Exhibit 1.1
Execution
Copy
CVS CAREMARK
CORPORATION
$1,500,000,000 6.125% Senior
Notes due 2039
Underwriting
Agreement
September 8, 2009
Barclays
Capital Inc.
Banc of
America Securities LLC
BNY Mellon
Capital Markets, LLC
J.P. Morgan
Securities Inc. and
Wells Fargo
Securities, LLC
As Representatives of the several
Underwriters
named in Schedule I
hereto
c/o Barclays Capital Inc.
745 Seventh Avenue
New York, New
York 10019
Ladies and Gentlemen:
CVS Caremark Corporation, a Delaware
corporation (the “ Company ”), proposes to issue
and sell $1,500,000,000 aggregate principal amount of its 6.125%
Senior Notes due 2039 (the “ Notes ”) to the
several underwriters named on Schedule I hereto (the “
Underwriters ”), for which Barclays Capital Inc., Banc
of America Securities LLC, BNY Mellon Capital Markets, LLC, J.P.
Morgan Securities Inc. and Wells Fargo Securities, LLC are acting
as representatives (the “ Representatives
”). The Notes will (i) have terms and provisions
which are summarized in the Disclosure Package as of the Applicable
Time and the Prospectus dated as of the date hereof (each as
defined in Section 1(a) hereof) and (ii) be issued pursuant to an
Indenture dated as of August 15, 2006 (the “ Indenture
”) between the Company and The Bank of New York Trust
Company, N.A., as Trustee (the “ Trustee
”). This agreement (this “ Agreement
”) is to confirm the agreement concerning the purchase of the
Notes from the Company by the Underwriters.
1.
Representations, Warranties and Agreements of the Company
. The Company represents and warrants to, and agrees
with, each Underwriter that:
(a) An
“automatic shelf registration statement” (as defined in
Rule 405 under the Securities Act of 1933, as amended (the
“ Securities Act ”)) on Form S-3 in respect of
the Notes (File No. 333-143110) (i) has been prepared by the
Company in conformity with the requirements of the Securities Act,
and the rules and regulations (the “ Rules and
Regulations ”) of the Securities and Exchange Commission
(the “ Commission ”) thereunder, (ii) has been
filed with the Commission under the Securities Act not earlier than
the date that is three years prior to the Closing Date (as defined
in Section 3 hereof) and (iii) upon its filing with the
Commission, automatically became and is effective under the
Securities Act. Copies of such registration statement
and any amendment thereto (excluding exhibits to such registration
statement but including all documents incorporated by reference in
each prospectus contained therein) have been delivered by the
Company to the Representatives; and no other document with respect
to such registration statement or any such document incorporated by
reference therein has heretofore been filed or transmitted for
filing with the Commission. For purposes of this
Agreement, the following terms have the specified
meanings:
“ Applicable Time ” means
3:45 p.m. (New York City time) on the date of this
Agreement;
“ Base Prospectus ” means the
base prospectus filed as part of the Registration Statement, in the
form in which it has most recently been amended on or prior to the
date hereof, relating to the Notes;
“Disclosure Package
” means, as of the Applicable
Time, the most recent Preliminary Prospectus, together with each
Issuer Free Writing Prospectus filed or used by the Company on or
before the Applicable Time and identified on Schedule II hereto,
other than a road show that is an Issuer Free Writing Prospectus
under Rule 433 of the Rules and Regulations;
“ Effective Date ” means any
date as of which any part of the Registration Statement or any
post-effective amendment thereto relating to the Notes became, or
is deemed to have become, effective under the Securities Act in
accordance with the Rules and Regulations (including pursuant to
Rule 430B of the Rules and Regulations);
“ Final Term Sheet ” means
the term sheet prepared pursuant to Section 4(a) of the Agreement
and substantially in the form attached in Schedule III
hereto;
“ Issuer Free Writing Prospectus
” means each “free writing prospectus” (as
defined in Rule 405 of the Rules and Regulations) prepared by or on
behalf of the Company or used or referred to by the Company in
connection with the offering of the Notes, including the Final Term
Sheet;
“ Preliminary Prospectus ”
means any preliminary prospectus relating to the Notes, including
the Base Prospectus and any preliminary prospectus supplement
thereto, included in the Registration Statement or as filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations
and provided to the Representatives for use by the
Underwriters;
“ Prospectus ” means the
final prospectus relating to the Notes, including the Base
Prospectus and the final prospectus supplement thereto relating to
the Notes, as filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations and provided to the Representatives for
use by the Underwriters; and
“ Registration Statement ”
means, collectively, the various parts of the above-referenced
registration statement, each as amended as of the Effective Date
for such part, including any Preliminary Prospectus and the
Prospectus, all exhibits to such registration statement and all
documents incorporated by reference therein.
