The Kroger Co. Debt Securities Underwriting Agreement
Exhibit 1.1
The Kroger Co.
Debt Securities
Debt Securities
January 9, 2008
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Dear Sirs:
From time to time The Kroger Co., an Ohio corporation (the “Company”), and the Guarantors on
Schedule I and the signature pages hereto propose to enter into one or more Pricing Agreements
(each a “Pricing Agreement”) in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions stated herein and
therein, to issue and sell to the firms named in Schedule I to the applicable Pricing Agreement
(such firms constituting the “Underwriters” with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the “Securities”) specified in
Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the “Designated
Securities”).
The terms and rights of any particular issuance of Designated Securities shall be as specified
in the Pricing Agreement relating thereto and in or pursuant to the indenture (the “Indenture”)
identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be made from time to time to the
Underwriters of such Securities, for whom the firms designated as representatives of the
Underwriters of such Securities in the Pricing Agreement relating thereto will act as
representatives (the “Representatives”). The term “Representatives” also refers to a single firm
acting as sole representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. This Underwriting Agreement shall not be construed as an
obligation of the Company to sell any of the Securities or as an obligation of any of the
Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of
the Securities and the obligation of any of the Underwriters to purchase any of the Securities
shall be evidenced by the Pricing Agreement with respect to the Designated Securities specified
therein. Each Pricing Agreement shall specify the aggregate principal amount of such Designated
Securities, the initial public offering price of such Designated Securities, the purchase price to
the Underwriters of such Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters and the principal amount of such
Designated Securities to be purchased by each Underwriter and shall set forth the date, time and
manner of delivery to such Designated Securities and payment therefor. The Pricing Agreement shall
also specify (to the extent not set forth in the Indenture and the registration statement and
prospectus with respect thereto) the terms of such Designated Securities. A Pricing Agreement shall be
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in the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the Underwriters that:
| (a) | A registration statement in respect of the Securities has been filed with the Securities and Exchange Commission (the “Commission”); such registration statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus contained therein, to the Representatives for each of the other Underwriters, have been declared effective by the Commission in such form; no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission; and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose or pursuant to Section 8A of the Securities Act of 1933, as amended (the “Act”) against the Company or related to the offering of the Designated Securities has been initiated or threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) or 424(b) of the rules and regulations of the Commission under the Act, including the prospectus filed as part of the Registration Statement together with a preliminary prospectus supplement relating to the Designated Securities, being hereinafter called a “Preliminary Prospectus”; the various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective but excluding Form T-1, each as amended at the time such part of the registration statement became effective, and including the information, if any, deemed pursuant to Rules 430A, 430B or 430C to be part of the Registration Statement at its effective time, being hereinafter called the “Registration Statement”; the prospectus relating to the Securities, together with a final prospectus supplement relating to the Designated Securities, in the form in which it has most recently been filed, or transmitted for filing, with the Commission (or made available upon request of purchasers pursuant to Rule 173 under the Act) in connection with confirmation of sales of the Designated Securities, being hereinafter called the “Prospectus”; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed 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, |
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as the case may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of
the Registration Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or supplemented shall be
deemed to refer to the Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof, including any documents incorporated by reference therein as of the date of
such filing); for purposes of this Agreement, the term “effective date” means the
effective date of the Registration Statement with respect to the offering of the
Designated Securities, as determined for the Company pursuant to Section 11 of the
Act and Item 512 of Regulation S-K, as applicable; at or prior to the time when
sales of the Designated Securities will be first made (the “Time of Sale”), the
Company will prepare certain information (collectively, the “Time of Sale
Information”) which information will be identified in Schedule III to the Pricing
Agreement for such offering of Designated Securities as constituting part of the
Time of Sale Information.
| (b) | The documents incorporated by reference in the Prospectus and the Time of Sale Information, when they became 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 to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities; | ||
| (c) | The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”) and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein |
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not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such Securities;
| (d) | The Time of Sale Information, at the Time of Sale and at the Time of Delivery for the Designated Securities (as defined in Section 4 herein), did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Time of Sale Information relating to such Securities. No statement of material fact included in the Prospectus has been omitted from the Time of Sale Information and no statement of material fact included in the Time of Sale Information that is required to be included in the Prospectus has been omitted therefrom. | ||
