THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
$175,000,000
9 3/8% Senior Quarterly Interest Bonds ("QUIBS")
UNDERWRITING AGREEMENT
August 4, 1999
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
Dain Rauscher Wessels,
a division of Dain Rauscher Incorporated
EVEREN Securities, Inc.
Ladies and Gentlemen:
The Great Atlantic & Pacific Tea Company, Inc., a Maryland corporation
(the "Company"), proposes, upon the terms and conditions set forth herein to
issue and sell 9 3/8% Senior Quarterly Interest Bonds due August 1, 2039 with an
aggregate principal amount equal to $175,000,000 (the "Firm Securities") to
Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc., Dain Rauscher
Wessels, a division of Dain Rauscher Incorporated, EVEREN Securities, Inc. and
the other Underwriters set forth on Schedule I attached hereto (collectively,
the "Underwriters"), for whom you (the "Representatives") are acting as
representatives. The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional
$25,000,000 aggregate principal amount of the Company's 9 3/8% Senior Quarterly
Interest Bonds due August 1, 2039 (the "Option Securities") upon the terms and
conditions set forth herein. The Firm Securities and the Option Securities are
together referred to as the "Debt Securities."
The Debt Securities will be issued pursuant to an indenture, dated as
of January 1, 1991, as supplemented (the "Indenture"), between the Company and
The Chase Manhattan Bank, as trustee (the "Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") registration statements on Form S-3 (Nos. 333-36225, 333-80347 and
333-80347-01) and a related preliminary prospectus for the registration of the
Debt Securities under the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations
thereunder (the "Securities Act Regulations"). The Company has prepared and
filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement as
amended at the time it became effective (including the Prospectus and the
documents incorporated by reference therein pursuant to the section therein
entitled "Incorporation of Certain Documents by Reference" and all information
deemed to be a part of the registration statement at the time it became
effective pursuant to Rule 430A of the Securities Act Regulations) is
hereinafter called the "Registration Statement," except that, if the Company
files a post-effective amendment to such registration statement which becomes
effective prior to the Closing Date or the Option Closing Date, if later,
"Registration Statement" shall refer to such registration statement as so
amended. Each prospectus included in the Registration Statement, or amendments
thereof, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Securities Act Regulations (including any
supplement thereto and the documents incorporated by reference therein) is
hereinafter called the "Preliminary Prospectus." The term "Prospectus" means the
final prospectus (including any supplement thereto and the documents
incorporated by reference therein), as first filed with the Commission pursuant
to Rule 415 and Rule 424(b)(2) or (5) of the Securities Act Regulations. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus. For purposes of this Agreement, all references to the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included", "set forth", "described"
or "stated" in the Registration Statement, any Preliminary Prospectus or the
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
are incorporated by reference in the Registration Statement, any Preliminary
Prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which is incorporated by reference in the Registration
Statement, such Preliminary Prospectus or the Prospectus, as the case may be.
Section 1. Representations and Warranties. The Company represents and
warrants to each of the Underwriters that as of the date hereof and on the
Closing Date and the Option Closing Date, if applicable:
(a) the Registration Statement has been declared effective by the
Commission under the Securities Act; to the Company's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for that purpose has been instituted
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or threatened by the Commission; and the Registration Statement at the time it
became effective and the Prospectus as of its date and as of the Closing Date
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto, but excluding the documents incorporated or deemed to be
incorporated by reference therein), in each case other than the Statement of
Eligibility on Form T-1 of the Trustee (the "Form T-1"), comply, or will comply,
as the case may be, as to form in all material respects with the Securities Act
and the Securities Act Regulations and do not and will not as of the applicable
effective date of the Registration Statement and any amendment thereto and as of
the date of the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and the
Prospectus, as amended or supplemented at the Closing Date and the Option
Closing Date, 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 foregoing representations and warranties shall not apply to
statements or omissions in the Registration Statement or the Prospectus made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the
Representative expressly for use therein;
(b) the documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they became
effective or were filed with the Commission, as the case may be, complied as to
form in all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will comply as to form in all
material respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading;
(c) the consolidated financial statements, together with the related
schedules and notes thereto, included in the Registration Statement and the
Prospectus present fairly in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations and the changes in their
consolidated cash flows for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved, except as indicated
therein; and the supporting schedules included or incorporated by reference in
the Registration Statement present fairly in all material respects the
information required to be stated therein;
(d) Except as disclosed in the Prospectus, since the respective dates
as of which information is given in the Registration Statement and the
Preliminary Prospectus, there has not
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been any material adverse change in the condition, financial or otherwise, of
