Food Lion, Inc.
Underwriting Agreement
New York, New York
April 16, 1997
To the Representative
named in Schedule I
hereto of the Underwriters
named in Schedule II
hereto
Ladies and Gentlemen:
Food Lion, Inc., a North Carolina corporation (the
"Company"), proposes to sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the
"Representative") are acting as representative, the principal
amount of its securities identified in Schedule I hereto (the
"Securities"), to be issued under an indenture dated as of August
15, 1991 and as supplemented from time to time (the "Indenture"),
between the Company and The Bank of New York, as trustee (the
"Trustee").
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, each Underwriter as
set forth below in this Section 1. Certain terms used in this
Section 1 are defined in paragraph (c) hereof.
(a) The Company has met the requirements for the use
of Form S-3 under the Securities Act of 1933 (the "Act") and
has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the file number of
which is set forth in Schedule I hereto) on such Form,
including a basic prospectus, for registration under the Act
of the offering and sale of the Securities. The Company may
have filed one or more amendments thereto, and may have used
a Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so
amended, has become effective. The offering of the
Securities is a Delayed Offering and, although the Basic
Prospectus may not include all the information with respect
to the Securities and the offering thereof required by the
Act and the rules thereunder to be included in the Final
Prospectus, the Basic Prospectus includes all such
information required by the Act and the rules thereunder to
be included therein as of the Execution Time. The Company
will next file with the Commission pursuant to Rules 415 and
424(b)(2) or (5) a final supplement to the form of
prospectus included in such registration statement relating
to the Securities and the offering thereof. As filed, such
final prospectus supplement shall include all required
information, with respect to the Securities and the offering
thereof and, except to the extent the Representative shall
agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as
the Company has advised you, prior to the Execution Time,
will be included or made therein.
(b) At the Execution Time, the Registration Statement
did or will, and when the Final Prospectus is first filed in
accordance with Rule 424(b) and on the Closing Date, the
Final Prospectus (and any supplement thereto) will, comply
in all material respects with the applicable requirements of
the Act, the Securities Exchange Act of 1934 (the "Exchange
Act") and the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the respective rules thereunder; at the
Execution Time, the Registration Statement did not or will
not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading; at the Execution Time and on the Closing Date
the Indenture did or will comply in all material respects
with the requirements of the Trust Indenture Act and the
rules thereunder; and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not, include 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; provided, however, that the
Company makes no representations or warranties as to (i)
that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification
(Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on
behalf of any Underwriter through the Representative
specifically for inclusion in the Registration Statement or
the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term "the
Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall
mean the basic prospectus referred to in the first sentence
of paragraph (a) above contained in the Registration
Statement at the Effective Date or, if such basic prospectus
has been amended after the Effective Date, the basic
prospectus as most recently amended and filed pursuant to
Rule 424(b). "Preliminary Final Prospectus" shall mean any
preliminary prospectus supplement to the Basic Prospectus
which describes the Securities and the offering thereof and
is used prior to the filing of the Final Prospectus. "Final
Prospectus" shall mean the prospectus supplement relating to
the Securities that is first filed pursuant to Rule 424(b)
after the Execution Time, together with the Basic
Prospectus. "Registration Statement" shall mean the
registration statement referred to in the first sentence of
paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the
Execution Time and, in the event any post-effective
amendment thereto becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such
registration statement as so amended. Such term shall
include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Regulation S-K"
refer to such rules or regulation under the Act. "Rule 430A
Information" means information with respect to the
Securities and the offering thereof permitted to be omitted
from the Registration Statement when it becomes effective
pursuant to Rule 430A. Any reference herein to the
Registration Statement, the Basic Prospectus any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed
under the Exchange Act on or before the Effective Date of
the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement", with respect
to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, shall
be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, deemed to be incorporated
therein by reference. A "Delayed Offering" shall mean an
offering of securities pursuant to Rule 415 which does not
commence promptly after the effective date of a registration
statement, with the result that only information required
pursuant to Rule 415 need be included in such registration
statement at the effective date thereof with respect to the
securities so offered.
