EXHIBIT 1.2
SAFEWAY INC.
$50,000,000 3.625% NOTES DUE 2003
UNDERWRITING AGREEMENT
November 1, 2001
November 1, 2001
Deutsche Banc Alex. Xxxxx Inc.
Banc of America Securities LLC
Banc One Capital Markets, Inc.
BNY Capital Markets, Inc.
Credit Suisse First Boston Corporation
c/o Deutsche Banc Alex. Xxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Safeway Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") $50,000,000 aggregate principal amount of its 3.625% Notes Due
2003 (the "Securities") to be issued pursuant to the provisions of an Indenture
dated as of September 10, 1997 (the "Indenture") between the Company and The
Bank of New York, as Trustee (the "Trustee").
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (Registration No. 333-55008),
including a prospectus, relating to the Securities and has filed with, or
transmitted for filing to, or shall promptly hereafter file with or transmit for
filing to, the Commission (i) a prospectus supplement as supplemented by a
supplement (the "Prospectus Supplement") specifically relating to the Securities
pursuant to Rule 424 under the Securities Act of 1933, as amended (the
"Securities Act"), and (ii) a related prospectus dated February 12, 2001 (the
"Basic Prospectus"). The term "Registration Statement" means the registration
statement (Registration No. 333-55008), as amended to the date of this
Agreement. If the Company has filed or files an abbreviated registration
statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement. The
term "Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Securities, together with the Basic
Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus," and
"preliminary prospectus" shall include in each case the documents incorporated
by reference therein, and the term "Registration Statement" shall include the
documents incorporated or deemed to be incorporated by reference therein. The
terms "supplement," "amendment" and "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement (other than any Rule 462
Registration Statement) has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) The Registration Statement, when it became effective, did
not contain and such Registration Statement, as amended or supplemented,
if applicable, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this Section 1(b) do not apply (A) to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter expressly for use therein or (B)
to that part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) (the "Form T-1") under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the
Trustee.
(c) The documents incorporated by reference in the Prospectus,
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 Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; 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 Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(d) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its properties
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in the State of
California and in each other jurisdiction in which such qualification is
required, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(e) Each subsidiary, if any, of the Company which is a
"significant subsidiary" as defined in Rule 405 of Regulation C of the
Securities Act (each a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation and in good
standing under the laws of the jurisdiction of its incorporation.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
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(g) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and (ii) rights of acceleration,
if any, and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(h) The Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and legally binding
obligations of the Company, enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and (ii) rights of acceleration, if any, and
the availability of equitable remedies may be limited by equitable
principles of general applicability.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Securities will not result in any violation of the
Restated Certificate of Incorporation or the By-Laws of the Company or
any agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken
as a whole, or any statute or any order, rule or regulation of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency having
jurisdiction over the Company is required for the performance by the
Company of its obligations under this Agreement, the Indenture and the
Securities, except such as may be required under the Securities Act and
the rules and regulations thereunder, and the Exchange Act and the rules
and regulations thereunder, the Trust Indenture Act and the securities
or Blue Sky laws of the various states in connection with the offer and
sale of the Securities.
(j) The financial statements (together with the related notes
thereto) incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of and at the dates indicated and the
results of their operations for the periods specified, except as
otherwise disclosed therein; and except as otherwise stated therein or
in the Registration Statement and the Prospectus, said financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus.
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(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending or, to the Company's
knowledge, threatened, to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company or any of
its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required.
(m) The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
2. AGREEMENT TO SELL AND PURCHASE. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth in Schedule I
hereto opposite its name at a purchase price of 99.624% of the principal amount
of the Securities.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon after this Agreement has become effective as in your
judgment is advisable. The Company is further advised by you that the Securities
are to be offered to the public initially at 99.874% of the principal amount of
the Securities (the "Public Offering Price") plus, accrued interest, if any,
from November 5, 2001 to the date of payment and delivery, and to certain
dealers selected by you at a price that represents a concession not in excess of
.150% of the principal amount under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of .125% of the principal amount of the Securities, to any Underwriter or to
certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Securities shall be made in
Federal or other immediately available funds to an account designated by the
Company at 7:00 A.M., California time, on November 5, 2001, or at such other
time on the same or such other date, not later than November 14, 2001, as shall
be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for the Securities shall be made against delivery to you for
the respective accounts of the several Underwriters of global certificates
representing the Securities registered in the name of Cede & Co. with any
transfer taxes payable in connection with the transfer of the Securities to the
Underwriters duly paid.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligation of the
Company to sell the Securities to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Securities are subject to the
following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
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(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied in all material respects with all of
the agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied hereunder on or
before the Closing Date (the officer signing and delivering such
certificate may rely upon his or her knowledge as to proceedings
threatened).
