EXHIBIT 1.1
UNDERWRITING AGREEMENT
AETNA INC.
Debt Securities
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Underwriting Agreement
__________, 2001
To the Underwriters
to be named in the applicable
Pricing Agreement
supplemental hereto
Ladies and Gentlemen:
From time to time, Aetna Inc., a Pennsylvania corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I
to the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain debt securities of the Company (the "Securities") specified in Schedule
II to such Pricing Agreement (with respect to such Pricing Agreement, the
"Designated Securities"), less the Designated Securities covered by Delayed
Delivery Contracts (as defined in Section 3 hereof), if any, as provided in
Section 3 hereof and as may be specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, any Designated Securities to
be covered by Delayed Delivery Contracts being herein sometimes referred to as
"Contract Securities" and the Designated Securities to be purchased by the
Underwriters (after giving effect to the deduction, if any, for Contract
Securities) being herein sometimes referred to as "Underwriters' Securities").
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The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in Schedule II to such
Pricing Agreement.
1. Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. Except as incorporated by reference into a Pricing
Agreement, this Underwriting Agreement shall not be construed as an obligation
of the Company to sell any of the Securities or as an obligation of any of the
Underwriters to purchase any of the Securities. The obligation of the Company
to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified therein.
Each Pricing Agreement shall specify, among other things, the aggregate
principal amount of such Designated Securities, the initial public offering
price of such Designated Securities, the purchase price to the Underwriters of
such Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters, the
principal amount of such Designated Securities to be purchased by each
Underwriter and whether any of such Designated Securities shall be covered by
Delayed Delivery Contracts, and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment thereto, each in
the form heretofore delivered or to be delivered to the Representatives
(with exhibits thereto) for delivery to each
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of the other Underwriters (without exhibits thereto), have been declared
effective by the Commission in such form; no other document with respect
to such registration statement or document incorporated by reference
therein has been filed or transmitted for filing with the Commission prior
to the effective date of the registration statement; and no stop order
suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the Commission. Any preliminary
prospectus included in such registration statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Securities Act of 1933, as amended (the "Act"), is
hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statement, including all exhibits thereto, but excluding Form
T-1, each as amended at the time such part of the registration statement
became effective are hereinafter collectively called the "Registration
Statement", provided if the Company has filed an abbreviated registration
statement to register additional Securities pursuant to Rule 462(b) under
the Act (the "Rule 462 Registration Statement"), then any reference in
this Agreement or a Pricing Agreement to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement; the
prospectus relating to the Securities, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Agreement, is hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed with the Commission after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
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 reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is first filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
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Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing;
(b) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein (i) in the case of the Registration Statement,
not misleading and (ii) in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives for use in the
Prospectus as amended or supplemented relating to such Securities;
(c) The Company has been duly incorporated and is validly subsisting
as a corporation in good standing under the laws of the Commonwealth of
Pennsylvania; the Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
where the failure to be so qualified or in good standing would not have a
material adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole;
(d) The Securities have been duly authorized by the Company; and,
when Designated Securities are issued, executed, authenticated, delivered
and paid for pursuant to this Agreement and the Pricing Agreement with
respect to such Designated Securities and the Indenture and, in the case
of any Contract Securities, pursuant to Delayed Delivery Contracts with
respect to such Contract Securities, such Designated Securities will have
been duly issued, executed and delivered and will constitute valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to (1) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other
similar laws now or hereafter in effect relating to or affecting
creditors' rights and remedies generally or the rights and
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remedies of creditors of insurance companies generally and (2) general
principles of equity (regardless of whether considered in a proceeding at
law or in equity);
(e) The Indenture, which will be substantially in one of the forms
filed as an exhibit to the Registration Statement, has been duly
authorized by the Company and, at the Time of Delivery (as defined in
Section 4 hereof) for such Designated Securities, the Indenture will be
duly qualified under the Trust Indenture Act and, assuming due
authorization, execution and delivery by the trustee under such Indenture
(the "Trustee"), the Indenture will constitute a valid and legally binding
instrument of the Company, enforceable against the Company in accordance
with its terms, subject to (1) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies generally
or the rights and remedies of creditors of insurance companies generally
and (2) general principles of equity (regardless of whether considered in
a proceeding at law or in equity); and the Indenture conforms, and the
Designated Securities will conform, in all material respects, to the
descriptions thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Securities;
(f) The issuance and sale of the Securities and the compliance by the
Company with all of the provisions of the Designated Securities, the
Indenture, each of the Delayed Delivery Contracts, if any, this Agreement
and any Pricing Agreement, and the consummation of the transactions herein
and therein contemplated will not (1) conflict with or result in a breach
or violation by the Company of any of the terms or provisions of, or
constitute a default by the Company under, any indenture, mortgage, deed
of trust, loan agreement or other similar agreement or instrument to which
the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject, except, in all such
cases, for such conflicts, breaches, violations or defaults as would not
