Exhibit 1.1
XXXXXXXXX'X INC.
40 million 7.25% Hybrid Income Term Security Units
(Initially consisting of 40 million Corporate Units)
UNDERWRITING AGREEMENT
dated May 3, 0000
XXXX XX XXXXXXX SECURITIES LLC
UNDERWRITING AGREEMENT
May 3, 0000
Xxxx xx Xxxxxxx Securities LLC
Credit Suisse First Boston LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Banc One Capital Markets, Inc.
Wachovia Capital Markets, LLC
Xxxxx Fargo Securities, LLC
Wedbush Xxxxxx Securities Inc.
The Xxxxxxxx Capital Group, L.P.
c/o Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Xxxxxxxxx'x Inc., a Delaware corporation (the "COMPANY"), proposes,
subject to the terms and conditions stated herein, to issue and sell an
aggregate of 40 million 7.25% Hybrid Income Term Security (HITS(TM)(1)) Units
(the "UNITS") of the Company (the "FIRM SECURITIES") to the several underwriters
named in Schedule 1 hereto (the "UNDERWRITERS"). In addition, the Company
proposes to grant to the several Underwriters an option (the "OPTION") to
purchase up to an additional 6 million Units (the "OPTIONAL SECURITIES" and,
together with the Firm Securities, the "DESIGNATED SECURITIES"). The terms of
the Designated Securities are identified in Schedule 2 hereto. Banc of America
Securities LLC ("BAS") has agreed to act as the sole book-running manager along
with Credit Suisse First Boston LLC and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated as Representatives of the several Underwriters (in such capacity,
the "REPRESENTATIVES") in connection with the offering and sale of the
Designated Securities.
Each of the Designated Securities initially will consist of a unit
(referred to as a "CORPORATE UNIT") with a stated amount of $25 (the "STATED
AMOUNT") comprised of (a) a stock purchase contract (a "PURCHASE CONTRACT" and,
collectively with each other Purchase Contract, the "PURCHASE CONTRACTS") under
which (i) the holder of a Corporate Unit (a "HOLDER" and, collectively with
other Holders of Corporate Units, the "HOLDERS") will purchase from the Company
no later than May 16, 2007 (the "SETTLEMENT DATE"), for $25 per Corporate Unit,
a number of shares (each, a "COMMON SHARE" and, collectively with all other
Common Shares that may be issued and sold by the Company upon settlement of the
Purchase Contracts, the "COMMON SHARES") of common stock, par value $1.00 per
share, of the Company (the "COMMON STOCK"), as set forth in the Purchase
Agreement (as defined below) and (ii) the Company will pay quarterly contract
adjustment payments at the rate of 3.50% of the Stated Amount per year, and (b)
a 1/40, or 2.5%, ownership interest in one of the Company's 3.75%
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1 "HITS" is a trademark of Banc of America Securities LLC
Senior Notes due 2009 with a principal amount of $1,000 (a "SENIOR NOTE" and,
collectively with each other Senior Note, the "SENIOR NOTES").
Each Common Share will have attached thereto a right (the "RIGHTS") to
purchase one one-thousandth of a share of Junior Preferred Stock of the Company.
The Rights have been issued pursuant to a Rights Agreement dated as of December
9, 1996 (as amended) (the "RIGHTS AGREEMENT") between the Company and American
Stock Transfer & Trust Company, as successor Rights Agent.
In accordance with the terms of a Purchase Contract Agreement (the
"PURCHASE AGREEMENT") to be dated as of the First Delivery Date (as defined in
Section 2(a) hereof) between the Company and U.S. Bank Trust National
Association, as Purchase Contract Agent (the "PURCHASE CONTRACT AGENT"),
pursuant to which the Purchase Contracts will be issued, the holders of the
Corporate Units will pledge all of their respective title, right and interest in
and to the Senior Notes constituting part of the Corporate Units to U.S. Bank
Trust National Association, as Collateral Agent (the "COLLATERAL AGENT"),
pursuant to a Pledge Agreement (the "PLEDGE AGREEMENT") to be dated as of the
First Delivery Date between the Company, the Purchase Contract Agent and the
Collateral Agent, to secure the Holders' obligations under the Purchase
Contracts. The Purchase Agreement and the Pledge Agreement are herein
collectively referred to as the "UNIT AGREEMENTS."
The Senior Notes will be issued pursuant to the Senior Indenture (the
"BASE INDENTURE") dated as of May 1, 1992 between the Company and U.S. Bank
Trust National Association, as successor indenture trustee (the "TRUSTEE"), as
supplemented by the Supplemental Indenture No. 1 (the "SUPPLEMENTAL INDENTURE"),
to be dated as of the First Delivery Date between the Company and the Trustee.
The Base Indenture, as so supplemented, is herein referred to as the
"INDENTURE".
Pursuant to a Remarketing Agreement (the "REMARKETING AGREEMENT") to be
dated as of the First Delivery Date between the Company, the Purchase Contract
Agent and the Remarketing Agent (as defined in the Remarketing Agreement, the
"REMARKETING AGENT"), the Remarketing Agent will remarket the Senior Notes,
subject to the terms and conditions set forth therein.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-3 (File No.
333-113995), which contains a form of prospectus to be used in connection with
the public offering and sale of the Designated Securities. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (collectively, the "SECURITIES ACT"),
including all documents incorporated or deemed to be incorporated by reference
therein or the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the "EXCHANGE ACT"), is called
the "REGISTRATION STATEMENT". Any registration statement filed by the Company
pursuant to Rule 462(b) under the Securities Act is called the "RULE 462(B)
REGISTRATION STATEMENT", and from and after the date and time of filing of the
Rule 462(b) Registration Statement, the term "Registration Statement" shall
include the Rule 462(b)
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Registration Statement. Such prospectus in the form first used by the
Underwriters to confirm sales of the Designated Securities, is called the
"PROSPECTUS". The term "PRELIMINARY PROSPECTUS" means a preliminary prospectus
specifically relating to the Designated Securities.
All references in this Agreement to (i) the Registration
Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus, the
Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX") and (ii) the Prospectus
shall be deemed to include the "electronic Prospectus" provided for use in
connection with the offering of the Designated Securities as contemplated by
Section 3(m) of this Agreement. All references in this Agreement to financial
statements and schedules and other information which is "contained," "included"
or "stated" in the Registration Statement, the Rule 462(b) Registration
Statement, a Preliminary Prospectus, the Prospectus, (and all other references
of like import) shall be deemed to mean and include all such financial
statements and schedules and other information which is or is deemed to be
incorporated by reference therein, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statement, the
Rule 462(b) Registration Statement, a Preliminary Prospectus, the Prospectus,
shall be deemed to mean and include any document subsequently filed by the
Company with the Commission pursuant to the Exchange Act, which is or is deemed
to be incorporated by reference therein, as the case may be.
This is to confirm the agreement as of the date first written above
between the Company and the Underwriters concerning the issue, offer and sale of
the Designated Securities.