| (e) | The Company (including its agents and representatives, other than the Underwriters in their capacity as such) has not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Act) that constitutes an offer to sell or solicitation of an offer to buy the Securities (each such communication by the Company or its agents and representatives (other than a communication referred to in clauses (i), (ii) and (iii) below) an “Issuer Free Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Act or Rule 134 under the Act, (ii) the Preliminary Prospectus with respect to the Designated Securities, (iii) the Prospectus, (iv) the documents listed on Schedule III to the Pricing Agreement as constituting the Time of Sale Information and (v) any electronic road show or other written communications, in each case approved in writing in advance by the Representatives. Each such Issuer Free Writing Prospectus complied in all material respects with the Act, has been or will be (within the time period specified in Rule 433) filed in accordance with the Act (to the extent required thereby) and, when taken together with the Preliminary Prospectus accompanying, or delivered prior to delivery of, or filed prior to the first use of such Issuer Free Writing Prospectus, did not, and at the Time of Delivery for the Designated Securities will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in an Issuer Free Writing Prospectus relating to such Securities. |
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| (f) | The Company and its subsidiaries have not sustained since the date of the latest audited financial statements included or incorporated by reference in the Time of Sale Information and the Prospectus any material loss or interference with their businesses, taken as a whole, from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Time of Sale Information and the Prospectus; and, since the respective dates as of which information is given in the Registration Statement, the Time of Sale Information and the Prospectus, there has not been any material change in the capital stock or long-term debt of the Company and its subsidiaries on a consolidated basis or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Time of Sale Information and the Prospectus; | ||
| (g) | The Company and its subsidiaries have good and marketable title in fee simple 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 Time of Sale Information and the Prospectus or such as do not materially affect the value of such property 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; | ||
| (h) | The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Ohio, with power and authority (corporate and other) to own its properties and conduct its business as described in the Time of Sale Information and 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, or is subject to no material liability or disability by reason of the failure to be qualified in any such jurisdiction; and each subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, or is subject to no material liability or disability by reason of the failure to be in good standing in any such jurisdiction; | ||
| (i) | The Company has an authorized capitalization as set forth in the Time of Sale Information and the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and (except for directors’ qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims; |
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| (j) | The Securities have been duly authorized, and, when Designated Securities are issued and delivered pursuant to this Agreement and the Pricing Agreement with respect to such Designated Securities against payment of the consideration specified in the Pricing Agreement, such Designated Securities will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles and will be entitled to the benefits provided by the Indenture under which they are to be issued which will be substantially in the form filed as an exhibit to the Registration Statement; the Indenture has been duly authorized and duly qualified under the Trust Indenture Act and, at the Time of Delivery for such Designated Securities (as defined in Section 4 hereof), the Indenture will constitute a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and the Indenture conforms, and the Designated Securities will conform, in all material respects, to the descriptions thereof contained in the Time of Sale Information and the Prospectus as amended or supplemented with respect to such Designated Securities; | ||
| (k) | The issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture, this Agreement and any Pricing Agreement, and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach 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, nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, or the Regulations of the Company or 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; 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 Securities or the consummation by the Company of the other transactions contemplated by this Agreement or any Pricing Agreement or the Indenture, except such as have been, or will have been prior to the Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters; |
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| (l) | Other than as set forth or contemplated in the Time of Sale Information and 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 with respect to which there is a reasonable likelihood of a determination which would individually or in the aggregate have a material adverse effect on the consolidated financial position, stockholders’ equity or results of operations of the Company and its subsidiaries; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; | ||
| (m) | None of the transactions contemplated by this Agreement, any Pricing Agreement or the Indenture (including, without limitation, the use of the proceeds from the sale of the Securities) will violate or result in a violation of Section 7 of the Exchange Act, or any regulation promulgated thereunder, including, without limitation, Regulations G, T, U and X of the Board of Governors of the Federal Reserve System; | ||
| (n) | The Company is not subject to regulation under the Investment Company Act of 1940, as amended; | ||
| (o) | The Company will apply the net proceeds from the sale of Securities for the purpose set forth in the Time of Sale Information and the Prospectus under the caption “Use of Proceeds”; | ||
| (p) | PricewaterhouseCoopers L.L.P., who has audited certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission and the Public Company Accounting Oversight Board (United States) thereunder; and | ||
| (q) | The Company is not an “ineligible issuer” as defined under the Act at the times specified in the Act in connection with the offering of the Securities. |
3. Upon the execution of the Pricing Agreement applicable to any Designated Securities and
authorization by the Representatives of the release of such Designated Securities, the several
Underwriters propose to offer such Designated Securities for sale upon the terms and conditions set
forth in the Time of Sale Information and the Prospectus as amended or supplemented.
4. The Designated Securities to be purchased by each Underwriter pursuant to the Pricing
Agreement relating thereto, in definitive form to the extent practicable, and in such authorized
denominations and registered in such names as the Representatives may request upon at least
forty-eight hours’ prior notice to the Company, shall be delivered by or on behalf of the Company
to the Representatives for the account of such Underwriter, against payment by such Underwriter or
on its behalf of the purchase price therefor by certified or official bank check or checks, payable
to the order of the Company in the funds specified in such Pricing Agreement, all at the place and
time and date specified in such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date being herein called
the “Time of Delivery” for such Securities.
