Exhibit 1.1
ShopKo Stores, Inc.
Common Stock
(par value $.01 per share)
Underwriting Agreement
(U.S. Version)
____________, 1997
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxxxxx Inc
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Supermarket Operators of America, Inc., a Delaware corporation (the
"Selling Shareholder"), proposes, subject to the terms and conditions stated
herein, to sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 5,245,824 shares (the "Firm Shares") of Common
Stock, par value $.01 per share (the "Stock"), of ShopKo Stores, Inc. (the
"Company") and the Company proposes, subject to the terms and conditions stated
herein, to sell to the Underwriters, at the election of the Underwriters, up to
786,874 additional shares (the "Optional Shares") of Stock (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to Section
2 hereof being collectively called the "Shares"). Supervalu Inc., a Delaware
corporation ("Parent"), owns 100% of the capital stock of the Selling
Shareholder.
It is understood and agreed to by all parties that the Company, the Parent
and the Selling Shareholder are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Shareholder of up to a total of 1,508,174 shares of Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Xxxxxxx Xxxxx International, Salomon
Brothers International and Xxxxxxx Xxxxx International are acting as lead
managers. Anything herein or therein to the contrary notwithstanding, the
respective closings under this Agreement and the International Agreement are
hereby expressly made conditional on one another. The Underwriters hereunder and
the International Underwriters are simultaneously entering into an Agreement
between U.S. and International Underwriting Syndicates (the "Agreement between
Syndicates") which provides, among other things, for the transfer of shares of
Stock between the two syndicates. Two forms of prospectus are to be used in
connection with the offering and sale of shares of Stock contemplated by the
foregoing, one relating to the Shares
hereunder and the other relating to the International Shares. The latter form of
prospectus will be identical to the former except for certain substitute pages
as included in the registration statement and amendments thereto as mentioned
below. Except as used in Sections 2, 3, 4, 9 and 11 herein, and except as the
context may otherwise require, references hereinafter to the Shares shall
include all the shares of Stock which may be sold pursuant to either this
Agreement or the International Underwriting Agreement, and references herein to
any prospectus whether in preliminary or final form, and whether as amended or
supplemented, shall include both the U.S. and the international versions
thereof.
The Company has adopted a Shareholder Rights Agreement, pursuant to which
the Stock, including the Shares and the International Shares, will have attached
thereto rights ("Rights"), promptly following the closing hereof, to purchase
additional equity securities under certain specified circumstances. None of the
Rights are currently exercisable. All references to the Shares and International
Shares herein shall be deemed to include the related Rights attached thereto.
The Company, the Parent and the Selling Shareholder have entered into a
Stock Buyback and Secondary Offering Agreement ("Stock Buyback and Secondary
Offering Agreement") pursuant to which the Company has agreed to repurchase
8,174,387 shares of Stock from the Selling Shareholder (such transaction is
herein referred to as the "Stock Repurchase Transaction"). The obligation of the
Company, the Parent and the Selling Shareholder to consummate the Stock
Repurchase Transaction is subject to completion of the transactions contemplated
hereby and by the International Underwriting Agreement.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-_____) (the
"Initial Registration Statement") in respect of the Shares has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement, as amended by pre-effective
amendments numbers ____ and __ and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference
in the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document
with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto
or the Rule 462(b) Registration Statement, if any, has been issued and
no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including (i)
the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in
2
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the registration statement became
effective, or such part of the Rule 462(b) Registration Statement, if
any, at the time it became or hereafter becomes effective, each as
amended at the time such part of the registration statement became
effective, are hereinafter collectively called the "Registration
Statement"; such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Prospectus");
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference
in such Preliminary Prospectus or Prospectus, as the case may be; and
any reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement;
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxxxx, Sachs & Co.
