Exhibit 99.1

 

$300,000,000 5.125% Senior Notes due 2020

Underwriting Agreement

 

 

May 12, 2010

 

Banc of America Securities LLC

One Bryant Park

New York, NY  10036

 

 

Deutsche Bank Securities Inc.

60 Wall Street, 3rd Floor

New York, NY  10005

 

 

UBS Securities LLC

677 Washington Boulevard

Stamford, CT  06901

 

 

as the Representatives of the several Underwriters

 

Ladies and Gentlemen:

 

CIGNA Corporation, a Delaware corporation (the “ Company ”), confirms, subject to the terms and conditions stated herein, its agreement to issue and sell to the Underwriters named in Schedule I hereto (the “ Underwriters ”) the aggregate principal amount of its notes listed in Schedule I (the “ Notes ”) to be issued pursuant to the Indenture, dated as of August 16, 2006, between the Company and U.S. Bank National Association, as trustee (the “ Trustee ”), as amended by Supplemental Indenture No. 3 thereto, dated as of March 7, 2008 (as amended, the “ Base Indenture ”), and Supplemental Indenture No. 5 to the Base Indenture to be entered into between the Company and the Trustee (the “ Supplemental Indenture, ” and together with the Base Indenture and any amendments or supplements thereto, the “ Indenture ”), between the Company and the Trustee.

 

1.              Representations and Warranties of the Company .   The Company represents and warrants to, and agrees with, each of the Underwriters that:

 

(a)  An “automatic shelf registration statement” as defined under Rule 405 under the Securities Act of 1933, as amended (the “ Securities Act ”) on Form S-3 (File No. 333-161227) in respect of the Notes has been filed with the Securities and Exchange Commission (the “ Commission ”) not earlier than three years prior to the date hereof; such registration statement, and any post-effective amendment thereto, became effective

 

 

 

 

on filing; and no stop order suspending the effectiveness of such registration statement or any part thereof has been issued and no proceeding for that purpose has been initiated or threatened by the Commission, and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company; the base prospectus filed as part of such registration statement, in the form in which it has most recently been filed with the Commission on or prior to the date of this Agreement, is hereinafter called the “ Basic Prospectus ”; the preliminary prospectus (including the preliminary prospectus supplement dated May 12, 2010) relating to the Notes filed with the Commission pursuant to Rule 424(b) under the Securities Act is hereinafter called the “ Preliminary Prospectus ”; the various parts of such registration statement, including all exhibits thereto but excluding Form T-1 and including any prospectus supplement relating to the Notes that is filed with the Commission and deemed by virtue of Rule 430B under the Securities Act to be part of such registration statement, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the “ Registration Statement ”; the form of the final prospectus relating to the Notes filed with the Commission pursuant to Rule 424(b) under the Securities Act in accordance with Section 7(a) hereof is hereinafter called the “ Prospectus ”; any reference herein to the Basic Prospectus, the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein, as of the date of such prospectus; any reference to any amendment or supplement to the Basic Prospectus, the Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any post-effective amendment to the Registration Statement, any prospectus supplement relating to the Notes filed with the Commission pursuant to Rule 424(b) under the Securities Act and any documents filed under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and incorporated therein, in each case after the date of the Basic Prospectus, the Preliminary Prospectus, or the 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 Company 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 “issuer free writing prospectus” as defined in Rule 433 under the Securities Act relating to the Notes is hereinafter called an “ Issuer Free Writing Prospectus ”;

 

(b)  No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Securities Act and the Trust Indenture Act of 1939, as amended (the “ Trust Indenture Act ”) and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in

 

 

 

 

reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives or Debevoise & Plimpton LLP on their behalf expressly for use therein;

 

(c)  For the purposes of this Agreement, the “ Applicable Time ” is 12:19 p.m. (Eastern time) on the date of this Agreement; the Preliminary Prospectus as supplemented by the final term sheet prepared and filed pursuant to Section 3(b) hereof and any Permitted Free Writing Prospectus (as defined in Section 3(a) below), taken together (collectively, the “ Pricing Disclosure Package ”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus does not conflict with the information contained in the Registration Statement, the Preliminary Prospectus or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives or Debevoise & Plimpton LLP on their behalf expressly for use therein;

 

(d)  The documents incorporated by reference in the Pricing Disclosure Package and the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; any further documents so filed and incorporated by reference in the Pricing Disclosure Package and the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement;

 

(e)  The Registration Statement conformed, as of its effective date, and conforms, and the Pricing Disclosure Package and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will

 

 

 

conform, in all material respects to the requirements of the Securities Act and 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 each part of the Registration Statement and as of its date and the Closing Date (as defined in Section 2(b)) 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 not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through the Representatives or Debevoise & Plimpton LLP on their behalf expressly for use therein;

 

(f)  ( i ) ( A ) At the time of filing the Registration Statement, ( B ) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), and ( C ) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) under the Securities Act) made any offer relating to the Notes in reliance on the exemption of Rule 163 under the Securities Act, the Company was a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act; and ( ii ) at the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Notes, the Company was not an “ineligible issuer” as defined in Rule 405 under the Securities Act;

 

(g)  The Company has been duly incorporated and is validly existing in good standing under the laws of the State of Delaware, with power and authority to own its properties and conduct its business as described in the Pricing Disclosure Package and the Prospectus; the Company’s authorized share capital is as set forth in the Pricing Disclosure Package and the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;

 

(h)  Each of Connecticut General Life Insurance Company and Life Insurance Company of North America (each being hereinafter referred to as a “ Principal Subsidiary ”) has been duly formed and is validly existing in good standing under the laws of the jurisdiction of its formation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Disclosure Package and the Prospectus; and each Principal Subsidiary of the Company maintains an insurance license or is duly qualified to do business as a foreign corporation, limited partnership or limited liability company in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification; all of the issued and outstanding ownership interests of each Principal Subsidiary of the

 

 

 

Company have been duly authorized and validly issued in accordance with the organizational documents of such Principal Subsidiary; and the ownership interests of each Principal Subsidiary owned by the Company, directly or through subsidiaries, is owned free from liens, encumbrances and defects, except where the failure to be so licensed or qualified or where such liens, encumbrances and defects would not, individually or in the aggregate, have a material adverse effect on the financial condition, business or results of operations of the Company and its subsidiaries taken as a whole (“ Material Adverse Effect ”);

 

(i)  This Agreement has been duly authorized, executed and delivered by the Company;

 

(j)  The Notes and the Indenture have been duly authorized by the Company and, when the Supplemental Indenture has been duly executed and delivered by the Company in accordance with its terms, and assuming the valid execution and delivery thereof by the Trustee, the Indenture will constitute, and, in the case of the Notes, when they are delivered by the Company, paid for pursuant to this Agreement and the Indenture and duly authenticated and delivered by the Trustee, the Notes will, on the Closing Date, constitute, valid and legally binding obligations of the Company, enforceable in accordance with their respective terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles (regardless of whether such enforceability is considered in a proceeding in equity or at law); the Notes when delivered by the Company, paid for pursuant to this Agreement and the Indenture and duly authenticated and delivered by the Trustee, will be entitled to the benefits of the Indenture; and the Notes conform to the descriptions thereof in the Pricing Disclosure Package and the Prospectus in all material respects;

 

