Company’s subsidiaries do not have any stock-based compensation plans and have not granted any Stock Options.
distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, “EnvironmentalLaws”), which violation includes, without limitation, noncompliance with any permits or other governmental authorizations required for the operation of the business of the Company or its subsidiaries under applicable Environmental Laws, or noncompliance with the terms and conditions thereof, nor has the Company or any of its subsidiaries received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that either the Company or any of its subsidiaries is in violation of any Environmental Law; (ii) there is no claim, action or cause of action filed with a court or governmental authority, there is no investigation with respect to which the Company or any of its subsidiaries has received written notice, and no written notice has been received by any person or entity alleging potential liability for investigatory costs, cleanup costs, governmental responses costs, natural resources damages, property damages, personal injuries, attorneys’ fees or penalties, in each case arising out of, based on or resulting from the presence, or release into the environment, of any Material of Environmental Concern at any location owned, leased or operated by the Company or any of its subsidiaries, now or in the past (collectively, “Environmental Claims”); and (iii) to the Company’s knowledge, there are no past, present or anticipated future actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that would result in a violation of any Environmental Law, require material expenditures to be incurred pursuant to an Environmental Law or form the basis of a potential Environmental Claim against the Company or any of its subsidiaries or against any person or entity whose liability for any Environmental Claim the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law. Neither the Company nor any of its subsidiaries is subject to any pending or threatened proceeding under Environmental Law to which a governmental authority is a party and which is reasonably likely to result in monetary sanctions of $100,000 or more.
(kk)ERISA Compliance. Except as would not result in a Material Adverse Effect, the Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974 (as amended, “ERISA,” which term, as used herein, includes the regulations and published interpretations thereunder)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance with ERISA. “ERISA Affiliate” means, with respect to the Company or a subsidiary, any member of any group of organizations described in Section 414 of the Code of which the Company or such subsidiary is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any material “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any material liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401 of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.
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(ll)Brokers. Except as otherwise disclosed in the Disclosure Package and the Prospectus, to the Company’s knowledge, there is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.
(mm)Compliance with Labor Laws. Except as would not result in a Material Adverse Effect, (i) there is (A) no unfair labor practice complaint pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements pending, or to the Company’s knowledge, threatened, against the Company or any of its subsidiaries, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries and (C) no union representation question existing with respect to the employees of the Company or any of its subsidiaries and, to the Company’s knowledge, no union organizing activities taking place and (ii) there has been no violation of any federal, state or local law relating to discrimination in hiring, promotion or pay of employees or of any applicable wage or hour laws.
(nn)Related Party Transactions. No relationship, direct or indirect, exists between or among the Company or any of its affiliates, on the one hand, and any director, officer, member, stockholder, customer or supplier of the Company or any of its affiliates, on the other hand, which is required by the Securities Act to be disclosed in a registration statement on Form S-3 which is not so disclosed in the Disclosure Package and the Prospectus. There are no outstanding loans, advances (except advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company or any of its affiliates to or for the benefit of any of the officers or directors of the Company or any of its affiliates or any of their respective family members.
(oo)Compliance with Money Laundering Laws. The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company threatened, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.
(pp)OFAC. Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company and its subsidiaries will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC (it being understood that the Company makes no representation
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or warranty herein as to any Underwriter or its affiliates that will receive proceeds from the Offering).
(qq)Foreign Corrupt Practices Act. Neither the Company nor any of its subsidiaries, nor, to the knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(rr)Lending Relationship. Except as disclosed in the Disclosure Package and the Prospectus, the Company does not intend to use any of the proceeds from the sale of the Notes hereunder to repay any outstanding debt owed to any affiliate of any Underwriter.
(ss)Statistical and Market Related Data. Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Disclosure Package and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.
(tt)Company Sales and Other Financial Data. Nothing has come to the Company's attention that causes the Company to believe that (1) during the period from September 9, 2007 to December 1, 2007 there was any material decrease in sales, income (loss) from operations, income from continuing operations or net income (loss) as compared to the corresponding period in fiscal 2006 (after adjusting the fiscal 2006 period to reflect the reclassification of the Company's stores in the Greater New Orleans area and the Midwest as discontinued operations) or that (2) during the period from September 9, 2007 to the date of this Agreement there was any material decrease in sales, income (loss) from operations, income from continuing operations or net income (loss) as compared to the corresponding period in fiscal 2006 (after adjusting the fiscal 2006 period to reflect the reclassification of the Company's stores in the Greater New Orleans area and the Midwest as discontinued operations).
Any certificate signed by an officer of the Company and delivered to the Underwriters or to counsel for the Underwriters shall be deemed to be a representation and warranty by the Company to each Underwriter as to the matters set forth therein to the extent set forth or referred to in such certificate.
SECTION 2.Purchase, Sale and Delivery of the Notes.
(a)The Firm Notes. The Company agrees to issue and sell to the several Underwriters, severally and not jointly, all of the Firm Notes, and each Underwriter agrees, severally and not jointly, to purchase from the Company the aggregate principal amount of Firm Notes set forth opposite its name onSchedule A, at a purchase price of 97.00% of the principal amount thereof, plus accrued interest, if any, from December 18, 2007, payable on the Initial Closing Date, in each case, on the basis of the representations, warranties and agreements herein contained, and upon the terms, and subject to the conditions, herein set forth.
