EXHIBIT 1.1
EXECUTION COPY
WALGREEN CO.
$1,000,000,000 5.25% Notes due 2019
Underwriting Agreement
January 8, 2009
Banc of America Securities LLC
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
c/o Banc of America Securities LLC
Hearst Tower
214 North Tryon Street
Charlotte, North Carolina 28255
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
c/o J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
Walgreen Co., an Illinois corporation (the Company), proposes to issue and sell to the
several Underwriters listed in Schedule 1 hereto (the Underwriters), for whom Banc of America
Securities LLC, Goldman, Sachs & Co., J.P. Morgan Securities Inc. and Morgan Stanley & Co.
Incorporated are acting as representatives (the Representatives), $1,000,000,000 principal amount
of its 5.25% Notes due 2019 (the Securities). The Securities will be issued pursuant to a base
indenture dated as of
July 17, 2008 (the Base Indenture) between the Company and Wells Fargo Bank, National
Association, as trustee (the Trustee). Certain terms of the Securities will be established
pursuant to a resolution of the board of directors of the Company and set forth in an officers
certificate (the Supplemental Terms, and together with the Base Indenture, the Indenture).
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Securities, as follows:
1.
Registration Statement
. The Company has prepared and filed with the Securities and
Exchange Commission (the Commission) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the Securities Act), a registration
statement on Form S-3 (File No. 333-152315), including a prospectus, relating to the Securities.
Such registration statement, as amended at the time it becomes effective, including the
information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part
of the registration statement at the time of its effectiveness (Rule 430 Information), is
referred to herein as the Registration Statement; and as used herein, the term Preliminary
Prospectus means each prospectus included in such registration statement (and any amendments
thereto) before it becomes effective, any prospectus filed with the Commission pursuant to
Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at
the time of its effectiveness that omits Rule 430 Information, and the term Prospectus means the
prospectus in the form first used (or made available upon request of purchasers pursuant to
Rule 173 under the Securities Act) in connection with confirmation of sales of the Securities. If
the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the Rule 462 Registration Statement), then any reference herein to the term
Registration Statement shall be deemed to include such Rule 462 Registration Statement. Any
reference in this Agreement to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as of the effective date of the
Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case
may be and any reference to amend, amendment or supplement with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively, the Exchange Act) that are
deemed to be incorporated by reference therein. Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Registration Statement and the Prospectus.
At or prior to 2:40 p.m. New York City Time on January 8, 2009 (the Time of Sale), the
Company had prepared the following information: a Preliminary Prospectus dated January 8, 2009, and
each free-writing prospectus (as defined pursuant to Rule 405 under the Securities Act) listed on
Annex B-1 hereto as constituting part of the Time of Sale Information (collectively, the Time of
Sale Information).
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2.
Purchase of the Securities by the Underwriters
. (a) The Company agrees to issue
and sell the Securities to the several Underwriters as provided in this Agreement, and each
Underwriter, on the basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto at a price equal to 98.827% of the principal amount thereof, plus
accrued interest, if any, from January 13, 2009 to the Closing Date (as defined below). The
Company will not be obligated to deliver any of the Securities except upon payment for all the
Securities to be purchased as provided herein.
(b) The Company understands that the Underwriters intend to make a public offering of the
Securities as soon after the effectiveness of this Agreement as in the judgment of the
Representatives is advisable, and initially to offer the Securities on the terms set forth in the
Prospectus. The Company acknowledges and agrees that the Underwriters may offer and sell
Securities to or through any affiliate of an Underwriter and that any such affiliate may offer and
sell Securities purchased by it to or through any Underwriter.
(c) Payment for and delivery of the Securities will be made at the offices of Shearman &
Sterling LLP, 599 Lexington Avenue, New York, New York, 10022 at 10:00 A.M., New York City time, on
January 13, 2009 or at such other time or place on the same or such other date, not later than the
fifth business day thereafter, as the Representatives and the Company may agree upon in writing.
The time and date of such payment and delivery is referred to herein as the Closing Date.
(d) Payment for the Securities shall be made by wire transfer in immediately available funds
to the account(s) specified by the Company to the Representatives against delivery to the nominee
of The Depository Trust Company, for the account of the Underwriters, of one or more global notes
representing the Securities (collectively, the Global Note), with any transfer taxes payable in
connection with the sale of the Securities duly paid by the Company. The Global Note will be made
available for inspection by the Representatives not later than 1:00 P.M., New York City time, on
the business day prior to the Closing Date.
(e) The Company acknowledges and agrees that the Underwriters are acting solely in the
capacity of an arms length contractual counterparty to the Company with respect to the offering of
Securities contemplated hereby (including in connection with determining the terms of the offering)
and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the Company or any
other person as to any legal, tax, investment, accounting or regulatory matters in any
jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company
with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated
hereby or other matters relating to such
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transactions will be performed solely for the benefit of the Underwriters and shall not be on
behalf of the Company.
3.
Representations and Warranties of the Company
. The Company represents and warrants to
each Underwriter that:
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(a)
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Preliminary Prospectus.
No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary
Prospectus and the Prospectus, at the time of filing thereof, complied in all material
respects with the Securities Act and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
provided
that the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Underwriter furnished
to the Company in writing by such Underwriter through the Representatives expressly for
use in any Preliminary Prospectus.
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(b)
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Time of Sale Information
. The Time of Sale Information, at the Time of Sale
did not, and at the Closing Date will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
provided
that the Company makes no representation and warranty with respect to
any statements or omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in such Time of Sale Information. No
statement of material fact included in the Prospectus has been omitted from the Time of
Sale Information and no statement of material fact included in the Time of Sale
Information that is required to be included in the Prospectus has been omitted
therefrom.
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(c)
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Issuer Free Writing Prospectus.
The Company (including its agents and
representatives, other than the Underwriters in their capacity as such) has not
prepared, made, used, authorized, approved or referred to and will not prepare, make,
use, authorize, approve or refer to any written communication (as defined in Rule 405
under the Securities Act) that constitutes an offer to sell or solicitation of an offer
to buy the Securities (each such communication by the Company or its agents and
representatives (other than a communication referred to in clauses (i), (ii) and (iii)
below) an Issuer Free Writing Prospectus) other than (i) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or
Rule 134 under the Securities Act, (ii) the Preliminary Prospectus, (iii) the
Prospectus, (iv) the documents listed on Annex B-1 hereto as constituting part of the
Time of Sale Information and (v) any
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electronic road show or other written communications, in each case approved in
writing in advance by the Representatives specified in Annex B-2 hereto. Each such
Issuer Free Writing Prospectus complied in all material respects with the Securities
Act, has been or will be (within the time period specified in Rule 433) filed in
accordance with the Securities Act (to the extent required thereby) and, when taken
together with the Preliminary Prospectus filed prior to the first use of such Issuer
Free Writing Prospectus, did not, and at the Closing Date will not, contain any
untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
provided
that the Company makes no
representation and warranty with respect to any statements or omissions made in each
such Issuer Free Writing Prospectus in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use in any Issuer Free Writing
Prospectus.