expressly for use therein or by the Parent or the Selling Shareholder
expressly for use therein;
(iii) The documents incorporated by reference in the
Prospectus,when they become effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply
3
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein or
by the Selling Shareholder or the Parent expressly for use therein;
there is no material document of a character required to be described
in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed
as required;
(v) Neither the Company nor any of its subsidiaries (as defined
in Section 14) has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any loss or interference with its business, whether or not
covered by insurance, which is material to the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries (other than
changes pursuant to employee stock plans outstanding on the date of
this Agreement, changes in the current portion of long-term debt of
the Company which, individually or in the aggregate, are not material
to the Company and its subsidiaries, taken as a whole, changes in the
amount of capital lease obligations of the Company which, individually
or in the aggregate, are not material to the Company and its
subsidiaries taken as a whole, and changes in the capital stock of
ProVantage, Inc. pursuant to an operating agreement dated
___________, 1997 to issue 4% of its capital stock to ProVMed, LLC
in exchange for a 20% interest in ProVMed, LLC (the "ProVantage
Transaction")) and there has not been any material adverse change, or
any development which the Company has reason to believe will involve a
prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus;
(vi) The Company and its subsidiaries have good and marketable
title to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not have, and would not reasonably be
expected to have, a Material Adverse Effect (as defined below), and do
not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
and its subsidiaries;
4
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of Minnesota, with power and authority (corporate and other) to own
its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, other than
where the failure to be so qualified and in good standing would not
have, or reasonably be expected to have, a Material Adverse Effect on
the Company and its subsidiaries, taken as a whole; and each
subsidiary of the Company has been duly incorporated or organized, as
the case may be, and is validly existing as a corporation or other
entity, as the case may be, in good standing under the laws of its
jurisdiction of incorporation or organization, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, other than
where the failure to be so qualified and in good standing would not
have, or reasonably be expected to have, a Material Adverse Effect (as
defined below);
(viii) All consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations or qualifications required to be
obtained by the Company in connection with the Stock Repurchase
Transaction have been obtained, other than such consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations
or qualifications which, individually or in the aggregate, would not
have a material adverse effect upon the current or future condition
(financial or otherwise), business, assets, results of operations or
prospects of the Company and its subsidiaries taken as a whole, upon
the ability of the Company to perform its obligations under this
Agreement or the International Underwriting Agreement or upon the
validity or consummation of the transactions contemplated hereby or
thereby (including consummation of the Stock Repurchase Transaction)
(a "Material Adverse Effect"); the consummation of the Stock
Repurchase Transaction will not (i) conflict with or result in a
breach or violation of any of terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries was or is bound or to which any of the property or assets
of the Company or any of its subsidiaries was or is subject, (ii)
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any of its subsidiaries or
(iii) result in any violation of the provisions of any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of their properties, other than, in the case of clauses (i) and (iii)
above, such conflicts, breaches, violations or defaults that,
individually or in the aggregate, would not have a Material Adverse
Effect;
(ix) The Company has an authorized and outstanding
capitalization as set forth in the Prospectus (other than changes to
its capitalization pursuant to employee stock plans outstanding on the
date of this Agreement, changes in the current portion of its long-
term debt of the Company since the date of the Prospectus, which,
individually or in the aggregate, are not material to the Company and
its subsidiaries taken as a
5
whole, and changes in the amount of capital lease obligations of the
Company which, individually or in the aggregate, are not material to
the Company and its subsidiaries taken as a whole), and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable,
subject to Wisconsin Statute Section 180.0622(2)(b); and all of the
issued shares of capital stock or other equity interests of each
subsidiary of the Company have been duly and validly authorized and
issued, in the case of each subsidiary of the Company that is a
corporation are fully paid and non-assessable, subject to Wisconsin
Statute Section 180.0622(2)(b), and (except as set forth in the
Prospectus) are owned directly or indirectly by the Company;
(x) The Firm Shares to be sold by the Selling Shareholder and the
unissued Optional Shares to be issued and sold by the Company, if
necessary, to the Underwriters hereunder and under the International
Underwriting Agreement have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein and
in the International Underwriting Agreement, will be duly and validly
issued and fully paid and non-assessable, subject to Wisconsin Statute
Section 180.0622(2)(b); the Company has not agreed, orally or in
writing, to issue or sell any shares of its capital stock to any
person, other than pursuant to this Agreement or the International
Underwriting Agreement or as set forth in the Prospectus (and other
than pursuant to employee stock plans outstanding as of the date of
this Agreement);
(xi) This Agreement and the International Underwriting Agreement
have each been duly authorized, executed and delivered by the Company.
