AHOLD FINANCE U.S.A., INC., Issuer
KONINKLIJKE AHOLD N.V., Guarantor
Debt Securities
Underwriting Agreement
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Ladies and Gentlemen:
1. Introductory. Ahold Finance U.S.A., Inc., a corporation organized under
the laws of the State of Delaware, the United States of America (the "Company"),
proposes to issue and sell from time to time certain of its debt securities (the
"Debt Securities"). Payment of principal of, and interest, if any, and premium,
if any, on the Debt Securities will be unconditionally guaranteed by Koninklijke
Ahold N.V. (Royal Ahold), a public company with limited liability organized
under the laws of The Netherlands, and with its corporate seat in Zaandam
(municipality Zaanstad), The Netherlands, as Guarantor (the "Guarantor"),
pursuant to the terms and conditions of the guaranty issued under the Indenture
(as defined below) (the "Guaranty"). The Debt Securities may be convertible into
common shares of the Guarantor (as defined below), par value NLG 0.50 per share
("Common Shares"). The Debt Securities will be issued under an indenture, dated
as of __________, _____ (the "Indenture"), between the Company, the Guarantor,
and ___________, as trustee (the "Trustee"), in one or more series, which series
may vary as to interest rates, maturities, redemption provisions, selling prices
and in the case of Debt Securities that are convertible at the option of holders
into Common Shares ("Convertible Debt Securities"), conversion prices and the
terms and conditions relating to such conversion rights and other terms, with
all such terms for any particular series of the Debt Securities being determined
at the time of sale. The issuance and sale of Debt Securities and the Guaranty
have been registered under the registration statement referred to in Section
2(a).
Particular series of the Debt Securities will be sold pursuant to a Terms
Agreement referred to in Section 3 in the form of Annex A attached hereto, for
resale in accordance with the terms of offering determined at the time of sale.
The Debt Securities involved in any such offering are hereinafter referred to as
the "Offered Debt Securities". The Offered Debt Securities and related Guaranty
are hereunder referred to as the "Securities". The firm or firms which agree to
purchase the Securities are hereinafter referred to as the "Underwriters" of
such Securities, and the representative or representatives of the Underwriters,
if any, specified in a Terms Agreement referred to in Section 3 are hereinafter
referred to as the "Representatives"; provided, however, that if the Terms
Agreement does not specify any representative of the Underwriters, the term
"Representatives", as used in this Agreement (other than in the second sentence
of Section 3) shall mean the Underwriters.
2. Representations and Warranties of the Company. The Company and the
Guarantor, jointly and severally, represent and warrant to, and agree with, each
Underwriter that:
(a) A registration statement on Form F-3 (No. 333-____), including a
prospectus relating to the Debt Securities and the Guaranty, has been filed
with the Securities and Exchange Commission (the "Commission") and has been
declared effective by the Commission. The various parts of such
registration statement, as amended at the time of the execution of the
Terms Agreement referred to in Section 3, including all exhibits thereto
(but excluding the Trustees' Statements of Eligibility on Form T-1) and the
documents incorporated by reference in the prospectus contained in such
registration statement at the time of execution of the Terms Agreement
referred to in Section 3, are hereinafter collectively referred to as the
"Registration Statement"; any prospectus included in the Registration
Statement at the time it became effective or in any post-effective
amendment thereto filed prior to the time of execution of the Terms
Agreement referred to in Section 3 at the time such amendment became
effective or filed with the Commission pursuant to and in accordance with
Rule 424(b) ("Rule 424(b)") of the rules and regulations of the Commission
(the "Rules and Regulations") under the Securities Act of 1933, as amended
(the "Act"), prior to the time of the execution of the Terms Agreement
referred to in Section 3, as supplemented by a preliminary prospectus
supplement reflecting the proposed terms of the offering of the Securities
that is filed with the Commission pursuant to and in accordance with Rule
424(b) prior to the time of the execution of the Terms Agreement referred
to in Section 3, including all material incorporated therein by reference,
is hereinafter referred to as a "Preliminary Prospectus", and the
prospectus included in the Registration Statement, as supplemented by a
prospectus supplement as contemplated by Section 3 to reflect the terms of
the offering of the Securities, as first filed with the Commission pursuant
to and in accordance with Rule 424(b) including all material incorporated
by reference therein, is hereinafter referred to as the "Prospectus". Any
reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Prospectus or
Preliminary Prospectus, as the case may be. No stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the
use of any Preliminary Prospectus or the Prospectus has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company or the Guarantor, threatened by the Commission.
(b) The Registration Statement relating to the Debt Securities and the
Guaranty, on the effective date thereof, and any Preliminary Prospectus, as
of its date, conformed in all material respects to the requirements of the
Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder and did
not include 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 not misleading, and the Registration Statement and the
Prospectus, on the date of the Terms Agreement referred to in Section 3,
will conform in all material respects to the requirements of the Act, the
Trust Indenture Act and the rules and regulations of the Commission
thereunder, and neither of such documents will include 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 case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, except that the foregoing representations do not apply to
statements in or omissions from any of such documents based upon written
information furnished to the Company by any Underwriter specifically for
use therein.
(c) The documents incorporated by reference into the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations
thereunder, and none of such documents when so filed included any untrue
statement of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and each document, if any, hereafter filed and so incorporated
by reference in the Prospectus and any further amendment or supplement
thereto (other than documents incorporated by reference therein relating
solely to an offering of securities other than the Securities) when such
documents are filed with the Commission will conform in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder 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 not
misleading, except that the foregoing representations do not apply to
statements in or omissions from any of such documents based upon written
information furnished to the Company by any Underwriter specifically for
use therein.
(d) Neither the Guarantor nor any of the Significant Subsidiaries (as
defined below) has sustained since the date of the latest audited financial
statements included in the Prospectus or incorporated by reference therein,
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, in either case
material to the Guarantor and its subsidiaries taken as a whole, and
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock or consolidated long-term debt of the Guarantor or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, financial position,
shareholders' equity or results of operations of the Guarantor and its
subsidiaries taken as a whole or the members of the Executive Board of the
Guarantor, otherwise than as set forth or contemplated in the Prospectus.
As used in this Agreement, the term "subsidiaries" means any corporation or
other entity of which at least a majority of the outstanding stock or other
ownership interests having by the terms thereof ordinary voting power for
the election of directors, managers or trustees of such corporation or
other entity or other persons performing similar functions (irrespective of
whether or not at the time stock or other ownership interests of any other
class or classes of such corporation or other entity shall have or might
have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned, or controlled by the Company or the
Guarantor or by one or more other subsidiaries, or by the Company or the
Guarantor and one or more other subsidiaries. As used in this Agreement,
the term "Significant Subsidiary" refers to ▇▇▇▇▇▇ ▇▇▇▇▇ B.V., BI-LO Inc.,
Giant Food Stores, Inc., Ahold Vastgoed B.V., Tops Markets, Inc., Giant
Food Inc. and The Stop & Shop Companies, Inc.
(e) Each of the Company and the Guarantor has been duly incorporated
and is validly existing under the laws of its jurisdiction of
incorporation, with corporate power and corporate authority to own or lease
its properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing (where applicable) under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction; and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing
(where applicable) under the laws of its jurisdiction of incorporation.