(c) Xxxxxx & Xxxxxxx, special counsel for the Company, shall
have furnished to you their written opinion dated the Closing Date, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated, and is
validly existing and in good standing under the laws of the
State of Delaware, with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus.
(ii) The execution, delivery and performance of this
agreement have been duly authorized by all necessary corporate
action of the Company, and this agreement has been duly executed
and delivered by the Company.
(iii) The Indenture has been (a) qualified under the
Trust Indenture Act of 1939, as amended, and (b) duly
authorized, executed and delivered by the Company and is the
legally valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(iv) The execution, delivery and performance of the
Securities have been duly authorized by the Company, the
Securities have been duly executed by the Company, and when the
Securities have been duly issued and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by
you in accordance with the terms of this agreement, the
Securities will be legally valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms.
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(v) The Registration Statement has become effective
under the Act. To the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued under the Act and no proceedings therefor have
been initiated by the Commission. Any required filing of the
Prospectus pursuant to Rule 424 under the Act has been made in
accordance with Rule 424 under the Act.
(vi) The Registration Statement, as of the date it was
declared effective, and the Prospectus, as of its date, complied
as to form in all material respects with the requirements for
registration statements on Form S-3 under the Act and the rules
and regulations of the Commission thereunder; it being
understood, however, that such counsel need express no opinion
with respect to the financial statements, schedules or other
financial data included in, incorporated by reference in, or
omitted from, the Registration Statement or the Prospectus or
with respect to the Statement of Eligibility of the Trustee on
Form T-1 (the "Form T-1"). In passing upon the compliance as to
form of the Registration Statement and the Prospectus, such
counsel may have assumed that the statements made therein are
correct and complete.
(vii) The Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus
under the captions "Description of the Notes" and "Description
of Debt Securities," in each case insofar as such statements are
summaries of legal matters.
(viii) The issue and sale of the Securities being
delivered on the Closing Date by the Company and the compliance
by the Company with the provisions of this agreement and the
Indenture on the Closing Date do not:
(1) violate the Company's Governing Documents;
or
(2) result in the breach of or a default under
any of the indentures relating to the Company's 6.15%
Notes due 2006, 6.50% Notes due 2011, 7.25% Debentures
due 2031, 7.00% Notes due 2002, 7.25% Notes due 2004,
7.50% Notes due 2009, 9.30% Senior Secured Debentures
due 2007, 10% Senior Notes due 2002, 10% Senior
Subordinated Notes due 2001, 9.875% Senior Subordinated
Debentures due 2007, 9.65% Senior Subordinated
Debentures due 2004, 5.875% Notes due 2001, 6.05% Notes
due 2003, 6.85% Senior Notes due 2004, 7.00% Senior
Notes due 2007, 6.50% Notes due 2008 or 7.45% Senior
Debentures due 2027, and the Bank Credit Agreement dated
as of May 24, 2001 between the Company and a consortium
of banks led by Deutsche Banc Alex. Xxxxx Inc. and X.X.
Xxxxxx Securities Inc., as co-arrangers; or
(3) violate any federal, New York or California
statute, rule or regulation applicable to the Company;
or
(4) require any consents, approvals,
authorizations, registrations, declarations or filings
by the Company under any federal, New York
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or California statute, rule or regulation applicable to
the Company, except such as have been obtained under the
Act and such as may be required under state securities
laws in connection with the purchase and distribution of
the Securities by you.
No opinion need be expressed in this paragraph (viii) as
to the application of Section 548 of the Federal Bankruptcy Code
and comparable provisions of state law, or under other laws
customarily excluded from such opinions, including federal
securities laws, state securities laws, antifraud laws,
antitrust or trade regulations laws.
(ix) Each of the Incorporated Documents, as of its
respective filing or effective date, appeared on its face to
comply as to form in all material respects with the applicable
requirements for reports on Forms 10-K, 10-Q and 8-K and proxy
statements under Regulation 14A, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission
thereunder, and for Registration Statements on Form 8-A under
the Exchange Act, and the rules of the Commission thereunder; it
being understood, however, that such counsel need express no
opinion with respect to financial statements, schedules or other
financial data included in, incorporated by reference in, or
omitted from such reports, proxy statements and registration
statements or with respect to the Form T-1. In passing upon the
compliance as to form of the Incorporated Documents, such
counsel may assume that the statements made therein are correct
and complete.