2. Purchase and Sale. Subject to the terms and
conditions and in reliance upon the representations and
warranties herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price set
forth in Schedule I hereto, the principal amount of the
Securities set forth opposite such Underwriter's name in Schedule
II.
3. Delivery and Payment. Delivery of and payment for
the Securities shall be made on the date and at the time
specified in Schedule I hereto (or such later date not later than
three business days after such specified date as the
Representative shall designate), which date and time may be
postponed by agreement between the Representative and the Company
or as provided in Section 8 hereof (such date and time of
delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made
through the facilities of the Depository Trust Company to the
respective accounts of the Underwriters against payment by each
of the Underwriters through the Representative of the purchase
price thereof to or upon the order of the Company by wire
transfer of same day funds to an account specified in writing by
the Company not less than two business days prior to the Closing
Date. Delivery of the Securities shall be made at such location
as the Representative shall reasonably designate at least one
business day in advance of the Closing Date and payment for the
Securities shall be made at the office specified in Schedule I
hereto. Certificates for the Securities shall be registered in
such names and in such denominations as the Representative may
request not less than three full business days in advance of the
Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by the Representative in New
York, New York, not later than 1:00 PM on the business day prior
to the Closing Date.
4. Agreements. The Company agrees with each of the
Underwriters that:
(a) Prior to the termination of the offering of the
Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus unless the Company has furnished you a copy for
your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Company will
cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to
the Representative of such timely filing. The Company will
promptly advise the Representative (i) when the Final
Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b), (ii)
when, prior to termination of the offering of the
Securities, any amendment to the Registration Statement
shall have been filed or become effective, (iii) of any
request by the Commission for any amendment of the
Registration Statement or supplement to the Final Prospectus
or for any additional information, (iv) of the issuance by
the Commission of any stop order suspending the
effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that
purpose and (v) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent
the issuance of any such stop order and, if issued, to
obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any
event occurs as a result of which the Final Prospectus as
then supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein in the light of the
circumstances under which they were made not misleading, or
if it shall be necessary to amend the Registration Statement
or supplement the Final Prospectus to comply with the Act or
the Exchange Act or the respective rules thereunder, the
Company promptly will prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the
Representative an earnings statement or statements of the
Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Representative and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer
may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and
any supplement thereto as the Representative may reasonably
request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) Until the business date set forth on Schedule I
hereto, the Company will not, without the consent of the
Representative, offer, sell or contract to sell, or announce
the offering of, any debt securities issued or guaranteed by
the Company (other than the Securities).
5. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Securities
shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
Execution Time and the Closing Date, to the accuracy of the
statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Final Prospectus, and any such supplement,
shall have been filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending
the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the
Representative the opinion of Xxxxx Xxxxx, Assistant General
Counsel of the Company, dated the Closing Date, to the
effect that:
(i) each of the Company and Kash n' Xxxxx Food
Stores, Inc. (the "Subsidiary") has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction in
which it is chartered or organized, with full corporate
power and authority to own its properties and conduct
its business as described in the Final Prospectus, and
is duly qualified to do business as a foreign
corporation and is in good standing under the laws of
each jurisdiction which requires such qualification
wherein it owns or leases material properties or
conducts material business;
(ii) all the outstanding shares of capital stock
of the Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Prospectus,
all outstanding shares of capital stock of the
Subsidiary are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security
interests, claims, liens or encumbrances;
(iii) the Company's authorized equity
capitalization is as set forth in the Final Prospectus;
and the Securities conform to the description thereof
contained in the Final Prospectus;
(iv) the Indenture has been duly authorized,
executed and delivered and constitutes a legal, valid
and binding instrument enforceable against the Company
in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time
in effect); and the Securities have been duly
authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant
to this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the
benefits of the Indenture;
(v) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Final Prospectus, and there
is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Final Prospectus, or to be filed as an
exhibit, which is not described or filed as required;
and the statements included or incorporated in the
Final Prospectus describing any legal proceedings or
material contracts or agreements relating to the
Company fairly summarize such matters;
(vi) such counsel has no reason to believe that
at the Execution Time the Registration Statement
contained any untrue statement of a material fact or
omitted to state any material fact required to be
stated therein or necessary to make the statements
therein not misleading or that on the date of any
filing pursuant to Rule 424(b) and on the Closing Date
the Final Prospectus included or includes any untrue
statement of a material fact or omits to state a
material fact necessary to make the statements therein,
in the light of the circumstances under which they were
made, not misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein, except such as have been obtained
under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in
such opinion) as have been obtained; and
(ix) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach
of, or constitute a default under the charter or
by-laws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and
to which the Company or any of its subsidiaries is a
party or bound, or any order or decree known to such
counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
subsidiaries.
