Exhibit 1.1
XXXXXXXXX'X INC.
40,000,000 [ ]% Hybrid Income Term Security Units
(Initially consisting of 40,000,000 Corporate Units)
UNDERWRITING AGREEMENT
dated May [ ], 2004
BANC OF AMERICA SECURITIES LLC
UNDERWRITING AGREEMENT
MAY [ ], 2004
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON LLC
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
WACHOVIA CAPITAL MARKETS, LLC
XXXXX FARGO SECURITIES, LLC
WEDBUSH XXXXXX SECURITIES INC.
THE XXXXXXXX CAPITAL GROUP, L.P.
c/o BANC OF AMERICA SECURITIES LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxxxxxx'x Inc., a Delaware corporation (the "COMPANY"), proposes, subject
to the terms and conditions stated herein, to issue and sell an aggregate of
40,000,000 [ ]% Hybrid Income Term Security (HITS(TM1)) Units (the "UNITS") of
the Company (the "FIRM SECURITIES") to the several underwriters named in
Schedule 1 hereto (the "UNDERWRITERS"). In addition, the Company proposes to
grant to the several Underwriters an option (the "OPTION") to purchase up to an
additional 6,000,000 Units (the "OPTIONAL SECURITIES" and, together with the
Firm Securities, the "DESIGNATED SECURITIES"). The terms of the Designated
Securities are identified in Schedule 2 hereto. Banc of America Securities LLC
("BAS") has agreed to act as the sole book-running manager along with Credit
Suisse First Boston LLC and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Representatives of the several Underwriters (in such capacity, the
"REPRESENTATIVES") in connection with the offering and sale of the Designated
Securities.
Each of the Designated Securities initially will consist of a unit
(referred to as a "CORPORATE UNIT") with a stated amount of $25 (the "STATED
AMOUNT") comprised of (a) a stock purchase contract (a "PURCHASE CONTRACT" and,
collectively with each other Purchase Contract, the "PURCHASE CONTRACTS") under
which (i) the holder of a Corporate Unit (a "HOLDER" and, collectively with
other Holders of Corporate Units, the "HOLDERS") will purchase from the Company
on May 16, 2007 (the "SETTLEMENT DATE"), for $25 per Corporate Unit, a number of
shares (each, a "COMMON SHARE" and, collectively with all other Common Shares
that may be issued and sold by the Company upon settlement of the Purchase
Contracts, the "COMMON SHARES") of common stock, par value $1.00 per share, of
the Company (the "COMMON STOCK"), as set forth in the Purchase Agreement (as
defined below) and (ii) the Company will pay quarterly contract adjustment
payments at the rate of [ ]% of the Stated Amount per year, and (b) a 1/40, or
2.5%, ownership interest in one of the Company's [ ]% Senior Notes due 2009 with
a principal amount of $1,000(a "SENIOR NOTE" and, collectively with each other
Senior Note, the "SENIOR NOTES").
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(1) "HITS" is a trademark of Banc of America Securities LLC
Each Common Share will have attached thereto a right (the "RIGHTS") to
purchase one one-thousandth of a share of Junior Preferred Stock of the Company.
The Rights have been issued pursuant to a Rights Agreement dated as of December
9, 1996 (as amended) (the "RIGHTS AGREEMENT") between the Company and American
Stock Transfer & Trust Company, as successor Rights Agent.
In accordance with the terms of a Purchase Contract Agreement (the
"PURCHASE AGREEMENT") to be dated as of the First Delivery Date (as defined in
Section 2(a) hereof) between the Company and U.S. Bank Trust National
Association, as Purchase Contract Agent (the "PURCHASE CONTRACT AGENT"),
pursuant to which the Purchase Contracts will be issued, the holders of the
Corporate Units will pledge all of their respective title, right and interest in
and to the Senior Notes constituting part of the Corporate Units to U.S. Bank
Trust National Association, as Collateral Agent (the "COLLATERAL AGENT"),
pursuant to a Pledge Agreement (the "PLEDGE AGREEMENT") to be dated as of the
First Delivery Date between the Company, the Purchase Contract Agent and the
Collateral Agent, to secure the Holders' obligations under the Purchase
Contracts. The Purchase Agreement and the Pledge Agreement are herein
collectively referred to as the "UNIT AGREEMENTS."
The Senior Notes will be issued pursuant to the Senior Indenture (the "BASE
INDENTURE") dated as of May 1, 1992 between the Company and U.S. Bank Trust
National Association, as successor indenture trustee (the "TRUSTEE"), as
supplemented by the Supplemental Indenture No. 1 (the "SUPPLEMENTAL INDENTURE"),
to be dated as of the First Delivery Date between the Company and the Trustee.
The Base Indenture, as so supplemented, is herein referred to as the
"INDENTURE".
Pursuant to a Remarketing Agreement (the "REMARKETING AGREEMENT") to be
dated as of the First Delivery Date between the Company, the Purchase Contract
Agent and the Remarketing Agent (as defined in the Remarketing Agreement, the
"REMARKETING AGENT"), the Remarketing Agent will remarket the Senior Notes,
subject to the terms and conditions set forth therein.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (File No.
333-113995), which contains a form of prospectus to be used in connection with
the public offering and sale of the Designated Securities. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "SECURITIES ACT"),
including all documents incorporated or deemed to be incorporated by reference
therein or the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the "EXCHANGE ACT"), is called
the "REGISTRATION STATEMENT". Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "RULE 462(B)
REGISTRATION STATEMENT", and from and after the date and time of filing of the
Rule 462(b) Registration Statement, the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. Such prospectus in the form
first used by the Underwriters to confirm sales of the Designated Securities, is
called the "PROSPECTUS". The term "PRELIMINARY PROSPECTUS" means a preliminary
prospectus specifically relating to the Designated Securities.
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All references in this Agreement to (i) the Registration Statement, the
Rule 462(b) Registration Statement, a Preliminary Prospectus, the Prospectus, or
any amendments or supplements to any of the foregoing, shall include any copy
thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System ("XXXXX") and (ii) the Prospectus shall be deemed
to include the "electronic Prospectus" provided for use in connection with the
offering of the Designated Securities as contemplated by Section 3(m) of this
Agreement. All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, the Rule 462(b) Registration Statement, a
Preliminary Prospectus, the Prospectus, (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference therein, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, the Rule 462(b)
Registration Statement, a Preliminary Prospectus, the Prospectus, shall be
deemed to mean and include any document subsequently filed by the Company with
the Commission pursuant to the Exchange Act, which is or is deemed to be
incorporated by reference therein, as the case may be.
This is to confirm the agreement as of the date first written above between
the Company and the Underwriters concerning the issue, offer and sale of the
Designated Securities.