have a material adverse effect on the financial condition of the Company
and its subsidiaries taken as a whole, or would not have a material
adverse effect on the issuance or sale of the Designated Securities, or
(2) result in any violation of (A) the provisions of the Amended and
Restated Articles of Incorporation or the Amended and Restated By-Laws of
the Company or (B) any statute of the United States or the Commonwealth of
Pennsylvania or any order, rule or regulation of any court or governmental
agency or body of the United States or the Commonwealth of Pennsylvania
having jurisdiction over the Company or any of its properties; provided,
however, that in the case of clause (B) of
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this paragraph 2(f), this representation and warranty shall not extend to
such violations as would not have a material adverse effect on the
financial condition of the Company and its subsidiaries taken as a whole
or would not have a material adverse effect on the issuance or sale of the
Designated Securities; provided further, that insofar as this
representation and warranty relates to the performance by the Company of
its obligations under the Indenture, this Agreement, the Pricing Agreement
relating to the Designated Securities, the Delayed Delivery Contracts, if
any, and the Designated Securities, such performance is subject to (1)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium
and other similar laws now or hereafter in effect relating to or affecting
creditors' rights and remedies generally or the rights and remedies of
creditors of insurance companies generally and (2) general principles of
equity (regardless of whether considered in a proceeding at law or in
equity);
(g) No consent, approval, authorization, order, registration, filing
or qualification of or with any court or governmental agency or body of
the United States or the Commonwealth of Pennsylvania is required for the
issuance and sale of the Securities by the Company or the consummation by
the Company of the transactions contemplated by this Agreement or any
Pricing Agreement or the Indenture or any Delayed Delivery Contract except
such as have been, or will have been, prior to the Time of Delivery,
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, orders, registrations, filings or
qualifications as may be required under state securities or Blue Sky laws
or insurance securities laws of any such jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters, and
except those which, if not obtained, will not have a material adverse
effect on the financial condition of the Company and its subsidiaries
taken as a whole or would not have a material adverse effect on the
issuance or sale of the Securities by the Company;
(h) In the event any of the Securities are purchased pursuant to
Delayed Delivery Contracts, each of such Delayed Delivery Contracts has
been duly authorized by the Company and, when executed and delivered by
the Company and the purchaser named therein, will constitute a valid and
legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, subject to (1) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now
or hereafter in effect relating to or affecting creditors' rights and
remedies generally or the rights and remedies of creditors of insurance
companies generally and (2) general principles of equity (regardless of
whether considered in a proceeding at law or in equity); and
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any Delayed Delivery Contracts will conform, in all material respects, to
the description thereof, contained in the Prospectus as amended or
supplemented with respect to such Designated Securities; and
(i) Aetna Life Insurance Company has been duly incorporated and is
validly existing and in good standing under the laws of Connecticut; all
of the outstanding shares of capital stock of Aetna Life Insurance Company
have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned directly or indirectly by the Company.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities, the several Underwriters propose to offer such
Underwriters' Securities for sale upon the terms and conditions set forth in
the Prospectus as amended or supplemented.
The Company may specify in Schedule II to the Pricing Agreement applicable
to any Designated Securities that the Underwriters are authorized to solicit
offers to purchase Designated Securities from the Company pursuant to delayed
delivery contracts (herein called "Delayed Delivery Contracts"), substantially
in the form of Annex II attached hereto but with such changes therein as the
Representatives and the Company may authorize or approve. If so specified, the
Underwriters will endeavor to make such arrangements and, as compensation
therefor, the Company will pay to the Representatives, for the accounts of the
Underwriters, at the Time of Delivery, such commission, if any, as may be set
forth in such Pricing Agreement. Delayed Delivery Contracts, if any, are to be
with investors of the types described in the Prospectus as amended or
supplemented and subject to other conditions therein set forth. The
Underwriters will not have any responsibility with respect to the validity or
performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be deducted from the
principal amount of Designated Securities to be purchased by each Underwriter
as set forth in Schedule I to the Pricing Agreement applicable to such
Designated Securities shall be, in each case, the principal amount of Contract
Securities which the Company has been advised by the Representatives have been
attributed to such Underwriter, provided that, if the Company has not been so
advised, the amount of Contract Securities to be so deducted shall be, in each
case, that proportion of Contract Securities which the principal amount of
Designated Securities to be purchased by such Underwriter under such Pricing
Agreement bears to the total principal amount of the Designated Securities
(rounded as the Representatives may determine). The total principal amount of
Underwriters' Securities to be purchased by all the Underwriters pursuant to
such Pricing Agreement shall be the total principal amount of Designated
Securities set forth in
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Schedule I to such Pricing Agreement less the principal amount of the Contract
Securities so set forth. If the Company determines to enter into Delayed
Delivery Contracts, the Company will deliver to the Representatives not later
than 3:30 p.m., New York City time, on the third business day preceding the
Time of Delivery specified in the applicable Pricing Agreement (or such other
time and date as the Representatives and the Company may agree upon in writing)
a written notice setting forth the principal amount of Contract Securities.
4. Underwriters' Securities to be purchased by each Underwriter pursuant
to the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least twenty-four hours prior notice
to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer to
a bank account specified by the Company and specified in Schedule II to the
Pricing Agreement, in federal or other funds immediately available in New York
City, all at the place and the time and date specified in such Pricing
Agreement or at such other place and time and date as the Representatives and
the Company may agree upon in writing, such time and date being herein called
the "Time of Delivery" for such Securities.