1. Representations, Warranties and Agreements of the Company. The Company
represents, warrants to and agrees with, the Underwriters that:
(a) The Registration Statement has been declared effective by the
Commission under the Securities Act. The Company has complied to the
Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement is in effect and no
proceedings for such purpose have been instituted or are pending or, to
the best knowledge of the Company, are contemplated or threatened by the
Commission.
Each Preliminary Prospectus and the Prospectus when filed complied
in all material respects with the Securities Act and the Trust Indenture
Act of 1939, as amended (the "TRUST INDENTURE ACT"), and, if filed by
electronic transmission pursuant to XXXXX (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy
thereof delivered to the Underwriters for use in connection with the offer
and sale of the Designated Securities. The Registration Statement
complies, and any post-effective amendment thereto will comply, in all
material respects with the Securities Act and the Trust Indenture Act, and
the Registration Statement as amended and supplemented by the Prospectus,
and any post-effective amendment thereto do not and will not, as of the
applicable effective date as to the Registration Statement, or any
post-effective amendment thereto, 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. The
Prospectus, as amended or supplemented, as of its date, and
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any further supplements to the Prospectus, as of the applicable filing
date as to any such supplement, do not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and
warranties set forth in the two immediately preceding sentences do not
apply to statements in or omissions from the Registration Statement, any
post-effective amendment thereto or the Prospectus or any supplement
thereto made in reliance upon and in conformity with written information
furnished to the Company in writing by or on behalf of the Representatives
specifically for inclusion therein, which information consists solely of
the information set forth in the letter referred to in Section 6(e), or to
information which shall constitute the Statement of Eligibility under the
Trust Indenture Act (Form T-1) of the Trustee under the Indenture. There
are no contracts or other documents required to be described in the
Prospectus or to be filed as exhibits to the Registration Statement which
have not been described or filed as required.
(b) The Company has delivered to each Representative one photocopy
of a complete manually signed copy of the Registration Statement and of
each consent and certificate of experts filed as a part thereof, and
conformed copies of the Registration Statement (without exhibits) and
Preliminary Prospectuses and the Prospectus, as amended or supplemented,
in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.
(c) The Company has not distributed and will not distribute, prior
to the later of the Optional Delivery Date (as defined below) and the
completion of the Underwriters' distribution of the Units, any offering
material in connection with the offering and sale of the Units other than
a Preliminary Prospectus, the Prospectus as the Registration Statement.
(d) Each of the Company and each of ABS Finance Company, Inc., Acme
Markets Inc., Jewel Food Stores, Inc., American Drug Stores, Inc., Lucky
Stores, Inc. (NV), Lucky Stores, Inc. (FL), Lucky Stores, Inc. (DE) and JS
USA Holdings Inc. (collectively, the "SIGNIFICANT SUBSIDIARIES") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation and has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus. Each of the
Significant Subsidiaries is a "significant subsidiary" of the Company as
defined in Rule 1-02 of Regulation S-X under the Securities Act. Except
for the Significant Subsidiaries (and except for the subsidiaries of JS
USA Holdings Inc., with respect to which no representation or warranty is
made hereby), none of the Company's subsidiaries is a "significant
subsidiary" of the Company as defined in Rule 1-02 of Regulation S-X under
the Securities Act.
(e) The Company has all requisite corporate power and authority to
execute and deliver this Agreement and perform its obligations hereunder;
this Agreement has been duly authorized, executed and delivered by the
Company.
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(f) The Company has all requisite corporate power and authority to
execute and deliver each of the Unit Agreements and perform its
obligations thereunder; each of the Unit Agreements has been duly
authorized and, on the First Delivery Date, will have been duly executed
and delivered by the Company, and, assuming due authorization, execution
and delivery thereof by the other parties thereto, will constitute a
legally valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, subject to general principles of equity and
to limitations on availability of equitable relief, including specific
performance (whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing; provided, however,
that upon the occurrence of a Termination Event (as defined in the
Purchase Contract), Title 11 of the United States Code (the "BANKRUPTCY
CODE") should not substantively limit the provisions of the Purchase
Agreement or the Pledge Agreement that require termination of the Purchase
Contracts and release of the Collateral Agent's security interest in (1)
the Senior Notes, (2) the Treasury Securities (as defined in the Purchase
Contract) or (3) the Applicable Ownership Interest in the Treasury
Portfolio (as defined in the Purchase Contract), as applicable, and the
transfer of such securities to the Purchase Contract Agent, for the
benefit of the Holders of the Units (as defined in the Prospectus);
provided further that the Company makes no representations as to whether
the procedural restrictions respecting relief from the automatic stay
under Section 362 of the Bankruptcy Code may delay the timing of the
exercise of the rights and remedies contained in Section 5.06 of the
Purchase Agreement and Section 5.04 of the Pledge Agreement. Each of the
Unit Agreements conforms in all material respects to the description
thereof contained in the Prospectus.
(g) The Company has all requisite corporate power and authority to
execute and deliver the Remarketing Agreement and perform its obligations
thereunder; the Remarketing Agreement has been duly authorized and, on the
First Delivery Date, will have been duly executed and delivered by the
Company, and, assuming due authorization, execution and delivery thereof
by the other parties thereto, will constitute a legally valid and binding
agreement of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, subject to general principles of equity and to limitations on
availability of equitable relief, including specific performance (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing, and except as any rights to indemnification,
contribution or exculpation thereunder may be limited by principles of
public policy, statutory duties and applicable securities laws. The
Remarketing Agreement conforms in all material respects to the description
thereof contained in the Prospectus.
(h) The Company has all requisite corporate power and authority to
execute and deliver the Supplemental Indenture and perform its obligations
thereunder; the Supplemental Indenture has been duly authorized and, on
the First Delivery Date, will have been duly executed and delivered by the
Company and qualified under the Trust
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Indenture Act, and, assuming due authorization, execution and delivery of
the Supplemental Indenture by the Trustee, the Supplemental Indenture will
constitute a legally valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, subject to general
principles of equity and to limitations on availability of equitable
relief, including specific performance (whether considered in a proceeding
in equity or at law) and an implied covenant of good faith and fair
dealing. The Supplemental Indenture conforms in all material respects to
the description thereof contained in the Prospectus.
(i) The Senior Notes have been duly authorized and, on the First
Delivery Date, will have been duly executed by the Company, and, when the
Senior Notes are authenticated by the Trustee in accordance with the
Indenture and delivered against payment therefor in accordance with this
Agreement, will constitute legally valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against
the Company in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, subject to general principles of equity and
to limitations on availability of equitable relief, including specific
performance (whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing. The Senior Notes will
conform in all material respects to the description thereof contained in
the Prospectus.