(k)   The issuance by the Company of the Notes, the compliance by the Company with all of the provisions of this Agreement, the Notes and the Indenture, and the consummation of the transactions contemplated herein and therein ( a ) will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any subsidiary is a party or by which the Company or any subsidiary is bound or to which any of the property or assets of the Company or any subsidiary is subject, which conflict, breach, violation, or default would individually, or in the aggregate, have a Material Adverse Effect; and ( b ) will not result in any violation of ( i ) the provisions of the Certificate of Incorporation or By-laws or other organizational documents of the Company, or the charter, by-laws or other organizational documents of any subsidiary of the Company or ( ii ) any existing statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company’s or any of its or its subsidiaries’ properties, which

 

 

 

violation, in the case of any of the Company’s subsidiaries, would, individually, or in the aggregate, have a Material Adverse Effect;

 

(l)  No consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue of the Notes or the consummation by the Company of the other transactions contemplated by this Agreement and the Indenture, except such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the issuance by the Company of the Notes and the purchase and distribution of the Notes by the Underwriters;

 

(m)  The Company and its Principal Subsidiaries possess certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by them and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect;

 

(n)  Except as disclosed in the Pricing Disclosure Package and the Prospectus, there are no pending actions, suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that are required to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus and are not so described or would not reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under the Indenture or this Agreement or which are otherwise reasonably possible to be material in the context of the sale of the Notes; and no such actions, suits or proceedings are threatened or, to the Company’s knowledge, contemplated;

 

(o)  There are no contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Registration Statement, Pricing Disclosure Package or the Prospectus or required to be described in the Registration Statement, Pricing Disclosure Package or the Prospectus which are not filed or incorporated by reference or described as required;

 

(p)  The financial statements included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and, except as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis;

 

 

(q)  Since the date of the latest audited financial statements incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus and except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, which incorporates by reference the annual report on Form 10-K for the fiscal year ended December 31, 2009, the quarterly report on Form 10-Q for the quarter ended March 31, 2010, as well as certain current reports on Form 8-K, as listed in such Prospectus, there has been no material adverse change in the business, financial condition, prospects or results of operations of the Company and its subsidiaries taken as a whole, and there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its equity interests, except the Company’s regular cash dividend on its common stock, par value $0.25 per share;

 

(r)  The Company and its consolidated subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that ( 1 ) transactions are executed in accordance with management’s general or specific authorization; ( 2 ) transactions are recorded as necessary to permit preparation of financial statements in conformity with accounting principles generally accepted in the United States (“ GAAP ”) and to maintain accountability for assets; ( 3 ) access to assets is permitted only in accordance with management’s general or specific authorization; and ( 4 ) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Except as described in the Pricing Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been ( i ) no material weakness identified by management, or by the Company’s auditors and communicated to management, in the Company’s internal control over financial reporting (whether or not remediated) and ( ii ) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

 

(s)  The Company and its consolidated subsidiaries employ disclosure controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and is accumulated and communicated to the Company’s management, including its principal executive and principal financial officer or officers, as appropriate, to allow timely decisions regarding disclosure;

 

(t)  PricewaterhouseCoopers LLP, who have certified certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm with respect to the Company and its subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Accounting Oversight Board (United States) and as required by the Securities Act; and

 

 

 

(u)  The Company is not and, after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as described in the Pricing Disclosure Package and the Prospectus, will not be an “investment company” as defined in the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

 

(v)  Neither the Company nor any of its subsidiaries nor, to the best knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has ( i ) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; ( ii ) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; ( iii ) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or ( iv ) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

 

(w)  The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

 

(x)  None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“ OFAC ”); and the Company will not directly or indirectly use the proceeds of the offering of the Notes hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

 

2.              Sale and Delivery .

 

(a)  Subject to the terms and conditions herein set forth, the Company  agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, the principal amount of each series of Notes set forth in Schedule I opposite the name of such Underwriter (plus an additional amount of Notes that such Underwriter may become obligated to purchase

 

 

 

pursuant to the provisions of Section 9 hereof) at the price set forth on Schedule I, plus accrued interest, if any, from May 17, 2010.

 

(b)  The Notes to be purchased by each Underwriter hereunder will be represented by registered global notes in book entry form which will be deposited by or on behalf of the Company with The Depository Trust Company (“ DTC ”) or its designated custodian.  The Company will deliver the Notes to the Representatives, acting on behalf of the Underwriters for the account of each Underwriter, against payment by or on behalf of such Underwriter of the amount therefor, as set forth above, by wire transfer of Federal (same day) funds to a commercial bank account located in the United States and designated in writing at least forty eight hours prior to the Closing Date by the Company to the Representatives, by causing DTC to credit the Notes to the account of one or more of the Representatives, as designated prior to the Closing Date, at DTC.  The Company will cause the global certificates representing the Notes to be made available to the Representatives, acting on behalf of the Underwriters, for checking at least twenty four hours prior to the Closing Date at the office of DTC or its designated custodian (the “ Designated Office ”).  The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on May 17, 2010 or such other time and date as the Representatives and the Company may agree upon in writing.  Such time and date are herein called the “ Closing Date. ”

 

(c)  The documents to be delivered on the Closing Date by or on behalf of the parties hereto pursuant to Section 7 hereof, including the cross receipt for the Notes and any additional documents requested by the Underwriters pursuant to Section 7(k) hereof, will be delivered at such time and date at the offices of Debevoise & Plimpton LLP, New York, New York or such other location as the Representatives and the Company may agree in writing (the “ Closing Location ”), and the Notes will be delivered at the Designated Office, all on the Closing Date.  A meeting will be held at the Closing Location at 1:00 p.m., New York City time or at such other time as the Representatives and the Company may agree in writing, on the New York Business Day next preceding the Closing Date, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto.  For the purposes of this Section 2, “ New York Business Day ” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.

 

3.              Free Writing Prospectuses .

 

(a)   The Company represents and agrees that, without the prior consent of the Representatives, it has not made and will not make any offer relating to the Notes that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act, other than a Permitted Free Writing Prospectus; each Underwriter, severally and not jointly, represents and agrees that, without the prior consent of the Company and the

 

 

 

Representatives, it has not made and will not make any offer relating to the Notes that would constitute a “free writing prospectus” as defined in Rule 405 under the Securities Act, other than a Permitted Free Writing Prospectus or a free writing prospectus that is not required to be filed by the Company pursuant to Rule 433, provided that the Underwriters may use a term sheet substantially in the form of Schedule II hereto without the consent of the Company; any such free writing prospectus (which shall include the pricing term sheet discussed in Section 3(b) hereof), the use of which has been consented to by the Company and the Representatives, is listed on Schedule III and herein called a “ Permitted Free Writing Prospectus. ”

 

(b)  The Company agrees to prepare a term sheet specifying the terms of the Notes not contained in the Preliminary Prospectus, substantially in the form of Schedule II hereto and approved by the Representatives, and to file such pricing term sheet pursuant to Rule 433(d) under the Securities Act within the time period prescribed by such Rule.

 

(c)  The Company and the Representatives have complied and will comply with the requirements of Rule 433 under the Securities Act applicable to any free writing prospectus, including timely Commission filing, where required, and legending.

 

(d)  The Company agrees that if at any time following issuance of a Permitted Free Writing Prospectus any event occurred or occurs as a result of which such Permitted Free Writing Prospectus would conflict with the information in the Registration Statement, the Preliminary Prospectus or the Prospectus, or the Pricing Disclosure Package 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, not misleading, the Company will give prompt notice thereof to the Representatives and, if requested by the Representatives, will prepare and furnish without charge to each Underwriter a free writing prospectus or other document, the use of which has been consented to by the Representatives, which will correct such conflict, statement or omission.