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(d)
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Registration Statement and Prospectus.
The Registration Statement is an
automatic shelf registration statement as defined under Rule 405 of the Securities
Act that has been filed with the Commission not earlier than three years prior to the
date hereof; and no notice of objection of the Commission to the use of such
registration statement or any post-effective amendment thereto pursuant to
Rule 401(g)(2) under the Securities Act has been received by the Company. No order
suspending the effectiveness of the Registration Statement has been issued by the
Commission and no proceeding for that purpose or pursuant to Section 8A of the
Securities Act against the Company or related to the offering has been initiated or, to
the best knowledge of the Company, threatened by the Commission; as of the applicable
effective date of the Registration Statement and any amendment thereto, the
Registration Statement complied and will comply in all material respects with the
Securities Act and the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder (collectively, the Trust Indenture Act), and
did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the date of the Prospectus and any
amendment or supplement thereto and as of the Closing Date, the Prospectus will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided
that the Company makes no representation and warranty with respect to
(i) that part of the Registration Statement that constitutes the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the Trust Indenture Act
or (ii) any statements or omissions made in reliance upon and in conformity with
information relating to any
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Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement and the Prospectus
and any amendment or supplement thereto.
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(e)
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Incorporated Documents.
The documents incorporated by reference in the
Registration Statement, the Prospectus and the Time of Sale Information, when they were
filed with the Commission, or as amended through the date hereof, conformed in all
material respects to the requirements of the Exchange Act and none of such documents
contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Registration Statement, the
Prospectus or the Time of Sale Information, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material respects to
the requirements of the Securities Act or the Exchange Act, as applicable, and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
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(f)
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Financial Statements.
The financial statements and the related notes thereto
included or incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable, and present
fairly the financial position of the Company and its subsidiaries as of the dates
indicated and the results of their operations and the changes in their cash flows for
the periods specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis throughout the
periods covered thereby, except as otherwise stated therein, and the supporting
schedules included or incorporated by reference in the Registration Statement present
fairly the information required to be stated therein; and the other financial
information included or incorporated by reference in the Registration Statement, the
Time of Sale Information and the Prospectus has been derived from the accounting
records of the Company and its subsidiaries and presents fairly the information shown
thereby.
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(g)
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No Material Adverse Change.
Since the date of the most recent financial
statements of the Company included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus, there has not occurred any
material adverse change, or any development involving a prospective material adverse
change, in or affecting the condition, financial or otherwise, business, properties or
results of
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operations of the Company and its subsidiaries taken as a whole, except as otherwise
disclosed in the Registration Statement, the Time of Sale Information and the
Prospectus.
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(h)
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Organization and Good Standing.
The Company and each of its subsidiaries
listed in Schedule 2 hereto (each, a Material Subsidiary and collectively, the
Material Subsidiaries) have been duly organized and are validly existing and in good
standing under the laws of their respective jurisdictions of organization, are duly
qualified to do business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they are engaged,
except where the failure to be so qualified, in good standing or have such power or
authority would not, individually or in the aggregate, have a material adverse effect
on the business, properties, management, financial position or results of operations of
the Company and its subsidiaries taken as a whole or on the performance by the Company
of its obligations under the Securities (a Material Adverse Effect). Except for the
Material Subsidiaries, there are no subsidiaries of the Company that would constitute a
significant subsidiary as defined in Rule 1-02(w) of Regulation S-X of the
Commission.
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(i)
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Capitalization.
The Company has an authorized capitalization as set forth in
the Time of Sale Information and the Prospectus and all the outstanding shares of
capital stock or other equity interests of each Material Subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable and,
except as described in the following sentence, are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party. The Company
indirectly owns all of the outstanding shares of common stock and 8,000 shares of 12.5%
Series A Preferred Stock of Waltrust Properties, Inc., and outside shareholders own the
remaining 913 outstanding shares of 12.5% Series A Preferred Stock of Waltrust
Properties, Inc.
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(j)
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Due Authorization.
The Company has full right, power and authority to execute
and deliver this Agreement, the Securities and the Indenture (collectively, the
Transaction Documents) and to perform its obligations hereunder and thereunder; and
all action required to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation of the transactions
contemplated thereby has been duly and validly taken.
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(k)
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The Indenture.
The Indenture has been duly authorized by the Company and
qualified under the Trust Indenture Act; the Base Indenture has been duly executed and
delivered by the Company; and when the officers
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certificate establishing the terms of the Securities has been duly executed and
delivered by the Company, the Indenture will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws affecting the
enforcement of creditors rights generally or by equitable principles relating to
enforceability, regardless of whether enforceability is considered in a proceeding
in equity or at law (collectively, the Enforceability Exceptions), and the
Indenture conforms to the description thereof contained in the Time of Sale
Information and the Prospectus.
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(l)
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The Securities
. The Securities have been duly authorized by the Company and,
when duly executed, authenticated, issued and delivered as provided in the Indenture
and paid for as provided herein, will be duly and validly issued and outstanding and
will constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms, subject to the Enforceability
Exceptions, will be entitled to the benefits of the Indenture, and the Securities will
conform to the description thereof contained in the Time of Sale Information and the
Prospectus.
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(m)
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Underwriting Agreement
. This Agreement has been duly authorized, executed and
delivered by the Company.
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(n)
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No Violation or Default.
(i) Neither the Company nor any of its Material
Subsidiaries is in violation of its charter or by-laws or similar organizational
documents; (ii) neither the Company nor any of its subsidiaries is in default, and no
event has occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject; and (iii) neither the
Company nor any of its subsidiaries is in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such
default or violation that would not, individually or in the aggregate, have a Material
Adverse Effect.
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(o)
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No Conflicts.
The execution, delivery and performance by the Company of each
of the Transaction Documents, the issuance and sale of the Securities and compliance by
the Company with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a default
under, or result in the
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creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or by-laws or similar organizational documents of the
Company or any of its Material Subsidiaries or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority, except, in the case of clauses (i) and
(iii) above, for any such conflict, breach, violation or default that would not,
individually or in the aggregate, have a Material Adverse Effect.
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(p)
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No Consents Required
. No consent, approval, authorization, order, registration
or qualification of or with any court or arbitrator or governmental or regulatory
authority is required for the execution, delivery and performance by the Company of
each of the Transaction Documents, the issuance and sale of the Securities and
compliance by the Company with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for the registration of
the Securities under the Securities Act, the qualification of the Indenture under the
Trust Indenture Act and such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state securities
laws in connection with the purchase and distribution of the Securities by the
Underwriters.
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(q)
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Legal Proceedings.