the Company and its subsidiaries considered as one enterprise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business;
(e) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland, with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement; and the Company
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases substantial properties
or in which the conduct of its business requires such qualification and in which
the failure to be so qualified would have a material adverse effect on the
business or financial condition of the Company and its subsidiaries taken as a
whole;
(f) each Subsidiary of the Company listed in Exhibit No. 21 to the Form
10-K annual report of the Company filed with the Commission under section 13 of
the Exchange Act for the most recent fiscal year ended which is a "significant
subsidiary" as defined in Rule 405 of Regulation C of the Regulations (a
"Significant Subsidiary") has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which it owns or leases substantial properties or in
which the conduct of its business requires such qualification in which the
failure to be so qualified would have a material adverse effect on the business
or financial condition of the Company and its subsidiaries taken as a whole; 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 of each such subsidiary owned by the
Company, directly or through subsidiaries, is owned free and clear of any
mortgage, pledge, lien, encumbrance, claim or equity;
(g) this Agreement has been duly authorized, executed and delivered by
the Company;
(h) the Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended, and the rules and regulations thereunder (collectively, the
"Trust Indenture Act") and, on the Closing Date, will have been duly authorized,
executed and delivered by the Company and will constitute a valid and binding
agreement of the Company, enforceable in accordance with its terms, except to
the extent that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by general principles of equity (regardless of whether enforcement
is considered in a proceeding at law or in equity) and the availability of
equitable remedies (collectively, the "Enforceability Exceptions"); and the
Indenture (including any amendments and supplements thereto) complies in all
material respects with all requirements of the Trust Indenture Act and the
applicable rules and regulations promulgated thereunder by the Commission;
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(i) the Debt Securities have been duly authorized and, when executed
and authenticated in accordance with the Indenture and delivered to and duly
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 binding
obligations of the Company, enforceable in accordance with their terms except to
the extent that enforcement thereof may be limited by the Enforceability
Exceptions;
(j) the Debt Securities and the Indenture conform in all material
respects to the summary descriptions thereof contained in the Prospectus;
(k) The execution, delivery and performance by the Company of its
obligations under this Agreement, the Indenture and the Debt Securities will not
contravene any provision of applicable law or the certificate of incorporation
or by-laws of the Company or any agreement or other instrument binding upon the
Company or any Significant Subsidiary that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or any
Significant Subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture and the Debt Securities except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Debt Securities;
(l) 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 other than proceedings accurately described in all
material respects in the Preliminary Prospectus or the Prospectus and
proceedings that could not reasonably be expected to have a material adverse
effect on the condition, financial or otherwise, of the Company and its
subsidiaries considered as one enterprise or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, or will materially and adversely affect the properties or assets
thereof or the consummation of this Agreement, the Indenture or the Debt
Securities or the transactions contemplated thereby or by the Prospectus;
(m) no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Securities Act to be described in
the Registration Statement and the Prospectus which is not so described;
(n) the Company is not and, after giving effect to the offering and
sale of the Debt Securities, will not be an "investment company" or entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(o) no labor disturbance by the employees of the Company or any
subsidiary exists or, to the knowledge of the Company is imminent which will
have a material adverse effect upon
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the conduct of the business, or the earnings, operations or condition, financial
or otherwise, of the Company and its subsidiaries taken as a whole;
(p) the Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Debt
Securities;
(q) the Company meets the requirements for the use of Form S-3 under
the Securities Act; and
(r) the Company and its Significant Subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, service marks and trade names
necessary to conduct the principal businesses now operated by them, and neither
the Company nor any of its subsidiaries has received any written notice of
infringement of or conflict with asserted rights of others with respect to any
trade names which, singly or in the aggregate, will materially adversely affect
the conduct of the business, operations, financial condition or income of the
Company and its subsidiaries considered as one enterprise.
Section 2. Offering. The Representatives have advised the Company that
the Underwriters will make an offering of the Debt Securities purchased by such
Underwriters hereunder on the terms and conditions set forth in the Registration
Statement as soon as practicable after this Agreement is entered into, as in the
Representatives' judgment is advisable.
Section 3. Purchase and Delivery; Commission. The Company hereby agrees
to sell to the Underwriters and each Underwriter, severally and not jointly,
upon the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agrees to purchase from the
Company the aggregate principal amount of Firm Securities set forth opposite
such Underwriters name on Schedule I hereto at a price equal to 100% of the
aggregate principal amount thereof less the aggregate amount of Underwriters'
compensation described below.