 

4.             Covenants and Agreements .

 

The Company covenants and agrees with each of the Underwriters:

 

(a)  That the Company will furnish without charge to the Underwriters a copy of the Registration Statement, including all documents incorporated by reference therein and exhibits filed with the Registration Statement (other than exhibits which are incorporated by reference and have previously been so furnished), and, during the period mentioned in paragraph (c) below, as many written and electronic copies of the Preliminary Prospectus, the Pricing Disclosure Package and the Prospectus, any documents incorporated by reference therein at or after the date thereof (including

 

 

 

documents from which information has been so incorporated) and any supplements and amendments thereto as each Underwriter may reasonably request;

 

(b)  That the Company will cause the Preliminary Prospectus and the Prospectus to be filed pursuant to, and in compliance with, Rule 424(b) and will promptly advise the Underwriters ( i ) when any amendment to the Registration Statement shall have been filed; provided, that, with respect to documents filed pursuant to the Exchange Act and incorporated by reference into the Registration Statement, such notice shall only be required during such time as the Underwriters are required in the reasonable opinion of the Representatives, to deliver a prospectus (or the notice referred to in Rule 173(a) under the Securities Act), ( ii ) of any request by the Commission for any amendment of the Registration Statement, ( iii ) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering, and ( iv ) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.  So long as any Underwriter is required in the reasonable opinion of the Representatives to deliver a prospectus (or the notice referred to in Rule 173(a) under the Securities Act), the Company will not file any amendment to the Registration Statement or supplement to the Preliminary Prospectus or the Prospectus unless the Company has furnished one copy of such amendment or supplement to each of the Representatives and to Debevoise & Plimpton LLP, and, if such amendment or supplement is to be filed on or prior to the Closing Date, or under circumstances where the Underwriters are required in the reasonable opinion of the Representatives, to deliver a prospectus (or the notice referred to in Rule 173(a) under the Securities Act), the Representatives, shall not reasonably have objected thereto.  If the Commission shall issue a stop order suspending the effectiveness of the Registration Statement, the Company will take such steps to obtain the lifting of that order as in the best judgment of the Company are not contrary to the interests of the Company;

 

(c)  That if, at any time when in the opinion of the Representatives the Pricing Disclosure Package or the Prospectus (or the notice referred to in Rule 173(a) under the Securities Act) is required by law to be delivered by an Underwriter or a dealer, any event shall occur as a result of which it is necessary, in the opinion of the Representatives or counsel for the Company, to amend or supplement the Pricing Disclosure Package or the Prospectus or modify the information incorporated by reference therein in order to make the statements therein, in light of the circumstances existing when the Pricing Disclosure Package or the Prospectus (or the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, not misleading, or if it shall be necessary in the opinion of the Representatives, to amend or supplement the Pricing Disclosure Package or the Prospectus or modify such information to comply with law, the Company will forthwith ( i ) prepare and furnish, at its own expense, to the Underwriters and to the

 

 

 

dealers (whose names and addresses the Underwriters will furnish to the Company) to whom Notes may have been sold by the Underwriters and to any other dealers upon reasonable request, either amendments or supplements to the Pricing Disclosure Package or the Prospectus or ( ii ) file with the Commission documents incorporated by reference in the Pricing Disclosure Package and Prospectus, which shall be so supplied to the Underwriters and such dealers, in either case so that the statements in the Pricing Disclosure Package or the Prospectus as so amended, supplemented or modified will not, in light of the circumstances when the Pricing Disclosure Package or the Prospectus (or the notice referred to in Rule 173(a) under the Securities Act) is delivered to a purchaser, be misleading or so that the Pricing Disclosure Package and the Prospectus will comply with law;

 

(d)  That, if required, the Company will endeavor to qualify, at its expense, the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Underwriters shall reasonably request and to pay all filing fees, reasonable expenses and legal fees in connection therewith and in connection with the determination of the eligibility for investment of the Notes; provided, that the Company shall not be required to qualify as a foreign corporation or a dealer in securities or to file any consents to service of process under the laws of any jurisdiction;

 

(e)  That the Company will pay the required Commission filing fees relating to the Notes within the time required by Rule 456(b)(1) under the Securities Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Securities Act;

 

(f)  That the Company will make generally available to its security holders and the holders of the Notes as soon as practicable an earnings statement of the Company covering a twelve month period beginning after the Closing Date which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder (including Rule 158 under the Securities Act); and

 

(g)  That during the period beginning on the date of this Agreement and continuing to and including the Closing Date, the Company will not offer, sell, contract to sell or otherwise dispose of any notes, any security convertible into or exchangeable into or exercisable for notes or any other debt securities substantially similar to the Notes (except for the Notes issued pursuant to this Agreement), without the prior written consent of the Representatives.

 

5.              Certain Agreements of the Underwriters .

 

(a)  Each Underwriter severally represents, warrants and agrees that: in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “ Relevant Member State ”), it has not made and will not make an offer of the Notes to the public in that Relevant Member State, except that it

 

 

 

may make an offer of Notes to the public in that Relevant Member State at any time under the following exemptions under the Prospectus Directive (as defined below), if they have been implemented in that Relevant Member State: ( i ) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; ( ii ) to any legal entity which has two or more of the following ( 1 ) an average of at least 250 employees during the last financial year, ( 2 ) a total balance sheet of more than €43,000,000 and ( 3 ) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; ( iii ) to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the Representatives for any such offer; or ( iv ) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Notes to the public shall result in a requirement for the publication by the Company or the Underwriters of a prospectus pursuant to Article 3 of the Prospectus Directive.

 

For the purposes of the preceding paragraph, the expression “offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe to the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

 

6.              Expenses .

 

The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following:  ( i ) all expenses in connection with the preparation, printing and filing of the Registration Statement as originally filed and of each amendment thereto; ( ii ) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the issue of the Notes and all other expenses in connection with the preparation, printing and filing of the Basic Prospectus, any Permitted Free Writing Prospectus, the Preliminary Prospectus, the Pricing Disclosure Package and the Prospectus, and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; ( iii ) all reasonable expenses in connection with the qualification of the Notes for offering and sale under state securities laws as provided in Section 4(d) 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 rating services for rating the Notes; ( v ) the cost of preparing the Notes; ( vi ) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture; and ( vii ) all other costs and expenses incident to the performance of its obligations hereunder

 

 

 

which are not otherwise specifically provided for in this Section.  It is understood, however, that, except as provided in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including any advertising expenses connected with any offers they may make and the fees, disbursements and expenses of counsel for the Underwriters.

 

7.              Conditions of Underwriters’ Obligations .

 

The obligations of the Underwriters hereunder shall be subject to the accuracy, at and (except as otherwise stated herein) as of the date hereof and at and as of the Closing Date, of the representations and warranties made herein by the Company, to compliance at and as of the Closing Date by the Company with its covenants and agreements herein contained and the other provisions hereof to be satisfied at or prior to the Closing Date, and to the following additional conditions:

 

(a)  ( i ) No stop order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering shall be pending before or threatened by the Commission, ( ii ) the Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for filing by the rules and regulations under the Securities Act and in accordance herewith and each Permitted Free Writing Prospectus shall have been filed by the Company with the Commission within the applicable time periods prescribed for such filings by, and otherwise in compliance with Rule 433 under the Securities Act to the extent so required and ( iii ) the Underwriters shall have received on and as of the Closing Date, a certificate dated such date, signed by an executive officer (including, without limitation, the Treasurer) of the Company to the foregoing effect.