Except as described in the Registration Statement, the Time
of Sale Information and the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or any of
its subsidiaries is or may be a party or to which any property of the Company or any of
its subsidiaries is or may be the subject that could reasonably be expected to have a
Material Adverse Effect; no such investigations, actions, suits or proceedings are, to
the best knowledge of the Company, contemplated or threatened by any governmental or
regulatory authority or threatened by others.
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(r)
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Independent Accountants.
Deloitte & Touche LLP, which has certified certain
financial statements of the Company and its subsidiaries is an independent registered
public accounting firm with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public Company
Accounting Oversight Board (United States) and as required by the Securities Act.
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(s)
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Title to Real and Personal Property.
The Company and its subsidiaries have
good and marketable title in fee simple to, or have valid rights to
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lease or otherwise use, all items of real and personal property that are material to
the respective businesses of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances, claims and defects and imperfections of title
except those that (i) do not materially interfere with the use made and proposed to
be made of such property by the Company and its subsidiaries or (ii) could not
reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect.
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(t)
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Investment Company Act.
The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof as
described in the Registration Statement, the Time of Sale Information and the
Prospectus, will not be an investment company or an entity controlled by an
investment company within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder (collectively,
Investment Company Act).
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(u)
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Licenses and Permits.
The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign
governmental or regulatory authorities that are necessary for the ownership or lease of
their respective properties or the conduct of their respective businesses as described
in the Registration Statement, the Time of Sale Information and the Prospectus, except
where the failure to possess or make the same would not, individually or in the
aggregate, have a Material Adverse Effect; and except as described in the Registration
Statement, the Time of Sale Information and the Prospectus, neither the Company nor any
of its subsidiaries has received notice of any revocation or modification of any such
license, certificate, permit or authorization or has any reason to believe that any
such license, certificate, permit or authorization will not be renewed in the ordinary
course.
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(v)
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Disclosure Controls
. The Company and its subsidiaries maintain an effective
system of disclosure controls and procedures (as defined in Rule 13a-15(e) of the
Exchange Act) that is designed to ensure that information required to be disclosed by
the Company in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Commissions rules and forms, including controls and procedures designed to ensure that
such information is accumulated and communicated to the Companys management as
appropriate to allow timely decisions regarding required disclosure. The Company and
its subsidiaries have carried out evaluations of the effectiveness of their disclosure
controls and procedures as required by Rule 13a-15 of the Exchange Act.
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(w)
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Accounting Controls.
The Company and its subsidiaries maintain systems of
internal control over financial reporting (as defined in Rule 13a-15(f) of the
Exchange Act) that comply with the requirements of the Exchange Act and have been
designed by, or under the supervision of, their respective principal executive and
principal financial officers, or persons performing similar functions, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including, but not limited to internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed
in accordance with managements general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with managements general or
specific authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Companys internal control over financial reporting is
effective and the Company is not aware of any material weakness in the Companys
internal controls.
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(x)
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No Registration Rights
. No person has the right to require the Company or any
of its subsidiaries to register any securities for sale under the Securities Act by
reason of the filing of the Registration Statement with the Commission or the issuance
and sale of the Securities.
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(y)
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No Stabilization.
The Company has not taken, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Securities.
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(z)
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Status under the Securities Act
. The Company is not an ineligible issuer and
is a well-known seasoned issuer, in each case as defined under the Securities Act, in
each case at the times specified in the Securities Act in connection with the offering
of the Securities.
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4.
Further Agreements of the Company
. The Company covenants and agrees with each
Underwriter that:
(a)
Required Filings.
The Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act,
will file any Issuer Free Writing Prospectus (including the Term Sheets in the forms of Annex C
hereto) to the extent required by Rule 433 under the Securities Act; and will file promptly all
reports and any definitive proxy or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities; and the Company will furnish
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copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously
delivered) to the Underwriters in New York City prior to 10:00 A.M., New York City time, on the
business day next succeeding the date of this Agreement in such quantities as the Representatives
may reasonably request. The Company will pay the registration fees for this offering within the
time period required by Rule 456(b)(1)(i) under the Securities Act (without giving effect to the
proviso therein) and in any event prior to the Closing Date.
(b)
Delivery of Copies.
The Company will deliver, without charge, (i) to the Representatives,
two signed copies of the Registration Statement as originally filed and each amendment thereto, in
each case including all exhibits and consents filed therewith and documents incorporated by
reference therein; and (ii) to each Underwriter (A) a conformed copy of the Registration Statement
as originally filed and each amendment thereto, in each case including all exhibits and consents
filed therewith and (B) during the Prospectus Delivery Period (as defined below), as many copies of
the Prospectus (including all amendments and supplements thereto and documents incorporated by
reference therein) and each Issuer Free Writing Prospectus as the Representatives may reasonably
request. As used herein, the term Prospectus Delivery Period means such period of time after the
first date of the public offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law to be delivered (or
required to be delivered but for Rule 172 under the Securities Act) in connection with sales of the
Securities by any Underwriter or dealer.
(c)
Amendments or Supplements; Issuer Free Writing Prospectuses.
Before making, preparing,
using, authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and
before filing any amendment or supplement to the Registration Statement or the Prospectus during
the Prospectus Delivery Period, the Company will furnish to the Representatives and counsel for the
Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for
review and will not make, prepare, use, authorize, approve, refer to or file any such Issuer Free
Writing Prospectus or file any such proposed amendment or supplement to which the Representatives
reasonably object, unless in the reasonable judgment of the Company and its counsel, such proposed
amendment or supplement is necessary to comply with law or to make the statements contained in the
Registration Statement, Time of Sale Information, Prospectus or any Issuer Free Writing Prospectus,
not misleading.
(d)
Notice to the Representatives.
During the Prospectus Delivery Period, the Company will
advise the Representatives promptly, and confirm such advice in writing, (i) when the Registration
Statement has become effective; (ii) when any amendment to the Registration Statement has been
filed or becomes effective; (iii) when any supplement to the Prospectus or any amendment to the
Prospectus or any Issuer Free Writing Prospectus has been filed; (iv) of any request by the
Commission for any amendment to the Registration Statement or any amendment or supplement to the
Prospectus or the receipt of any comments from the Commission relating to the Registration
Statement or any other request by the Commission for any additional information; (v) of the
issuance by the Commission of any order suspending the
12
effectiveness of the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding for
that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence of any event
within the Prospectus Delivery Period as a result of which the Prospectus, the Time of Sale
Information or any Issuer Free Writing Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances existing
when the Prospectus, the Time of Sale Information or any such Issuer Free Writing Prospectus is
delivered to a purchaser, not misleading; (vii) of the receipt by the Company of any notice of
objection of the Commission to the use of the Registration Statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Securities Act or if the Company otherwise
ceases to be eligible to use the automatic shelf registration form; and (viii) of the receipt by
the Company of any notice with respect to any suspension of the qualification of the Securities for
offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such
order suspending the effectiveness of the Registration Statement, preventing or suspending the use
of any Preliminary Prospectus or the Prospectus or suspending any such qualification of the
Securities and, if any such order is issued, will obtain as soon as possible the withdrawal
thereof.