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5. The Company agrees with each of the Underwriters of any Designated Securities:
| (a) | To prepare the Prospectus as amended and supplemented in relation to the applicable Designated Securities in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the execution and delivery of the Pricing Agreement relating to the applicable Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented after the date of the Pricing Agreement relating to such Securities and prior to the Time of Delivery for such Securities which shall be disapproved by the Representatives for such Securities promptly after reasonable notice thereof; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; to furnish the Representatives a copy of any proposed Issuer Free Writing Prospectus relating to such Securities prior to its use; not to use, authorize, approve, refer to or file any Issuer Free Writing Prospectus which shall be disapproved by the Representatives for such Securities promptly after reasonable notice thereof; to file promptly any Issuer Free Writing Prospectus (including the Term Sheet in the form of Schedule IV to the Pricing Agreement) to the extent required by Rule 433 under the Act; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Securities, and during such same period to advise the Representatives, 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 or any Issuer Free Writing Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Securities, of the suspension of the qualification of such Securities for offering or sale in any jurisdiction, of the initiation of or threatening of any proceeding for any such purpose or pursuant to Section 8A of the Act, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or any Issuer Free Writing Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Securities or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; | ||
| (b) | Promptly from time to time to take such action as the Representatives may reasonably request to qualify such Securities for offering and sale under the securities laws of such jurisdictions in the United States as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; |
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| (c) | To furnish the Underwriters with copies of the Prospectus as amended or supplemented and each Issuer Free Writing Prospectus in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of any Designated Securities and if at such time any event shall have occurred as a result of which the Prospectus, the Time of Sale Information or any Issuer Free Writing 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, Time of Sale Information or any such Issuer Free Writing Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus, the Time of Sale Information or any Issuer Free Writing Prospectus or to file under the Exchange Act any document incorporated by reference in the Time of Sale Information or the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and upon their 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 the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus, Time of Sale Information or Issuer Free Writing 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 Designated Securities at any time nine months or more after the time of issue of the Prospectus as amended or supplemented with respect to such Designated Securities, upon the request of the Representatives but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as it may request of a further amended or supplemented Prospectus for such Designated Securities complying with Section 10(a)(3) of the Act; | ||
| (d) | To make generally available to its security holders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c)), an earning statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including at the option of the Company Rule 158); | ||
| (e) | During the period beginning from the date of the Pricing Agreement for such Designated Securities and continuing to and including the earlier of (i) the termination of trading restrictions for such Designated Securities, as notified to the Company by the Representatives, and (ii) the Time of Delivery for such Designated Securities, not to offer, sell, contract to sell or otherwise dispose of any debt securities of the Company which mature more than one year after such Time of Delivery and which are substantially similar to such Designated Securities, without the prior written consent of the Representatives; and |
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| (f) | The Company will, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Act. |
6. Each Underwriter hereby represents and agrees that:
| (a) | It has not and will not use, authorize use of, refer to, or participate in the planning for use of, any “free writing prospectus,” as defined in Rule 405 under the Act (which term includes use of any written information furnished to the Commission by the Company and not incorporated by reference into the Registration Statement and any press release issued by the Company) other than (i) a free writing prospectus that, solely as a result of use by such underwriter, would not trigger an obligation to file such free writing prospectus with the Commission pursuant to Rule 433, (ii) any Issuer Free Writing Prospectus listed on Schedule III to the Pricing Agreement or prepared pursuant to Section 2(e) or Section 5(a) above (including any electronic road show), or (iii) any free writing prospectus prepared by such underwriter and approved by the Company in advance in writing (each such free writing prospectus referred to in clauses (i) or (iii), an “Underwriter Free Writing Prospectus”). | ||
| (b) | Notwithstanding the foregoing, the Underwriters may use a term sheet substantially in the form of Schedule IV to the Pricing Agreement for the Designated Securities without the consent of the Company. | ||
| (c) | It is not subject to any pending proceeding under Section 8A of the Act with respect to the offering of the Designated Securities (and will promptly notify the Company if any such proceeding against it is initiated during any period when a prospectus is required to be delivered in connection with the Designated Securities). |
7. The Company covenants and agrees with the several Underwriters that the Company will pay
or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s
counsel and accountants in connection with the registration of the Securities under the Act and all
other expenses in connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus, any Time of Sale
Information 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, any Pricing Agreement, any Indenture,
any Blue Sky and Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for rating the Securities;
(v) any filing fees incident to securing any required review by the National Association of
Securities
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Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of preparing the
Securities; (vii) the fees and expenses of any Trustee and any agent of any Trustee and the fees
and disbursements of counsel for any Trustee in connection with any Indenture and the Securities;
(viii) the fees and disbursements of counsel for the Underwriters to the extent they exceed such
amount as may be specified in the Pricing Agreements; and (ix) all other costs and expenses
incident to the performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as provided in this Section,
Section 9 and Section 12 hereof, the Underwriters will pay all of their own costs and expenses,
including, but not limited to, the fees and disbursements of their counsel up to such amount as may
be specified in the Pricing Agreements, transfer taxes on resale of any of the Securities by them,
and any advertising expenses connected with any offers they may make.
