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1,500,000,000 6.125% Senior Notes due 2039 Underwriting Agreement

Underwriting Agreement

1,500,000,000 6.125% Senior Notes due 2039 Underwriting Agreement | Document Parties: CVS CAREMARK CORP | Bank of New York Trust Company, N.A. | Wells Fargo Securities, LLC You are currently viewing:
This Underwriting Agreement involves

CVS CAREMARK CORP | Bank of New York Trust Company, N.A. | Wells Fargo Securities, LLC

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Title: 1,500,000,000 6.125% Senior Notes due 2039 Underwriting Agreement
Governing Law: New York     Date: 9/11/2009
Industry: Retail (Drugs)     Law Firm: Davis Polk     Sector: Services

1,500,000,000 6.125% Senior Notes due 2039 Underwriting Agreement, Parties: cvs caremark corp , bank of new york trust company  n.a. , wells fargo securities  llc
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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;

 

NY2 2036993.8

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

 

 

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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

 

 

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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.

 

 

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(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

 

 

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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

 

 

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amendment or supplement to the Registration Statement, the most recent Preliminary Prospectus or the Prospectus has been filed and will furnish the Representatives with copies thereof; (iv) will prepare the Final Term Sheet, substantially in the form of Schedule III hereto and approved by the Representatives and file the Final Term Sheet pursuant to Rule 433(d) of the Rules and Regulations within the time period prescribed by such Rule; (v) will advise the Representatives promptly after it receives notice thereof, of the issuance by the Commission or any state or other regulatory body of any stop order or any order suspending the effectiveness of the Registration Statement, suspending or preventing the use of any Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus or suspending the qualification of the Notes for offering or sale in any jurisdiction, of the initiation or threatening of any proceedings for any such purpose or pursuant to Section 8A of the Securities Act, of receipt by the Company from the Commission of any notice of objection to the use of the Registration Statement or any post-effective amendment thereto or of any request by the Commission for the amending or supplementing of the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus or for additional information; and (vi) will use its reasonable best efforts to prevent the issuance of any stop order or other such order or any such notice of objection and, if a stop order or other such order is issued or any such notice of objection is received, to obtain as soon as possible the lifting or withdrawal thereof.

 

(b)         The Compa


 
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