In rendering such opinion, such counsel may rely (A) as
to matters involving the application of laws of any
jurisdiction other than the State of North Carolina or the
United States, to the extent deemed proper and specified in
such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact,
to the extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to
the Final Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
(c) The Company shall have furnished to the
Representative the opinion of Akin, Gump, Strauss, Xxxxx &
Xxxx, L.L.P., counsel to the Company, dated the Closing
Date, to the effect that:
(i) each of the Company and the Subsidiary has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its
properties and conduct its business as described in the
Final Prospectus.
(ii) the Indenture has been duly authorized,
executed and delivered, has been duly qualified under
the Trust Indenture Act, and constitutes a legal, valid
and binding instrument enforceable against the Company
in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time
in effect); and the Securities have been duly
authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant
to this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the
benefits of the Indenture;
(iii) to the knowledge of such counsel, there is
no pending or threatened action, suit or proceeding
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its subsidiaries, of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Final Prospectus; and the
statements included or incorporated in the Final
Prospectus describing any legal proceedings known to
such counsel or material contracts or agreements
relating to the Company and known to such counsel
fairly summarize such matters;
(iv) the Registration Statement has become
effective under the Act; any required filing of the
Basic Prospectus, any Preliminary Final Prospectus and
the Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the
best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the
Registration Statement and the Final Prospectus (other
than the financial statements and other financial and
statistical information contained therein as to which
such counsel need express no opinion) comply as to form
in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; and
such counsel has no reason to believe that at the
Execution Time the Registration Statement contained any
untrue statement of a material fact or omitted to state
any material fact required to be stated therein or
necessary to make the statements therein not misleading
or that on the date of any filing pursuant to Rule
424(b) and on the Closing Date the Final Prospectus
included or includes any untrue statement of a material
fact or omits to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading;
(v) this Agreement has been duly authorized,
executed and delivered by the Company;
(vi) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach
of, or constitute a default under the charter or
by-laws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and
to which the Company or any of its subsidiaries is a
party or bound or any order or decree known to such
counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Company or any of its
subsidiaries; and
(vii) no consent, approval, authorization or
order of any court or governmental agency or body is
required for the consummation of the transactions
contemplated herein, except such as have been obtained
under the Act and such as may be required under the
blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the
Underwriters and such other approvals (specified in
such opinion) as have been obtained.
In rendering such opinion, such counsel may rely (A) as
to matters involving the application of laws of any
jurisdiction other than the State of New York or the United
States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing
believed to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the
extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to
the Final Prospectus in this paragraph (c) include any
supplements thereto at the Closing Date.
(d) The Representative shall have received from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Underwriters,
such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Final Prospectus
(together with any supplement thereto) and other related
matters as the Representative may reasonably require, and
the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them
to pass upon such matters.
(e) The Company shall have furnished to the
Representative a certificate of the Company, signed by the
Chief Financial Officer, Vice President and the Director of
Accounting, Treasurer, dated the Closing Date, to the effect
that the signer of such certificate has carefully examined
the Registration Statement, the Final Prospectus, any
supplement to the Final Prospectus and this Agreement and
that:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive
of any supplement thereto), there has been no material
adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions
in the ordinary course of business, except as set forth
in or contemplated in the Final Prospectus (exclusive
of any supplement thereto).
