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EXHIBIT 1.1
AETNA SERVICES, INC.
AETNA INC.
Guaranteed Debt Securities
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Underwriting Agreement
-------, ----
To the Underwriters
to be named in the applicable
Pricing Agreement
supplemental hereto
Ladies and Gentlemen:
From time to time Aetna Services, Inc. a Connecticut corporation (the
"Company"), and Aetna Inc., a Connecticut corporation (the "Guarantor"), propose
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 debt
securities of the Company (the "Securities") specified in Schedule II to such
Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities"), guaranteed by the Guarantor, less the Designated Securities
covered by Delayed Delivery Contracts (as defined in Section 3 hereof), 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 being herein sometimes
referred to as "Contract Securities" and the Designated Securities to be
purchased
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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 as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in Schedule II to
such Pricing Agreement. The Designated Securities shall be guaranteed (the
"Guarantees") by the Guarantor as specified in the Pricing Agreement relating to
such Designated Securities and in or pursuant to the Indenture identified in
Schedule II to 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. Except as incorporated by reference into a Pricing
Agreement, this Underwriting Agreement shall not be construed as an obligation
of the Company or the Guarantor to sell any of the Securities guaranteed by the
Guarantor 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, the obligation of the Guarantor to issue its Guarantee of 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,
among other things, 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 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
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transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.
2. The Company and the Guarantor jointly and severally represent and
warrant to, and agree with, each of the Underwriters that:
(a) A registration statement in respect of
the Securities and the Guarantees has been filed with the
Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be
delivered to the Representatives (with exhibits thereto) for
delivery to each of the other Underwriters (without exhibits
thereto), have been declared effective by the Commission in
such form; no other document with respect to such registration
statement or document incorporated by reference therein has
been filed or transmitted for filing with the Commission prior
to the effective date of the registration statement; and no
stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose
has been initiated or, to the knowledge of the Company or the
Guarantor, threatened by the Commission. Any preliminary
prospectus included in such registration statement or filed
with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of
1933, as amended (the "Act"), is hereinafter called a
"Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto, but
excluding Form T-1, each as amended at the time such part of
the registration statement became effective are hereinafter
collectively called the "Registration Statement", provided if
the Company and the Guarantor have filed an abbreviated
registration statement to register additional Securities and
Guarantees pursuant to Rule 462(b) under the Act (the "Rule
462 Registration Statement"), then any reference in this
Agreement or a Pricing Agreement to the term "Registration
Statement" shall be deemed to include such Rule 462
Registration Statement; the prospectus relating to the
Securities and the Guarantees, in the form in which it has
most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is
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
Act, as of the date of
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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 with the Commission
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 by reference
in such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual
report of the Guarantor filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in
the Registration Statement; 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(b)
under the Act in accordance with Section 5(a) hereof,
including any documents incorporated by reference therein as
of the date of such filing;
(b) The Registration Statement and the
Prospectus conform, and any further amendments or supplements
to the Registration Statement or the Prospectus 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 as to the Registration Statement and
any amendment thereto and as of the applicable filing date as
to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein (i) in the case of
the Registration Statement, not misleading and (ii) in the
case of the Prospectus, in light of the circumstances under
which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company or the Guarantor by an Underwriter of Designated
Securities through the Representatives for use in the
Prospectus as amended or supplemented relating to such
Securities;
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(c) Each of the Company and the Guarantor
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Connecticut; each of the Company and the Guarantor is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified or in good
standing would not have a material adverse effect on the
financial condition of the Guarantor and its subsidiaries
taken as a whole;
(d) The Securities have been duly authorized
by the Company; and, when Designated Securities are issued,
executed, authenticated, delivered and paid for pursuant to
this Agreement and the Pricing Agreement with respect to such
Designated Securities and the Indenture 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 issued, executed and
delivered and will constitute valid and legally binding
obligations of the Company enforceable against the Company in
accordance with their terms, subject to (1) bankruptcy,
insolvency, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors'
rights generally and the rights of creditors of insurance
companies generally and (2) general principles of equity
(regardless of whether considered in a proceeding at law or in
equity);
(e) The Guarantees have been duly authorized
by the Guarantor; and, when (i) the Guarantees endorsed on the
Designated Securities are issued and executed by the Guarantor
pursuant to the Indenture and (ii) such Designated Securities
are issued, executed, authenticated, delivered and paid for
pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Securities and the Indenture and,
in the case of any Contract Securities, pursuant to Delayed
Delivery Contracts with respect to such Contract Securities,
such Guarantees will have been duly issued, executed and
delivered and will constitute valid and legally binding
obligations of the Guarantor enforceable against the Guarantor
in accordance with their terms, subject to (1) bankruptcy,
insolvency, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or
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affecting creditors' rights generally and the rights of
creditors of insurance companies generally and (2) general
principles of equity (regardless of whether considered in a
proceeding at law or in equity);
