EXHIBIT 1.1
SAFEWAY INC.
$480,000,000 4.80% NOTES DUE 2007
UNDERWRITING AGREEMENT
July 11, 2002
July 11, 0000
Xxxx xx Xxxxxxx Securities LLC
Deutsche Bank Securities Inc.
Banc One Capital Markets, Inc.
Barclays Capital Inc.
BNP Paribas Securities Corp.
BNY Capital Markets, Inc.
c/o Banc of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Safeway Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") $480,000,000 aggregate principal amount of its 4.80% Notes Due
2007 (the "Securities") to be issued pursuant to the provisions of an Indenture
dated as of September 10, 1997 (the "Indenture") between the Company and The
Bank of New York, as Trustee (the "Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Registration No. 333-55008), including a
prospectus, relating to the Securities and has filed with, or transmitted for
filing to, or shall promptly hereafter file with or transmit for filing to, the
Commission (i) a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Securities pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), and (ii) a related
prospectus dated February 12, 2001 (the "Base Prospectus"). The term
"Registration Statement" means the registration statement (Registration No.
333-55008), as amended to the date of this Agreement. If the Company has filed
or files an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. The term "Prospectus" means the Base Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Securities,
together with the Base Prospectus. As used herein, the terms "Base Prospectus,"
"Prospectus," and "preliminary prospectus" shall include in each case the
documents incorporated by reference therein, and the term "Registration
Statement" shall include the documents incorporated or deemed to be incorporated
by reference therein. The terms "supplement," "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by reference in the
Prospectus that are filed subsequent to the date of
the Base Prospectus by the Company with the Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement (other than any Rule 462
Registration Statement) has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) The Registration Statement, when it became effective, did not
contain and such Registration Statement, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (ii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder
and (iii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this Section 1(b) do not apply (A) to statements
or omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statement of
Eligibility (Form T-1) (the "Form T-1") under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), of the Trustee.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder.
(d) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its properties
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in the State of
California and in each other jurisdiction in which such qualification is
required, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
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(e) Each subsidiary, if any, of the Company which is a
"significant subsidiary" as defined in Rule 405 of Regulation C of the
Securities Act (each a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation and in good
standing under the laws of the jurisdiction of its incorporation.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and (ii) rights of acceleration,
if any, and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(h) The Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and legally binding
obligations of the Company, enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and (ii) rights of acceleration, if any, and
the availability of equitable remedies may be limited by equitable
principles of general applicability.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Securities will not result in any violation of the
Restated Certificate of Incorporation or the By-Laws of the Company or
any agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken
as a whole, or any statute or any order, rule or regulation of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency having
jurisdiction over the Company is required for the performance by the
Company of its obligations under this Agreement, the Indenture and the
Securities, except such as may be required under the Securities Act and
the rules and regulations thereunder, and the Exchange Act and the rules
and regulations thereunder, the Trust Indenture Act and the securities
or Blue Sky laws of the various states in connection with the offer and
sale of the Securities.
(j) The financial statements (together with the related notes
thereto) incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of and at the dates indicated and the
results of their operations for the periods specified, except as
otherwise disclosed therein; and except as otherwise stated therein or
in the Registration Statement and the
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Prospectus, said financial statements have been prepared in conformity
with generally accepted accounting principles in the United States
applied on a consistent basis.
(k) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus.
(l) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending or, to the Company's knowledge,
threatened, to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required.
(m) The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
2. AGREEMENT TO SELL AND PURCHASE. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Securities set forth in Schedule I
hereto opposite its name at a purchase price of 99.207% of the principal amount
of the Securities.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Securities as soon after this Agreement has become effective as in your
judgment is advisable. The Company is further advised by you that the Securities
are to be offered to the public initially at 99.807% of the principal amount of
the Securities (the "Public Offering Price") plus, accrued interest, if any,
from July 16, 2002 to the date of payment and delivery, and to certain dealers
selected by you at a price that represents a concession not in excess of 0.35%
of the principal amount under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of 0.25% of the principal amount of the Securities, to any Underwriter or to
certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Securities shall be made
in Federal or other immediately available funds to an account designated by the
Company at 7:00 A.M., California time, on July 16, 2002, or at such other time
on the same or such other date, not later than July 25, 2002, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Closing Date."
Payment for the Securities shall be made against delivery to you for the
respective accounts of the several Underwriters of global certificates
representing the Securities registered
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in the name of Cede & Co. with any transfer taxes payable in connection with the
transfer of the Securities to the Underwriters duly paid.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligation of
the Company to sell the Securities to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Securities are
subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus; and
(iii) the Registration Statement shall have become
effective under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement shall have been
issued under the Securities Act and no proceedings therefor shall
have been initiated or threatened by the Commission.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied in all material respects with all of
the agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied hereunder on or
before the Closing Date (the officer signing and delivering such
certificate may rely upon his or her knowledge as to proceedings
threatened).