Concurrently with the delivery of and payment for the Underwriters'
Securities, the Company will deliver to the Representatives, for the accounts
of the Underwriters, a check payable to the order of the party designated in
the Pricing Agreement relating to such Securities in the amount of any
compensation payable by the Company to the Underwriters in respect of any
Delayed Delivery Contracts as provided in Section 3 hereof and the Pricing
Agreement relating to such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities and to file such Prospectus
pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of the Pricing Agreement relating to the applicable Designated
Securities or, if applicable, such other time as may be required by Rule
424(b); to advise the Representatives promptly of any proposal to amend or
supplement the Registration Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Designated Securities and prior to the Time of Delivery for such
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Designated Securities, and afford the Representatives a reasonable
opportunity to comment on any such proposed amendment or supplement; to
advise the Representatives of any such amendment or supplement promptly
after such Time of Delivery for so long as the delivery of a prospectus is
required under the Act in connection with the offering or sale of such
Designated Securities; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required under
the Act in connection with the offering or sale of such Designated
Securities, and during such same period to advise the Representatives,
promptly after the Company receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission; for so long as the delivery of a
prospectus is required under the Act in connection with the offering or
sale of the Designated Securities, to advise the Representatives promptly
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Designated Securities, of the suspension of the qualification of such
Designated Securities for offering or sale in any jurisdiction or of the
initiation or, if known to the Company, threatening of any proceeding for
any such purpose, or of any request by the Commission for amending or
supplementing the Registration Statement or Prospectus; and, in the event
of the issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or
suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) Promptly from time to time to endeavor to take such action as the
Representatives may reasonably request to qualify such Designated
Securities for offering and sale under the securities laws of such
jurisdictions of the United States, Puerto Rico and Guam as the
Representatives may reasonably request and such other jurisdictions as the
Company and the Representatives may agree and to comply with such laws so
as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of such Designated Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction, and
provided further that in connection therewith the Company shall not be
required to qualify such Designated Securities for offering and sale under
the securities laws of any such jurisdiction for a period in excess of
nine
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months after the initial time of issue of the Prospectus as amended or
supplemented relating to such Designated Securities;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from
time to time reasonably request, and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Designated Securities and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus in
order to comply with the Act or the Exchange Act, to notify the
Representatives and to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of
any amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance; provided,
however, that in case any Underwriter is required under the Act to deliver
a prospectus in connection with the offering or sale of the Designated
Securities at any time more than nine months after the date of the Pricing
Agreement relating to the Designated Securities, the costs of such
preparation and furnishing such amended or supplemented Prospectus shall
be borne by the Underwriters of such Designated Securities;
(d) To make generally available to the Company's securityholders as
soon as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c)), an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158); and
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the Time of Delivery for such Designated Securities, not to offer, sell,
contract to sell or otherwise dispose of in the United States any debt
securities of the Company which mature more than one year after such Time
of Delivery and which are substantially similar to such Designated
Securities, without the prior written consent of the Representatives,
which consent shall not be unreasonably withheld.
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6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the Company's preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and, subject to the proviso
of Section 5(c), the Prospectus and amendments and supplements thereto and the
mailing and delivery of copies thereof to the Underwriters and dealers; (ii)
all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iii) any fees charged by securities
rating services for rating the Securities; (iv) any filing fees incident to any
required review by NASD Regulation, Inc. of the terms of the sale of the
Securities; (v) any cost of preparing certificates or other evidences of the
Securities or any costs of The Depository Trust Company; (vi) the fees and
expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; and (vii) all other costs and expenses incident to the
performance of the Company's obligations hereunder and under any Delayed
Delivery Contracts which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
The foregoing provisions of this Section 6 shall be without prejudice to
the Company's rights under any separate agreements between the Company and its
attorneys, accountants and vendors with respect to such fees, disbursements,
expenses and costs.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company included in
or incorporated by reference in the Pricing Agreement relating to such
Designated Securities are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that the Company shall
have performed in all material respects all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
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(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or, to the
knowledge of the Company, threatened by the Commission;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions, dated the Time
of Delivery for such Designated Securities, with respect to the
incorporation of the Company, the validity of the Indenture, the
Designated Securities, the Delayed Delivery Contracts, if any, the
Registration Statement, the Prospectus as amended or supplemented and
other related matters as the Representatives may reasonably request, and
such counsel shall have received such papers and information as it may
reasonably request to enable them to pass upon such matters;
(c) The Company's Deputy General Counsel or such other internal counsel as
shall be reasonably acceptable to the Representatives (the "Internal
Counsel"), shall have furnished to the Representatives such counsel's
written opinion, dated the Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives, to
the effect that:
(i) Aetna Life Insurance Company has been duly incorporated and is
validly existing and in good standing under the laws of the
Connecticut; all of the outstanding shares of capital stock of Aetna
Life Insurance Company have been duly authorized and validly issued
and are fully paid and non-assessable, and are owned directly or
indirectly by the Company;
(ii) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or
governmental proceedings pending or threatened involving the Company
or any of its subsidiaries of a character required to be disclosed in
the Registration Statement or Prospectus which are not adequately
disclosed in the Registration Statement or Prospectus;
(iii) The issuance and sale of the Designated Securities and the
performance by the Company of its obligations under the Designated
Securities, the Indenture, each of the Delayed Delivery
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Contracts, if any, this Agreement and the Pricing Agreement with
respect to the Designated Securities will not (1) conflict with or
result in a breach or violation by the Company of any of the terms or
provisions of, or constitute a default by the Company under, any
indenture, mortgage, deed of trust, loan agreement or other similar
agreement or instrument known to such counsel to which the Company is
a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, except, in all such
cases, for such conflicts, breaches, violations or defaults as would
not have a material adverse effect on the financial condition of the
Company and its subsidiaries taken as a whole, or would not have a
material adverse effect on the issuance or sale of the Designated
Securities or (2) result in any violation of any statute of the
United States or any order, rule or regulation known to such counsel
of any court or governmental agency or body of the United States
having jurisdiction over the Company or any of its properties, except
with respect to clause (2), such violations as would not have a
material adverse effect on the financial condition of the Company and
its subsidiaries taken as a whole, or would not have a material
adverse effect on the issuance or sale of the Designated Securities
(and except that for purposes of this paragraph (iii) such counsel
need not express any opinion as to any violation of any fraudulent
transfer laws or other antifraud laws or as to any violation of any
securities or insurance laws or as to any transactions of the type
described in the Prospectus under the caption "Erisa Matters";
provided further, that insofar as performance by the Company of its
obligations under the Indenture, the Delayed Delivery Contracts, if
any, the Underwriting Agreement, the Pricing Agreement relating to
the Designated Securities, and the Designated Securities is
concerned, such counsel need not express any opinion as to
bankruptcy, insolvency, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors'
rights and remedies generally or the rights and remedies of creditors
of insurance companies generally or to general principles of equity
(regardless of whether considered in a proceeding at law or in
equity));
(iv) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and
related notes, information as to reserves, the financial statement
schedules and the other financial and statistical data included
therein or omitted therefrom, as to which such counsel need express
no opinion), when they became effective or were filed
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with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and
(v) Under the federal laws of the United States, no consent,
approval, authorization, order, registration, filing or qualification
of or with any court or governmental agency or body is required for
the issuance and sale of the Designated Securities in accordance with
the Indenture, each of the Delayed Delivery Contracts, if any, this
Agreement and the Pricing Agreement with respect to the Designated
Securities, except for such consents, approvals, authorizations,
orders, registrations, filings or qualifications as have been
obtained under the Act and the Trust Indenture Act in connection with
the purchase and sale and distribution of the Designated Securities
by the Underwriters, and except those which, if not obtained, will
not have a material adverse effect on the financial condition of the
Company and its subsidiaries taken as a whole; provided that such
counsel need not express any opinion as to any transactions of the
type described in the Prospectus under the caption "Erisa Matters";
and
(vi) In the event any of the Designated Securities are to be
purchased pursuant to Delayed Delivery Contracts, each of such
Delayed Delivery Contracts conforms in all material respects to the
description thereof in the Prospectus as amended or supplemented.