Any reference to the “ most recent
Preliminary Prospectus ” will be deemed to refer to the
latest Preliminary Prospectus included in the Registration
Statement or filed pursuant to Rule 424(b) of the Rules and
Regulations prior to or on the date hereof (including, for purposes
of this Agreement, any documents incorporated by reference therein
prior to or on the date of this Agreement). Any
reference to any Preliminary Prospectus or the Prospectus will be
deemed to refer to and include any documents incorporated by
reference therein pursuant to Form S-3 under the Securities Act as
of the date of such Preliminary Prospectus or the Prospectus, as
the case may be. Any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus will be
deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated
by reference in such Preliminary Prospectus or the Prospectus, as
the case may be; and any reference to any amendment to the
Registration Statement will be deemed to include any annual report
of the Company on Form 10-K filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Date
that is incorporated by reference in the Registration
Statement.
(b) The
Commission has not issued any order preventing or suspending the
effectiveness of the Registration Statement or preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus; and no proceeding for any
such purpose or pursuant to Section 8A of the Securities Act
against the Company or related to the offering has been instituted
or, to the Company’s knowledge, threatened by the
Commission. The Commission has not issued any order
directed to any document incorporated by reference in the most
recent Preliminary Prospectus or the Prospectus, and no proceeding
has been instituted or, to the Company’s knowledge,
threatened by the Commission with respect to any document
incorporated by reference in the most recent Preliminary Prospectus
or the Prospectus. The Commission has not notified the
Company of any objection to the use of the form of the Registration
Statement.
(c) The
Company is a “well-known seasoned issuer” (as defined
in Rule 405 of the Rules and Regulations) and has not been, and
continues not to be, an “ineligible issuer” (as defined
in Rule 405 of the
Rules and Regulations), in each case
at all times relevant under the Securities Act in connection with
the offering of the Notes.
(d) The
Registration Statement conformed on the Effective Date and
conforms, and any amendment to the Registration Statement filed
after the date hereof will conform, in all material respects, to
the requirements of the Securities Act and the Rules and
Regulations. The most recent Preliminary Prospectus
conforms on the date hereof, and the Prospectus, and any amendment
or supplement thereto, will conform as of its date and as of the
Closing Date, in all material respects, to the requirements of the
Securities Act and the Rules and Regulations. The
documents incorporated by reference in the most recent Preliminary
Prospectus or the Prospectus conformed, and any further documents
so incorporated will conform, when filed with the Commission, in
all material respects to the requirements of the Exchange Act or
the Securities Act, as applicable, and the Rules and Regulations;
and no such documents have been filed with the Commission since the
close of business of the Commission on the Business Day immediately
prior to the date hereof.
(e) The
Registration Statement does not, as of the date hereof, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that
no representation or warranty is made as to information contained
in or omitted from the Registration Statement in reliance upon and
in conformity with written information furnished to the Company
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein (which information is specified
in Section 12 hereof).
(f) The
Disclosure Package did not, as of the Applicable Time, contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that no
representation or warranty is made as to information contained in
or omitted from the Disclosure Package in reliance upon and in
conformity with written information furnished to the Company
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein (which information is specified
in Section 12 hereof).
(g) The
Prospectus, and any amendment or supplement thereto, will not, as
of its date and on the Closing Date, contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that no representation or
warranty is made as to information contained in or omitted from the
Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by
or on behalf of any Underwriter specifically for inclusion therein
(which information is specified in Section 12 hereof).
(h) The
documents incorporated by reference in any Preliminary Prospectus
or the Prospectus did not, and any further documents incorporated
by reference therein will not, when filed with the Commission,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(i) The
Company has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its
business as described in the most recent Preliminary Prospectus and
the Prospectus; and the Company is duly qualified to do business as
a foreign corporation in good standing in all other jurisdictions
in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to
be so qualified or be in good standing would not have a material
adverse effect on the financial condition, business, properties,
results of operations or affairs of the Company and its
subsidiaries taken as a whole (a “ Material Adverse
Effect ”).