(c) Xxxxxx & Xxxxxxx, special counsel for the Company, shall have
furnished to you their written opinion dated the Closing Date, in form
and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated, and is validly
existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to own, lease and
operate its properties and to conduct its business as described
in the Registration Statement and the Prospectus.
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(ii) The execution, delivery and performance of this
agreement have been duly authorized by all necessary corporate
action of the Company, and this agreement has been duly executed
and delivered by the Company.
(iii) The Indenture has been (a) qualified under the Trust
Indenture Act of 1939, as amended, and (b) duly authorized,
executed and delivered by the Company and is the legally valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms.
(iv) The execution, delivery and performance of the
Securities have been duly authorized by the Company, the
Securities have been duly executed by the Company, and when the
Securities have been duly issued and authenticated in accordance
with the terms of the Indenture and delivered to and paid for by
you in accordance with the terms of this agreement, the
Securities will be legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms.
(v) The Registration Statement has become effective under
the Securities Act. To the best of such firm's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued under the Securities Act and no proceedings
therefor have been initiated by the Commission. Any required
filing of the Prospectus pursuant to Rule 424 under the
Securities Act has been made in accordance with Rule 424 under
the Securities Act.
(vi) The Registration Statement, as of the date it was
declared effective, and the Prospectus, as of its date, complied
as to form in all material respects with the requirements for
registration statements on Form S-3 under the Securities Act and
the rules and regulations of the Commission thereunder; it being
understood, however, that such firm need express no opinion with
respect to the financial statements, schedules or other financial
data included in, incorporated by reference in, or omitted from,
the Registration Statement or the Prospectus or with respect to
the Statement of Eligibility of the Trustee on Form T-1 (the
"Form T-1"). In passing upon the compliance as to form of the
Registration Statement and the Prospectus, such firm may have
assumed that the statements made therein are correct and
complete.
(vii) The Securities and the Indenture conform in all
material respects to the descriptions thereof in the Prospectus
under the captions "Description of the Notes" and "Description of
Debt Securities," in each case insofar as such statements are
summaries of legal matters.
(viii) The issue and sale of the Securities being
delivered on the date hereof by the Company and the compliance by
the Company with the provisions of this agreement and the
Indenture on the date hereof do not:
(1) violate the Company's Governing Documents; or
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(2) result in the breach of or a default under any
of the indentures relating to the Company's 3.625% Notes due
2003, 6.15% Notes due 2006, 6.50% Notes due 2011, 7.25%
Debentures due 2031, 7.00% Notes due 2002, 7.25% Notes due 2004,
7.50% Notes due 2009, 9.30% Senior Secured Debentures due 2007,
10% Senior Notes due 2002, 10% Senior Subordinated Notes due
2001, 9.875% Senior Subordinated Debentures due 2007, 9.65%
Senior Subordinated Debentures due 2004, 5.875% Notes due 2001,
6.05% Notes due 2003, 6.85% Senior Notes due 2004, 7.00% Senior
Notes due 2007, 6.50% Notes due 2008 or 7.45% Senior Debentures
due 2027, and the Bank Credit Agreement dated as of May 24, 2001
between the Company and a consortium of banks led by Deutsche
Banc Alex. Xxxxx Inc. and X.X. Xxxxxx Securities Inc., as
co-arrangers; or
(3) violate any federal, New York or California
statute, rule or regulation applicable to the Company; or
(4) require any consents, approvals,
authorizations, registrations, declarations or filings by the
Company under any federal, New York or California statute, rule
or regulation applicable to the Company, except such as have been
obtained under the Securities Act and such as may be required
under state securities laws in connection with the purchase and
distribution of the Securities by you.
No opinion need be expressed in this paragraph (viii) as
to the application of Section 548 of the Federal Bankruptcy Code
and comparable provisions of state law, or under other laws
customarily excluded from such opinions, including federal
securities laws (certain aspects of which are expressly addressed
herein), state securities laws, antifraud laws, antitrust or
trade regulations laws.
(ix) Each of the Incorporated Documents, as of its
respective filing or effective date, appeared on its face to
comply as to form in all material respects with the applicable
requirements for reports on Forms 10-K, 10-Q and 8-K and proxy
statements under Regulation 14A, as the case may be, under the
Exchange Act, and the rules and regulations of the Commission
thereunder, and for Registration Statements on Form 8-A under the
Exchange Act, and the rules and regulations of the Commission
thereunder; it being understood, however, that such firm need
express no opinion with respect to financial statements,
schedules or other financial data included in, incorporated by
reference in, or omitted from such reports, proxy statements and
registration statements or with respect to the Form T-1. In
passing upon the compliance as to form of the Incorporated
Documents, such firm may assume that the statements made therein
are correct and complete.