In addition, such counsel shall state that such counsel does not know
of any contract or other document (i) of a character required to be filed
as an exhibit to the Registration Statement or to any of the documents
incorporated by reference into the Prospectus as amended or supplemented
which is not so filed, (ii) required to be incorporated by reference into
the Prospectus as amended or supplemented which is not so incorporated by
reference or (iii) required to be described in the Registration Statement
or the Prospectus as amended or supplemented which is not so described.
In rendering the opinion required by subsection (c) of this Section,
the Internal Counsel may state that he is admitted to the Bar of the State
of Connecticut and that his opinion is limited to the laws of the State of
Connecticut and the federal laws of the United States of America. The
Internal Counsel may rely (A) as to any matter to which you consent (which
consent shall not be unreasonably withheld), to the extent specified in
such opinion, upon the opinions of other counsel in good standing
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whom such counsel believes to be reliable, provided that the Internal
Counsel shall state that he and you are justified in relying on such
opinions and (B) as to matters of fact, upon certificates of officers and
representatives of the Company and of public officials, and may state that
he has not verified independently the accuracy or completeness of
information or documents furnished to such counsel with respect to the
Registration Statement or the Prospectus.
(d) Drinker Biddle & Reath LLP, special Pennsylvania counsel for the
Company, shall have furnished to the Representatives its written opinion,
dated the Time of Delivery for such Designated Securities, in form and
substance satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly subsisting
as a corporation in good standing under the laws of the Commonwealth
of Pennsylvania;
(ii) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and
delivered by the Company;
(iii) The Designated Securities have been duly authorized by the
Company; assuming the due authentication of the Underwriters'
Securities by the Trustee, the Underwriters' Securities have been
duly issued, executed and delivered by the Company; and assuming the
due authentication of the Contract Securities by the Trustee, the
Contract Securities, if any, have been duly issued, executed and
delivered by the Company;
(iv) The Indenture has been duly authorized, executed and delivered
by the Company;
(v) The issuance and sale of the Designated Securities and the
performance by the Company of its obligations under the Designated
Securities, the Indenture, each of the Delayed Delivery Contracts, if
any, this Agreement and the Pricing Agreement with respect to the
Designated Securities will not result in any violation of (1) the
provisions of the Amended and Restated Articles of Incorporation or
the Amended and Restated By-Laws of the Company or (2) any statute of
the Commonwealth of Pennsylvania or any order, rule or regulation
known to such counsel of any court or governmental agency or body of
the Commonwealth of Pennsylvania having jurisdiction over the Company
or any of its
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properties, except with respect to clause (2), such violations as
would not have a material adverse effect on the financial condition
of the Company and its subsidiaries taken as a whole, or would not
have a material adverse effect on the issuance or sale of the
Designated Securities (and except that for purposes of this paragraph
(v) such counsel need not express any opinion as to any violation of
any fraudulent transfer laws or other antifraud laws or as to any
violation of any federal and state securities laws or Blue Sky or
insurance or insurance securities laws; provided further, that
insofar as performance by the Company of its obligations under the
Indenture, the Delayed Delivery Contracts, if any, the Underwriting
Agreement, the Pricing Agreement relating to the Designated
Securities, and the Designated Securities is concerned, such counsel
need not express any opinion as to bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies
generally or the rights and remedies of creditors of insurance
companies generally or to general principles of equity (regardless of
whether considered in a proceeding at law or in equity));
(vi) Under the laws of the Commonwealth of Pennsylvania, no consent,
approval, authorization, order, registration, filing or qualification
of or with any court or governmental agency or body is required for
the issuance and sale of the Designated Securities in accordance with
the Indenture, each of the Delayed Delivery Contracts, if any, this
Agreement and the Pricing Agreement with respect to the Designated
Securities except for such consents, approvals, authorizations,
orders, registrations, filings or qualifications as may be required
under state securities or Blue Sky laws or insurance or insurance
securities laws in connection with the purchase and sale and
distribution of the Designated Securities by the Underwriters, and
except those which, if not obtained, will not have a material adverse
effect on the financial condition of the Company and its subsidiaries
taken as a whole; and
(vii) In the event any of the Designated Securities are to be
purchased pursuant to Delayed Delivery Contracts, each such Delayed
Delivery Contract has been duly authorized, executed and delivered by
the Company.