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants to and agrees with, the Underwriters that:
(a) The Registration Statement has been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement is in effect and no proceedings
for such purpose have been instituted or are pending or, to the best
knowledge of the Company, are contemplated or threatened by the Commission.
Each Preliminary Prospectus and the Prospectus when filed complied in
all material respects with the Securities Act and the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), and, if filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale
of the Designated Securities. The Registration Statement complies, and any
post-effective amendment thereto will comply, in all material respects with
the Securities Act and the Trust Indenture Act, and the Registration
Statement as amended and supplemented by the Prospectus, and any
post-effective amendment thereto do not and will not, as of the applicable
effective date as to the Registration Statement, or any post-effective
amendment thereto, contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Prospectus, as amended or
supplemented, as of its date, and any further supplements to the
Prospectus, as of the applicable filing date as to any such supplement, do
not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
The representations and
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warranties set forth in the two immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement, any
post-effective amendment thereto or the Prospectus or any supplement
thereto made in reliance upon and in conformity with written information
furnished to the Company in writing by or on behalf of the Representatives
specifically for inclusion therein, which information consists solely of
the information set forth in the letter referred to in Section 6(e), or to
information which shall constitute the Statement of Eligibility under the
Trust Indenture Act (Form T-1) of the Trustee under the Indenture. There
are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.
(b) The Company has delivered to each Representative one photocopy of
a complete manually signed copy of the Registration Statement and of each
consent and certificate of experts filed as a part thereof, and conformed
copies of the Registration Statement (without exhibits) and Preliminary
Prospectuses and the Prospectus, as amended or supplemented, in such
quantities and at such places as the Representatives have reasonably
requested for each of the Underwriters.
(c) The Company has not distributed and will not distribute, prior to
the later of the Optional Delivery Date (as defined below) and the
completion of the Underwriters' distribution of the Units, any offering
material in connection with the offering and sale of the Units other than a
Preliminary Prospectus, the Prospectus as the Registration Statement.
(d) Each of the Company and its Significant Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus. The Company does not own or
control, directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in Exhibit 21 of the Company's
Annual Report on Form 10-K for the fiscal year ended January 29, 2004, each
such entity referred to as a "Subsidiary". Except for American Stores
Company and JS USA Holdings Inc., none of the Company's subsidiaries is a
"significant subsidiary" of the Company as defined in Rule 1-02 of
Regulation S-X under the Securities Act.
(e) The Company has all requisite corporate power and authority to
execute and deliver this Agreement and perform its obligations hereunder;
this Agreement has been duly authorized, executed and delivered by the
Company.
(f) The Company has all requisite corporate power and authority to
execute and deliver each of the Unit Agreements and perform its obligations
thereunder; each of the Unit Agreements has been duly authorized and, on
the First Delivery Date, will have been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery thereof by
the other parties thereto, will constitute a legally valid and binding
agreement of the Company enforceable against the Company in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws
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relating to or affecting creditors' rights generally, subject to general
principles of equity and to limitations on availability of equitable
relief, including specific performance (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair
dealing; provided, however, that upon the occurrence of a Termination Event
(as defined in the Purchase Contract), Title 11 of the United States Code
(the "BANKRUPTCY CODE") should not substantively limit the provisions of
the Purchase Agreement or the Pledge Agreement that require termination of
the Purchase Contracts and release of the Collateral Agent's security
interest in (1) the Senior Notes, (2) the Treasury Securities (as defined
in the Purchase Contract) or (3) the Applicable Ownership Interest in the
Treasury Portfolio (as defined in the Purchase Contract), as applicable,
and the transfer of such securities to the Purchase Contract Agent, for the
benefit of the Holders of the Units (as defined in the Prospectus);
provided further, that the Company makes no representations as to whether
the procedural restrictions respecting relief from the automatic stay under
Section 362 of the Bankruptcy Code may delay the timing of the exercise of
the rights and remedies contained in Section 5.06 of the Purchase Agreement
and Section 5.04 of the Pledge Agreement. Each of the Unit Agreements
conforms in all material respects to the description thereof contained in
the Prospectus.
(g) The Company has all requisite corporate power and authority to
execute and deliver the Remarketing Agreement and perform its obligations
thereunder; the Remarketing Agreement has been duly authorized and, on the
First Delivery Date, will have been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery thereof by
the other parties thereto, will constitute a legally valid and binding
agreement of the Company enforceable against the Company in accordance with
its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally,
subject to general principles of equity and to limitations on availability
of equitable relief, including specific performance (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing, and except as any rights to indemnification, contribution or
exculpation thereunder may be limited by principles of public policy,
statutory duties and applicable securities laws. The Remarketing Agreement
conforms in all material respects to the description thereof contained in
the Prospectus.
(h) The Company has all requisite corporate power and authority to
execute and deliver the Supplemental Indenture and perform its obligations
thereunder; the Supplemental Indenture has been duly authorized and, on the
First Delivery Date, will have been duly executed and delivered by the
Company and qualified under the Trust Indenture Act, and, assuming due
authorization, execution and delivery of the Supplemental Indenture by the
Trustee, the Supplemental Indenture will constitute a legally valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific
performance (whether considered in a proceeding in equity or at law) and an
implied
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covenant of good faith and fair dealing. The Supplemental Indenture
conforms in all material respects to the description thereof contained in
the Prospectus.
(i) The Senior Notes have been duly authorized and, on the First
Delivery Date, will have been duly executed by the Company, and, when the
Senior Notes are authenticated by the Trustee in accordance with the
Indenture and delivered against payment therefor in accordance with this
Agreement, will constitute legally valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against
the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific
performance (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing. The Senior Notes will
conform in all material respects to the description thereof contained in
the Prospectus.
(j) The Designated Securities have been duly authorized and, on the
First Delivery Date, will have been duly executed by the Company, and, when
the Designated Securities are authenticated by the Purchase Contract Agent
in accordance with the Purchase Agreement and delivered against payment
therefor in accordance with this Agreement, will constitute legally valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, subject to general principles of equity and to
limitations on availability of equitable relief, including specific
performance (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing; provided, however, that
upon the occurrence of a Termination Event (as defined in the Purchase
Contract), the Bankruptcy Code should not substantively limit the
provisions of the Purchase Agreement or the Pledge Agreement that require
termination of the Purchase Contracts and release of the Collateral Agent's
security interest in (1) the Senior Notes, (2) the Treasury Securities (as
defined in the Purchase Contract) or (3) the Applicable Ownership Interest
in the Treasury Portfolio (as defined in the Purchase Contract), as
applicable, and the transfer of such securities to the Purchase Contract
Agent, for the benefit of the Holders of the Units (as defined in the
Prospectus); provided further, that the Company makes no representations as
to whether the procedural restrictions respecting relief from the automatic
stay under Section 362 of the Bankruptcy Code may delay the timing of the
exercise of the rights and remedies contained in Section 5.06 of the
Purchase Agreement and Section 5.04 of the Pledge Agreement. The issuance
of the Designated Securities will not be subject to any preemptive or other
similar rights and the Designated Securities will conform in all material
respects to the description thereof in the Prospectus.