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(b)The Optional Notes; the Subsequent Closing Date. In addition, on the basis of the representations, warranties and agreements herein contained, and upon the terms and subject to the conditions herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, the Optional Notes from the Company at the purchase price per note of 100% of the principal amount thereof to be paid by the Underwriters, plus accrued interest, if any, from December 18, 2007 to the settlement date for the Optional Notes (the “settlement date”). The option granted hereunder may be exercised once upon notice by the Representatives to the Company, which notice may be given at any time within 13 days from the Initial Closing Date (as defined below). Such notice shall set forth the aggregate principal amount of Optional Notes as to which the Underwriters are exercising the option and the settlement date. Delivery of the Optional Notes, and payment therefor, shall be made as provided in Sections 2(c), 2(e) and 2(f) hereof. The principal amount of Optional Notes to be purchased by each Underwriter shall be the same percentage as such Underwriter is purchasing of the Firm Notes, subject to such adjustments as the Representatives shall deem advisable.
(c)The Closing Date. Delivery of and payment for the Firm Notes and the Optional Notes (if the option provided for in Section 2(b) hereof shall have been exercised on or before the Initial Closing Date) shall be made at the offices of Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, New York 10004 (or such other place as may be agreed to by the Company and the Representatives) at 10:00 A.M., New York City time, on December 18, 2007, or at such time on such later date (not later than December 28, 2007) as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Company (such date and time of delivery and payment for the Notes being herein called the “Initial Closing Date”). Delivery of the Notes shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to the account specified by the Company. The certificates for the Notes shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depositary, pursuant to the DTC Agreement, and shall be made available for inspection on the business day preceding the Initial Closing Date at a location in New York City, as the Representatives may designate. If the option provided for in Section 2(b) hereof is exercised on or after the third Business Day prior to the Initial Closing Date, the Company will deliver the Optional Notes (at the expense of the Company) to the Representatives on the date specified by the Representatives (which shall be not fewer than three, but no more than five, Business Days after exercise of said option), for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to the account specified by the Company. If settlement for the Optional Notes occurs after the Initial Closing Date (the “Subsequent Closing Date”), the Company will deliver to the Representatives on the settlement date, and the obligation of the Underwriters to purchase the Optional Notes shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Initial Closing Date pursuant to Section 5 hereof.
(d)Public Offering of the Notes.The Representatives hereby advise the Company that the Underwriters intend to offer for sale to the public, as described in the Prospectus, their
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respective portions of the Notes as soon after this Agreement has been executed as the Representatives, in their sole judgment, have determined is advisable and practicable.
(e)Payment for the Notes.Payment for the Notes shall be made at the Initial Closing Date (and, if applicable, at the Subsequent Closing Date) by wire transfer of immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for their own account and the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of the purchase price for, the Firm Notes and any Optional Notes the Underwriters have agreed to purchase. The Representatives, individually and not as Representatives of the Underwriters, may (but shall not be obligated to) make payment for any Notes to be purchased by any Underwriter whose funds shall not have been received by the Representatives by the Initial Closing Date or the Subsequent Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any of its obligations under this Agreement.
(f)Delivery of the Notes.Delivery of the Notes and the Optional Notes shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Underwriters.
(g)Delivery of Prospectus to the Underwriters.Not later than 3:00 p.m. on the second business day in New York City following the date of this Agreement, the Company shall deliver or cause to be delivered, copies of the Prospectus in such quantities and at such places as the Representatives shall reasonably request.
SECTION 3.Additional Covenants. The Company further covenants and agrees with each Underwriter and the QIU as follows:
(a)The Representatives’ Review of Proposed Amendments and Supplements. During the period beginning on the date of this Agreement and ending on the later of the (i) Initial Closing Date or the Subsequent Closing Date, as applicable, or (ii) such date the Prospectus is no longer required by law to be delivered in connection with sales by an Underwriter or dealer, including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act (the “Prospectus Delivery Period”) (but in no event more than one year after the date of the Prospectus), prior to filing any amendment or supplement to the Registration Statement (including any filing under Rule 462(b) under the Securities Act), or any amendment, supplement or revision to the Disclosure Package or the Prospectus, whether pursuant to the Securities Act, the Exchange Act or otherwise, the Company will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such proposed amendment or supplement to which the Representatives shall reasonably object.
(b)Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(a), will promptly notify the Representatives in writing pursuant to Section 12 hereof of (i) the filing or effectiveness during the Prospectus Delivery Period of any
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post-effective amendment to the Registration Statement or the filing of any supplement or amendment to the preliminary prospectus or the Prospectus, (ii) the receipt of any comments regarding such Registration Statement from the Commission during the Prospectus Delivery Period, (iii) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the preliminary prospectus or the Prospectus or for additional information regarding the Registration Statement or Prospectus, and (iv) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of the preliminary prospectus or the Prospectus, the suspension of the qualification of the Notes for offering or sale in any jurisdiction or of the initiation or, to the Company’s knowledge, threatening of any proceedings for any such purposes or of any proceedings to remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any such purpose. If the Company receives sufficient notice prior to the issuance of such order or notice, the Company shall use its commercially reasonable efforts to prevent the issuance of any such stop order or notice of prevention or suspension of such use. If the Commission shall enter any such stop order or issue any such notice at any time, the Company will use its commercially reasonable efforts to obtain the lifting or reversal of such order or notice as soon as practicable, or, subject to Section 3(a), will file an amendment to the Registration Statement or will file a new registration statement and use its commercially reasonable efforts to have such amendment or new registration statement declared effective as soon as practicable. The Company will promptly effect the filings necessary pursuant to Rule 424 and 430A or 430B, as applicable, under the Securities Act and will take such steps as it deems necessary to ascertain promptly whether the preliminary prospectus and the Prospectus transmitted for filing under Rule 424 was received for filing by the Commission and, in the event that it was not, it will promptly file such document.