(e)
Time of Sale Information.
If at any time prior to the Closing Date (i) any event shall
occur or condition shall exist as a result of which the Time of Sale Information as then amended or
supplemented would include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the circumstances, not
misleading or (ii) it is necessary to amend or supplement the Time of Sale Information to comply
with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and,
subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to
the Underwriters and to such dealers as the Representatives may designate, such amendments or
supplements to the Time of Sale Information as may be necessary so that the statements in the Time
of Sale Information as so amended or supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with law.
(f)
Ongoing Compliance
. If during the Prospectus Delivery Period (i) any event shall occur or
condition shall exist as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it
is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately
notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file
with the Commission and furnish to the Underwriters and to such dealers as the Representatives may
designate, such amendments or supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or
13
supplemented will not, in the light of the circumstances existing when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus will comply with law
.
(g)
Blue Sky Compliance.
The Company will qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request
and will continue such qualifications in effect so long as required for distribution of the
Securities;
provided
that the Company shall not be required to (i) qualify as a foreign
corporation or other entity or as a dealer in securities in any such jurisdiction where it would
not otherwise be required to so qualify, (ii) file any general consent to service of process in any
such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not
otherwise so subject.
(h)
Earning Statement.
The Company will make generally available to its security holders and
the Representatives as soon as practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering
a period of at least twelve months beginning with the first fiscal quarter of the Company occurring
after the effective date (as defined in Rule 158) of the Registration Statement.
(i)
Clear Market.
During the period from the date hereof through and including the business
day following the Closing Date, the Company will not, without the prior written consent of the
Representatives, offer, sell, contract to sell or otherwise dispose of any debt securities issued
or guaranteed by the Company and having a tenor of more than one year.
(j)
Use of Proceeds.
The Company will apply the net proceeds from the sale of the Securities
as described in the Registration Statement, the Time of Sale Information and the Prospectus under
the heading Use of Proceeds.
(k)
No Stabilization.
The Company will not take, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any stabilization or manipulation of
the price of the Securities.
(l)
Record Retention
. The Company will, pursuant to reasonable procedures developed in good
faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission
in accordance with Rule 433 under the Securities Act.
(m)
Registration Statement Renewal Deadline
. If immediately prior to the third anniversary
(the Renewal Deadline) of the initial effective date of the Registration Statement, any of the
Securities remain unsold by the Underwriters, the Company will prior to the Renewal Deadline file,
if it has not already done so and is eligible to do so, a new automatic shelf registration
statement relating to the Securities, in a form satisfactory to the Representatives. If the
Company is no longer eligible to file an automatic shelf registration statement, the Company will
prior to the Renewal Deadline, if it has not already done so, file a new shelf registration
statement relating to the Securities, in a form satisfactory to the Representatives, and will use
its best efforts to cause such registration statement to be declared effective within 90 days after
the
14
Renewal Deadline. The Company will take all other action necessary or appropriate to permit
the public offering and sale of the Securities to continue as contemplated in the expired
registration statement relating to the Securities. References herein to the Registration Statement
shall include such new automatic shelf registration statement or such new shelf registration
statement, as the case may be.
(n)
Notice of Inability to Use Automatic Shelf Registration Statement Form
. If at any time
during the Prospectus Delivery Period the Company receives from the Commission a notice pursuant to
Rule 401(g)(2) or otherwise ceases to be eligible to use the automatic shelf registration statement
form (as specified in Section 3(d)(vii) hereof), the Company will (i) promptly notify the
Representatives, (ii) promptly file a new registration statement or post-effective amendment on the
proper form relating to the Securities, in a form satisfactory to the Representatives, (iii) use
its best efforts to cause such registration statement or post-effective amendment to be declared
effective and (iv) promptly notify the Representatives of such effectiveness. The Company will
take all other action necessary or appropriate to permit the public offering and sale of the
Securities to continue as contemplated in the registration statement that was the subject of the
Rule 401(g)(2) notice or for which the Company has otherwise become ineligible. References herein
to the Registration Statement shall include such new registration statement or post-effective
amendment, as the case may be.
5.
Certain Agreements of the Underwriters
. Each Underwriter hereby represents and
agrees that:
(a) It has not and will not use, authorize use of, refer to, or participate in the planning
for use of, any free writing prospectus, as defined in Rule 405 under the Securities Act (which
term includes use of any written information furnished to the Commission by the Company and not
incorporated by reference into the Registration Statement and any press release issued by the
Company) other than (i) a free writing prospectus that, solely as a result of use by such
underwriter, would not trigger an obligation to file such free writing prospectus with the
Commission pursuant to Rule 433, (ii) any Issuer Free Writing Prospectus listed on Annex B-1 and
Annex B-2 or prepared pursuant to Section 3(c) or Section 4(c) above (including any electronic road
show), or (iii) any free writing prospectus prepared by such underwriter and approved by the
Company in advance in writing (each such free writing prospectus referred to in clauses (i) or
(iii), an Underwriter Free Writing Prospectus). Notwithstanding the foregoing, the Underwriters
may use any term sheet substantially in the form of Annex C hereto without the consent of the
Company.
(b) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such proceeding against it is
initiated during the Prospectus Delivery Period).
(c) It agrees that it has complied and will comply with the selling restrictions in connection
with the offering of Securities as set forth in Annex D hereto.
15
6.
Conditions of Underwriters Obligations.
The obligation of each Underwriter to
purchase Securities on the Closing Date as provided herein is subject to the performance by the
Company of its covenants and other obligations hereunder and to the following additional
conditions:
(a)
Registration Compliance; No Stop Order.
No order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose, pursuant to
Rule 401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before or
threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have
been timely filed with the Commission under the Securities Act (in the case of a Issuer Free
Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance
with Section 4(a) hereof; and all requests by the Commission for additional information shall have
been complied with to the reasonable satisfaction of the Representatives.
(b)
Representations and Warranties.
The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and on and as of the Closing Date;
and the statements of the Company and its officers made in any certificates delivered pursuant to
this Agreement shall be true and correct on and as of the Closing Date.
(c)
No Downgrade.
Subsequent to the earlier of (A) the Time of Sale and (B) the execution and
delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded the
Securities or any other debt securities or preferred stock of or guaranteed by the Company or any
of its subsidiaries by any nationally recognized statistical rating organization, as such term is
defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no such
organization shall have publicly announced that it has under surveillance or review, or has changed
its outlook with respect to, its rating of the Securities or of any other debt securities or
preferred stock of or guaranteed by the Company or any of its subsidiaries (other than an
announcement with positive implications of a possible upgrading).