8. The obligations of the Underwriters of any Designated Securities under the Pricing
Agreement relating to such Designated Securities shall be subject, in the discretion of the
Representatives, to the condition that all representations and warranties and other statements of
the Company in or incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct,
the condition that the Company shall have performed all of its obligations hereunder theretofore to
be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the applicable Designated
Securities shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5 (a) hereof; each Issuer Free Writing Prospectus shall have
been filed with the Commission to the extent required by Rule 433 under the Act; no stop order
suspending the effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose or pursuant to Section 8A under the Act 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 the Representatives’ reasonable
satisfaction;
(b) Counsel for the Underwriters shall have furnished to the Representatives such opinion
or opinions, dated the Time of Delivery for such Designated Securities, with respect to the
incorporation of the Company, the validity of the Indenture, the Designated Securities, the
Registration Statement, the Prospectus as amended or supplemented and other related matters as
the Representatives may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon such matters;
(c) Xxxx Xxxxxxx, Executive Vice President, Secretary and General Counsel of the Company,
shall have furnished to the Representatives his written opinion, dated the Time of Delivery for
such Designated Securities, in form and substance satisfactory to the Representatives, to the
effect that:
(i) The Company has been duly incorporated and is validly existing as a corporation
in good standing under the laws of Ohio, with corporate power
and authority to own its properties and conduct its business as described in the Time of
Sale Information and the Prospectus as amended or supplemented;
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(ii) The Company has an authorized capitalization as set forth in the Time of Sale
Information and the Prospectus as amended or supplemented, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable;
(iii) 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, or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided that such counsel
shall state that he believes that both the Underwriters and he are justified in relying
upon such opinions and certificates);
(iv) Each subsidiary of the Company, with respect to which the Company owns,
directly or indirectly, an equity interest of more than 50% (each a “subsidiary”), has
been duly incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, or is subject to no material liability or
disability by reason of the failure to be in good standing in any such jurisdiction; and
all of the issued shares of capital stock of each such subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable, and (except for
directors’ qualifying shares) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims, other than as described in the
Prospectus (such counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall state that he believes that both
the Underwriters and he are justified in relying upon such opinions and certificates);
(v) The Company and its subsidiaries have good and marketable title in fee simple 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 Time of Sale Information and the
Prospectus or such as do not materially affect the value of such property 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 (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 he is 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 of matters of fact, upon
certificates of officers of the Company or its subsidiaries, provided that such counsel
shall state that he believes that both the Underwriters and he are justified in relying
upon such opinions, abstracts, reports, policies and certificates);
- 12 -
(vi) To the best of such counsel’s knowledge and other than as set forth in the Time
of Sale Information and 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 with respect to which
there is a reasonable likelihood of determinations which would individually or in the
aggregate have a material adverse effect on the consolidated financial position,
stockholders’ equity or results of operations of the Company and its subsidiaries; and, to
the best of such counsel’s knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(vii) This Agreement and the Pricing Agreement with respect to the Designated
Securities have been duly authorized, executed and delivered by the Company;
(viii) The Designated Securities have been duly authorized, executed, authenticated,
issued and delivered, and the Designated Securities (assuming that (i) the Trustee has all
requisite power and authority to perform its obligations under the Indenture and has made
all necessary filings and received all necessary consents, (ii) the Indenture has been
duly authorized, executed and delivered by the Trustee and (iii) the Trustee’s
certificates of authentication have been manually executed by an authorized officer of the
Trustee) constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and are entitled to the benefits of the Indenture,
except that (a) such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, or other laws now or hereafter in effect affecting creditors’ rights
generally, and (b) the enforceability thereof is subject to the general principles of
equity (whether such enforceability is considered in a proceeding in equity or at law);
provided, however, that such counsel need express no opinion as to the application or
effect of any applicable fraudulent conveyance, fraudulent transfer, fraudulent obligation
or preferential transfer laws or any laws governing the distribution of assets of the
Company to its stockholders; and the terms of the Designated Securities and the Indenture
conform in all material respects to the descriptions thereof in the Time of Sale
Information and the Prospectus as amended or supplemented;
(ix) The Indenture (i) has been duly authorized, executed and delivered by the
Company and (ii) (assuming that (a) the Trustee has all requisite power and authority to
perform its obligations under the Indenture and has made all necessary filings and
received all necessary consents, and (b) the Indenture has been duly authorized, executed
and delivered by the Trustee) constitutes a valid and binding instrument of the Company,
enforceable in accordance with its terms, except (a) that such enforcement may be subject
to bankruptcy, insolvency, reorganization, moratorium, or other laws now or hereafter in
effect affecting creditors’ rights generally, and (b) that the enforceability thereof is
subject to general principles of equity (whether such enforceability is considered in a
proceeding in equity or at law); provided, however, that such
counsel need express no opinion as to the application or effect of any applicable
fraudulent conveyance, fraudulent transfer, fraudulent obligation or preferential transfer
laws or any laws governing the distribution of assets of the Company to its stockholders;
and the Indenture has been duly qualified under the Trust Indenture Act;
- 13 -
(x) The issuance and sale of the Designated Securities and the compliance by the
Company with all of the provisions of the Designated Securities, the Indenture, this
Agreement and the Pricing Agreement with respect to the Designated Securities and the
consummation of the transactions herein and therein contemplated, to the best of such
counsel’s knowledge, will not conflict with or result in a breach 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, nor will such
actions result in any violation of the provisions of the Articles of Incorporation, as
amended, or the Regulations of the Company or any statute of the United States of America
or of Ohio or any other statute known to such counsel 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; provided, however, that such counsel need
express no opinion as to the application or effect of any applicable fraudulent
conveyance, fraudulent transfer, fraudulent obligation or preferential transfer laws or
any laws governing the distribution of assets of the Company to its stockholders;
(xi) To the best of such counsel’s knowledge, no consent, approval, authorization,
order, registration or qualification of or with any such court or governmental agency or
body is required for the issuance and sale of the Designated Securities or the
consummation of the other transactions contemplated by this Agreement or such Pricing
Agreement or the Indenture, except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Designated Securities by the Underwriters and as
may be required due to the Underwriters’ or the Trustees’ legal or regulatory status;
(xii) The Company is not subject to regulation under the Investment Company Act of
1940, as amended;
(xiii) The documents incorporated by reference in the Time of Sale Information and
