EXHIBIT 1.1
EXECUTION COPY
$2,200,000,000
THE MAY DEPARTMENT STORES COMPANY,
Issuer
and
THE MAY DEPARTMENT STORES COMPANY,
Guarantor
3.95% NOTES DUE 2007
4.80% NOTES DUE 2009
5.75% NOTES DUE 2014
6.65% DEBENTURES DUE 2024
6.70% DEBENTURES DUE 2034
PURCHASE AGREEMENT
July 13, 2004
July 13, 2004
Morgan Stanley & Co. Incorporated
Citigroup Global Markets Inc.
J.P. Morgan Securities Inc.
c/o Morgan Stanley & Co.
Incorporated
1585
Broadway
New York, New
York 10036
Dear Sirs and Mesdames:
The May
Department Stores Company, a New York corporation (the
"Company"), proposes to issue and sell to
the several purchasers named in
Schedule I hereto (the "Initial
Purchasers") $400,000,000 principal amount of
its 3.95% Notes due 2007, $600,000,000
principal amount of its 4.80% Notes
due 2009, $500,000,000 principal amount of
its 5.75% Notes due 2014,
$300,000,000 principal amount of its 6.65%
Debentures due 2024 and
$400,000,000 principal amount of its 6.70%
Debentures due 2034 (collectively,
the "Securities") to be issued pursuant to
the provisions of an Indenture
(the "Indenture") to be dated as of the
Closing Date (as herein defined)
between the Company, The May Department
Stores Company, a Delaware
corporation (the "Guarantor"), and J.P.
Morgan Trust Company, National
Association, as trustee (the "Trustee").
The Securities and the
securities
to be offered in exchange for the
Securities pursuant to the Registration
Rights Agreement (as defined below) are to
be unconditionally guaranteed as
to payment of principal and interest,
premium and Additional Interest (as
defined in the Indenture), if any, by the
Guarantor (the "Guarantee").
The Securities
will be offered without being registered under the
Securities Act of 1933, as amended (the
"Securities Act"), to qualified
institutional buyers in compliance with the
exemption from registration
provided by Rule 144A under the Securities
Act, in offshore transactions in
reliance on Regulation S under the
Securities Act ("Regulation S") and to
institutional accredited investors (as
defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act) that deliver
a letter in the form annexed to
the Final Memorandum (as defined
below).
The Initial
Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration
Rights Agreement to be dated as of
the Closing Date between the Company, the
Guarantor and the Initial
Purchasers (the "Registration Rights
Agreement").
In connection
with the sale of the Securities, the Company has prepared
a preliminary offering memorandum (the
"Preliminary Memorandum") and will
prepare a final offering memorandum (the
"Final Memorandum", and each, a
"Memorandum") including or incorporating by
reference a description of the
terms of the Securities, the terms of the
offering and a description of the
Company. As used herein, the term
"Memorandum" shall include in each case
the documents incorporated by reference
therein. The terms "supplement",
"amendment" and "amend" as used herein with
respect to a Memorandum shall
include all documents deemed to be
incorporated by reference in the
Preliminary Memorandum or Final Memorandum
that are filed subsequent to the
date of such Memorandum with the Securities
and Exchange Commission (the
"Commission") pursuant to the Securities
Exchange Act of 1934, as amended
(the "Exchange Act").
1. Representations and Warranties.
The Company and the Guarantor, jointly
and severally, represent and warrant to,
and agree with, you that:
(a) (i) Each document, if any, filed
or to be filed pursuant to the
Exchange Act and incorporated by reference
in either Memorandum complied or
will comply when so filed in all material
respects with the Exchange Act and
the applicable rules and regulations of the
Commission thereunder and (ii) the
Preliminary Memorandum does not contain and
the Final Memorandum, in the form
used by the Initial Purchasers to confirm
sales and on the Closing Date (as
defined in Section 4), will not contain any
untrue statement of a material
fact or omit to state a material fact
necessary to make the statements
therein, in the light of the circumstances
under which they were made, not
misleading, except that the representations
and warranties set forth in this
paragraph do not apply to statements or
omissions in either Memorandum based
upon information relating to any Initial
Purchaser furnished to the Company
in writing by such Initial Purchaser
through you expressly for use therein.