(j) The Designated Securities have been duly authorized and, on the
First Delivery Date, will have been duly executed by the Company, and,
when the Designated Securities are authenticated by the Purchase Contract
Agent in accordance with the Purchase Agreement and delivered against
payment therefor in accordance with this Agreement, will constitute
legally valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, subject to general principles of equity and
to limitations on availability of equitable relief, including specific
performance (whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing; provided, however,
that upon the occurrence of a Termination Event (as defined in the
Purchase Contract), the Bankruptcy Code should not substantively limit the
provisions of the Purchase Agreement or the Pledge Agreement that require
termination of the Purchase Contracts and release of the Collateral
Agent's security interest in (1) the Senior Notes, (2) the Treasury
Securities (as defined in the Purchase Contract) or (3) the Applicable
Ownership Interest in the Treasury Portfolio (as defined in the Purchase
Contract), as applicable, and the transfer of such securities to the
Purchase Contract Agent, for the benefit of the Holders of the Units (as
defined in the Prospectus); provided further that the Company makes no
representations as to whether the procedural restrictions respecting
relief from the automatic stay under Section 362 of the Bankruptcy Code
may delay the timing of the exercise of the rights and remedies contained
in Section 5.06 of
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the Purchase Agreement and Section 5.04 of the Pledge Agreement. The
issuance of the Designated Securities will not be subject to any
preemptive or other similar rights and the Designated Securities will
conform in all material respects to the description thereof in the
Prospectus.
(k) The Common Shares have been duly authorized and reserved for
issuance pursuant to the Purchase Contracts, and are free of any
preemptive or similar rights, and, when issued and delivered by the
Company against payment therefor in accordance with the terms of the
Purchase Contracts, will be validly issued, fully paid and nonassessable
and free and clear of all liens, encumbrances, equities or claims and will
conform to the descriptions thereof in the Prospectus.
(l) The Junior Preferred Stock of the Company issuable pursuant to
the Rights Agreement has been duly authorized and reserved for issuance
pursuant to the Rights Agreement, and are free of any preemptive or
similar rights, and, when issued and delivered by the Company in
accordance with the terms of the Rights Agreement, will be validly issued,
fully paid and nonassessable and free and clear of all liens,
encumbrances, equities or claims and will conform to the descriptions
thereof in the Prospectus
(m) The execution, delivery and performance of the Indenture, this
Agreement, the Units, the Senior Notes, the Unit Agreements and the
Remarketing Agreement (collectively, the "TRANSACTION DOCUMENTS") by the
Company and the issuance and sale of the Designated Securities and the
consummation of the transactions contemplated hereby and by the other
Transaction Documents have been authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, violate or constitute a breach of any
of the terms or provisions of, or constitute a default or Repayment Event
(as defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or
any Significant Subsidiary pursuant to any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is bound or to which any of
the property or assets of the Company or any of its Significant
Subsidiaries is subject, except for such conflicts, breaches, violations,
defaults Repayment Events, or creations or impositions as would not,
either individually or in the aggregate, have a material adverse effect or
cause a development involving a prospective material adverse effect on the
consolidated financial position, business, or results of operations of the
Company and its Subsidiaries, taken as a whole (such effect, a "MATERIAL
ADVERSE EFFECT"); nor will such action result in any violation of (i) any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries
or any of their assets, properties or operations (except for such
violations that would not have a Material Adverse Effect) or (ii) the
provisions of the charter or bylaws of the Company or any of its
Subsidiaries. As used herein, a "REPAYMENT EVENT" means any event or
condition that gives the holder of any note, debenture or other evidence
of indebtedness of the Company or any Significant Subsidiary (or any
person acting on such holder's behalf) the right to require
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the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Subsidiary.
(n) Neither the Company nor any of its Significant Subsidiaries is
in violation of its charter or by-laws or in default (or, with the giving
of notice or lapse of time, would be in default) under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its Significant Subsidiaries is a party or
by which the Company or any of its Significant Subsidiaries may be bound,
or to which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, except for such violations or
defaults as would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the Registration Statement.
(p) No consent, approval, authorization or order of, or filing or
registration with, any court or governmental agency or body is required
for the execution, delivery and performance of the Transaction Documents
by the Company, and the consummation of the transactions contemplated
hereby and by the Transaction Documents, except such as has been, or will
be prior to the applicable Delivery Date (as defined herein) obtained or
made under the Securities Act, the Exchange Act and the Trust Indenture
Act and as required by the state securities or "blue sky" laws.
(q) The authorized, issued and outstanding capital stock of the
Company as of January 29, 2004, is as set forth in the Prospectus; since
such date, except as disclosed in the Prospectus or changes occurring in
the ordinary course of business, there has been no change in the
capitalization of the Company (other than changes in outstanding Common
Stock resulting from grants, exercises and sales pursuant to employee or
director benefit plans, including, without limitation, the Company's stock
option plans, in each case existing on the date hereof (collectively, the
"STOCK PLANS")); all of the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is fully paid and
nonassessable.
(r) Except as disclosed in the Prospectus and except for grants,
exercises and sales pursuant to the Stock Plans, (i) there are no
outstanding securities convertible into or exchangeable for, or warrants,
rights or options issued by the Company to purchase, any shares of the
capital stock of the Company, (ii) there are no statutory, contractual,
preemptive or other rights to subscribe for or to purchase any Designated
Securities or Common Stock and (iii) there are no restrictions upon
transfer of the Designated Securities or the Common Stock pursuant to the
Company's certificate of incorporation or bylaws.
(s) The Company is not, and after giving effect to the offering and
sale of the Designated Securities and the application of the proceeds
thereof as described in the
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Prospectus will not be, required to register as an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended
(the "INVESTMENT COMPANY ACT").
(t) Except as otherwise disclosed in the Prospectus, there are no
legal or governmental actions, suits or proceedings pending to which the
Company or any of its Subsidiaries is a party or to which any property or
assets of the Company or any of its Subsidiaries is the subject which,
individually or in the aggregate, if so determined adversely, would
reasonably be expected to have a Material Adverse Effect or adversely
affect the consummation of the transactions contemplated by this
Agreement; and, to the best of the Company's knowledge, no such actions,
suits or proceedings are threatened. Except as otherwise disclosed in the
Prospectus, no labor dispute with the employees of the Company or any of
its Subsidiaries exists or, to the best of the Company's knowledge, is
threatened or imminent, except for any such dispute that would not have a
Material Adverse Effect.
(u) The Company and each of its Subsidiaries have filed all
necessary federal, state, local and foreign income and franchise tax
returns required to be filed through the date hereof and have paid all
taxes due thereon and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them, except for taxes
being contested in good faith for which reserves in accordance with
generally accepted accounting principles have been provided and except
where the failure to file such returns or pay such taxes would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; and no tax deficiency has been determined
adversely to the Company or any of its Subsidiaries which has had (nor
does the Company or any of its Subsidiaries have any knowledge of any tax
deficiency which, if determined adversely to the Company or any of its
Subsidiaries, would reasonably be expected to have) a Material Adverse
Effect.