the Prospectus as amended or supplemented (other than (a) the financial statements, notes
and schedules thereto included or incorporated by reference therein and (b) other
financial and statistical information included or incorporated by reference therein, as to
all of 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 such counsel has no reason to
believe that any of such documents, when they 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 Act
or 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
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(xiv) The Registration Statement, the Preliminary Prospectus with respect to the
Designated Securities, each Issuer Free Writing Prospectus included in the Time of Sale
Information and the Prospectus as amended or supplemented and any further amendments and
supplements thereto made by the Company prior to the Time of Delivery for the Designated
Securities (other than (a) the financial statements, notes and schedules thereto included
or incorporated by reference therein, (b) other financial and statistical information
included or incorporated by reference therein or (c) the Forms T-1 filed as exhibits to
the Registration Statement, as to all of which such counsel need express no opinion)
comply as to form in all material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations thereunder; such counsel has no reason to
believe (A) that, as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Time of Delivery, including the
information, if any, deemed pursuant to Rules 430A, 430B or 430C to be part of the
Registration Statement at its effective time (other than (a) the financial statements,
notes and schedules thereto included or incorporated by reference therein, (b) other
financial and statistical information included or incorporated by reference therein or (c)
the Forms T-1 filed as exhibits to the Registration Statement, as to all of 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, (B) that, at the Time of Sale (which such counsel may
assume to be the date of the Pricing Agreement), the Time of Sale Information (other than
(a) the financial statements, notes and schedules thereto included or incorporated by
reference therein, (b) other financial and statistical information included or
incorporated by reference therein or (c) the Forms T-1 filed as exhibits to the
Registration Statement, as to all of which such counsel need express no opinion) contained
any untrue statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances in which they were made, not
misleading, (C) that, as of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company prior to the Time of Delivery
(other than (a) the financial statements, notes and schedules thereto included or
incorporated by reference therein, (b) other financial and statistical information
included or incorporated by reference therein or (c) the Forms T-1 filed as exhibits to
the Registration Statement, as to all of 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 light of the circumstances in which they were
made, not misleading or (D) that, as of the Time of Delivery, either the Registration
Statement or the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery (other than (a) the
financial statements, notes and schedules thereto included or incorporated by reference therein, (b)
other financial and statistical information included or incorporated by reference therein
or (c) the Forms T-1 filed as exhibits to the Registration Statement, as to all of 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 light of the
circumstances in which they were made, not misleading; and such counsel does not know of
any amendment to the Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus as amended or supplemented
or required to be described in the Registration Statement, the Time of Sale Information or
the Prospectus as amended or supplemented which are not filed or incorporated by reference
or described as required;
- 15 -
(d) On the date of the Pricing Agreement for such Designated Securities and at the Time
of Delivery for such Designated Securities, the independent accountants of the Company who have
certified the financial statements of the Company and its subsidiaries included or incorporated
by reference in the Registration Statement shall have furnished to the Representatives letters,
dated the respective dates of delivery of such letters, to the effect set forth in Annex II
hereto, in form and substance satisfactory to the Representatives;
(e) [Intentionally Omitted]
(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
Time of Sale Information and the Prospectus as amended or supplemented any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Time of Sale Information and the Prospectus
as amended or supplemented, and (ii) since the respective dates as of which information is
given in the Time of Sale Information and the Prospectus as amended or supplemented there shall
not have been any change in the capital stock or long-term debt of the Company and its
subsidiaries or any change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, stockholders’ equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Time of Sale Information and the Prospectus as amended or supplemented, 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 Designated Securities on the terms and in the
manner contemplated in the Time of Sale Information and the Prospectus as amended or
supplemented;
(g) On or after the earlier of (A) the Time of Sale relating to the Designated Securities
and (B) the date of the Pricing Agreement, (i) no downgrading shall have occurred in the rating
accorded the debt securities of the Company and its subsidiaries 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 and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its rating of any of the debt
securities of the Company and its subsidiaries;
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(h) On or after the earlier of (A) the Time of Sale relating to the Designated Securities
and (B) the date of the Pricing Agreement there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally on the New York
Stock Exchange; (ii) a general moratorium on commercial banking activities in New York declared
by either Federal or New York State authorities; or (iii) the outbreak or 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 Designated Securities on the terms and in the manner
contemplated by the Time of Sale Information and the Prospectus as amended and supplemented;
and
(i) The Company shall have furnished or caused to be furnished to the Representatives at
the Time of Delivery for the Designated Securities a certificate or certificates of officers of
the Company satisfactory to the Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of this Section and as to such
other matters as the Representatives may reasonably request.
9. (a) The Company will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary in order to make the
statements therein not misleading or (ii) an untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement thereto), any Preliminary
Prospectus, any preliminary prospectus supplement related to the Designated Securities, any Issuer
Free Writing Prospectus, any Time of Sale Information or any other prospectus relating to the
Securities, or any omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not
misleading, and in either case (i) or (ii) 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; 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 in the Registration
Statement, any Preliminary Prospectus, any preliminary prospectus supplement related to the
Designated Securities, the Prospectus, or any amendment or supplement thereto, any Time of Sale
Information, any Issuer Free Writing Prospectus or any other prospectus relating to the Securities
in reliance upon and in conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives expressly for use therein;
(b) Each Underwriter will indemnify and hold harmless the Company against any losses, claims,
damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary
- 17 -
Prospectus, any preliminary prospectus supplement related
to the Designated Securities, the Prospectus, or any amendment or supplement thereto, any Issuer
Free Writing Prospectus, any Time of Sale Information, or any other prospectus relating to the
Securities, 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 the Registration Statement,
any Preliminary Prospectus, any preliminary prospectus supplement related to the Designated
Securities, the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing
Prospectus, any Time of Sale Information, or any other prospectus relating to the Securities, in
each case in reliance upon and in conformity with written information furnished to the Company by
such Underwriter through the Representatives expressly for use therein; and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim;
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any indemnified party and
it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with counsel 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.