Subject to the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to $25,000,000 aggregate principal amount of the Option Securities
from the Company at the same purchase price per Debt Security as the
Underwriters shall pay for the Firm Securities plus any accrued and unpaid
interest on the Option Securities as of the Option Closing Date (as defined
below). The Option may be exercised only to cover over-allotments in the sale of
the Firm Securities by the Underwriters and may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date
hereof, upon written notice (the "Option Securities Notice") by the
Representatives to the Company no later than 12:00 noon, New York City time, at
least two and no more than five business days before the date specified for
closing in the Option Securities Notice (the "Option Closing Date") setting
forth the aggregate principal amount of Option Securities to be purchased and
the time and date for such purchase. On the Option Closing Date, the Company
will issue and sell to the Underwriters the aggregate principal amount of Option
Securities set forth in the Option Securities Notice, and each Underwriter will
purchase such percentage of the Option Securities as is equal to the percentage
of Firm Securities that such
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Underwriter is purchasing, as adjusted by the Representatives in such manner as
they deem advisable to avoid fractional Debt Securities.
As compensation to the Underwriters for their commitments hereunder,
the Company hereby agrees to pay at the Closing Date (as defined below) and the
Option Closing Date (if applicable) to the Representatives, for the accounts of
the several Underwriters, an amount equal to $.7875 per Debt Security for the
Debt Securities to be delivered at the applicable Closing Date.
Except as set forth in the next paragraph, the Debt Securities to be
purchased by each Underwriter hereunder will be represented by one or more
definitive global Debt Securities in book-entry form which will be deposited by
or on behalf of the Company with DTC or its designated custodian. The Company
will deliver the Firm Securities to the Representatives, for the account of each
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by certified or official bank check or checks or fedwire, payable
to the order of the Company in federal (same day) funds, by causing DTC to
credit the Firm Securities to the account of the Representatives at DTC. The
Company will cause the certificates representing the Firm Securities to be made
available to the Representatives for checking at least 24 hours prior to the
Closing Date (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The place, time and date of such delivery and payment
shall be at the offices of Cahill Gordon & Reindel, 80 Pine Street, New York,
New York 10005, at 10:00 a.m, New York time, on August 11, 1999 or such other
place, time and date as the Representatives and the Company may agree upon in
writing (the "Closing Date").
Such Debt Securities, if any, as the Representatives may request upon
at least 48 hours' prior notice to the Company (such request to include the
authorized denominations and the names in which they are to be registered),
shall be delivered in definitive certificated form, by and on behalf of the
Company to the Representatives for the account of certain of the Underwriters,
against payment by or on behalf of such Underwriter of the purchase price
therefor by fedwire, payable to the order of the Company in federal (same day)
funds. The Company will cause the certificates representing the Debt Securities
to be made available for checking and packaging at least 24 hours prior to the
Closing Date at the office of The Chase Manhattan Bank, 450 West 33rd Street,
15th Floor, New York, New York 10001.
To the extent the Option is exercised, delivery of the Option
Securities against payment by the Underwriters (in the manner specified above)
will take place at the time and date (which may be the Closing Date) specified
in the Option Securities Notice.
Section 4. Conditions to Closing. The several obligations of the
Underwriters to purchase and pay for the Debt Securities will be subject to the
accuracy of the representations and warranties on the part of the Company herein
contained, to the accuracy of the statements of the Company's officers made in
any certificate furnished pursuant to the provisions hereof, to the performance
by the Company of all of its covenants and other obligations hereunder and to
the following further conditions:
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(a) The Prospectus shall have been timely filed with the Commission in
accordance with Rule 430A of the Securities Act Regulations; and, at the Closing
Date and the Option Closing Date, if applicable, the Registration Statement
shall have been declared effective and no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued under the Securities Act or proceedings therefor initiated or threatened
by the Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters.
(b) The Underwriters shall have received, on the Closing Date and, with
respect to the Option Securities, on the Option Closing Date, if applicable, a
certificate signed by the Chairman of the Board, the President, a Vice Chairman
of the Board or any Executive or Senior Vice President and the principal
financial or accounting officer of the Company, dated the Closing Date or the
Option Closing Date, as the case may be, to the effect that the signers of such
certificate have carefully examined the Registration Statement and this
Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date, and
with respect to the Option Securities, as of the Option Closing Date,
if applicable, with the same effect as if made on the Closing Date or
on the Option Closing Date, if applicable, and the Company has complied
in all material respects with all the agreements and satisfied in all
material respects all the conditions on its part to be performed or
satisfied at or prior to the Closing Date and, with respect to the
Option Securities, at or prior to the Option Closing Date, if
applicable;
(ii) since the date of the most recent financial statements
included in the Registration Statement (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or other), earnings, business or properties of the Company
and its subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Registration Statement (exclusive of any
supplement thereto); and
(iii) to each such officer's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(c) Subsequent to the date hereof and prior to the Closing Date, except
as set forth in the Prospectus, there shall not have been any change in the
business or properties of the Company and its subsidiaries, taken as a whole,
from that set forth in the Preliminary Prospectus that, in the Underwriters'
judgment, is so material and adverse as to make it impractical to proceed with
the offering or the delivery of the Debt Securities as contemplated by the
Prospectus.