(c)Amendments and Supplements to the Registration Statement, Disclosure Package and Prospectus and Other Securities Act Matters. If at any time during the Prospectus Delivery Period (but in no event more than six months after the date of the Prospectus), any event or development shall occur or condition exist as a result of which the Disclosure Package or the Prospectus as then amended or supplemented would include any 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 under which they were made not misleading, or if it shall be necessary to amend or supplement the Disclosure Package or the Prospectus, or to file under the Exchange Act any document incorporated by reference in the Disclosure Package or the Prospectus, in order to make the statements therein, in the light of the circumstances under which they were made not misleading, in any material respect or if in the reasonable judgment of the Representatives it is otherwise necessary or advisable to amend or supplement the Registration Statement, the Disclosure Package or the Prospectus, or to file under the Exchange Act any document incorporated by reference in the Disclosure Package or the Prospectus, or to file a new registration statement containing the Prospectus, in order to comply with law, including in connection with the delivery of the Prospectus, the Company agrees to (i) notify the Representatives of any such event or condition and (ii) promptly prepare (subject to Section 3(a) and 3(e) hereof), file with the Commission (and use its commercially reasonable efforts to have any amendment to the Registration Statement or any new registration statement to be declared effective) and furnish at its own expense to the Underwriters and to dealers, amendments or supplements to the Registration Statement, the Disclosure Package or the Prospectus, or any new
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registration statement, necessary in order to make the statements in the Disclosure Package or the Prospectus as so amended or supplemented, in the light of the circumstances under which they were made not misleading in any material respect or so that the Registration Statement, the Disclosure Package or the Prospectus, as amended or supplemented, will comply with all applicable law.
The Company hereby expressly acknowledges that the indemnification and contribution provisions of Sections 7 and 8 hereof are specifically applicable and relate to each registration statement, preliminary prospectus, prospectus, amendment or supplement referred to in this Section 3.
(d)Final Term Sheet. The Company will prepare a final term sheet in a form approved by the Representatives and attached asSchedule C hereto, and will file such term sheet pursuant to Rule 433(d) under the Securities Act within the time required by such rule (such term sheet, the “Final Term Sheet”). Any such Final Term Sheet will be an Issuer Free Writing Prospectus for purposes of this Agreement.
(e)Permitted Free Writing Prospectuses. The Company represents that it has not made, and agrees that, unless it obtains the prior written consent of the Representatives, it will not make, any offer relating to the Notes that constitutes or would constitute an Issuer Free Writing Prospectus or that otherwise constitutes or would constitute a “free writing prospectus” (as defined in Rule 405 under the Securities Act) or a portion thereof required to be filed by the Company with the Commission or retained by the Company under Rule 433 under the Securities Act;provided that the prior written consent of the Representatives hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included inSchedule B hereto and any electronic road show. Any such free writing prospectus consented to by the Representatives is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the Securities Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
(f)Copies of any Amendments and Supplements to the Prospectus.The Company agrees to furnish the Representatives, without charge, during the Prospectus Delivery Period, as many copies of the Prospectus and any amendments and supplements thereto (including any documents incorporated or deemed incorporated by reference therein) and the Disclosure Package as the Representatives may request.
(g)Copies of the Registration Statement and Prospectus. The Company will furnish to the Representatives and counsel for the Underwriters upon request signed copies of the Registration Statement (including exhibits thereto) and, during the Prospectus Delivery Period, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act, as many copies of each preliminary prospectus, the Prospectus and any supplement thereto and the Disclosure Package as the Representatives may reasonably request.
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(h)Blue Sky Compliance. The Company shall cooperate with the Underwriters and counsel for the Underwriters to qualify or register (or to obtain exemptions from qualifying or registering) all or any part of the Notes for offer and sale under the securities laws of the several states of the United States, the provinces of Canada or any other jurisdictions designated by the Representatives, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Notes. The Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Underwriters promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Notes for offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.
(i)Reservation of Common Stock. The Company will use its commercially reasonable efforts to increase the number of shares of Common Stock authorized for issuance under its charter and, upon such increase of authorized shares, will reserve and keep available at all times, free of preemptive rights, the full number of shares of Common Stock issuable upon conversion of the Notes (it being acknowledged that the Company cannot compel the approval of such increase by its stockholders).
(j)NYSE Listing. The Company will use its commercially reasonable efforts to increase the number of shares of Common Stock authorized for issuance under its charter and, upon such increase of authorized shares, will use its commercially reasonable efforts to cause the Underlying Shares to be approved for listing on the New York Stock Exchange, subject only to notice of issuance.
(k)Use of Proceeds. The Company shall apply the net proceeds from the sale of the Notes sold by it in the manner described under the caption “Use of Proceeds” in the Disclosure Package and the Prospectus.
(l)Transfer Agent.The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Common Stock.