(f) Each of the Company and the Guarantor has an authorized
capitalization as set forth in the Prospectus, and all of the issued shares
of capital stock of the Guarantor have been duly and validly authorized and
issued, and are fully paid and non-assessable; all of the issued shares of
capital stock of each Significant Subsidiary and of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Guarantor, free and clear of
all liens, encumbrances, equities or claims; in the case of Debt Securities
that are Convertible Debt Securities, the holders of outstanding shares of
capital stock of the Guarantor will not be entitled to preemptive or other
rights to acquire the Common Shares issuable upon conversion thereof, such
rights (if applicable) having been excluded by resolution of the Corporate
Executive Board of the Guarantor which has been approved by the Supervisory
Board of the Guarantor in accordance with the Articles of Association of
the Guarantor, the Corporate Executive Board being entitled to exclude such
rights with respect to Common Shares by authorization of the general
meeting of shareholders;
(g) The Offered Debt Securities to be issued and sold by the Company
to the Underwriters under the Terms Agreement referred to in Section 3 have
been duly and validly authorized by the Company and, when such Offered Debt
Securities are issued, authenticated and delivered in accordance with the
provisions of the Indenture and pursuant to such Terms Agreement against
payment therefor as provided therein, will constitute valid and legally
binding instruments, enforceable in accordance with their terms, subject,
as to enforceability, to bankruptcy, insolvency, reorganization and similar
laws of general applicability relating to or affecting creditors' rights
and to general principles of equity; such Offered Debt Securities conform
in all material respects to the description thereof contained in the
Prospectus.
(h) The Guaranty endorsed upon the Offered Debt Securities has been
duly and validly authorized by the Guarantor and, when such Offered Debt
Securities are issued, authenticated and delivered in accordance with the
provisions of the Indenture and pursuant to the Terms Agreement referred to
in Section 3, will constitute the valid and legally binding obligation of
the Guarantor, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and to general principles of equity, regardless
of whether the issue of enforceability is considered in a proceeding in
equity or at law; the Guaranty conforms in all material respects to the
description thereof contained in the Prospectus.
(i) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
the Guarantor and, assuming due authorization, execution and delivery by
the Trustee, constitutes a valid and legally binding agreement of the
Company and the Guarantor, enforceable in accordance with its terms,
subject, as to enforceability, to bankruptcy, insolvency, reorganization
and similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity, regardless of
whether the issue of enforceability is considered in a proceeding in equity
or at law; the Indenture conforms in all material respects to the
description thereof contained in the Prospectus.
(j) If the Offered Debt Securities are Convertible Debt Securities,
the Common Shares initially issuable upon conversion thereof (i) will have
been duly and validly authorized, (ii) when such Common Shares are issued
and delivered upon such conversion, will be duly and validly issued,
provided that upon conversion pursuant to the terms thereof at least the
nominal value of such Common Shares and any premium is paid up, and fully
paid and non-assessable and will conform to the description of the Common
Shares contained in the Prospectus, and (iii) when such Common Shares are
issued and delivered, may be freely deposited with the depositary for such
Common Shares against issuance of American depositary receipts evidencing
American depositary shares, as provided in the Deposit Agreement, dated
January 20, 1998 among the Guarantor, The Bank of New York, as depositary,
and the registered holders from time to time of the American depositary
receipts.
(k) The issue and sale of the Securities to be sold by the Company
under the Terms Agreement referred to in Section 3, the endorsement of the
Guaranty upon the Offered Debt Securities by the Guarantor, the issuance of
Common Shares (if the Offered Debt Securities include Convertible Debt
Securities), and the compliance by the Company and the Guarantor with all
of the provisions of such Securities, such Guaranty, this Agreement, such
Terms Agreement, the Indenture and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company, the
Guarantor or any of the Significant Subsidiaries is a party or by which the
Company, the Guarantor or any of the Significant Subsidiaries is bound or
to which any of the property or assets of the Company, the Guarantor or any
of the Significant Subsidiaries is subject, nor will such action result in
any violation of the provisions of the Articles of Association of the
Company or the Guarantor or any statute or any order, rule or regulation of
any Governmental Agency having jurisdiction over the Company, the Guarantor
or any of the Significant Subsidiaries or any of their properties; and no
Governmental Authorizations are required for the issue and sale of the
Securities or the consummation by the Company and the Guarantor of the
transactions contemplated by this Agreement, the Terms Agreement referred
to in Section 3 and the Indenture, except (A) the registration under the
Act of the Securities, (B) such Governmental Authorizations as have been
duly obtained and are in full force and effect and copies of which have
been furnished to you and (C) such Governmental Authorizations as may be
required under state securities or Blue Sky laws or any laws of
jurisdictions outside The Netherlands and the United States in connection
with the purchase and distribution of the Securities by or for the account
of the Underwriters.
(l) Neither the Guarantor nor any of its subsidiaries has taken,
directly or indirectly, any action which was designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
or the Guarantor to facilitate the sale or resale of the Securities;
provided, however, that this provision shall not apply to stabilization or
other activities conducted by the Underwriters or on their behalf, as
described in the Prospectus.
(m) The statements set forth in the Prospectus under the caption
"Taxation--U.S. Taxation", insofar as they constitute matters of United
States federal income tax law or legal conclusions with respect thereto,
are accurate in all material respects.
(n) The statements set forth in the Prospectus under the caption
"Taxation--Netherlands Taxation" insofar as they relate to matters of Dutch
tax law or regulation or to provisions of documents therein described, are
true and accurate in all material respects.
(o) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Guarantor or any of the
Significant Subsidiaries is a party or of which any property of the
Guarantor or any of the Significant Subsidiaries is the subject which are
reasonably likely, individually or in the aggregate, to have a material
adverse effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Guarantor and its
subsidiaries taken as a whole; and, to the best of the Guarantor's
knowledge, no such proceedings are threatened or contemplated by any
Governmental Agency or threatened by others.
(p) Neither the Company nor the Guarantor is and, after giving effect
to the offering and sale of the Securities, will be an "investment company"
or an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(q) The Guarantor and each of its Significant Subsidiaries have all
licenses, franchises, permits, authorizations, approvals and orders and
other concessions of and from all Governmental Agencies that are necessary
to own or lease their properties and conduct their businesses as described
in the Prospectus except for such licenses, franchises, permits,
authorizations, approvals and orders the failure to obtain which
individually or in the aggregate, will not have a material adverse effect
on the general affairs, consolidated financial position or results of
operation of the Guarantor and its subsidiaries taken as a whole.
(r) The Guarantor is not a Passive Foreign Investment Company ("PFIC")
within the meaning of Section 1297 of the United States Internal Revenue
Code of 1986, as amended.
(s) Deloitte & Touche, Registeraccountants, who have certified certain
financial statements of the Guarantor and its subsidiaries, are independent
public accountants as required by the Act and the Rules and Regulations.