(f) The Indenture, which will be
substantially in one of the forms filed as an exhibit to the
Registration Statement, has been duly authorized by the
Company and the Guarantor and, at the Time of Delivery (as
defined in Section 4 hereof) for such Designated Securities,
the Indenture will be duly qualified under the Trust Indenture
Act and, assuming due authorization, execution and delivery by
the trustee under such Indenture (the "Trustee"), the
Indenture will constitute a valid and legally binding
instrument of the Company and the Guarantor enforceable
against the Company and the Guarantor in accordance with its
terms, subject to (1) bankruptcy, insolvency, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and the
rights of creditors of insurance companies generally and (2)
general principles of equity (regardless of whether considered
in a proceeding at law or in equity); and the Indenture
conforms, and the Designated Securities and the Guarantees
will conform, in all material respects, to the descriptions
thereof contained in the Prospectus as amended or supplemented
with respect to such Designated Securities;
(g) The issue and sale of the Securities,
the issuance of the Guarantees and the compliance by the
Company and the Guarantor with all of the provisions of the
Designated Securities and the Guarantees, respectively, the
Indenture, each of the Delayed Delivery Contracts, if any,
this Agreement and any Pricing Agreement, and the consummation
of the transactions herein and therein contemplated will not
(1) conflict with or result in a breach or violation by the
Company or the Guarantor, as applicable, of any of the terms
or provisions of, or constitute a default by the Company or
the Guarantor, as applicable, under, any indenture, mortgage,
deed of trust, loan agreement or other similar agreement or
instrument to which the Company or the Guarantor, as the case
may be, is a party or by which the Company or the Guarantor,
as the case may be, is bound or to which any of the property
or assets of the Company or the Guarantor, as the case may be,
is subject, except, in all such cases, for such conflicts,
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breaches, violations or defaults as would not have a material
adverse effect on the financial condition of the Guarantor and
its subsidiaries taken as a whole, or would not have a
material adverse effect on the issuance or sale of the
Designated Securities or the issuance of the Guarantees, and
(2) result in any violation of (A) the provisions of the
Certificate of Incorporation or By-Laws of the Company or the
Guarantor or (B) any statute of the United States or the State
of Connecticut or any order, rule or regulation of any court
or governmental agency or body of the United States or the
State of Connecticut having jurisdiction over the Company or
the Guarantor or any of their respective properties; provided,
however that in the case of clause (B) of this paragraph 2(g),
this representation and warranty shall not extend to such
violations as would not have a material adverse effect on the
financial condition of the Guarantor and its subsidiaries
taken as a whole or would not have a material adverse effect
on the issuance or sale of the Designated Securities or the
issuance of the Guarantees; provided further, that insofar as
this representation and warranty relates to the performance by
the Company or the Guarantor of its obligations under the
Indenture, this Agreement, the Pricing Agreement relating to
the Designated Securities, the Delayed Delivery Contracts, if
any, and the Designated Securities and the Guarantees, such
performance is subject to bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other
similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and the rights of
creditors of insurance companies generally;
(h) No consent, approval, authorization,
order, registration, filing or qualification of or with any
court or governmental agency or body of the United States or
the State of Connecticut is required for the issue and sale of
the Securities by the Company or the issuance of the
Guarantees by the Guarantor or the consummation by the Company
and the Guarantor of the transactions contemplated 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 and the Trust Indenture Act and such consents, approvals,
authorizations, orders, registrations, filings or
qualifications as may be required under state securities or
Blue Sky laws or insurance securities laws of any such
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters, and except those which,
if not obtained, will
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not have a material adverse effect on the financial condition
of the Guarantor and its subsidiaries taken as a whole or
would not have a material adverse effect on the issuance or
sale of the Securities by the Company or the issuance of the
Guarantees by the Guarantor;
(i) 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 the Guarantor and, when executed and delivered by
the Company, the Guarantor and the purchaser named therein,
will constitute a valid and legally binding agreement of the
Company and the Guarantor enforceable against the Company and
the Guarantor in accordance with its terms, subject to (1)
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and the
rights of creditors of insurance companies generally and (2)
general principles of equity (regardless of whether considered
in a proceeding at law or in equity); and any Delayed Delivery
Contracts will conform, in all material respects, to the
description thereof, contained in the Prospectus as amended or
supplemented with respect to such Designated Securities; and
(j) All of the outstanding shares of capital
stock of the Company, Aetna Life Insurance Company, Aetna Life
Insurance and Annuity Company and Aetna U.S. Healthcare Inc.
have been duly authorized and validly issued and are fully
paid and non-assessable, and (except for directors' qualifying
shares, if any) are owned directly or indirectly by the
Guarantor.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters propose to offer such
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 (herein called "Delayed Delivery Contracts"),
substantially in the form
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of Annex II 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 as amended or supplemented and subject to
other conditions therein set forth. The Underwriters will not have any
responsibility with respect to 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 1 to the Pricing Agreement applicable 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 1 to
such Pricing Agreement less the principal amount of the Contract Securities so
set forth. If the Company determines to enter into Delayed Delivery Contracts,
the Company will deliver to the Representatives not later than 3:30 p.m., New
York City 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 having the Guarantee of the Guarantor
endorsed thereon 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 twenty-four 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 wire transfer to
a bank account specified by the Company and specified in Schedule II, in federal
or other funds immediately available in New York City, all at the place and the
time and date specified in such Pricing
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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 the Pricing Agreement relating to
such Securities.