(x) The Company is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that they have
participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company, and your
representatives, at which the contents of the Registration
Statement and the Prospectus and the Incorporated Documents and
related matters were discussed and, although such counsel need
not pass upon or assume any responsibility for, the accuracy,
completeness or fairness of the statements contained or
incorporated by reference in the Registration Statement and the
Prospectus or the Incorporated Documents and need not make any
independent check or verification thereof, during the course of
such participation, no facts came to such counsel's attention
that caused such counsel to believe that the Registration
Statement (including the Incorporated Documents), at the time it
became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus (including the Incorporated
Documents), as of November 1, 2001 or as of the date hereof,
contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the
statements therein, in light
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of the circumstances under which they were made, not misleading;
it being understood that such counsel need express no belief
with respect to the financial statements, schedules or other
financial data included or incorporated by reference in, or
omitted from, the Registration Statement or the Prospectus or
with respect to the Form T-1.
In rendering such opinion, such counsel may state that
they express an opinion only as to federal securities laws, New
York and California (as to paragraphs (viii)(3) and (viii)(4)
only) law and the General Corporation Law of the State of
Delaware. Such opinion may also be subject to customary
assumptions and limitations, including that opinions on
enforceability may be subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights and
remedies of creditors; (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which
any proceeding therefor may be brought; (iii) the
unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy;
(iv) such counsel need not express an opinion concerning the
enforceability of the waiver of rights or defenses contained in
Section 4.4 of the Indenture; (v) such counsel need not express
an opinion with respect to Sections 10.15 and 10.16 under the
Indenture; (vi) such counsel need not express an opinion with
respect to whether acceleration of the Securities may affect
the collectibility of that portion of the stated principal
amount thereof which might be determined to constitute unearned
interest thereon; and (vii) the unenforceability of any
provision requiring the payment of attorney's fees, except to
the extent a court determines such fees to be reasonable.
(d) Xxxxxxxx Xxxxx, Vice President-Corporate Law and Secretary
of the Company, shall have furnished to you her written opinion, dated
the Closing Date, in form and substance satisfactory to you, to the
effect that:
(i) 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 jurisdiction in which its
ownership or lease of substantial properties or the conduct of
its business requires such qualification, and in which the
failure to be so qualified and in good standing would have a
material adverse effect upon the Company and its subsidiaries
considered as a whole;
(ii) based solely on certificates from public officials,
each Significant 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;
has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Prospectus; and to the best of such counsel's knowledge 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 its ownership or lease of substantial
properties or the conduct of its business requires such
qualification, and in which failure to be so qualified and in
good standing would have a material adverse effect upon the
Company and its subsidiaries considered as a whole; and all of
the issued and
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outstanding capital stock of each such Significant Subsidiary
has been duly authorized and validly issued and is fully paid
and non-assessable, and the capital stock owned by the Company
in each such subsidiary is owned by the Company free and clear
of any mortgage, pledge, lien, encumbrance, claim or equity;
(iii) to the best of such counsel's knowledge there are
no legal or governmental proceedings pending or threatened 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, required to be described in the Prospectus, which
are not described as required; and
(iv) the issue and sale of the Securities being
delivered at the Closing Date by the Company and the application
of the net proceeds therefrom as contemplated under "Use of
Proceeds" in the Prospectus, and the compliance by the Company
with all of the provisions of this Agreement will not conflict
with or result in a material breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument relating to indebtedness in excess of
$25 million 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.
(e) The Underwriters shall have received on the Closing Date an
opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in the first
clause of subparagraph (i), subparagraphs (ii), (iii), (iv), (viii) (but
only as to the opinion that the Securities conform in all material
respects to the description thereof in the Prospectus), (x), (xi) and
the penultimate paragraph of paragraph (c) above and such counsel shall
have received such papers and information as they may reasonably request
to enable them to pass upon such matters.
The opinions of Xxxxxx & Xxxxxxx and Xxxxxxxx Xxxxx described in
paragraphs (c) and (d) above shall be rendered to the Underwriters at
the request of the Company and shall so state therein.