(v) Except as otherwise disclosed in the Prospectus, the Company and
each of its Significant Subsidiaries has good and marketable title to all
the properties and assets reflected as owned in the financial statements
referred to in Section 1(aa) (or elsewhere in the Prospectus), in each
case free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such
property by the Company or such Significant Subsidiary. The real property,
improvements, equipment and personal property held under lease by the
Company or any Significant Subsidiary are held under valid and enforceable
leases, with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such
Significant Subsidiary.
(w) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "CODE")) or "accumulated funding deficiency" (as defined in Section
302 of ERISA) or any of the events set forth in Section
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4043(b) of ERISA (other than events with respect to which the 30-day
notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan of the Company or any
of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect; each such employee benefit plan is in compliance with
applicable law, including ERISA and the Code, except where such
non-compliance could not reasonably be expected to have a Material Adverse
Effect; the Company and each of its Subsidiaries have not incurred and do
not expect to incur liability expected to have a Material Adverse Effect
under (i) Title IV of ERISA with respect to the termination of, or
withdrawal from, any pension plan for which the Company or any of its
Subsidiaries would have any liability or (ii) Sections 412, 4971, 4975 or
4980B of the Code; and each such pension plan that is intended to be
qualified under Section 401(a) of the Code has received a determination
from the Internal Revenue Service that such pension plan is so qualified
in all material respects.
(x) Neither the Company, nor to its knowledge, any of its
affiliates, has taken, directly or indirectly, any action designed to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Designated Securities (other than stabilization and other activities that
may be taken by the Underwriters and which are described under the caption
"Underwriting" in the Prospectus or any amendment or supplement thereto).
(y) The consolidated financial statements and supporting schedules
of the Company filed with the Commission and included in the Registration
Statement and the Prospectus fairly present in all material respects the
financial condition of the Company and its consolidated subsidiaries as of
the respective dates indicated and the consolidated results of operations,
cashflows and changes in shareholders' equity of the Company and its
consolidated subsidiaries for the periods specified, in each case in all
material respects in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as indicated in the notes thereto). No other financial
statements or supporting schedules are required to be included in the
Registration Statement. The summary and selected historical financial data
of the Company included in the Prospectus fairly present in all material
respects the information shown therein and have been compiled on a basis
consistent with that of the consolidated interim or audited financial
statements of the Company included in the Registration Statement and the
Prospectus.
(z) Neither the Company nor any of its Subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business material to
the Company and its Subsidiaries considered as a whole, otherwise than as
set forth or contemplated in the Prospectus; and, since the date as of
which information is given in the Prospectus, except as otherwise set
forth or contemplated in the Prospectus (including, without limitation,
the incurrence of debt in connection with the consummation of transactions
contemplated by the Stock Purchase Agreement (as defined below)), there
has not been (i) any change in the authorized capital stock of the
Company, (ii) any material increase in the aggregate in the consolidated
short-term or long-term debt of the Company (other than increases in the
10
ordinary course of business in amounts outstanding under the Company's
commercial paper program) or (iii) any Material Adverse Effect.
(aa) To the best of the Company's knowledge, Deloitte & Touche LLP,
who have audited certain financial statements and supporting schedules of
the Company and its consolidated subsidiaries, are independent accountants
as required by the Securities Act and the Exchange Act.
(bb) The Designated Securities and the Common Shares have been
approved for listing on the New York Stock Exchange (the "NYSE"), subject
only to official notice of issuance and the Company meeting the listing
requirements, and the Units and the Common Stock have been registered
under the Exchange Act.
(cc) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, at the time they were filed with the
Commission, complied in all material respects with the requirements of the
Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement and any amendments
thereto become effective and at the First Delivery Date (as defined below)
and each Optional Delivery Date (as defined below), as the case may be,
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
shall not apply to statements in or omissions from the Prospectus made in
reliance upon and in conformity with written information furnished to the
Company in writing by or on behalf of the Representatives specifically for
inclusion therein, which information consists solely of the information
set forth in the letter referred to in Section 6(e).
(dd) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15(e) under the
Exchange Act), which (i) are designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made
known to the Company's principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act are
being prepared, (ii) have been evaluated for effectiveness as of the end
of the relevant period covered by the Company's most recent annual or
quarterly report filed with the Commission and (iii) were effective in all
material respects to perform the functions for which they were established
as of the date of their last evaluation. Based on the evaluation of the
Company's disclosure controls and procedures described above, the Company
is not aware of (a) any significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the Company's ability to
record, process, summarize and report financial information or (b) any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company's internal control
over financial reporting. Since the most recent evaluation of the
Company's disclosure controls and procedures described above, there have
been no changes in internal control
11
over financial reporting that occurred during the Company's most recent
fiscal quarter that has materially affected the Company's internal control
over financial reporting.
(ee) The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) There is and has been no failure on the part of the Company
and, to the best knowledge of the Company, any of the Company's directors
or officers, in their capacities as such, to comply with any provision of
the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated
in connection therewith, including Section 402 related to loans and
Sections 302 and 906 related to certifications, except where failure to so
comply would not, individually or in the aggregate, have a Material
Adverse Effect.
(gg) The Stock Purchase Agreement, dated as of March 25, 2004, among
J Sainsbury plc, JS USA Holdings Inc. and the Company (the "STOCK PURCHASE
AGREEMENT"), has been duly authorized, executed and delivered by the
Company, and, assuming due authorization, execution and delivery thereof
by the other parties thereto, constitutes a legally valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights
generally, subject to general principles of equity and to limitations on
availability of equitable relief, including specific performance (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
2. Purchase, Sale and Delivery of Designated Securities.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to issue and
sell to the several Underwriters, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the respective number of Firm Securities
set forth opposite such Underwriter's name on Schedule 1 hereto, at a purchase
price (the "PURCHASE PRICE") and upon such other terms as set forth in Schedule
2 attached hereto.
Delivery of and payment for the Firm Securities shall be made at the
office of Shearman & Sterling LLP, 000 Xxxxxxxxx Xxx, Xxx Xxxx, XX 00000 (or
such other place as may be agreed to by the Company and the Representatives) at
10:00 a.m. (New York time) on May 7, 2004, which date and time may be postponed
by agreement between the Representatives and the Company (such date and time of
delivery and payment for the Firm Securities being herein called the "FIRST
DELIVERY DATE"). Delivery of the Firm Securities shall be made to the
Representatives for the accounts of the several Underwriters against payment of
the purchase
12
price by the Underwriters. Payment for the Firm Securities shall be made against
delivery to you of the Firm Securities as described below and effected either by
wire transfer of immediately available funds to a bank account, the account
number and the ABA number for such bank account to be provided by the Company to
the Representatives at least two business days in advance of the First Delivery
Date, or by such other manner of payment as may be agreed by the Company and the
Representatives.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants the
Option to the several Underwriters to purchase, severally and not jointly, the
Optional Securities at the same purchase price as the Underwriters shall pay for
the Firm Securities. The Option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and
distribution of the Firm Securities. The Option may be exercised in whole or in
part at any time, and from time to time, so long as the related Optional
Delivery Date (as defined below) is within the 30-day period starting from (and
including) the date of this Agreement, upon notice in writing or by facsimile by
the Underwriters to the Company setting forth (i) the aggregate number of
Optional Securities as to which the Underwriters are exercising the option, (ii)
the names and denominations in which the certificates for the Optional
Securities are to be registered and (iii) the Optional Delivery Date. If any
Optional Securities are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase the number of Optional Securities (subject to such
adjustments to eliminate fractional amounts as the Representatives may
determine) that bears the same proportion to the total number of Optional
Securities to be purchased as the number of Firm Securities set forth on
Schedule 1 opposite the name of such Underwriter bears to the total number of
Firm Securities (rounded as the Representatives may determine to the nearest
share).
