AMERICAN STORES COMPANY
$500,000,000
MEDIUM-TERM NOTES, SERIES B
Due 9 Months or More from Date of Issue
Distribution Agreement
March 5, 1998
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
American Stores Company, a Delaware corporation (the "COMPANY"),
confirms its agreement with each of you with respect to the issue and sale from
time to time by the Company of its Medium-Term Notes, Series B due 9 months or
more from date of issue (the "SECURITIES") in an aggregate initial offering
price of up to $500,000,000 (or the equivalent thereof in one or more foreign
currencies or composite currencies), as such amount shall be reduced by the
aggregate initial offering price of any other securities issued by the Company,
whether within or without the United States ("OTHER SECURITIES") pursuant to the
registration statement referred to below after the initial issuance of
$500,000,000 of securities outside of this program, and agrees with each of you
(individually, an "AGENT", and collectively, the "AGENTS", which term shall
include any additional agents appointed pursuant to Section 13 hereof) as set
forth in this Agreement. The Securities will be issued under an indenture dated
as of May 1, 1995 (the "INDENTURE") between the Company and The First National
Bank of Chicago, as Trustee (the "TRUSTEE"). The Securities shall have the
maturities, interest rates, redemption provisions, if any, and other terms set
forth in the Prospectus referred to below as it may be amended or supplemented
from time to time. The
Securities will be issued, and the terms and rights thereof established, from
time to time by the Company in accordance with the Indenture.
On the basis of the representations and warranties herein contained, but
subject to the terms and conditions stated herein and to the reservation by the
Company of the right to sell Securities directly to investors (other than
broker-dealers) on its own behalf, the Company hereby (i) appoints the Agents as
the exclusive agents of the Company (subject to Section 13 hereof) for the
purpose of soliciting and receiving offers to purchase Securities from the
Company by others pursuant to Section 2(a) hereof and (ii) agrees that, except
as otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each such agreement a "TERMS AGREEMENT"), substantially in the form of Exhibit
A hereto, relating to such sale in accordance with Section 2(b) hereof.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") in accordance with the provisions of Securities
Act of 1933, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "SECURITIES ACT"), a registration statement (the
file number of which is 333-43251) on Form S-3, relating to the Securities to be
issued from time to time by the Company. The Company also has filed with, or
proposes to file with, the Commission pursuant to Rule 424 under the Securities
Act a prospectus supplement describing certain terms of the Securities. The
registration statement as amended to the date of this Agreement is hereinafter
referred to as the "REGISTRATION STATEMENT" and the related prospectus covering
the Securities and the Other Securities included in the Registration Statement
is hereinafter referred to as the "BASIC PROSPECTUS". The Basic Prospectus as
supplemented by the prospectus supplement specifically relating to the
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "PROSPECTUS". If at any time the Company has
filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, the Basic Prospectus, any preliminary form of Prospectus (a
"PRELIMINARY PROSPECTUS") previously filed with the Commission pursuant to Rule
424 or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "EXCHANGE ACT") on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "amend", "amendment" or "supplement"
with respect to the Registration Statement, the
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Basic Prospectus, any preliminary prospectus or the Prospectus, including any
supplement to the Prospectus that sets forth only the terms of a particular
issue of the Securities (a "PRICING SUPPLEMENT"), shall be deemed to refer to
and include any documents filed under the Exchange Act after the date of this
Agreement, or the date of the Basic Prospectus, any preliminary prospectus or
the Prospectus, as the case may be, which are deemed to be incorporated by
reference therein.
1. Representations. The Company represents and warrants to, and agrees
with, each Agent as of the Commencement Date (as hereinafter defined), as of
each date on which the Company accepts an offer to purchase Securities
(including any purchase by an Agent as principal pursuant to a Terms Agreement
or otherwise), as of each date the Company issues and sells Securities and as of
each date the Registration Statement or the Prospectus is amended or
supplemented, as follows (it being understood that such representations and
warranties shall be deemed to relate to the Registration Statement, the Basic
Prospectus and the Prospectus, each as amended or supplemented to each such
date):
(a) the Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Company, threatened by the Commission; and the Registration
Statement and Prospectus (as amended or supplemented, if applicable)
comply, or will comply, as the case may be, in all material respects
with the Securities Act and the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission thereunder
(collectively, the "TRUST INDENTURE ACT"), and do not and will not, as
of the applicable effective date as to the Registration Statement and
any amendment or supplement thereto and as of the date of the Prospectus
and any amendment or supplement thereto, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; except that
the foregoing representations and warranties shall not apply to (i) that
part of the Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee, and (ii) statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to any Agent furnished to the Company in writing by
such Agent expressly for use therein;
(b) except for statements in such documents which do not
constitute part of the Registration Statement or the Prospectus pursuant
to
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Rule 412 of Regulation C under the Securities Act and after
substituting therefor any modifying or superseding statements, the
documents incorporated by reference in the Prospectus, when they were
filed with the Commission, or if applicable, became effective, conformed
in all material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and none of such documents contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and will not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(c) the financial statements, and the related notes thereto,
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly, in all material respects, the financial
position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes in
their consolidated cash flows for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly, in all material respects, the information
required to be stated therein as of the dates indicated; and the pro
forma financial information, and the related notes thereto, if any,
included or incorporated by reference in the Registration Statement and
the Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as applicable
and is based upon good faith estimates and assumptions believed by the
Company to be reasonable;
(d) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
material adverse change in the business, business prospects, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(e) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
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Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a whole;
(f) each Significant Subsidiary (as defined in Regulation S-X
promulgated by the Commission) of the Company has been duly incorporated
and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business so as to require such qualification, other than
where the failure to be so qualified or in good standing would not have
a material adverse effect on the Company and its subsidiaries taken as a
whole; and all of the outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued, are
fully-paid and non-assessable, and are owned by the Company, directly or
indirectly, free and clear of all liens, encumbrances, security
interests and claims;
(g) each of this Agreement and any other applicable Terms
Agreement has been duly authorized, executed and delivered by the
Company;
(h) the Securities have been duly authorized, and when validly
authenticated and when issued and delivered in accordance with the
Indenture and sold to the Agents pursuant to this Agreement and any
applicable Terms Agreement, will have been duly executed, issued and
delivered by the Company and will constitute valid and binding
obligations of the Company entitled to the benefits provided by the
Indenture; the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding instrument
of the Company; the Indenture has been duly qualified under the Trust
Indenture Act; and the Indenture conforms, and the Securities of any