The issue and sale of the Option Shares by the Company, if necessary,
hereunder and under the International Underwriting Agreement and the
compliance by the Company with all of the provisions of this Agreement
and the International Underwriting Agreement and the consummation of
the transactions herein and therein contemplated (including the Stock
Repurchase Transaction) will not (A) conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, (B) result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any of its subsidiaries, or (C) result in
the violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties, other than, in the case of clauses (A) and (C)
above, such conflicts, breaches, violations or defaults that,
individually or in the aggregate, do not have and would not reasonably
be expected to have a Material Adverse Effect; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Option Shares, if necessary, or the consummation
by the Company of the transactions contemplated by this Agreement and
the International Underwriting Agreement (including the Stock
Repurchase Transaction), except the registration under the Act of the
Shares and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or
Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters and the International Underwriters;
(xii) Neither the Company nor any of its subsidiaries is (A) in
violation of its Certificate of Incorporation or By-laws or (B) in
default in the performance or
6
observance of any obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound other than such
defaults that, individually or in the aggregate, do not have and would
not reasonably be expected to have a Material Adverse Effect;
(xiii) The statements set forth in the Prospectus under the
captions "Certain Anti-Takeover Provisions," "Underwriting," and
"Certain U.S. Tax Consequences to Non-U.S. Shareholders" insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(xiv) Neither the Company nor any of its subsidiaries have taken
or will take, directly or indirectly, any action designed to, or that
might reasonably be expected to, cause or result in the stabilization
or manipulation of the price of the Stock in violation of federal or
state securities or Blue Sky laws;
(xv) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which could
individually or in the aggregate have, or reasonably be expected to
have, a Material Adverse Effect; and, to the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xvi) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company"
or an entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xvii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes;
(xviii) The consummation by the Company of the Stock Repurchase
Transaction will not result in any violation of the federal securities
laws, the state Blue Sky laws or the Minnesota Business Corporation
Act;
(xix) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules
and regulations of the Commission thereunder;
(xx) The consolidated financial statements and schedules of the
Company included in the Registration Statement present fairly the
consolidated financial position of the Company as of the respective
dates of such financial statements, and the consolidated results of
operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles consistently applied throughout the periods involved,
except as disclosed in the
7
Prospectus, and the supporting schedules included in the Registration
Statement present fairly the information required to be stated
therein. The financial information set forth in the Prospectus under
the captions "Summary Consolidated Financial Data" and "Selected
Consolidated Financial Data" presents fairly on the basis stated in
the Prospectus, the information set forth therein. The pro forma
information included in the Prospectus presents fairly the information
shown therein, has been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma information, has been
properly compiled on the pro forma basis described therein, and, in
the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate under the circumstances;
(xxi) The Company and its subsidiaries (A) are in compliance in
all respects with applicable federal, state, local and foreign laws
and regulations, except where the failure to be in compliance would
not have a Material Adverse Effect; and (B) possess and are in
compliance with the terms and conditions of such licenses, permits,
consents, orders, certificates or authorizations issued by the
appropriate federal, state, foreign or local regulatory agencies or
bodies necessary to conduct the businesses now operated by each of
them, except for licenses, permits, consents, orders, certificates or
authorizations, the absence of which, individually or in the
aggregate, would not have a Material Adverse Effect; neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
licenses, permits, consents, orders, certificates or authorizations;
(xxii) The Company and each of its subsidiaries has filed all
necessary federal and state income, franchise, sales and use tax
returns and has paid all taxes shown as due thereon, other than such
filings or payments which would if not made have, or could reasonably
be expected to have, a Material Adverse Effect, and there is no tax
deficiency that has been asserted, or to the knowledge of the Company
threatened, against the Company, any of its subsidiaries, or any of
their respective properties or assets that would or could be expected
to have a Material Adverse Effect; and
(xxiii) The Company and its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is adequate
for the conduct of their businesses and the value of their properties
and as is customary for companies engaged in similar businesses in
similar industries.