(j) Each
subsidiary of the Company that is material to the Company and its
subsidiaries taken as a whole (collectively, the “
Significant Subsidiaries ”) is listed on Exhibit
A hereto, together with its jurisdiction of organization and
the beneficial ownership of the Company therein. Each
Significant Subsidiary has been duly organized and is an existing
corporation or limited liability company in good
standing under the laws of the jurisdiction of its formation, with
corporate power and authority to own its properties and conduct its
business as described in the most recent Preliminary Prospectus and
the Prospectus; and each Significant
Subsidiary of the Company is duly
qualified to do business as a foreign entity in good standing in
all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where the failure to be so qualified or in good standing would not
have a Material Adverse Effect; all of the issued and outstanding
capital stock or membership interests of each Significant
Subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable; and the capital stock
of each Significant Subsidiary owned by the Company, directly or
through subsidiaries, is owned, except to the extent set forth in
Schedule B hereto, free and clear of any mortgage, pledge, lien,
security interest, claim, encumbrance or defect of any
kind.
(k) This
Agreement has been duly authorized, executed and delivered by the
Company.
(l) The
Indenture has been duly authorized by the Company and, assuming due
authorization by the Trustee, when duly executed and delivered by
the Company and the Trustee, will constitute a valid and legally
binding obligation of the Company, enforceable against the Company
in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors’ rights and remedies generally and by general
principles of equity and concepts of reasonableness (regardless of
whether enforcement is sought in a proceeding at law or in equity);
and the Indenture conforms in all material respects to the
description thereof contained in the most recent Preliminary
Prospectus and the Prospectus.
(m) The
Notes have been duly authorized by the Company, and when executed,
authenticated and delivered and paid for as provided in this
Agreement and the Indenture, the Notes will have been duly
executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to
the benefits of the Indenture and enforceable against the Company
in accordance with their terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to
creditors’ rights and remedies generally and by general
principles of equity and concepts of reasonableness (regardless of
whether enforcement is sought in a proceeding at law or in equity);
and the Notes conform in all material respects to the description
thereof contained in the Disclosure Package and the
Prospectus.
(n) The
execution, delivery and performance of the Indenture and this
Agreement and the issuance and sale of the Notes will not require
the consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court (except such as have
been obtained or made and such as may be required under state
securities laws).
(o) The
execution, delivery and performance of the Indenture and this
Agreement and the issuance and sale of the Notes and compliance
with the terms and provisions thereof will not conflict with or
result in a breach or violation of any of the terms and provisions
of, and do not and will not constitute a default (or an event which
with the giving of notice or the lapse of time or both would
constitute a default) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any material
assets or properties of the Company or any of its subsidiaries
under (A) the charter, by-laws or other organizational documents of
the Company or any Significant Subsidiary, (B) any statute, any
rule, regulation, order or decree of any governmental or regulatory
agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their
properties, assets or operations, or (C) any indenture, mortgage,
loan or credit agreement, note, lease, permit, license or other
agreement or instrument to which the Company or any subsidiary is a
party or by which the Company or any subsidiary is bound or to
which any of the properties, assets or operations of the Company or
any subsidiary is subject, except, in the case of clauses (B) and
(C), for such breaches or violations which would not have a
Material Adverse Effect.
(p) The
Company and its subsidiaries have good and marketable title to all
real properties owned by them, in each case free and clear of any
mortgage, pledge, lien, security interest, claim or other
encumbrance or defect; the Company and its subsidiaries hold any
leased real property under valid, subsisting and enforceable leases
or subleases with no exceptions that would materially interfere
with the use made or to be made thereof by them; neither the
Company nor any of its subsidiaries is in material default under
any such lease or sublease; and no material claim of any sort has
been asserted by anyone adverse to the rights of the Company or any
subsidiary under any such lease or sublease or affecting or
questioning the right of such entity to the continued possession of
the leased or subleased properties under any such lease or
sublease, except in each case as would not, individually or in the
aggregate, have a Material Adverse Effect.