(k) The Common Shares have been duly authorized and reserved for
issuance pursuant to the Purchase Contracts, and are free of any preemptive
or similar rights, and, when issued and delivered by the Company against
payment therefor in accordance with
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the terms of the Purchase Contracts, will be validly issued, fully paid and
nonassessable and free and clear of all liens, encumbrances, equities or
claims and will conform to the descriptions thereof in the Prospectus.
(l) The Junior Preferred Stock of the Company issuable pursuant to the
Rights Agreement has been duly authorized and reserved for issuance
pursuant to the Rights Agreement, and are free of any preemptive or similar
rights, and, when issued and delivered by the Company in accordance with
the terms of the Rights Agreement, will be validly issued, fully paid and
nonassessable and free and clear of all liens, encumbrances, equities or
claims and will conform to the descriptions thereof in the Prospectus
(m) The execution, delivery and performance of the Indenture, this
Agreement, the Units, the Senior Notes, the Unit Agreements and the
Remarketing Agreement (collectively, the "TRANSACTION DOCUMENTS") by the
Company and the issuance and sale of the Designated Securities and the
consummation of the transactions contemplated hereby and by the other
Transaction Documents have been authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, violate or constitute a breach of any of
the terms or provisions of, or constitute a default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Significant Subsidiary pursuant to any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
of its Significant Subsidiaries is a party or by which the Company or any
of its Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is subject,
except for such conflicts, breaches, violations, defaults Repayment Events,
or creations or impositions as would not, either individually or in the
aggregate, have a material adverse effect or cause a development involving
a prospective material adverse effect on the consolidated financial
position, business, or results of operations, whether or not arising from
transactions in the ordinary course of business, of the Company and its
Subsidiaries, taken as a whole (such effect, a "MATERIAL ADVERSE EFFECT");
nor will such action result in any violation of (i) any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its Subsidiaries or any of
their assets, properties or operations (except for such violations that
would not result in a Material Adverse Effect) or (ii) the provisions of
the charter or bylaws of the Company or any of its Subsidiaries. As used
herein, a "REPAYMENT EVENT" means any event or condition that gives the
holder of any note, debenture or other evidence of indebtedness of the
Company or any Significant Subsidiary (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
Subsidiary.
(n) Neither the Company nor any of its Significant Subsidiaries is in
violation of its charter or by-laws or in default (or, with the giving of
notice or lapse of time, would be in default) under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Significant Subsidiaries is a party or by
which the Company or any of its Significant Subsidiaries may be bound, or
to
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which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, except for such violations or defaults
as would not, individually or in the aggregate, have a Material Adverse
Effect.
(o) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the Registration Statement.
(p) No consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body is required for
the execution, delivery and performance of the Transaction Documents by the
Company, and the consummation of the transactions contemplated hereby and
by the Transaction Documents, except such as has been, or will be prior to
the applicable Delivery Date (as defined herein) obtained or made under the
Securities Act, the Exchange Act and the Trust Indenture Act and as
required by the state securities or "blue sky" laws.
(q) The authorized, issued and outstanding capital stock of the
Company as of January 29, 2004, is as set forth in the Prospectus; since
such date, except as disclosed in the Prospectus or changes occurring in
the ordinary course of business, there has been no change in the
capitalization of the Company (other than changes in outstanding Common
Stock resulting from grants, exercises and sales pursuant to employee or
director benefit plans, including, without limitation, the Company's stock
option plans, in each case existing on the date hereof (collectively, the
"STOCK PLANS")); all of the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable.
(r) Except as disclosed in the Prospectus and except for grants,
exercises and sales pursuant to the Stock Plans, (i) there are no
outstanding securities convertible into or exchangeable for, or warrants,
rights or options issued by the Company to purchase, any shares of the
capital stock of the Company, (ii) there are no statutory, contractual,
preemptive or other rights to subscribe for or to purchase any Designated
Securities or Common Stock and (iii) there are no restrictions upon
transfer of the Designated Securities or the Common Stock pursuant to the
Company's certificate of incorporation or bylaws.
(s) The Company is not, and after giving effect to the offering and
sale of the Designated Securities and the application of the proceeds
thereof as described in the Prospectus will not be, required to register as
an "investment company" as such term is defined in the Investment Company
Act of 1940, as amended (the "INVESTMENT COMPANY ACT").
(t) Except as otherwise disclosed in the Prospectus, there are no
legal or governmental actions, suits or proceedings pending to which the
Company or any of its Subsidiaries is a party or to which any property or
assets of the Company or any of its Subsidiaries is the subject which,
individually or in the aggregate, if so determined
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adversely, would reasonably be expected to have a Material Adverse Effect
or adversely affect the consummation of the transactions contemplated by
this Agreement; and, to the best of the Company's knowledge, no such
actions, suits or proceedings are threatened. Except as otherwise disclosed
in the Prospectus, no material labor dispute with the employees of the
Company or any of its Subsidiaries, or with the employees of any principal
supplier of the Company, exists or, to the best of the Company's knowledge,
is threatened or imminent.
(u) The Company and each of its Subsidiaries have filed all necessary
federal, state, local and foreign income and franchise tax returns required
to be filed through the date hereof and have paid all taxes due thereon
and, if due and payable, any related or similar assessment, fine or penalty
levied against any of them, except for taxes being contested in good faith
for which reserves in accordance with generally accepted accounting
principles have been provided and except where the failure to file such
returns or pay such taxes would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and no tax
deficiency has been determined adversely to the Company or any of its
Subsidiaries which has had (nor does the Company or any of its Subsidiaries
have any knowledge of any tax deficiency which, if determined adversely to
the Company or any of its Subsidiaries, would reasonably be expected to
have) a Material Adverse Effect.
(v) Except as otherwise disclosed in the Prospectus, the Company and
each of its Significant Subsidiaries has good and marketable title to all
the properties and assets reflected as owned in the financial statements
referred to in Section 1(aa) (or elsewhere in the Prospectus), in each case
free and clear of any security interests, mortgages, liens, encumbrances,
equities, claims and other defects, except such as do not materially and
adversely affect the value of such property and do not materially interfere
with the use made or proposed to be made of such property by the Company or
such Significant Subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or any Significant
Subsidiary are held under valid and enforceable leases, with such
exceptions as are not material and do not materially interfere with the use
made or proposed to be made of such real property, improvements, equipment
or personal property by the Company or such Significant Subsidiary.