3. Purchase and Offering of Securities. The obligation of the Company to
issue and sell any Offered Debt Securities, the obligation of the Guarantor to
guaranty such Offered Debt Securities and the obligation of the Underwriters to
purchase the Securities will be set forth in a Terms Agreement (the "Terms
Agreement") which shall be in the form of an executed writing (which may be
handwritten), and may be evidenced by an exchange of telegraphic or any other
rapid transmission device designed to produce a written record of communications
transmitted at the time the Company determines to sell the Securities. The Terms
Agreement will incorporate by reference the provisions of this Agreement, except
as otherwise provided therein, and will specify the following: the firm or firms
which will be Underwriters; the names of any Representatives; the aggregate
principal amount of the Offered Debt Securities; the principal amount of Offered
Debt Securities to be purchased by each Underwriter; the initial public offering
price of the Offered Debt Securities; the purchase price to be paid by the
Underwriters, the terms of the Offered Debt Securities not already specified in
the Indenture, including, but not limited to, dates of payment and rate of
interest, if any, maturity, any redemption or repayment provisions and any
sinking fund requirements. The Terms Agreement will also specify the place of
delivery and payment for the Securities and any details of the terms of offering
that should be reflected in the prospectus supplement relating to the offering
of the Securities.
The time and date of delivery and payment of the Securities will be the
time and date specified in the Terms Agreement, or such other time not later
than seven full business days thereafter as the Representatives, the Company and
the Guarantor agree as the time for payment and delivery of the Securities (such
time and date, being herein and in the Terms Agreement referred to as the
"Closing Date").
The obligations of the Underwriters to purchase the Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Securities for sale as set forth in the Prospectus. The Offered Debt
Securities delivered to the Underwriters on the Closing Date will be in
definitive fully registered form, in such denominations and registered in such
names as the Underwriters may request.
4. Certain Agreements of the Guarantor and the Company. Each of the
Guarantor and the Company, jointly and severally, agrees with the several
Underwriters that it will furnish to ________, counsel for the Underwriters, one
copy of the Registration Statement relating to the Debt Securities and the
Guaranty, including all exhibits, in the form in which each became effective and
of all amendments thereto and that, in connection with each offering of
Securities:
(a) The Company and the Guarantor will prepare the Prospectus in a
form approved by the Representatives and will file the Prospectus with the
Commission pursuant to and in accordance with Rule 424(b) under the Act not
later than the Commission's close of business on the second business day
following execution and delivery of the Terms Agreement referred to in
Section 3 and will make no further amendment to the Registration Statement
or amendment or supplement to the Prospectus (other than those relating
solely to an offering of securities other than the Securities) prior to the
Closing Date which in any case shall be disapproved by the Representatives
promptly after reasonable notice thereof.
(b) During the time when a prospectus relating to the Securities is
required to be delivered under the Act, (i) the Company or Guarantor will
advise the Representatives, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed (other than those relating solely to an offering
of securities other than the Securities) and furnish the Representatives
copies thereof; (ii) the Guarantor will file promptly all reports required
to be filed by the Guarantor with the Commission pursuant to Section 13(a),
13(c), 14(d) or 15(d) of the Exchange Act subsequent to the date of the
Prospectus; (iii) the Company will advise the Representatives promptly of
any request by the Commission for the amending or supplementing of the
Registration Statement or of any part thereof or for additional information
(other than solely in respect of an offering of securities other than the
Securities), and will advise the Representatives promptly of the
institution by the Commission of any stop order proceedings in respect of
the Registration Statement or of any part thereof and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued; and (iv) the Company or the
Guarantor will advise the Representatives promptly of the receipt by the
Company or the Guarantor of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose.
(c) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or if for any other reason it is necessary at any time to amend
or supplement the Prospectus or to file under the Exchange Act any document
to be incorporated by reference in the Prospectus in order to comply with
the Act, the Trust Indenture Act or the Exchange Act, the Company and the
Guarantor promptly will notify the Representatives and at the
Representatives' request file such document and prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus, or the document that
will be filed under the Exchange Act so as to be incorporated by reference
in the Prospectus, which will correct such statement or omission or effect
such compliance, provided, that in case any Underwriter is required to
deliver a prospectus in connection with sales of any of the Securities at
any time nine months or more after the time of issue of the Prospectus,
upon the Representatives' request but at the expense of such Underwriter,
the Company and the Guarantor promptly will prepare and deliver to such
Underwriter as many copies as the Representatives may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act.
Neither the Representatives' consent to, nor the Underwriters' delivery of,
any such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5.
(d) If necessary, the Company and the Guarantor will promptly from
time to time take such action as the Representatives may reasonably request
to qualify the Securities for offering and sale and to determine their
eligibility for investment under the securities laws of such jurisdictions
as the Representatives may request and to comply with such laws as to
permit the continuance of sales and dealings therein in such jurisdictions
for so long as may be necessary to complete the distribution of the
Securities, provided that in connection therewith neither the Company nor
the Guarantor shall be required to qualify as a foreign corporation or to
file a general or unlimited consent to process in any jurisdiction.
(e) The Guarantor will make generally available to its security
holders as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement of the Guarantor and
its subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the Rules and Regulations (including, at the option of the
Guarantor, Rule 158 under the Act).
(f) The Company and the Guarantor will furnish to the Representatives
copies of the Registration Statement, including all exhibits, any
Preliminary Prospectus and the Prospectus and during the time when a
prospectus relating to the Securities is required to be delivered under the
Act, all amendments and supplements to such documents (other than those
solely relating to an offering of securities other than the Securities), in
each case as soon as available and in such quantities as are reasonably
requested.
(g) The Company and the Guarantor will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's and
Guarantor's counsel and accountants in connection with the registration of
the Debt Securities under the Act and all other expenses in connection with
the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing any Agreement among
Underwriters, any Selling Agreements, this Agreement, any Terms Agreement,
the Indenture, any Blue Sky Memorandum, Legal Investment Survey and any
other documents in connection with the offering, purchase, sale and
delivery of the Securities; (iii) if applicable, all reasonable expenses in
connection with the qualification of the Securities for offering and sale
under state securities laws as provided in Section 4(d), including the
reasonable fees and disbursements of counsel for the Underwriters in
connection with any Blue Sky Memorandum or Legal Investment Survey; (iv)
any fees charged by securities rating services for rating the Securities;
(v) the cost of preparing the Securities; (vi) the fees and expenses
(including fees and disbursements of counsel) of the Trustee under the
Indenture; (vii) the fees and expenses of the Authorized Agent (as defined
in Section 12); (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise
specifically provided for in this Section; provided, however, that, the
Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, travel expenses and any advertising expenses
incurred in connection with the transactions contemplated hereby.
(h) To use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement and the Terms Agreement referred
to in Section 3 in the manner specified in the Prospectus under the caption
"Use of Proceeds".
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Securities on the Closing
Date will be subject, in their discretion, to the truth and accuracy of the
representations and warranties on the part of the Company and the Guarantor
herein at and as of the Closing Date, to the truth and accuracy of the written
statements of the officers of the Company and Guarantor made pursuant to the
provisions hereof at and as of the Closing Date, to the performance by each of
the Company and the Guarantor of its obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated the
Closing Date, of Deloitte & Touche, Registeraccountants, in form and
substance satisfactory to the Representatives, to the effect set forth in
Annex B hereto.