particular issuance of Securities will conform, to the descriptions
thereof in the Prospectus as amended or supplemented to relate to such
issuance of Securities;
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(i) neither the Company nor any Significant Subsidiary is, or with
the giving of notice or lapse of time or both would be, in violation of
or in default under, its Certificate of Incorporation or By-Laws or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any Significant Subsidiary is a party
or by which it or any of them or any of their respective properties is
bound or to which any of the property or assets of the Company or any
Significant Subsidiary is subject, except for violations and defaults
which individually and in the aggregate would not have a material
adverse effect on the Company and its subsidiaries taken as a whole; the
issue and sale of the Securities and the performance by the Company of
all of the provisions of its obligations under the Securities, the
Indenture, this Agreement and any applicable Terms Agreement or other
agreement pursuant to which an Agent purchases Securities as principal,
and the consummation of the transactions herein and therein
contemplated, will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any Significant
Subsidiary is a party or by which the Company or any Significant
Subsidiary is bound or to which any of the property or assets of the
Company or any Significant Subsidiary is subject, nor will any such
action result in any violation of the provisions of the Restated
Certificate of Incorporation or the By-Laws of the Company or any
material violation of any applicable law or statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company, any Significant Subsidiary or any of
their respective properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement, any applicable Terms Agreement or the
Indenture, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the
Securities Act or the Trust Indenture Act and as may be required under
the applicable securities or Blue Sky Laws of the various states and
other jurisdictions in connection with the issue, sale and distribution
of the Securities;
(j) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any
Significant Subsidiary is or may be a party or to which any property of
the Company or any Significant Subsidiary is or may be the subject that
are required to be described in the Registration Statement or the
Prospectus
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that are not so described; and there are no contracts or
other documents of a character required to be filed as an exhibit to the
Registration Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as
required;
(k) Ernst & Young LLP who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act; and
(l) immediately after any sale of Securities by the Company
hereunder or under any applicable Terms Agreement, (i) the aggregate
amount of Securities which shall have been issued and sold by the
Company hereunder or under any Terms Agreement taken together with any
other securities of the Company (other than the Securities) that shall
have been issued and sold pursuant to the Registration Statement will
not exceed the amount of debt securities registered under the
Registration Statement and (ii) the aggregate initial offering price of
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement will not exceed $500,000,000.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions
herein set forth, each of the Agents hereby severally and not jointly
agrees, as agent of the Company, to use its reasonable efforts to
solicit offers to purchase the Securities from the Company upon the
terms and conditions set forth in the Prospectus as amended or
supplemented from time to time. So long as this Agreement shall remain
in effect with respect to any Agent, the Company shall not, without the
consent of such Agent, solicit or accept offers to purchase, or sell,
Securities or any other debt securities with a maturity at the time of
original issuance of 9 months or more except pursuant to this Agreement
and any Terms Agreement, or except pursuant to a private placement not
constituting a public offering under the Securities Act or except in
connection with a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering
of medium-term debt securities. However, the Company reserves the right
to sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf to investors (other than broker-dealers).
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of time or
permanently,
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the solicitation of offers to purchase Securities. Upon
notice from the Company, each Agent will, as promptly as practicable,
but in no event later than one business day following such notice,
suspend solicitation of offers to purchase Securities from the Company
until such time as the Company has advised such Agent or Agents that
such solicitation may be resumed. During the period of time that such
solicitation is suspended, the Company shall not be required to deliver
any opinions, letters or certificates in accordance with Sections 4(i),
4(j) and 4(k) hereof; provided that if the Registration Statement or
Prospectus is amended or supplemented during the period of suspension
(other than by an amendment or supplement providing solely for a change
in the interest rates, redemption provisions, amortization schedules or
maturities offered for the Securities or for a change that the Agents
deem to be immaterial), no Agent shall be required to resume soliciting
offers to purchase Securities until the Company has delivered such
opinions, letters and certificates as such Agent may reasonably request.
The Company agrees to pay each Agent, as consideration for the
sale of each Security resulting from a solicitation made or an offer to
purchase received by such Agent, a commission in the form of a discount
from the purchase price of such Security in an amount equal to the
following applicable percentage of the principal amount of such Security
sold:
RANGE OF MATURITIES COMMISSION (PERCENTAGE
OF AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES SOLD)
From 9 months to less than 1 year................ .125%
From 12 months to less than 18 months............ .150%
From 18 months to less than 2 years.............. .200%
From 2 years to less than 3 years................ .250%
From 3 years to less than 4 years................ .350%
From 4 years to less than 5 years................ .450%
From 5 years to less than 6 years................ .500%
From 6 years to less than 7 years................ .550%
From 7 years to less than 10 years............... .600%
From 10 years to less than 15 years.............. .625%
From 15 years to less than 20 years.............. .700%
From 20 years to and including 30 years.......... .750%
Greater than 30 years............................ to be negotiated
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The Agents are authorized to solicit offers to purchase
Securities only in the principal amount of $1,000 (or, in the case of
Securities not denominated in U.S. dollars, the equivalent thereof in
the applicable foreign currency or composite currency, rounded down to
the nearest 1,000 units of such foreign currency or composite currency)
or any amount in excess thereof which is an integral multiple of $1,000
(or, in the case of Securities not denominated in U.S. dollars, 1,000
units of such foreign currency or composite currency). Each Agent shall
communicate to the Company, orally or in writing, each reasonable offer
to purchase Securities received by such Agent as agent. The Company
shall have the sole right to accept offers to purchase the Securities
and may reject any such offer in whole or in part. Each Agent shall have
the right, in its discretion reasonably exercised without advising the
Company, to reject any offer to purchase Securities, as a whole or in
part, that it considers to be unacceptable and any such rejection shall
not be deemed a breach of its agreements herein contained. The
procedural details relating to the issue and delivery of Securities sold
by an Agent as agent and the payment therefor are set forth in the
Administrative Procedures (as hereinafter defined). Each Agent agrees
that it will not solicit an offer to purchase Securities or deliver any
of the Securities in any jurisdiction outside the United States of
America except under circumstances that will not result in a violation
of the applicable laws thereof. Each Agent understands that no action
has been taken to permit a public offering in any jurisdiction outside
the United States of America where action would be required for such
purpose. The Agents further understand that in connection with the
distribution of Securities denominated in any foreign currency or
currency unit, they will as agent, directly or indirectly, not solicit
offers to purchase and as principal pursuant to a Terms Agreement or
otherwise, directly or indirectly, not offer, sell or deliver, such
Securities in, or to residents of, the country issuing such currency,
except as permitted by applicable law.