(b) Each of the Parent and the Selling Shareholder, jointly and severally,
represents and warrants to, and agrees with, each of the Underwriters that:
(i) The Parent has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware; the Selling Shareholder has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware; and all of the issued shares of capital stock
of the Selling Shareholder have been duly and validly issued and are
fully paid and non-assessable;
(ii) All consents, approvals, authorizations and orders necessary
for the execution and delivery by the Parent and Selling Shareholder
of this Agreement and the
8
International Underwriting Agreement, and for the sale and delivery of
the Shares to be sold by the Selling Shareholder hereunder and under
the International Underwriting Agreement, have been obtained, except
for consents, approvals, authorizations or orders which may be
required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters and the International Underwriters; and the Parent and
the Selling Shareholder each has full right, power and authority to
enter into this Agreement and the International Underwriting
Agreement, and the Selling Shareholder has full right, power and
authority to sell, assign, transfer and deliver the Shares to be sold
by the Selling Shareholder hereunder and under the International
Underwriting Agreement;
(iii) The sale of the Shares to be sold by the Selling
Shareholder hereunder and under the International Underwriting
Agreement and the compliance by the Company, the Parent and the
Selling Shareholder with all of the provisions of this Agreement and
the International Underwriting Agreement and the consummation of the
transactions herein and therein contemplated (including the Stock
Repurchase Transaction) have in each case been duly authorized by all
necessary corporate and stockholder action on the part of the Parent
and the Selling Shareholder, will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Parent and the Selling Shareholder is a party or by which the Parent
and the Selling Shareholder is bound, or to which any of the property
or assets of the Parent and the Selling Shareholder is subject, nor
will the action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Parent and the Selling
Shareholder or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Parent and the Selling Shareholder or any of their respective
properties, except that the Parent and the Selling Shareholder make no
representation in this clause (iii) with respect to the registration
under the Act of the Shares and the requirements under state or
foreign securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters and the
International Underwriters;
(iv) The Selling Shareholder has, and immediately prior to the
Time of Delivery (as defined in Section 4 hereof) the Selling
Shareholder will have, good and valid title to the Shares to be sold
by the Selling Shareholder hereunder and under the International
Underwriting Agreement, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto and thereto, good and valid title to such
Shares, free and clear of all liens, encumbrances, equities or claims,
will pass to the several Underwriters or the International
Underwriters, as the case may be;
(v) Neither the Parent, the Selling Shareholder nor any of their
subsidiaries has taken nor will take, directly or indirectly, any
action which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company, to
facilitate the sale or resale of the Shares;
9
(vi) The consummation by the Parent and the Selling Shareholder
of the Stock Repurchase Transaction will not result in any violation
of the federal securities laws or the state Blue Sky laws;
(vii) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by the
Parent or the Selling Shareholder expressly for use therein, such
Preliminary Prospectus and the Registration Statement did, and the
Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus, when they become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading;
(viii) To the knowledge of the Parent and the Selling
Shareholder, the Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein or by the
Parent or the Selling Shareholder expressly for use therein; to the
knowledge of the Parent and the Selling Shareholder, there is no
material document of a character required to be described in the
Registration Statement or the Prospectus which is not described as
required; and
(ix) In order to document the Underwriters' compliance with the
reporting and withholdings provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Shareholder will deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
2. Subject to the terms and conditions herein set forth, (a) the Selling
Shareholder agrees to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the Selling
Shareholder, at a purchase price per share of $__________, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a)
10
of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction, the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 786,874 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company, shall be delivered by the Company, on behalf of the
Selling Shareholder or the Company, as the case may be, to Xxxxxxx, Xxxxx & Co.,
through the facilities of the Depository Trust Company, ("DTC") for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by certified or official bank check or checks, payable
to the order of the Selling Shareholder or the Company, as the case may be, in
Federal (same day) funds. The Company will cause the certificates representing
the Shares to be made available for checking and packaging at least twenty-four
hours prior to the Time of Delivery (as defined below) with respect thereto at
the office of DTC or its designated custodian (the "Designated Office"). The
time and date of such delivery and payment shall be, with respect to the Firm
Shares, 9:30 a.m., New York City time, on _____________, 1997 or such other time
and date as Xxxxxxx, Sachs & Co. and the Selling Shareholder may agree upon in
writing, and, with respect to the Optional Shares, 9:30 a.m., New York City
time, on the date specified by Xxxxxxx, Xxxxx & Co. in the written notice given
by Xxxxxxx, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Xxxxxxx, Xxxxx & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(k) hereof, will be
11
delivered at the offices of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, 0000 Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at such Time of Delivery. A meeting will
be held at the Closing Location at 4:00 p.m., New York City time, on the New
York Business Day next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding sentence
will be available for review by the parties hereto. For the purposes of this
Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the last Time of
Delivery which shall be disapproved by you after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies
thereof; to promptly file all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under
the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation, or to file a general consent to service of
process in any jurisdiction, or be obligated to subject itself to any
material additional tax or other liabilities;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the
12
Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with
the offering or sale of the Shares and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to
comply with the Act or the Exchange Act, to notify you and upon your
request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as
many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, not to (i) offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder and under the International
Underwriting Agreement, any securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially
similar securities (other than pursuant to employee stock plans
existing on the date of this Agreement or upon the conversion or
exchange of convertible or exchangeable securities outstanding on the
date of this Agreement) or (ii) file any registration statement under
the Act with respect to Stock, securities convertible into or
exchangeable for Stock, rights or warrants to acquire Stock, or any
other securities substantially similar to Stock (other than with
respect to the aforementioned employee stock plans or convertible or
exchangeable securities), in each case without your prior written
consent;
(f) To furnish to its shareholders as soon as practicable after
the end of each fiscal year an annual report (including a balance
sheet and statements of income, shareholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end
13
of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable
detail;
(g) During a period of three years from the effective date of
the Registration Statement, to furnish to you copies of all reports or
other communications (financial or other) furnished to stockholders,
and to deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its shareholders generally or to the Commission),
provided that you keep any nonpublic information received by you under
this clause (g) confidential, unless otherwise required by law;
(h) If the Company elects to rely on Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on
the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
(i) To use the net proceeds received by it from the sale of the
Optional Shares pursuant to this Agreement and the International
Underwriting Agreement in the manner specified in the Prospectus under
the caption "Use of Proceeds"; and
(j) To use its best efforts to list the Shares on the New York
Stock Exchange.