(b) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) of the Act within the applicable time period prescribed for
such filing by the Rules and Regulations and in accordance with Section
4(a) of this Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted or shall have been
threatened by the Commission. All requests for additional information on
the part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction.
(c) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any downgrading in the rating of any debt securities
of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) of the Rules and
Regulations), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the
Company, with possible negative implications; (ii) any suspension for more
than two hours or material limitation in trading in securities generally on
the New York Stock Exchange or the AEX-Stock Exchange; (iii) any suspension
for more than two hours or material limitation in trading in the
Guarantor's securities on the New York Stock Exchange or the AEX-Stock
Exchange; (iv) any general moratorium on commercial banking activities in
New York or Amsterdam declared by the relevant authorities; (v) any
outbreak or escalation of hostilities in which the United States or The
Netherlands is involved, any declaration of war or a national emergency by
the United States or The Netherlands, if the effect of any such event
specified in this clause (v) in the judgment of the Representatives, makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered at the Closing Date on the terms
and in the manner contemplated in the Prospectus; or (vi) the occurrence of
any material adverse change in the existing financial, political or
economic conditions in the United States and The Netherlands or elsewhere
which, in the judgment of the Representatives, would materially and
adversely affect the financial markets or the market for the Securities and
other convertible debt (if the Debt Securities include Convertible Debt
Securities) or other debt securities.
(d) (i) Neither the Guarantor nor any of the Significant Subsidiaries
shall have sustained since the date of the latest audited financial
statements included 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, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been
any change in the capital stock or consolidated long-term debt of the
Guarantor or any change, or any development involving a prospective change,
in or affecting the general affairs, financial position, shareholders'
equity or results of operations of the Guarantor and its subsidiaries taken
as a whole or the officers and directors of the Guarantor, 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
Representatives, after consultation with the Guarantor if practicable, so
material and adverse to the Guarantor and its subsidiaries taken as a whole
as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities being delivered at the Closing
Date on the terms and in the manner contemplated in the Prospectus.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of White & Case LLP, counsel for the Company and the
Guarantor, to the effect that:
(i) The Company has been duly incorporated and is validly
existing under the laws of the State of Delaware;
(ii) This Agreement and the Terms Agreement and the Indenture
have been duly executed and delivered by the Company;
(iii)The Company has the corporate power and corporate authority
to execute and deliver and perform the obligations on its part to be
performed under the Terms Agreement (including the provisions of this
Agreement), the Indenture and the Securities and to authorize, issue
and sell the Offered Debt Securities. The Company has the corporate
power and corporate authority to conduct its business as described in
the Prospectus;
(iv) The execution and delivery by the Company of this Agreement,
the Terms Agreement and the Indenture and the performance by the
Company of its obligations hereunder and thereunder and the execution,
delivery and filing by or in the name of the Company of the
Registration Statement have been duly authorized by the Company; and
(v) The issue and sale by the Company of the Securities, the
compliance by the Company with the provisions under the Terms
Agreement (including the provisions of this Agreement), the Indenture
and the Securities, and the consummation of the transactions
contemplated therein and herein, do not violate any provisions of the
Company's Certificate of Incorporation or By-laws.
(vi) Assuming (x) due authorization, execution and delivery by
the Guarantor under Dutch law of the Indenture, (y) due authorization,
execution and delivery of the Indenture by the Trustee and (z) that
each of the Trustee and the Guarantor has full power, authority and
legal right to enter into and perform its obligations thereunder, the
Indenture constitutes a valid and legally binding agreement of each of
the Company and the Guarantor, enforceable against the Company and the
Guarantor in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other similar laws relating to or
affecting creditors' rights generally and to general principles of
equity (regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law), provided that, if the
Securities are subordinated debt securities, such counsel may state
that they express no opinion as to the provisions of such Securities
relating to the subordination of the Guaranty which are expressed to
be governed by and construed in accordance with the laws of The
Netherlands;
(vii)The Indenture has been duly qualified under the Trust
Indenture Act;
(viii) The execution, delivery and filing by or in the name of
the Company of the Registration Statement have been duly authorized by
the Company.
(ix) The Securities constitute valid and legally binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights
generally, or to general principles of equity (regardless of whether
the issue of enforceability is considered in a proceeding in equity or
at law);
(x) The Offered Debt Securities have been duly authenticated in
the manner provided in the Indenture, are entitled to the benefits
provided by the Indenture and conform in all material respects to the
description of the Debt Securities contained in the Prospectus;
(xi) Assuming due authorization, execution and delivery by the
Guarantor under Dutch law of the Guaranty, the Guaranty constitutes a
valid and legally binding obligation of the Guarantor, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally,
or to general principles of equity (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law),
provided that, if the Securities are subordinated debt securities,
such counsel may state that they express no opinion as to the
provisions of such Securities relating to the subordination of the
Guaranty which are expressed to be governed by and construed in
accordance with the laws of The Netherlands;
(xii)The Guaranty has been duly endorsed upon the Offered Debt
Securities in the manner provided in the Indenture, is entitled to the
benefits provided by the Indenture and conforms in all material
respects to the description of the Guaranty contained in the
Prospectus;
(xiii) Under the laws of the State of New York relating to
personal jurisdiction, the Guarantor has, pursuant to Section 12 of
this Agreement and Section ____ of the Indenture, validly and
irrevocably submitted to the personal jurisdiction of any state or
federal court located in the Borough of Manhattan, The City of New
York, New York (each a "New York Court") in any action arising out of
or relating to the Terms Agreement (including the provisions of this
Agreement), the Offered Debt Securities, the Guaranty or the
Indenture, as the case may be, or the transactions contemplated
thereby or hereby, has validly and irrevocably waived any objection to
the venue of a proceeding in any such court, and has validly and
irrevocably appointed the Authorized Agent (as defined herein) as its
authorized agent for the purpose described in Section 12; and service
of process effected on such agent in the manner set forth in Section
12 will be effective to confer valid personal jurisdiction over the
Guarantor in the New York Courts; provided, however, that such counsel
need express no opinion as to whether a Federal court sitting in New
York would have jurisdiction in a suit, action or proceeding against
the Guarantor brought by one or more plaintiffs who are not United
States nationals or residents;
(xiv) No consent, approval, authorization or order of, or
registration or qualification with, any Federal or New York court or
governmental agency or body is required for the issue and sale of the
Securities or, if the Offered Debt Securities include Convertible Debt
Securities, the issuance of Common Shares upon conversion thereof, or
the consummation by the Company and the Guarantor of the transactions
contemplated by the Terms Agreement (including the provisions of this
Agreement) or the Indenture, except the registration under the Act of
the Securities and such consents, approvals, authorizations,
registrations or qualifications as have been obtained and made and
such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters (as to which such counsel need express no opinion);
(xv) The statements set forth in the Prospectus under the caption
"Description of Debt Securities", insofar as they purport to
constitute a summary of the terms of the Securities, fairly summarize
in all material respects the terms thereof;
(xvi)The statements set forth in the Prospectus under the caption
"Taxation--U.S. Taxation", to the extent they constitute matters of
United States federal income tax law or legal conclusions with respect
thereto, are accurate in all material respects;
(xvii) Neither the Guarantor nor the Company is an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act;
(xviii) The documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Company or
the Guarantor prior to the relevant Closing Date (other than the
financial statements and related schedules and other financial and
statistical data included or incorporated by reference therein or
omitted therefrom, as to which such counsel need express no opinion),
when they were filed with the Commission, appeared on their face to
comply as to form in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder; and
(xix) The Registration Statement relating to the Securities, as
of its effective date, the Registration Statement, and the Prospectus,
as of the date of the Terms Agreement (other than the financial
statements and related schedules and other financial and statistical
data included or incorporated by reference therein or omitted
therefrom and other than the Trustees' Statements of Eligibility on
Form T-1, as to which such counsel need express no opinion) appeared
on their face to comply as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the rules and
regulations of the Commission thereunder; nothing has come to such
counsel's attention which causes it to believe that the Registration
Statement relating to the Securities, as of its effective date, or the
Prospectus, as of the date of the Terms Agreement (other than, in each
case, the financial statements and related schedules and other
financial and statistical data included or incorporated by reference
therein or omitted therefrom and other than the Trustees' Statements
of Eligibility on Form T-1, as to which such counsel need express no
opinion), contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading
or that the Prospectus, as amended or supplemented as of the Closing
Date, as of the Closing Date (other than the financial statements and
related schedules and other financial and statistical data included or
incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion) contains an untrue statement of
a material fact or omits to state a material fact 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
may state that they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement, or the Prospectus, except for those referred
to in subsection (vi) or (vii) of this Section 5(e).