Each date for the delivery of and payment for the Optional
Securities, being herein referred to as an "OPTIONAL DELIVERY DATE", which may
be the First Delivery Date (the First Delivery Date and each Optional Delivery
Date, if any, being sometimes referred to as a "DELIVERY DATE"), shall be
determined by the Representatives but shall not be later than five full business
days after written notice of election to purchase Optional Securities is given.
Delivery of the Optional Securities shall be made to the Representatives for the
accounts of the several Underwriters against payment of the purchase price by
the Underwriters. Payment for the Optional Securities shall be made against
delivery to you of the Optional Securities as described below and effected
either by wire transfer of immediately available funds to a bank account, the
account number and the ABA number for such bank account to be provided by the
Company to the Representatives at least two business days in advance of the
Optional Delivery Date, or by such other manner of payment as may be agreed by
the Company and the Representatives.
(c) The Company will deliver against payment of the purchase price
the certificates for the Designated Securities which shall be in definitive form
and registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the Delivery Date and shall
be made available, at the request of the Representatives, for inspection at
least 24 hours prior to such Delivery Date.
(d) It is understood that the Representatives have been authorized,
for their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for,
13
and make payment of the purchase price for, the Firm Securities and any Optional
Securities the Underwriters have agreed to purchase. BAS, individually and not
as the Representatives of the Underwriters, may (but shall not be obligated to)
make payment for any Designated Securities to be purchased by any Underwriter
whose funds shall not have been received by the Representatives by the Delivery
Date for the account of such Underwriter, but any such payment shall not relieve
such Underwriter from any of its obligations under this Agreement.
(e) The Representatives hereby advise the Company that the
Underwriters intend to offer for sale to the public, as described in the
Prospectus, their respective portions of the Designated Securities as soon after
this Agreement has been executed as the Representatives, in their sole judgment,
have determined is advisable and practicable.
(f) Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligations
of the Underwriters hereunder.
3. Further Agreements of the Company. The Company further agrees:
(a) During such period beginning on the date hereof and ending on
the later of the First Delivery Date or such date, as in the reasonable
opinion of counsel for the Underwriters, the Prospectus is no longer
required by law to be delivered in connection with sales by an Underwriter
or dealer (the "PROSPECTUS DELIVERY PERIOD"), prior to amending the
Registration Statement (including any Rule 462(b) Registration Statement
under the Securities Act) or supplementing the Prospectus (including any
amendment or supplement through incorporation by reference of any report
filed under the Exchange Act), to furnish to the Representatives for
review a copy of each such proposed amendment or supplement, and not to
file any such proposed amendment or supplement to which the
Representatives reasonably object; provided however that, with respect to
any such proposed amendment or supplement resulting solely from the
incorporation by reference of any report to be filed under the Exchange
Act, the Company shall only be required to consult in good faith with the
Representatives and provide reasonable advance notice to the
Representatives prior to filing such amendment or supplement.
(b) After the date of this Agreement, to promptly advise the
Representatives in writing (i) of the receipt of any comments of, or
requests for additional or supplemental information from, the Commission
relating to the Registration Statement, any Preliminary Prospectus or the
Prospectus, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to
any Preliminary Prospectus or the Prospectus (other than any amendment or
supplement resulting solely from the incorporation by reference of any
report filed under the Exchange Act), (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective
and (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, or of any proceedings to remove,
suspend or terminate from listing or quotation the Designated Securities
or the Common Stock from any securities exchange upon which the relevant
securities are listed for trading or
14
included or designated for quotation, or of the threatening or initiation
of any proceedings for any of such purposes. If the Commission shall enter
any such stop order at any time, the Company will use its best efforts to
obtain the lifting of such order at the earliest possible moment.
Additionally, the Company agrees that it shall comply with the provisions
of Rule 424(b), as applicable, under the Securities Act and will use its
reasonable efforts to confirm that any filings made by the Company under
such Rule 424(b) were received in a timely manner by the Commission.
(c) If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order that the Prospectus as then amended
or supplemented will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the
time it is delivered to a purchaser, not misleading, or if in the
opinion of the Representatives or counsel for the Underwriters it is
otherwise necessary to amend or supplement the Prospectus to comply
with law, to promptly notify the Underwriters and prepare, subject to
Section 3(a) hereof, file with the Commission and furnish at its own
expense to the Underwriters and to dealers, 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) Not later than 12:00 p.m. (New York time) on the second business
day following the date the Designated Securities are first released by the
Underwriters for sale to the public and from time to time, furnish to the
Underwriters and to Shearman & Sterling LLP, counsel to the Underwriters,
copies of the Prospectus (and all amendments and supplements thereto) in
each case as soon as available and in such quantities as the Underwriters
reasonably request for internal use and for distribution to prospective
purchasers. The Company will pay the expenses of printing and distributing
to the Underwriters all such documents.
(e) Promptly to take such action as the Representatives may
reasonably request from time to time, to qualify the Designated Securities
for offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions
in the United States for as long as may be necessary to complete the
distribution of the Designated Securities; provided that in connection
therewith, the Company shall not be required to qualify as a foreign
corporation or otherwise subject itself to taxation in any jurisdiction in
which it is not otherwise so qualified or subject.
(f) As soon as practicable, to make generally available to its
security holders an earnings statement (which need not be audited)
covering the twelve-month period ending April 30, 2005 that satisfies the
provisions of Section 11(a) of the Securities Act.
(g) During the Prospectus Delivery Period, to file, on a timely
basis, with the Commission and the NYSE all reports and documents required
to be filed under the Exchange Act.
15
(h) For a period of two years following the First Delivery Date, to
furnish to the Underwriters upon request copies of all materials furnished
by the Company to its stockholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act; provided, however, that the
Company shall not be required to provide the Underwriters with any such
reports or similar forms that have been filed with the Commission by
electronic transmission pursuant to XXXXX.
(i) To apply the proceeds from the sale of the Designated Securities
as set forth under "Use of Proceeds" in the Prospectus.