(b) Purchase as Principal. Each sale of Securities to any Agent as
principal shall be made in accordance with the terms of this Agreement
and (unless such Agent shall otherwise agree) a Terms Agreement which
will provide for the sale of such Securities to, and the purchase
thereof by, such Agent. A Terms Agreement will be substantially in the
form of Exhibit A hereto but may take the form of an exchange of any
standard form of written telecommunication between an Agent and the
Company and may also specify certain provisions relating to the
reoffering of such Securities by such Agent or may be an oral agreement
confirmed by a Terms Agreement or other written telecommunication, as
the case may be. The commitment of any Agent to purchase securities as
principal, whether pursuant to any Terms Agreement or otherwise, shall
be deemed to have
9
been made on the basis of the representations and
warranties of the Company herein contained and shall be subject to the
terms and conditions herein and in the applicable Terms Agreement set
forth. Each agreement by an Agent to purchase Securities as principal
(pursuant to a Terms Agreement or otherwise) shall specify the principal
amount of Securities to be purchased by such Agent pursuant thereto, the
price to be paid to the Company for such Securities, the maturity date
of such Securities, the interest rate or interest rate basis, if any,
applicable to such Securities, any other terms of such Securities, the
time and date and place of delivery of and payment for such Securities
(the time and date of any and each such delivery and payment, the "TIME
OF DELIVERY"), any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of
Securities, and shall also specify any requirements for opinions of
counsel, accountants' letters and officers' certificates pursuant to
Section 4 hereof. Unless otherwise specified in a Terms Agreement, the
procedural details relating to the issue and delivery of Securities
purchased by an Agent as principal and the payment therefor shall be as
set forth in the Administrative Procedures.
(c) Obligations Several. The Company acknowledges that the
obligations of the Agents are several and not joint and, subject to the
provisions of this Section 2, each Agent shall have complete discretion
as to the manner in which it solicits purchasers for the Securities and
as to the identity thereof.
(d) Administrative Procedures. The Agents and the Company agree to
perform their respective duties and obligations specifically provided to
be performed in the Medium-Term Notes Administrative Procedures (the
"ADMINISTRATIVE PROCEDURES") attached hereto as Exhibit B, as the same
may be amended from time to time. The Administrative Procedures may be
amended only by written agreement of the Company and the Agents.
(e) Other Securities. The Company agrees to notify each Agent of
sales by the Company of Other Securities.
3. Commencement Date. The documents required to be delivered pursuant to
Section 6 hereof on the Commencement Date (as defined below) shall be delivered
to the Agents at the offices of Xxxxx Xxxx & Xxxxxxxx, New York, New York, at
11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agents and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or the
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first date on which the Company accepts an offer by any Agent to purchase
Securities as principal (such time and date being referred to herein as the
"COMMENCEMENT DATE").
4. Covenants of the Company. The Company covenants and agrees with each
Agent:
(a) (i) to make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
shall be disapproved by any Agent promptly after reasonable notice
thereof, or (B) after the date of any Terms Agreement or other agreement
by an Agent to purchase any particular series of Securities as principal
and prior to the related Time of Delivery which shall be disapproved by
any Agent party to such Terms Agreement or so purchasing as principal
promptly after reasonable notice thereof, provided, however, that the
foregoing shall not apply to any of the Company's periodic filings with
the Commission described in clause 4(a)(iv) below, copies of which
filings the Company will cause to be delivered to the Agents promptly
upon request after their transmission to the Commission for filing; (ii)
subject to the foregoing clause 4(a)(i), promptly to cause each
Prospectus Supplement to be filed with or transmitted for filing to the
Commission in accordance with Rule 424(b) under the Securities Act and
to prepare, with respect to any Securities to be sold through or to such
Agent pursuant to this Agreement, a Pricing Supplement with respect to
such Securities in a form previously approved by such Agent and to file
such Pricing Supplement in accordance with Rule 424(b) under the
Securities Act; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing Supplement,
at any time prior to having afforded each Agent a reasonable opportunity
to review and comment on it, provided however, that the foregoing shall
not apply to any of the Company's periodic filings with the Commission
described in clause 4(a)(iv) below, copies of which filings the Company
will cause to be delivered to the Agents promptly upon request after
their transmission to the Commission for filing; and (iv) promptly to
file all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities. The Company will promptly advise each Agent (A)
of the filing of any amendment or supplement to the Basic Prospectus or
any amendment to the Registration Statement and of the effectiveness of
any such amendment to the Registration Statement, (B) of the issuance by
the Commission of any stop order suspending the effectiveness of the
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Registration Statement or any order preventing or suspending the use of
any prospectus relating to the Securities or the initiation or
threatening of any proceeding for that purpose, or of any request by the
Commission for any amendment or supplement of the Registration Statement
or Prospectus or for additional information; and (C) of the receipt by
the Company of any notification with respect to any suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for
any such purpose. The Company agrees to use its best efforts to prevent
the issuance of any such stop order or of any such order preventing or
suspending the use of any such prospectus or of any notification
suspending any such qualification and, if issued, to use promptly its
best efforts to obtain withdrawal thereof as soon as possible. No Agent
shall be obligated to solicit offers to purchase Securities so long as
it is not reasonably satisfied with the Prospectus as then amended or
supplemented;
(b) to endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Agents
shall reasonably request and to continue such qualification in effect so
long as reasonably required in connection with the distribution of the
Securities; provided that the Company shall not be obligated to subject
itself to any material additional tax or other liabilities, to qualify
as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or required to file a
general consent to service of process in any jurisdiction;
(c) to furnish each Agent and counsel to the Agents, at the
expense of the Company, a signed copy of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits and documents incorporated by reference therein and, during the
period mentioned in Section 4(d) below, to furnish each Agent as many
copies of the Prospectus (including all amendments and supplements
thereto) and documents incorporated by reference therein as such Agent
may reasonably request;
(d) if at any time when a prospectus relating to the Securities is
required to be delivered under the Securities Act, any event shall occur
as a result of which the Prospectus, as then amended or supplemented,
would include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances when such Prospectus is delivered to a
purchaser, not misleading, or if it is necessary at any time to amend or
supplement the Prospectus to comply with law, to immediately notify the
Agents by
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telephone (with confirmation in writing) and request each
Agent (i) in its capacity as agent of the Company, to suspend
solicitation of offers to purchase Securities from the Company (and, if
so notified, such Agent shall cease such solicitations and cease using
the Prospectus as soon as practicable, but in any event not later than
one business day later); and (ii) to cease sales of any Securities such
Agent may then own as principal. If the Company shall decide to amend or
supplement the Registration Statement or the Prospectus, as then amended
or supplemented, it shall so advise each Agent promptly by telephone
(with confirmation in writing) and, at its expense, shall prepare and
cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus, as then
amended or supplemented, that will correct such statement or omission or
effect such compliance and will supply such amended or supplemented
Prospectus to the Agents in such quantities as they may reasonably
request. If such amendment or supplement and the documents, opinions,