(f) At the Execution Time, Coopers & Xxxxxxx L.L.P.
shall have furnished to the Representative a letter or
letters (which may refer to letters previously delivered to
the Representative), dated as of the date of the Execution
Time, in form and substance satisfactory to the
Representative, confirming that they are independent
accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules included
or incorporated in the Registration Statement and the
Final Prospectus and reported on by them comply in form
in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the
related published rules and regulations;
(ii) on the basis of a reading, and limited
review in accordance with standards established by the
American Institute of Certified Public Accountants, of
the latest unaudited financial statements made
available by the Company and its subsidiaries; carrying
out certain specified procedures (but not an
examination in accordance with generally accepted
auditing standards) which would not necessarily reveal
matters of significance with respect to the comments
set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the
audit, profit sharing, stock option, senior management
compensation and management succession plan committees
of the Company and the Subsidiary; and inquiries of
certain officials of the Company who have
responsibility for financial and accounting matters of
the Company and its subsidiaries as to transactions and
events subsequent to the date of the most recent
audited financial statements in or incorporated in the
Final Prospectus, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration
Statement and the Final Prospectus do not comply
in form in all material respects with applicable
accounting requirements and with the published
rules and regulations of the Commission with
respect to financial statements included or
incorporated in quarterly reports on Form 10-Q
under the Exchange Act; and said unaudited
financial statements are not in conformity with
generally accepted accounting principles applied
on a basis substantially consistent with that of
the audited financial statements included or
incorporated in the Registration Statement and the
Final Prospectus;
(2) with respect to the period subsequent to
the date of the most recent financial statements
(other than any capsule information), audited or
unaudited, in or incorporated in the Registration
Statement and the Final Prospectus, there were any
changes, at a specified date not more than five
business days prior to the date of the letter, in
the long-term debt, working capital or
shareholders equity of the Company and its
subsidiaries as compared with the amounts shown on
the most recent consolidated balance sheet
included or incorporated in the Registration
Statement and the Final Prospectus, or for the
period from the date of the most recent financial
statements included or incorporated in the
Registration Statement and the Final Prospectus to
such specified date there were any decreases, as
compared with the corresponding period in the
preceding year, in net sales, income before income
taxes, or net income, except in all instances for
changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Representative; or
(3) the amounts included in any unaudited
"capsule" information included or incorporated in
the Registration Statement and the Final
Prospectus do not agree with the amounts set forth
in the unaudited financial statements for the same
periods or were not determined on a basis
substantially consistent with that of the
corresponding amounts in the audited financial
statements included or incorporated in the
Registration Statement and the Final Prospectus
and in conformity with generally accepted
accounting principles; and
(iii) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement
and the Final Prospectus and in Exhibit 12 to the
Registration Statement, including the information
included or incorporated in Items 1, 5, 6, 7, 8, 9,
and 11 of the Company's 1996 Annual Report on
Form 10-K, incorporated in the Registration Statement
and the Final Prospectus, and the information included
in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included
or incorporated in the Registration Statement and the
Final Prospectus, agrees with the accounting records of
the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Final Prospectus in this
paragraph (f) include any supplement thereto at the date of the
letter.
In addition at the Closing Date, Coopers & Xxxxxxx
L.L.P. shall have furnished to the Representative a letter or
letters, dated as of the Closing Date, in form and substance
satisfactory to the Representative, to the effect set forth
above.
(g) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the
Registration Statement (exclusive of any amendment thereof)
and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in
paragraph (f) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting
the business or properties of the Company and its
subsidiaries, the effect of which, in any case referred to
in clause (i) or (ii) above, is, in the judgment of the
Representative, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or
the delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof)
and the Final Prospectus (exclusive of any supplement
thereto).
(h) Subsequent to the Execution Time, there shall not
have been any decrease in the ratings of any of the
Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate
the direction of the possible change.
(i) Prior to the Closing Date, the Company shall have
furnished to the Representative such further information,
certificates and documents as the Representative may
reasonably request.
If any of the conditions specified in this Section 5
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to the Representative and counsel for the
Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior
to, the Closing Date by the Representative. Notice of such
cancellation shall be given to the Company in writing or by
telephone or telecopy confirmed in writing.