(d)
No Material Adverse Change.
No event or condition of a type described in Section 3(g)
hereof shall have occurred or shall exist, which event or condition is not described in the Time of
Sale Information (excluding any amendment or supplement thereto) and the Prospectus (excluding any
amendment or supplement thereto) and the effect of which in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the
Securities on the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Prospectus.
(e)
Officers Certificate.
The Representatives shall have received on and as of the Closing
Date a certificate of an executive officer of the Company who has specific knowledge of the
Companys financial matters and is satisfactory to the Representatives (i) confirming that such
officer has carefully reviewed the Registration Statement, the Time of Sale Information and the
Prospectus and, to the best knowledge of such officer,
16
the representations set forth in Sections 3(b) and 3(d) hereof are true and correct, (ii)
confirming that the other representations and warranties of the Company in this Agreement are true
and correct and that the Company 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 and (iii) to the
effect set forth in paragraphs (a), (c) and (d) above.
(f)
Certificate of the Chief Financial Officer and Controller
. On the date of this Agreement
the Representatives shall have received a certificate of the Chief Financial Officer and Controller
of the Company, in form and substance reasonably satisfactory to the Representatives.
(g)
Comfort Letters.
On the date of this Agreement and on the Closing Date, Deloitte & Touche
LLP shall have furnished to the Representatives, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form and substance
reasonably satisfactory to the Representatives, containing statements and information of the type
customarily included in accountants comfort letters to underwriters with respect to the
financial statements and certain financial information contained or incorporated by reference in
the Registration Statement, the Time of Sale Information and the Prospectus;
provided
that
the letter delivered on the Closing Date shall use a cut-off date no more than three business
days prior to the Closing Date.
(h)
Opinion and 10b-5 Statement of Counsel for the Company.
(i) Drinker Biddle & Reath LLP,
counsel for the Company, shall have furnished to the Representatives, at the request of the
Company, their written opinion and 10b-5 Statement, dated the Closing Date and addressed to the
Underwriters, in form and substance reasonably satisfactory to the Representatives, to the effect
set forth in Annex A-1 hereto; and (ii) Oren B. Azar, Director M&A, Securities and Corporate of
the Company, shall have furnished to the Representatives, at the request of the Company, his
written opinion, dated the Closing Date and addressed to the Underwriters, in form and substance
reasonably satisfactory to the Representatives, to the effect set forth in Annex A-2 hereto.
(i)
Opinion and 10b-5 Statement of Counsel for the Underwriters.
The Representatives shall
have received on and as of the Closing Date an opinion and 10b-5 Statement of Shearman & Sterling
LLP, counsel for the Underwriters, with respect to such matters as the Representatives may
reasonably request, and such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.
(j)
No Legal Impediment to Issuance.
No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or
sale of the Securities; and no injunction or order of any federal, state or foreign court shall
have been issued that would, as of the Closing Date, prevent the issuance or sale of the
Securities.
17
(k)
Good Standing
. The Representatives shall have received on the Closing Date satisfactory
evidence as of the Closing Date or a date prior to the Closing Date that is reasonably acceptable
to the Representatives of the good standing of the Company and its Material Subsidiaries in their
respective jurisdictions of organization and their good standing in such other jurisdictions as the
Representatives may reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such jurisdictions.
(l)
Additional Documents.
On or prior to the Closing Date, the Company shall have furnished
to the Representatives such further certificates and documents as the Representatives may
reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
7.
Indemnification and Contribution
.
(a)
Indemnification of the Underwriters.
The Company agrees to indemnify and hold harmless
each Underwriter, its affiliates, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities (including, without
limitation, legal fees and other expenses reasonably incurred in connection with any suit, action
or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several,
that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary in order to make the
statements therein, not misleading, (ii) or any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or supplement thereto), any Issuer Free
Writing Prospectus or any Time of Sale Information, or caused by any omission or alleged omission
to state therein a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in conformity with any
information relating to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein.
(b)
Indemnification of the Company.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise
out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission
made in
18
reliance upon and in conformity with any information relating to such Underwriter furnished to
the Company in writing by such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus (or any amendment or supplement thereto), any Issuer Free
Writing Prospectus or any Time of Sale Information, it being understood and agreed that the only
such information consists of the following: the two paragraphs under the subsection entitled
Stabilization and Short Positions under the caption Underwriting.
(c)
Notice and Procedures.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such
person (the Indemnified Person) shall promptly notify the person against whom such
indemnification may be sought (the Indemnifying Person) in writing;
provided
that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under this Section 7 except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and
provided
,
further
, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this Section 7. If any
such proceeding shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others
entitled to indemnification pursuant to Section 7 that the Indemnifying Party may designate in such
proceeding and shall pay the fees and expenses of such proceeding and shall pay the fees and
expenses of counsel related to such proceeding, as incurred. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person
and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those available to the
Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded
parties) include both the Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential differing interest
between them. It is understood and agreed that the Indemnifying Person shall not, in connection
with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for any Underwriter, its affiliates, directors and officers and any control persons
of such Underwriter shall be designated in writing by the Representatives and any such separate
firm for the Company, its directors, its officers who signed the Registration Statement and any
control persons of the Company shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if
19
there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to the date
of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such proceeding and (y) does
not include any statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.
(d)
Contribution.
If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Securities or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but also the
relative fault of the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the Company from the sale
of the Securities and the total underwriting discounts and commissions received by the Underwriters
in connection therewith, in each case as set forth in the table on the cover of the Prospectus,
bear to the aggregate offering price of the Securities. The relative fault of the Company on the
one hand and the Underwriters on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company or by the
Underwriters and the parties relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e)
Limitation on Liability.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by
pro
rata
allocation (even if the Underwriters were treated as one entity for
20
such purpose) or by any other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified
Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Person in connection with any such action or
claim. Notwithstanding the provisions of this Section 7, in no event shall an Underwriter be
required to contribute any amount in excess of the amount by which the total underwriting discounts
and commissions received by such Underwriter with respect to the offering of the Securities exceeds
the amount of any damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters obligations to contribute pursuant to this Section 7 are several in proportion to
their respective purchase obligations hereunder and not joint.
(f)
Non-Exclusive Remedies.
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
8.
Effectiveness of Agreement
. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9.
Termination
. This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company, if after the execution and delivery of this Agreement
and prior to the Closing Date (i) trading generally shall have been suspended or materially limited
on the New York Stock Exchange or the over-the-counter market; (ii) trading of any securities
issued or guaranteed by the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the Representatives, is
material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale
or delivery of the Securities on the terms and in the manner contemplated by this Agreement, the
Time of Sale Information and the Prospectus.
10.