letters and certificates, if any, furnished to the Agents pursuant to
Sections 4(e), 4(i), 4(j) and 4(k) in connection with the preparation
and filing of such amendment or supplement are reasonably satisfactory
to the Agents, then upon the filing with the Commission of such
amendment or supplement to the Prospectus or upon the effectiveness of
an amendment to the Registration Statement, the Agents will resume the
solicitation of offers to purchase Securities hereunder. Notwithstanding
any other provision of this Section 4(d), if during such period an Agent
continues to own Securities purchased from the Company by such Agent as
principal or in the event such Agent is otherwise required to deliver a
prospectus in respect of a transaction in the Securities, if any event
described in this Section 4(d) occurs the Company will, at its own
expense, promptly prepare and file with the Commission an amendment or
supplement, reasonably satisfactory in all material respects to such
Agent, that will correct such statement or omission or effect such
compliance, will supply such amended or supplemented Prospectus to such
Agent in such quantities as such Agent may reasonably request and shall
furnish to such Agent pursuant to Sections 4(e), 4(i), 4(j) and 4(k)
such documents, certificates, opinions and letters as it may reasonably
request in connection with the preparation and filing of such amendment
or supplement;
(e) to notify the Agents promptly in writing of any downgrading,
or on its receipt of any notice of (i) any intended downgrading or (ii)
any formal review or formal indication of a possible negative change in
the rating accorded any of the senior unsecured debt securities of, or
guaranteed by, the Company by any "nationally recognized statistical
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rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(f) to make generally available to its security holders and to the
Agent as soon as practicable after the "EFFECTIVE DATE" (as defined in
Rule 158 of the Commission promulgated under the Securities Act) of the
Registration Statement with respect to each sale of Securities earnings
statements which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 covering periods of at least twelve months
beginning in each case with the first fiscal quarter of the Company
occurring such effective date;
(g) so long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or other)
furnished to holders of Securities and promptly upon request copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed;
(h) that, from the date of any applicable Terms Agreement with an
Agent or other agreement by an Agent to purchase Securities as principal
and continuing to and including the business day following the related
Time of Delivery, not to offer, sell, contract to sell or otherwise
dispose of any debt securities of or guaranteed by the Company which
both mature more than 9 months after such Time of Delivery and are
substantially similar to the Securities, without the prior written
consent of such Agent;
(i) that each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or
supplement providing solely (i) for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on
the Securities, (ii) for a change which the Agents deem to be immaterial
or (iii) for an offering of securities other than the Securities) and
each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement or other agreement and such Terms
Agreement or other agreement specifies the delivery of an opinion under
this Section 4(i) as a condition to the purchase of Securities pursuant
to such Terms Agreement or other agreement, the Company shall furnish or
cause to be furnished forthwith to such Agent a written opinion of
Wachtell, Lipton, Xxxxx & Xxxx, or other counsel for the Company
reasonably satisfactory to such Agent, dated the date of such amendment
or supplement, or the related Time of Delivery relating to such sale, as
the case may be, in form
14
reasonably satisfactory to such Agent, of the same tenor as the opinion
referred to in Section 6(b) hereof but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the date of such opinion; provided, however, that in lieu of such
opinion, counsel last furnishing such an opinion, may furnish to the
Agents a letter to the effect that such Agent may rely on the opinion
of such counsel which was last furnished to such Agent to the same
extent as though it were dated the date of such letter (except that the
statements in such last opinion shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented
to date of delivery of such letter);
(j) that each time the Registration Statement or the Prospectus
shall be amended or supplemented to include or incorporate amended or
supplemented financial information and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement or
other agreement and such Terms Agreement or other agreement specifies
the delivery of a letter under this Section 4(j) as a condition to the
purchase of Securities pursuant to such Terms Agreement or other
agreement, the Company shall cause the independent certified public
accountants who have certified the financial statements of the Company
and its subsidiaries included or incorporated by reference in the
Registration Statement (or other independent accountants of the Company
acceptable to the Agents) forthwith to furnish such Agent a letter,
dated the date of such amendment or supplement or the related Time of
Delivery relating to such sale, as the case may be, in form reasonably
satisfactory to such Agent, of the same tenor as the letter referred to
in Section 6(e) hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the date of
such letter with such changes as may be necessary to reflect such
amended or supplemented financial information included or incorporated
by reference in the Registration Statement or the Prospectus as amended
or supplemented, provided, however, that, with respect to any financial
information or other matter, such letter may reconfirm as true and
correct at such date, as though made at and as of such date, rather than
repeat statements with respect to such financial information or other
matters made in the letter referred to in Section 6(e) hereof which was
last furnished to such Agent;
(k) that each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or
supplement providing solely (i) for a change in the interest rates,
redemption provisions, amortization schedules or maturities offered on
the Securities, (ii) for a change which the Agents deem to be immaterial
or
15
(iii) for an offering of securities other than Securities), and each
time the Company sells Securities to such Agent as principal and the
applicable Terms Agreement or other agreement specifies the delivery of
a certificate under this Section 4(k) as a condition to the purchase of
Securities pursuant to such Terms Agreement or other agreement, the
Company shall furnish or cause to be furnished forthwith to such Agent a
certificate signed by an executive officer of the Company, dated the
date of such amendment or supplement or the related Time of Delivery
relating to such sale, as the case may be, in form reasonably
satisfactory to such Agent, of the same tenor as the certificates
referred to in Section 6(f) but modified to relate to the Registration
Statement and the Prospectus as amended and supplemented to the date of
delivery of such certificate or to the effect that the statements
contained in the certificate referred to in Section 6(f) hereof which
was last furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements shall be
deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented to such date).
5. Costs and Expenses. The Company covenants and agrees with each Agent
that the Company will, whether or not any sale of Securities is consummated, pay
or cause to be paid all costs and expenses incident to the performance of its
obligations hereunder and under any applicable Terms Agreement, including
without limiting the generality of the foregoing, all costs and expenses: (i)
incident to the preparation, issuance, execution, authentication and delivery of
the Securities, including any expenses of the Trustee, its counsel and any
Paying Agent, Authenticating Agent or Calculation Agent for the Notes, (ii)
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus (including
in each case all exhibits, amendments and supplements thereto), (iii) in
connection with the listing of the Securities on any stock exchange, (iv)
related to any filing with NASD Regulation, Inc., (v) in connection with the
printing (including word processing and duplication costs) and delivery of this
Agreement and the Indenture and the furnishing to the Agents and dealers of
copies of the Registration Statement and the Prospectus, including mailing and
shipping to the Agents, as herein provided, (vi) payable to rating agencies in
connection with the rating of the Securities, (vii) the reasonable fees and
disbursements of counsel for the Agents incurred in connection with the offering
and sale of the Securities, including any opinions to be rendered by such
counsel hereunder and (viii) any advertising expenses incurred by the Agents
with the consent of the Company.