5. The Company and the Guarantor agree with each of the Underwriters of
any Designated Securities:
(a) To prepare the Prospectus as amended and
supplemented in relation to the applicable Designated
Securities and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of
business on the second business day following the execution
and delivery of the Pricing Agreement relating to the
applicable Designated Securities or, if applicable, such other
time as may be required by Rule 424(b); to advise the
Representatives promptly of any proposal to amend or
supplement the Registration Statement or Prospectus as amended
or supplemented after the date of the Pricing Agreement
relating to such Designated Securities and prior to the Time
of Delivery for such Designated Securities, and afford the
Representatives a reasonable opportunity to comment on any
such proposed amendment or supplement; to advise the
Representatives of any such amendment or supplement promptly
after such Time of Delivery for so long as the delivery of a
prospectus is required under the Act in connection with the
offering or sale of such Designated Securities; to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Guarantor 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 under the Act in connection with the offering or
sale of such Designated Securities,
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and during such same period to advise the Representatives,
promptly after the Company or the Guarantor receives notice
thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has
been filed with the Commission; for so long as the delivery of
a prospectus is required under the Act in connection with the
offering or sale of the Designated Securities, to advise the
Representatives promptly 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 Designated Securities,
of the suspension of the qualification of such Designated
Securities for offering or sale in any jurisdiction or of the
initiation or, if known to the Company or the Guarantor,
threatening of any proceeding for any such purpose, or of any
request by the Commission for amending or supplementing the
Registration Statement or Prospectus; 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 endeavor
to take such action as the Representatives may reasonably
request to qualify such Designated Securities and the
Guarantees for offering and sale under the securities laws of
such jurisdictions of the United States, Puerto Rico and Guam
as the Representatives may reasonably request and such other
jurisdictions as the Company and the Representatives may agree
and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of such
Designated Securities, provided that in connection therewith
neither the Company nor the Guarantor shall be required to
qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction, and provided
further that in connection therewith neither the Company nor
the Guarantor shall be required to qualify such Designated
Securities and Guarantees for offering and sale under the
securities laws of any such jurisdiction for a period in
excess of nine months after the initial time of issue of the
Prospectus as amended or supplemented relating to such
Designated Securities;
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(c) To furnish the Underwriters with copies
of the Prospectus as amended or supplemented in such
quantities as the Representatives may from time to time
reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale
of the Designated Securities and the related Guarantees 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 is delivered, not
misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus
in order to comply with the Act or the Exchange Act, to notify
the Representatives and 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 any amended Prospectus
or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance; provided,
however, that in case any Underwriter is required under the
Act to deliver a prospectus in connection with the offering or
sale of the Designated Securities and the related Guarantees
at any time more than nine months after the date of the
Pricing Agreement relating to the Designated Securities and
the related Guarantees, the costs of such preparation and
furnishing such amended or supplemented Prospectus shall be
borne by the Underwriters of such Designated Securities;
(d) To make generally available to the
Company's and the Guarantor's securityholders as soon as
practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as
defined in Rule 158(c)), an earning statement of the Guarantor
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
Guarantor Rule 158); and
(e) During the period beginning from the
date of the Pricing Agreement for such Designated Securities
and continuing to and including the Time of Delivery for such
Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of in the United States any debt securities
of the
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Company guaranteed by the Guarantor which mature more than one
year after such Time of Delivery and which are substantially
similar to such Designated Securities and the related
Guarantees, without the prior written consent of the
Representatives, which consent shall not be unreasonably
withheld.
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 and the Guarantor's counsel and accountants in
connection with the registration of the Securities and the Guarantees under the
Act and all other expenses in connection with the Company's and the Guarantor's
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and, subject to the proviso of Section 5(c), the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or otherwise
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 Guarantees for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (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) any cost of preparing certificates or other evidences of
the Securities or any costs of The Depository Trust Company; (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 any Indenture and
the Securities; and (viii) all other costs and expenses incident to the
performance of the Company's and the Guarantor's 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.
The foregoing provisions of this Section 6 shall be without prejudice to the
Company's or the Guarantor's rights under any separate agreements between the
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Company or the Guarantor and their respective attorneys, accountants and vendors
with respect to such fees, disbursements, expenses and costs.
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 and the Guarantor in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company and the Guarantor
shall have performed in all material respects all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or
supplemented in relation to the applicable Designated
Securities shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and
in accordance with Section 5(a) hereof; no stop order
suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or, to the knowledge of
the Company or the Guarantor, threatened by the Commission;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the
Underwriters, shall have furnished to the Representatives such
opinion or opinions, dated the Time of Delivery for such
Designated Securities, with respect to the incorporation of
the Company and the Guarantor, the validity of the Indenture,
the Designated Securities, the Guarantees, 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. Xxxxxxxxxxxx, counsel to the
Company and the Guarantor, shall have furnished to the
Representatives such counsel's written opinion, dated the Time
of
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Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) Each of the Company and the
Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of Connecticut;
(ii) Each of Aetna Life Insurance
Company and Aetna Life Insurance and Annuity Company
has been duly incorporated and is validly existing as
an insurance corporation in good standing under the
laws of the State of Connecticut; Aetna U.S.
Healthcare Inc. has been duly incorporated and is
validly existing and in good standing under the laws
of the State of Pennsylvania; all of the outstanding
shares of capital stock of the Company, Aetna Life
Insurance and Annuity Company and Aetna U.S.
Healthcare Inc. have been duly authorized and validly
issued and are fully paid and non-assessable, and
(except for directors' qualifying shares, if any) are
owned directly or indirectly by the Guarantor; and
all of the outstanding shares of capital stock of
Aetna Life Insurance Company (except for directors'
qualifying shares, if any) are owned directly or
indirectly by the Company;
(iii) To the best of such counsel's
knowledge and other than as set forth or contemplated
in the Prospectus, there are no legal or governmental
proceedings pending or threatened involving the
Company or the Guarantor or any of their respective
subsidiaries of a character required to be disclosed
in the Registration Statement or Prospectus which are
not adequately disclosed in the Registration
Statement or Prospectus;
(iv) This Agreement and the Pricing
Agreement with respect to the Designated Securities
have been duly authorized, executed and delivered by