 

(b)  Subsequent to the earlier of the Applicable Time and the execution and delivery of this Agreement, there shall not have occurred ( i ) any change in the business, financial condition, prospects or results of operations of the Company and its subsidiaries taken as one enterprise which, in the reasonable judgment of the Representatives, is material and adverse and makes it impractical or inadvisable to proceed with completion of the offering or the sale of and payment for the Notes on the terms set forth herein; ( ii ) any downgrading in the rating of any debt securities of the Company or the financial strength rating of any Principal Subsidiary of the Company by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Securities Act), or any public announcement that any such organization has newly placed under surveillance or review any such rating (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); ( iii ) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, or on the over-the-counter market or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; ( iv ) any general moratorium on commercial banking activities

 

 

 

declared by U.S. Federal or New York State authorities; ( v ) any major disruption of settlements of securities or clearance services in the United States or ( vi ) any act of terrorism in the United States, any attack on, outbreak or escalation of hostilities involving the United States, any declaration of war by Congress or any other national or international calamity or crisis if, in the judgment of the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or crisis on the financial markets makes it impractical or inadvisable to proceed with completion of the offering or sale of and payment for the Notes on the terms set forth herein.

 

(c)  Debevoise & Plimpton LLP, counsel for the Underwriters, shall have furnished to you a negative assurance letter and such opinion or opinions, each dated the Closing Date, each with respect to such matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to provide negative assurance with respect to such matters or to pass upon such matters.

 

(d)  Carol Ann Petren, Executive Vice President and General Counsel of the Company, or Danthu Phan, Associate Chief Counsel of the Company, shall have furnished to you her written opinion, dated the Closing Date, substantially in the form of Exhibit A hereto in form and substance satisfactory to you.

 

(e)  Davis Polk & Wardwell LLP, counsel for the Company, shall have furnished to you their written opinion, dated the Closing Date, substantially in the form of Exhibit B hereto in form and substance satisfactory to you.

 

(f)  At the time of execution of this Agreement, PriceWaterhouseCoopers LLC shall have furnished to you a letter dated the date of such execution, substantially in the form heretofore supplied and deemed satisfactory to you.

 

(g)  At the Closing Date, PriceWaterhouseCoopers LLC shall have furnished you a letter, dated the Closing Date, to the effect that such accountants reaffirm, as of the Closing Date and as though made on the Closing Date, the statements made in the letter furnished by such accountants pursuant to paragraph (f) of this Section 7, except that the specified date referred to in such letter will be a date not more than three business days prior to the Closing Date.

 

(h)  The Company shall have furnished or caused to be furnished to you at the Closing Date certificates of the President or any Vice President and a principal financial or accounting officer of the Company in which such officers, to the best of their knowledge after reasonable investigation, shall state that ( i ) the representations and warranties of the Company in this Agreement are true and correct, ( ii ) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date, ( iii ) subsequent to the date of the most recent financial statements in the Registration Statement, the Pricing Disclosure Package and the Prospectus, there has been no material adverse change in the business, financial condition, prospects or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Pricing Disclosure Package

 

 

 

and the Prospectus, ( iv ) to the effect set forth in paragraph (b)(ii) above, and ( v ) as to such other matters as you may reasonably request.

 

(i)  No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would as of the Closing Date, prevent the issuance or the sale of the Notes; and no injunction, restraining order or order of any other nature by any court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Notes.

 

(j)  The Notes shall be eligible for clearance and settlement through DTC.

 

(k)  On or prior to the Closing Date, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.

 

8.              Indemnification and Contribution .

 

(a)   The Company will indemnify and hold harmless each Underwriter, its affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other reasonable expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, to which such person may become subject, under the Securities 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 the Registration Statement, any preliminary prospectus, the Basic Prospectus, the Preliminary Prospectus, any Permitted Free Writing Prospectus, the Pricing Disclosure Package, the Prospectus or any free writing prospectus used by the Company other than a Permitted Free Writing Prospectus (or any such document, as from time to time amended, or deemed to be amended, supplemented or modified), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided , however , that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any preliminary prospectus, the Basic Prospectus, the Preliminary Prospectus, any Permitted Free Writing Prospectus, the Pricing Disclosure Package, the Prospectus or any free writing prospectus used by the Company other than a Permitted Free Writing Prospectus (or any such document, as from

 

 

 

time to time amended, or deemed to be amended, supplemented or modified), in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use therein.

 

(b)  Each Underwriter will, severally and not jointly, indemnify and hold harmless the Company, its directors, its officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, to the same extent as the indemnity set forth in paragraph (a) above, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any preliminary prospectus, the Basic Prospectus, the Preliminary Prospectus, any Permitted Free Writing Prospectus, the Pricing Disclosure Package, the Prospectus or any free writing prospectus used by the Company other than a Permitted Free Writing Prospectus (or any such document, as from time to time amended, or deemed to be amended, supplemented or modified), in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives expressly for use therein.

 

(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 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 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.  In any such action, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless ( i ) the indemnifying party and the indemnified party shall have mutually agreed to the contrary; ( ii ) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party; ( iii ) the indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the indemnifying party; or ( iv ) the named parties in any such action (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing

 

 

 

interest between them.  It is understood and agreed that the indemnifying party shall not, in connection with any action or related action in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all indemnified parties, and that all such fees and expenses shall be reimbursed as they are incurred.  Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representatives and any such separate firm for the Company, its directors, its officers and any control persons of the Company shall be designated in writing by the Company.  The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify each indemnified party from and against any loss or liability by reason of such settlement or judgment.  No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment ( i ) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and ( ii ) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

 

(d)  If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid 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 on the one hand and the Underwriters on the other from the offering of the Notes.  If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law 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 on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact

 

 

 

relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any reasonable legal or other reasonable expenses incurred by such indemnified party in connection with 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 Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.

 

9.             Substitution of Underwriters .

 

If any Underwriter shall default in its obligation to purchase the Notes which it has agreed to purchase hereunder and the aggregate principal amount of such Notes which such defaulting Underwriter agreed but failed to purchase does not exceed 10% of the total principal amount of Notes, the non defaulting Underwriters may make arrangements satisfactory to the Company for the purchase of the aggregate principal amount of such Notes by other persons, including any of the non defaulting Underwriters, but if no such arrangements are made by the Closing Date, the non defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Notes that such defaulting Underwriter agreed but failed to purchase.  If any Underwriter or Underwriters shall so default and the aggregate principal amount of Notes with respect to which such default or defaults occur exceeds 10% of the total principal amount of Notes and arrangements satisfactory to the non defaulting Underwriters and the Company for the purchase of such Notes by other persons are not made within 36 hours after such default, this agreement will terminate.

 

If the non defaulting Underwriter or Underwriters or substituted underwriter or underwriters are required hereby or agree to take up all or part of the Notes of the defaulting Underwriter as provided in this Section 9, ( i ) the Company shall have the right to postpone the Closing Date for a period of not more than five full business days, in

 

 

 

order that the Company may effect whatever changes may thereby be made necessary in the Registration Statement or Prospectus or in any other documents or arrangements, and the Company agrees to promptly file any amendments to the Registration Statement or supplements to the Prospectus which may thereby be made necessary, and ( ii ) the respective aggregate principal amount of Notes which the non defaulting Underwriters or substituted purchaser or purchasers shall thereafter be obligated to purchase shall be taken as the basis of their underwriting obligation for all purposes of this Agreement.  Nothing herein contained shall relieve any defaulting Underwriter of its liability to the Company or the non defaulting Underwriters for damages occasioned by its default hereunder.  Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the non defaulting Underwriters or the Company, other than as provided in Sections 8 and 11.