6. Conditions. The obligation of any Agent, as agent of the Company, at
any time ("SOLICITATION TIME") to solicit offers to purchase the Securities, the
obligation of any Agent to purchase Securities as principal pursuant to any
Terms
16
Agreement or otherwise, and the obligation of any other purchaser to purchase
Securities shall in each case be subject (1) to the condition that all
representations and warranties of the Company herein and all statements of
officers of the Company made in any certificate furnished pursuant to the
provisions hereof are true and correct, in all material respects (i) in the case
of an Agent's obligation to solicit offers to purchase Securities, at and as of
such Solicitation Time and (ii) in the case of any Agent's or any other
purchaser's obligation to purchase Securities, at and as of the time the Company
accepts the offer to purchase such Securities and, as the case may be, at and as
of the related Time of Delivery or time of purchase; (2) to the condition that
at or prior to such Solicitation Time, time of acceptance, Time of Delivery or
time of purchase, as the case may be, the Company shall have complied in all
material respects with all its agreements and all conditions on its part to be
performed or satisfied hereunder; and (3) to the following additional conditions
when and as specified:
(a) Prior to such Solicitation Time or corresponding Time of
Delivery or time of purchase, as the case may be:
(i) the Prospectus as amended or supplemented (including,
if applicable, the Pricing Supplement) with respect to such
Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Securities Act within the applicable time
period prescribed for such filing by the rules and regulations
under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall be in effect
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been
complied with to the reasonable satisfaction of such Agent;
(ii) subsequent to the execution and delivery of this
Agreement and prior to the Commencement Date or Time of Delivery
there shall not have occurred any downgrading, nor shall any
notice have been given of (A) downgrading, (B) any intended
downgrading or (C) any formal review or formal indication of a
possible negative change in the rating accorded any senior
unsecured debt securities of or guaranteed by the Company by any
"nationally recognized statistical rating organization", as such
term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act;
(iii) there shall not have been since the respective dates
as to which information is given in the Prospectus, any material
17
adverse change in the business, business prospects, financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole, the effect of
which in the judgment of the applicable Agent makes it
impracticable or inadvisable to proceed with the solicitation by
such Agent of offers to purchase Securities from the Company or
the purchase by such Agent of Securities from the Company as
principal, as the case may be, on the terms and in the manner
contemplated in the Prospectus, as so amended or supplemented;
and
(iv) (A) trading generally shall not have been suspended or
materially limited on or by the New York Stock Exchange, (B)
trading of any securities of or guaranteed by the Company shall
not have been suspended on any exchange or in any
over-the-counter market, (C) a general moratorium on commercial
banking activities in New York shall not have been declared by
either Federal or New York State authorities, or (D) there shall
not have occurred any outbreak or escalation of hostilities or
calamity or crisis (including a crisis in the financial markets)
that, in the case of any of the foregoing clauses (A) through
(D), in the judgment of such Agent or Agents or of such other
purchaser, is material and adverse and which in the judgment of
such Agent or Agents or of such other purchaser makes it
impracticable to proceed with the solicitation by such Agent of
offers to purchase Securities from the Company or the purchase by
such Agent of Securities from the Company as principal, as the
case may be, on the terms and in the manner contemplated in the
Prospectus as amended or supplemented at the Solicitation Time or
at the time such offer to purchase was made.
(b) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or
otherwise, if required by the applicable Terms Agreement or other
agreement, at the corresponding Time of Delivery, Wachtell, Lipton,
Xxxxx & Xxxx, counsel for the Company, shall have furnished to the
relevant Agent or Agents their written opinion, dated the Commencement
Date or Time of Delivery, as the case may be, in form and substance
reasonably satisfactory to such Agent or Agents, to the effect that:
(i) this Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
18
(ii) the Securities are in a form contemplated by the
Indenture, and have been duly authorized, and when validly
authenticated and when issued and delivered in accordance with
the terms of the Indenture and delivered to and paid for by any
purchaser of Securities sold through an Agent as agent in
accordance with this Agreement or any Agent as principal pursuant
to any Terms Agreement or other agreement, will constitute valid
and binding obligations of the Company entitled to the benefits
provided by the Indenture, subject to the effect of (A)
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors
generally and (B) the application of general principles of equity
(regardless of whether enforcement is considered in proceedings
at law or in equity);
(iii) the Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding
instrument of the Company, subject to the effect of (A)
bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors
generally and (B) the application of general principles of equity
(regardless of whether enforcement is considered in proceedings
at law or in equity); and the Indenture has been duly qualified
under the Trust Indenture Act;
(iv) the issue and sale of the Securities and the
performance by the Company of all of the provisions of its
obligations under the Securities, the Indenture, this Agreement
and any applicable Terms Agreement or other agreement pursuant to
which an Agent purchases Securities as principal, and the
consummation of the transactions herein and therein contemplated,
will not (a) conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument set forth on a Schedule previously
furnished to the Agents (such counsel may assume compliance with
the financial covenants contained therein), (b) result in any
violation of the provisions of the Restated Certificate of
Incorporation or the By-Laws of the Company or (c) violate the
federal securities laws or regulations, the Delaware General
Corporation Law or any law, statute, order, rule or regulation
known to such counsel (without independent investigation) of any
court or governmental agency or body of the State of New York
having jurisdiction over the Company, any Significant Subsidiary
or any of their respective
19
properties, except, in the case of clauses (a) and (c), for
conflicts, breaches, defaults or violations which would not
have a material adverse effect on the financial condition,
results of operations, assets or business of the Company and
its subsidiaries taken as a whole;
(v) no consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale of
the Securities, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained under the
Securities Act or the Trust Indenture Act and as may be required
under the securities or Blue Sky laws of the various states and
other jurisdictions in connection with the issue, sale and
distribution of the Securities;
(vi) the Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus;
and
(vii) (A) each document incorporated by reference in the
Registration Statement and the Prospectus (except for the
financial statements and related schedules and notes or other
financial or statistical data included or incorporated by
reference therein as to which such counsel need express no
opinion) complied when filed as to form, in all material
respects, with the Exchange Act; (B) based upon the review
described in the last paragraph of this Section 6(b), no facts
have come to such counsel's attention which lead such counsel to
believe that (except for the financial statements and related
schedules and notes or other financial or statistical data
included or incorporated by reference therein as to which such
counsel need express no belief and except for that part of the
Registration Statement which constitutes the Form T-1 of the
Trustee under the Trust Indenture Act) any part of the
Registration Statement (including the documents incorporated by
reference therein), when such part became effective contained,
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading; (C) the Registration
Statement and the Prospectus as amended or supplemented (except
for the financial statements and related schedules and notes or
other financial or statistical data included or incorporated by
reference therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Trust Indenture Act;
and (D) based upon the
20
review described in the last paragraph of this Section 6(b),
no facts have come to such counsel's attention which lead
such counsel to believe that (except for the financial
statements and related schedules and notes or other financial or
statistical data included or incorporated by reference therein as
to which such counsel need express no belief) the Prospectus, as
amended or supplemented, if applicable, as of the date such
opinion is delivered does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that in the
case of an opinion delivered on the Commencement Date or pursuant
to Section 4(i), the opinion and belief set forth in clauses
6(b)(vii)(C) and 6(b)(vii)(D) above shall be deemed not to cover
information concerning an offering of particular Securities to
the extent such information will be set forth in a supplement to
the Basic Prospectus. In rendering such opinions, such counsel
may rely (x) upon the opinion furnished to the Agents pursuant to
Section 6(c); (y) upon oral advice of the staff of the
Commission; and (z) as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers of
the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting
the corporate existence or good standing of the Company.