(m)The Depositary. The Company will cooperate with the Underwriters and use its commercially reasonable best efforts to permit the Notes to be eligible for clearance and settlement through the facilities of the Depositary.
(n)Earnings Statement. As soon as reasonably practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement (which need not be audited) that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act for the fiscal year during which this Agreement was executed. For the avoidance of doubt, if the Company has made such earnings statement available to the public on EDGAR, the Company will have no obligation to otherwise furnish such earnings statement to its security holders or to the Representatives.
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(o)Agreement Not To Offer or Sell Additional Securities. During the period commencing on the date hereof and ending on the 90th day following the date of the Prospectus, the Company and its subsidiaries will not, without the prior written consent of the Representatives, directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition of), or announce the offering of, or file any registration statement under the Securities Act in respect of, any (A) debt securities convertible into Common Stock, (B) shares of Common Stock, (C) options or warrants to acquire shares of the Common Stock or (D) securities exchangeable or exercisable for or convertible into debt securities convertible into Common Stock or shares of Common Stock (other than as contemplated by this Agreement with respect to the Notes and the transactions pursuant to the Share Lending Agreement);provided,however, that the Company may (i) file a registration statement on Form S-8, (ii) enter into and consummate the Hedge Transactions, (iii) issue shares of its Common Stock upon exercise of warrants described in the Prospectus and (iv) issue shares of its Common Stock or options to purchase its Common Stock upon exercise of options, in each case pursuant to any stock option, stock bonus or other stock plan or arrangement currently in effect described in the Prospectus, but only if the holders of such shares, options, or shares issued upon exercise of such options or warrants, agree in writing not to sell, offer, dispose of or otherwise transfer any such shares or options during such 90-day period without the prior written consent of the Representatives (which consent may be withheld at the sole discretion of the Representatives), subject to the exceptions contained in the Lock-Up Agreement (as defined below). Notwithstanding the foregoing, if (x) during the last 17 days of the 90-day restricted period, the Company issues an earnings release, or (y) prior to the expiration of the 90-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 90-day period, the restrictions imposed in this clause shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release. The Company will provide the Representatives and any co-managers and each individual subject to the restricted period pursuant to the lockup letters described in Section 5(k) with prior notice of any such announcement that gives rise to an extension of the restricted period.
(p)Notice of Inability to Use Automatic Shelf Registration Statement Form.If at any time during the Prospectus Delivery Period, the Company receives from the Commission a notice pursuant to Rule 401(g)(2) under the Securities Act or otherwise ceases to be eligible to use the automatic shelf registration statement form, the Company will (i) promptly notify the Representatives, (ii) promptly file a new registration statement or post-effective amendment on the proper form relating to the Notes, in a form satisfactory to the Representatives, (iii) use its commercially reasonable efforts to cause such registration statement or post-effective amendment to be declared effective and (iv) promptly notify the Representatives of such effectiveness. The Company will take all other action necessary or appropriate to permit the public offering and sale of the Notes to continue as contemplated in the registration statement that was the subject of the Rule 401(g)(2) notice or for which the Company has otherwise become ineligible. References herein to the Registration Statement shall include such new registration statement or post-effective amendment, as the case may be.
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(q)No Manipulation of Price. Prior to the Initial Closing Date, the Company will not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, cause or result in under the Exchange Act or otherwise, the stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Notes.
(r)No Adjustment of Conversion Price. Between the date hereof and the Initial Closing Date, the Company will not do or authorize any act or thing that would result in an adjustment of the conversion price.
(s)Subsidiaries. The Company shall use its commercially reasonable efforts, and shall file all documents required by the laws of the relevant jurisdiction, to ensure that the subsidiaries listed inExhibit B (except if any such subsidiary is immaterial) are in good standing in such jurisdiction, unless, as to any subsidiary, that subsidiary has been dissolved or merged into the Company or another subsidiary.
The Representatives, on behalf of the several Underwriters, may, in their sole discretion, waive in writing the performance by the Company of one or more of the foregoing covenants or extend the time for its performance.
SECTION 4.Payment of Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation, (i) all expenses incident to the issuance and delivery of the Notes (including all printing and engraving costs), (ii) all necessary issue, transfer and other stamp taxes in connection with the issuance and offering and sale of the Notes to the Underwriters, (iii) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors, (iv) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution or reproduction of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), each Issuer Free Writing Prospectus, each preliminary prospectus and the Prospectus (including financial statements and exhibits), and all amendments and supplements thereto, this Agreement, the Indenture, the DTC Agreement, the Share Lending Agreements and the Notes, (v) all filing fees, attorneys’ fees and expenses incurred by the Company or the Underwriters in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Notes for offer and sale under the securities laws of the several states of the United States, the provinces of Canada or other jurisdictions designated by the Representatives (including, without limitation, the cost of preparing, printing and mailing preliminary and final blue sky or legal investment memoranda and any related supplements, including a Canadian “wrapper,” to the Disclosure Package or the Prospectus), (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Notes, (vii) the fees and expenses associated with listing of the Underlying Shares on the NYSE, (viii) any fees payable in connection with the rating of the Notes with the ratings agencies, (ix) any filing fees incident to, and any reasonable fees and disbursements of counsel to the Underwriters in connection with the review by the FINRA, if any, of the terms of the sale of the Notes, (x) all fees and expenses (including reasonable fees and expenses of counsel) of the Company in connection with approval of the Notes by the Depositary for “book-entry” transfer, and the
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performance by the Company of its other obligations under this Agreement, (xi) all reasonable and documented fees and out-of-pocket disbursements of counsel to the Underwriters, (xii) all reasonable, documented out-of-pocket expenses associated with the “road show” undertaken in connection with the marketing of the Notes, including the cost of any chartered airplane or other transportation, (xiii) all other fees, costs and expenses referred to in Part II of the Registration Statement and (xiv) the fees and expenses of the QIU.