(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient
to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters of the Designated Securities on the other from the offering of the
Designated Securities to which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and the Underwriters of the Designated Securities on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and such Underwriters on the other shall be deemed to be in
the same proportion as the
- 18 -
total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by such
Underwriters, in each case as set forth in the table on the cover page of the Prospectus as amended
or supplemented to relate to a particular offering of Designated Securities. The relative fault
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company on the one hand or such Underwriters on the other and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages 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
obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations with respect to such Securities
and not joint.
(e) The obligations of the Company under this Section 9 shall be in addition to any liability
which the Company 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 9 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.
10. (a) If any Underwriter shall default in its obligation to purchase the Designated
Securities which it has agreed to purchase under the Pricing Agreement relating to such Designated
Securities, the Representatives may in their discretion arrange for themselves or another party or
other parties to purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do not arrange for the
purchase of such Designated Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the event that, within
the respective prescribed period, the Representatives notify the Company that they have so arranged for the purchase of such Designated Securities, or the Company notifies
the Representatives that it has so arranged for the purchase of such Designated Securities, the
Representatives or the Company shall have the right to postpone the Time of Delivery for such
Designated Securities for a period of not more than seven days, in order to effect whatever changes
may thereby be made necessary in the Registration
- 19 -
Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees to file promptly
any amendments or supplements to the Registration Statement or the Prospectus which in the opinion
of the Representatives may thereby be made necessary. The term “Underwriter” as used in this
Agreement shall include any person substituted under this Section with like effect as if such
person had originally been a party to the Pricing Agreement with respect to such Designated
Securities.
(b) If, after giving effect to any arrangements for the purchase of the Designated Securities
of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in
subsection (a) above, the aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated
Securities, then the Company shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Designated Securities which such Underwriter agreed to purchase
under the Pricing Agreement relating to such Designated Securities and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based on the principal amount of
Designated Securities which such Underwriter agreed to purchase under such Pricing Agreement) of
the Designated Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Designated Securities
of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in
subsection (a) above, the aggregate principal amount of Designated Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Securities, as
referred to in subsection (b) above, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Designated Securities of a
defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated
Securities shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters
as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof;
but nothing herein shall relieve a defaulting Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties and other statements
of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or
director or controlling person of the Company, and shall survive delivery of and payment for the
Securities.
12. If any Pricing Agreement shall be terminated pursuant to Section 10 hereof, the Company
shall not then be under any liability to any Underwriter with respect to the Designated Securities
covered by such Pricing Agreement except as provided in Section 7 and Section 9 hereof; but, if for any other reason Designated Securities are not
delivered by or on behalf of the Company as provided herein, the Company will reimburse the
Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the
- 20 -
purchase, sale and delivery of such Designated
Securities, but the Company shall then be under no further liability to any Underwriter with
respect to such Designated Securities except as provided in Section 7 and Section 9 hereof.
13. In all dealings hereunder, the Representatives of the Underwriters of Designated
Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be
entitled to act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by such Representatives jointly or by such of the Representatives, if
any, as may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the
Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of
the Representatives as set forth in the Pricing Agreement; and if to the Company shall be delivered
or sent by mail, telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 9(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters’ Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
14. This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in Section 9 and Section 11
hereof, the officers and directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
15. Time shall be of the essence of each Pricing Agreement. As used herein, “business day”
shall mean any day when the Commission’s office in Washington, D.C. is open for business.
16. This Agreement and each Pricing Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. This Agreement and each Pricing Agreement may be executed by any one or more of the
parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and the same
instrument.
18. The Company acknowledges and agrees that the Underwriters named in the Pricing Agreement
are acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to any offering of Designated Securities contemplated
thereby (including in connection with determining the terms of the offering) and not as a financial
advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally, no such
Underwriter is advising the Company or any other person as to any legal, tax, investment,
accounting or regulatory matters in any
- 21 -
jurisdiction. The Company shall consult with its own
advisors concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and such Underwriters shall
have no responsibility or liability to the Company with respect thereto. Any review by such
Underwriters named in the Pricing Agreement of the Company, the transactions contemplated thereby
or other matters relating to such transactions will be performed solely for the benefit of the
Underwriters and shall not be on behalf of the Company.
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Very Truly Yours,
THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Designated Securities
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Designated Securities
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxx | |||
| Title: | Vice President/Treasurer | |||
THE KROGER CO. OF MICHIGAN
as Guarantor of the Designated Securities
as Guarantor of the Designated Securities
| By: | /s/ Xxxx Going | |||
| Name: | Xxxx Going | |||
| Title: | President | |||
QUEEN CITY ASSURANCE, INC.
as Guarantor of the Designated Securities
RJD ASSURANCE, INC.
as Guarantor of the Designated Securities
VINE COURT ASSURANCE INCORPORATED
as Guarantor of the Designated Securities
as Guarantor of the Designated Securities
RJD ASSURANCE, INC.
as Guarantor of the Designated Securities
VINE COURT ASSURANCE INCORPORATED
as Guarantor of the Designated Securities
| By: | /s/ Xxxxx X. Xxxx | |||
| Name: | Xxxxx X. Xxxx | |||
| Title: | Senior Vice President/Vice President | |||
ROCKET NEWCO, INC.
as Guarantor of the Designated Securities
HENPIL, INC.
as Guarantor of the Designated Securities
as Guarantor of the Designated Securities
HENPIL, INC.