(d) The Underwriters shall have received opinions, dated the Closing
Date and, with respect to the Option Securities, dated the Option Closing Date,
of Robert G. Ulrich, Esq., General Counsel to the Company, and Cahill, Gordon &
Reindel, counsel to the Company,
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substantially in the form attached hereto as Exhibit A-1 and A-2, respectively.
Insofar as such opinions involve factual matters, such counsel may rely, to the
extent such counsel deems proper, upon certificates of officers of the Company,
its subsidiaries and certificates of public officials.
(e) The Underwriters shall have received an opinion, dated the Closing
Date and, with respect to the Option Securities, dated the Option Closing Date,
of Brown & Wood LLP, counsel to the Underwriters as to such matters as the
Underwriters shall reasonably request. In rendering such opinion, counsel may
rely upon an opinion or opinions, each dated the Closing Date and, with respect
to the Option Securities, dated the Option Closing Date, of other counsel
retained by them or the Company as to laws of any jurisdiction other than the
United States or the State of New York, provided that (A) such reliance is
expressly authorized by each opinion so relied upon and a copy of each such
opinion is delivered to the Underwriters, and (B) counsel shall state in their
opinion that they believe that they and the Underwriters are justified in
relying thereon. Insofar as such opinions involve factual matters, such counsel
may rely, to the extent such counsel deems proper, upon certificates of officers
of the Company, its subsidiaries and certificates of public officials.
(f) On the Closing Date, the Debt Securities shall be rated at least
"Ba1" by Moody's Investor Service, Inc. ("Moody's") and "BBB-" by Standard &
Poor's Rating Services, a division of McGraw Hill, Inc. ("S&P"), and the Company
shall have delivered to the Underwriters a letter dated the Closing Date and,
with respect to the Option Securities, dated the Option Closing Date, from each
such rating agency, or other evidence satisfactory to the Underwriters,
confirming that the Debt Securities have such ratings; and on or prior to the
Closing Date and, with respect to the Option Securities, on or prior to the
Option Closing Date, 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 of the Company's securities by any
"nationally recognized statistical rating organization" as such term is defined
by the Commission for the purposes of Rule 436(g)(2) under the Securities Act;
shall have occurred, or any public announcement shall have been made that any
such organization has under surveillance or review their ratings of the Debt
Securities or any other debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating), and if, in any such
case, the effect thereof in the reasonable judgment of the Underwriters makes it
impracticable or inadvisable to proceed with the purchase of the Debt
Securities.
(g) At the time of the execution of this Agreement, the Underwriters
shall have received a letter, dated such date, in form and substance reasonably
satisfactory to them, from Deloitte & Touche LLP, independent public accountants
of the Company, 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, including the financial
information contained or incorporated by reference in the Registration Statement
as identified by the Representative.
(h) At the Closing Date and, with respect to the Option Securities, at
the Option Closing Date, the Representative shall have received from Deloitte &
Touche LLP a letter, dated
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as of the Closing Date and, with respect to the Option Securities, dated the
Option Closing Date, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (g) of this Section.
Section 5. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants as
follows:
(a) The Company will prepare the Prospectus in a form approved by the
Underwriters and will file such Prospectus with the Commission pursuant to Rule
424(b) not later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement. The Company will
notify the Underwriters immediately, and confirm the notice in writing, (i) of
the effectiveness of the Registration Statement and any amendment thereto
(including any post-effective amendment), and of the filing of the Prospectus
pursuant to Rule 424(b), (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of 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 any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Debt Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for such purpose. The Company will make every reasonable effort to
prevent the issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification and, if any such order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company will deliver to the Underwriters, without charge, such
number of conformed copies of the Registration Statement as originally filed and
of each amendment thereto (including documents incorporated by reference into
the Prospectus but without exhibits) as such Underwriters may reasonably request
and copies of each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus.