(j) For a period of 60 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any Units, Purchase Contracts or shares of Common
Stock or securities convertible into or exchangeable for Units, Purchase
Contracts or shares of Common Stock or substantially similar securities,
or sell or grant options, rights or warrants with respect to any shares of
Common Stock or securities convertible into or exchangeable for Common
Stock or substantially similar securities, or publicly announce the
intention to do any of the foregoing, other than (i) the Designated
Securities, (ii) shares of Common Stock issuable in connection with the
Treasury Units (as defined in the Prospectus) or Corporate Units, or
shares of Common Stock issuable upon settlement of the Corporate Units or
the Treasury Units, (iii) shares issuable pursuant to the conversion or
exchange of convertible securities outstanding on the date hereof, (iv)
shares issuable pursuant to the exercise of warrants, rights or options
outstanding on the date hereof, or (v) the grant of options to purchase
Common Stock and other awards pursuant to the Stock Plans, the issuance of
Common Stock pursuant to the Stock Plans and the issuance of Common Stock
upon exercise, conversion or exchange of such options and other awards
granted pursuant to the Stock Plans, or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case without the prior written consent of Banc
of America Securities LLC (provided that, notwithstanding the foregoing
restrictions, the Company may publicly announce an intention to issue
Common Stock or other securities or issue Common Stock or other securities
in connection with any acquisition made by the Company, so long as any
such acquisition does not close prior to the expiration of the 60-day
period referenced above); and to use its reasonable efforts to cause each
executive officer (as defined for purposes of Section 16 of the Exchange
Act) and director of the Company (other than the individuals set forth in
Exhibit D) to furnish to the Underwriters, prior to the First Delivery
Date, an executed letter substantially in the form attached hereto as
Exhibit C.
(k) During the Prospectus Delivery Period, none of the Company or
any of its affiliates will take, directly or indirectly, any action which
is designed to stabilize or
16
manipulate, or which constitutes or which might reasonably be expected to
cause or result in stabilization or manipulation, of the price of any
security of the Company in connection with the offering of the Designated
Securities (other than stabilization and other activities that may be
taken by the Underwriters and which are described under the caption
"Underwriting" in the Prospectus or any amendment or supplement thereto).
(l) For a period of five years after the date of this Agreement, to
take such steps as shall be necessary to ensure that it shall not become
an "investment company" within the meaning of such term under the
Investment Company Act.
(m) To use its best efforts to have the Designated Securities and
the Common Shares approved by the NYSE for listing prior to the date of
this Agreement.
(n) To cause to be prepared and delivered, at the Company's expense,
within one business day from the effective date of this Agreement, to the
Underwriters an "electronic Prospectus" to be used by the Underwriters in
connection with the offering and sale of the Designated Securities. As
used herein, the term "electronic Prospectus" means a form of Prospectus,
and any amendment or supplement thereto, that meets each of the following
conditions: (i) it shall be encoded in an electronic format, satisfactory
to the Representatives, that may be transmitted electronically by the
Representatives and the other Underwriters to offerees and purchasers of
the Designated Securities for at least the Prospectus Delivery Period;
(ii) it shall disclose the same information as the paper Prospectus and
Prospectus filed pursuant to XXXXX, except to the extent that graphic and
image material cannot be disseminated electronically, in which case such
graphic and image material shall be replaced in the electronic Prospectus
with a fair and accurate narrative description or tabular representation
of such material, as appropriate; and (iii) it shall be in or convertible
into a paper format or an electronic format, satisfactory to the
Representatives, that will allow investors to store and have continuously
ready access to the Prospectus at any future time, without charge to
investors (other than any fee charged for subscription to the Internet as
a whole and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to XXXXX or
otherwise with the Commission an undertaking that, upon receipt of a
request by an investor or his or her representative within the Prospectus
Delivery Period, the Company shall transmit or cause to be transmitted
promptly, without charge, a paper copy of the Prospectus.
(o) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company in connection with the
distribution of the Designated Securities.
4. Expenses. The Company agrees to pay: (a) the costs incident to
the authorization, issuance, sale and delivery of the Designated Securities, and
any taxes payable in that connection; (b) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Registration Statement (including financial statements, exhibits, schedules,
consents and certificates of experts), each Preliminary Prospectus and the
Prospectus, and all amendments and supplements thereto, and the Transaction
Documents; (c)
17
the fees and expenses of the Company's counsel and independent accountants (it
being understood that in no event shall the Underwriters be liable to pay any
fees or expenses of Deloitte & Touche LLP); (d) any stamp or transfer taxes in
connection with the issuance and sale of the Designated Securities to the
Underwriters; (e) the fees and expenses of qualifying the Designated Securities
and the Common Shares under the securities laws of the several jurisdictions as
provided in Section 3(e); (f) the costs and expenses of the Company and the
reasonable expenses of the Underwriters in connection with the marketing and
offering of the Designated Securities and the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Designated Securities, 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 in connection with the road
show with the prior approval of the Company; (g) all expenses and fees in
connection with listing the Designated Securities and the Common Shares on the
NYSE; (h) the fees and expenses of the Trustee under the Indenture, (i) all fees
and expenses of any securities intermediary in connection with the Transaction
Documents and of the Purchase Contract Agent and the Collateral Agent under the
Unit Agreements, (j) the fees and expenses of the registrar and transfer agent
of the Common Stock; (k) the filing fees incident to the NASD's review and
approval of the Underwriters' participation in the offering and distribution of
the Designated Securities, if required; (l) all fees, costs and expenses
referred to in Item 14 of Part II of the Registration Statement; and (m) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement; provided that, except as provided in this Section
4, Section 6 and Section 9, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel.
5. Conditions of the Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy, when made and on
each Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) For the period from and after effectiveness of this Agreement
and prior to the Delivery Date:
(i) the Company shall have filed the final Prospectus in
relation to the Designated Securities with the Commission pursuant
to Rule 424(b) in the manner and within the time period required by
Rule 424(b) under the Securities Act;
(ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or
any post-effective amendment to the Registration Statement shall be
in effect and no proceedings for such purpose shall have been
instituted or threatened by the Commission; and
18
(iii) the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements that
shall not have been resolved to the NASD's satisfaction.
(b) The Underwriters shall not have discovered and disclosed to the
Company prior to or on such Delivery Date that the Registration Statement,
any Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto contains any untrue statement of a fact that, in the opinion of
counsel to the Underwriters, is material or omits to state any fact that
is material and necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Registration
Statement, the Prospectus, any Preliminary Prospectus or any amendment or
supplement thereto, and all other legal matters relating to this Agreement
and the transactions contemplated hereby shall be reasonably satisfactory
in all material respects to counsel to the Underwriters, and the Company
shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(d) Xxxxx Day shall have furnished to the Underwriters its written
opinion and letter, as counsel to the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Underwriters and substantially to the effect set forth
in Exhibit A hereto.
(e) Xxxx X. Xxxx, Esq., General Counsel and Secretary to the
Company, shall have furnished to the Underwriters his written opinion
addressed to the Underwriters and dated such Delivery Date, in form and
substance satisfactory to the Underwriters and substantially to the effect
set forth in Exhibit B hereto.
