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EXHIBIT 1
$600,000,000
SAFEWAY INC.
7.25% DEBENTURES DUE 2031
UNDERWRITING AGREEMENT
January 26, 2001
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January 26, 2001
Chase Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc One Capital Markets, Inc.
Deutsche Bank Securities Inc.
Wachovia Securities, Inc.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
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")
$600,000,000 aggregate principal amount of its 7.25% Debentures Due 2031 (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. 333-84201), 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 (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 August 10, 1999 (the "Basic Prospectus"). The registration
statement, as amended, constitutes post-effective amendment No. 1 to the
Company's registration statement (Registration No. 333-65903), as amended. The
term "Registration Statement" means the registration statement (Registration No.
333-84201), 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:
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(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 amount of Securities set forth in Schedule I
hereto opposite its name at a purchase price of 98.870% 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 99.745% of their principal amount
(the "Public Offering Price") plus, in each case, accrued interest, if any, from
January 31, 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 .50% of
their principal amount under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in excess of .25% of
their principal amount 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 January 31, 2001, or at such other
time on the same or such other date, not later than February 9, 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 Prospectus;
(ii) this Agreement has been duly authorized, executed and delivered by
the Company;
(iii) the Indenture has been (a) duly qualified under the Trust Indenture
Act 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 Securities have been duly authorized and executed by the Company
and, when duly authenticated by the Trustee in accordance with the terms of
the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms;
(v) the issue and sale of the Securities being delivered at the Closing
Date by the Company and the compliance by the Company with the provisions
of
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this Agreement and the Indenture will not result in the violation by the
Company of its Restated Certificate of Incorporation or By-laws or any
federal, New York or California statute, rule or regulation known to such
counsel to be applicable to the Company (other than federal securities
laws, which are specifically addressed elsewhere in such counsel's opinion,
or state securities laws, as to which such counsel need not express an
opinion) or result in a material breach or violation of any of the terms or
provisions of, or constitute a default under, any of the indentures
relating to the 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. 5.75%
Notes due 2000, 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, or the bank credit agreement between the
Company and a consortium of banks led by Deutsche Bank (formerly known as
Bankers Trust Company);
(vi) no consent, approval, authorization or order of, or filing with, any
federal, New York or California court or governmental agency or body is
required for the issue and sale of the Securities except such as have been
obtained under the Securities Act and such as may be required under state
securities laws in connection with the purchase and distribution of the
Securities by the Underwriters as to which such counsel need not express an
opinion;
(vii) each document incorporated by reference in the Prospectus (other
than the financial statements, schedules and other financial data included
or incorporated by reference therein, as to which such counsel need express
no opinion), when it became effective or was filed with the Commission, as
the case may be, appeared on its face to comply as to form in all material
respects with the requirements of the Exchange Act and the applicable rules
and regulations of the Commission thereunder. In passing upon the
compliance as to form of each of such documents, such counsel may assume
that the statements made and incorporated by reference therein are correct
and complete;
(viii) the statements in the Prospectus under the captions "Description
of the Debentures" and "Description of Debt Securities," in each case
insofar as such statements constitute summaries of legal matters, are
accurate in all material respects; and the Securities conform in all
material respects to the description thereof in the Prospectus;
(ix) the Company is not an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended;
(x) the Registration Statement (333-84201) and the Registration Statement
(333-54344) (collectively, the "Registration Statements") and the
Prospectus (in each case excluding the documents incorporated by reference
therein, and except for financial statements, schedules and other financial
data
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included or incorporated by reference therein, and excluding the Form
T-1, as to which such counsel need express no opinion), as of their
respective effective or issue dates, complied as to form in all material
respects with the requirements for registration statements on Form S-3
under the Securities Act and the applicable rules and regulations of the
Commission thereunder. In passing upon the compliance as to form of the
Registration Statements and the Prospectus, such counsel may assume that
the statements made and incorporated by reference therein are correct and
complete; and
(xi) the Registration Statements have become effective under the
Securities Act and, to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under the
Securities Act and no proceedings therefor have been initiated by the
Commission; and the Prospectus has been filed in accordance with Rule
424(b) under the Securities Act.
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 Statements
and the Prospectus and related matters were discussed and, although such
counsel is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statements and the Prospectus and such counsel has not made
any independent check or verification thereof (except as set forth in
paragraph (viii) above), during the course of such participation, no facts
came to such counsel's attention that caused such counsel to believe that
the Registration Statement (333-54344) (which incorporates by reference the
Company's Registration Statement (333-84201), including the documents
incorporated by reference therein), 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
documents incorporated by reference therein), as of the date of the
Prospectus Supplement or as of the Closing Date, 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 the light 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 and other financial data included in or
omitted from the Registration Statement or the Prospectus or incorporated
by reference therein 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 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,
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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 thereof 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 and (v) such counsel need not express an
opinion with respect to Sections 10.15 and 10.16 of the Indenture.
(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 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
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(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
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 each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, 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 the letter delivered on the Closing Date 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.
(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
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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.
(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 Chase Securities Inc. and
Xxxxxxx Xxxxx Xxxxxx 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
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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 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
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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 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 Chase Securities Inc. and Xxxxxxx Xxxxx Xxxxxx 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
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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 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
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(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, 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
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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.
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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
Chase Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Banc One Capital Markets, Inc.
Deutsche Bank Securities Inc.
Wachovia Securities, Inc.
By: Chase Securities Inc.
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
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SCHEDULE I
Principal Amount
of Debentures Due
2031 to be
Underwriter Purchased
----------- -----------------
Chase Securities Inc. $240,000,000
Xxxxxxx Xxxxx Xxxxxx Inc. 240,000,000
Banc One Capital Markets, Inc. 40,000,000
Deutsche Bank Securities Inc. 40,000,000
Wachovia Securities, Inc. 40,000,000
------------
Total $600,000,000
============