as Guarantor of the Designated Securities
| By: | /s/ Xxx Xxxxxx | |||
| Name: | Xxx Xxxxxx | |||
| Title: | Vice President | |||
- 23 -
SCHEDULE I
| Name of Guarantor | State of Organization | |
Alpha Beta Company
|
California | |
Bay Area Warehouse Stores, Inc.
|
California | |
Xxxx Markets, Inc.
|
California | |
Cala Co.
|
Delaware | |
Cala Foods, Inc.
|
California | |
CB&S Advertising Agency, Inc.
|
Oregon | |
Xxxxxxxx Stores, Inc.
|
California | |
Xxxxxx Companies, Inc.
|
Kansas | |
Xxxxxx Real Estate Co., Inc.
|
Kansas | |
Distribution Trucking Company
|
Oregon | |
F4L L.P.
|
Ohio | |
FM, Inc.
|
Utah | |
FMJ, Inc.
|
Delaware | |
Food 4 Less GM, Inc.
|
California | |
Food 4 Less Holdings, Inc.
|
Delaware | |
Food 4 Less Merchandising, Inc.
|
California | |
Food 4 Less of California, Inc.
|
California | |
Food 4 Less of Southern California, Inc.
|
Delaware | |
Xxxx Xxxxx, Inc.
|
Delaware | |
Xxxx Xxxxx Jewelers, Inc.
|
California | |
Xxxx Xxxxx Stores, Inc.
|
Ohio | |
Xxxxxx Markets, Inc.
|
California | |
Xxxxxx Realty, Inc.
|
California | |
Inter-American Foods, Inc.
|
Ohio | |
Junior Food Stores of West Florida, Inc.
|
Florida | |
J.V. Distributing, Inc.
|
Michigan | |
KRGP Inc.
|
Ohio | |
KRLP Inc.
|
Ohio | |
The Kroger Co. of Michigan
|
Michigan | |
Kroger Dedicated Logistics Co.
|
Ohio | |
Kroger Group Cooperative, Inc.
|
Ohio | |
Kroger Limited Partnership I
|
Ohio | |
Kroger Limited Partnership II
|
Ohio | |
Kroger Texas L.P.
|
Ohio | |
Kwik Shop, Inc.
|
Kansas | |
Mini Mart, Inc.
|
Wyoming | |
Peyton’s-Southeastern, Inc.
|
Tennessee |
- 24 -
| Name of Guarantor | State of Organization | |
Quik Stop Markets, Inc.
|
California | |
Ralphs Grocery Company
|
Ohio | |
Second Story, Inc.
|
Washington | |
Xxxxx’x Beverage of Wyoming, Inc.
|
Wyoming | |
Xxxxx’x Food & Drug Centers, Inc.
|
Ohio | |
THGP Co., Inc.
|
Pennsylvania | |
THLP Co., Inc.
|
Pennsylvania | |
Topvalco, Inc.
|
Ohio | |
Turkey Xxxx X.X.
|
Pennsylvania |
- 25 -
ANNEX I
Pricing Agreement
[Names of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
As Representatives of the several
Underwriters named in Schedule I hereto,
.........................., 20..
Dear Sirs:
The Kroger Co., an Ohio corporation (the “Company”), proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated , (the “Underwriting
Agreement”), to issue and sell to the Underwriters named in Schedule I hereto (the “Underwriters”)
the Securities specified in Schedule II hereto (the “Designated Securities”). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and
shall be deemed to be a part of this Agreement to the same extent as if such provisions had been
set forth in full herein; and each of the representations and warranties set forth therein shall be
deemed to have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the Underwriting
Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of this Pricing Agreement.
Each reference to the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 13 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 13 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may
be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed
to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the Underwriting Agreement
incorporated herein by reference, the Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at
the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto.
- 26 -
The Company understands that the Underwriters intend to make a public offering of the
Securities as soon after the effectiveness of this Agreement as in the judgment of the
Representatives is advisable, and initially to offer the Securities on the terms set forth in the
Time of Sale information and the Prospectus. Schedule III hereto sets forth the Time of Sale
Information made available at the Time of Sale.
If the foregoing is in accordance with your understanding, please sign and return to us
counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Representatives as to the authority of the signers
thereof.
| Very Truly Yours, |
||||||
| Atttest: |
THE KROGER CO. |
|||||
| By: |
|
|||||
| Title: | ||||||
- 27 -
Accepted as of the date hereof:
[Name(s) of Co-Representative(s)]
On behalf of each of the Underwriters
- 28 -
SCHEDULE I
| Principal | ||||
| Amount of | ||||
| Designated | ||||
| Securities | ||||
| to be | ||||
| Underwriter | Purchased | |||
[Name(s) of Co-Representative(s)] |
$ | |||
[Names of other Underwriters] |
||||
Total |
$ | |||
- 29 -
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
[Debentures] due
Aggregate principal amount:
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from to ]
interest from to [and accrued amortization, if any, from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from to ]
interest from to [and accrued amortization, if any, from to ]
Specified funds for payment of purchase price:
[New York] Clearing House funds
Indenture:
Indenture dated , 20 , between the Company and , as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$] or an integral multiple thereof,
sinking fund, in whole or in part at the option of the Company, in the
amount of [$] or an integral multiple thereof,
[on or after , at the following redemption prices
(expressed in percentages of principal amount). If [redeemed on or before
, %, and if] redeemed during the 12-month period
beginning ,
(expressed in percentages of principal amount). If [redeemed on or before
, %, and if] redeemed during the 12-month period
beginning ,
| Redemption | Year | Price | ||||
- 30 -
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
with accrued interest to the redemption date.]