(w) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "CODE")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA
(other than events with respect to which the 30-day notice requirement
under Section 4043 of ERISA has been waived) has occurred with respect to
any employee benefit plan of the Company or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect; each such
employee benefit plan is in compliance with applicable law, including ERISA
and the Code, except where such non-compliance could not reasonably be
expected to have a Material Adverse Effect; the Company and each of its
Subsidiaries have not incurred and do not expect to incur liability
expected to have a Material Adverse Effect under (i) Title IV of ERISA with
9
respect to the termination of, or withdrawal from, any pension plan for
which the Company or any of its Subsidiaries would have any liability or
(ii) Sections 412, 4971, 4975 or 4980B of the Code; and each such pension
plan that is intended to be qualified under Section 401(a) of the Code has
received a determination from the Internal Revenue Service that such
pension plan is so qualified in all material respects.
(x) Neither the Company, nor to its knowledge, any of its affiliates,
has taken, directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Designated
Securities (other than stabilization and other activities that may be taken
by the Underwriters and which are described under the caption
"Underwriting" in the prospectus or any amendment or supplement thereto).
(y) The consolidated financial statements and supporting schedules of
the Company filed with the Commission and included in the Registration
Statement and the Prospectus fairly present in all material respects the
financial condition of the Company and its consolidated subsidiaries as of
the respective dates indicated and the consolidated results of operations,
cashflows and changes in shareholders' equity of the Company and its
consolidated subsidiaries for the periods specified, in each case in all
material respects in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as indicated in the notes thereto). No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The summary and selected historical financial data
of the Company included in the Prospectus fairly present in all material
respects the information shown therein and have been compiled on a basis
consistent with that of the consolidated interim or audited financial
statements of the Company included in the Registration Statement and the
Prospectus.
(z) Neither the Company nor any of its Subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business material to
the Company and its Subsidiaries considered as a whole, otherwise than as
set forth or contemplated in the Prospectus; and, since the date as of
which information is given in the Prospectus, except as otherwise set forth
or contemplated in the Prospectus (including, without limitation, the
incurrence of debt in connection with the consummation of transactions
contemplated by the Stock Purchase Agreement (as defined below)), there has
not been (i) any change in the authorized capital stock of the Company,
(ii) any material increase in the aggregate in the consolidated short-term
or long-term debt of the Company (other than increases in the ordinary
course of business in amounts outstanding under the Company's commercial
paper program) or (iii) any Material Adverse Effect.
(aa) To the best of the Company's knowledge, Deloitte & Touche LLP,
who have audited certain financial statements and supporting schedules of
the Company and its consolidated subsidiaries, are independent accountants
as required by the Securities Act and the Exchange Act.
10
(bb) The Designated Securities and the Common Shares have been
approved for listing on the New York Stock Exchange (the "NYSE"), subject
only to official notice of issuance and the Company meeting the listing
requirements, and the Units and the Common Stock have been registered under
the Exchange Act.
(cc) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of the
Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement and any amendments
thereto become effective and at the First Delivery Date (as defined below)
and each Optional Delivery Date (as defined below), as the case may be,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
shall not apply to statements in or omissions from the Prospectus made in
reliance upon and in conformity with written information furnished to the
Company in writing by or on behalf of the Representatives specifically for
inclusion therein, which information consists solely of the information set
forth in the letter referred to in Section 6(e).
(dd) The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14 under the Exchange Act),
which (i) are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the
Company's principal executive officer and its principal financial officer
by others within those entities, particularly during the periods in which
the periodic reports required under the Exchange Act are being prepared,
(ii) have been evaluated for effectiveness as of the end of the relevant
period covered by the Company's most recent annual or quarterly report
filed with the Commission and (iii) are effective in all material respects
to perform the functions for which they were established. Based on the
evaluation of the Company's disclosure controls and procedures described
above, the Company is not aware of (a) any significant deficiency in the
design or operation of internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data
or any material weaknesses in internal controls or (b) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company's internal controls. Since the most recent
evaluation of the Company's disclosure controls and procedures described
above, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls.
(ee) The Company maintains a system of accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
11
(ff) There is and has been no failure on the part of the Company and
any of the Company's directors or officers, in their capacities as such, to
comply with any provision of the Sarbanes Oxley Act of 2002 and the rules
and regulations promulgated in connection therewith, including Section 402
related to loans and Sections 302 and 906 related to certifications, except
where failure to so comply would not, individually or in the aggregate,
have a Material Adverse Effect.
(gg) The Stock Purchase Agreement, dated as of March 25, 2004, among J
Sainsbury plc, JS USA Holdings Inc. and the Company (the "STOCK PURCHASE
AGREEMENT"), has been duly authorized, executed and delivered by the
Company, and, assuming due authorization, execution and delivery thereof by
the other parties thereto, constitutes a legally valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally
general principles of equity and to limitations on availability of
equitable relief, including specific performance (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
2. Purchase, Sale and Delivery of Designated Securities.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to issue and
sell to the several Underwriters, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the respective number of Firm Securities
set forth opposite such Underwriter's name on Schedule 1 hereto, at a purchase
price (the "PURCHASE PRICE") and upon such other terms as set forth in Schedule
2 attached hereto.
Delivery of and payment for the Firm Securities shall be made at the office
of Shearman & Sterling LLP, 000 Xxxxxxxxx Xxx, Xxx Xxxx, XX 00000 (or such other
place as may be agreed to by the Company and the Representatives) at 10:00 a.m.
(New York time) on [ ], 2004, which date and time may be postponed by agreement
between the Representatives and the Company (such date and time of delivery and
payment for the Firm Securities being herein called the "FIRST DELIVERY DATE").
Delivery of the Firm Securities shall be made to the Representatives for the
accounts of the several Underwriters against payment of the purchase price by
the Underwriters. Payment for the Firm Securities shall be made against delivery
to you of the Firm Securities as described below and effected either by wire
transfer of immediately available funds to a bank account, the account number
and the ABA number for such bank account to be provided by the Company to the
Representatives at least two business days in advance of the First Delivery
Date, or by such other manner of payment as may be agreed by the Company and the
Representatives.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants the
Option to the several Underwriters to purchase, severally and not jointly, the
Optional Securities at the same purchase price as the Underwriters shall pay for
the Firm Securities. The Option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection
12
with the sale and distribution of the Firm Securities. The Option may be
exercised in whole or in part at any time, and from time to time, so long as the
related Optional Delivery Date (as defined below) is within the 30-day period
starting from (and including) the date of this Agreement, upon notice in writing
or by facsimile by the Underwriters to the Company setting forth (i) the
aggregate number of Optional Securities as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Securities are to be registered and (iii) the
Optional Delivery Date. If any Optional Securities are to be purchased, each
Underwriter agrees, severally and not jointly, to purchase the number of
Optional Securities (subject to such adjustments to eliminate fractional amounts
as the Representatives may determine) that bears the same proportion to the
total number of Optional Securities to be purchased as the number of Firm
Securities set forth on Schedule 1 opposite the name of such Underwriter bears
to the total number of Firm Securities (rounded as the Representatives may
determine to the nearest share).