(q) Except
as described in the most recent Preliminary Prospectus and the
Prospectus, the Company and its subsidiaries possess adequate
certificates, authorizations, licenses or permits issued by
appropriate governmental agencies or bodies necessary to conduct
the business now operated by them, except as would not have a
Material Adverse Effect, and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization, license or permit that, individually or
in the aggregate, could have a Material Adverse Effect.
(r) The
Company and each of its subsidiaries have filed all tax returns
required to be filed, which returns are complete and correct in all
material respects, and neither the Company nor any of its
subsidiaries is in default in the payment of any taxes which were
payable pursuant to said returns or any assessments with respect
thereto, in each case except as would not, individually or in the
aggregate, have a Material Adverse Effect.
(s) Neither
the filing of the Registration Statement, the most recent
Preliminary Prospectus or the Prospectus nor the offer or sale of
the Notes as contemplated by this Agreement gives rise to any
rights, other than those which have been duly waived or satisfied,
for or relating to the registration of any securities of the
Company.
(t) Except
as described in the most recent Preliminary Prospectus and the
Prospectus (A) neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws, (B) neither
the Company nor any of its subsidiaries is in violation of any
applicable law, ordinance, administrative or governmental rule or
regulation, or any order, decree or judgment of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries and (C) no event of default or event that,
but for the giving of notice or the lapse of time or both, would
constitute an event of default, exists, or as a result of the
consummation of the sale of the Notes will exist, under any
indenture, mortgage, loan agreement, note, lease, permit, license
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or to which any of the properties, assets
or operations of the Company or any such Subsidiary is subject,
except, in the case of clauses (B) and (C), for such violations and
defaults that would not have a Material Adverse Effect.
(u) Except
as described in the most recent Preliminary Prospectus and the
Prospectus, there are no pending actions, suits or proceedings
against or, to the knowledge of the Company, affecting the Company,
any of its subsidiaries or any of their respective properties,
assets or operations that would have, individually or in the
aggregate, a Material Adverse Effect, or could materially and
adversely affect the ability of the Company to perform its
obligations under this Agreement, the Indenture or any other
document governing the sale of the Notes; and no such actions,
suits or proceedings are, to the knowledge of the Company,
threatened.
(v) The
financial statements, together with the related schedules and notes
included or incorporated by reference in the most recent
Preliminary Prospectus and the Prospectus, present fairly, in all
material respects, the respective financial position of the Company
and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and
have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis,
except as disclosed therein. The other financial and
statistical information set forth in the most recent Preliminary
Prospectus and the Prospectus present fairly, in all material
respects, the information shown therein and have been, except as
disclosed therein, compiled on a basis consistent with that of the
financial statements included or incorporated by reference in the
most recent Preliminary Prospectus and the Prospectus.
(w) Since
the date of the latest audited financial statements of the Company
included or incorporated by reference in the Preliminary Prospectus
and the Prospectus, there has been no material adverse change, nor
any development or event involving a prospective material adverse
change, in the financial condition, business, properties or results
of operations of the Company and its subsidiaries taken as a
whole.
(x) There
is no contract or document required to be described in the
Registration Statement, any Preliminary Prospectus or the
Prospectus or to be filed as an exhibit to the Registration
Statement or to a document incorporated by reference into the
Registration Statement, any Preliminary Prospectus or the
Prospectus which is not described or filed as required.
(y) The
Company is not and, after giving effect to the offering and sale of
the Notes and the application of the proceeds thereof as described
in the most recent Preliminary Prospectus and the Prospectus
will
not be required to register as, an
“investment company” as defined in the Investment
Company Act of 1940, as amended.
(z) Each
of the Company and its Significant Subsidiaries maintains a system
of internal accounting controls over financial
reporting. The Company’s internal controls over
financial reporting includes those policies and procedures that
pertain to the Company’s ability to record, process,
summarize and report a system of internal accounting controls and
procedures to provide reasonable assurance, at an appropriate
cost/benefit relationship, that the unauthorized acquisition, use
or disposition of assets are prevented or timely detected and that
transactions are authorized, recorded and reported properly to
permit the preparation of financial statements in accordance with
generally accepted accounting principles and receipts and
expenditures are duly authorized. The Company’s
internal controls over financial reporting were effective and
provided such reasonable assurance for the preparation of financial
statements as of December 31, 2008 and, to the best of the
Company’s knowledge, there have been no changes in the
Company’s internal controls over financial reporting
subsequent to December 31, 2008.