the Company and the Guarantor;
16
(v) The Designated Securities have
been duly authorized by the Company; assuming the due
authentication of the Underwriters' Securities by the
Trustee, the Underwriters' Securities have been duly
issued, executed and delivered and constitute valid
and legally binding obligations of the Company
enforceable against the Company in accordance with
their terms, subject to (1) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally
and the rights of creditors of insurance companies
generally and (2) general principles of equity
(regardless of whether considered in a proceeding at
law or in equity); and assuming the due
authentication of the Contract Securities by the
Trustee, the Contract Securities, if any, when
issued, executed and delivered and when paid for in
accordance with the Delayed Delivery Contracts will
constitute valid and legally binding obligations of
the Company enforceable against the Company in
accordance with their terms, subject to (1)
bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting
creditors' rights generally and the rights of
creditors of insurance companies generally and (2)
general principles of equity (regardless of whether
considered in a proceeding at law or in equity);
(vi) The Guarantees have been duly
authorized by the Guarantor; upon execution and
delivery of the Underwriters Securities by the
Company against payment therefor and assuming the due
authentication of the Underwriters' Securities by the
Trustee, the Guarantees endorsed on the Underwriters'
Securities have been duly issued, executed and
delivered and constitute valid and legally binding
obligations of the Guarantor enforceable against the
Guarantor in accordance, with their terms, subject to
(1) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or
affecting creditors' rights generally and the rights
of creditors of insurance companies generally and (2)
general principles of equity (regardless of whether
considered in a proceeding at law or in equity); and
when the Contract
17
Securities, if any, are issued, executed,
authenticated and delivered in accordance with the
Indenture and paid for in accordance with the Delayed
Delivery Contracts, upon execution and delivery of
the Guarantees endorsed on such Contract Securities
in accordance with the Indenture, such Guarantees
will constitute valid and legally binding obligations
of the Guarantor enforceable against the Guarantor in
accordance with their terms, subject to (1)
bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting
creditors' rights generally and the rights of
creditors of insurance companies generally and (2)
general principles of equity (regardless of whether
considered in a proceeding at law or in equity);
(vii) The Indenture has been duly
authorized, executed and delivered by the Company and
the Guarantor and, assuming the due authorization,
execution and delivery thereof by the Trustee, the
Indenture constitutes a valid and legally binding
instrument of the Company and the Guarantor
enforceable against the Company and the Guarantor in
accordance with its terms, subject to (1) bankruptcy,
insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights
generally, and the rights of creditors of insurance
companies generally and (2) general principles of
equity (regardless of whether considered in a
proceeding at law or in equity);
(viii) The issue and sale of the
Designated Securities, the issuance of the Guarantees
and the performance by the Company and the Guarantor
of their respective obligations under the Designated
Securities, the Guarantees, the Indenture, each of
the Delayed Delivery Contracts, if any, this
Agreement and the Pricing Agreement with respect to
the Designated Securities will not (1) conflict with
or result in a breach or violation by the Company or
the Guarantor of any of the terms or provisions of,
or constitute a default by the Company or the
Guarantor under, any indenture, mortgage, deed of
trust, loan agreement or other similar agreement or
instrument known
18
to such counsel to which the Company or the Guarantor
is a party or by which the Company or the Guarantor
is bound or to which any of the property or assets of
the Company or the Guarantor is subject, except, in
all such cases, for such conflicts, breaches,
violations or defaults as would not have a material
adverse effect on the financial condition of the
Guarantor and its subsidiaries taken as a whole, or
would not have a material adverse effect on the
issuance or sale of the Designated Securities or the
issuance of the Guarantees; and (2) result in any
violation of (A) the provisions of the Certificate of
Incorporation or By-Laws of the Company or the
Guarantor or (B) any statute of the United States or
the State of Connecticut or any order, rule or
regulation known to such counsel of any court or
governmental agency or body of the United States or
the State of Connecticut having jurisdiction over the
Company or the Guarantor or any of their respective
properties, except with respect to clause (B) of this
Paragraph (viii) (2), such violations as would not
have a material adverse effect on the financial
condition of the Guarantor and its subsidiaries taken
as a whole, or would not have a material adverse
effect on the issuance or sale of the Designated
Securities or the issuance of the Guarantees (and
except that for purposes of this paragraph (viii)
such counsel need not express any opinion as to any
violation of any fraudulent transfer laws or other
antifraud laws or as to any violation of any federal
and state securities laws or blue sky or insurance
laws; provided further, that insofar as performance
by the Company and the Guarantor of their respective
obligations under the Indenture, the Delayed Delivery
Contracts, if any, the Underwriting Agreement, the
Pricing Agreement relating to the Designated
Securities, and the Designated Securities and the
Guarantees is concerned, such counsel need not
express any opinion as to bankruptcy, insolvency,
reorganization, moratorium and other similar laws now
or hereafter in effect relating to or affecting
creditors' rights generally and the rights of
creditors of insurance companies generally);
(ix) The documents incorporated by
reference in the Prospectus as amended or
supplemented (other than the financial statements and
related notes, information as to reserves, the
financial statement
19
schedules and the other financial and statistical
data included therein or omitted therefrom, as to
which such counsel need express no opinion), when
they became effective or were filed with the
Commission, as the case may be, complied as to form
in all material respects with the requirements of the
Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder;
(x) Under the laws of the State of
Connecticut and under the federal laws of the United
States, no consent, approval, authorization, order,
registration, filing or qualification of or with any
court or governmental agency or body is required for
the issue and sale of the Designated Securities and
the issuance of the Guarantees in accordance with the
Indenture, each of the Delayed Delivery Contracts, if
any, this Agreement and the Pricing Agreement with
respect to the Designated Securities except for such
consents, approvals, authorizations, orders,
registrations, filings or qualifications as have been
obtained under the Act and the Trust Indenture Act
and such as may be required under state securities or
Blue Sky laws or insurance securities laws of any
such jurisdiction in connection with the purchase and
sale and distribution of the Designated Securities by
the Underwriters, and except those which, if not
obtained, will not have a material adverse effect on
the financial condition of the Guarantor and its
subsidiaries taken as a whole; and
(xi) 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 the Guarantor and,
assuming such Delayed Delivery Contract has been duly
authorized, executed and delivered by the purchaser
named therein, and the Securities to be delivered
thereunder have been paid for by the purchaser named
therein, such Delayed Delivery Contract constitutes a
valid and legally binding agreement of the Company
and the Guarantor enforceable against the Company and
the Guarantor in accordance with its terms, subject
to (1) bankruptcy, insolvency, reorganization,
20
fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or
affecting creditors' rights generally and the rights
of creditors of insurance companies generally and (2)
general principles of equity (regardless of whether
considered in a proceeding at law or in equity); and
any Delayed Delivery Contracts conform in all
material respects to the description thereof in the
Prospectus as amended or supplemented.
In addition, such counsel shall state that such counsel does not know of any
contract or other document (i) of a character required to be filed as an exhibit
to the Registration Statement or to any of the documents incorporated by
reference into the Prospectus as amended or supplemented which is not so filed,
(ii) required to be incorporated by reference into the Prospectus as amended or
supplemented which is not so incorporated by reference or (iii) required to be
described in the Registration Statement or the Prospectus as amended or
supplemented which is not so described.
