Exhibit 1
EXECUTION COPY
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
$275,000,000
9 1/8% Senior Notes due 2011
UNDERWRITING AGREEMENT
December 14, 2001
Lehman Brothers Inc.
101 Hudson Street
Jersey City, NJ 07302
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 its 9 1/8% Senior Notes due December 15, 2011 with an aggregate
principal amount equal to $275,000,000 (the "Debt Securities") to Lehman
Brothers Inc. ("Lehman") and the other Underwriters set forth on Schedule I
attached hereto (collectively, the "Underwriters"), for whom you (the
"Representative") are acting as representative.
The Debt Securities will be issued pursuant to an indenture, dated as
of January 1, 1991, as supplemented for the issuance of the Debt Securities by a
Second Supplemental Indenture (the "Supplemental Indenture") between the Company
and the Trustee to be dated as of the Closing Date (such indenture, as
supplemented by the Supplemental Indenture, is referred to herein as the
"Indenture"), between the Company and JPMorgan Chase Bank (formerly 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 (No. 333-80347), including a
prospectus relating to, among other things, offerings of securities of the
Company from time to time 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 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 and any
registration statement filed pursuant to Rule 462(b) of the Securities Act
Regulations with respect to the Debt Securities (a "Rule 462(b) registration
statement")) 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, "Registration Statement"
shall refer to such registration statement as so amended (including any Rule
462(b) registration statement). Each prospectus included in the Registration
Statement, or amendments thereof, before it became effective under the
Securities Act and any prospectus with respect to the Debt Securities, including
the prospectus supplement reflecting the terms of the offering of the Debt
Securities and the other matters set forth therein (such prospectus supplement
is herein referred to as the "Prospectus Supplement") 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 the Prospectus Supplement) with respect to the Debt Securities
(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.
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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:
(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 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, 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 or incorporated by reference 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;
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(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 been (i) any material adverse change
(whether or not arising in the ordinary course of business) 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 or in the properties
or assets of the Company and its subsidiaries considered as one enterprise or
(ii) any change (whether or not arising in the ordinary course of business) that
would materially and adversely affect the Company's ability to perform its
obligations under this Agreement, the Supplemental Indenture, the Indenture or
the Debt Securities or the transactions contemplated thereby or by the
Prospectus (each of (i) and (ii) a "Material Adverse Effect");
(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;
(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 (each a "Subsidiary")
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; all of the issued and outstanding capital stock of each such
Significant Subsidiary has been duly and validly authorized and 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;
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(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;
(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 (i) any provision of applicable law or the certificate of
incorporation or by-laws of the Company or (ii) 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 (iii) any
judgment, order or decree of any domestic or foreign 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
domestic or foreign 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;
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(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 Prospectus and proceedings that would, if adversely
determined, have a Material Adverse Effect;
(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 and application of the net proceeds from such sale
(as described in the Prospectus Supplement under the caption "Use of Proceeds"),
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 would
have a Material Adverse Effect;
(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;
(r) the Company and its subsidiaries own, possess, license or can
otherwise acquire on reasonable terms, adequate trademarks, service marks, trade
names and other rights to inventions, know-how, patents, copyrights, licenses,
inventions, confidential information and other intellectual property
(collectively, "intellectual property rights") 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 intellectual property rights,
except to the extent that the failure to own, possess, license or otherwise
acquire intellectual property rights would not, and except for such
infringements or conflicts which do not, have a Material Adverse Effect.
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(s) the Company, directly or through a subsidiary, has good and
marketable title to all property (real and personal) described in the Prospectus
as being owned by it, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Prospectus or to the
extent that any such liens, claims, security interests or other encumbrances
(individually or in the aggregate) would not have a Material Adverse Effect and
all the material properties described in the Prospectus as being held under
lease by the Company, directly or through subsidiaries, are held under valid,
subsisting and enforceable leases, with only such exceptions as would not have a
Material Adverse Effect (individually or in the aggregate); the Company and its
subsidiaries are in compliance with all material obligations, considering
applicable grace periods, under such leases, with such exceptions as would not
have a Material Adverse Effect; to the knowledge of the Company, no person has
instituted or threatened to institute proceedings, or has taken or threatened to
take any other action, to challenge or terminate, and no event or circumstance
has occurred which reasonably could be expected to materially interfere with (x)
the lessee's right to occupy the premises leased thereunder or to continue to
use such premises in the manner in which it is currently being used, or (y) the
lessor's right to continue to lease such premises to the lessee, with such
exceptions as would not have a Material Adverse Effect; and none of such leases
contains any unusual or burdensome provision which would have a Material Adverse
Effect.