 

10.           Survival of Indemnities, Representations, Warranties, etc .

 

The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Notes.

 

11.           Termination .

 

If this Agreement shall be terminated pursuant to Section 9 or if for any reason the purchase of the Notes by the Underwriters is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 6 and the respective obligations of the Company and the Underwriters pursuant to Section 8 shall remain in effect.  If the purchase of the Notes by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 or the occurrence of any event specified in clause (iii) (other than any suspension of trading specific to the Company's securities), (iv), (v) or (vi) of Section 7(b), the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Notes.

 

12.           Notices .

 

In all dealings hereunder, the Representatives shall act on behalf of each of the 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 the Representatives.

 

 

 

All statements, requests, notices and agreements hereunder shall be in writing, and ( i ) if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the Underwriters in care of:

 

Banc of America Securities LLC, One Bryant Park, NY1-100-18-03, New York, NY 10036, Attention:  High Grade Debt Capital Markets Transaction Management/Legal (facsimile: (212) 901-7881);

 

Deutsche Bank Securities Inc., 60 Wall Street, 3rd Floor, New York, New York 10005; Attention: Debt Capital Markets Syndicate Desk (facsimile: (212) 469-7875), with a copy to 60 Wall Street, New York, New York 10005, Attention: General Counsel (facsimile: (212) 797-4561);

 

UBS Securities LLC, 677 Washington Boulevard, Stamford, Connecticut 06901, Attention: Fixed Income Syndicate (facsimile: (203) 719-0495);

 

and ( ii ) if to the Company shall be delivered or sent by mail, telex or facsimile transmission to CIGNA Corporation, Two Liberty Place, 1601 Chestnut Street, Philadelphia, Pennsylvania 19192, Attention: Executive Vice President and General Counsel (facsimile number: (215) 761-2824).  Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

 

13.           Successors .

 

This Agreement shall inure to the benefit of and be binding upon the several Underwriters and the Company and their respective successors and the directors, trustees, officers and controlling persons referred to in Section 8 of this Agreement.  Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person other than the persons mentioned in the preceding sentence any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be, and being, for the sole and exclusive benefit of such persons and for the benefit of no other person; except that the representations, warranties, covenants, agreements and indemnities of the Company contained in this Agreement shall also be for the benefit of the person or persons, if any, who control any Underwriter within the meaning of the Securities Act or the Exchange Act, and the representations, warranties, covenants, agreements and indemnities of the several Underwriters shall also be for the benefit of each director of the Company, each person who has signed the Registration Statement and the person or persons, if any, who control the Company within the meaning of the Securities Act.

 

 

14.           Relationship .

 

The Company acknowledges and agrees that ( i ) the purchase and sale of the Notes pursuant to this Agreement is an arm's-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, ( ii ) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, ( iii ) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and ( iv ) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate.  The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

 

15.           Applicable Law .

 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

16.           Counterparts .

 

This Agreement may be executed by any one or more of the parties hereto 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.  Delivery of an executed signature page of this Agreement by facsimile or any other rapid transmission device designed to produce a written record of the communication transmitted shall be as effective as delivery of a manually executed counterpart thereof.

 

 

[signature page follows]

 

 

 

If the foregoing is in accordance with your understanding, please sign and return to us five counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters and the Company.  It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.

 

 

Accepted as of the date hereof:

 

 

BANC OF AMERICA SECURITIES LLC

DEUTSCHE BANK SECURITIES INC.

UBS SECURITIES LLC

 

as the Representatives of the several Underwriters

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.2

 

SUPPLEMENTAL INDENTURE NO. 5

 

 

THIS SUPPLEMENTAL INDENTURE NO. 5 , dated as of May 17, 2010 (the “ Supplemental Indenture No. 5 ”), between CIGNA CORPORATION , a corporation duly organized and existing under the laws of the State of Delaware (the “ Company ”), and U.S. BANK NATIONAL ASSOCIATION , a national banking association duly organized and existing under the laws of the United States of America, as trustee (the “ Trustee ”).

 

 

RECITALS:

 

WHEREAS, the Company and the Trustee are parties to a Senior Indenture, dated as of August 16, 2006, as amended by Supplemental Indenture No. 3 thereto, dated as of March 7, 2008 (as amended, the “ Base Indenture ” and as supplemented by this Supplemental Indenture No. 5, the “ Indenture ”), relating to the issuance from time to time by the Company of its Securities on terms to be specified at the time of issuance;

 

WHEREAS, Section 901(7) of the Base Indenture provides that the Company may enter into a supplemental indenture to establish the terms and provisions of a series of Securities issued pursuant to the Indenture;

 

WHEREAS, the Company desires to issue a series of Securities, and has duly authorized the creation and issuance of such Securities and the execution and delivery of this Supplemental Indenture No. 5 to modify the Base Indenture and provide certain additional provisions as hereinafter described;

 

WHEREAS, the parties hereto deem it advisable to enter into this Supplemental Indenture No. 5 for the purpose of establishing the terms of such Securities, providing for the rights, obligations and duties of the Trustee with respect to such Securities; and

 

WHEREAS, all conditions and requirements of the Base Indenture necessary to make this Supplemental Indenture No. 5 a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto.

 

NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged by the parties hereto, the parties hereto agree as follows:

 

 

ARTICLE I

THE SENIOR NOTES

 

Section 1.01   Title of Securities .  There shall be a series of Securities designated the “5.125% Senior Notes due 2020” of the Company (the “ Senior Notes ”).

 

 

Section 1.02   Limitation of Aggregate Principal Amount .  The aggregate principal amount of the Senior Notes shall initially be limited to $300,000,000 (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, Senior Notes pursuant to Sections 304, 305, 306, 906 or 1107 of the Indenture and except for any Securities which, pursuant to Section 303 of the Indenture, are deemed never to have been authenticated and delivered thereunder).  The Company may, without the consent of the Holders of the Senior Notes, issue additional Senior Notes having the same interest rate, maturity date, CUSIP number and other terms (other than issue date and issue price) (“ Additional Senior Notes ”).  Any Additional Senior Notes, together with the Senior Notes, will constitute a single series of Securities under the Indenture.  No Additional Senior Notes may be issued if an Event of Default under the Indenture has occurred and is continuing with respect to the Senior Notes.

 

Section 1.03   Principal Payment Date .  The principal amount of the Senior Notes outstanding (together with any accrued and unpaid interest) shall be payable in a single installment on June 15, 2020, which date shall be the Stated Maturity of the Senior Notes.

 

Section 1.04   Interest and Interest Rates .  The rate of interest on each Senior Note shall be 5.125% per annum, accruing from May 17, 2010, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2010 until the principal thereof is paid or made available for payment.  The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year of twelve 30-day months.  The amount of interest payable for any period shorter than a full monthly period shall be computed on the basis of the actual number of calendar days elapsed in such a period.  In the event that any Interest Payment Date, Redemption Date, Change of Control Payment Date, Maturity or Stated Maturity of any Senior Note is not a Business Day, then payment of interest or principal (and premium, if any) payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay).  The interest so payable in respect of any Senior Note, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the Person in whose name such Senior Note (or one or more Predecessor Securities) is registered at the close of business on the fifteenth calendar day (whether or not a Business Day) prior to such Interest Payment Date (the “ Regular Record Date ”).  Any such interest not punctually paid or duly provided for in respect of any Senior Note shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may either be paid to the Person in whose name such Senior Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such Defaulted Interest, notice whereof shall be given to the Holders of the Senior Notes not less than 10 calendar days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on

 

 

 

which the Senior Notes may be listed, and upon such notice as may be required by such exchange.