In rendering the opinion required by subsection (c) of this Section, Xx.
Xxxxxxxxxxxx may state that he is admitted to the Bar of the State of
Connecticut and that his opinion is limited to the laws of the State of
Connecticut and the federal laws of the United States of America. Xx.
Xxxxxxxxxxxx may rely (A) as to any matter to which you consent (which consent
shall not be unreasonably withheld), to the extent specified in such opinion,
upon the opinions of other counsel in good standing whom such counsel believes
to be reliable, provided that Xx. Xxxxxxxxxxxx shall state that he and you are
justified in relying on such opinions and (B) as to matters of fact, upon
certificates of officers and representatives of the Company and the Guarantor
and of public officials, and may state that he has not verified independently
the accuracy or completeness of information or documents furnished to such
counsel with respect to the Registration Statement or the Prospectus.
(d) Xxxxx Xxxx & Xxxxxxxx, special counsel
for the Company and the Guarantor, shall have furnished to the
Representatives their written opinion, dated the Time of
Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) This Agreement and the Pricing
Agreement with respect to the Designated
21
Securities have been duly authorized, executed and
delivered by the Company and the Guarantor;
(ii) The Designated Securities have
been duly authorized by the Company; assuming the due
authentication of the Underwriters' Securities by the
Trustee, the Underwriters' Securities are duly
issued, executed and delivered, and constitute valid
and legally binding obligations of the Company
enforceable against the Company in accordance with
their terms, subject to (1) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally
and the rights of creditors of insurance companies
generally and (2) general principles of equity
(regardless of whether considered in a proceeding at
law or in equity); the Contract Securities when
issued, executed and delivered (and assuming the due
authentication thereof by the Trustee) and when paid
for in accordance with the Indenture and the Delayed
Delivery Contracts, will constitute valid and legally
binding obligations of the Company enforceable
against the Company in accordance with their terms,
subject to (1) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally
and the rights of creditors of insurance companies
generally and (2) general principles of equity
(regardless of whether considered in a proceeding at
law or in equity); and the Designated Securities and
the Indenture conform in all material respects to the
descriptions thereof in the Prospectus as amended or
supplemented;
(iii) The Guarantees have been duly
authorized by the Guarantor; upon execution and
delivery of the Underwriters' Securities by the
Company against payment therefor and assuming the due
authentication of the Underwriters' Securities by the
Trustee, the Guarantees endorsed on the Underwriters'
Securities will be duly issued, executed and
delivered, and constitute valid and legally binding
obligations of the Guarantor enforceable against the
Guarantor in accordance with their terms, subject to
(1) bankruptcy, insolvency,
22
reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally
and the rights of creditors of insurance companies
generally and (2) general principles of equity
(regardless of whether considered in a proceeding at
law or in equity); and when the Contract
Securities are issued, executed and delivered (and
assuming the due authentication thereof by the
Trustee) and paid for in accordance with the
Indenture and the Delayed Delivery Contracts, upon
execution and delivery of the Guarantees endorsed on
such Contract Securities, such Guarantees will
constitute valid and legally binding obligations of
the Guarantor enforceable against the Guarantor in
accordance with their terms, subject to (1)
bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting
creditors' rights generally and the rights of
creditors of insurance companies generally and (2)
general principles of equity (regardless of whether
considered in a proceeding at law or in equity); and
the Guarantees conform in all material respects to
the description thereof in the Prospectus as amended
or supplemented;
(iv) The Indenture has been duly
authorized, executed and delivered by the Company and
the Guarantor and, assuming the due authorization,
execution and delivery thereof by the Trustee, the
Indenture constitutes a valid and legally binding
instrument of the Company and the Guarantor
enforceable against the Company and the Guarantor in
accordance with its terms, subject to (1) bankruptcy,
insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights
generally and the rights of creditors of insurance
companies generally and (2) general principles of
equity (regardless of whether considered in a
proceeding at law or in equity); and the Indenture
has been duly qualified under the Trust Indenture
Act;
(v) In the event any of the
Designated Securities are to be purchased pursuant to
Delayed Delivery Contracts, each of such Delayed
Delivery
23
Contracts has been duly authorized, executed and
delivered by the Company and the Guarantor and,
assuming such Delayed Delivery Contract has been duly
authorized, executed and delivered by the purchaser
named therein, and the Securities to be delivered
thereunder have been paid for by the purchaser named
therein, such Delayed Delivery Contract constitutes a
valid and legally binding agreement of the Company
and the Guarantor enforceable in accordance with its
terms, subject to (1) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and
other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally
and the rights of creditors of insurance companies
generally and (2) general principles of equity
(regardless of whether considered in a proceeding at
law or in equity); and any Delayed Delivery Contracts
conform in all material respects to the description
thereof in the Prospectus as amended and
supplemented;
(vi) The statements contained in the
Prospectus under the captions "Description of Debt
Securities and Debt Guarantees" and "Plan of
Distribution" and the corresponding sections in any
prospectus supplement relating to the description of
the Designated Securities or their distribution,
insofar as such statements constitute summaries of
certain provisions of the documents referred to
therein, accurately summarize the material provisions
of such documents required to be stated therein; and
(vii) (1) such counsel is of the
opinion that the Registration Statement, as amended,
and the Prospectus, as amended or supplemented, as
of the Time of Delivery (other than the financial
statements and related notes, the financial statement
schedules and the other financial data included
therein or omitted therefrom, as to which such
counsel need express no opinion), comply as to form
in all material respects with the Act and the rules
and regulations of the Commission thereunder, (2)
nothing has come to the attention of such counsel
that would cause such counsel to believe that each
part of the Registration Statement (other than the
financial statements and related notes, the financial
statement schedules and the other
24
financial data included therein or omitted therefrom,
as to which such counsel need express no belief), at
the time such part became effective, contained any
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 (3) nothing has come to the attention
of such counsel that would cause such counsel to
believe that the Registration Statement or the
Prospectus, as amended or supplemented, as of the
Time of Delivery (other than the financial statements
and related notes, the financial statement schedules
and the other financial data included therein or
omitted therefrom, as to which such counsel need
express no belief), contains an untrue statement of a
material fact or omits to state a material fact
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading.