6. The Company, the Parent and the Selling Shareholder covenant and agree
with one another and with the several Underwriters that (a) the Company, the
Parent and the Selling Shareholder will pay or cause to be paid, in accordance
with Section 5A of the Stock Buyback and Secondary Offering Agreement, the
following: (i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the International Underwriting
Agreement, the Agreement between Syndicates, the Selling Agreement, the Blue Sky
Memorandum, closing documents (including compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the New York
Stock Exchange; (v) the filing fees
14
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (b) the Company
will pay or cause to be paid (i) the cost of preparing stock certificates; (ii)
the cost and charges of any transfer agent or registrar; (iii) all expenses and
taxes incident to the sale and delivery of the Shares by the Selling Shareholder
to the Underwriters hereunder; and (iv) all other costs and expenses incident to
the performance of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section; (c) the Selling Shareholder will pay
or cause to be paid all costs and expenses incident to the performance of the
Parent's and the Selling Shareholder's obligations hereunder; and (d) each of
the Company, on the one hand, and the Parent and the Selling Shareholder, on the
other hand, will pay or cause to be paid any fees and expenses of their
respective counsel. It is understood, however, that, except as provided in this
Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, stock transfer
taxes on resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company, the Parent and the Selling Shareholder herein are, at and as of
such Time of Delivery, true and correct, the condition that the Company, the
Parent and the Selling Shareholder shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction;
(b) Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated such Time of
Delivery, with respect to the incorporation of the Company, the validity of
the Shares being delivered at such Time of Delivery, the Registration
Statement, the Prospectus, and such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) (i) Xxxxxxx & Xxxx, S.C., counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(A) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with corporate power and authority to
own its properties and conduct its business as described in the
Prospectus;
15
(B) The Company has an authorized and outstanding capitalization
as set forth in the Prospectus, and all of the issued shares of
capital stock of the Company (including the Shares being delivered at
such Time of Delivery) have been duly and validly authorized and
issued and are fully paid and nonassessable, subject to Wisconsin
Statute Section 180.0622(2)(b); and the Shares conform to the
description of the Stock contained in the Prospectus;
16
(C) This Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the
Company;
17
(D) No consent, approval, authorization, order, filing,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares, if any, or the consummation by the Company of the transactions
contemplated by this Agreement and the International Underwriting
Agreement, other than consents, approvals, authorizations, orders,
filings, registrations or qualifications which if not obtained would
not have, and would not reasonably be expected to have, a Material
Adverse Effect and except for registration under the Act of the
Shares, and except for such consents, approvals, authorizations,
filings, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters and the
International Underwriters;
(E) The statements set forth in the Prospectus under the
captions "Certain Anti-Takeover Provisions" and "Certain U.S. Tax
Consequences to Non-U.S. Shareholders," insofar as they purport to
describe the provisions of the laws and documents referred to therein,
are accurate, complete and fair;
(F) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act;
(G) The consummation by the Company of the Stock Repurchase
Transaction will not result in any violation of Regulation M under the
Exchange Act, the state Blue Sky laws or the Minnesota Business
Corporation Act.