(x) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
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In addition, we have participated in conferences with
officers and other representatives of the Company,
representatives of the independent public accountants for the
Company, and your representatives, at which the contents of the
Registration Statement and the Prospectus and the Incorporated
Documents and related matters were discussed and, although such
counsel is not passing upon, and does not assume any
responsibility for, the accuracy, completeness or fairness of the
statements contained or incorporated by reference in the
Registration Statement and the Prospectus or the Incorporated
Documents and has not made any independent check or verification
thereof, during the course of such participation, no facts came
to such counsel's attention that caused such counsel to believe
that the Registration Statement (including the Incorporated
Documents), at the time of the filing of the Company's Annual
Report for the fiscal year ended December 29, 2001, contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus
(including the Incorporated Documents), as of July 11, 2002 or as
of the Closing Date, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it
being understood that such counsel need express no belief with
respect to the financial statements, schedules or other financial
data included or incorporated by reference in, or omitted from,
the Registration Statement or the Prospectus or with respect to
the Form T-1.
In rendering such opinion, such counsel may state that
they express an opinion only as to federal laws, New York and
California law and the General Corporation Law of the State of
Delaware. Such opinion may also be subject to customary
assumptions and limitations, including that opinions on
enforceability may be subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights and
remedies of creditors; (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before which
any proceeding thereof may be brought; (iii) the unenforceability
under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution
to a party with respect to a liability where such indemnification
or contribution is contrary to public policy; (iv) such counsel
need not express an opinion concerning the enforceability of the
waiver of rights or defenses contained in Section 4.4 of the
Indenture; (v) such counsel need not express an opinion with
respect to Sections 10.15 and 10.16 of the Indenture; (vi) such
counsel need not express an opinion with respect to whether
acceleration of the notes may affect the collectibility of that
portion of the stated principal amount thereof which might be
determined to constitute unearned interest thereon; and (vii) the
unenforceability of any provision
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requiring the payment of attorneys' fees, except to the extent a
court determines such fees to be reasonable.
(d) Xxxxxx X. Xxxxxx, Senior Vice President, General Counsel and
Secretary of the Company, shall have furnished to you his written
opinion, dated the Closing Date, in form and substance satisfactory to
you, to the effect that:
(i) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which its
ownership or lease of substantial properties or the conduct of
its business requires such qualification, and in which the
failure to be so qualified and in good standing would have a
material adverse effect upon the Company and its subsidiaries
considered as a whole;
(ii) based solely on certificates from public officials,
each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation; has
corporate power and authority to own, lease and operate its
properties and conduct its business as described in the
Prospectus; and to the best of such counsel's knowledge has been
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which its ownership or lease of substantial
properties or the conduct of its business requires such
qualification, and in which failure to be so qualified and in
good standing would have a material adverse effect upon the
Company and its subsidiaries considered as a whole; and all of
the issued and outstanding capital stock of each such Significant
Subsidiary has been duly authorized and validly issued and is
fully paid and non-assessable, and the capital stock owned by the
Company in each such subsidiary is owned by the Company free and
clear of any mortgage, pledge, lien, encumbrance, claim or
equity;
(iii) to the best of such counsel's knowledge there are no
legal or governmental proceedings pending or threatened to which
the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the
subject, required to be described in the Prospectus, which are
not described as required; and
(iv) the issue and sale of the Securities being delivered
at the Closing Date by the Company and the application of the net
proceeds therefrom as contemplated under "Use of Proceeds" in the
Prospectus, and the compliance by the Company with all of the
provisions of this Agreement will not conflict with or result in
a material breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument
relating to indebtedness in excess of $25 million to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries
is subject.
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(e) The Underwriters shall have received on the Closing Date an
opinion of Sidley Xxxxxx Xxxxx & Xxxx LLP, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in the first
clause of subparagraph (i), subparagraphs (ii), (iii), (iv), (viii) (but
only as to the opinion that the Securities conform in all material
respects to the description thereof in the Prospectus), (x), (xi) and
the penultimate paragraph of paragraph (c) above and such counsel shall
have received such papers and information as they may reasonably request
to enable them to pass upon such matters.
The opinions of Xxxxxx & Xxxxxxx and Xxxxxx X. Xxxxxx
described in paragraphs (c) and (d) above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(f) The Underwriters shall have received, on the Closing Date, a
letter dated the Closing Date, in form and substance satisfactory to the
Underwriters, from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that such letter shall use a "cut-off date" not earlier than
the date hereof.
(g) At the date of this Agreement, the Company shall have
furnished for review by the Underwriters copies of such further
information, certificates and documents as they may reasonably request.