With respect to clause (vii) of subsection (d) of this Section, Xxxxx
Xxxx & Xxxxxxxx may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
(other than the documents incorporated by reference therein) and any amendments
or supplements thereto and review and discussion of the contents thereof
(including the documents incorporated by reference therein), but are without
independent check or verification except as specified. In rendering the opinion
required by subsection (d) of this Section, Xxxxx Xxxx & Xxxxxxxx may rely upon
the accuracy of matters (A) involving the application of laws of any
jurisdiction other than the United States or New York and as to any other matter
to which you consent (which consent shall not be unreasonably withheld), to the
extent specified in such opinion, upon the opinions of other counsel reasonably
satisfactory to you (including without limitation, as to matters of Connecticut
law, on the opinion of Xxxxxx X. Xxxxxxxxxxxx, counsel to the Company and the
Guarantor), and (B) of fact upon certificates of officers and representatives of
the Company and the Guarantor and of public officials.
(e) At the Time of Delivery for such
Designated Securities, KPMG Peat Marwick LLP, independent
public accountants for the Company and the Guarantor, shall
have furnished to the Representatives a letter dated such Time
of Delivery to the effect set forth in Annex III hereto and as
to such other matters as the Representatives may reasonably
request and in form and substance satisfactory to the
Representatives, provided
25
that the letter shall use a "cut-off date" not earlier than
the date of the Pricing Agreement;
(f) Since the respective dates as of which
information is given in the Prospectus as amended or
supplemented as of the date of the Pricing Agreement there
shall not have been any adverse change or a development
involving a prospective material adverse change in the
financial position, stockholders' equity or results of
operations of the Guarantor and its subsidiaries considered as
a whole, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented as of the date of the
Pricing Agreement, the effect of which, in any such case
described above, is in the reasonable judgment of the
Representatives, after consultation with the Company and
Guarantor, so material and adverse as to make it impracticable
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 as
of the date of the Pricing Agreement;
(g) On or after the date of the Pricing
Agreement relating to the Designated Securities, no
downgrading shall have occurred in the rating accorded the
Company's or the Guarantor's debt securities by either the
Standard & Poor's Corporation or Xxxxx'x Investors Service,
Inc.;
(h) On or after 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 material 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 of the above specified
events, in the reasonable judgment of the Representatives,
after consultation with the Company and the Guarantor, makes
it impracticable to proceed with the public offering or the
delivery of the Underwriters' Securities on the
26
terms and in the manner contemplated by the Prospectus as
amended or supplemented; and
(i) The Company and the Guarantor shall each
have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated
Securities a certificate or certificates of the Vice Chairman
for Strategy and Finance or the Vice President, Corporate
Finance or the Treasurer as to the accuracy of the
representations and warranties of the Company and the
Guarantor herein at and as of such Time of Delivery, as to the
performance by the Company and the Guarantor of all of their
respective obligations hereunder to be performed at or prior
to such Time of Delivery, as to the matters set forth in
subsections (a) and (f) of this Section and as to such other
matters as the Representatives may reasonably request.
8. (a) The Company and the Guarantor, jointly and severally, 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 (i) in the case of the Registration Statement, not misleading and (ii)
in the case of any Prospectus, in light of the circumstances in which they were
made, 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 and the Guarantor 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, the
Prospectus as amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company or the Guarantor by
any Underwriter of Designated Securities through the Representatives for
inclusion therein; and provided, further, that the Company and the Guarantor
shall not be liable to any
27
Underwriter under the indemnity agreement in this subsection (a) with respect to
any Preliminary Prospectus or any preliminary prospectus supplement to the
extent that any 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 the written confirmation of such
sale, a copy of the Prospectus (excluding documents incorporated by reference)
or of the Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is required by the
Act if the Company has previously furnished copies thereof to such Underwriter
(or to the Representatives) and the loss, claim, damage or liability of such
Underwriter results from an untrue or alleged untrue statement or omission or
alleged omission of a material fact contained in the Preliminary Prospectus or
any preliminary prospectus supplement which was corrected in the Prospectus (or
the Prospectus as amended or supplemented).
(b) Each Underwriter will indemnify and hold
harmless the Company and the Guarantor against any losses,
claims, damages or liabilities to which the Company or the
Guarantor 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 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
(i) in the case of the Registration Statement, not misleading
and (ii) in the case of any Prospectus, in light of the
circumstances under which they were made, 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 such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company or the Guarantor by such
Underwriter through the Representatives for inclusion therein;
and will reimburse the Company and the Guarantor for any legal
or other expenses reasonably incurred by the Company or the
Guarantor in
28
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 be entitled
to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably
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 shall not be
liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable
costs of investigation, unless such indemnifying party and
indemnified party are named parties to any such action
(including any impleaded parties) and representation of both
parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. In no
event shall any indemnifying party be liable for the fees and
expenses of more than one counsel (in addition to local
counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances. In no
event shall an indemnifying party be liable with respect to
any action or claim settled without its written consent. No
indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such
29
indemnified party from all liability on claims that are the
subject matter of such proceeding.