In rendering such opinion, such counsel may state that they express no
opinion as to the laws other than the Federal securities law of the United
States and the law of the State of New York.
(f) The Representatives shall have received an opinion dated the
Closing Date, from the General Counsel or the Vice President Legal Affairs
of the Guarantor, to the effect that:
(i) Nothing has come to such counsel's attention that causes such
counsel to believe that any of the documents incorporated by reference
in the Prospectus and any further amendment or supplement thereto made
by the Company or the Guarantor prior to the Closing Date (other than
the financial statements and related schedules and other financial and
statistical data included or incorporated by reference therein or
omitted therefrom, as to which such counsel need express no opinion),
when it was filed with the Commission, 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 light
of the circumstances under which they were made when such documents
were so filed, not misleading; and
(ii) Nothing has come to such counsel's attention which causes
such counsel to believe that the Registration Statement relating to
the Securities, as of its effective date, the Registration Statement
and the Prospectus, as of the date of the Terms Agreement (other than,
in each case, the financial statements and related schedules and other
financial and statistical data included or incorporated by reference
therein or omitted therefrom and other than the Trustees' Statements
of Eligibility on Form T-1, as to which such counsel need express no
opinion) 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 case of the Prospectus, in light
of the circumstances under which they were made) not misleading or
that the Prospectus, as amended or supplemented as of the Closing
Date, as of the Closing Date (other than the financial statements and
related schedules and other financial and statistical data included or
incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion) contains an untrue statement of
a material fact or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(iii)The execution, delivery and filing by or in the name of the
Company and the Guarantor of the Registration Statement have been duly
authorized by the Company and the Guarantor.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws other than the laws of The Netherlands.
(g) The Representatives shall have received an opinion, dated the
Closing Date, of De Brauw Blackstone Westbroek N.V., Dutch counsel for the
Guarantor, to the effect that:
(i) The Guarantor has been duly incorporated and is validly
existing under the law of The Netherlands as a legal entity in the
form of a "naamloze vennootschap" (a public company with limited
liability);
(ii) This Agreement, the Terms Agreement, the Indenture, the
Guaranty and the endorsement of the Guaranty on the Offered Debt
Securities have been duly executed and delivered by the Guarantor;
(iii) If the Offered Debt Securities include Convertible Debt
Securities, the Common Shares have been duly authorized and, when such
Common Shares are issued and delivered upon such conversion, will be
validly issued by the Guarantor in accordance with the laws of The
Netherlands and the provisions of the Articles of Association
applicable thereto and will be fully paid and non-assessable. Pursuant
to the Articles of Association and the laws of The Netherlands, the
Common Shares may be freely issued by the Guarantor to or for the
account of the holders of the Offered Debt Securities converting the
same in the manner contemplated by the Indenture;
(iv) The Guarantor has the corporate power and corporate
authority to execute and deliver and perform the obligations on its
part to be performed under the Terms Agreement (including the
provisions of this Agreement), the Indenture and the Guaranty and to
authorize and issue the Guaranty. The Guarantor has the corporate
power and corporate authority to conduct its business as described in
the Prospectus;
(v) The execution and delivery by the Guarantor of this
Agreement, the Terms Agreement, the Indenture, the Guaranty and the
endorsement of the Guaranty on the Offered Debt Securities, and the
performance by the Guarantor of its obligations hereunder and
thereunder and the execution, delivery and filing by or in the name of
the Guarantor of the Registration Statement have been duly authorized
by the Guarantor;
(vi) The choice of New York law as the law expressed to be
governing the Terms Agreement (including the provisions of this
Agreement), the Indenture and the Guaranty will be recognized as the
law governing the Terms Agreement (including the provisions of this
Agreement), the Indenture and the Guaranty and accordingly the courts
of The Netherlands should apply New York law as the law expressed to
be governing the Terms Agreement (including the provisions of this
Agreement), the Indenture and the Guaranty;
(vii) If the Securities are subordinated debt Securities, the
provisions of the Indenture relating to the subordination of the
Guaranty are valid and binding under the law of The Netherlands to
which they are expressed to be subject;
(viii) The execution and delivery by the Guarantor of the Terms
Agreement (including the provisions of this Agreement), the Indenture
the Guaranty and the endorsement of the Guaranty on the Offered Debt
Securities and the consummation of the transactions contemplated
therein and herein, do not violate any provisions of the law of The
Netherlands or the Articles of Association;
(ix) In order to ensure the legality, validity, enforceability or
admissibility in evidence of the Terms Agreement (including the
provisions of this Agreement), the Indenture, the Guaranty and the
endorsement of the Guaranty on the Offered Debt Securities, it is not
necessary that the Terms Agreement (including the provisions of this
Agreement), the Indenture the Guaranty be filed, recorded or enrolled
with any public authority, governmental agency or governmental
department of The Netherlands (excluding, for the avoidance of doubt,
a court in connection with legal proceedings insofar as the
enforceability and admissibility in evidence are concerned), or that
any stamp, registration or similar tax or charge be paid in The
Netherlands, except for certain court fees in connection with legal
proceedings;
(x) The submission to the jurisdiction of any United States
Federal court or state court sitting in the Borough of Manhattan, the
City of New York, State of New York, and the irrevocable waiver of any
objection to the laying of venue of a proceeding in such court and of
any immunity to jurisdiction of such court, to which it is or may
become entitled, will, according to the courts of The Netherlands duly
applying New York law as the law governing the Terms Agreement
(including the provisions of this Agreement) (including such
submission and waiver), the Indenture and the Guaranty, as the case
may be, be valid and binding on the Guarantor;
(xi) All authorizations, consents or approvals of, or
registrations or filings with, any governmental department or
regulatory authority of or within The Netherlands which are required
for the execution and delivery of the Guaranty, the Indenture replace
the Terms Agreement (including the provisions of this Agreement) by
the Guarantor or the consummation by the Guarantor of the transactions
contemplated under the Terms Agreement (including the provisions of
this Agreement) and the Indenture have been obtained or made and are
in full force and effect;
(xii) The statements set forth in the Prospectus under the
captions (if applicable) "Limitations on Enforcement of U.S. Laws
Against Royal Ahold, its Management, and Others", "Management" and
"Description of Debt Securities" to the extent that such statements
are statements as to matters of the law of The Netherlands or the
Articles of Association of the Guarantor are correct in all material
respects; and
(xiii) If the Offered Debt Securities include Convertible Debt
Securities, the Corporate Executive Board of the Guarantor has in its
resolutions referred to above in Section 2(f) validly resolved to
exclude the preemptive rights of shareholders in respect of the issue
of the Common Shares by the Guarantor, the Corporate Executive Board
of the Guarantor has the authority to adopt such resolutions, and no
other action is required to exclude such preemptive rights.