Defaulting Underwriter
. (a) If, on the Closing Date, any Underwriter defaults on
its obligation to purchase the Securities that it has agreed to purchase hereunder, the
non-defaulting Underwriters may in their discretion arrange for the purchase of such Securities by
other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36
hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for
the purchase of such Securities, then the Company shall be entitled to a further period of 36 hours
within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase
such Securities on such terms. If other persons become obligated or agree to
21
purchase the Securities of a defaulting Underwriter, either the non-defaulting Underwriters or
the Company may postpone the Closing Date for up to five full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement and the Prospectus or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the Registration
Statement and the Prospectus that effects any such changes. As used in this Agreement, the term
Underwriter includes, for all purposes of this Agreement unless the context otherwise requires,
any person not listed in Schedule 1 hereto that, pursuant to this Section 10, purchases Securities
that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as
provided in paragraph (a) above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities,
then the Company shall have the right to require each non-defaulting Underwriter to purchase the
principal amount of Securities that such Underwriter agreed to purchase hereunder plus such
Underwriters
pro
rata
share (based on the principal amount of Securities that such
Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as
provided in paragraph (a) above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the
Company shall not exercise the right described in paragraph (b) above, then this Agreement shall
terminate without liability on the part of the non-defaulting Underwriters. Any termination of
this Agreement pursuant to this Section 10 shall be without liability on the part of the Company,
except that the Company will continue to be liable for the payment of expenses as set forth in
Section 11 hereof and except that the provisions of Section 7 hereof shall not terminate and shall
remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its default.
11.
Payment of Expenses
.
(a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid
all costs and expenses incident to the performance of its obligations hereunder, including without
limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery
of the Securities and any taxes payable in that connection; (ii) the costs incident to the
preparation, printing and filing under the Securities Act of the Registration Statement, the
Preliminary Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information and the
Prospectus (including all exhibits, amendments and supplements thereto) and the distribution
22
thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents;
(iv) the fees and expenses of the Companys counsel and independent accountants; (v) the fees and
expenses incurred in connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such jurisdictions as the
Representatives may designate and the preparation, printing and distribution of a Blue Sky
Memorandum (including the related fees and expenses of counsel for the Underwriters); (vi) any fees
charged by rating agencies for rating the Securities; (vii) the fees and expenses of the Trustee
and any paying agent (including related fees and expenses of any counsel to such parties); (viii)
all expenses and application fees incurred in connection with any filing with, and clearance of the
offering by, the Financial Industry Regulatory Authority; (ix) all expenses incurred by the Company
in connection with any road show presentation to potential investors, if any; and (x) all
expenses and application fees related to the listing of the Securities on any securities exchange.
(b) If (i) this Agreement is terminated pursuant to Section 9(ii), (ii) the Company for any
reason fails to tender the Securities for delivery to the Underwriters or (iii) the Underwriters
decline to purchase the Securities for any reason permitted under this Agreement, the Company
agrees to reimburse the Underwriters for all out-of-pocket costs and expenses (including the fees
and expenses of their counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
12.
Persons Entitled to Benefit of Agreement
. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to herein, and the affiliates of each
Underwriter referred to in Section 7 hereof. Nothing in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. No purchaser of Securities from any
Underwriter shall be deemed to be a successor merely by reason of such purchase.
13.
Survival
. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company and the Underwriters contained in this Agreement or made
by or on behalf of the Company or the Underwriters pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company or the Underwriters.
14.
Certain Defined Terms
. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term affiliate has the meaning set forth in Rule 405 under the Securities
Act; (b) the term business day means any day other than a day on which banks are permitted or
required to be closed in New York City; (c) the term subsidiary has the meaning set forth in
Rule 405 under the Securities Act.
23
15.
Miscellaneous
. (a)
Authority of the Representatives.
Any action by the
Underwriters hereunder may be taken by the Representatives on behalf of the Underwriters, and any
such action taken by the Representatives shall be binding upon the Underwriters.
(b)
Notices.
All notices and other communications hereunder shall be in writing and shall
be deemed to have been duly given if mailed or transmitted and confirmed by any standard
form of telecommunication. Notices to the Underwriters shall be given to the
Representatives c/o Banc of America Securities LLC, One Bryant Park, NY1-100-18-03, New
York, New York 10036 (fax: 646-855-5958), Attention: High Grade Transactions
Management/Legal; c/o Goldman, Sachs & Co., 85 Broad Street, 20
th
Floor, New
York, New York 10004, Attention: Registration Department; c/o J.P. Morgan Securities Inc.,
270 Park Avenue, New York, New York 10017 (fax: 212-834-6081), Attention: High Grade
Syndicate Desk 8
th
floor; and c/o Morgan Stanley & Co. Incorporated,
1585 Broadway, New York, New York 10036 (fax: 212-507-8999), Attention: Equity Syndicate
Desk. Notices to the Company shall be given to it at 1411 Wilmot Road, Deerfield, Illinois
60015 (fax: 847-914-3005); Attention: Dana I. Green.
(c)
Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
(d)
Counterparts.
This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e)
Amendments or Waivers.
No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f)
Headings.
The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
24
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
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Very truly yours,
WALGREEN CO.
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By
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/s/ Alan G. McNally
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Name:
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Alan G. McNally
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Title:
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Chairman & Acting Chief Executive
Officer
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By
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/s/ Wade D. Miquelon
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Name:
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Wade D. Miquelon
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Title:
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Chief Financial Officer & Senior Vice-President
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Accepted as of the date first written above
BANC OF AMERICA SECURITIES LLC
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By
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/s/ Peter J. Carbone
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Authorized Signatory
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GOLDMAN, SACHS & CO.
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By
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/s/ Goldman, Sachs & Co.
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(Goldman, Sachs & Co.)
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J.P. MORGAN SECURITIES INC.
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By
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/s/ Robert Bottamedi
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Authorized Signatory
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MORGAN STANLEY & CO. INCORPORATED
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By
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/s/ Yuri Slyz
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Authorized Signatory
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For themselves and on behalf of the several Underwriters listed in Schedule 1 hereto.
Underwriting Agreement (Signature Page)
Schedule 1
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Principal Amount
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Underwriter
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of Notes
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Banc of America Securities LLC
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$
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225,000,000
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Goldman, Sachs & Co.
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225,000,000
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J.P. Morgan Securities Inc.
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225,000,000
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Morgan Stanley & Co. Incorporated
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225,000,000
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Wells Fargo Securities, LLC
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70,000,000
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Loop Capital Markets, LLC
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30,000,000
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Total
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$
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1,000,000,000
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Sch 1-1
Schedule 2
Material Subsidiaries
Waltrust Properties, Inc.
Bond Drug Company of Illinois, LLC
Walgreen Mercantile Corp.
