will be the interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury bills plus
% of Interest Differential (the excess, if any, of (i) then current weekly
average per annum secondary market yield for -month certificates of deposit
over (ii) then current interest yield equivalent of the weekly average per annum
market discount rate of -month Treasury bills); [from
and thereafter the rate will be the then current interest yield equivalent plus
% of Interest Differential].]
Conversion Provisions:
Initial Conversion Price: $ per share of Common Stock
Initial Conversion Date:
Final Conversion Date:
Overallotment Provisions:
[specify overallotment provisions]
24
[Other Terms]*:
-------------------------
* A description of particular tax, accounting or other unusual features of
the Securities should be set forth, or referenced to an attached and
accompanying description, if necessary to the issuer's understanding of
the transaction contemplated. Such a description might appropriately be
in the form in which such features will be described in the Prospectus
Supplement for the offering.
In addition, if the Securities are denominated in a currency or currencies
other than United States dollars, e.g., Japanese Yen, Australian Dollars,
European Currency Units or Special Drawing Rights, additional terms should be
considered as appropriate to the particular situation.
25
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, Price Waterhouse LLP
shall furnish letters to the Underwriters in form and substance satisfactory to
the Underwriters to the effect that:
(i) They are independent accountants with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the consolidated financial statements and financial
statement schedules of the Company and its subsidiaries audited by them
and included or incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the published rules and
regulations thereunder with respect to registration statements on Form
S-3;
(iii) On the basis of procedures (but not an audit in accordance with
generally accepted auditing standards) consisting of:
a) Reading the minutes of meetings of the Board of Directors and its
Audit and Finance Committees since December 31, 1996 as set forth in
the minute books through a specified date not more than five business
days prior to the date of delivery of such letter;
b) Performing the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial
Information, on the unaudited consolidated balance sheet and the
unaudited consolidated statements of income and retained earnings and
cash flows of the Company and its consolidated subsidiaries included
or incorporated by reference in the Registration Statement and
reading the unaudited interim consolidated financial data for the
period from the date of the latest balance sheet included or
incorporated by reference in the Registration Statement to the date
of the latest available interim financial data; and
c) Making inquiries of certain officials of the Company who have
responsibility for financial and accounting matters regarding the
specific items for which representations are requested below;
nothing has come to their attention as a result of the foregoing
procedures that caused them to believe that:
(1) the unaudited consolidated interim financial statements
described in (iii)(b) above, included in the Company's Quarterly
Reports on Form 10-Q and included or incorporated by reference in
the Registration Statement, do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the Exchange Act and the published rules and
regulations thereunder;
(2) any material modifications should be made to the unaudited
consolidated interim financial statements described in (iii)(b)
above included in the Company's Quarterly Reports on Form 10-Q
and included or incorporated by reference in the Registration
Statement, for them to be in conformity with generally accepted
26
accounting principles;
(3) (i) at the date of the latest available interim financial
data and at a specified date not more than five business days
prior to the date of delivery of such letter, there was any
change in the capital stock, comprising the common stock and
additional paid-in capital of the Company (other than issuances
of capital stock upon exercise of options, stock appreciation
rights and other benefit plans and upon earn-outs of performance
shares), increase in short-term or long-term debt or decrease in
shareholders' equity (except for decreases resulting from
dividends, realized and unrealized investment losses, foreign
currency translations or operating results) of the Company and
its consolidated subsidiaries as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Registration Statement or (ii) for the period from the date
of the latest available financial data to a specified date not
more than five business days prior to delivery of such letter,
there were any decreases, as compared with the corresponding
period in the preceding year, in consolidated revenues or in the
total or per-share amounts of consolidated income (excluding net
realized investment results), except in all instances for
changes, increases or decreases which the Registration Statement
discloses have occurred or may occur, or they shall state any
specific changes, increases or decreases.
(iv) The letter shall also state that they have read the dollar
amounts (or percentages derived from such dollar amounts) included or
incorporated by reference in the Registration Statement which is
expressed in dollars (or percentages derived from such dollar amounts)
and have been obtained from accounting records which are subject to its
system of internal controls or which have been derived directly from such
accounting records by analysis or computation and agreed such amounts (or
percentages derived from such dollar amounts) with such records or
computations made therefrom.