In rendering such opinions, such counsel may state that with respect to all
matters of United States federal and New York law they have relied upon the
opinions of United States counsel for the Guarantor and the Company delivered
pursuant to paragraph (e) of this Section 5.
(h) The Representatives shall have received an opinion, dated the
Closing Date, of ___________________, Dutch tax counsel for the Guarantor,
to the effect that the statements set forth in the Prospectus under the
caption "Taxation--Netherlands Taxation" insofar as they relate to matters
of Dutch tax law or regulation or to provisions of documents therein
described, are true and accurate in all material respects.
(i) The Representatives shall have received from
_______________________, U.S. counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the validity of the
Offered Debt Securities and the Guaranty, the Registration Statement, the
Prospectus and such other related matters as the Underwriters may
reasonably require, and the Company and the Guarantor shall have furnished
to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(j) The Representatives shall have received a certificate, dated the
Closing Date, of two officers of the Guarantor satisfactory to the
Representatives in which such officers, to their knowledge, shall state
that the representations and warranties of the Company and the Guarantor in
this Agreement and in the Terms Agreement referred to in Section 3, if
applicable, are true and correct at and as of the Closing Date, that each
of the Company and the Guarantor has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted by the
Commission, that, subsequent to the date of the most recent financial
statements in the Prospectus, there has been no material adverse change in
the financial position or results of operation of the Guarantor and its
subsidiaries taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate, and shall cover such other
matters as the Representatives may reasonably request.
The Company and the Guarantor will furnish the Representatives with
such conformed copies of such opinions, certificates, letters and documents
as they reasonably request.
6. Indemnification and Contribution. (a) Each of the Company and the
Guarantor will, jointly and severally, indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Preliminary Prospectus,
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim, as such
expenses are incurred; provided, however, that neither the Company nor the
Guarantor will be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company or the Guarantor by any Underwriter through the Representatives
expressly for use therein; and provided, further, that neither the Company nor
the Guarantor shall be liable to any Underwriter under the indemnity agreement
in this subsection (a) with respect to any Preliminary Prospectus to the extent
that any such loss, claim, damage or liability of such Underwriter results from
the fact that such Underwriter sold Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Prospectus or the Prospectus as then amended or supplemented in any case
where such delivery is required by the Act if the Company or the Guarantor has
previously furnished copies thereof in sufficient quantity to such Underwriter
as required by Section 4(f) and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in a Preliminary Prospectus which was corrected in the Prospectus or
the Prospectus as then amended, modified or supplemented.
(b) Each Underwriter will indemnify and hold harmless the Company and the
Guarantor against any losses, claims, damages or liabilities to which the
Company or the Guarantor may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any of such documents in reliance upon and in conformity
with written information furnished to the Company or the Guarantor by such
Underwriter through the Representatives expressly for use therein, and will
reimburse the Company and the Guarantor for any legal or other expenses
reasonably incurred by the Company or the Guarantor in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section. In case any such action is brought against any indemnified party
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by
reason of such settlement. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) 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.
(d) If the indemnification provided for in this Section is unavailable
(other than as a result of (i) the provisos contained in subsection (a) or (ii)
the failure of the indemnified party to give notice to the indemnifying party as
required under subsection (c) hereof) or insufficient to hold harmless an
indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Guarantor on
the one hand and by the Underwriters on the other from the offering of the
Securities. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Guarantor on the one hand and of the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantor on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Securities purchased under the Terms
Agreement (before deducting expenses) received by the Company and the Guarantor
bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Securities purchased under the Terms Agreement,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 and the Guarantor on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company, the
Guarantor and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Guarantor under this Section
shall be in addition to any liability which the Company and the Guarantor may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company or
the Guarantor, to each officer of the Company or the Guarantor who has signed
the Registration Statement and to each person, if any, who controls the Company
or the Guarantor within the meaning of the Act.
7. Default of Underwriters. (a) If any Underwriter shall default in its
obligation to purchase the Securities which it has agreed to purchase under the
Terms Agreement relating to such Securities, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Securities on the terms contained herein and therein. If within thirty-six
hours after such default by any Underwriter the Representatives do not arrange
for the purchase of such Securities, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Securities on
such terms. In the event that, within the respective prescribed periods, the
Representatives notify the Company that they have so arranged for the purchase
of the Securities, or the Company notifies the Representatives that it has so
arranged for the purchase of such Securities, the Representatives or the Company
shall have the right to postpone the Closing Date for the Securities for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company and the Guarantor agree to file promptly any amendments or supplements
to the Registration Statement or the Prospectus which may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this section with like effect as if such person had
originally been a party to the Terms Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by the Representatives
and the Company as provided in subsection (a) above, the aggregate principal
amount of such Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of the Offered Debt Securities to be purchased
at such Closing Date, then the Company shall have the right to require each
non-defaulting Underwriter to purchase on the applicable Closing Date the
principal amount of Offered Debt Securities which such Underwriter agreed to
purchase at such Closing Date under the Terms Agreement relating to such Offered
Debt Securities and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Offered Debt
Securities which such Underwriter agreed to purchase under such Terms Agreement
at such Closing Date) of the Offered Debt Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by the Representatives
and the Company as provided in subsection (a) above, the aggregate principal
amount of Offered Debt Securities which remains unpurchased exceeds one-eleventh
of the aggregate principal amount of the Offered Debt Securities to be purchased
at such Closing Date, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Offered Debt Securities of a defaulting Underwriter or Underwriters, then the
Terms Agreement relating to such Offered Debt Securities shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Company or the Guarantor, except for the expenses to be borne by the Company,
the Guarantor and the Underwriters as provided in Section 4(g) and the indemnity
and contribution agreements in Section 6; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, the Guarantor or their officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company, the Guarantor or any of
their respective representatives, officers or directors or any controlling
person and will survive delivery of and payment for the Securities. If the Terms
Agreement is terminated pursuant to Section 7 or if for any reason the purchase
of the Securities by the Underwriters under the Terms Agreement is not
consummated, the Company, and the Guarantor shall remain responsible for the
expenses to be paid or reimbursed by them pursuant to Section 4(g) and the
respective obligations of the Company, the Guarantor and the Underwriters
pursuant to Section 6 shall remain in effect. If the purchase of the Securities
by the Underwriters is not consummated for any reason, other than solely because
of the termination of the Terms Agreement pursuant to Section 7 or the
occurrence of any event specified in clause (ii), (iv), (v) or (vi) of Section
5(c), the Company and the Guarantor will reimburse the Underwriters for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by them in connection with the
offering of the Securities, but the Company and the Guarantor shall be under no
further liability to any Underwriter except as provided in Section 4(g) and
Section 6.