With respect to the matters to be covered in subparagraph (vii)
above counsel may state their opinion is based upon their participation
in the preparation of the Registration Statement and the Prospectus and
any amendment or supplement thereto (excluding any documents
incorporated by reference thereto, in which case such opinion is based
upon their review of such documents) and discussions with
representatives of the Company and its auditors (including discussions
in which the Agents and their counsel participated) but is without
independent check or verification except as specified. Such counsel may
further state that such counsel have not verified, and are not passing
upon and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than those statements referred to in
subparagraph (vi) above). In connection with the opinion contained in
subparagraph (iv)(a), the Schedule referred to therein shall have been
updated to include all material agreements and instruments of a similar
tenor, as in effect on such date.
(c) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or
21
otherwise, if required by the applicable Terms Agreement or other
agreement, at the corresponding Time of Delivery, Xxxxxxxx X. XxXxxxxxx,
Chief Legal Officer and Assistant Secretary of the Company, shall have
furnished to the relevant Agent or Agents her written opinion, dated the
Commencement Date or Time of Delivery, as the case may be, in form and
substance reasonably satisfactory to such Agent or Agents, to the effect
that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other)
to own its properties and conduct its business as described in
the Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole;
(iii) each Significant Subsidiary has been duly incorporated
and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would
not have a material adverse effect on the Company and its
subsidiaries taken as a whole; and all of the outstanding shares
of capital stock of each Significant Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable,
and are owned by the Company, directly or indirectly, free and
clear of all material liens, encumbrances, security interests and
claims;
(iv) other than as set forth or contemplated in the
Prospectus, such counsel does not know of any legal or
governmental proceedings pending to which the Company or any
Significant Subsidiary is a party or to which any property of the
22
Company or any Significant Subsidiary is the subject which are
required to be described in the Prospectus as amended or
supplemented which are not described as required; and such
counsel does not know of any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be described in the Registration
Statement or the Prospectus which are not filed or described as
required; and
(v) the statements in the Prospectus incorporated by
reference from Item 3 of Part I of the Company's Annual Report on
Form 10-K for the year ended February 1, 1997, as modified or
amended by any subsequent documents incorporated by reference in
the Registration Statement or the Prospectus, insofar as such
statements constitute a summary of the legal matters, documents
or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents or proceedings.
(d) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or
otherwise, if required by the applicable Terms Agreement or other
agreement, at the corresponding Time of Delivery, Xxxxx Xxxx & Xxxxxxxx,
counsel to the Agents, shall have furnished to the relevant Agent or
Agents such opinion or opinions, dated the Commencement Date or Time of
Delivery, as the case may be, with respect to the validity of the
Indenture, the Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related legal matters relating to this
Agreement and the transactions contemplated hereby as such Agent or
Agents may reasonably request, and in each case such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
(e) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or
otherwise, if required by the applicable Terms Agreement or other
agreement, at the corresponding Time of Delivery, the Company's
independent certified public accountants who have certified the
financial statements of the Company (or other independent accountants
for the Company acceptable to the Agents) and its subsidiaries included
or incorporated by reference in the Registration Statement and
Prospectus, as then amended or supplemented, shall have furnished to the
relevant Agent or Agents a letter, dated the Commencement Date or Time
of Delivery, as the case may be, in form and substance reasonably
satisfactory to such
23
Agent or Agents, 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 relating to the Company contained in or
incorporated by reference in the Registration Statement and the
Prospectus, as then amended or supplemented.
(f) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or
otherwise, if required by the applicable Terms Agreement or other
agreement, at the corresponding Time of Delivery, the relevant Agent or
Agents shall have received a certificate or certificates signed by an
executive officer of the Company, dated the Commencement Date or Time of
Delivery, as the case may be, to the effect set forth in Sections
6(a)(i) and 6(a)(ii) above and to the further effect that (1) the
representations and warranties of the Company contained herein are true
and correct in all material respects on and as of the Commencement Date
or Time of Delivery, as the case may be, as if made on and as of such
date, (2) the Company has complied in all material respects with all
agreements and all conditions on its part to be performed or satisfied
hereunder or under the applicable Terms Agreement or other agreement at
or prior to the Commencement Date or Time of Delivery, as the case may
be, and (3) there has not been any material adverse change in the
business, business prospects, financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole, from that set forth in or contemplated by the Registration
Statement or the Prospectus as so amended or supplemented.
7. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Agent and each person, if any, who controls such Agent,
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including without limitation the reasonable legal fees and other
expenses incurred in connection with investigating, preparing to defend or
defending any suit, action or proceeding or any claim asserted which shall be
reimbursed as such legal fees and other expenses are incurred) arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof or the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or, in case of the Registration Statement or
the Prospectus (as amended or supplemented), necessary to make the statements
24
therein not misleading or, in the case of any preliminary prospectus, necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except insofar as such losses, claims, damages
or liabilities arise out of or are based upon any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with information furnished to the Company in writing by such Agent expressly for
use therein; provided that the foregoing indemnity with respect to any
preliminary prospectus shall not inure to the benefit of any Agent (or to the
benefit of any person controlling such Agent) for any such losses, claims,
damages or liabilities (a) resulting solely from the Agent having sold
Securities to a person to whom there was not sent or given, if required by law,
at or prior to the time of written confirmation of such sale, a copy of the
Prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or (b) if such losses, claims, damages or
liabilities result from an untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus that is eliminated or
remedied in the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) and, if required by law, a copy
of the Prospectus (as so amended or supplemented) shall not have been furnished
to such person at or prior to the written confirmation of the sale of such
Securities to such person.