 

Section 1.05   Place of Payment .  The place where the Senior Notes may be presented or surrendered for payment, where the Senior Notes may be surrendered for registration of transfer or exchange and where notices and demand to or upon the Company in respect of the Senior Notes and the Indenture may be served shall be the Corporate Trust Office of the Trustee or the Paying Agent’s office maintained for that purpose in the Borough of Manhattan, City of New York.

 

Section 1.06   Optional Redemption .

 

(a)   The Company may redeem the Senior Notes, at any time, and from time to time, in whole or in part, at a redemption price equal to the greater of ( i ) 100% of the principal amount of such Senior Notes to be redeemed and ( ii ) the sum of the present values of the remaining scheduled payments of principal and interest (excluding interest accrued to the Redemption Date) on the Senior Notes to be redeemed from the Redemption Date to the Stated Maturity date discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points, plus, in each case, accrued and unpaid interest on the Senior Notes to the Redemption Date (the “ Redemption Price ”).  Unless the Company defaults in payment of the Redemption Price, interest will cease to accrue on the Senior Notes called for redemption on and after the Redemption Date.

 

(b)   The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

 

(c)   Notice of redemption shall be given in accordance with Section 1104 of the Indenture; provided that, any such notice of redemption shall be given by first-class mail, postage pre-paid, mailed not less than 15 nor more than 60 days prior to the Redemption Date, to each holder of the Senior Notes to be redeemed, at the holder’s address appearing in the Security Register (as defined in the Indenture).  If less than all of the Senior Notes then Outstanding are to be redeemed, the Trustee will select the particular Senior Notes or portions thereof in accordance with Section 1103 of the Indenture.

 

(d)   For the purposes of this Section 1.06 of Supplemental Indenture No. 5, the terms below are defined as follows:

 

“ Comparable Treasury Issue ” means the United States Treasury Security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate

 

 

debt securities of comparable maturity to the remaining term of the Senior Notes to be redeemed.

 

“ Comparable Treasury Price ” means, with respect to any Redemption Date for any Senior Notes, the average of all Reference Treasury Dealer Quotations obtained.

 

“ Independent Investment Banker ” means one of the Reference Treasury Dealers appointed by the Trustee after consultation with the Company.

 

“ Primary Treasury Dealer ” means a primary U.S. Government securities dealer in the United States.

 

“ Reference Treasury Dealer ” means Banc of America Securities LLC, Deutsche Bank Securities Inc., UBS Securities LLC and their successors; provided , however , that if any Reference Treasury Dealer ceases to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer.

 

“ Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third Business Day preceding such Redemption Date.

 

“ Treasury Rate ” means, with respect to any Redemption Date, ( 1 ) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the maturity date for the Senior Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or ( 2 ) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield-to-maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

 

Section 1.07   Change of Control Offer .

 

 

(a)   If a Change of Control Triggering Event occurs, unless the Company has exercised its right to redeem the Senior Notes in full, the Company will make an offer to each Holder (the “ Change of Control Offer ”) to repurchase any and all of such Holder’s Senior Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of the Senior Notes repurchased plus accrued and unpaid interest, if any, thereon, to the date of repurchase (the “ Change of Control Payment ”).  Within 30 days following any Change of Control Triggering Event, the Company will mail a notice to Holders of Senior Notes describing the transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase the Senior Notes on the date specified in the notice, which date will be no less than 30 days and no more than 60 days from the date such notice is mailed (the “ Change of Control Payment Date ”), pursuant to the procedures required by the Senior Notes and described in such notice.

 

(b)   The Company will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Senior Notes as a result of a Change of Control Triggering Event.  To the extent that the provisions of any securities laws or regulations conflict with the Change of Control repurchase provisions of the Senior Notes, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control repurchase provisions of the Senior Notes by virtue of such conflicts.

 

(c)   The Company will not be required to offer to repurchase the Senior Notes upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases on the applicable date all Senior Notes properly tendered and not withdrawn under its offer; provided that for all purposes of the Senior Notes and the Indenture, a failure by such third party to comply with the requirements of such offer and to complete such offer shall be treated as a failure by the Company to comply with its obligations to offer to purchase the Senior Notes unless the Company promptly makes an offer to repurchase the Senior Notes at 101% of the principal amount thereof plus accrued and unpaid interest, if any, thereon, to the date of repurchase, which shall be no later than 30 days after the third party’s scheduled Change of Control Payment Date.

 

(d)   On the Change of Control Payment Date, the Company will, to the extent lawful:

 

  (i)   accept or cause a third party to accept for payment all Senior Notes properly tendered pursuant to the Change of Control Offer;

 

 

(ii)   deposit or cause a third party to deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Senior Notes properly tendered; and

 

(iii)   deliver or cause to be delivered to the Trustee the Senior Notes properly accepted, together with an officer’s certificate stating the principal amount of Senior Notes being purchased.

 

(e)   For the purposes of this Section 1.07, the terms below are defined as follows:

 

“ Below Investment Grade Rating Event ” means the Senior Notes are rated below all Investment Grade Ratings by at least two of the three Rating Agencies on any date from the earlier of ( 1 ) the occurrence of a Change of Control and ( 2 ) public notice of the Company’s intention to effect a Change of Control, in each case until the end of the 60-day period following public notice of the occurrence of the Change of Control; provided , however , that if ( a ) during such 60-day period one or more Rating Agencies has publicly announced that it is considering the possible downgrade of the Senior Notes, and ( b ) a downgrade by each of the Rating Agencies that has made such an announcement would result in a Below Investment Grade Rating Event, then such 60-day period shall be extended for such time as the rating of the Senior Notes by any such Rating Agency remains under publicly announced consideration for possible downgrade to a rating below an Investment Grade Rating and a downgrade by such Rating Agency to a rating below an Investment Grade Rating could cause a Below Investment Grade Rating Event.  Notwithstanding the foregoing, a rating event otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a rating event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Company’s or the Trustee’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the rating event).

 

“ Change of Control ” means the occurrence of any of the following: ( 1 ) direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than to the Company or one of its subsidiaries; ( 2 ) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Company or one of its subsidiaries becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s voting stock; or ( 3 ) the first day

 

 

 

on which a majority of the members of the Company’s Board of Directors are not Continuing Directors; provided , however , that a transaction will not be deemed to involve a Change of Control if ( A ) the Company becomes a wholly owned subsidiary of a holding company and ( B )( x ) the holders of the voting stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s voting stock immediately prior to that transaction or ( y ) immediately following that transaction no Person is the beneficial owner, directly or indirectly, of more than 50% of the voting stock of such holding company. For purposes of this definition, “ voting stock ” means capital stock of any class or kind the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of the Company, even if the right to vote has been suspended by the happening of such a contingency.

 

“ Change of Control Triggering Event ” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

 

“ Continuing Director ” means, as of any date of determination, any member of the Board of Directors of the Company who ( 1 ) was a member of the Board of Directors of the Company on the date of the issuance of the Senior Notes; or ( 2 ) was nominated for election or elected to the Board of Directors of the Company with the approval of a majority of the Continuing Directors who were members of such Board of Directors of the Company at the time of such nomination or election (either by specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director).

 

“ Fitch ” means Fitch Ratings Inc. and its successors.