SECTION 5.Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Firm Notes as provided herein on the Initial Closing Date and, with respect to the Optional Notes, on the Subsequent Closing Date and of the QIU to serve as QIU shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 1 hereof as of the date hereof and as of the Initial Closing Date as though then made and, with respect to the Optional Notes, as of the Subsequent Closing Date as though then made, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the timely performance by the Company of its covenants and other obligations hereunder, and to each of the following additional conditions:
(a)Accountants’ Comfort Letters. On the date hereof, the Underwriters and the QIU shall have received from each of PricewaterhouseCoopers LLP, independent public or certified public accountants for the Company, and Deloitte & Touche LLP, independent public or certified public accountants for Pathmark, a “comfort letter” dated the date hereof addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, covering the financial information in the General Disclosure Package and the Prospectus of the Company and Pathmark, as applicable, and other customary matters. In addition, on the Initial Closing Date and the Subsequent Closing Date, the Underwriters and the QIU shall have received from each such accountant, a “bring-down comfort letter” dated the Initial Closing Date or such Subsequent Closing Date addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, in the form of the “comfort letters” delivered on the date hereof, except that (i) it shall cover the financial information in the Prospectus and any amendment or supplement thereto and (ii) procedures shall be brought down to a date no more than three business days prior to the Initial Closing Date or such Subsequent Closing Date.
(b)Effectiveness of Registration Statement. No stop order suspending the effectiveness of the Registration Statement shall be in effect and no proceedings for that purpose shall have been instituted or be pending or threatened by the Commission and the Company shall not have received from the Commission any notice pursuant to Rule 401(g)(2) under the Securities Act objecting to use of the automatic shelf registration statement form. The preliminary prospectus and the Prospectus shall have been filed with the Commission in accordance with Rule 424(b) (or any required post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A or 430B). All material required to be filed by the Company pursuant to Rule 433(d) under the Securities Act shall have been filed with the Commission within the applicable time periods prescribed for such filings under such Rule 433 under the Securities Act.
(c)No Objection. Either (1) no filing of the Registration Statement with FINRA shall be required or (2) if the Registration Statement and/or the offering of the Notes has been filed
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with the FINRA for review, the FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.
(d)No Material Adverse Effect or Ratings Agency Change. For the period from and after the date of this Agreement and prior to the Initial Closing Date and, with respect to any Optional Notes, the Subsequent Closing Date:
(i)in the judgment of the Representatives there shall not have occurred any Material Adverse Effect; and
(ii)there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any securities or indebtedness of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” as such term is defined for purposes of Rule 436(g) under the Securities Act.
(e)Opinions of Counsel for the Company. On the Initial Closing Date and the Subsequent Closing Date, the Underwriters and the QIU shall have received (a) the opinions and the negative assurance letter of Cahill Gordon & Reindel LLP, counsel for the Company, (b) the opinions of thegeneral counsel for the Company, and (c) the opinions of McGuireWoods LLP, special Maryland counsel for the Company, each dated as of such Initial Closing Date and the Subsequent Closing Date and substantially in the form ofExhibits C-1,C-2 andC-3 (with customary qualifications and exceptions).
(f)Opinion of Counsel for the Underwriters. On the Initial Closing Date and, if applicable, the Subsequent Closing Date, the Underwriters and the QIU shall have received the favorable opinion of Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for the Underwriters, dated as of such Initial Closing Date and, if applicable, the Subsequent Closing Date, with respect to such matters as may be reasonably requested by the Representatives.
(g)Officers’ Certificate. On the Initial Closing Date and, if applicable, the Subsequent Closing Date the Underwriters and the QIU shall have received a written certificate executed by the Chairman of the Board, Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of the Initial Closing Date or such Subsequent Closing Date, to the effect that the signers of such certificate have examined the Registration Statement, the Prospectus and any amendment or supplement thereto, any Issuer Free Writing Prospectus and any amendment or supplement thereto and this Agreement and to the effect that:
(i)no stop order suspending the effectiveness of the Registration Statement shall have been issued under the Securities Act and the Company is not aware of, and has not received any, notice from the Commission that any proceedings for that purpose shall have been instituted or be pending or threatened by the Commission;
(ii)for the period from and after the date of this Agreement and prior to the Initial Closing Date or Subsequent Closing Date there has not occurred any Material Adverse Effect;
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(iii)the representations, warranties and covenants of the Company set forth in Section 1 hereof were true and correct in all material respects (except that any representation and warranty that is qualified as to materiality shall be true and correct in all respects) as of the date hereof and are true and correct as of the Initial Closing Date or Subsequent Closing Date with the same force and effect as though expressly made on and as of the Initial Closing Date or Subsequent Closing Date (except that representations and warranties made as of a particular date were true and correct on and as of such particular date); and
(iv)the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Initial Closing Date or Subsequent Closing Date, in each case in all material respects (except that any agreement or condition that is qualified as to materiality shall be performed or satisfied in all respects).