(b) Each Agent agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers and each person who controls
the Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Agent, but only with reference to any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company in writing by such Agent
expressly for use in the Registration Statement, the Prospectus, any amendment
or supplement thereto, or any preliminary prospectus.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "INDEMNIFIED PERSON") shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PERSON") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and
25
expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Agents, and
such control persons of the Agents shall be designated in writing by X.X. Xxxxxx
Securities Inc. or, if X.X. Xxxxxx Securities Inc. is not an Indemnified Party,
by the Agents that are Indemnified Parties and any such separate firm for the
Company, its directors, its officers and such control persons of the Company or
authorized representatives shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment to the extent set forth in this Section 7.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person
shall have requested an Indemnifying Person to reimburse the Indemnified Person
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
(d) If the indemnification provided for in Section 7(a) or 7(b) is
unavailable to an Indemnified Person or insufficient in respect of any losses,
claims, damages or liabilities referred to herein in connection with any
offering of Securities, then each Indemnifying Person under such paragraph, in
lieu of indemnifying such Indemnified Person thereunder, shall contribute to the
amount
26
paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and each
Agent on the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and each Agent on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and each Agent on the other in connection with the
offering of such Securities shall be deemed to be in the same respective
proportion as the net proceeds from the offering of such Securities (before
deducting expenses) received by the Company and the total discounts and
commissions received by each Agent in respect thereof bear to the aggregate
offering price of such Securities. The relative fault of the Company on the one
hand and of each Agent on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by such Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and each Agent agrees that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if all Agents were treated as one entity for such purpose)
or by any other method of allocation that does not take account of the equitable
considerations referred to above in this Section 7(d). The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and
liabilities referred to above in this Section 7 shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 7, in no
event shall an Agent be required to contribute any amount in excess of the
amount by which the total price at which the Securities referred to in Section
7(d) that were sold by or through such Agent exceeds the amount of any damages
that such Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligation of each Agent to
contribute pursuant to this Section 7(d) is several (in the proportion that the
principal amount of the Securities the sale of which by or through such Agent
gave rise to such losses, claims, damages or liabilities bears to the aggregate
principal amount of the
27
Securities the sale of which by or through any Agent gave rise to such losses,
claims, damages or liabilities) and is not joint.
(e) The indemnity and contribution agreements contained in this Section 7
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
8. Termination. (a) This Agreement may be terminated at any time (i) by
the Company with respect to any or all of the Agents or (ii) by any Agent with
respect to itself only, in each case upon the giving of written notice of such
termination to each other party hereto. Any Terms Agreement shall be subject to
termination in the absolute discretion of the Agent or Agents that are parties
thereto on the terms set forth or incorporated by reference therein. The
termination of this Agreement shall not require termination of any agreement by
an Agent to purchase Securities as principal (whether pursuant to a Terms
Agreement or otherwise) and the termination of such an agreement shall not
require termination of this Agreement. In the event this Agreement is terminated
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such termination has not occurred,
(y) this Agreement shall remain in full force and effect with respect to the
rights and obligations of any party which have previously accrued or which
relate to Securities which are already issued, agreed to be issued and (z) in
any event, the provisions of the fourth paragraph of Section 2(a), Section 2(c),
the last sentence of Section 4(d) and Sections 4(f), 4(g), 5, 7, 9, 10, 12 and
15 shall survive; provided that if at the time of termination an offer to
purchase Securities has been accepted by the Company but the time of delivery to
the purchaser or its agent of such Securities has not yet occurred, the
provisions of Sections 2(b), 2(d), 4(a) through 4(e), 4(h) through 4(k) and 6
shall also survive. If any Terms Agreement is terminated (whether as a result of
the consummation of the transactions contemplated thereby, or otherwise), the
provisions of the last sentence of Section 4(d) and Sections 2(b), 2(d), 5, 6,
7, 8(b), 10, 11, 12 and 15 (which shall have been incorporated by reference in
such Terms Agreement) shall survive.
(b) If this Agreement or any Terms Agreement shall be terminated by an
Agent or Agents because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement or
any Terms Agreement or if for any reason the Company shall be unable to perform
its obligations under this Agreement or any Terms Agreement or any condition of
any Agent's obligations cannot be fulfilled, the Company agrees to reimburse
each Agent or such Agents as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the reasonable
fees and expenses of their counsel) reasonably incurred by such Agent or Agents
in connection with this Agreement or the offering of Securities.
28
9. Position of the Agents. Each Agent, in soliciting offers to purchase
Securities from the Company and in performing the other obligations of such
Agent hereunder (other than in respect of any purchase by an Agent as principal,
pursuant to a Terms Agreement or otherwise), is acting solely as agent for the
Company and not as principal and does not assume any obligation towards or
relationship of agency or trust with any purchaser of Securities. Each Agent
will make reasonable efforts to assist the Company in obtaining performance by
each purchaser whose offer to purchase Securities from the Company was solicited
by such Agent and has been accepted by the Company, but such Agent shall not
have any liability to the Company in the event such purchase is not consummated
for any reason. If the Company shall default on its obligation to deliver
Securities to a purchaser whose offer it has accepted, the Company shall (i)
hold the relevant Agent harmless against any loss, claim, damage or liability
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
10. Representations and Indemnities to Survive. The respective
indemnities and contribution agreements, representation, warranties and other
statements of the Company, its officers and the Agents set forth in or made
pursuant to this Agreement or any agreement by an Agent to purchase Securities
as principal shall remain in full force and effect regardless of any termination
of this Agreement or any such agreement, any investigation made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
11. Notices. Except as otherwise specifically provided herein or in the
Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing and effective only on receipt, and will be
delivered by hand, by mail (postage prepaid), by telegram (charges prepaid) or
by telex. Communications to the Agents will be sent, in the case of X.X. Xxxxxx
Securities Inc., to 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Transaction Execution Group, (Fax: (000) 000-0000); in the case of Xxxxxxx Xxxxx
& Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, to Xxxxxxx Xxxxx &
Co., Xxxxxxx Xxxxx World Headquarters, North Tower, World Financial Center, 000
Xxxxx Xx., 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Product
Management (Fax: (000) 000-0000); in the case of Xxxxxx Xxxxxxx & Co.