(b) Each of the Company and the
Guarantor has been duly incorporated, is
validly existing as a corporation in good
standing under the laws of the
jurisdiction of its incorporation, has the
corporate power and authority to
own its property and to conduct its
business as described in each Memorandum
and is duly qualified to transact business
and is in good standing in each
jurisdiction in which the conduct of its
business or its ownership or leasing
of property requires such qualification,
except to the extent that the
failure to be so qualified or be in good
standing would not have a material
adverse effect on the Guarantor and its
subsidiaries, taken as a whole.
(c) Each subsidiary of the Company and
the Guarantor that is a
significant subsidiary (within the meaning
of Regulation S-X 1.02(w) of the
Securities Act) (the "Significant
Subsidiaries") has been duly incorporated,
is validly existing as a corporation in
good standing under the laws of the
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jurisdiction of its incorporation, has the
corporate power and authority to
own its property and to conduct its
business as described in each Memorandum
and is duly qualified to transact business
and is in good standing in each
jurisdiction in which the conduct of its
business or its ownership or leasing
of property requires such qualification,
except to the extent that the
failure to be so qualified or be in good
standing would not have a material
adverse effect on the Company or the
Guarantor and its subsidiaries, taken as
a whole; all of the issued shares of
capital stock of each Significant
Subsidiary of the Guarantor have been duly
and validly authorized and issued,
are fully paid and non-assessable and are
owned directly by the Guarantor,
free and clear of all liens, encumbrances,
equities or claims.
(d) This Agreement has been duly
authorized, executed and delivered by
the Company and the Guarantor.
(e) The Securities have been duly
authorized by the Company and, when
executed and authenticated in accordance
with the provisions of the Indenture
and delivered to and paid for by the
Initial Purchasers in accordance with
the terms of this Agreement, will be valid
and binding obligations of the
Company, enforceable in accordance with
their terms, subject to applicable
bankruptcy, insolvency and similar laws
affecting creditors' rights generally
and equitable principles of general
applicability, and will be entitled to
the benefits of the Indenture and the
Registration Rights Agreement pursuant
to which such Securities are to be
issued.
(f) The Guarantee has been duly
authorized by the Guarantor and, when
the Securities have been executed and
delivered and the Guarantee has been
executed and delivered in accordance with
the provisions of the Indenture,
will be a valid and binding obligation of
the Guarantor, enforceable in
accordance with its terms, subject to
applicable bankruptcy, insolvency and
similar laws affecting creditors' rights
generally and equitable principles
of general applicability, and will be
entitled to the benefits of the
Indenture.
(g) Each of the Indenture and the
Registration Rights Agreement has been
duly authorized, and on or prior to the
Closing Date will be duly executed
and delivered by, and will be a valid and
binding agreement of, the Company
and the Guarantor, enforceable in
accordance with its terms, subject to
applicable bankruptcy, insolvency and
similar laws affecting creditors'
rights generally and equitable principles
of general applicability and except
as rights to indemnification and
contribution under the Registration Rights
Agreement may be limited under applicable
law.
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(h) The execution and delivery by each
of the Company and the Guarantor
of, and the performance by the Company and
the Guarantor of their obligations
under, this Agreement, the Indenture, the
Registration Rights Agreement, and
the Securities and the Guarantee will not
contravene any provision of
applicable law or the certificate of
incorporation or by-laws of the Company
or the Guarantor or any agreement or other
instrument binding upon the
Company or the Guarantor or any of its
Significant Subsidiaries that is
material to the Company or the Guarantor
and its subsidiaries, taken as a
whole, or any judgment, order or decree of
any governmental body, agency or
court having jurisdiction over the Company,
the Guarantor or any Significant
Subsidiary, and no consent, approval,
authorization or order of, or
qualification with, any governmental body
or agency is required for the
performance by the Company or the Guarantor
of their obligations under this
Agreement, the Indenture, the Registration
Rights Agreement, the Securities
or the Guarantee, except such as may be
required by the securities or Blue
Sky laws of the various states in
connection with the offer and sale of the
Securities and by Federal and state
securities laws with respect to the
Company's obligations under the
Registration Rights Agreement.