(c) The Company will furnish to the Underwriters, without charge, from
time to time during the period when the Prospectus is required to be delivered
under the Securities Act and the Securities Act Regulations, such number of
copies of the Prospectus (as amended or supplemented, if applicable) as they may
reasonably request for the purposes contemplated by the Securities Act or the
Securities Act Regulations. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(d) The Company will deliver to the Underwriters notice of their
intention to prepare or file any amendment to the Registration Statement
relating to the Debt Securities (including any post-effective amendment) or any
amendment or supplement to the Prospectus (other than documents deemed to be
incorporated by reference into the Prospectus) which the Company proposes for
use by the Underwriters in connection with the offering of the Debt Securities
and
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which differs from the prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the Securities Act
Regulations), will furnish the Underwriters and counsel for the Underwriters
with copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file any
such amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall reasonably object.
(e) If, during such period ending six months after the Closing Date and
prior to the date on which the distribution of Debt Securities by the
Underwriters is completed, any event shall occur as a result of which it is
necessary, in the opinion of the Company's or Underwriters' counsel, to amend or
supplement the Prospectus (as then amended or supplemented) in order to ensure
that the Prospectus does not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or it is
necessary to amend or supplement the Prospectus to comply with law, the Company
forthwith shall prepare and furnish, at the Company's own expense, to the
Underwriters, 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 under which they were made, be misleading or so that
the Prospectus will comply with law, as the case may be.
(f) The Company, during the period when the Prospectus is required to
be delivered under the Securities Act, will file promptly all documents required
to be filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act subsequent to the time the Registration Statement becomes effective.
(g) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Debt Securities for offer and sale under the applicable securities
or blue sky laws of such states and other jurisdictions of the United States as
the Underwriters may reasonably designate, and will maintain such qualifications
in effect for as long as may be required for the distribution of the Debt
Securities. The Company will file such statements and reports as may be required
by the laws of each jurisdiction in which the Debt Securities have been
qualified as above provided; provided, however, that the Company will not be
required to file any general consent to the service of process or take any
action which would subject it to taxation in any such jurisdiction.
(h) During the period beginning on the date hereof and continuing to
and including the Closing Date, the Company will not offer, sell, contract to
sell or otherwise dispose of (other than in an offering made exclusively outside
the United States) any securities of the Company substantially similar to the
Debt Securities or any securities convertible into or exchangeable for the Debt
Securities without the prior written consent of the Underwriters.
(i) During the period when the Debt Securities are outstanding, the
Company will not be or become an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the Investment Company Act.
11
(j) The Company shall not enter into any contractual agreement with
respect to the distribution of the Debt Securities except for the arrangements
with the Underwriters.
(k) The Company will make generally available to its securityholders,
as soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning on the first day of the first full fiscal
quarter after the effective date of the Registration Statement, which earnings
statement shall satisfy the requirements of Section 11(a) of the Securities Act
and Rule 158 of the Securities Act Regulations and will advise you in writing
when such statement has been so made available. If such fiscal quarter is the
last fiscal quarter of the Company's fiscal year, such earnings statement shall
be made available not later than 90 days after the close of the period covered
thereby and in all other cases shall be made available not later than 45 days
after the close of the period covered thereby.
(l) The Company shall take all reasonable action necessary to enable
Moody's and S&P to provide their respective credit ratings of the Debt
Securities.
(m) The Company will cooperate with the Underwriters and use their
reasonable best efforts to permit the Debt Securities to be eligible for
clearance and settlement through the facilities of DTC.
(n) The Company will use their reasonable best efforts to list the Debt
Securities on the New York Stock Exchange within 30 days following the Closing
Date.
(o) The Company will use the proceeds received by it from the sale of
the Debt Securities in the manner specified in the Prospectus under "Use of
Proceeds."
Section 6. Expenses. The Company covenants and agrees with the
Underwriters that the Company will pay all expenses incident to the performance
of its obligations under this Agreement, including: (i) the printing and filing
of the Registration Statement and the Prospectus, and all amendments and
supplements thereto, (ii) all expenses and disbursements of counsel to the
Company, (iii) all costs and expenses incurred in connection with the
preparation, issuance and delivery of the Debt Securities, (iv) the fees and
disbursements of the Company's accountants, (v) all costs and expenses incurred
in the preparation and the printing of the Debt Securities, the Indenture, and
all other documents relating to the issuance, purchase and initial resale of the
Debt Securities, (vi) rating agency fees, (vii) fees and expenses of a trustee
appointed under the Indenture, including reasonable fees and expenses of counsel
for such trustee, (viii) costs and expenses in connection with the listing of
the Debt Securities on the New York Stock Exchange and (ix) all other costs and
expenses incident to the performance by the Company of its obligations hereunder
which are not otherwise specifically provided in this Section. The Underwriters
shall be responsible for all of their own expenses, including the fees of the
Underwriters' counsel.