(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, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits
received by the Company and the Guarantor 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 action in respect
thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable
law or if the indemnified party is not entitled to receive the
indemnification provided for in subsection (a) above because
of the second proviso thereof or if the indemnified party
failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion
as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Guarantor
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 and the Guarantor on the one hand and
such Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from such offering
(before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by
such Underwriters. 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 and the Guarantor on the
one hand or such Underwriters on the other and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission,
including with respect to any Underwriter, the extent to
30
which such losses, claims, damages or liabilities (or actions
in respect thereof) with respect to any Preliminary Prospectus
or any preliminary prospectus supplement result from the fact
that the Underwriter sold Securities to a person to whom there
was not sent or given, at or prior to the written confirmation
of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by
reference), if the Company has previously furnished copies
thereof to such Underwriters. The Company, the Guarantor 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) 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
applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds
the amount of any damages (other than amounts paid or incurred
without the consent of the indemnifying party as provided in
this Section 8) 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 obligations of the Underwriters of
Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting
obligations with respect to such Securities and not joint. No
indemnifying party will be liable for contribution with
respect to any action or claim settled without its written
consent.
(e) The obligations of the Company and the
Guarantor under this Section 8 shall be in addition to any
liability which the Company and the Guarantor may otherwise
have and shall extend or not extend, as the case may be, upon
the
31
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 or not
extend, as the case may be, upon the same terms and
conditions, to each officer and director of the Company and
the Guarantor and to each person, if any, who controls the
Company and the Guarantor 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 under the Pricing
Agreement relating to such Underwriters' 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 reasonably 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 and the Guarantor 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 and the Guarantor agree 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 shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(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 amount of such Underwriters' Securities
which remains unpurchased does not exceed one- tenth of the
aggregate principal amount of the Designated Securities, then
the Company shall have
32
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.
(c) If, after giving effect to any
arrangements for the purchase of the Designated Securities of
a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a)
above, the aggregate principal amount of Designated Securities
which remains unpurchased exceeds one-tenth 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 Designated 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 or the Guarantor,
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, the Guarantor 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 the Guarantor, or any officer or director or controlling person of
the Company or the Guarantor, and shall survive delivery of and payment for the
Securities.
33
11. If any Pricing Agreement shall be terminated pursuant to Section 9 hereof,
the Company and the Guarantor 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 Section 6 and Section 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 reasonable out-of-pocket expenses approved in
writing by the Representatives, including reasonable 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 and
the Guarantor shall then be under no further liability to any Underwriter with
respect to such Designated Securities except as provided in Section 6 and
Section 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,
and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company or the Guarantor shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company and
the Guarantor 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 mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company and the Guarantor by the Representatives upon request.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and inure
solely to the benefit of, the Underwriters, the Company, the Guarantor and, to
the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company, the Guarantor and each person who controls the
Company, the Guarantor or any Underwriter, and their respective 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
34
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 for each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS, BUT WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS OF THE STATE OF NEW YORK.
35
16. 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,
AETNA SERVICES, INC.
By:_______________________________________
Name:
Title:
AETNA INC.
By:_______________________________________
Name:
Title:
36
ANNEX I
PRICING AGREEMENT
[Insert Representatives]
As Representatives of the several
Underwriters named in Schedule 1 hereto
-----------, ----.
Ladies and Gentlemen:
Aetna Services, Inc. a Connecticut corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated _______ (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"). The Securities
specified in Schedule II hereto shall be guaranteed by Aetna Inc., a Connecticut
corporation (the "Guarantor"), as set forth in the Indenture identified in
Schedule II hereto. Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and
37
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
that refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or 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 at the end of 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 to
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
Schedule II, and the Guarantor agrees to issue its Guarantees with respect to
such Designated Securities.
38
If the foregoing is in accordance with your understanding,
please sign and return to us 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 and the Guarantor. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Guarantor for
examination upon request.
Very truly yours,
AETNA SERVICES, INC.
By:_______________________________________
Name:
Title:
AETNA INC.
By:_______________________________________
Name:
Title:
39
Accepted as of the date hereof:
[Insert Representatives]
On behalf of each of the
Underwriters
By:_________________________
Name:
Title:
40
SCHEDULE I
Principal
Amount of
Designated
Securities
to be
Underwriter Purchased
----------- ----------
$
----------
Total................................. $
==========
41
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
[ %] Guaranteed [Floating Rate] [Zero Coupon] [Senior]
[Subordinated] [Junior Subordinated]
[Notes] [Debentures] due
AGGREGATE PRINCIPAL AMOUNT:
[$] [Foreign Currency]
PRICE TO PUBLIC:
% of the principal amount of the Designated Securities, plus accrued interest
from to
[and accrued amortization, if any, from to ]
PURCHASE PRICE BY UNDERWRITERS:
% of the principal amount of the Designated Securities, plus accrued interest
from to
[and accrued amortization, if any, from to ]
42
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately Available Funds
INDENTURE:
Indenture dated 19 , among the Company, the Guarantor and as
Trustee
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
INTEREST PAYMENT DATES:
[months and dates]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the amount
of [$] or an integral multiple thereof,
43
[or on 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]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$] principal amount of Designated Securities on in
each of the years through at 100% of their principal amount
plus accrued interest][, together with [cumulative] [noncumulative]
redemptions at the option of the Company to retire an additional [$]
principal amount of
44
Designated Securities in the years through at 100% of their
principal amount plus accrued interest].
[If Securities may be put to the issuer by holders, insert
OPTIONAL REPAYMENT PROVISIONS:
Securities are repayable on , [insert date and years],
at the option of the holder, at their principal amount with accrued interest.
[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] issued 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 for -month
Treasury bills); [from and thereafter the rate will be the then
current interest yield equivalent plus % of Interest Differential].]
TIME OF DELIVERY:
45
CLOSING LOCATION:
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 ____]
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
46
ANNEX II
DELAYED DELIVERY CONTRACT
Aetna Services, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention ____________
Aetna Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention ____________
____________, ____
Dear Sirs:
47
The undersigned hereby agrees to purchase from Aetna Services, Inc.
(hereinafter called the "Company"), and the Company agrees to sell to the
undersigned,
$__________
principal amount of the Company's debt securities (hereinafter called the
"Designated Securities"), guaranteed by Aetna Inc. (hereinafter called the
"Guarantor"), offered by the Company's and the Guarantor's Prospectus dated
_____________, 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 on the further terms and conditions 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
__________ (the "Delivery Date") and interest on the Designated Securities so
purchased will accrue from ___________.