D-1
EXHIBIT 4.1
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY (AS DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. THIS
GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR ITS NOMINEE ONLY IN LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND
UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS GLOBAL SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (DTC), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
WALGREEN CO.
5.25% Note due January 15, 2019
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No. ___
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Principal Amount
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CUSIP No. 931422AE9
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$
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Walgreen Co., an Illinois corporation (hereinafter called the Company, which term includes
any successor Person under the Indenture referred to below), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of
January
15, 2019 and to pay interest thereon from January 13, 2009 or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on January 15 and July 15
in each year (each an Interest Payment Date), commencing July 15, 2009 at the rate of 5.25% per
annum, until the principal hereof is paid or duly made available for payment. The interest so
payable and punctually paid or duly provided for on any Interest Payment Date shall, as provided in
such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest,
which shall be the January 1 or July 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.
Any such interest which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date shall forthwith cease to be payable to the Holder hereof on the relevant
Regular Record Date by virtue of having been such Holder, and may be paid to the Person in
whose
name this Note (or one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by the Company, notice
whereof shall be given to Holders of Notes of this series not less than 10 days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in said Indenture.
Payment of the principal of and the interest on this Note shall be made at the designated
office of the Trustee (as defined below) at Wells Fargo Bank, National Association, Corporate Trust
Operations, 608 Second Avenue South, N9303-121, Minneapolis, Minnesota 55479, in such currency of
the United States of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company, interest may be paid by check
mailed to the address of the Person entitled thereto as such address shall appear in the Security
Register, provided, further, that payment to DTC or any successor depositary may be made by wire
transfer to the account maintained with a bank in the United States designated by DTC or such
successor depositary in writing.
This Note is one of a duly authorized issue of securities of the Company (herein called the
Notes), issued and to be issued in one or more series under an Indenture, dated as of July 17,
2008 (herein called, together with all indentures supplemental thereto, the Indenture) between
the Company and Wells Fargo Bank, National Association, as Trustee (herein called the Trustee,
which term includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders
of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.
This Note is one of the series designated on the face hereof, limited (subject to exceptions
provided in the Indenture) to the aggregate principal amount specified in the Officers Certificate
dated January 13, 2009 establishing the terms of the Notes pursuant to the Indenture.
The Company may, at its option, redeem the Notes, at any time in whole or from time to time in
part, at a redemption price equal to the greater of: (i) 100% of the principal amount of the Notes
to be redeemed; or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of interest accrued as
of the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below), plus 45
basis points, plus accrued and unpaid interest thereon to, but excluding, the date of redemption.
Further, installments of interest on the Notes to be redeemed that are due and payable on
Interest Payment Dates falling on or prior to a redemption date shall be payable on the Interest
Payment Date to the Holders thereof as of the close of business on the relevant Regular Record
Date.
For purposes of the optional redemption provisions of this Note, the following defined terms
shall have the meanings specified:
Comparable Treasury Issue means the United States Treasury security selected by the
Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of
the Notes to be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Notes.
Comparable Treasury Price means, with respect to any redemption date, (i) the average of
four Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, (ii) if the Company obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such quotations, or (iii) if only one
Reference Treasury Dealer Quotation is received, such quotation.
Primary Treasury Dealer means a primary United States government securities dealer in the
United States.
Quotation Agent means the Reference Treasury Dealer appointed by the Company.
Reference Treasury Dealer means Banc of America Securities LLC, Goldman, Sachs & Co., J.P.
Morgan Securities, Inc. and Morgan Stanley & Co. Incorporated (or their respective affiliates that
are Primary Treasury Dealers) and their respective successors; provided, however, that if any of
the foregoing shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer.
Reference Treasury Dealer Quotations means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Company, of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Company by such Reference Treasury Dealer at 3:30 p.m., New York City
time, on the third business day preceding such redemption date.
Treasury Rate means, with respect to any redemption date, the rate per annum equal to the
semi-annual equivalent yield to actual or interpolated maturity (on a day count basis) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for such redemption
date.
Notice of any redemption shall be mailed at least 30 days but not more than 60 days before the
redemption date to each Holder of the Notes to be redeemed.
Unless the Company defaults in payment of the redemption price, on and after the redemption
date, interest shall cease to accrue on the Notes or portions thereof called for redemption. If
less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected by the
Trustee by a method the Trustee deems to be fair and appropriate.
If a Change of Control Triggering Event (as defined below) occurs with respect to the Notes,
unless the Company has exercised its option to redeem the Notes as described above, the Company
shall make an offer (a Change of Control Offer) to each Holder of the Notes to repurchase all or
any part equal to $2,000 or an integral multiple of $1,000 in excess thereof of
that Holders Notes
on the terms set forth herein. In a Change of Control Offer, the Company shall offer payment in
cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid
interest, if any, on the Notes repurchased to the date of repurchase (a Change of Control
Payment).
Within 30 days following any Change of Control Triggering Event or, at the Companys option,
prior to any Change of Control (as defined below), but after public announcement of the transaction
that constitutes or may constitute the Change of Control, a notice shall be mailed to each Holder,
describing the transaction that constitutes or may constitute the Change of Control Triggering
Event and offering to repurchase the Notes on the date specified in the applicable notice, which
date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed
(a Change of Control Payment Date). The notice shall, if mailed prior to the date of consummation
of the Change of Control, state that the Change of Control Offer is conditioned on the Change of
Control Triggering Event occurring on or prior to the applicable Change of Control Payment Date.
On each Change of Control Payment Date, the Company shall, to the extent lawful:
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(i)
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accept for payment all Notes or portions of Notes properly
tendered pursuant to the applicable Change of Control Offer;
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(ii)
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deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly tendered;
and
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(iii)
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deliver or cause to be delivered to the Trustee the Notes
properly accepted, together with an Officers Certificate stating the aggregate
principal amount of Notes or portions of Notes being repurchased.
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The Company shall not be required to make a Change of Control Offer upon the occurrence of a
Change of Control Triggering Event if a third party makes such an offer in the manner, at the times
and otherwise in compliance with the requirements for an offer made by the Company and such third
party purchases all Notes properly tendered and not withdrawn under its offer. In addition, the
Company shall not repurchase any Notes if there has occurred and is continuing on the Change of
Control Payment Date an Event of Default under the Indenture, other than a default in the payment
of the Change of Control Payment upon a Change of Control Triggering Event.
The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act
of 1934, as amended (the Exchange Act), and any other securities laws and regulations thereunder,
to the extent those laws and regulations are applicable in connection with the repurchase of the
Notes as a result of a Change of Control Triggering Event.
To the extent that the provisions of any securities laws or regulations conflict with the
Change of Control Offer provisions of the Notes, the Company shall comply with those securities
laws and regulations and shall not be deemed to have breached its obligations under the Change of
Control Offer provisions of the Notes by virtue of any such conflict and compliance.