Each date for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL DELIVERY DATE", which may be the First
Delivery Date (the First Delivery Date and each Optional Delivery Date, if any,
being sometimes referred to as a "DELIVERY DATE"), shall be determined by the
Representatives but shall not be later than five full business days after
written notice of election to purchase Optional Securities is given. Delivery of
the Optional Securities shall be made to the Representatives for the accounts of
the several Underwriters against payment of the purchase price by the
Underwriters. Payment for the Optional Securities shall be made against delivery
to you of the Optional Securities as described below and effected either by wire
transfer of immediately available funds to a bank account, the account number
and the ABA number for such bank account to be provided by the Company to the
Representatives at least two business days in advance of the Optional Delivery
Date, or by such other manner of payment as may be agreed by the Company and the
Representatives.
(c) The Company will deliver against payment of the purchase price the
certificates for the Designated Securities which shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the Delivery Date and shall
be made available, at the request of the Representatives, for inspection at
least 24 hours prior to such Delivery Date.
(d) It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Securities and any Optional Securities the Underwriters have agreed to
purchase. BAS, individually and not as the Representatives of the Underwriters,
may (but shall not be obligated to) make payment for any Designated Securities
to be purchased by any Underwriter whose funds shall not have been received by
the Representatives by the Delivery Date for the account of such Underwriter,
but any such payment shall not relieve such Underwriter from any of its
obligations under this Agreement.
(e) The Representatives hereby advise the Company that the Underwriters
intend to offer for sale to the public, as described in the Prospectus, their
respective portions of the Designated Securities as soon after this Agreement
has been executed as the Representatives, in their sole judgment, have
determined is advisable and practicable.
13
(f) Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Underwriters hereunder.
3. Further Agreements of the Company. The Company further agrees:
(a) During such period beginning on the date hereof and ending on the
later of the First Delivery Date or such date, as in the reasonable opinion
of counsel for the Underwriters, the Prospectus is no longer required by
law to be delivered in connection with sales by an Underwriter or dealer
(the "PROSPECTUS DELIVERY PERIOD"), prior to amending the Registration
Statement (including any Rule 462(b) Registration Statement under the
Securities Act) or supplementing the Prospectus (including any amendment or
supplement through incorporation by reference of any report filed under the
Exchange Act), to furnish to the Representatives for review a copy of each
such proposed amendment or supplement, and not to file any such proposed
amendment or supplement to which the Representatives reasonably object.
(b) After the date of this Agreement, to promptly advise the
Representatives in writing (i) of the receipt of any comments of, or
requests for additional or supplemental information from, the Commission
relating to the Registration Statement, any Preliminary Prospectus or the
Prospectus, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to
any Preliminary Prospectus or the Prospectus (other than any amendment or
supplement resulting solely from the incorporation by reference of any
report filed under the Exchange Act), (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Designated Securities or the Common
Stock from any securities exchange upon which the relevant securities are
listed for trading or included or designated for quotation, or of the
threatening or initiation of any proceedings for any of such purposes. If
the Commission shall enter any such stop order at any time, the Company
will use its best efforts to obtain the lifting of such order at the
earliest possible moment. Additionally, the Company agrees that it shall
comply with the provisions of Rule 424(b), as applicable, under the
Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rule 424(b) were received in a
timely manner by the Commission.
(c) If, during the Prospectus Delivery Period, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order that the Prospectus as then amended or
supplemented will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if in the opinion of the
Representatives or counsel for the Underwriters it is otherwise necessary
to amend or supplement the Prospectus to comply with law, to promptly
notify the Underwriters and prepare, subject to Section 3(a) hereof,
14
file with the Commission and furnish at its own expense to the Underwriters
and to dealers, amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) Not later than 12:00 p.m. (New York time) on the second business
day following the date the Designated Securities are first released by the
Underwriters for sale to the public and from time to time, furnish to the
Underwriters and to Shearman & Sterling LLP, counsel to the Underwriters,
copies of the Prospectus (and all amendments and supplements thereto) in
each case as soon as available and in such quantities as the Underwriters
reasonably request for internal use and for distribution to prospective
purchasers. The Company will pay the expenses of printing and distributing
to the Underwriters all such documents.
(e) Promptly to take such action as the Representatives may reasonably
request from time to time, to qualify the Designated Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions in the
United States for as long as may be necessary to complete the distribution
of the Designated Securities; provided that in connection therewith, the
Company shall not be required to qualify as a foreign corporation or
otherwise subject itself to taxation in any jurisdiction in which it is not
otherwise so qualified or subject.
(f) As soon as practicable, to make generally available to its
security holders an earnings statement (which need not be audited) covering
the twelve-month period ending April 30, 2005 that satisfies the provisions
of Section 11(a) of the Securities Act.
(g) During the Prospectus Delivery Period, to file, on a timely basis,
with the Commission and the NYSE all reports and documents required to be
filed under the Exchange Act.
(h) For a period of two years following the First Delivery Date, to
furnish to the Underwriters upon request copies of all materials furnished
by the Company to its stockholders and all public reports and all reports
and financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act; provided, however, that the Company shall not
be required to provide the Underwriters with any such reports or similar
forms that have been filed with the Commission by electronic transmission
pursuant to XXXXX.
(i) To apply the proceeds from the sale of the Designated Securities
as set forth under "Use of Proceeds" in the Prospectus.