18
(H) The documents incorporated by reference in the Prospectus
or any amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and he has no
reason to believe that any of such documents, when such documents
became effective or were so filed, as the case may be, contained, in
the case of a registration statement which became effective under the
Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other documents
which were filed under the Exchange Act with the Commission, an untrue
statement, of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading; and
(I) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder,
although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to
in the opinion in subsection (E) of this Section 7(c)(i); they have no
reason to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of such Time of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an
19
exhibit to the Registration Statement or required to be incorporated
by reference into the Prospectus or required to be described in the
Registration Statement or the Prospectus which are not filed or
incorporated by reference or described as required.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States.
(ii) Xxxxxxx X. Xxxxxx, Esq., Vice President - Legal Affairs of
the Company, acting as counsel for the Company, shall have furnished
to you his written opinion dated the Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(A) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, other than
where the failure to be so qualified and in good standing would not
have, or would not reasonably be expected to have, a Material Adverse
Effect;
(B) Each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation or limited liability company, as
the case may be, in good standing under the laws of its jurisdiction
of incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
and all of the issued shares of capital stock or unit ownership
interests, as the case may be, of each such subsidiary have been duly
and validly authorized and issued, are fully paid and non-assessable,
subject to Wisconsin Statute Section 180.0622(2)(b), and (except as
otherwise set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims, other than such liens, encumbrances, equities or
claims which, individually or in the aggregate, would not have, or
would not reasonably be expected to have, a Material Adverse
Effect (it being expressly understood that American Medical Security
Holdings, Inc. will hold a 20% unit ownership interest in ProVMed,
LLC, and will have conversion rights to acquire up to 4% of the
capital stock of ProVantage, Inc.);
(C) All consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations or qualifications required to be
obtained in connection with the Stock Repurchase Transaction have been
obtained, other than such consents, approvals, authorizations, orders,
licenses, certificates, permits, registrations or qualifications
which, individually or in the aggregate, would not have a Material
Adverse Effect; the Stock Repurchase Transaction did not and will not
(i) conflict with or result in a breach or violation of any of terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries was or is
bound or to which any of the property or assets of the Company or any
of its subsidiaries was or is subject, (ii) result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any of its subsidiaries or (iii) result in any violation of
the provisions of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties, other
than, in the case of clauses (i) and (iii) above, such conflicts,
breaches, violations or defaults that, individually or in the
aggregate, would not have a Material Adverse Effect;
(D) The Company and its subsidiaries have good and marketable
title to all real property owned by them, in each case free and clear
of all liens, encumbrances and defects except such as are described in
the Prospectus or such as do not have, and would not reasonably be
expected to have, a Material Adverse Effect, and do not interfere with
the use currently made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as do
not interfere with the current use made and proposed to be made of
such property and buildings by the Company and its subsidiaries (in
giving the opinion in this clause, such counsel may state that no
examination of record titles for the purpose of such opinion has been
made, and that they are relying upon a general review of the titles of
the Company and its subsidiaries, upon opinions of local counsel and
abstracts, reports and policies of title companies rendered or issued
at or subsequent to the time of acquisition of such property by the
Company or its subsidiaries, upon opinions of counsel to the lessors
of such property and, in respect to matters of fact, upon certificates
of officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions, abstracts, reports, policies
and certificates);
(E) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which could individually or in the
aggregate have a Material Adverse Effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and, to such counsel's
actual knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(F) The issue and sale of the Shares, if any, being delivered at
such Time of Delivery by the Company and the compliance by the Company
with all of the provisions of this Agreement and the International
Underwriting Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach
or violations of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, or any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties, in each
case other than such breaches, conflicts, violations or defaults
which, individually or in the aggregate, would not have a Material
Adverse Effect; nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any or its subsidiaries; and
(G) Neither the Company nor any of its subsidiaries, is (i) in
violation of its Certificate of Incorporation or By-laws or (ii) in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound other than such defaults that, individually or in the aggregate,
do not have and would not reasonably be expected to have a Material
Adverse Effect.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States;
(d) Xxxxx X. Xxxxxxx, Esq., Senior Vice President--Law and External
Relations of Parent, acting as counsel for the Parent and the Selling