Section 7. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter, and each person, if any, who
controls each Underwriter within
12
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled by, each
Underwriter, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by such Underwriter or any such controlling or affiliated
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, any Preliminary Prospectus, the
Prospectus or any amendment or supplement 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 in light of the circumstances under
which they were made, 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 the
Underwriters furnished to the Company in writing by the Representatives
expressly for use therein; provided, however, that the Company shall not be
required to indemnify any Underwriter or any such controlling or affiliated
person for any such losses, claims, damages or liabilities alleged by any person
who purchased Debt Securities from such Underwriter if the untrue statement,
omission or allegation thereof upon which such losses, claims, damages or
liabilities are based was made in the Preliminary Prospectus, if a copy of the
Prospectus (as then amended or supplemented), furnished on a timely basis by the
Company, was not sent or given by or on behalf of such Underwriter to such
person at or prior to the written confirmation of the sale of Debt Securities to
such person, and if the Prospectus as so amended or supplemented corrected the
untrue statement or omission giving rise to such loss, claim, damage or
liability.
(a) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, any authorized representative of the Company and
any person controlling 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 the Representatives expressly for use in the Registration
Statement and Prospectus or any amendments or supplements thereto.
(b) 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) above, 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 the impleaded parties) include
both the indemnifying party and the indemnified party, and the 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
13
indemnifying party shall not, 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 fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representatives 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 has been 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. 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 and unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding.
(c) 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, 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 such Debt 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 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 such
Debt Securities shall be deemed to be in the same respective proportions as the
net proceeds from the offering of such Debt Securities (before deducting
expenses) received by the Company and the total discounts and commissions
received by the Underwriters in respect thereof, in each case as set forth in
the Prospectus, bear to the aggregate offering price of such Debt Securities.
The relative fault of the Company on the one hand and of 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.
(d) 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 or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred
14
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 Debt Securities resold by it in the
initial placement of such Debt Securities were offered to investors exceed the
amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
indemnity and contribution provisions 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 an Underwriter or by
or on behalf of the Company, its directors or officers, any authorized
representative of the Company or any person controlling the Company and (iii)
acceptance of any payment for any of the Debt Securities. 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.
Section 8. Termination. This Agreement shall be subject to termination
by notice given by the Underwriters to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date, as the case may
be, (i) trading generally shall have been suspended or materially limited on or
by, as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the Representatives' judgment, is
material and adverse; and (b) in the case of any of the events specified in
clauses (a)(i) through (iv), such event, singly or together with any other such
event, makes it, in the Representatives' judgment, impracticable to market the
Debt Securities on the terms and in the manner contemplated in the Prospectus or
any supplement thereto.
Section 9. Pro Rata Purchase in Certain Events. If on the Closing Date
any one or more of the Underwriters shall fail or refuse to purchase Firm
Securities that it or they have agreed to purchase hereunder and the aggregate
principal amount of Firm Securities that such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of Firm Securities to be purchased on such
date, the other Underwriters shall be obligated severally and not jointly in the
proportions which the aggregate principal amount of Firm Securities set forth
opposite their names in Schedule I to this Agreement bears to the aggregate
principal amount of Firm Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representatives
may specify, to purchase the Firm Securities that such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Firm Securities and the aggregate principal amount of Firm Securities with
respect to which such default occurs is more than one-
15
tenth of the aggregate principal amount of Firm Securities to be purchased on
such date, and arrangements satisfactory to the Representatives and the Company
for the purchase of such Firm Securities are not made within 36 hours after such
default, this Agreement shall thereupon terminate without liability on the part
of any non-defaulting Underwriters or of the Company. In any such case either
the Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven (7) days, in order that the required
changes, if any, in the Registration Statement or in any other documents or
arrangements may be effected. An action taken under this Section 9 shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
Section 10. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives c/o Morgan Stanley at 1585
Broadway, New York, New York 10036, Attention: Syndicate Desk, Managing
Director, with a copy to Brown & Wood LLP, One World Trade Center, New York, New
York 10048, Attention: Michael A. King, Esq.; notices to the Company shall be
directed to The Great Atlantic & Pacific Tea Company, Inc, 2 Paragon Drive,
Montvale New Jersey 07645, Attention: Robert G. Ulrich, General Counsel, with a
copy to Cahill, Gordon & Reindel, 80 Pine Street, New York, New York 10005,
Attention: Gary Brooks.
Section 11. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers, directors and trustees referred to in Section 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers, directors and
trustees and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Debt Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
Section 12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters by having an authorized officer
sign a copy of this Agreement in the space set forth below and by returning the
signed copy to us.
Very truly yours,
THE GREAT ATLANTIC & PACIFIC TEA
COMPANY, INC.