Incorporated, to Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager Continuously Offered Products (Fax:
(000) 000-0000), with a copy to: Xxxxxx Xxxxxxx & Co. Incorporated, 0000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
29
Attention: Xxxxx Xxxxxx, Investment Banking Information Center (Fax: (212)
000-0000); in the case of Salomon Brothers Inc, to Xxxxxxx Xxxxx Xxxxxx, 7 World
Trade Center, 32nd Floor, New York, New York 10048, Attention: Xxxxxxxx Xxxxxxxx
(Fax: (000) 000-0000); and, if sent to the Company, to it at 000 Xxxx Xxxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (Fax: (000) 000-0000); Attention: Xxxxxxxx X.
XxXxxxxxx.
12. Successors. This Agreement and any Terms Agreement shall be binding
upon, and inure solely to the benefit of, each Agent and the Company, and their
respective successors and the officers, directors and controlling persons
referred to in Section 7 and (to the extent expressly provided in Section 6) the
purchasers of Securities, and no other person shall acquire or have any right or
obligation under or by virtue of this Agreement or any Terms Agreement. No
purchaser of Securities through or from any Agent shall be deemed a successor by
reason merely of such purchase.
13. Amendments. This Agreement may be amended or supplemented if, but
only if, such amendment or supplement is in writing and is signed by the Company
and each Agent; provided that the Company may from time to time, upon one
business day's prior written notice to the Agents but without the consent of any
Agent, (i) amend this Agreement to add as a party hereto one or more other
persons, partnerships or corporations ("Additional Agents") to act as its agent
to solicit offers for the purchase of Securities pursuant to this Agreement or
(ii) execute an agreement substantially identical in form to this Agreement with
such Additional Agent, whereupon each such Additional Agent shall become an
Agent hereunder on the same terms and conditions as the other Agents that are
parties hereto. The Agents shall sign any amendment or supplement giving effect
to the addition of any such firm as an Agent under this Agreement.
14. Business Day. Time shall be of the essence in this Agreement and any
Terms Agreement. As used herein, the term "BUSINESS DAY" shall mean any day
which is not a Saturday or Sunday or legal holiday or a day on which banks in
New York City are required or authorized by law or executive order to close.
15. Applicable Law. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflict of laws provisions thereof.
16. Counterparts. This Agreement and any Terms Agreement may be signed in
counterparts, each of which shall be an original, and all of which together
shall constitute one and the same instrument.
30
17. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
AMERICAN STORES COMPANY
By: /s/ J. Xxxx Xxxxxxx
Name: J. Xxxx Xxxxxxx
Title: Senior Vice President,
Treasurer and Assistant
Secretary
Accepted in New York, New York, as of the date first above written:
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxxx X. Post
Name: Xxxxxx X. Post
Title: Managing Director
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
31
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
SALOMON BROTHERS INC
By: /s/ Xxxxxxxx XxXxxx
Name: Xxxxxxxx XxXxxx
Title: Vice President
32
EXHIBIT A
AMERICAN STORES COMPANY
MEDIUM TERM NOTES, SERIES A
TERMS AGREEMENT
------, ----
AMERICAN STORES COMPANY
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxxxx X. XxXxxxxxx
Re: DISTRIBUTION AGREEMENT DATED AS OF MARCH __ , 1998 (THE
"DISTRIBUTION AGREEMENT")
The undersigned agrees to purchase your Medium-Term Notes, Series A
having the following terms:
Specified Currency:
---------------------------------------
Principal Amount:
---------------------------------------
Original Issue Date:
---------------------------------------
Settlement Date, Time and Place:
---------------------------------------
Maturity Date:
---------------------------------------
Purchase Price: [ ]% of Principal Amount, plus
accrued interest, if any, from
Settlement Date
Price to Public: [ ]% of Principal Amount, plus
accrued interest, if any, from
Settlement Date
Redemption Date(s): [ ], commencing
Initial Redemption Price:
---------------------------------------
Annual Redemption Price Decrease:
---------------------------------------
Repayment Date(s):
---------------------------------------
Repayment Price:
---------------------------------------
Initial Accrual Period OID:
---------------------------------------
Original Yield to Maturity
---------------------------------------
[(For Fixed Rate Notes)
Interest Rate:
---------------------------------------
Applicability of modified payment upon
acceleration:
---------------------------------------
If yes, state issue price:
---------------------------------------
Amortization Schedule: ]
---------------------------------------
*[(For Floating Rate Notes)
Initial Interest Rate:
---------------------------------------
Interest Rate Basis (Commercial paper,
LIBOR, Treasury, _________):
---------------------------------------
Index Maturity (30, 60, 90 days,
6 months, 1 year, other):
---------------------------------------
Interest Reset Period (monthly,
quarterly, semiannually,
annually):
---------------------------------------
Interest payment Period (monthly,
quarterly, semiannually,
annually):
---------------------------------------
Spread: points (+/-)
---------------------------------------
Spread Multiplier: %
---------------------------------------
--------
*See Prospectus Supplement dated ____________ for explanation of terms.
2
Maximum Interest Rate: %
---------------------------------------
Minimum Interest Rate: %
---------------------------------------
Initial Interest Reset Date:
---------------------------------------
Interest Reset Dates:
---------------------------------------
Interest Determination Dates:
---------------------------------------
Interest Payment Dates:
---------------------------------------
Calculation Agent: ]
---------------------------------------
Other terms of Securities:
---------------------------------------
Provisions relating to underwriter
default; if any:
---------------------------------------
The provisions of Sections 1, 2(b), 2(d), 4 through 8, 10, 11, 12, and
15 of the Distribution Agreement and the related definitions are incorporated by
reference herein and shall be deemed to have the same force and effect as if set
forth in full herein.
This Agreement is subject to termination in our absolute discretion on
the terms incorporated by reference herein and, if after the execution and
delivery of this Agreement and prior to the Time of Delivery (i) trading
generally shall have been suspended or materially limited on or by the New York
Stock Exchange, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or other calamity or crisis
(including a crisis in the financial markets) the effect of which, in the case
of any of the foregoing clauses (i) through (iv), is so material and adverse as
to make it, in our judgment, impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus Supplement, and as otherwise
agreed by the Company and us. If this Agreement is so terminated, the provisions
set forth in the last sentence of Section 8(a) of the Distribution Agreement
shall survive for the purpose of this Agreement.
3
[The certificate referred to in Section 4(k) of the Distribution
Agreement, the opinion referred to in Section 4(i) of the Distribution Agreement
and the accountants' letter referred to in Section 4(j) of the Distribution will
be required.]
[Agent]
By:
Name:
Title:
Accepted:
AMERICAN STORES COMPANY
By:
Name:
Title:
4