(t) the Company possesses adequate certificates, authorizations,
licenses or permits issued by appropriate domestic or foreign governmental
bodies or agencies, necessary to conduct the business now operated by it and has
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit, except to the extent
that the failure to possess such certificates, authorizations, licenses or
permits does not, and except for such revocations or modifications which do not,
have a Material Adverse Effect.
(u) the Company and its subsidiaries maintain or are covered by
insurance in such amounts and for such risks as are adequate for the conduct of
their respective businesses and the value of their respective properties and as
is customary for companies of like size engaged in a similar business.
(v) the Company and its subsidiaries (A) are in compliance with any and
all applicable U.S. and other national, state, provincial and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (B) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (C) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a Material Adverse Effect.
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(w) neither the Company nor any of its subsidiaries (i) is in violation
of its certificate of incorporation, by-laws or other organizational documents,
(ii) is in default in any respect, and no event has occurred which, with notice
or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
agreement or other instrument to which it is a party or by which it is bound or
to which any of its properties or assets is subject other than as would not have
a Material Adverse Effect or (iii) is in violation of any judgment, order or
decree of any domestic or foreign governmental body, agency or court to which it
or its property or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business other than as would not have a Material Adverse Effect.
Section 2. Offering. The Representative has 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
Representative's 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 Debt Securities set forth opposite
such Underwriters name on Schedule I hereto at a purchase price of 97.75% of the
principal amount thereof.
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 Debt Securities to the Representative, 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 Debt Securities to the account of the Representative at DTC. The
Company will cause the certificates representing the Debt Securities to be made
available to the Representative 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 Milbank, Tweed, Hadley & McCloy LLP, 1 Chase
Manhattan Plaza, New York, New York 10005, at 10:00 a.m, New York time, on
December 20, 2001 or such other place, time and date as the Representative and
the Company may agree upon in writing (the "Closing Date").
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Such Debt Securities, if any, as the Representative 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 Representative 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.
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:
(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, the Registration Statement shall be 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, 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, 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, with
the same effect as if made on the Closing Date, 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;
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(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) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in,
or incorporated by reference in, the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
or (ii) since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representative, so material
and adverse as to make it impracticable or inadvisable 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, of William P. Costantini, Esq., General Counsel to the Company, and
Cahill, Gordon & Reindel, counsel to the Company, 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 counsel to the
Underwriters 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, of Milbank, Tweed, Hadley & McCloy 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, 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 such reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is delivered to the Underwriters. 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.
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(f) On the Closing Date, the Debt Securities shall be rated at least
"B2" by Moody's Investor Service, Inc. ("Moody's") and "BB" 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, 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, there shall not have occurred any downgrading, nor shall any
notice have been given on or after the date hereof 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; no 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 the Representative shall have received from
Deloitte & Touche LLP a letter, dated as of the Closing Date, to the effect that
they reaffirm the statements made in the letter furnished pursuant to subsection
(g) of this Section.
(i) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on
any exchange or in the over-the-counter market, shall have been suspended or
the settlement of such trading generally shall have been materially disrupted
or minimum prices shall have been established on any such exchange or such
market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by U.S. federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been
a declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions
on the financial markets in the United States shall be such), including,
without limitation, as a result of terrorist activities after the date hereof,
as to make it, in the judgment of the Underwriters, impracticable or
inadvisable to proceed with the offering or delivery of the Debt Securities
being delivered on such Closing Date on the terms and in the manner
contemplated in the Prospectus.
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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 any amendment to the Registration Statement (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.
12
(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 which differs from the prospectus on file at the Commission at the time the
Registration Statement became 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, 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.
13
(h) During the period beginning on the date hereof and continuing to
and including the 90th day following the date hereof, the Company will not
issue, sell, offer to sell, contract to sell, grant any option for the sale of,
or otherwise dispose of, any debt securities of, or guaranteed by, the Company
with substantially similar terms to the Debt Securities.
(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.
(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 required by Section 4(f) hereof.
(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 the proceeds received by it from the sale of
the Debt Securities in the manner specified in the Prospectus Supplement under
"Use of Proceeds."