(j) For a period of 60 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any
15
transaction or device which is designed to, or could be expected to, result
in the disposition by any person at any time in the future of) any Units,
Purchase Contracts or shares of Common Stock or securities convertible into
or exchangeable for Units, Purchase Contracts or shares of Common Stock or
substantially similar securities, or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or substantially similar
securities, or publicly announce the intention to do any of the foregoing,
other than (i) the Designated Securities, (ii) shares of Common Stock
issuable in connection with the Treasury Units (as defined in the
Prospectus) or Corporate Units, or shares of Common Stock issuable upon
settlement of the Corporate Units or the Treasury Units, (iii) shares
issuable pursuant to the conversion or exchange of convertible securities
outstanding on the date hereof, (iv) shares issuable pursuant to the
exercise of warrants, rights or options outstanding on the date hereof, or
(v) the grant of options to purchase Common Stock and other awards pursuant
to the Stock Plans, the issuance of Common Stock pursuant to the Stock
Plans and the issuance of Common Stock upon exercise, conversion or
exchange of such options and other awards granted pursuant to the Stock
Plans, or (2) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, in each
case without the prior written consent of Banc of America Securities LLC
(provided that, notwithstanding the foregoing restrictions, the Company may
publicly announce an intention to issue Common Stock or other securities or
issue Common Stock or other securities in connection with any acquisition
made by the Company, so long as any such acquisition does not close prior
to the expiration of the 60-day period referenced above); and to use its
reasonable efforts to cause each executive officer (as defined for purposes
of Section 16 of the Exchange Act) and director of the Company to furnish
to the Underwriters, prior to the First Delivery Date, an executed letter
substantially in the form attached hereto as Exhibit C; provided, however,
that the Company may issue shares of its Common Stock or options to
purchase its Common Stock, or Common Stock upon exercise of options,
pursuant to any stock option, stock bonus or other stock plan or
arrangement described in the Prospectus, but only if the executive officers
and directors that are holders of such shares, options, or shares issued
upon exercise of such options, agree in writing not to sell, offer, dispose
of or otherwise transfer any such shares or options during such 60-day
period without the prior written consent of BAS (which consent may be
withheld at the sole discretion of the BAS). Notwithstanding the foregoing,
if (x) during the last 17 days of the 60-day restricted period the Company
issues an earnings release or material news or a material event relating to
the Company occurs; or (y) prior to the expiration of the 60-day restricted
period, the Company announces that it will release earnings results during
the 16 day period beginning on the last day of the 60-day period; the
restrictions imposed in this clause (l) shall continue to apply until the
expiration of the 18 day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event; provided
however, that this sentence shall not apply if the research published or
distributed on the Company is compliant under Rule 139 of the Securities
Act and the Company's securities are actively traded as defined in Rule
101(c)(1) of Regulation M of the Exchange Act.
16
(k) During the Prospectus Delivery Period, none of the Company or any
of its affiliates will take, directly or indirectly, any action which is
designed to stabilize or manipulate, or which constitutes or which might
reasonably be expected to cause or result in stabilization or manipulation,
of the price of any security of the Company in connection with the offering
of the Designated Securities (other than stabilization and other activities
that may be taken by the Underwriters and which are described under the
caption "Underwriting" in the Prospectus or any amendment or supplement
thereto).
(l) To take such steps as shall be necessary to ensure that it shall
not become an "investment company" within the meaning of such term under
the Investment Company Act.
(m) To use its best efforts to have the Designated Securities and the
Common Shares approved by the NYSE for listing prior to the date of this
Agreement.
(n) To cause to be prepared and delivered, at the Company's expense,
within one business day from the effective date of this Agreement, to the
Underwriters an "electronic Prospectus" to be used by the Underwriters in
connection with the offering and sale of the Designated Securities. As used
herein, the term "electronic Prospectus" means a form of Prospectus, and
any amendment or supplement thereto, that meets each of the following
conditions: (i) it shall be encoded in an electronic format, satisfactory
to the Representatives, that may be transmitted electronically by the
Representatives and the other Underwriters to offerees and purchasers of
the Designated Securities for at least the Prospectus Delivery Period; (ii)
it shall disclose the same information as the paper Prospectus and
Prospectus filed pursuant to XXXXX, except to the extent that graphic and
image material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic Prospectus
with a fair and accurate narrative description or tabular representation of
such material, as appropriate; and (iii) it shall be in or convertible into
a paper format or an electronic format, satisfactory to the
Representatives, that will allow investors to store and have continuously
ready access to the Prospectus at any future time, without charge to
investors (other than any fee charged for subscription to the Internet as a
whole and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to XXXXX or
otherwise with the Commission an undertaking that, upon receipt of a
request by an investor or his or her representative within the Prospectus
Delivery Period, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the Prospectus.
(o) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Units in such a manner as
would require the Company or any of its subsidiaries to register as an
investment company under the Investment Company Act.
(p) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any securities of the Company.
17
4. Expenses. The Company agrees to pay: (a) the costs incident to the
authorization, issuance, sale and delivery of the Designated Securities, and any
taxes payable in that connection; (b) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each Preliminary Prospectus and the
Prospectus, and all amendments and supplements thereto, and the Transaction
Documents; (c) the fees and expenses of the Company's counsel and independent
accountants (it being understood that in no event shall the Underwriters be
liable to pay any fees or expenses of Deloitte & Touche LLP); (d) any stamp or
transfer taxes in connection with the issuance and sale of the Designated
Securities to the Underwriters; (e) the fees and expenses of qualifying the
Designated Securities and the Common Shares under the securities laws of the
several jurisdictions as provided in Section 3(e); (f) the costs and expenses of
the Company and the reasonable expenses of the Underwriters in connection with
the marketing and offering of the Designated Securities and the costs and
expenses of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the Designated
Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show with the prior
approval of the Company; (g) all expenses and fees in connection with listing
the Designated Securities and the Common Shares on the NYSE; (h) the fees and
expenses of the Trustee under the Indenture, (i) all fees and expenses of any
securities intermediary in connection with the Transaction Documents and of the
Purchase Contract Agent and the Collateral Agent under the Unit Agreements, (j)
the fees and expenses of the registrar and transfer agent of the Common Stock;
(i) the filing fees incident to the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Designated
Securities, if required; (x) all fees, costs and expenses referred to in Item 14
of Part II of the Registration Statement; and (k) all other costs and expenses
incident to the performance of the obligations of the Company under this
Agreement; provided that, except as provided in this Section 4, Section 6 and
Section 9, the Underwriters shall pay their own costs and expenses, including
the costs and expenses of their counsel.
5. Conditions of the Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) For the period from and after effectiveness of this Agreement and
prior to the Delivery Date:
(i) the Company shall have filed the final Prospectus in relation
to the Designated Securities with the Commission pursuant to Rule
424(b) in the manner and within the time period required by Rule
424(b) under the Securities Act;
18
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement shall be in
effect and no proceedings for such purpose shall have been instituted
or threatened by the Commission; and
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements that shall
not have been resolved to the NASD's satisfaction.
(b) The Underwriters shall not have discovered and disclosed to the
Company prior to or on such Delivery Date that the Registration Statement,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto contains any untrue statement of a fact that, in the opinion of
counsel to the Underwriters, is material or omits to state any fact that is
material and necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Registration
Statement, the Prospectus, any Preliminary Prospectus or any amendment or
supplement thereto, and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel to the Underwriters, and the Company
shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(d) Xxxxx Day shall have furnished to the Underwriters its written
opinion and letter, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Underwriters and substantially to the effect set forth
in Exhibit A hereto.
(e) Xxxx X. Xxxx, Esq., General Counsel and Secretary to the Company,
shall have furnished to the Underwriters his written opinion to the effect
set forth in Exhibit B hereto; addressed to the Underwriters and dated such
Delivery Date, in form and substance satisfactory to the Underwriters and
substantially to the effect set forth in Exhibit B hereto.
(f) Shearman & Sterling LLP shall have furnished to the Underwriters
its written opinion, as counsel to the Underwriters, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Underwriters.