9. Notices. All statements, requests, notices and agreements hereunder
shall be in writing and if to the Underwriters shall be sufficient in all
respects, if delivered or sent by first class mail, telex, or facsimile
transmission (confirmed in writing by overnight courier sent on the day of such
facsimile transmission) to the address of the Representatives as set forth in
the Terms Agreement; and if to the Company or the Guarantor shall be sufficient
in all respects if delivered or sent by first class mail (air mail, in the case
of the Guarantor), telex, or facsimile transmission (confirmed in writing by
overnight courier sent on the day of such facsimile transmission) to the address
of the Company or the Guarantor, respectively, set forth in the Registration
Statement, Attention: Secretary. Any such statements, requests, notices or
agreements shall have effect upon receipt thereof.
10. Successors. This Agreement will inure solely to the benefit of and be
binding upon the Company, the Guarantor and such Underwriters as are identified
in Terms Agreements and their respective officers and directors and controlling
persons referred to in Sections 6 and 8, and the respective heirs, executors,
administrators, successors and assigns, and no other person will acquire or have
any right or obligation hereunder or by virtue of this Agreement. No purchaser
of any of the Securities from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
11. Representatives. In all dealings under any Terms Agreement and
hereunder, the Representatives shall act on behalf of each of the Underwriters,
and the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by the
Representatives.
12. Submission to Jurisdiction. Each of the parties hereto irrevocably (i)
agrees that any legal suit, action or proceeding arising out of or based upon a
Terms Agreement (including the provisions of this Agreement) or the transactions
contemplated thereby or hereby may be instituted in any New York Court, (ii)
waives, to the fullest extent permitted by applicable law, any objection which
it may now or hereafter have to the laying of venue of any such proceeding and
(iii) submits to the exclusive jurisdiction of such courts in any such suit,
action or proceeding. The Guarantor has appointed Ahold U.S.A., Inc., One
Atlanta Plaza, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any such action arising out of or based on any such Terms Agreement (including
the provisions of this Agreement) or the transactions contemplated hereby or
thereby which may be instituted in any New York Court by any Underwriter or by
any person who controls any Underwriter, expressly consents to the jurisdiction
of any such court in respect of any such action, and waives any other
requirements of or objections to personal jurisdiction with respect thereto.
Such appointment shall be irrevocable. The Guarantor represents and warrants
that the Authorized Agent has agreed to act as such agent for service of process
and agrees to take any and all action, including the filing of any and all
documents and instruments, that may be necessary to continue such appointment in
full force and effect as aforesaid. Service of process upon the Authorized Agent
and written notice of such service to the Guarantor shall be deemed, in every
respect, effective service of process upon the Guarantor.
13. Judgment Currency. In respect of any judgment or order given or made
for any amount due hereunder in United States dollars that is expressed and paid
in a currency (the "judgment currency") other than United States dollars, the
Company and the Guarantor will indemnify each Underwriter against any loss
incurred by such Underwriter as a result of any variation as between (i) the
rate of exchange at which the United States dollar amount is converted into the
judgment currency for the purpose of such judgment or order and (ii) the rate of
exchange at which an Underwriter is able to purchase United States dollars with
the amount of the judgment currency actually received by such Underwriter. The
foregoing indemnity shall constitute a separate and independent obligation of
the Company and the Guarantor and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid. The term "rate of
exchange" shall include any premiums and costs of exchange payable in connection
with the purchase of or conversion into United States dollars.
14. Time of Essence. Time shall be of the essence of each Terms Agreement.
As used herein the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. GOVERNING LAW. THIS AGREEMENT AND EACH TERMS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. Counterparts. This Agreement and each Terms Agreement may be executed
by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return three counterparts hereof. Very truly yours,
AHOLD FINANCE U.S.A., INC.
By___________________________
Name:
Title:
KONINKLIJKE AHOLD N.V.
By___________________________
Name:
Title:
Accepted as of the date hereof:
[Names of Underwriters]
By: [Representatives]
By: ___________________________
Name:
Title:
On behalf of each of the Underwriters
Annex A
AHOLD FINANCE U.S.A., INC., Issuer
KONINKLIJKE AHOLD N.V., Guarantor
Debt Securities
Terms Agreement
_______________, ____
[Names and Addresses of Representatives]
Ladies and Gentlemen:
Ahold Finance U.S.A., Inc., a corporation organized under the laws of the
State of Delaware, the United States of America (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated _________ __, ____ (the "Underwriting Agreement"), between the
Company and Koninklijke Ahold N.V. (Royal Ahold), a public company with limited
liability organized under the laws of The Netherlands, and with its corporate
seat in Zaandam (municipality Zaanstad), The Netherlands (the Guarantor"), on
the one hand and __________________, on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the debt securities
of the Company specified in Schedule II hereto (the "Offered Debt Securities").
Payment of principal of, and interest, if any, and premium, if any, on the Debt
Securities will be unconditionally guaranteed by the Guarantor pursuant to the
terms and conditions of the guaranty issued under the Indenture (the
"Guaranty"). The Offered Debt Securites and related Guaranty are hereafter
referred to as the "Securities". Except to the extent explicitly provided
otherwise herein, each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and as of the date of this
Terms Agreement, except that, if this Terms Agreement and the Underwriting
Agreement are dated different dates, each representation and warranty with
respect to the Prospectus in Section 2 of the Underwriting Agreement shall be
deemed to be a representation and warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined) and also a
representation and warranty as of the date of this Terms Agreement in relation
to the Prospectus as amended or supplemented relating to the Securities which
are the subject of this Terms Agreement. Each reference to the Representatives
herein and in the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein defined.
The Representatives designated to act on behalf of each of the Underwriters of
Securities are set forth in Schedule II hereto.
Subject to the terms and conditions set forth herein, in Schedule II hereto
and in the Underwriting Agreement incorporated herein by reference, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the time and place and at a purchase price to the Underwriters set forth in
Schedule II hereto, the principal amount of Securities set forth opposite the
name of such Underwriter in Schedule I hereto, and the Guarantor agrees,
pursuant to the terms and conditions set forth in the Indenture, to endorse the
Guaranty on such Securities.