For purposes of the Change of Control Offer provisions of the Notes, the following defined
terms shall have the meanings specified:
Change of Control means the occurrence of any of the following: (1) the direct or indirect
sale, lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or more series of related transactions, of all or substantially all of the
Companys assets and those of the Companys subsidiaries, taken as a whole, to any person, other
than the Company or one of its subsidiaries; (2) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that any person becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the Companys outstanding Voting Stock or other Voting Stock into
which the Companys Voting Stock is reclassified, consolidated, exchanged or changed, measured by
voting power rather than number of shares; (3) the Company consolidates with, or merges with or
into, any person, or any person consolidates with, or merges with or into, the Company, in any such
event pursuant to a transaction in which any of the Companys outstanding Voting Stock or the
Voting Stock of such other person is converted into or exchanged for cash, securities or other
property, other than any such transaction where the shares of the Companys Voting Stock
outstanding immediately prior to such transaction constitute, or are converted into or exchanged
for, a majority of the Voting Stock of the surviving person or any direct or indirect parent
company of the surviving person immediately after giving effect to such transaction; (4) the first
day on which a majority of the members of the Companys Board of Directors are not Continuing
Directors; or (5) the adoption of a plan relating to the Companys liquidation or dissolution.
Notwithstanding the foregoing, a transaction shall not be deemed to involve a Change of Control
under clause (2) above if (i) the Company becomes a direct or indirect wholly owned subsidiary of a
holding company and (ii)(A) the direct or indirect holders of the Voting Stock of such holding
company immediately following that transaction are substantially the same as the holders of the
Companys Voting Stock immediately prior to that transaction or (B) immediately following that
transaction no person (other than a holding company satisfying the requirements of this sentence)
is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such
holding company. The term person, as used in this definition, has the meaning given thereto in
Section 13(d)(3) of the Exchange Act.
Change of Control Triggering Event means the occurrence of both a Change of Control and a
Rating Event.
Continuing Directors means, as of any date of determination, any member of the Companys
Board of Directors who (1) was a member of such Board of Directors on the date the Notes were
issued; or (2) was nominated for election, elected or appointed to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such Board of Directors at
the time of such nomination, election or appointment (either by a specific vote or by approval of
the Companys proxy statement in which such member was named as a nominee for election as a
director, without objection to such nomination).
Investment Grade Rating means a rating equal to or higher than Baa3 (or the equivalent) by
Moodys and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from
any replacement Rating Agency or Rating Agencies selected by the Company.
Moodys means Moodys Investors Service, Inc. and its successors.
Rating Agencies means (1) each of Moodys and S&P; and (2) if either of Moodys or S&P
ceases to rate the Notes or fails to make a rating of the Notes publicly available for reasons
outside of the Companys control, a nationally recognized statistical rating organization within
the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company (as
certified by a resolution of the Companys Board of Directors) as a replacement agency for Moodys
or S&P, or both of them, as the case may be.
Rating Event means the rating on the Notes is lowered by both Rating Agencies and the Notes
are rated below an Investment Grade Rating by both Rating Agencies, in any case on any day during
the period (which period shall be extended so long as the rating of the Notes is under publicly
announced consideration for a possible downgrade by any of the Rating Agencies) commencing upon the
first public notice of the occurrence of a Change of Control or our intention to effect a Change of
Control and ending 60 days following consummation of such Change of Control.
S&P means Standard & Poors Rating Services, a division of The McGraw-Hill Companies, Inc.,
and its successors.
Voting Stock means, with respect to any specified person (as such term is used in Section
13(d)(3) of the Exchange Act) as of any date, the capital stock of such person that is at the time
entitled to vote generally in the election of the board of directors of such person.
The Notes are not subject to any sinking fund.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of
this Note or certain restrictive covenants and Events of Default with respect to this Note, in each
case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur and be continuing, the
then-outstanding principal of the Notes of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority in aggregate principal amount
of the Securities at the time Outstanding of each series affected thereby. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate principal amount
of the Securities of any series at the time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the right of the Holder of this Note, which is absolute and unconditional, to
receive payment of the principal of and, subject to certain qualifications in the Indenture,
interest on this Note at the times herein and in the Indenture prescribed and to institute suit for
the enforcement of any such payment unless the Holder of this Note shall have consented to the
impairment of such right.
As provided in the Indenture and subject to certain limitations set forth therein, the
transfer of this Note may be registered in the Security Register, upon surrender of this Note for
registration of transfer at the Office or Agency of the Company in any place where the principal of
and any premium and interest on this Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or by his attorney duly authorized in writing, and thereupon one or
more new Notes of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, shall be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in denominations of $2,000 and
integral multiples of $1,000 in excess thereof. Subject to certain limitations therein set forth
in the Indenture and in this Note, the Notes are exchangeable for a like aggregate principal amount
of Notes of this series in different authorized denominations, as requested by the Holders
surrendering the same.
No service charge by the Company shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any tax or other
governmental charge and any other expenses payable in connection therewith, other than in certain
cases provided in the Indenture.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name this Note is
registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture contains provisions whereby (i) the Company may be discharged from its
obligations with respect to the Notes (subject to certain exceptions) or (ii) the Company may be
released from its obligations under specified covenants and agreements in the Indenture, in each
case if the Company irrevocably deposits with the Trustee money or U.S. Government Obligations
sufficient to pay and discharge the entire indebtedness on all Notes of this series, and satisfies
certain other conditions, all as more fully provided in the Indenture.
This Note shall be governed by and construed in accordance with the laws of the State of New
York.
All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by or on behalf of the
Trustee under the Indenture by the manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefits under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal.
Dated: January 13, 2009
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[Seal]
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WALGREEN CO.
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Attest:
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By:
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Name:
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Name:
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Title:
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Title:
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TRUSTEES CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
Dated: January 13, 2009
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WELLS FARGO BANK,
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NATIONAL ASSOCIATION, as
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Trustee
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By:
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Authorized Signatory
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations.
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TEN COM
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as tenants
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UNIF GIFT MIN ACT . . .Custodian..
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in common
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(Cust) (Minor)
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TEN ENT
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as tenants by
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Under Uniform Gifts to
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the entireties
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Minor Act
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JT TEN
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as joint tenants
with right of
survivorship and
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not as tenants in
common
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(State)
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Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
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(Please insert Assignees legal name)
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(Please insert Social Security or other identifying number of Assignee)
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(Please print or typewrite name and address including postal zip code of Assignee)
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the within Note of WALGREEN CO. and does hereby irrevocably constitute and
appoint
attorney to transfer the
said Note on the books of the Company, with full power of substitution in the
premises.
Dated:
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Your Signature:
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(Sign exactly as your name appears
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on the face of this Note)
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[NOTICE: The signature to this assignment must correspond with the name as written upon the
face of the within instrument in every particular, without alteration or enlargement or any change
whatever.]