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 Amount Interest Accrues
------------- ---------------- -----------------------
__________, 19__ $________ __________, 19__
__________, 19__ $________ __________, 19__
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 each Delivery Date shall be made to the Company in Federal or other
funds immediately available in New York City, by wire transfer to a bank account
specified by the Company, on such Delivery Date upon delivery to the
48
undersigned of the Designated Securities, having the Guarantee of the Guarantor
endorsed thereon, then to be purchased by the undersigned in definitive fully
registered form and in such denominations and registered in such names as the
undersigned may designate by written, telex or facsimile communication addressed
to the Company not less than five full business days prior to such Delivery
Date.
The obligation of the undersigned to take delivery of and make payment for
Designated Securities on each Delivery Date shall be subject to the condition
that the purchase of Designated Securities to be made by the undersigned shall
not on 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 and the
Guarantor 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.
49
It is understood that the acceptance by the Company and the Guarantor of any
Delayed Delivery Contract (including this contract) is in the Company's and the
Guarantor'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 and the Guarantor, it is requested
that the Company and the Guarantor 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 among the Company, the
Guarantor and the undersigned when such counterpart is so mailed or delivered by
the Company and the Guarantor.
Yours very truly,
By:_______________________________________
(Authorized Signature)
Name:
Title:
_______________________________________
(Address)
Accepted:__________
Aetna Services, Inc.
50
By________________________
Name:
Title:
Aetna Inc.
By________________________
Name:
Title:
51
ANNEX III
Pursuant to Section 7(f) of the Underwriting Agreement, KPMG Peat Marwick
LLP shall furnish letters to the Underwriters with respect to the Company and
the Guarantor to the effect that:
(i) They are independent certified public
accountants with respect to the Company and the Guarantor and
their respective subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements
and any supplementary financial information and schedules
audited by them and included or incorporated by reference in
the Registration Statement or the Prospectus comply as to form
in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable,
and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial
statements and selected financial data derived from audited
financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies
of which have been furnished to the representatives of the
Underwriters (the "Representatives");
(iii) The unaudited selected financial information
with respect to the consolidated results of operations and
financial position of the Company or the Guarantor for the
five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the
Company's or the Guarantor's Annual Report on Form 10-K for
the most recent fiscal year agrees with the corresponding
amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years
which were included or
52
incorporated by reference in the Company's or the Guarantor's
Annual Reports on Form 10-K for such fiscal years;
(iv) on the basis of limited procedures, not
constituting an audit in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below,
a reading of the latest available interim financial statements
of the Company or the Guarantor and their respective
subsidiaries, inspection of the minute books of the Company
and the Guarantor and their respective subsidiaries since the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of
officials of the Company and the Guarantor and their
respective subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their
attention that caused them to believe that:
(a) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included or incorporated by reference in the Company's or the
Guarantor's Quarterly Reports on Form 10-Q incorporated by reference
in the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act as
it applies to Form 10-Q and the related published rules and
regulations thereunder or, if no report has been issued by such
accountants on the consolidated interim financial statements as set
forth in (ii) above, based on a review under their applicable
professional standards, that any material modifications should be
made to such condensed consolidated financial statements for them to
be in conformity with generally accepted accounting principles;
(b) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
53
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's or the Guarantor's Annual
Report on Form 10-K for the most recent fiscal year;
(c) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (a) above and
any unaudited income statement data and balance sheet items included
in the Prospectus and referred to in Clause (b) above were not
determined on a basis substantially consistent with the basis for
the audited financial statements included or incorporated by
reference in the Company's or the Guarantor's Annual Report on Form
10-K for the most recent fiscal year;
(d) as of a specified date not more than three business days
prior to the date of such letter, there have been any changes in the
consolidated Common Stock (other than issuances of common stock
pursuant to employee benefit plans, upon exercise of options and
stock appreciation rights, upon earn-outs of performance shares and
upon conversions of convertible securities), which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
Long-Term Debt of the Company and the Guarantor and their respective
subsidiaries, as compared with amounts shown in the latest balance
sheet included or incorporated by reference in the Prospectus,
except in each case for changes or increases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(i) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the last day of the month immediately
preceding the date of such letter for which monthly financial
statements are available, if any, there were any decreases in
consolidated total revenues or income before income taxes,
discontinued operations and cumulative effect of accounting
changes or the per share amounts of consolidated income before
income taxes, discontinued operations and cumulative effect of
accounting changes, in each case as compared with the
54
comparable period of the preceding year, except in each case
for decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(ii) In addition to the audit referred to in their
report(s) included or incorporated by reference in the
Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information
specified by the Representatives which are derived from the
general accounting records of the Company or the Guarantor and
their respective subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II
of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting
records of or schedules prepared by the Company or the
Guarantor and their respective subsidiaries and have found
them to be in agreement.
(iii) if pro forma financial statements and other
pro forma financial information (the "Pro Forma Disclosure")
are required to be included in the Registration Statement,
such letter shall further state that although they are unable
to and do not express any opinion on such Pro Forma Disclosure
or on the pro forma adjustments applied to the historical
amounts included in that statement, for purposes of such
letter they have:
(e) read the Pro Forma Disclosure;
(f) made inquiries of certain officials of the Company and the
Guarantor who have responsibility for financial and
55
accounting matters about the basis for their determination of the
pro forma adjustments and whether the Pro Forma Disclosure above
complies in form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X; and
(g) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the Pro Forma
Disclosure; and
on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that the Pro Forma
Disclosure included in the Registration Statement does not comply
in form in all material respects with the applicable requirements
of Rule 11-02 of Regulation S-X and that the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of that statement.
All references in this Annex III to the Prospectus shall be deemed to refer to
the Prospectus (including 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
Prospectus as amended or supplemented (including 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.