6. Reimbursement of Underwriters' Expenses. If the
sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set
forth in Section 5 hereof is not satisfied, because of any
termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for
all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them
in connection with the proposed purchase and sale of the
Securities.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless
each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement for the registration of the Securities as
originally filed or in any amendment thereof, or in the
Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) this
indemnity with respect to any Preliminary Final Prospectus
or Basic Prospectus shall not inure to the benefit of any
Underwriter (or any director, officer, employee or agent of
such Underwriter or any person controlling such Underwriter)
from whom the person asserting any such loss, claim, damage
or liability purchased the Securities which are the subject
thereof if there was not sent or given to such person a copy
of the Final Prospectus (or the Final Prospectus as then
amended or supplemented) (exclusive of material incorporated
therein by reference) at or prior to the confirmation of the
sale of such Securities to such person in any case where
such delivery is required by the Act, and the untrue
statement or omission of a material fact contained in the
Preliminary Final Prospectus or Basic Prospectus was
corrected in such Final Prospectus (or Final Prospectus as
so amended or supplemented) and the Company previously
furnished copies thereof to such Underwriter and (ii) the
Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter
through the Representative specifically for inclusion
therein. This indemnity agreement will be in addition to
any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and
hold harmless the Company, each of its directors, each of
its officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter,
but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of
such Underwriter through the Representative specifically for
inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The
Company acknowledges that the statements set forth in the
last paragraph of the cover page and under the heading
"Underwriting", respectively, in the Preliminary Final
Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of any of
the Underwriters for inclusion in the documents referred to
in the foregoing indemnity, and you, as the Representative,
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party
under this Section 7 of notice of the commencement of any
action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of
the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability
under paragraph (a) or (b) above unless and to the extent it
did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations
to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's
expense to represent the indemnified party in any action for
which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory
to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the
reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably
concluded 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,
(iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party.
An indemnifying party will not, without the prior written
consent of the indemnified parties, 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.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 7 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Company and the Underwriters agree to contribute
to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in
connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more
of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the
Company and by the Underwriters from the offering of the
Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the
underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters
shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the
relative fault of the Company and of the Underwriters in
connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the
offering (before deducting expenses), and benefits received
by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set
forth on the cover page of the Final Prospectus. Relative
fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information
provided by the Company or the Underwriters. The Company
and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not
take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph
(d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls an Underwriter within
the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of an Underwriter
shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the
Registration Statement and each director of the Company
shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions
of this paragraph (d).
8. Default by an Underwriter. If any Underwriter
shall fail to purchase and pay for any of the Securities agreed
to be purchased by such Underwriter hereunder and such failure to
purchase shall constitute a default in the performance of its
obligations under this Agreement, the other Underwriter shall be
obligated to take up and pay for the Securities which the
defaulting Underwriter agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities
set forth in Schedule II hereto, the other Underwriter shall have
the right to purchase all, but shall not be under any obligation
to purchase any, of the Securities, and if such nondefaulting
Underwriter does not purchase all the Securities, this Agreement
will terminate without liability to any nondefaulting Underwriter
or the Company. In the event of a default by any Underwriter as
set forth in this Section 8, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Representative
shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its
liability, if any, to the Company and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representative, by
notice given to the Company prior to delivery of and payment for
the Securities, if prior to such time (i) trading in the
Company's Class A Common Stock or Class B Common Stock shall have
been suspended by the Commission or the National Association of
Securities Dealers Automated Quotation National Market System or
trading in securities generally on the New York Stock Exchange or
the National Association of Securities Dealers Automated
Quotation National Market System shall have been suspended or
limited or minimum prices shall have been established on such
Exchange or Market System, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which
on financial markets is such as to make it, in the judgment of
the Representative, impracticable or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the
Final Prospectus (exclusive of any supplement thereto).
10. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities
and other statements of the Company or its officers and of the
Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for
the Securities. The provisions of Sections 6 and 7 hereof shall
survive the termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the
Representative, will be mailed, delivered or telecopied and
confirmed to them, at the address specified in Schedule I hereto;
or, if sent to the Company, will be mailed, delivered or
telecopied and confirmed to it at 0000 Xxxxxxxxx Xxxxx, X.X. Xxx
0000, Xxxxxxxxx, Xxxxx Xxxxxxxx, telecopy (000) 000-0000
attention of the legal department.
12. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and
controlling persons referred to in Section 7 hereof, and no other
person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed
by and construed in accordance with the laws of the State of New
York.
14. Counterparts. This agreement may be signed in one
or more counterparts, each of which shall be an original, and
together shall constitute one and the same instrument.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us the
enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company
and each of the Underwriters.
Very truly yours,
Food Lion, Inc.
By: Xxxxx Xxxxxxx
Name:Xxxxx Xxxxxxx
Title: Vice President of Finance
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
Salomon Brothers Inc
By: Salomon Brothers Inc
By: Xxxxxxxx X. Xxxxxxxxx
Name:Xxxxxxxx X. Xxxxxxxxx
Title:Vice President of Salomon Brothers Inc
For itself and the other
Underwriter named
in Schedule II to the
foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated as of April 16, 1997
Registration Statement No. (33-49620)
Representative: Salomon Brothers Inc
Seven World Trade Center
New York, NY
Telecopy: (000) 000-0000
Attn: Legal Department
Title, Purchase Price and Description of Securities:
Title: 7.55% Notes due 2007
8.05% Notes due 2027
Principal amount: $150,000,000 7.55% Notes due 2007
$150,000,000 8.05% Notes due 2027
Purchase price for 7.55% Notes due 2007: 99.677% of the
principal amount being
purchased, plus accrued
interest, if any, from April
21, 1997 to the Closing Date,
less an underwriting discount
of .650% of the principal
amount being purchased
Purchase price for 8.05% Notes due 2027: 99.632% of the
principal amount being
purchased, plus accrued
interest, if any, from
April 21, 1997 to the Closing
Date, less an underwriting
discount of .875% of the
principal amount being
purchased.
Sinking fund provisions: None
Redemption provisions:
The 7.55% Notes due 2007 will be redeemable as a whole or in
part, at the option of the Company at any time, at a
redemption price equal to the greater of (i) 100% of the
principal amount of each such Note to be redeemed and (ii)
the sum of the present values of the Remaining Scheduled
Payments (as defined in the Final Prospectus) thereon
discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate (as defined in the Final Prospectus)
plus 5 basis points, plus, in either case, accrued interest
on the principal amount being redeemed to the date of
redemption.
The 8.05% Notes due 2027 will be redeemable as a whole or in
part, at the option of the Company at any time, at a
redemption price equal to the greater of (i) 100% of the
principal amount of each such Note to be redeemed and (ii)
the sum of the present values of the Remaining Scheduled
Payments (as defined in the Final Prospectus) thereon
discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate (as defined in the Final Prospectus)
plus 20 basis points, plus, in either case, accrued interest
on the principal amount being redeemed to the date of
redemption.
Notice of any redemption will be mailed at least 30 days but
not more than 60 days before the redemption date to each
holder of any such Notes to be redeemed.
Unless the Company defaults in payment of the redemption
price, on and after the redemption date interest will cease
to accrue on such Notes or portions thereof called for
redemption.
Closing Date, Time and Location: April 21, 1997, 10:00 AM, New
York City time, at the offices of Cleary, Gottlieb, Xxxxx &
Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
Type of Offering: Delayed Offering
Date referred to in Section 4(e) after which the Company may
offer or sell debt securities issued or guaranteed by the Company
without the consent of the Representative: the first business
day occurring on or after the tenth day after the Closing Date.
SCHEDULE II
Principal Amount of
7.55% Notes due 2007
Underwriters to be Purchased
Salomon Brothers Inc $75,000,000
NationsBanc Capital Markets, $75,000,000
Inc.
Total $150,000,000
Principal Amount of
8.05% Notes due 2027
Underwriters to be Purchased
Salomon Brothers Inc $75,000,000
NationsBanc Capital Markets, $75,000,000
Inc.
Total $150,000,000