(g) The Underwriters shall have received, on each of the date hereof
and each Delivery Date, a letter dated the date hereof or such Delivery
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Deloitte & Touche LLP, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information of the Company and its consolidated
subsidiaries contained in and incorporated by reference in the Registration
Statement and the Prospectus provided that
19
the letter delivered on the First Delivery Date shall use a "cut-off date"
not earlier than the date hereof.
(h) The Company shall have furnished to the Underwriters on such
Delivery Date its certificate, dated such Delivery Date, executed by its
Chief Executive Officer, and by its Executive Vice President and Chief
Financial Officer, in form and substance satisfactory to the Underwriters,
to the effect that the representations, warranties and agreements of the
Company in Section 1 are true and correct as of the date given and as of
such Delivery Date; and the Company has complied in all material respects
with all its agreements contained herein to be performed prior to or on
such Delivery Date and the conditions set forth in Sections 5(i) and 5(k)
have been fulfilled.
(i) (i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
material to the Company and its Subsidiaries considered as whole, otherwise
than as set forth or contemplated in the Prospectus or (ii) since such
date, except as otherwise set forth or contemplated in the Prospectus
(including, without limitation, the incurrence of debt in connection with
the consummation of transactions contemplated by the Stock Purchase
Agreement (as defined below)), there shall not have been (A) any change in
the authorized capital stock of the Company, (B) any material increase in
the consolidated short-term or long-term debt of the Company (other than
increases in the ordinary course) of business in amounts outstanding under
the Company's commercial paper program) or (B) any Material Adverse Effect,
the effect of which, in any such case described in clause (i) or (ii), is,
in the judgment of the Representatives, material and adverse and makes it
impracticable or inadvisable to proceed with the offering or the delivery
of the Designated Securities being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
NASDAQ or the over-the-counter market, or trading in any securities of the
Company on any exchange shall have been suspended or limited, or minimum or
maximum prices shall have been established on any such exchange or market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a general banking
moratorium shall have been declared by United States federal, New York,
Delaware or California authorities; (iii) there shall have occurred any
outbreak or escalation of national or international hostilities or any
crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representative is material and adverse and makes it impracticable or
inadvisable to market the Designated Securities in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; or (iv) in the judgment of the Representative there shall have
occurred any Material Adverse Effect.
20
(k) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities or preferred stock by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities or preferred stock.
(l) The Representatives shall have received from each executive
officer and director [(other than the individuals set forth on Exhibit D
attached hereto)] of the Company an executed letter contemplated by Section
3(i) hereof.
(m) The Company shall have furnished to the Representatives such
further information, certificates and documents as the Representatives may
reasonably request to evidence compliance with the conditions set forth in
this Section 5.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel to the Underwriters.
6. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Underwriter within the meaning
of the Securities Act or the Exchange Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of the Designated Securities), to which the
Underwriters or any such officer, employee or controlling person may become
subject, insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, any Preliminary
Prospectus or the Prospectus, or in any amendment or supplement thereto, (ii)
the omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus or the Prospectus or in any amendment or supplement
thereto, in any Marketing Materials or in any Blue Sky Application, any material
fact necessary to make the statements therein not misleading, and shall
reimburse the Underwriters and each such officer, employee and controlling
person promptly upon demand for any legal or other expenses (including the fees
and disbursements of counsel chosen by BAS) reasonably incurred by the
Underwriters or any such officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action 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, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, any such Preliminary
Prospectus or the Prospectus, or in any such amendment or supplement, in
reliance upon and in conformity with the written information furnished to the
Company by or on behalf of the Underwriters concerning the Underwriters
specifically for inclusion therein, which information consists solely of the
information set forth in the letter referred to in Section 6(e);
21
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 to the extent that such loss, claim, damage, liability or
action of such Underwriter results from the fact such Underwriter sold
Designated Securities to a person as to whom it shall be established that such
sale was an initial resale by such Underwriter and there was not sent or given
to such person, if required by law to have been so sent or given, at or prior to
the written confirmation of such sale to such person, a copy of the Prospectus,
if the Company had previously furnished copies thereof pursuant to Section 3(d)
and the loss, claim, damage or liability of such Underwriter results from an
untrue statement or omission of a material fact contained in the Preliminary
Prospectus which was (i) identified to such Underwriter prior to the furnishing
to such Underwriter of the corrected Prospectus and (ii) corrected in the
Prospectus. The foregoing indemnity agreement is in addition to any liability
which the Company may otherwise have to the Underwriters or to any officer,
employee or controlling person of the Underwriters.
(b) The Underwriters, severally and not jointly, shall indemnify and hold
harmless the Company, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state in the Registration Statement, any Preliminary Prospectus, the Prospectus
or in any amendment or supplement thereto, any material fact necessary to make
the statements therein not misleading, but in each case only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with the written
information furnished to the Company by the Representatives specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The Company hereby acknowledges that the only information
that the Underwriters have furnished to the Company expressly for use in the
Registration Statement, any Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements referred to in the letter to
be delivered pursuant to Section 6(e) hereof. The foregoing indemnity agreement
is in addition to any liability which the Underwriters may otherwise have to the
Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been prejudiced by
such failure and, provided, further, that the failure to notify the indemnifying
party shall not relieve it from
22
any liability which it may have to an indemnified party otherwise than under
this Section 6. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 6 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that a conflict may arise between the positions of the indemnifying
party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party in connection with the defense
thereof unless the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (the Representatives in the case of Section 6(b),
representing the indemnified parties who are parties to such action) and in that
event the reasonable fees and expenses of such separate counsel shall be paid by
the Company. No indemnifying party shall, (i) without the prior written consent
of the indemnified parties (which consent shall not be unreasonably withheld)
settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss of
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the
Designated Securities, or (ii) if the allocation provided by clause 6(d)(i) is
not permitted by applicable law, in such proportion as is appropriate
23
to reflect not only the relative benefits referred to in clause 6(d)(i) but also
the relative fault of the Company on the one hand and the Underwriters on the
other with respect to the statements or omissions or alleged statements or
alleged omissions that resulted in such loss, claim, damage or liability (or
action in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Designated Securities purchased under this Agreement (before deducting expenses)
received by the Company on the one hand, and the total discounts and commissions
received by the Underwriters with respect to the Designated Securities purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Designated Securities under this Agreement. The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if the amount of
contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 6(d) shall be
deemed to include, for purposes of this Section 6(d), 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 Section 6(d), the Underwriters shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Designated Securities distributed by it exceeds the amount of any damages
which the Underwriters have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) Prior to the First Delivery Date, the Underwriters shall deliver a
letter identifying the statements supplied by them in writing to the Company
specifically for inclusion in the Prospectus.