(h) If the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 9:00 a.m.,
Washington, D.C. time, on July 12, 2002.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and documents
incorporated by reference and to each Underwriter a copy of the
Registration Statement (without exhibits thereto but including documents
incorporated by reference) and to furnish to you in New York City
without charge prior to 5:00 p.m. local time on the business day next
succeeding the date of this Agreement, and during the period mentioned
in paragraph (c) below, as many copies of the Prospectus, any documents
incorporated therein by reference, and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
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(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earnings statement that satisfies
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) During the period beginning on the date hereof and continuing
to and including the Closing Date, not to offer, sell, contract to sell
or otherwise dispose of any debt securities of the Company or warrants
to purchase debt securities of the Company substantially similar to the
Securities (other than (i) the Securities or (ii) commercial paper
issued in the ordinary course of business), without the prior written
consent of Banc of America Securities LLC and Deutsche Bank Securities
Inc.
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel and Company's accountants in
connection with the registration and delivery of the Securities under
the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers
in the quantities hereinabove specified, (ii) the preparation, issuance
and delivery of the Securities; (iii) the fees and disbursements of the
Trustee and its counsel; (iv) all expenses in connection with the
qualification of the Securities for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with any Blue Sky memorandum, (v) the printing and delivery to the
Underwriters of copies of any Blue Sky memorandum; (vi) any fees charged
by rating agencies for the rating of the Securities; (vii) the cost of
printing
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certificates representing the Securities, (viii) the costs and expenses
of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering, including,
without limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
the Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered by the Company in connection with the road show, (ix)
all other costs and expenses of the Company in connection with the
performance of its obligations hereunder for which provision is not
otherwise made in this Section and (x) any other costs and expenses of
others in connection with the performance of the Company's obligations
hereunder which have been previously approved by the Company. It is
understood, however, that except as provided in this Section, Section 7
entitled "Indemnity and Contribution", and the last paragraph of Section
9 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Securities by them, the costs and
expenses of the Underwriters relating to investor presentations on any
"road shows" undertaken in connection with the marketing of the
Securities and any advertising expenses connected with any offers they
may make.
7. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages
and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Underwriter or any such controlling
person in connection with defending or investigating any such action or
claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Securities, or any person controlling
such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities.
12
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either paragraph (a) or (b) of
this Section 7, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed
to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local
counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Banc of America Securities LLC and Deutsche
Bank Securities Inc., in the case of parties indemnified pursuant to
paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and
(ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional
13
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other hand
from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other hand in connection
with the offering of the Securities shall be deemed to be in the same
respective proportions as the aggregate net proceeds from the offering
of the Securities (before deducting expenses) received by the Company
and the aggregate underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public Offering Price of the
Securities. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective
principal amounts of Securities they have purchased hereunder, and not
joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to
in paragraph (d) of this Section 7. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
14
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of
the Company contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Securities.
8. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, either of the
New York Stock Exchange or the National Association of Securities Dealers, Inc.,
(ii) trading of any securities of the Company shall have been suspended or
materially limited on any exchange or in any over-the-counter market, (iii)
there has occurred a material disruption in securities settlement or clearance
services, (iv) a general moratorium on commercial banking activities in New York
or California shall have been declared by either Federal or New York State or
California authorities or (v) there shall have occurred any outbreak or
escalation of hostilities or any change in the financial markets in the United
States or in the international financial markets or any calamity or crisis,
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (v), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the
Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of the Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bear to the
principal amount of Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 9 by an amount
in excess of one-ninth of such principal amount of Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Securities to be purchased
on such date, and arrangements
15
satisfactory to you and the Company for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either you or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder; provided, however, that no such
reimbursement shall be required with respect to a termination of this Agreement
by the Underwriters pursuant to Section 8 or this Section 9.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
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[SIGNATURE PAGE FOLLOWS]
16
Very truly yours,
SAFEWAY INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
______________________________
Title: Senior Vice President, Finance
and Investor Relations
Accepted as of the date hereof
Banc of America Securities LLC
Deutsche Bank Securities Inc.
Banc One Capital Markets, Inc.
Barclays Capital Inc.
BNP Paribas Securities Corp.
BNY Capital Markets, Inc.
By: Banc of America Securities LLC
By: /s/ Xxxxx Xxxxx
___________________________________
Name: Xxxxx Xxxxx
Title: Principal
By: Deutsche Bank Securities Inc.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
___________________________________
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxx
___________________________________
Name: Xxxxx Xxxx
Title: Managing Director
SCHEDULE I
Principal
Amount of
Securities to be
Underwriter Purchased
-------------------------------- -------------
Banc of America Securities LLC $156,000,000
Deutsche Bank Securities Inc. 156,000,000
Banc One Capital Markets, Inc. 42,000,000
Barclays Capital Inc. 42,000,000
BNP Paribas Securities Corp. 42,000,000
BNY Capital Markets, Inc. 42,000,000
Total $480,000,000
============
I-1