(h)The Depositary. The Notes shall be eligible for clearance and settlement through the Depositary.
(i)Indenture. As of the Initial Closing Date, the Company and the Trustee shall have entered into the Indenture and the Underwriters shall have received executed counterparts thereof.
(j)Transactions. At the Initial Closing Date, the Transactions shall have been consummated on the terms and conditions described in the Disclosure Package and the Prospectus.
(k)Lock-up Agreements. At the date of this Agreement, the Representatives shall have received an agreement (a “Lock-up Agreement”) substantially in the form ofExhibit D hereto signed by each of the persons listed onSchedule D hereto.
(l)Additional Documents. On or before the Initial Closing Date and the Subsequent Closing Date, the Underwriters and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Notes as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Underwriters by notice to the Company at any time on or prior to the Initial Closing Date and, with respect to the Optional Notes, at any time prior to the Subsequent Closing Date, which termination shall be without liability on the part of any party to any other party, except that Sections 4, 6, 7 and 8 hereof shall at all times be effective and shall survive such termination.
SECTION 6.Reimbursement of Underwriters’ Expenses. If this Agreement is terminated by the Underwriters pursuant to Section 5 (other than 5(f)) or 9 hereof, the Company agrees to reimburse the Representatives and the other Underwriters (or such Underwriters as have terminated this Agreement with respect to themselves) and the QIU, severally, upon
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demand for all reasonable and documented out-of-pocket expenses that shall have been reasonably incurred by the Representatives and the Underwriters and the QIU in connection with the proposed purchase and the offering and sale of the Notes, including, without limitation, reasonable and documented fees and disbursements of counsel.
SECTION 7.Indemnification.
(a)Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter and the QIU, their respective directors, officers, employees and agents and each person, if any, who controls any Underwriter or the QIU within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter, QIU, director, officer, employee, agent or controlling person may become subject, insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based: (i) upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A, Rule 430B or Rule 430C under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) upon any untrue statement or alleged untrue statement of a material fact contained in any Issuer Free Writing Prospectus, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or any “road show” (as defined in Rule 433 under the Securities Act) not constituting an Issuer Free Writing Prospectus (a “Non-IFWP Road Show”), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and to reimburse each Underwriter or QIU and each such director, officer, employee, agent or controlling person for any and all expenses (including the fees and disbursements of one firm of counsel and local counsel, as appropriate, chosen by the Representatives) as such expenses are reasonably incurred by such Underwriter or QIU or such director, officer, employee or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action;provided,however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission based upon and in conformity with written information furnished to the Company by the Underwriters or the QIU through the Representatives expressly for use in the Registration Statement, the Disclosure Package, any preliminary prospectus, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or supplement to any of the foregoing). The indemnity agreement set forth in this Section 7(a) shall be in addition to any liabilities that the Company may otherwise have.
(b)Indemnification of the Company, its Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which the Company or any such director, officer or controlling person may become subject, insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration
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Statement, the Disclosure Package, any preliminary prospectus, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or supplement to any of the foregoing), or the Marketing Materials, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Disclosure Package, any preliminary prospectus, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or supplement to any of the foregoing), or the Marketing Materials in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use therein; and to reimburse the Company and each such director, officer or controlling person for any and all expenses (including the fees and disbursements of one firm of counsel and local counsel, as appropriate) as such expenses are reasonably incurred by the Company or such director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Company hereby acknowledges that the only information that the Underwriters have furnished to the Company expressly for use in the Disclosure Package, the preliminary prospectus or the Prospectus (or any amendment or supplement thereto) or the Marketing Materials are the statements set forth in the third sentence of the second paragraph, the third sentence of the sixth paragraph, and the fifteenth and the sixteenth paragraphs under the caption “Underwriting” in the preliminary prospectus and the Prospectus. The indemnity agreement set forth in this Section 7(b) shall be in addition to any liabilities that each Underwriter may otherwise have.
(c)Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof, but the failure to so notify the indemnifying party (i) will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party;provided,however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the
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indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with local counsel), reasonably approved by the indemnifying party (the Representatives in the case of Sections 7(b) and 8 hereof), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party,provided, however, that if indemnity may be sought pursuant to Section 7(a) by the QIU in respect of any such proceeding in which the QIU has defenses or claims materially different than the Underwriters, then in addition to any separate firm of the Underwriters, their officers, directors, affiliates and such control persons of the Underwriters, the indemnifying person shall be liable for the fees and expenses of not more than one separate firm (in addition to any local counsel) for the QIU, its affiliates and all persons, if any, who control the QIU within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act.
(d)Settlements. The indemnifying party under this Section 7 shall not be liable for any settlement of any proceeding effected without its written consent, which shall not be withheld unreasonably, 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 against any loss, claim, damage, liability or expense 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 this Section 7, 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 45 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 (which consent shall not be unreasonably withheld), effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (ii) does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any indemnified party.