By: /s/ R. Terrence Galvin
-------------------------------------------
Name: R. Terrence Galvin
Title: Vice President, Finance
and Treasurer
Accepted by:
MORGAN STANLEY & CO. INCORPORATED
SALOMON SMITH BARNEY INC.
DAIN RAUSCHER WESSELS,
A DIVISION OF DAIN RAUSCHER INCORPORATED
EVEREN SECURITIES, INC.
as representatives of the several
Underwriters named in Schedule I hereto
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ Harold J. Hendershot III
------------------------------------------
Name: Harold J. Hendershot III
Title: Vice President
17
SCHEDULE I
Underwriter Amount
- ----------- ------
Morgan Stanley & Co. Incorporated $32,375,000
Salomon Smith Barney Inc. 32,375,000
Dain Rauscher Wessels,
a division of Dain Rauscher Incorporated 32,375,000
EVEREN Securities, Inc. 32,375,000
Bear, Stearns & Co. Inc. 1,750,000
CIBC World Markets Corp. 1,750,000
Deutsche Bank Securities Inc. 1,750,000
A.G. Edwards & Sons, Inc. 1,750,000
First Union Capital Markets Corp. 1,750,000
SG Cowen Securities Corporation 1,750,000
Warburg Dillon Read LLC 1,750,000
Advest, Inc. 875,000
Robert W. Baird & Co. Incorporated 875,000
Banc One Capital Markets, Inc. 875,000
Banc of America Securities LLC 875,000
J.C. Bradford & Co. 875,000
BB&T Capital Markets
A Division of Scott & Stringfellow, Inc. 875,000
Crowell, Weedon & Co. 875,000
Davenport & Company LLC 875,000
D.A. Davidson & Co. Incorporated 875,000
Fahnestock & Co. Inc. 875,000
Ferris, Baker Watts, Incorporated 875,000
Fifth Third Securities, Inc. 875,000
First Albany Corporation 875,000
Gibraltar Securities Co. 875,000
Gruntal & Co., L.L.C. 875,000
Janney Montgomery Scott Inc. 875,000
Kirkpatrick, Pettis, Smith, Polian Inc. 875,000
Legg Mason Wood Walker, Incorporated 875,000
McDonald Investments Inc.,
A Keycorp Company 875,000
Mesirow Financial, Inc. 875,000
Miller, Johnson & Kuehn, Inc. 875,000
18
Morgan Keegan & Company, Inc. 875,000
Neuberger & Berman, LLC 875,000
Parker/Hunter Incorporated 875,000
Pershing/Division of
Donaldson, Lufkin & Jenrette Securities Corporation 875,000
Raymond James & Associates, Inc. 875,000
The Robinson-Humphrey Company, LLC 875,000
Roney & Co. 875,000
Schroder & Co. Inc. 875,000
Southwest Securities, Inc. 875,000
Sterne, Agee & Leach, Inc. 875,000
Stifel, Nicolaus & Company, Incorporated 875,000
Sutro & Co. Incorporated 875,000
TD Securities (USA) Inc. 875,000
Tucker Anthony Incorporated 875,000
U.S. Bancorp Piper Jaffray Inc. 875,000
Wachovia Securities, Inc. 875,000
Wedbush Morgan Securities 875,000
Total $175,000,000
===========
19
EXHIBIT A-1
The opinion of Robert G. Ulrich, Esq, General Counsel to the Company,
to be delivered pursuant to Section 4(d) of the Underwriting Agreement shall be
substantially to the effect that:
1. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Maryland, has the corporate power and authority
to own its property and to conduct its business as described
in the Registration Statement.
2. To the best of such counsel's knowledge, the Company has
been duly qualified as a foreign corporation for to transact
business and is in good standing in each jurisdiction in which
it owns or leases substantial properties or in which the
conduct of its business requires such qualification and in
which the failure so to qualify would result in a material
adverse effect on the business or financial condition of the
Company and its subsidiaries taken as a whole.
3. Each of the Significant Subsidiaries of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its 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, is duly qualified as a foreign
corporation to transact business and is in good standing under
the laws of each jurisdiction in which it owns or leases
substantial properties or in which the conduct of its business
requires such qualification and in which the failure so to
qualify would result in a material adverse effect on the
business or financial condition of the Company and its
subsidiaries taken as a whole; and all of the issued and
outstanding shares of capital stock of each Significant
Subsidiary have been duly authorized and validly issued, are
fully-paid and non-assessable, and the capital stock of each
such subsidiary, to the best of such counsel's knowledge, is
owned by the Company, directly or indirectly, free and clear
of any mortgage, pledge, lien, encumbrance, claim or equity.