14
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) the fees and expenses of qualifying the Debt Securities
under the securities laws of the several jurisdictions as provided in Section
5(g) and of preparing, printing and distributing a Blue Sky Memorandum
(including related reasonable fees and expenses of counsel to the Underwriters),
(ix) all costs and expenses of the Company relating to investor presentations on
any roadshow undertaken in connection with the marketing of the offering of the
Debt Securities, including, without limitation, expenses associated with the
production of roadshow slides and graphics, fees and expenses of any consultants
engaged in connection with the roadshow presentation with the prior approval of
the Company, and travel and lodging expenses of Company personnel and (x) 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; provided that, except as provided in this Section 6 and in Section 12,
the Underwriters shall pay all of their own costs and expenses, including the
costs and expenses of their counsel.
Section 7. Indemnification and Contribution
(a) The Company agrees to indemnify and hold harmless each Underwriter,
its respective directors, officers and employees, and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, any 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 director,
officer, employee or controlling or affiliated person in connection with
defending or investigating any such action or claim) caused by, or arising out
of, (i) 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 (ii) any omission or
alleged omission to state in the Registration Statement, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, 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 an Underwriter furnished to the Company in writing by
the Representative expressly for use therein, which information consists solely
of the information specified in Section 7(f) hereof; provided, however, that the
Company shall not be required to indemnify any Underwriter or any such director,
officer, employee, 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. The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Underwriter or to any officer, director, employee or
controlling person of that Underwriter.
15
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its officers, directors and employees 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 Representative expressly for use in the Registration Statement
and Prospectus or any amendments or supplements thereto; provided, that the only
written information concerning the Underwriters furnished to the Company by or
on behalf of any Underwriter specifically for inclusion therein consists solely
of the information specified in Section 7(f) hereof.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 7 except to the extent
it has been materially prejudiced by such failure and, provided further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 7. If any such proceeding shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. 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
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) and all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representative 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 (x) includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such proceeding and
(y) does not include a statement as to or an admission of fault, culpability or
a failure to act, by or on behalf of any indemnified party.
16
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 7 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, 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 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.
17
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) 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 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 Underwriters' obligations to contribute as provided in
this Section 7 are several in proportion to the respective principal amount of
the Debt Securities set forth opposite their names in Schedule 1 attached
hereto, and not joint.
(f) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the offering of the Debt Securities by the
Underwriters set forth in the table on the cover and the last full sentence on
the cover, and the third and fourth paragraphs and the second sentence of the
fifth paragraph under the heading "Underwriting" in the Prospectus Supplement,
regarding certain concessions and stabilization matters with respect to the Debt
Securities, constitute the only information concerning such Underwriters
furnished to the Company by or on behalf of the Underwriters specifically for
inclusion in the Prospectus.
(g) 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. The obligations of the Underwriters hereunder
may be terminated by the Underwriters by notice given by the Representative, on
behalf of the Underwriters, to and received by the Company prior to the Closing
Date if, prior to that time, any of the events described in Sections 4(c) or
4(f) or 4(i) hereof, shall have occurred such that the Underwriters would not be
obligated to purchase the Debt Securities under Section 4 hereof or if the
Underwriters shall decline to purchase the Debt Securities for any reason
permitted under this Agreement.
18
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 Debt
Securities that it or they have agreed to purchase hereunder and the aggregate
principal amount of Debt 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 Debt 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 Debt Securities set forth
opposite their names in Schedule I to this Agreement bears to the aggregate
principal amount of Debt Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as the Representative
may specify, to purchase the Debt 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
Debt Securities and the aggregate principal amount of Debt Securities with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Debt Securities to be purchased on such date, and
arrangements satisfactory to the Representative and the Company for the purchase
of such Debt 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 except that the Company will
continue to be liable for expenses under Section 6. In any such case either the
Representative 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 Representative c/o Lehman Brothers Inc. at
101 Hudson Street, Jersey City, New Jersey 07302, Attention: Fixed Income
Syndicate, Managing Director, with a copy to Milbank, Tweed, Hadley & McCloy
LLP, One Chase Manhattan Plaza, New York, New York 10005-1413, Attention: Arnold
B. Peinado, III, Esq.; notices to the Company shall be directed to The Great
Atlantic & Pacific Tea Company, Inc, 2 Paragon Drive, Montvale New Jersey 07645,
Attention: William P. Costantini, General Counsel, with a copy to Cahill, Gordon
& Reindel, 80 Pine Street, New York, New York 10005, Attention: Kenneth W. Orce,
Esq.