(i) Neither the Company or the
Guarantor are, and after giving effect to
the offering and sale of the Securities by
the Company and the application of
the proceeds thereof and the issuance of
the Guarantee by the Guarantor, each
as described in the Final Memorandum, will
be, required to register as an
"investment company" as such term is
defined in the Investment Company Act of
1940, as amended.
(j) None of the Company, the Guarantor
or any affiliate (as defined in
Rule 501(b) of Regulation D under the
Securities Act, an "Affiliate") of the
Company or the Guarantor has directly, or
through any agent, (i) sold, offered
for sale, solicited offers to buy or
otherwise negotiated in respect of, any
security (as defined in the Securities Act)
which is or will be integrated
with the sale of the Securities in a manner
that would require the
registration under the Securities Act of
the Securities or (ii) offered,
solicited offers to buy or sold the
Securities by any form of general
solicitation or general advertising (as
those terms are used in Regulation D
under the Securities Act) or in any manner
involving a public offering within
the meaning of Section 4(2) of the
Securities Act.
(k) None of the Company, the
Guarantor, their Affiliates or any person
acting on its or their behalf has engaged
or will engage in any directed
selling efforts (within the meaning of
Regulation S) with respect to the
Securities and the Company, the Guarantor
and their Affiliates and any person
acting on its or their behalf have complied
and will comply with the offering
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restrictions requirement of Regulation S,
except no representation, warranty
or agreement is made by the Company or the
Guarantor in this paragraph with
respect to the Initial Purchasers.
(l) Assuming the accuracy of the
representations and warranties of the
Initial Purchasers contained in Section 7
hereof and their compliance with
the agreements set forth therein, it is not
necessary in connection with the
offer, sale and delivery of the Securities
to the Initial Purchasers in the
manner contemplated by this Agreement to
register the Securities under the
Securities Act or to qualify the Indenture
under the Trust Indenture Act of
1939, as amended.
(m) The Securities satisfy the
requirements set forth in Rule 144A(d)(3)
under the Securities Act.
2. Agreements to Sell and Purchase.
The Company hereby
agrees to sell to
the several Initial Purchasers, and each
Initial Purchaser, upon the basis of
the representations and warranties herein
contained, but subject to the
conditions hereinafter stated, agrees,
severally and not jointly, to purchase
from the Company the respective principal
amount of Securities set forth in
Schedule I hereto opposite its name at a
purchase price of 99.517% of the
principal amount of the 3.95% Notes due
2007, 99.374% of the principal amount
of the 4.80% Notes due 2009, 99.216% of the
principal amount of the 5.75%
Notes due 2014, 99.017% of the principal
amount of the 6.65% Debentures due
2024 and 98.998% of the principal amount of
the 6.70% Debentures due 2034
(the "Purchase Price") plus accrued
interest, if any, to the Closing Date.
Each of the Company and the Guarantor
hereby agree that, without the prior
written consent of Morgan Stanley & Co.
Incorporated on behalf of the Initial
Purchasers, it will not, during the period
beginning on the date hereof and
continuing to and including the Closing
Date, offer, sell, contract to sell
or otherwise dispose of any debt of the
Company or warrants to purchase debt
of the Company substantially similar to the
Securities (other than the sale
of the Securities under this
Agreement).
3. Terms of Offering. You have
advised the Company that the Initial
Purchasers will make an offering of the
Securities purchased by the Initial
Purchasers hereunder on the terms to be set
forth in the Final Memorandum, as
soon as practicable after this Agreement is
entered into as in your judgment
is advisable.
4. Payment and Delivery. Payment for
the Securities shall be made by wire
transfer of same day funds to an account
specified by the Company against
delivery of such Securities for the
respective accounts of the several
Initial Purchasers at 10:00 a.m., New York
City time, on July 20, 2004, or at
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such other time on the same or such other
date, not later than July 30, 2004,
as shall be designated in writing by you.