 

“ Investment Grade Rating ” means a rating by Moody’s equal to or higher than Baa3 (or the equivalent under a successor rating category of Moody’s), a rating by S&P equal to or higher than BBB- (or the equivalent under any successor rating category of S&P), a rating by Fitch equal to or higher than BBB- (or the equivalent under any successor rating category of Fitch), and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the Company under the circumstances permitting the Company to select a replacement agency and in the manner for selecting a replacement agency, in each case as set forth in the definition of “ Rating Agencies ”.

 

“ Moody’s ” means Moody’s Investors Service, Inc. and its successors.

 

“ Rating Agencies ” means ( 1 ) Moody’s, S&P and Fitch; and ( 2 ) if any or all of Moody’s, S&P or Fitch ceases to rate the Senior Notes or fails to make a rating of the Senior Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act, that the Company selects (pursuant to a resolution of the

 

 

 

Company’s Board of Directors) as a replacement agency for any of Moody’s, S&P or Fitch, or all of them, as the case may be.

 

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

 

Section 1.08   Sinking Fund Obligations .  The Company has no obligation to redeem or purchase any Senior Notes pursuant to any sinking fund or analogous requirement or upon the happening of a specified event or at the option of a Holder thereof.

 

Section 1.09   Denomination .  The Senior Notes shall be issuable only in registered form without coupons and in denominations of $2,000 and multiples of $1,000 in excess thereof.

 

Section 1.10   Currency .  Principal and interest on the Senior Notes shall be payable in such coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts.

 

Section 1.11   Senior Notes to be Issued in Global Form .  The Senior Notes will be permanently represented by one or more securities in global form (the “ Global Note ”). The Company hereby designates The Depository Trust Company as the initial Depositary for the Global Note.

 

Section 1.12   Form of Senior Notes .  The Senior Notes shall be substantially in the form attached as Annex A hereto.

 

Section 1.13   Security Registrar and Paying Agent for the Senior Notes .  The Trustee shall serve initially as the Security Registrar and the Paying Agent.

 

Section 1.14   Defeasance .  The provisions of Section 1006 of the Indenture shall apply to the Senior Notes.

 

ARTICLE II

MISCELLANEOUS

 

Section 2.01   Integral Part; Effect of Supplement on Indenture .  This Supplemental Indenture No. 5 constitutes an integral part of the Indenture.  Except for the amendments and supplements made by this Supplemental Indenture No. 5 (which only apply to the Senior Notes and any other Securities issued thereunder), the Base Indenture shall remain in full force and effect as executed.

 

Section 2.02   General Definitions .  For purposes of this Supplemental Indenture No. 5:

 

 

(a)   Capitalized terms used herein without definition shall have the meanings specified in the Base Indenture;

 

(b)   All references to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of the Base Indenture; and

 

(c)   The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Supplemental Indenture No. 5.

 

Section 2.03   Adoption, Ratification and Confirmation .  The Indenture, as supplemented by this Supplemental Indenture No. 5, is in all respects hereby adopted, ratified and confirmed.

 

Section 2.04   Trustee Not Responsible for Recitals . The recitals in this Supplemental Indenture No. 5 are made by the Company, and the Trustee assumes no responsibility for the correctness of such recitals.  The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture No. 5.

 

Section 2.05   Counterparts .  This Supplemental Indenture No. 5 may be executed in multiple counterparts, each of which shall be regarded for all purposes as an original and all of which shall constitute but one and the same instrument.

 

Section 2.06   Governing Law .  This Supplemental Indenture No. 5 and the Senior Notes shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made or instruments entered into and, in each case, performed in said state.

 

 

[signature page follows]

 

 

IN WITNESS WHEREOF, the Company and the Trustee have executed this Supplemental Indenture No. 5 as of the date first above written.

 

 

ANNEX A

 

FORM OF GLOBAL NOTE

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE AND IS REGISTERED IN THE NAME OF CEDE & CO.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFERS OF THIS GLOBAL SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN NOMINEES OF CEDE & CO. OR A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE.

 

 

CIGNA CORPORATION

5.125% Senior Note Due 2020

 

CUSIP: 125509 BM0   

 

 

CIGNA CORPORATION, a Delaware corporation (herein called the “ Company ”), which term includes any successor Person under the Indenture hereinafter referred to, for value received, hereby promises to pay to CEDE & CO., or its registered assigns, the principal sum of Three Hundred Million Dollars ($300,000,000) upon presentation and surrender of this Security on June 15, 2020 and to pay interest thereon accruing from May 17, 2010, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2010, at the rate of 5.125% per annum, until the principal hereof is paid or made available for payment.  The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record

 

 

 

Date for such interest payment, which shall be the close of business on the fifteenth calendar day (whether or not a Business Day) prior to such Interest Payment Date.  Any such interest not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 calendar days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

Payment of the principal of (and premium, if any) and interest on this Security will be made at the Corporate Trust Office of the Trustee or the Paying Agent’s office maintained for that purpose in the Borough of Manhattan, City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided , however , that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

 

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

 

 

 

 

 

 

 

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

 

This is one of the Securities of the series designated under, and referred to in, the within-mentioned Indenture.

 

 

 

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “ Securities ”), issued and to be issued in one or more series under a Senior Indenture, dated as of August 16, 2006, as amended by a Supplemental Indenture No. 3 thereto, dated as of March 7, 2008, and as supplemented by a Supplemental Indenture No. 5, dated as of May 17, 2010 (as so amended and supplemented, the “ Indenture ”), between the Company, as issuer, and U.S. Bank National Association, as trustee (herein called the “ Trustee ”, which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  This Security is one of the series designated on the face hereof, initially limited in aggregate principal amount to $300,000,000, subject to future issuances of additional Securities pursuant to Section 301 of the Indenture.

 

The Securities of this series are subject to redemption upon not less than 15 calendar days’ nor more than 60 calendar days’ notice by mail, at any time, and from time to time, in whole or in part, at a redemption price equal to the greater of ( i ) 100% of the principal amount of such Securities to be redeemed and ( ii ) the sum of the present values of the remaining scheduled payments of principal and interest (excluding interest accrued to the Redemption Date) on the Securities to be redeemed from the Redemption Date to the Stated Maturity date discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, plus 25 basis points, plus, in each case, accrued and unpaid interest on the Securities to the Redemption Date.

 

“ Treasury Rate ” means, with respect to any Redemption Date, ( 1 ) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the maturity date for the Senior Notes, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue will be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or ( 2 ) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield-to-

 

 

 

 

maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date.

 

The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.

 

“ Comparable Treasury Issue ” means the United States Treasury Security selected by an Independent Investment Banker as having a maturity comparable to the remaining term of the Senior Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Senior Notes to be redeemed.

 

“ Comparable Treasury Price ” means, with respect to any Redemption Date for any Senior Notes, the average of all Reference Treasury Dealer Quotations obtained.

 

“ Independent Investment Banker ” means one of the Reference Treasury Dealers appointed by the Trustee after consultation with the Company.

 

“ Primary Treasury Dealer ” means a primary U.S. Government securities dealer in the United States.

 

“ Reference Treasury Dealer ” means Banc of America Securities LLC, Deutsche Bank Securities Inc., UBS Securities LLC and their successors; provided , however , that if any Reference Treasury Dealer ceases to be a Primary Treasury Dealer, the Company will substitute therefor another Primary Treasury Dealer.

 

“ Reference Treasury Dealer Quotations ” means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by that Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third Business Day preceding such Redemption Date.

 

Unless the Company defaults in payment of the Redemption Price, interest will cease to accrue on the Securities of this series called for redemption on and after the Redemption Date.  In the event of redemption of this Security in part only, a new Security or Securities of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.