In rendering the opinion required by subsection (d) of this Section,
Drinker Biddle & Reath LLP may state that its opinion is limited to the
laws of the Commonwealth of Pennsylvania.
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<PAGE>
(e) Davis Polk & Wardwell, special counsel for the Company, shall have
furnished to the Representatives its written opinion, dated the Time of
Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) This Agreement and the Pricing Agreement with respect to the
Designated Securities have been duly authorized, executed and
delivered by the Company;
(ii) The Designated Securities have been duly authorized by the
Company; assuming the due authentication of the Underwriters'
Securities by the Trustee, the Underwriters' Securities are duly
issued, executed and delivered, and constitute valid and legally
binding obligations of the Company, enforceable against the Company
in accordance with their terms, subject to (1) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other
similar laws now or hereafter in effect relating to or affecting
creditors' rights and remedies generally or the rights and remedies
of creditors of insurance companies generally and (2) general
principles of equity (regardless of whether considered in a
proceeding at law or in equity); assuming the due authentication of
the Contract Securities by the Trustee, the Contract Securities, if
any, when issued, executed and delivered and when paid for in
accordance with the Indenture and the Delayed Delivery Contracts will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms,
subject to (1) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies
generally or the rights and remedies of creditors of insurance
companies generally and (2) general principles of equity (regardless
of whether considered in a proceeding at law or in equity); and the
Designated Securities and the Indenture conform in all material
respects to the descriptions thereof in the Prospectus as amended or
supplemented;
(iii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming the due authorization, execution and
delivery thereof by the Trustee, the Indenture constitutes a valid
and legally binding instrument of the Company, enforceable against
the Company in accordance with its terms, subject to (1) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other
similar laws now or hereafter in
17
<PAGE>
effect relating to or affecting creditors' rights and remedies
generally or the rights and remedies of creditors of insurance
companies generally and (2) general principles of equity (regardless
of whether considered in a proceeding at law or in equity); and the
Indenture has been duly qualified under the Trust Indenture Act;
(iv) In the event any of the Designated Securities are to be
purchased pursuant to Delayed Delivery Contracts, each such Delayed
Delivery Contract has been duly authorized, executed and delivered by
the Company and, assuming such Delayed Delivery Contract has been
duly authorized, executed and delivered by the purchaser named
therein, and the Securities to be delivered thereunder have been paid
for by the purchaser named therein, such Delayed Delivery Contract
constitutes a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject
to (1) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights and remedies generally or the
rights and remedies of creditors of insurance companies generally and
(2) general principles of equity (regardless of whether considered in
a proceeding at law or in equity); and any Delayed Delivery Contracts
conform in all material respects to the description thereof in the
Prospectus as amended and supplemented;
(v) The statements contained in the Prospectus under the captions
"Description of Debt Securities" and "Plan of Distribution" and the
corresponding sections in any prospectus supplement relating to the
description of the Designated Securities or their distribution, in
each case insofar as such statements constitute summaries of certain
provisions of the documents referred to therein, fairly summarize in
all material respects the provisions of such documents required to be
stated therein; and
(vi) Nothing has come to the attention of such counsel to cause it to
believe that (1) the Registration Statement, as amended, and the
Prospectus, as amended or supplemented, as of the Time of Delivery
(other than the financial statements and related notes, the financial
statement schedules and the other financial data included or
incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion), do not comply as to form in
all material respects with the Act and the rules and
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<PAGE>
regulations of the Commission thereunder, (2) each part of the
Registration Statement (other than the financial statements and
related notes, the financial statement schedules and the other
financial data included or incorporated by reference therein or
omitted therefrom, as to which such counsel need express no belief),
at the time such part became effective, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (3) the Prospectus, as amended or
supplemented, as of the Time of Delivery (other than the financial
statements and related notes, the financial statement schedules and
the other financial data included or incorporated by reference
therein or omitted therefrom, as to which such counsel need express
no belief), contains an untrue statement of a material fact or omits
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
With respect to clause (vi) of subsection (e) of this Section, Davis
Polk & Wardwell may state that its opinion and belief are based upon its
participation in the preparation of the Registration Statement and
Prospectus (other than the documents incorporated by reference therein)
and any amendments or supplements thereto and review and discussion of the
contents thereof (including the documents incorporated by reference
therein), but are without independent check or verification except as
specified. In rendering the opinion required by subsection (e) of this
Section, Davis Polk & Wardwell may state that it is admitted to the Bar of
the State of New York and that its opinion is limited to the laws of the
State of New York and the federal laws of the United States of America.
Davis Polk & Wardwell may rely upon the accuracy of matters (A) involving
the application of laws of any jurisdiction other than the United States
or the State of New York and as to any other matter to which you consent
(which consent shall not be unreasonably withheld), to the extent
specified in such opinion, upon the opinions of other counsel reasonably
satisfactory to you (including without limitation, (x) as to matters of
Pennsylvania law, on the opinion of Drinker Biddle & Reath LLP, special
Pennsylvania counsel to the Company, and (y) as to matters of Connecticut
law, on the opinion of the Internal Counsel), and (B) of fact upon
certificates of officers and representatives of the Company and of public
officials.