The time and date of
such payment
are hereinafter referred to as the "Closing
Date."
The Securities shall be in definitive form
or global form, as specified by
you, and registered in such names and in
such denominations as you shall
request in writing not later than one full
business day prior to the Closing
Date. The Securities shall be delivered to
you on the Closing Date for the
respective accounts of the several Initial
Purchasers, with any transfer
taxes payable in connection with the
transfer of the Securities to the
Initial Purchasers duly paid, against
payment of the Purchase Price therefor
plus accrued interest, if any, to the date
of payment and delivery.
5. Conditions to the Initial
Purchasers' Obligations. The several
obligations of the Initial Purchasers to
purchase and pay for the Securities
on the Closing Date are subject to the
following conditions:
(a) Subsequent to the execution and
delivery of this Agreement and prior
to the Closing Date:
(i) there shall have
been no material adverse change in the
condition of the
Guarantor and its subsidiaries, taken as a whole, from
that set forth in the
Memorandum; and
(ii) there shall not
have occurred any downgrading in the rating
accorded any of the
Company's or the Guarantor's securities by Moody's
Investors Service,
Inc. or Standard & Poor's Corporation, other than
pursuant to
announcements of downgrades described in the Final
Memorandum.
(b) The Initial Purchasers shall have
received on the Closing Date a
certificate, dated the Closing Date and
signed by an executive officer of the
Company and the Guarantor, to the effect
set forth in Section 5(a)(i) and to
the effect that the representations and
warranties of the Company and the
Guarantor contained in this Agreement are
true and correct as of the Closing
Date and that the Company and the Guarantor
have complied with all of the
agreements and satisfied all of the
conditions on their parts to be performed
or satisfied hereunder on or before the
Closing Date.
The officer signing and delivering such
certificate may rely upon his or her
knowledge as to proceedings threatened.
(c) The Initial Purchasers shall have
received on the Closing Date an
opinion of Skadden, Arps, Slate, Meagher
& Flom LLP, outside counsel for the
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Company and the Guarantor, dated the
Closing Date, to the effect set forth in
Exhibit A. Such opinion shall be rendered to
the Initial Purchasers at the
request of the Company and shall so state
therein.
(d) The Initial Purchasers shall have
received on the Closing Date an
opinion of Alan E. Charlson, General
Counsel for the Company and the
Guarantor, dated the Closing Date, to the
effect set forth in Exhibit B.
Such opinion shall be rendered to the
Initial Purchasers at the request of
the Company and shall so state therein.
(e) The Initial Purchasers shall have
received on the Closing Date an
opinion of Davis Polk & Wardwell,
counsel for the Initial Purchasers, dated
the Closing Date, to the effect set forth
in Exhibit C.
(f) The Initial Purchasers shall have
received on each of the date
hereof and the Closing Date a letter, dated
the date hereof or the Closing
Date, as the case may be, in form and
substance satisfactory to the Initial
Purchasers, from Deloitte & Touche LLP,
independent public accountants,
containing statements and information of
the type ordinarily included in
accountants' "comfort letters" to
underwriters with respect to the financial
statements and certain financial
information contained in or incorporated by
reference into each Memorandum; provided
that the letter delivered on the
Closing Date shall use a "cut-off date" not
earlier than the date hereof.
6. Covenants of the Company and the
Guarantor. In further consideration of
the agreements of the Initial Purchasers
contained in this Agreement, each of
the Company and the Guarantor covenants
with each Initial Purchaser as
follows:
(a) To furnish to you in New York
City, without charge, prior to
10:00 a.m. New York City time on the
business day next succeeding the date of
this Agreement and during the period
mentioned in Section 6(c), as many
copies of the Final Memorandum, any
documents incorporated by reference
therein and any supplements and amendments
thereto as you may reasonably
request.
(b) Before amending or supplementing
either Memorandum, to furnish to
you a copy of each such proposed amendment
or supplement and not to use any
such proposed amendment or supplement to
which you reasonably object.