4. The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, in
each case other than financial statements and the notes
thereto and other financial, accounting or statistical
information contained therein as to which such counsel need
not express an opinion, when such documents became effective
or were filed with the Commission, as the case may be,
complied as to form in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable.
5. The execution, delivery and performance by the Company of
its obligations under the Underwriting Agreement, the
Indenture and the Debt
20
Securities will not contravene (i) the certificate of
incorporation or by-laws of the Company, (ii) to my
knowledge, 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 (iii)
to my knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary.
6. 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 to which any
of the properties of the Company or any of its subsidiaries is
subject other than proceedings fairly summarized in all
material respects in the Registration Statement and
proceedings which I believe are not likely to have a material
adverse effect on the Company and its subsidiaries, taken as a
whole, or on the power or ability of the Company to perform
its obligations under the Underwriting Agreement, the
Indenture and the Debt Securities or to consummate the
transactions contemplated thereby.
8. In addition, such counsel shall state that such counsel has
participated in conferences with officers and other
representatives of the Company, representatives of the
independent accountants of the Company, and the Underwriters
and their counsel at which the contents of the Registration
Statement and Prospectus and related matters were discussed
and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or Prospectus, such counsel advise the Underwriters
that, on the basis of the foregoing (relying as to materiality
to a large extent on the opinions of officers and other
representatives of the Company), no facts have come to such
counsel's attention which lead them to believe that the
Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
that the Prospectus, as of its date or as of the Closing Date,
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, in the light of the
circumstances under which they were made, not misleading (it
being understood that such counsel has not been requested to
and does not make any comment with respect to the Form T-1 or
the financial statements and the notes thereto and the other
financial, accounting and statistical information included in
the Registration Statement or the Prospectus).
21
EHIBIT A-2
The opinion of Cahill Gordon & Reindel, counsel to the Company, to be
delivered pursuant to Section 4(d) of the Underwriting Agreement shall be
substantially to the effect that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland,
has the corporate power and authority to own its property and conduct
its business as described in the Registration Statement.
2. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
3. The Indenture has been duly qualified under the Trust Indenture Act
and has been duly authorized, executed and delivered by the Company
and will constitutes a valid and binding agreement of the Company,
enforceable in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or in equity)
and the availability of equitable remedies (collectively, the
"Enforceability Exceptions"); and the Indenture (including any
amendments and supplements thereto) complies in all material respects
with all requirements of the Trust Indenture Act and the applicable
rules and regulations promulgated thereunder by the Commission.
4. The Debt Securities have been duly authorized and, when executed
and authenticated in accordance with the Indenture and delivered to
and duly paid for by the Underwriters in accordance with the terms of
the Underwriting Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except to the extent that
enforcement thereof may be limited by the Enforceability Exceptions.
5. The Debt Securities and the Indenture conform in all material
respects to the summary descriptions thereof contained in the
Prospectus.
6. No consent, approval, authorization, order, license, registration
or qualification of or with any such court or governmental agency or
body is required for the issue and sale of the Debt Securities or the
consummation by the Company of the transactions contemplated by the
Underwriting Agreement, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as
may have been obtained as may be required under state securities
22
or Blue Sky Laws in connection with the purchase and distribution of
the Debt Securities by the Underwriters.
7. The Registration Statement at the time it became effective and the
Prospectus, as of its date and as of the Closing Date (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), in each case other than the Statement of
Eligibility on Form T-1 of the Trustee (the "Form T-1") and the
financial statements and the notes thereto and the other financial,
accounting or statistical information contained therein as to which
such counsel need not express an opinion, complied as to form in all
material respects with the Securities Act and the Securities Act
Regulations.
8. The statements in the Prospectus under the caption "United States
Tax Considerations" fairly summarize matters referred to therein.
9. The Registration Statement has been declared effective under the
Securities Act; the Prospectus has been filed pursuant to Rule 415 and
Rule 424(b)(2) or (5) of the Securities Act Regulations in the manner
and within the time period prescribed therein; and, to our knowledge,
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are pending.
10. In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company, representatives of the independent accountants of the
Company, and the Underwriters and their counsel at which the contents
of the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not
assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or
Prospectus, such counsel advise the Underwriters that, on the basis of
the foregoing (relying as to materiality to a large extent on the
opinions of officers and other representatives of the Company), no
facts have come to such counsel's attention which lead them to believe
that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as of its
date or as of the Closing Date, 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, in the
light of the circumstances under which they were made, not misleading
(it being understood that such counsel has not been requested to and
does not make any comment with respect to the Form T-1 or the
financial statements and the notes thereto and the other financial,
accounting and statistical information included in the Registration
Statement or the Prospectus).
23