(f) At the Time of Delivery for such Designated Securities, KPMG LLP,
independent public accountants for the Company, shall have
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<PAGE>
furnished to the Representatives a letter dated such Time of Delivery to
the effect set forth in Annex III hereto and as to such other matters as
the Representatives may reasonably request and in form and substance
satisfactory to the Representatives, provided that the letter shall use a
"cut- off date" not earlier than the date of the Pricing Agreement;
(g) Since the respective dates as of which information is given in the
Prospectus as amended or supplemented as of the date of the Pricing
Agreement there shall not have been any adverse change or a development
involving a prospective material adverse change in the financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries considered as a whole, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented as of the date
of the Pricing Agreement, the effect of which, in any such case described
above, is in the reasonable judgment of the Representatives, after
consultation with the Company, so material and adverse as to make it
impracticable to proceed with the public offering or the delivery of the
Underwriters' Securities on the terms and in the manner contemplated in
the Prospectus as amended or supplemented as of the date of the Pricing
Agreement;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities, no downgrading shall have occurred in the rating
accorded the Company's debt securities by either Standard & Poor's Ratings
Services or Moody's Investors Service, Inc.;
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities, there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a general moratorium on commercial
banking activities in New York declared by either Federal or New York
state authorities; or (iii) the outbreak or material escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any of the above
specified events, in the reasonable judgment of the Representatives, after
consultation with the Company, makes it impracticable to proceed with the
public offering or the delivery of the Underwriters' Securities on the
terms and in the manner contemplated by the Prospectus as amended or
supplemented; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities a
certificate or certificates of officers of the Company as to the accuracy
of
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<PAGE>
the representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (g) of this
Section and as to such other matters as the Representatives may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (i) in the case of the
Registration Statement, not misleading and (ii) in the case of any Prospectus,
in light of the circumstances in which they were made, not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives for inclusion
therein; and provided, further, that the Company shall not be liable to any
Underwriter under the indemnity agreement in this subsection (a) with respect
to any Preliminary Prospectus or any preliminary prospectus supplement to the
extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus (excluding documents incorporated by reference)
or of the Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is required by the
Act if the Company has previously furnished copies thereof to such Underwriter
(or to the Representatives) and the loss, claim, damage or liability of such
Underwriter results from an untrue or alleged untrue statement or omission or
alleged omission
21
<PAGE>
of a material fact contained in the Preliminary Prospectus or any preliminary
prospectus supplement which was corrected in the Prospectus (or the Prospectus
as amended or supplemented).
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (i) in the
case of the Registration Statement, not misleading and (ii) in the case of
any Prospectus, in light of the circumstances under which they were made,
not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives for inclusion therein; and will
reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
22
<PAGE>
and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation, unless such
indemnifying party and indemnified party are named parties to any such
action (including any impleaded parties) and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. In no event shall any
indemnifying party be liable for the fees and expenses of more than one
counsel (in addition to local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances. In no event shall an
indemnifying party be liable with respect to any action or claim settled
without its written consent. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above in respect of any losses, claims, damages or liabilities
(or actions in respect thereof) referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters of the Designated Securities on the other from the offering
of the Designated Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the
allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party is not entitled to receive
the indemnification provided for in subsection (a) above because of the
second proviso thereof or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on
23
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the one hand and the Underwriters of the Designated Securities on the
other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or such Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, including with respect to
any Underwriter, the extent to which such losses, claims, damages or
liabilities (or actions in respect thereof) with respect to any
Preliminary Prospectus or any preliminary prospectus supplement result
from the fact that the Underwriter sold Securities to a person to whom
there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Prospectus (excluding documents incorporated by
reference) or of the Prospectus as then amended or supplemented (excluding
documents incorporated by reference), if the Company has previously
furnished copies thereof to such Underwriters. The Company and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages (other than amounts paid or incurred without the consent of
the indemnifying party as provided in this Section 8) which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f)
24
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of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to contribute
are several in proportion to their respective underwriting obligations
with respect to such Securities and not joint. No indemnifying party will
be liable for contribution with respect to any action or claim settled
without its written consent.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend or not extend, as the case may be, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within
the meaning of the Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend or not extend, as the
case may be, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the
Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Underwriters' Securities which it has agreed to purchase under the Pricing
Agreement relating to such Underwriters' Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Underwriters' Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Underwriters' Securities, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties reasonably satisfactory to the
Representatives to purchase such Underwriters' Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Company that they have so arranged for the purchase of such Underwriters'
Securities, or the Company notifies the Representatives that it has so arranged
for the purchase of such Underwriters' Securities, the Representatives or the
Company shall have the right to postpone the Time of Delivery for such
Underwriters' Securities for a period of not more than seven days in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
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<PAGE>
(b) If, after giving effect to any arrangements for the purchase of the
Underwriters' Securities of a defaulting Underwriter or Underwriters by
the Representatives and the Company as provided in subsection (a) above,
the aggregate amount of such Underwriters' Securities which remains
unpurchased does not exceed one-tenth of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the principal amount
of Underwriters' Securities which such Underwriter agreed to purchase
under the Pricing Agreement relating to such Designated Securities and, in
addition, to require each non-defaulting Underwriter to purchase its pro
rata share (based on the principal amount of Designated Securities which
such Underwriter agreed to purchase under such Pricing Agreement) of the
Underwriters' Securities of such defaulting Underwriter or Underwriters
for which such arrangements have not been made; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains
unpurchased exceeds one-tenth of the aggregate principal amount of the
Designated Securities, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement
relating to such Designated Securities shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements
in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with
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respect to the Designated Securities covered by such Pricing Agreement except
as provided in Section 6 and Section 8 hereof; but, if for any other reason
Underwriters' Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all reasonable out-of-pocket expenses approved in writing
by the Representatives, including reasonable fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Designated Securities, but the Company
shall then be under no further liability to any Underwriter with respect to
such Designated Securities except as provided in Section 6 and Section 8
hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Representatives as set forth in
the Pricing Agreement; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement; Attention: Corporate Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 8 and Section 10 hereof, the officers and directors
of the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
27
<PAGE>
14. Time shall be of the essence for each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each
of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Very truly yours,
AETNA INC.