(c) If, during such period after the
date hereof and prior to the date
on which all of the Securities shall have
been sold by the Initial
Purchasers, any event shall occur or
condition exist as a result of which it
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is necessary to amend or supplement the
Final Memorandum in order to make the
statements therein, in the light of the
circumstances when the Final
Memorandum is delivered to a purchaser, not
misleading, or if, in the opinion
of counsel for the Initial Purchasers, it
is necessary to amend or supplement
the Final Memorandum to comply with
applicable law, forthwith to prepare and
furnish (to the extent not filed with the
Commission), at its own expense, to
the Initial Purchasers, either amendments
or supplements to the Final
Memorandum so that the statements in the
Final Memorandum as so amended or
supplemented will not, in the light of the
circumstances when the Final
Memorandum is delivered to a purchaser, be
misleading or so that the Final
Memorandum, as amended or supplemented,
will comply with applicable law.
(d) To endeavor to qualify the
Securities for offer and sale under the
securities or Blue Sky laws of such
jurisdictions as you shall reasonably
request.
(e) Whether or not the transactions
contemplated in this Agreement are
consummated or this Agreement is
terminated, to pay or cause to be paid all
expenses incident to the performance of its
obligations under this Agreement,
including: (i) the fees, disbursements and
expenses of the Company's counsel
and the Company's accountants in connection
with the issuance and sale of the
Securities and all other fees or expenses
in connection with the preparation
of each Memorandum and all amendments and
supplements thereto, including all
printing costs associated therewith, and
the delivering of copies thereof to
the Initial Purchasers, in the quantities
herein above specified, (ii) all
costs and expenses related to the transfer
and delivery of the Securities to
the Initial Purchasers, including any
transfer or other taxes payable
thereon, (iii) the cost of printing or
producing any Blue Sky or legal
investment memorandum in connection with
the offer and sale of the Securities
under state securities laws and all
expenses in connection with the
qualification of the Securities for offer
and sale under state securities
laws as provided in Section 6(d) hereof,
including filing fees and the
reasonable fees and disbursements of
counsel for the Initial Purchasers
(including fees not exceeding $10,000 and
disbursements of counsel) in
connection with such qualification and in
connection with the Blue Sky or
legal investment memorandum, (iv) any fees
charged by rating agencies for the
rating of the Securities, (v) the fees and
expenses, if any, incurred in
connection with the admission of the
Securities for trading in PORTAL or any
appropriate market system, (vi) the costs
and charges of the Trustee and any
transfer agent, registrar or depositary,
(vii) the cost of the preparation,
issuance and delivery of the Securities,
(viii) the costs and expenses of the
Company relating to investor presentations
on any "road show" undertaken in
connection with the marketing of the
offering of the Securities, including,
without limitation, expenses associated
with the production of road show
slides and graphics, fees and expenses of
any consultants engaged in
connection with the road show presentations
with the prior approval of the
Company, travel and lodging expenses of the
representatives and officers of
the Company and any such consultants, and
the cost of any aircraft chartered
in connection with the road show, (ix) the
document production charges and
expenses associated with printing this
Agreement and (x) all other costs and
expenses incident to the performance of the
obligations of the Company
hereunder for which provision is not
otherwise made in this Section. It is
understood, however, that except as
provided in this Section, Section 8, and
the last paragraph of Section 10, the
Initial Purchasers will pay all of their
costs and expenses, including fees and
disbursements of their counsel,
transfer taxes payable on resale of any of
the Securities by them and any
advertising expenses connected with any
offers they may make.
(f) None of the Company, the Guarantor
or any of their Affiliates will
sell, offer for sale or solicit offers to
buy or otherwise negotiate in
respect of any security (as defined in the
Securities Act) which could be
integrated with the sale of the Securities
in a manner which would require
the registration under the Securities Act
of the Securities.
(g) Not to solicit any offer to buy or
offer or sell the Securities by
means of any form of general solicitation
or general advertising (as those
terms are used in Regulation D under the
Securities Act) or in any manner
involving a public offering within the
meaning of Section 4(2) of the
Securities Act.
(h) While any of the Securities remain
"restricted securities" within
the meaning of the Securities Act, to make
available, upon request, to any
seller of