(e)Indemnification of the QIU. Without limitation and in addition to its obligation under the other subsections of this Section 7, the Company agrees to indemnify and hold harmless the QIU, its officers and employees and each person, if any, who controls the QIU within the meaning of the Securities Act or the Exchange Act from and against any loss, claim, damage, liabilities or expense, as incurred, arising out of or based upon the QIU’s acting as a “qualified independent underwriter” (within the meaning of NASD Conduct Rule 2720) in connection with the offering contemplated by this Agreement, and agrees to reimburse each such
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indemnified person for any legal or other expense reasonably incurred by them in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action as such expenses are incurred, other than, in each case, any loss, claim, damage, liability, expense (legal or other) that are found by a court of competent jurisdiction in a final, non-appealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of the QIU, or any of its officers, employees or any person who so controls the QIU, in performing the services as QIU.
SECTION 8.Contribution. If the indemnification provided for in Section 7 hereof is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters or the QIU, on the other hand, from the offering of the Notes pursuant to this Agreement 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 the Underwriters or the QIU, on the other hand, in connection with the statements or omissions or inaccuracies in the representations and warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters or the QIU, on the other hand, in connection with the offering of the Notes pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Notes pursuant to this Agreement (before deducting expenses) received by the Company, and the total discount received by the Underwriters or the fee to be received by the QIU, as the case may be, bear to the aggregate initial offering price of the Notes. The relative fault of the Company, on the one hand, and the Underwriters or the QIU, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to information supplied by the Company, on the one hand, or the Underwriters, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or inaccuracy.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 7 hereof, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 7 hereof with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 8;provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 7 hereof for purposes of indemnification.
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the
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Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 8.
Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the discount received by such Underwriter in connection with the Notes underwritten by it and distributed by it to the public. No person guilty of fraudulent misrepresentation (within the meaning of Section 11 of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 8 are several, and not joint, in proportion to their respective commitments as set forth opposite their names inSchedule A. For purposes of this Section 8, each director, officer and employee of an Underwriter and each person, if any, who controls an Underwriter within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, and each person, if any, who controls the Company, within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.
SECTION 9.Termination of this Agreement. Prior to the Initial Closing Date and, with respect to any Optional Notes, the Subsequent Closing Date, this Agreement may be terminated by the Underwriters by notice given to the Company if at any time: (i) trading or quotation in any of the Company’s securities shall have been suspended or limited by the Commission or by the NYSE, or trading in securities generally on either the Nasdaq Stock Market or the NYSE shall have been suspended or limited, or minimum or maximum prices shall have been generally established by the Commission or the FINRA or on either such stock exchange; (ii) a general banking moratorium shall have been declared by federal or New York authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States has occurred; or (iii) there shall have occurred any outbreak or escalation of national or international hostilities or declaration of a national emergency or war by the United States or any crisis or calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, in each case, as in the judgment of the Representatives is material and adverse and makes it impracticable or inadvisable to market the Notes in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of securities. Any termination pursuant to Sections 5, 9 or 16 shall be without liability on the part of (i) the Company, to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (ii) any Underwriter to the Company, or (iii) any party hereto to any other party except that the provisions of Sections 7 and 8 hereof shall at all times be effective and shall survive such termination.
SECTION 10.Research Analyst Independence. The Company acknowledges that the Underwriters’ research analysts and research departments are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriters’ research analysts may hold views and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from the views of their respective investment banking divisions. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any conflict of interest that may
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arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriters’ investment banking divisions. The Company acknowledges that each of the Underwriters is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the Company that may be the subject of the transactions contemplated by this Agreement.
SECTION 11.Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Company, of its officers and of the several Underwriters and the QIU set forth in or made pursuant to this Agreement (i) will remain operative and in full force and effect, regardless of any (A) investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the QIU, the officers or employees of any Underwriter or the QIU, or any person controlling the Underwriter or the QIU, the Company, the officers or employees of the Company or any person controlling the Company, as the case may be or (B) acceptance of the Notes and payment for them hereunder and (ii) will survive delivery of and payment for the Notes sold hereunder and any termination of this Agreement.
SECTION 12.Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered, couriered or facsimiled and confirmed to the parties hereto as follows:
If to the Underwriters:
Banc of America Securities LLC
9 West 57th Street
New York, New York 10019
Attention: ECM Legal
Lehman Brothers Inc.
745 Seventh Ave.
New York, New York 10019
Facsimile: (636) 834-8133
Attention: Syndicate Registration
with a copy, in the case of any notice pursuant to Section 7(c), to:
Lehman Brothers Inc.
399 Park Avenue, Tenth Floor
New York, New York 10022
Facsimile: (212) 520-0421
Attention: Director of Litigation, Office of the General Counsel
Friedman, Billings, Ramsey & Co., Inc.
1001 Nineteenth Street North
Arlington, VA 22209
Facsimile: (703) 312-9501
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Attention: General Counsel
with a copy to:
Fried, Frank, Harris, Shriver & JacobsonLLP
One New York Plaza
New York, New York 10004
Facsimile: (212) 859-4000
Attention: Valerie Ford Jacob, Esq. and Michael Levitt, Esq.
with a copy to:
The Great Atlantic & Pacific Tea Company
2 Paragon Drive
Montvale, New Jersey 07645
Facsimile: (201) 571-8715
Attention: Brenda Galgano,
Senior Vice President and
Chief Financial Officer
with a copy to:
Cahill Gordon & ReindelLLP
80 Pine Street
New York, New York 10005
Facsimile: (212) 378-2324
Attention: Kenneth W. Orce, Esq.