Shareholder, shall have furnished to you his written opinion dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) Each of the Parent and the Selling Shareholder has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware; all of the issued shares of
capital stock of the Selling Shareholder have been duly and validly
issued and are fully paid and non-assessable;
(ii) This Agreement and the International Underwriting Agreement
have been duly executed and delivered by or on behalf of the Parent
and the Selling Shareholder; and the sale of the Shares to be sold by
the Selling Shareholder hereunder and thereunder and the compliance by
the Parent and the Selling Shareholder with all of the provisions of
this Agreement and the International Underwriting Agreement and the
consummation of the transactions herein and therein contemplated
(including the Stock Repurchase Transaction) will not conflict with or
result in a breach or violation of any terms or provisions of, or
constitute a default under, any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which the Parent or the Selling Shareholder is a party or
by which the Parent or the Selling Shareholder is bound, to or which
any of the property or assets of the Parent or the Selling Shareholder
is subject, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Parent or the Selling Shareholder or any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Parent or the Selling Shareholder or
their respective properties (in rendering the opinion in this clause
(ii), such counsel may state that it is not opining on the
registration under the Act of the Shares and the requirements under
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters and the
International Underwriters);
(iii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement and the International
Underwriting Agreement in connection with the Shares to be sold by
such Selling Shareholder hereunder or thereunder, except such as have
been obtained under the Act and such as may be required under state or
foreign securities or Blue
20
Sky laws in connection with the purchase and distribution of such
Shares by the Underwriters or the International Underwriters;
(iv) Immediately prior to the First Time of Delivery such Selling
Shareholder had good and valid title to the Shares to be sold at the
First Time of Delivery by such Selling Shareholder under this
Agreement and the International Underwriting Agreement, free and clear
of all liens, encumbrances, equities or claims, and full right, power
and authority to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder and thereunder;
(v) Upon delivery to the Underwriters by the Selling Shareholder
of a certificate or certificates for the Shares to be sold by it
against receipt of the purchase price therefor as provided in this
Agreement and the International Underwriting Agreement, good and valid
title to such Shares, free and clear of all liens, encumbrances,
equities or claims, will have been transferred to each of the several
Underwriters or International Underwriters, as the case may be, who
will have purchased such Shares in good faith and without notice of
any such lien, encumbrance, equity or claim or any other adverse claim
within the meaning of the Uniform Commercial Code; and
(vi) The consummation by the Parent and the Selling Shareholder of
the Stock Repurchase Transaction will not result in any violation of
the federal securities laws or state Blue Sky laws.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction outside the United
States;
(e) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Registration Statement
filed subsequent to the date of this Agreement and also at each Time of
Delivery, Deloitte & Touche LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I
hereto;
(f)(i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business, whether or not covered by insurance,
otherwise than as set forth or contemplated in the Prospectus, and (ii)
since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock
(except for changes pursuant to employee stock plans outstanding on the
date of this Agreement) or increase in long-term debt of the Company or
any of its subsidiaries, or there shall not have occurred any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company
21
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(g) On or after the date hereof no downgrading shall have occurred
in the rating accorded any of 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) under the Act, below "investment grade" as that term
is defined by any "nationally recognized statistical rating
organization";
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities declared by either Federal,
New York or Illinois authorities; or (iii) the outbreak or escalation
of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such
event specified in this Clause (iii) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in
the Prospectus;
(i) The Shares to be sold by the Company and the Selling Shareholder
at such Time of Delivery shall have been duly listed, subject to notice
of issuance, on the New York Stock Exchange;
(j) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(k) Each of the Company, the Parent and the Selling Shareholder
shall have furnished or caused to be furnished to you at such Time of
Delivery certificates of officers of the Company, the Parent and the
Selling Shareholder satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Selling
Shareholder, respectively, herein at and as of such Time of Delivery,
as to the performance by the Company, the Parent and the Selling
Shareholder, respectively, of all of its obligations hereunder to be
performed by it at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (e) of this Section and as to such
other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter and the
Selling Shareholder against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a
22
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein or by the Selling
Shareholder expressly for use therein. The indemnification by the Company of the
Selling Shareholder under this clause (a) and under Section 8(a) of the
International Underwriting Agreement shall supersede and replace the Company's
indemnification obligations set forth in that certain Registration Rights
Agreement dated October 8, 1991 by and between the Company and the Selling
Shareholder.