By:
--------------------------------
Name:
Title:
28
<PAGE>
ANNEX I
PRICING AGREEMENT
[Insert Representatives]
As Representatives of the several
Underwriters named in Schedule I hereto
__________, 200_
Ladies and Gentlemen:
Aetna Inc., a Pennsylvania corporation (the "Company"), proposes, subject
to the terms and conditions stated herein and in the Underwriting Agreement,
dated January __, 2001 (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty that refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or supplemented
relating to the Designated Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in the provisions
of the Underwriting Agreement so incorporated by reference shall be deemed to
refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 12 are set forth at the end
of Schedule II hereto.
<PAGE>
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time
and place and at the purchase price to the Underwriters set forth in Schedule
II hereto, the principal amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto, less the principal amount of
Designated Securities covered by Delayed Delivery Contracts, if any, as may be
specified in Schedule II hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us counterparts hereof, and upon acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof, including
the provisions of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is or will be pursuant to the authority set forth in a form
of Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request.
Very truly yours,
AETNA INC.
By:_________________________________
Name:
Title:
Accepted as of the date hereof:
[Insert Representatives]
On behalf of each of the
Underwriters
By:_________________________
Name:
Title:
2
<PAGE>
SCHEDULE I
TO PRICING AGREEMENT
Principal
Amount of
Designated
Securities to be
Underwriter Purchased
----------- ----------------
[Underwriters] $____________
_____________
Total............................................... $
=============
3
<PAGE>
SCHEDULE II
TO PRICING AGREEMENT
TITLE OF DESIGNATED SECURITIES:
[ %] [Floating Rate] [Zero Coupon] [Senior]
[Subordinated]
[Notes] [Debentures] due
AGGREGATE PRINCIPAL AMOUNT:
[$] [Foreign Currency]
PRICE TO PUBLIC:
__% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any,
from to ]
PURCHASE PRICE BY UNDERWRITERS:
__% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any,
from to ]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately Available Funds
INDENTURE:
[Senior][Subordinated] Debt Indenture dated as of January __, 2001,
between the Company, and State Street Bank and Trust Company, as
Trustee, as supplemented by the ____________ Indenture Supplement
dated _______________, 200_ to the [Senior][Subordinated] Debt
Indenture
MATURITY:
INTEREST RATE:
[ %] [Zero Coupon] [See Floating Rate Provisions]
<PAGE>
INTEREST PAYMENT DATES:
[months and dates]
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Securities may be redeemed, [otherwise than through
the sinking fund], in whole or in part at the option of the Company,
in the amount of [$ ] or an integral multiple thereof, [on or after
_________, ____________ at the following redemption prices (expressed
in percentages of principal amount). If [redeemed on or before
________, _____________, ___, % and if] redeemed during the 12-month
period beginning ___, _______________:
YEAR REDEMPTION PRICE
------ -------------------
and thereafter at 100% of their principal amount, together in each
case with accrued interest to the redemption date.]
[on any interest payment date falling on or after _____, _____, at the
election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax
law]
[Restriction on refunding]
SINKING FUND PROVISIONS:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking
fund to retire [$ ] principal amount of Designated Securities on in
each of the years through at 100% of their principal
amount plus accrued interest][, together with [cumulative]
[noncumulative] redemptions at the option of the Company to retire an
additional [$ ] principal amount of Designated Securities in
the years through at 100% of their principal amount plus
accrued interest].
2
<PAGE>
[If Securities may be put to the issuer by holders, insert ______]
OPTIONAL REPAYMENT PROVISIONS:
Securities are repayable on , [insert date and
years], at the option of the holder, at their principal amount with
accrued interest.
[If securities are Floating Rate debt securities, insert ______]
FLOATING RATE PROVISIONS:
Initial annual interest rate will be % through __________, _________
(and thereafter will be adjusted (monthly] [on each , and ] [to an
annual rate of % above the average rate for -[year] [month]
[securities] [certificates of deposit] issued by and
[insert names of banks] [and the annual interest rate [thereafter]
[from through ] will be the interest yield equivalent of
the weekly average per annum market discount rate for -month
Treasury bills plus % of Interest Differential (the excess, if any,
of (i) then current weekly average per annum secondary market yield
for -month certificates of deposit over (ii) then current interest
yield equivalent of the weekly average per annum market discount rate
for -month Treasury bills); [from and thereafter the rate
will be the then current interest yield equivalent plus % of
Interest Differential].
TIME OF DELIVERY:
CLOSING LOCATION:
DELAYED DELIVERY:
[None] [Underwriters' commission shall be __% of the principal amount
of Designated Securities for which Delayed Delivery Contracts have
been entered into. Such commission shall be payable to the order of
____]
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
3
<PAGE>
ANNEX II
DELAYED DELIVERY CONTRACT
Aetna Inc.
151 Farmington Avenue
Hartford, CT 06156
Attention: ____________
------------, ----
Dear Sirs:
The undersigned hereby agrees to purchase from Aetna Inc. (hereinafter
called the "Company"), and the Company agrees to sell to the undersigned,
$__________
principal amount of the Company's debt securities (hereinafter called the
"Designated Securities") offered by the Company's Prospectus dated
_____________, as amended or supplemented, receipt of a copy of which is hereby
acknowledged, at a purchase price of __% of the principal amount thereof, plus
accrued interest from the date from which interest accrues as set forth below,
and on the further terms and conditions set forth below, and on the further
terms and conditions set forth in this contract.
The undersigned will purchase the Designated Securities from the Company
on __________ (the "Delivery Date") and interest on the Designated Securities
so purchased will accrue from ___________.
The undersigned will purchase the Designated Securities from the Company
on the delivery date or dates and in the principal amount or amounts set forth
below:
<PAGE>
Date from Which
Delivery Date Principal Amount Interest Accrues
------------- ---------------- ----------------
----------, ---- $-------- ----------, ----
----------, ---- $-------- ----------, ----
EACH SUCH DATE ON WHICH DESIGNATED SECURITIES ARE TO BE PURCHASED HEREUNDER IS
HEREINAFTER REFERRED TO AS A "DELIVERY DATE."