 

If a Change of Control Triggering Event occurs, unless the Company has exercised its right to redeem the Securities in full, the Company will make an offer to each Holder (the “ Change of Control Offer ”) to repurchase any and all of such Holder’s \

 

 

 

Securities at a repurchase price in cash equal to 101% of the aggregate principal amount of the Securities repurchased plus accrued and unpaid interest, if any, thereon, to the date of repurchase (the “ Change of Control Payment ”).  Within 30 days following any Change of Control Triggering Event, the Company will mail a notice to Holders of Securities describing the transaction or transactions that constitute the Change of Control Triggering Event and offering to repurchase the Securities on the date specified in the notice, which date will be no less than 30 days and no more than 60 days from the date such notice is mailed (the “ Change of Control Payment Date ”), pursuant to the procedures required hereby and described in such notice.

 

The Company will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Securities as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control repurchase provisions of the Securities, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control repurchase provisions of the Securities by virtue of such conflicts.

 

The Company will not be required to offer to repurchase the Securities upon the occurrence of a Change of Control Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases on the applicable date all Securities properly tendered and not withdrawn under its offer; provided   that for all purposes of the Securities and the Indenture, a failure by such third party to comply with the requirements of such offer and to complete such offer shall be treated as a failure by the Company to comply with its obligations to offer to purchase the Securities unless the Company promptly makes an offer to repurchase the Securities at 101% of the principal amount thereof plus accrued and unpaid interest, if any, thereon, to the date of repurchase, which shall be no later than 30 days after the third party’s scheduled Change of Control Payment Date.

 

On the Change of Control Payment Date, the Company will, to the extent lawful:

 

·	accept or cause a third party to accept for payment all Securities properly tendered pursuant to the Change of Control Offer;

 

·	deposit or cause a third party to deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Securities properly tendered; and

 

 

 

·	deliver or cause to be delivered to the Trustee the Securities properly accepted, together with an officer’s certificate stating the principal amount of Securities being purchased.

 

“ Below Investment Grade Rating Event ” means the Securities are rated below all Investment Grade Ratings by at least two of the three Rating Agencies on any date from the earlier of ( 1 ) the occurrence of a Change of Control and ( 2 ) public notice of the Company’s intention to effect a Change of Control, in each case until the end of the 60-day period following public notice of the occurrence of the Change of Control; provided , however , that if ( i ) during such 60-day period one or more Rating Agencies has publicly announced that it is considering the possible downgrade of the Securities, and ( ii ) a downgrade by each of the Rating Agencies that has made such an announcement would result in a Below Investment Grade Rating Event, then such 60-day period shall be extended for such time as the rating of the Securities by any such Rating Agency remains under publicly announced consideration for possible downgrade to a rating below an Investment Grade Rating and a downgrade by such Rating Agency to a rating below an Investment Grade Rating could cause a Below Investment Grade Rating Event. Notwithstanding the foregoing, a rating event otherwise arising by virtue of a particular reduction in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a rating event for purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the Trustee in writing at the Company’s or the Trustee’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control has occurred at the time of the rating event).

 

“ Change of Control ” means the occurrence of any of the following: ( 1 ) direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than to the Company or one of its subsidiaries; ( 2 ) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Company or one of its subsidiaries becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of the Company’s voting stock; or ( 3 ) the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors; provided , however , that a transaction will not be deemed to involve a Change of Control if ( A ) the Company becomes a wholly owned subsidiary of a holding company and ( B )( x ) the holders of the voting stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s voting stock immediately prior to that transaction or ( y ) immediately

 

 

 

following that transaction no Person is the beneficial owner, directly or indirectly, of more than 50% of the voting stock of such holding company. For purposes of this definition, “ voting stock ” means capital stock of any class or kind the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of the Company, even if the right to vote has been suspended by the happening of such a contingency.

 

“ Change of Control Triggering Event ” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

 

“ Continuing Director ” means, as of any date of determination, any member of the Board of Directors of the Company who (1) was a member of the Board of Directors of the Company on the date of the issuance of the Securities; or (2) was nominated for election or elected to the Board of Directors of the Company with the approval of a majority of the Continuing Directors who were members of such Board of Directors of the Company at the time of such nomination or election (either by specific vote or by approval of the Company’s proxy statement in which such member was named as a nominee for election as a director).

 

“ Fitch ” means Fitch Ratings Inc. and its successors.

 

“ Investment Grade Rating ” means a rating by Moody’s equal to or higher than Baa3 (or the equivalent under a successor rating category of Moody’s), a rating by S&P equal to or higher than BBB- (or the equivalent under any successor rating category of S&P), a rating by Fitch equal to or higher than BBB- (or the equivalent under any successor rating category of Fitch), and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the Company under the circumstances permitting the Company to select a replacement agency and in the manner for selecting a replacement agency, in each case as set forth in the definition of “Rating Agencies”.

 

“ Moody’s ” means Moody’s Investors Service, Inc. and its successors.

 

“ Rating Agencies ” means ( 1 ) Moody’s, S&P and Fitch; and ( 2 ) if any or all of Moody’s, S&P or Fitch ceases to rate the Securities or fails to make a rating of the Securities publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act, that the Company selects (pursuant to a resolution of the Company’s Board of Directors) as a replacement agency for any of Moody’s, S&P or Fitch, or all of them, as the case may be.

 

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

 

 

 

If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of each series to be affected.  The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, or the right of the Holder of this Security, which is absolute and unconditional, to pay, or, in the case of the Holder of this Security, to receive payment of, the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the Corporate Trust Office of the Trustee or the Paying Agent’s office where the principal of (and premium, if any) and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing; and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $2,000 and multiples of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for other Securities of this series, of a like tenor and aggregate principal amount but of a different authorized denomination, as requested by the Holder surrendering the same.

 

 

 

No service charge shall be made for any such registration of transfer or exchange, but the Company or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Sections 304, 906 or 1107 of the Indenture not involving any transfer.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture provides that the Company, at the Company’s option, ( a ) will be discharged from any and all obligations in respect of the Securities (except for certain obligations to register the transfer or exchange of Securities, replace stolen, lost or mutilated Securities, maintain paying agencies and hold moneys for payment in trust) or ( b ) need not comply with certain restrictive covenants of the Indenture, in each case if the Company deposits, in trust with the Trustee, money, or U.S. Government Obligations (or Foreign Government Obligations if the Securities are denominated in a foreign currency or currencies) which through the payment of interest thereon and principal thereof in accordance with their terms will provide money, in an amount sufficient to pay all the principal (including any mandatory sinking fund payments) of (and premium, if any) or interest on the Securities on the dates such payments are due in accordance with the terms of such Securities, and certain other conditions are satisfied.

 

No recourse shall be had for the payment of the principal of (and premium, if any) or interest on this Security, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer, employee, agent or director, as such, past, present or future, of the Company or of any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

ASSIGNMENT FORM

 

I or we assign and transfer this Security to:                                                                                                                                                                                                             

 

Insert social security or other identifying number of assignee

 

                                                                                                                                                                                                                                                                                         

 

 

Print or type name, address and zip code of assignee

 

                                                                                                                                                                                                                                                                                         

 

                                                                                                                                                                                                                                                                                         

 

and irrevocably appoint _______________________, as agent, to transfer this Security on the books of the Company.

 

The agent may substitute another to act for him.

 

 

Signature Guarantee*:

 

*   The Holder’s signature must be guaranteed by a member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States or an “eligible guarantor institution” as defined by Rule 17Ad-15 under the Exchange Act.

 

 

 

 

 

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