19
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. Reimbursement of Underwriters' Expenses. If (a) the Company
shall fail to tender the Debt Securities for delivery to the Underwriters by
reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of the obligations hereunder required to be fulfilled by the Company
is not fulfilled, the Company will reimburse the Underwriters for all expenses
(including fees and disbursements of counsel) incurred by the Underwriters in
connection with this Agreement and the proposed purchase of the Debt Securities,
and upon demand the Company shall pay the full amount thereof to the
Underwriters. If this Agreement is terminated pursuant to Section 9 hereof, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of such defaulting Underwriter's expenses.
Section 13. 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 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 15. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Debt Securities and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them. The
respective agreements, indemnities, representations and warranties set forth in
Sections 6, 7 and 12 hereof shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement.
20
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/ Mitchell P. Goldstein
------------------------------------------
Name: Mitchell P. Goldstein
Title: Senior Vice President, Finance
and Treasurer
Accepted by:
LEHMAN BROTHERS INC.
as representative of the several
Underwriters named in Schedule I hereto
By: /s/ William Gates
-----------------------------------------
Name: William Gates
Title: Managing Director
21
SCHEDULE I
Underwriter Amount
Lehman Brothers Inc. ................................ $ 150,000,000
Goldman, Sachs & Co. ............................... 68,750,000
Morgan Stanley & Co. Incorporated ................... 45,000,000
Scotia Capital (USA) Inc. ........................... 11,250,000
-------------
Total $ 275,000,000
=============
22
EXHIBIT A-1
The opinion of William P. Costantini, 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. To 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.
2. 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 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; 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 such counsel's knowledge, is
owned by the Company, directly or indirectly, free and clear
of any mortgage, pledge, lien, encumbrance, claim or equity.
3. 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.
23
4. None of the execution, delivery and performance by the
Company of its obligations under the Underwriting Agreement,
the Indenture and the Debt Securities will, to the knowledge
of such counsel, conflict with or result in a breach of or
violate any of the terms or provisions of, or constitute a
default (with or without due notice and lapse of time, or
either) under (a) any material loan or credit agreement,
indenture, mortgage, note or other material agreement or
instrument, or (b) any judgment, decree, injunction, writ or
order, to which the Company or any of its affiliates is a
party, or by which the Company or any of its affiliates or any
of the Company's or the Company's affiliates' properties or
assets is or may be subject or bound, in each case, except
where the consequence of any such breach or violation would
not have a Material Adverse Effect.
5. 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 such counsel believes are not likely to have
a Material Adverse Effect.
6. To such counsel's knowledge, there are no contracts or
other documents which are required to be described in the
Prospectus Supplement or filed as exhibits to the Registration
Statement by the Securities Act or by the Securities Act
Regulations which have not been described or filed as exhibits
to the Registration Statement.
24
EXHIBIT 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") or public
policy considerations as they relate to matters of
indemnification or contribution; 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.
25
6. 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 (i) of
Applicable Law, except where the consequence of any such
contravention of Applicable Law would not have a Material
Adverse Effect or (ii) the certificate of incorporation or
by-laws of the Company. "Applicable Law" means those laws,
rules and regulations of the State of New York, the Maryland
General Corporation Law and of the United States of America
which, in such counsel's experience, are typically applicable
to transactions of the type contemplated by the Prospectus,
other than the securities or blue sky laws of the various
states.
7. No consent, approval, authorization or other order of, or
filing with, any federal, New York or Maryland state
authority, regulatory body, administrative agency, court or
other governmental body that, in each case, has authority to
administer Applicable Law is legally required for the
execution, delivery and performance of the Underwriting
Agreement, the Indenture or the Debt Securities, the issue and
sale of the Debt Securities or the consummation by the Company
of the transactions contemplated by the Underwriting
Agreement, the Indenture or the Debt Securities, except such
consents, approvals, authorizations or orders as have been
obtained or filings that have been made or, in each case, as
may be required under state securities or Blue Sky laws.
8. 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.
9. The statements in the Prospectus under the caption "United
States Tax Considerations" fairly summarize matters referred
to therein.
10. The Registration Statement has been declared effective
under the Securities Act; the Prospectus has been filed
pursuant to 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.
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11. The Company is not and, after giving effect to the
offering and sale of the Debt Securities and application of
the net proceeds from such sale (as described in the
Prospectus under the caption "Use of Proceeds"), will not be
an "investment company", as such term is defined in the
Investment Company Act.
12. 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 the date of the Prospectus
Supplement 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).
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