Payment for the Designated Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Company in Federal or other
funds immediately available in New York City, by wire transfer to a bank
account specified by the Company, on such Delivery Date upon delivery to the
undersigned of the Designated Securities then to be purchased by the
undersigned in definitive fully registered form and in such denominations and
registered in such names as the undersigned may designate by written, telex or
facsimile communication addressed to the Company not less than five full
business days prior to such Delivery Date.
The obligation of the undersigned to take delivery of and make payment for
Designated Securities on each Delivery Date shall be subject to the condition
that the purchase of Designated Securities to be made by the undersigned shall
not on such Delivery Date be prohibited under the laws of the jurisdiction to
which the undersigned is subject. The obligation of the undersigned to take
delivery of and make payment for Designated Securities shall not be affected by
the failure of any purchaser to take delivery of and make payment for
Designated Securities pursuant to other contracts similar to this contract.
The undersigned understands that Underwriters (the "Underwriters") are
also purchasing Designated Securities from the Company, but that the
obligations of the undersigned hereunder are not contingent on such purchases.
Promptly after completion of the sale to the Underwriters the Company will mail
or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the Designated
Securities hereby agreed to be purchased by it under the laws of the
jurisdictions to which the undersigned is subject.
2
<PAGE>
This contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
This contract may be executed by either of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
It is understood that the acceptance by the Company of any Delayed
Delivery Contract (including this contract) is in the Company's sole discretion
and that, without limiting the foregoing, acceptances of such contracts need
not be on a first-come, first-served basis. If this contract is acceptable to
the Company, it is requested that the Company sign the form of acceptance below
and mail or deliver one of the counterparts hereof to the undersigned at its
address set forth below. This will become a binding contract between the
Company and the undersigned when such counterpart is so mailed or delivered by
the Company.
Yours very truly,
By:_________________________________
(Authorized Signature)
Name:
Title:
____________________________________
(Address)
Accepted:__________
Aetna Inc.
By________________________
Name:
Title:
3
<PAGE>
ANNEX III
Pursuant to Section 7(f) of the Underwriting Agreement, KPMG LLP shall
furnish letters to the Underwriters with respect to the Company to the effect
that:
(a) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(b) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have made
a review in accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial statements
and selected financial data derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their reports
thereon, copies of which have been furnished to the representatives of the
Underwriters (the "Representatives");
(c) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included or incorporated by reference in the
Prospectus and included or incorporated by reference in Item 13 of the
Company's Registration Statement on Form 10 filed December 1, 2000 or Item 6 of
the Company's Annual Report on Form 10-K for the most recent fiscal year agrees
with the corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements (to the extent available) for five
such fiscal years which were included or incorporated by reference in the
Company's Registration Statement on Form 10 filed December 1, 2000 or the
Company's Annual Reports on Form 10-K for such fiscal years];
(d) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below,
a reading of the latest available interim financial statements of the Company
and its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
<PAGE>
(i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Registration
Statement on Form 10 filed December 1, 2000 or the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10 and Form 10-Q,
as applicable, and the related published rules and regulations thereunder
or, if no report has been issued by such accountants on the consolidated
interim financial statements as set forth in (ii) above, based on a review
under their applicable professional standards, that any material
modifications should be made to such condensed consolidated financial
statements for them to be in conformity with generally accepted accounting
principles;
(ii) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Registration
Statement on Form 10 filed December 1, 2000 or the Company's Annual Report
on Form 10-K for the most recent fiscal year;
(iii) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (a) above and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in clause (b) above were not determined on a basis
substantially consistent with the basis for the audited financial
statements included or incorporated by reference in the Company's
Registration Statement on Form 10 filed December 1, 2000 or the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(iv) as of a specified date not more than three business days prior to the
date of such letter, there have been any changes in the consolidated
common stock (other than issuances of common stock pursuant to employee
benefit plans, upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of convertible
securities), which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
2
<PAGE>
subsidiaries, as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in each
case for changes or increases which the Prospectus discloses have occurred
or may occur or which are described in such letter; or
(v) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the last day of
the month immediately preceding the date of such letter for which monthly
financial statements are available, if any, there were any decreases in
consolidated total revenues or income before income taxes, discontinued
operations and cumulative effect of accounting changes or the per share
amounts of consolidated income before income taxes, discontinued
operations and cumulative effect of accounting changes, in each case as
compared with the comparable period of the preceding year, except in each
case for decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter;
(e) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (c) and (d) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of,
or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of or
schedules prepared by the Company and its subsidiaries and have found them to
be in agreement;
(f) If pro forma financial statements and other pro forma financial
information (the "Pro Forma Disclosure") are required to be included in the
Registration Statement, such letter shall further state that although they are
unable to and do not express any opinion on such Pro Forma Disclosure or on the
pro forma adjustments applied to the historical amounts included in that
statement, for purposes of such letter they have:
(i) read the Pro Forma Disclosure;
(ii) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis for
their
3
<PAGE>
determination of the pro forma adjustments and whether the Pro Forma
Disclosure above complies as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X; and
(iii) proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the Pro Forma Disclosure; and
on the basis of such procedures, and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that caused them
to believe that the Pro Forma Disclosure included in the Registration Statement
does not comply in form in all material respects with the applicable
requirements of Rule 11-02 of Regulation S-X and that the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
that statement.
With respect to any Designated Securities, all references in this Annex
III to the Prospectus shall be deemed to refer to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) in
relation to the applicable Designated Securities for purposes of the letter
delivered at the Time of Delivery for such Designated Securities.
4