(aa) The
Company has made the evaluations of the Company’s disclosure
controls and procedures required under Rule 13a−15(b) under
the Exchange Act and management’s conclusions regarding the
effectiveness of such disclosure controls and procedures were
included in the Company’s annual report on Form 10−K
for the fiscal year ended December 31, 2008.
For purposes of this Section 1, as
well as for Section 6 hereof, references to “the most recent
Preliminary Prospectus and the Prospectus” or “the
Disclosure Package and the Prospectus” are to each of the
most recent Preliminary Prospectus or the Disclosure Package, as
the case may be, and the Prospectus as separate or stand-alone
documentation (and not the most recent Preliminary Prospectus or
the Disclosure Package, as the case may be, and the Prospectus
taken together), so that representations, warranties, agreements,
conditions and legal opinions will be made, given or measured
independently in respect of each of the most recent Preliminary
Prospectus or the Disclosure Package, as the case may be, and the
Prospectus.
2.
Purchase of the Notes by the Underwriters
. Subject to the terms and conditions and upon the basis
of the representations and warranties herein set forth, the Company
agrees to issue and sell to the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from
the Company, at a price equal to 98.797% of the principal amount of
the Notes, plus, accrued interest, if any, from September 11, 2009
to the Closing Date, the respective principal amount of the Notes
set forth opposite such Underwriter’s name in Schedule I
hereto.
3.
Delivery of and Payment for the Notes . Delivery
of the Notes will be made at the offices of Dewey & LeBoeuf
LLP, 1301 Avenue of the Americas, New York, NY 10019, or at such
place or places as mutually may be agreed upon by the Company and
the Underwriters, at 9:00 A.M., New York City time, on September
11, 2009 or on such later date not more than seven Business Days
after such date as may be determined by the Representatives and the
Company (the “ Closing Date ”).
Delivery of the Notes will be made to the
Representatives by or on behalf of the Company against payment of
the purchase price therefor by wire transfer of immediately
available funds. Delivery of the Notes will be made
through the facilities of The Depository Trust Company unless the
Representatives will otherwise instruct. Delivery of the
Notes at the time and place specified in this Agreement is a
further condition to the obligations of each
Underwriter.
4.
Covenants of the Company . The Company covenants
and agrees with each Underwriter that:
(a) The
Company (i) will prepare the Prospectus in a form approved by the
Representatives and file the Prospectus pursuant to Rule 424(b) of
the Rules and Regulations within the time period prescribed by such
Rule; (ii) will not file any amendment or supplement to the
Registration Statement or the Prospectus or file any document under
the Exchange Act (except for filings of annual reports on Form 10-K
and quarterly reports on Form 10-Q under the Exchange Act) before
the termination of the offering of the Notes by the Underwriters if
such document would be deemed to be incorporated by reference into
the Prospectus, which filing is not consented to by the
Representatives after reasonable notice thereof (such consent not
to be unreasonably withheld or delayed); (iii) will advise the
Representatives, promptly after it receives notice thereof, of the
time when any
amendment or supplement to the
Registration Statement, the most recent Preliminary Prospectus or
the Prospectus has been filed and will furnish the Representatives
with copies thereof; (iv) will prepare the Final Term Sheet,
substantially in the form of Schedule III hereto and approved by
the Representatives and file the Final Term Sheet pursuant to Rule
433(d) of the Rules and Regulations within the time period
prescribed by such Rule; (v) will advise the Representatives
promptly after it receives notice thereof, of the issuance by the
Commission or any state or other regulatory body of any stop order
or any order suspending the effectiveness of the Registration
Statement, suspending or preventing the use of any Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus or
suspending the qualification of the Notes for offering or sale in
any jurisdiction, of the initiation or threatening of any
proceedings for any such purpose or pursuant to Section 8A of the
Securities Act, of receipt by the Company from the Commission of
any notice of objection to the use of the Registration Statement or
any post-effective amendment thereto or of any request by the
Commission for the amending or supplementing of the Registration
Statement, the Prospectus or any Issuer Free Writing Prospectus or
for additional information; and (vi) will use its reasonable best
efforts to prevent the issuance of any stop order or other such
order or any such notice of objection and, if a stop order or other
such order is issued or any such notice of objection is received,
to obtain as soon as possible the lifting or withdrawal
thereof.