If the foregoing is in accordance with your understanding, please sign and
return to us _______ counterparts hereof, and upon acceptance hereof by you, on
behalf of the Underwriters, this Terms Agreement and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement among each of the Underwriters,
the Company and the Guarantor. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be supplied to the Company and the Guarantor upon request, but without
warranty on your part (other than as to yourselves) as to the authority of the
signers thereof.
Very truly yours,
AHOLD FINANCE U.S.A., INC.
By__________________________
Name:
Title:
KONINKLIJKE AHOLD N.V.
By__________________________
Name:
Title:
Accepted as of the date hereof:
By:_________________________
On behalf of each of the Underwriters
SCHEDULE I
Principal Amount of
Underwriter Securities to Purchased
________________
Total............................................. ________________
________________
Schedule II
Title of Securities:
[Registered] [ %] [Floating Rate] [Zero Coupon] Guaranteed [Notes]
[Debentures] due
Aggregate principal amount:
$------------
Price to Public:
_____% of the principal amount of the Securities, plus accrued interest [,
if any,] from _________ to __________ [and accrued amortization, if any,
from __________ to ____________]
Purchase Price by Underwriters:
_____% of the principal amount of the Securities, plus accrued interest
[,if any,] from _________ to __________ [and accrued amortization, if any,
from __________ to ____________]
Specified funds for payment of purchase price:
[Federal funds]
Ranking: [Senior] [Subordinated]
Indenture:
Indenture, dated as of __________, [, as supplemented by ________,] between
the Company and [if senior debt securities -- The Chase Manhattan Bank] [if
subordinated debt securities - The Bank of New York], as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates]
Redemption Provisions:
The Securities may be redeemed, in whole but not in part, at the option of
the Company at their principal amount, together with accrued interest
thereon to the date of redemption, if as a result of any change in, or
amendment to, the laws or regulations of The Netherlands which becomes
effective after the date of the Indenture, the Guarantor becomes, or will
become obligated to pay any Additional Amounts (as defined in the
Indenture) with respect to any payments made pursuant to the Guaranty.
[No other provisions for redemption]
[The Securities may be redeemed, otherwise than through the sinking fund,
in whole or in part at the option of the Company, in the amount of $ _____
or an integral multiple thereof, on or after _________, _________ at the
following redemption prices (expressed in percentages of principal amount):
If [redeemed on or before _________, ___ %, and if] redeemed during the
12-month period beginning -----------,
Year Redemption
Price
and thereafter at 100% of principal amount, together in each case with
accrued interest to the redemption date]
[on any interest payment date falling on or after ____________,
___________, at the election of the Company, at a redemption price equal to
the principal amount thereof, plus accrued interest to the date of
redemption].
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Securities are entitled to the benefit of a sinking fund to retire $
_______ principal amount of Securities on ______ in each of the years _____
through ____ at 100% of their principal amount plus accrued interest] [,
together with [cumulative] [non-cumulative] redemptions at the option of
the Company to retire an additional $ _________ principal amount of
Securities in the years ____ through ____ at 100% of their principal amount
plus accrued interest.]
[If Securities are extendable debt Securities, insert--
Extendable provisions:
Securities are repayable on ______, _____ [insert date and years], at the
option of the holder, at their principal amount with accrued interest.
Initial annual interest rate will be ___%, and thereafter annual interest
rate will be adjusted on ______, and _______ to a rate not less than ___ %
of the effective annual interest rate on U.S. Treasury obligations with
_________-year maturities as of the [insert date 15 days prior to maturity
date] prior to such [insert maturity date].]
[If Securities are Floating Rate debt Securities, insert--
Floating rate provisions:
Initial annual interest rate will be __% through ____________ [and
thereafter will be adjusted [monthly] [on each _____, ________, and
___________] [to an annual rate of ______ % above the average rate for
______ -year [month] [securities] [certificates of deposit] issued by
_________ and ___________________ [insert names of banks].] [and the annual
interest rate [thereafter] [from ______________ through ____________] will
be the interest yield equivalent of the weekly average per annum market
discount rate for _____-month Treasury bills plus ___% of Interest
Differential (the excess, if any, of (i) then current weekly average per
annum secondary market yield for ______-month certificates of deposit over
(ii) then current interest yield equivalent of the weekly average per annum
market discount rate for ______-month Treasury bills); [from _________ and
thereafter the rate will be the then current interest yield equivalent plus
____ % of Interest Differential].]
Closing Date:
[Time and date]
Closing Location:
Names and addresses of Representatives:
Address for Notices, etc.:
[Other Terms]1
1 A description of particular tax, accounting or other unusual features of
the Securities should be set forth, or referenced to an attached and
accompanying description, if necessary to the issuer's understanding of the
transaction contemplated. Such a description might appropriately be in the
form in which such features will be described in the Prospectus for the
offering.
Annex B
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 5(a) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Guarantor and its subsidiaries within the meaning of the Securities Act
of 1933, as amended, (the "Act") and the applicable published rules and
regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Securities Exchange Act, of 1934,
as amended (the "Exchange Act"), as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute
of Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecast and/or condensed financial statements derived from
audited financial statements of the Guarantor for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Guarantor's
reports on Form 6-K incorporated by reference into the Prospectus and, if
applicable, included in the Prospectus, as indicated in their reports
thereon; and on the basis of specified procedures including inquiries of
officials of the Guarantor who have responsibility for financial and
accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A)(i) below comply as to
form in all material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Guarantor
for the five most recent fiscal years included or incorporated by reference
in Item 8 of the Guarantor's Annual Report on Form 20-F for the most recent
fiscal year and, if applicable, included, in the Prospectus agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Guarantor's Annual Reports on
Form 20-F for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 8 and 11 of Form 20-F and of
Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Guarantor and its subsidiaries, inspection of
the minute books of the Guarantor and its subsidiaries since the date of
the latest audited financial statements incorporated by reference in the
Prospectus and, if applicable, included in the Prospectus, inquiries of
officials of the Guarantor and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them
to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included or incorporated by reference in a report on Form
6-K incorporated by reference in the Prospectus and, if applicable,
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows or included in a report on Form
6-K incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items incorporated by reference in the Prospectus do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis substantially
consistent with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the Guarantor's Annual Report on Form 20-F for the fiscal
year ended _______;
(C) the unaudited financial statements which were not included in
the Prospectus or incorporated by reference therein but from which
were derived the unaudited condensed financial statements referred to
in Clause (A) and any unaudited income statement data and balance
sheet items included in the Prospectus or incorporated by reference
therein and referred to in Clause (B) were not determined on a basis
substantially consistent with the basis for the audited financial
statements included or incorporated by reference in the Guarantor's
Annual Report on Form 20-F for the fiscal year ended December 29,
1996;
(D) any unaudited pro forma consolidated condensed financial
statements incorporated by reference in the Prospectus and, if
applicable, included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
incorporated by reference in the Prospectus or, if applicable,
included in the Prospectus) or any increase in the consolidated
long-term debt of the Guarantor and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet incorporated by reference in
the Prospectus or, if applicable, included in the Prospectus, except
in each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages
and financial information specified by the Representatives which are
derived from the general accounting records of the Guarantor and its
subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Guarantor and its
subsidiaries and have found them to be in agreement.