(b) The Parent and the Selling Shareholder, jointly and severally, will
indemnify and hold harmless the Company and the Underwriters against any losses,
claims, damages or liabilities to which the Company or the Underwriters, as the
case may be, may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case in which such untrue statement or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the Parent or
the Selling Shareholder, as the case may be, expressly for use therein to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
conformity with such information, and in each other case to the extent, but only
to the extent that, to the Parent's or the Selling Shareholder's knowledge, as
the case may be, at the time that such untrue statement or alleged untrue
statement or omission or alleged omission was so made, such statement was untrue
or such omission had occurred; and will reimburse the Company and the
Underwriters for any legal or other expenses reasonably incurred by the Company
and the Underwriters in connection with investigating or defending any action or
claim as such expenses are incurred.
(c) Each Underwriter will indemnify and hold harmless the Company, the
Parent and the Selling Shareholder against any losses, claims, damages or
liabilities to which the Company, the Parent or the Selling Shareholder, as the
case may be, may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with
23
written information furnished to the Company by such Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein; and will reimburse the Company,
the Parent and the Selling Shareholder for any legal or other expenses
reasonably incurred by the Company, the Parent and the Selling Shareholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company, the Parent and/or the Selling Shareholder on the one
hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, the Parent and/or the Selling Shareholder on
the one hand and the Underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Parent and/or
the Selling Shareholder on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Shares purchased under
24
this Agreement (before deducting expenses) received by the Company, the Parent
and/or the Selling Shareholder bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Shares purchased
under this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Parent and/or the Selling Shareholder
on the one hand or the Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Parent and the Selling Shareholder
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company, the Parent and the Selling Shareholder
under this Section 8 shall be in addition to any liability which the Company,
the Parent and the Selling Shareholder may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Shareholder shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Shareholder that you have so arranged for the purchase of such
Shares, or the Company and the Selling Shareholder notifies you that it has so
arranged for the purchase of such Shares, you or the Company and the Selling
Shareholder shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
25
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Shareholder as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Shareholder shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Shareholder as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery, or
if the Company and the Selling Shareholder shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Company to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Shareholder, except for the expenses
to be borne by the Company and the Selling Shareholder and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Parent and the Selling Shareholder and
the several Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, the Parent or the Selling Shareholder or any
officer or director or controlling person of the Company, the Parent or the
Selling Shareholder and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Shareholder shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason, any Shares are not delivered by or on behalf of the
Company and/or the Selling Shareholder as provided herein, the Company and the
Selling Shareholder pro rata (based on the number of Shares to be sold by the
Company and the Selling Shareholder hereunder) will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but the
26
Company and the Selling Shareholder shall then be under no further liability to
any Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; and if to the Parent and the
Selling Shareholder, to Supervalu Inc., 00000 Xxxxxx Xxxx Xxxx, X.X. Xxx 000,
Xxxx Xxxxxxx, Xxxxxxxxx 00000, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, the Parent and the Selling Shareholder and,
to the extent provided in Sections 8 and 10 hereof, the officers and directors
of the Company and each person who controls the Company, the Selling Shareholder
or any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. All references herein to a "subsidiary" of a corporation shall mean
each corporation, limited liability company, partnership or other entity which
such corporation beneficially owns, directly or indirectly, capital stock or
other equity interests representing in the aggregate 50% or more of the total
combined voting power of such entity.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us six counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
the Selling Shareholder. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the
27
authority set forth in a form of Agreement among Underwriters (U.S. Version),
the form of which shall be submitted to the Company and the Selling Shareholder
for examination upon request, but without warranty on your part as to the
authority of the signers thereof.
Very truly yours,
SHOPKO STORES, INC.
By:.........................................
Name:
Title:
SUPERMARKET OPERATORS OF AMERICA, INC.
By:.........................................
Name:
Title:
SUPERVALU INC.
By:.........................................
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Xxxxxxx Xxxxxxxx Inc
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
By:..........................
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
1274451.03
28
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
-----------
Xxxxxxx, Xxxxx & Co......................
Salomon Brothers Inc.....................
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated...................
--------- -------
Total.......................... 5,245,824 786,874
========= =======
29
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act or the Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's Quarterly Report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which have been separately furnished to the Representatives and on the
basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing came
to their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
30
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus and/or included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act and the related
published rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus for them to
be in conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Company's Annual Report on Form
10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on
a basis substantially consistent with the basis for the audited
consolidated financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
31
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements
of the Act or the Exchange Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon earn-
outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest financial statements included in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets
or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectus, except in each
case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in consolidated
net revenues or operating profit or the total or per share amounts
of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in
each case for decreases or increases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
32