All references in this Annex II to the Registration Statement shall be deemed to
refer to the Registration Statement (including the Prospectus and the documents
incorporated by reference therein) as defined in the Underwriting Agreement as
of the date of the letter delivered on the date of the Pricing Agreement for
purposes of such letter and to the Registration Statement as amended or
supplemented (including the Prospectus and the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
27
ANNEX III
Delayed Delivery Contract
-------------------------
................., 199...
CIGNA Corporation,
c/o [Name and address of appropriate
Representatives]
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from CIGNA Corporation (hereinafter
called the "Company"), and the Company agrees to sell to the undersigned,
$.....................................
principal amount of the Company's [Title of Designated Securities] (hereinafter
called the "Designated Securities"), offered by the Company's Prospectus dated
........... 199....., as amended or supplemented, receipt of a copy of which is
hereby acknowledged, at a purchase price of .....% of the principal amount
thereof [, plus accrued interest from the date from which interest accrues as
set forth below,] [and accrued amortization, if any, from [......] [the date
from which interest accrues as set forth below]] and on the further terms and
conditions set forth in this contract.
The undersigned will purchase the Designated Securities from the Company on
.............. 199.. (the "Delivery Date") and interest on the Designated
Securities so purchased will accrue from ................., 199..
[The undersigned will purchase the Designated Securities from the Company on
the delivery date or dates and in the principal amount or amounts set forth
below:
Date from Which
Delivery Date Principal Amount Interest Accrues
------------- ---------------- ----------------
........................., 199.... $ ........................., 199....
........................., 199.... $ ........................., 199....
Each such date on which Designated Securities are to be purchased hereunder is
hereinafter referred to as a "Delivery Date".]
Payment for the Designated Securities which the undersigned has agreed to
purchase on [the] [each] Delivery Date shall be made to the Company or its order
by certified or official bank check in .................. Clearing House funds
at the office of .........................., or by wire transfer to a bank
account specified by the Company, on [the] [such] Delivery Date upon delivery to
the undersigned of the Designated Securities then to be purchased by the
undersigned in definitive fully registered form and in such denominations and
registered
28
in such names as the undersigned may designate by written or telegraphic
communication addressed to the Company not less than five full business days
prior to [the] [such] Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Designated Securities on [the] [each] Delivery Date shall be subject to the
condition that the purchase of Designated Securities to be made by the
undersigned shall not on [the] [such] Delivery Date be prohibited under the laws
of the jurisdiction to which the undersigned is subject. The obligation of the
undersigned to take delivery of and make payment for Designated Securities
shall not be affected by the failure of any purchaser to take delivery of and
make payment for Designated Securities pursuant to other contracts similar to
this contract.
[The undersigned understands that underwriters (the "Underwriters") are also
purchasing Designated Securities from the Company, but that the obligations of
the undersigned hereunder are not contingent on such purchases.] Promptly after
completion of the sale to the Underwriters the Company will mail or deliver to
the undersigned at its address set forth below notice to such effect,
accompanied by a copy of the Opinion of Counsel for the Company delivered to the
Underwriters in connection therewith.
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Designated
Securities hereby agreed to be purchased by it under the laws of the
jurisdiction to which the undersigned is subject.
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
This contract may be executed by either of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
29
It is understood that the acceptance by the Company of any Delayed Delivery
Contract (including this (contract) is in the Company's sole discretion and
that, without limiting the foregoing, acceptances of such contracts need not be
on a first-come, first-served basis. If this contract is acceptable to the
Company, it is requested that the Company sign the form of acceptance below and
mail or deliver one of the counterparts hereof to the undersigned at its address
set forth below. This will become a binding contract between the Company and
the undersigned when such counterpart is so mailed or delivered by the Company.
Yours very truly,
...........................................
(Name of Purchaser)
By
.........................................
(Signature)
...........................................
(Name and Title)
...........................................
(Address)
Accepted, ..............., 199......
CIGNA Corporation
By .................................
[Title]
30