7. Default of One or More of the Several Underwriters. If, on any Delivery
Date, any one or more of the several Underwriters shall fail or refuse to
purchase Designated Securities that it or they have agreed to purchase hereunder
on such date, and the aggregate number of Designated Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
does not exceed 10% of the aggregate number of the Designated Securities to be
purchased on such date, the other Underwriters shall be obligated, severally, in
the proportions that the number of Firm Securities set forth opposite their
respective names on Schedule 1 bears to the aggregate number of Firm Securities
set forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as may be specified by the Representatives with the consent of
the non-defaulting Underwriters, to purchase the Designated Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date. If, on any Delivery Date, any one or more of the
Underwriters shall fail or refuse to purchase Designated Securities and the
aggregate number of Designated Securities
24
with respect to which such default occurs exceeds 10% of the aggregate number of
Designated Securities to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Designated Securities are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 6 and Section 9 shall at all
times be effective and shall survive such termination. In any such case either
the Representatives or the Company shall have the right to postpone the Delivery
Date but in no event for longer than seven days in order that the required
changes, if any, to the Registration Statement and the Prospectus or any other
documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
7. Any action taken under this Section 7 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
8. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Firm Securities or the Optional
Securities, respectively, if, prior to that time, any of the events described in
Sections 5(i), (j) or (k) shall have occurred or if the Underwriters shall
decline to purchase such Designated Securities for any reason permitted under
this Agreement. In such case, the Company shall have no liability hereunder
except as provided by Sections 4, 6 and 9 hereof
9. Reimbursement of Underwriters' Expenses. If (a) the Company shall fail
to tender the Designated Securities for delivery to the Underwriters for any
reason permitted under this Agreement other than a breach by the Underwriters of
their representations herein or obligations hereunder or (b) the Underwriters
shall decline to purchase the Designated Securities for any reason permitted
under this Agreement (including the termination of this Agreement pursuant to
Section 8 but excluding the failure of any of the conditions herein to be
satisfied as a result of a breach by the Underwriters of their representations
herein), the Company shall reimburse the Underwriters for the reasonable fees
and expenses of their counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Designated Securities, and upon demand, the Company
shall pay the full amount thereof to the Underwriters.
10. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) If to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Banc of America Securities LLC, 0 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets (Fax:
000-000-0000); and
with a copy (which shall not constitute notice) to Shearman & Sterling
LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxxx III, Esq. (Fax: 000-000-0000; Telephone: 000-000-0000);
25
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to it at 000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxx
00000, Attention: General Counsel (Fax: 000-000-0000; Telephone:
000-000-0000);
with a copy (which shall not constitute notice) to Xxxxx Day, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxx,
Esq. (Fax: 000-000-0000; Telephone: 000-000-0000).
Any notice of a change of address or facsimile transmission number must be
given by the Company or the Underwriters, as the case maybe, in writing at least
three days in advance of such change.
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company and their
respective successors. This Agreement and the terms and provisions hereof are
for the sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company contained in this
Agreement shall also be deemed to be for the benefit of the officers and
employees of the Underwriters and the person or persons, if any, who control the
Underwriters within the meaning of Section 15 of the Securities Act and (B) the
representations and warranties of the Underwriters in this Agreement and the
indemnity agreement of the Underwriters contained in Section 6(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company, and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing contained in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 11, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
12. Survival. The respective indemnities, representations, warranties and
agreements of the Company and the Underwriters contained in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Designated Securities and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any of them or
any person controlling any of them.
13. Definition of the Terms "Business Day", "Significant Subsidiary" and
"Subsidiary". For purposes of this Agreement, (a) "BUSINESS DAY" means any day
on which the New York Stock Exchange, Inc. is open for trading, (b) "SIGNIFICANT
SUBSIDIARY" has the meaning assigned to it under Rule 405 of the Securities Act
and (c) "SUBSIDIARY" shall mean any entity of which the Company owns, directly
or indirectly, at least 50 percent of the voting securities; provided that no
entity shall be deemed to be a Significant Subsidiary or a Subsidiary for
purposes of this Agreement unless such entity is accounted for as a consolidated
entity in the Company's consolidated financial statements in accordance with
generally accepted accounting principles in the United States.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
26
15. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
27
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for that
purpose below.
Very truly yours,
XXXXXXXXX'X, INC.
By:
---------------------------------------
Name:
Title:
Accepted and agreed by:
BANC OF AMERICA SECURITIES LLC
CREDIT SUISSE FIRST BOSTON LLC
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
WACHOVIA CAPITAL MARKETS, LLC
XXXXX FARGO SECURITIES, LLC
WEDBUSH XXXXXX SECURITIES INC.
THE XXXXXXXX CAPITAL GROUP, L.P.
Acting as Representatives of the
several Underwriters named in
attached Schedule 1
BANC OF AMERICA SECURITIES LLC
By:
--------------------------------------------
Name:
Title
28
SCHEDULE 1
NUMBER OF FIRM SECURITIES
UNDERWRITERS TO BE PURCHASED
----------------------------------------------------------------------------------------------------------
Banc of America Securities LLC.............................................
Credit Suisse First Boston LLC ............................................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ........................
Banc One Capital Markets, Inc. ............................................
Wachovia Capital Markets, LLC .............................................
Xxxxx Fargo Securities, LLC ...............................................
Wedbush Xxxxxx Securities Inc. ............................................
The Xxxxxxxx Capital Group, L.P............................................
-----------------------
TOTAL................................. 40,000,000
Schedule 1
SCHEDULE 2
REGISTRATION STATEMENT NO.: 333-113995
NUMBER OF DESIGNATED SECURITIES: 46,000,000
Number of Firm Securities: 40,000,000
Maximum Number of Optional Securities: 6,000,000
PURCHASE PRICE BY UNDERWRITERS: $[ ] per Corporate Unit
PRICE TO PUBLIC PER CORPORATE UNIT: $25.00
GROSS SPREAD PER CORPORATE UNIT: [ ]%
REFERENCE PRICE: $[ ]
THRESHOLD APPRECIATION PRICE: $[ ]
PAYMENT DATES: February 16, May 16, August 16 and November 16
CONTRACT ADJUSTMENT PAYMENT DATES: February 16, May 16, August 16 and
November 16
CONTRACT ADJUSTMENT PAYMENTS: [ ]% of $25.00 Stated Amount
PURCHASE CONTRACT SETTLEMENT DATE: May 16, 2007
AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES: $1,000,000,000
AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES (IF THE UNDERWRITERS PURCHASE ALL
OF THE OPTIONAL SECURITIES): $1,150,000,000
MATURITY OF THE SENIOR NOTES: February 16, 2009
INTEREST RATE ON THE SENIOR NOTES: [ ]%
STOCK EXCHANGE LISTING: New York Stock Exchange
Schedule 2