(f) Shearman & Sterling LLP shall have furnished to the Underwriters
its written opinion, as counsel to the Underwriters, addressed to the
Underwriters and dated such Delivery Date, in form and substance
satisfactory to the Underwriters.
(g) The Underwriters shall have received, on each of the date hereof
and each Delivery Date, a letter dated the date hereof or such Delivery
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Deloitte & Touche LLP, 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 of the Company and its consolidated
subsidiaries contained in and incorporated by reference in the
Registration Statement and the Prospectus provided that the letter
delivered on the First Delivery Date shall use a "cut-off date" not
earlier than the date hereof.
(h) The Company shall have furnished to the Underwriters on such
Delivery Date its certificate, dated such Delivery Date, executed by its
Chief Executive Officer, and by its Executive Vice President and Chief
Financial Officer or Treasurer in form and substance satisfactory to the
Underwriters, to the effect that the representations,
19
warranties and agreements of the Company in Section 1 are true and correct
as of the date given and as of such Delivery Date; and the Company has
complied in all material respects with all its agreements contained herein
to be performed prior to or on such Delivery Date and the conditions set
forth in Sections 5(i) and 5(k) have been fulfilled.
(i) (i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
material to the Company and its Subsidiaries considered as a whole,
otherwise than as set forth or contemplated in the Prospectus or (ii)
since such date, except as otherwise set forth or contemplated in the
Prospectus (including, without limitation, the incurrence of debt in
connection with the consummation of transactions contemplated by the Stock
Purchase Agreement (as defined below)), there shall not have been (A) any
change in the authorized capital stock of the Company, (B) any material
increase in the consolidated short-term or long-term debt of the Company
(other than increases in the ordinary course) of business in amounts
outstanding under the Company's commercial paper program) or (C) any
Material Adverse Effect, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representatives,
material and adverse and makes it impracticable or inadvisable to proceed
with the offering or the delivery of the Designated Securities being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
NASDAQ or the over-the-counter market, or trading in any securities of the
Company on any exchange shall have been suspended or limited, or minimum
or maximum prices shall have been established on any such exchange or
market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction; (ii) a general banking
moratorium shall have been declared by United States federal, New York,
Delaware or California authorities; (iii) there shall have occurred any
outbreak or escalation of national or international hostilities or any
crisis or calamity, or any change in the United States or international
financial markets, or any substantial change or development involving a
prospective substantial change in United States' or international
political, financial or economic conditions, as in the judgment of the
Representative is material and adverse and makes it impracticable or
inadvisable to market the Designated Securities in the manner and on the
terms described in the Prospectus or to enforce contracts for the sale of
securities; or (iv) in the judgment of the Representative there shall have
occurred any Material Adverse Effect.
(k) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the Securities Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities.
20
(l) The Representatives shall have received from each executive
officer and director (other than the individuals set forth on Exhibit D
attached hereto) of the Company an executed letter contemplated by Section
3(i) hereof.
(m) The Company shall have furnished to the Representatives such
further information, certificates and documents as the Representatives may
reasonably request to evidence compliance with the conditions set forth in
this Section 5.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel to the Underwriters.
6. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its affiliates, their respective officers, directors, employees, representatives
and agents, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of the Designated
Securities), to which the Underwriters or any such officer, employee or
controlling person may become subject, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, any Preliminary Prospectus or the Prospectus, or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus or the Prospectus or in any
amendment or supplement thereto, any material fact necessary to make the
statements therein not misleading, and shall reimburse the Underwriters and each
such officer, employee and controlling person promptly upon demand for any legal
or other expenses (including the fees and disbursements of counsel chosen by
BAS) reasonably incurred by the Underwriters or any such officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
any such Preliminary Prospectus or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with the written information
furnished to the Company by or on behalf of the Underwriters concerning the
Underwriters specifically for inclusion therein, which information consists
solely of the information set forth in the letter referred to in Section 6(e);
and provided, further, that the Company shall not be liable to any Underwriter
under the indemnity agreement in this subsection (a) with respect to any
Preliminary Prospectus to the extent that such loss, claim, damage, liability or
action of such Underwriter results from the fact such Underwriter sold
Designated Securities to a person as to whom it shall be established that such
sale was an initial resale by such Underwriter and there was not sent or given
to such person, if required by law to have been so sent or given, at or prior to
the written confirmation of such sale to such person, a copy of the Prospectus,
if the Company had previously furnished copies thereof pursuant to Section 3(d)
and the loss, claim, damage or liability of such Underwriter results from an
untrue
21
statement or omission of a material fact contained in the Preliminary Prospectus
which was (i) identified to such Underwriter prior to the furnishing to such
Underwriter of the corrected Prospectus and (ii) corrected in the Prospectus.
The foregoing indemnity agreement is in addition to any liability which the
Company may otherwise have to the Underwriters or to any officer, employee or
controlling person of the Underwriters.
(b) The Underwriters, severally and not jointly, shall indemnify and
hold harmless the Company, its affiliates, their respective officers, directors,
employees, representatives and agents, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, any Preliminary Prospectus, the Prospectus or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state in the Registration Statement, any Preliminary Prospectus, the Prospectus
or in any amendment or supplement thereto, any material fact necessary to make
the statements therein not misleading, but in each case only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with the written
information furnished to the Company by the Representatives specifically for
inclusion therein, and shall reimburse the Company and any such director,
officer or controlling person promptly upon demand for any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The Company hereby acknowledges that the only information
that the Underwriters have furnished to the Company expressly for use in the
Registration Statement, any Preliminary Prospectus or the Prospectus (or any
amendment or supplement thereto) are the statements referred to in the letter to
be delivered pursuant to Section 6(e) hereof. The foregoing indemnity agreement
is in addition to any liability which the Underwriters may otherwise have to the
Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent it has
been prejudiced by such failure and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in
22
connection with the defense thereof other than reasonable costs of
investigation; provided, however, if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that a conflict may arise between the positions
of the indemnifying party and the indemnified party in conducting the defense of
any such action or shall have been advised by counsel that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of such indemnifying party's
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party in connection with the defense thereof unless the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (together
with local counsel), approved by the indemnifying party (the Representatives in
the case of Section 6(b), representing the indemnified parties who are parties
to such action) and in that event the reasonable fees and expenses of such
separate counsel shall be paid by the Company. No indemnifying party shall, (i)
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld) settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld).
(d) If the indemnification provided for in this Section 6 shall for
any reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the
Designated Securities, or (ii) if the allocation provided by clause 6(d)(i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 6(d)(i) but also the
relative fault of the Company on the one hand and the Underwriters on the other
with respect to the statements or omissions or alleged statements or alleged
omissions that resulted in such loss, claim, damage or liability (or action in
respect thereof), 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 with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Designated
Securities purchased under this Agreement (before deducting expenses) received
by the Company on the one hand, and the total discounts and commissions received
by the Underwriters with respect to the Designated Securities purchased under
this Agreement, on the other hand, bear to the total gross proceeds from the
offering of the
23
Designated Securities under this Agreement. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if the amount of contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 6(d) shall be deemed to include, for
purposes of this Section 6(d), 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 6(d), the
Underwriters shall not be required to contribute any amount in excess of the
amount by which the total price at which the Designated Securities distributed
by it exceeds the amount of any damages which the Underwriters have 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.