[on any interest payment date falling in or after , at the
election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]
election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to retire [$]
principal amount of Designated Securities on in each of the years
through at 100% of their principal amount plus accrued interest] [,together with
[cumulative] [noncumulative] redemptions at the option of the Company to retire an additional
[$] principal amount of Designated Securities in the years through
at 100% of their principal amount plus accrued interest].
[If Securities are extendable debt Securities, insert —
Extendable provisions:
Securities are repayable on , [insert date and years], at the option of the
holder, at their principal amount with accrued interest. Initial annual interest rate will be
%, and thereafter annual interest rate will be adjusted on , and to a
rate not less than % of the effective annual interest rate on U.S. Treasury obligations with
-year maturities as of the [insert date 15 days prior to maturity date] prior to such [insert
maturity date].]
[If Securities are Floating Rate debt Securities, insert —
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter will be adjusted
[monthly] [on each , , and ] [to an annual rate of
% above the average rate for -year [month] [securities] [certificates of deposit] issued by
and [insert names of banks].] [and the annual interest rate
[thereafter] [from through ] will be the interest yield equivalent of the weekly
average per annum market discount rate for -month Treasury bills plus % of Interest
Differential (the excess, if any, of (i) then current weekly average per annum secondary market
yield for -month certificates of deposit over (ii) then current interest yield equivalent of
the weekly average per annum market discount rate for -month Treasury bills); [from
and thereafter the rate will be the then current interest yield equivalent plus % of
Interest Differential].]
- 31 -
Defeasance provisions:
Time of Delivery:
Closing Location:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
Address for Notices, etc.:
[Other Terms]:
- 32 -
Schedule III
Time of Sale Information
- 33 -
Schedule IV
Pricing Term Sheet
The Kroger Co.
Pricing Term Sheet
___% Notes due
Issuer: |
The Kroger Co. | |
Principal Amount: |
$ | |
Security Type: |
Senior Note | |
Maturity: |
_______________________ ___, 20___ | |
Coupon: |
—% | |
Price to Public: |
—% | |
Yield to Maturity: |
—% | |
Spread to Benchmark Treasury: |
—% | |
Benchmark Treasury: |
— | |
Benchmark Treasury Spot and Yield: |
______ _____% | |
Interest Payment Dates: |
__________________ and _________________, commencing _________________, 2008 | |
Make-Whole Call: |
Treasury Rate plus ___ basis points | |
Trade Date: |
_______________________ ___, 2008 | |
Settlement Date: |
_______________________ ___, 2008 (T+5) | |
Denominations: |
$2,000 x $1,000 | |
Ratings: |
||
Joint Bookrunners: |
Citigroup Global Markets Inc. |
|
| Greenwich Capital Markets, Inc. | ||
Co-Managers: |
Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
XXXXX on the SEC Web site at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any dealer
participating in the offering will arrange to send you the prospectus if you request it by calling
Citigroup Global Markets Inc. collect at 1-877-858-5407 or Greenwich Capital Markets, Inc. toll
free at 0-000-000-0000.
Any disclaimer or other notice that may appear below is not applicable to this communication and
should be disregarded. Such disclaimer or notice was automatically generated as a result of this
communication being sent by Bloomberg or another email system.
- 34 -
ANNEX II
Pursuant to Section 8(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 audited (and, if applicable, prospective financial statements and/or
pro forma financial information examined) by them and included or incorporated by reference in
the Registration Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as applicable, and the
related published rules and regulations thereunder; and, if applicable, they have made a review
in accordance with standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements 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) 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 restatement where applicable) in the audited consolidated
financial statements for five such fiscal years which were included or incorporated by
reference in the Company’s Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in accordance with
generally accepted auditing standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention that caused them
to believe that:
(A) the unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included or incorporated by reference in
the Company’s 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
- 35 -
Exchange Act as it applies to Form 10-Q and the related published rules and regulations
thereunder or are not in conformity with generally accepted accounting principles applied
on a basis substantially consistent with the basis for the audited consolidated statements
of income, consolidated balance sheets and consolidated statements of cash flows included
or incorporated by reference in the Company’s Annual Report on Form 10-K for the most
recent fiscal year;
(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 the 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 financial statements included or incorporated by
reference in the Company’s Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements included or
incorporated by reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the 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 balance sheet included or incorporated by reference
in the Prospectus, and sales of capital stock to employee benefit plans of the Company) or
any increase in the consolidated long-term debt of the Company and its subsidiaries, or
any decreases in consolidated net current assets or net assets 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 or
incorporated by reference 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 or
incorporated by reference 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 increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in such letter; and
- 36 -
(v) In addition to the audit referred to in their report(s) included or incorporated by
reference in the Prospectus and the limited procedures, inspection of minute books, inquiries
and other procedures referred to in paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial information
specified by the Representatives, which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus (excluding documents incorporated
by reference), or in Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer to the Prospectus
(including the documents incorporated by reference therein) as defined in the Underwriting
Agreement as of the date of the letter delivered on the date of the Pricing Agreement for purposes
of such letter and to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated Securities for purposes
of the letter delivered at the Time of Delivery for such Designated Securities.
- 37 -