Any notice to an Underwriter pursuant to Section 7(c) shall be delivered or sent by hand delivery, mail, telex or facsimile transmission to such Underwriter at its address set forth in its acceptance telex to the Representatives, which address will be supplied to any other party hereto by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof.
Any party hereto may change the address or facsimile number for receipt of communications by giving written notice to the others.
SECTION 13.Successors and Assigns. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Underwriters pursuant to Section 16 hereof, and to the benefit of (i) the Company, its directors, any person who controls the Company within the meaning of the Securities Act or the Exchange Act and any officer of the Company who signs the Registration Statement, (ii) the Underwriters, the officers, directors, employees and agents of the Underwriters, and each person, if any, who controls any Underwriter within the meaning of the Securities Act or the Exchange Act , (iii) the QIU, the QIU’s officers, directors, employees and agents, and each person, if any, who controls the QIU within the meaning of the Securities Act or the Exchange Act, and (iv) the respective successors and assigns of any of the above, all as and to the extent provided in this Agreement, and no other
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person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” shall not include a purchaser of any of the Notes from any of the several Underwriters merely because of such purchase.
SECTION 14.Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
SECTION 15.Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the City and County of New York or the courts of the State of New York in each case located in the City and County of New York (collectively, the“Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for suits, actions, or proceedings instituted in regard to the enforcement of a judgment of any Specified Court in a Related Proceeding, as to which such jurisdiction is non-exclusive) of the Specified Courts in any Related Proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any Related Proceeding brought in any Specified Court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any Specified Proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any Specified Court that any Related Proceeding brought in any Specified Court has been brought in an inconvenient forum.
SECTION 16.Default of One or More of the Several Underwriters.If any one or more of the several Underwriters shall fail or refuse to purchase Notes that it or they have agreed to purchase hereunder on the Initial Closing Date or a Subsequent Closing Date, as the case may be, and the aggregate number of Notes which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Notes to be purchased on such date, the other Underwriters shall be obligated, severally, in the proportions that the number of Firm Notes set forth opposite their respective names onSchedule A bears to the aggregate number of Firm Notes set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Underwriters with the consent of the non-defaulting Underwriters, to purchase the Notes which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on the Initial Closing Date or a Subsequent Closing Date, as the case may be. If any one or more of the Underwriters shall fail or refuse to purchase Notes and the aggregate number of Notes with respect to which such default occurs exceeds 10% of the aggregate number of Notes to be purchased on the Initial Closing Date or a Subsequent Closing Date, as the case may be, and arrangements satisfactory to
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the Underwriters and the Company for the purchase of such Notes are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Sections 4, 6, 7 and 8 hereof shall at all times be effective and shall survive such termination. In any such case either the Underwriters or the Company shall have the right to postpone the Initial Closing Date or a Subsequent Closing Date, as the case may be, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Registration Statement or the Prospectus or any other documents or arrangements may be effected.
As used in this Agreement, the term “Underwriter” shall be deemed to include any person substituted for a defaulting Underwriter under this Section 16. Any action taken under this Section 16 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.
SECTION 17.No Advisory or Fiduciary Responsibility.The Company acknowledges and agrees that: (i) the purchase and sale of the Notes pursuant to this Agreement, including the determination of the offering price of the Notes and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand, and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in connection with each transaction contemplated hereby and the process leading to such transaction each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company or its respective affiliates, stockholders, creditors or employees or any other party; (iii) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to any of the transactions contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company, except the obligations expressly set forth in this Agreement; (iv) the several Underwriters and their affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company and that the several Underwriters have no obligation to disclose any of such interests by virtue of any fiduciary or advisory relationship; and (v) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent the Company deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the several Underwriters, or any of them, with respect to the subject matter hereof. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the several Underwriters with respect to any breach or alleged breach of fiduciary duty.
SECTION 18.General Provisions.This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no
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condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 7 and the contribution provisions of Section 8, and is fully informed regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Sections 7 and 8 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the Prospectus (and any amendments and supplements thereto), as required by the Securities Act and the Exchange Act.
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If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
| | |
| | Very truly yours, |
| | | |
| | THE GREAT ATLANTIC & |
| | PACIFIC TEA COMPANY, INC. |
| | | |
| | | |
| | | |
| | By: | /s/ William Moss |
| | | Name: William Moss |
| | | Title: Vice President and Treasurer |
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The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives as of the date first above written.
| | |
| BANC OF AMERICA SECURITIES LLC | |
| LEHMAN BROTHERS INC. | |
| | Acting as Representatives of the | |
| | Several Underwriters named in | |
| | the attached Schedule A. | |
| | | |
| | | |
| By: | Banc of America Securities LLC | |
| | | |
| | | |
| | | |
| By: | /s/ Craig W. McCracken
| |
| | Name: Craig W. McCracken | |
| | Title: Managing Director | |
| | | |
| | | |
| | | |
| By: | Lehman Brothers Inc. | |
| | | |
| | | |
| | | |
| By: | /s/ Michael Hrynuik | |
| | Name: Michael Hrynuik | |
| | Title: Senior Vice President | |
| | | |
| | | |
| | | |
| FRIEDMAN, BILLINGS, RAMSEY & CO., INC., | |
| | as QIU | |
| | | |
| By: /s/ James R. Kleeblatt | |
| Name: James R. Kleeblatt | |
| Title: Executive Vice President | |
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