(e) Prior to the First Delivery Date, the Underwriters shall deliver
a letter identifying the statements supplied by them in writing to the Company
specifically for inclusion in the Prospectus.
7. Default of One or More of the Several Underwriters. If, on any
Delivery Date, any one or more of the several Underwriters shall fail or refuse
to purchase Designated Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate number of Designated Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase does not exceed 10% of the aggregate number of the Designated
Securities to be purchased on such date, the other Underwriters shall be
obligated, severally, in the proportions that the number of Firm Securities set
forth opposite their respective names on Schedule 1 bears to the aggregate
number of Firm Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as may be specified by
the Representatives with the consent of the non-defaulting Underwriters, to
purchase the Designated Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on any
Delivery Date, any one or more of the Underwriters shall fail or refuse to
purchase Designated Securities and the aggregate number of Designated Securities
with respect to which such default occurs exceeds 10% of the aggregate number of
Designated Securities to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Designated Securities are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any other party
except that the provisions of Section 4, Section 6 and Section 9 shall at all
times be effective and shall survive such termination. In any such case either
the Representatives or the Company shall have the right to postpone the Delivery
Date but in no event for longer than seven days in order that the required
changes, if any, to the Registration Statement and the Prospectus or any other
documents or arrangements may be effected.
24
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this Section
7. Any action taken under this Section 7 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
8. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Firm Securities or the Optional
Securities, respectively, if, prior to that time, any of the events described in
Sections 5(i), (j) or (k) shall have occurred or if the Underwriters shall
decline to purchase such Designated Securities for any reason permitted under
this Agreement. In such case, the Company shall have no liability hereunder
except as provided by Sections 4, 6 and 9 hereof
9. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Designated Securities for delivery to the Underwriters for
any reason permitted under this Agreement other than a breach by the
Underwriters of their representations herein or obligations hereunder or (b) the
Underwriters shall decline to purchase the Designated Securities for any reason
permitted under this Agreement (including the termination of this Agreement
pursuant to Section 8 but excluding the failure of any of the conditions herein
to be satisfied as a result of a breach by the Underwriters of their
representations herein), the Company shall reimburse the Underwriters for the
reasonable fees and expenses of their counsel and for such other out-of-pocket
expenses as shall have been reasonably incurred by them in connection with this
Agreement and the proposed purchase of the Designated Securities, and upon
demand, the Company shall pay the full amount thereof to the Underwriters.
10. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) If to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Banc of America Securities LLC, 0 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets
(Fax: 000-000-0000); and
with a copy (which shall not constitute notice) to Shearman &
Sterling LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx Xxxxx III, Esq. (Fax: 000-000-0000; Telephone: 000-000-0000);
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to it at 000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxx
00000, Attention: General Counsel (Fax: 000-000-0000; Telephone:
000-000-0000);
with a copy (which shall not constitute notice) to Xxxxx Day, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Xxxxxxxxxxx X. Xxxxx,
Esq. (Fax: 000-000-0000; Telephone: 000-000-0000).
Any notice of a change of address or facsimile transmission number
must be given by the Company or the Underwriters, as the case maybe, in writing
at least three days in advance of such change.
25
11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of the Underwriters and the person or persons, if any, who control the
Underwriters within the meaning of Section 15 of the Securities Act and (B) the
representations and warranties of the Underwriters in this Agreement and the
indemnity agreement of the Underwriters contained in Section 6(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company, and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing contained in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 11, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
12. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Designated
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any person controlling any of them.
13. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "BUSINESS DAY" means any day on which the New
York Stock Exchange, Inc. is open for trading, and (b) "SUBSIDIARY" shall mean
any entity of which the Company owns, directly or indirectly, at least 50
percent of the voting securities; provided that no entity shall be deemed to be
a Subsidiary for purposes of this Agreement unless such entity is accounted for
as a consolidated entity in the Company's consolidated financial statements in
accordance with generally accepted accounting principles in the United States.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
26
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
Albertson's, Inc.
By: /s/ Xxxx X. Xxxx
---------------------------------------
Name: Xxxx X. Xxxx
Title: Executive Vice President and
General Counsel
27
Accepted and agreed by:
Banc of America Securities LLC
Credit Suisse First Boston LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Banc One Capital Markets, Inc.
Wachovia Capital Markets, LLC
Xxxxx Fargo Securities, LLC
Wedbush Xxxxxx Securities Inc.
The Xxxxxxxx Capital Group, L.P.
Acting as
Representatives of the
several Underwriters
named in attached Schedule 1
Banc of America Securities LLC
By: /s/ Xxxxx Xxxxxx
--------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director -
Head of U.S. Equity -
Linked Capital Markets
28
SCHEDULE 1
NUMBER OF FIRM
SECURITIES TO BE
UNDERWRITERS PURCHASED
------------ ---------
Banc of America Securities LLC..................... 20,000,000
Credit Suisse First Boston LLC .................... 6,600,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 6,600,000
Banc One Capital Markets, Inc. .................... 2,000,000
Wachovia Capital Markets, LLC ..................... 2,000,000
Xxxxx Fargo Securities, LLC ....................... 2,000,000
Wedbush Xxxxxx Securities Inc. .................... 400,000
The Xxxxxxxx Capital Group, L.P.................... 400,000
----------
TOTAL..................... 40,000,000
Schedule 1
SCHEDULE 2
REGISTRATION STATEMENT NO.: 333-113995
NUMBER OF DESIGNATED SECURITIES: 46,000,000
Number of Firm Securities: 40,000,000
Maximum Number of Optional Securities: 6,000,000
PURCHASE PRICE BY UNDERWRITERS: $24.3125 per Corporate Unit
PRICE TO PUBLIC PER CORPORATE UNIT: $25.00
GROSS SPREAD PER CORPORATE UNIT: 2.75%
REFERENCE PRICE: $23.06
THRESHOLD APPRECIATION PRICE: $28.82
PAYMENT DATES: February 16, May 16, August 16 and November 16
CONTRACT ADJUSTMENT PAYMENT DATES: February 16, May 16, August 16 and November
16
CONTRACT ADJUSTMENT PAYMENTS: 3.50% per annum of $25.00 Stated Amount
PURCHASE CONTRACT SETTLEMENT DATE: May 16, 2007
AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES: $1,000,000,000
AGGREGATE PRINCIPAL AMOUNT OF SENIOR NOTES (IF THE UNDERWRITERS PURCHASE ALL OF
THE OPTIONAL SECURITIES): $1,150,000,000
MATURITY OF THE SENIOR NOTES: February 16, 2009
INTEREST RATE ON THE SENIOR NOTES: 3.75% per annum
STOCK EXCHANGE LISTING: New York Stock Exchange
Schedule 2