(f) The Underwriters shall have received, on the Closing Date, a
letter dated the Closing Date, in form and substance satisfactory to the
Underwriters, from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that such letter shall use a "cut-off date" not earlier than
the date hereof.
(g) At the date of this Agreement, the Company shall have
furnished for review by the Underwriters copies of such further
information, certificates and documents as they may reasonably request.
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(h) If the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement shall have become effective by 10:00
p.m., Washington, D.C. time, on the date of this Agreement.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and documents
incorporated by reference and to each Underwriter a copy of the
Registration Statement (without exhibits thereto but including documents
incorporated by reference) and to furnish to you in New York City
without charge prior to 5:00 p.m. local time on the business day next
succeeding the date of this Agreement, and during the period mentioned
in paragraph (c) below, as many copies of the Prospectus, any documents
incorporated therein by reference, and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earnings statement that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
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(f) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company
substantially similar to the Securities (other than (i) the Securities
or (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of Deutsche Banc Alex. Xxxxx Inc..
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel and Company's accountants in
connection with the registration and delivery of the Securities under
the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers
in the quantities hereinabove specified, (ii) the preparation, issuance
and delivery of the Securities; (iii) the fees and disbursements of the
Trustee and its counsel; (iv) all expenses in connection with the
qualification of the Securities for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with any Blue Sky memorandum, (v) the printing and delivery to the
Underwriters of copies of any Blue Sky memorandum; (vi) any fees charged
by rating agencies for the rating of the Securities; (vii) the cost of
printing certificates representing the Securities, (viii) the costs and
expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered by the Company in connection with
the road show, (ix) all other costs and expenses of the Company in
connection with the performance of its obligations hereunder for which
provision is not otherwise made in this Section and (x) any other costs
and expenses of others in connection with the performance of the
Company's obligations hereunder which have been previously approved by
the Company. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Securities by them,
the costs and expenses of the Underwriters relating to investor
presentations on any "road shows" undertaken in connection with the
marketing of the Securities and any advertising expenses connected with
any offers they may make.
7. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section
11
15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses
reasonably incurred by any Underwriter or any such controlling person
in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Securities, or any person
controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the
sale of the Securities to such person, and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to
such losses, claims, damages or liabilities.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from the Company to such Underwriter, but
only with reference to information relating to such Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either paragraph (a) or (b)
of this Section 7, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought
(the "indemnifying party") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate
in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be
12
inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
respect of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Deutsche Banc
Alex. Xxxxx Inc., in the case of parties indemnified pursuant to
paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss
or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying
party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that
are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an
indemnified party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Securities shall be deemed to be in the same respective proportions
as the aggregate net proceeds from the offering of the Securities
(before deducting expenses) received by the Company and the aggregate
underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the
Securities. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether
13
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 or by the Underwriters and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal
amounts of Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would
not be just or equitable if contribution pursuant to this Section 7
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 that does not take account of the equitable considerations
referred to in paragraph (d) of this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
7, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that 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 Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 7 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other
statements of the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter
or by or on behalf of the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment
for any of the Securities.
8. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, either of the
New York Stock Exchange or the National Association of Securities Dealers, Inc.,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York or California shall have been declared
by either Federal or New York State or California authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis, that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event, singly or together with any other such event, makes
it, in your judgment,
14
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bear to the
principal amount of Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 9 by an amount
in excess of one-ninth of such principal amount of Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased
on such date, and arrangements satisfactory to you and the Company for the
purchase of such Securities are not made within 36 hours after such default,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder; provided, however, that no such
reimbursement shall be required with respect to a termination of this Agreement
by the Underwriters pursuant to Section 8 or this Section 9.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
15
12. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
SAFEWAY INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President -
Finance and Investor
Relations
Accepted as of the date hereof
Deutsche Banc Alex. Xxxxx Inc.
Banc of America Securities LLC
Banc One Capital Markets, Inc.
BNY Capital Markets, Inc.
Credit Suisse First Boston Corporation
By: Deutsche Banc Alex. Xxxxx Inc.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Managing Director
SCHEDULE I
Principal Amount of
Securities to be
Underwriter Purchased
----------- -------------------
Deutsche Banc Alex. Xxxxx Inc. $20,000,000
Banc of America Securities LLC 15,000,000
Banc One Capital Markets, Inc. 5,000,000
BNY Capital Markets, Inc. 5,000,000
Credit Suisse First Boston Corporation 5,000,000
Total $50,000,000
===========
