EXHIBIT 10.17
Execution Copy
Smith's Food & Drug Centers, Inc.
Note Agreement
Dated as of November 1, 1993
Re: $81,000,000 6.44% Senior Notes, Series 1993-E,
Due December 1, 2005,
$21,000,000 6.54% Senior Notes, Series 1993-F,
Due December 1, 2007,
$35,000,000 6.69% Senior Notes, Series 1993-G,
Due December 1, 2010
and
$13,000,000 6.94% Senior Notes, Series 1993-H,
Due December 1, 2015
Table of Contents
(Not a part of the Agreement)
Section Heading Page
Section 1. Description of Notes and Commitment 1
Section 1.1. Description of Notes 1
Section 1.2. Commitment, Closing Date 2
Section 1.3. Other Agreements 3
Section 2. Prepayment of Notes 3
Section 2.1. Required Prepayments 3
Section 2.2. Optional Prepayment with Premium 4
Section 2.3. Prepayment of Notes upon Change of Control 5
Section 2.4. Notice of Optional Prepayments 8
Section 2.5. Application of Prepayments 8
Section 2.6. Direct Payment 8
Section 3. Representations 8
Section 3.1. Representations of the Company 8
Section 3.2. Representations of the Purchaser
Section 4. Closing Conditions 9
Section 4.1. Conditions 9
Section 4.2. Waiver of Conditions 10
Section 5. Company Covenants 11
Section 5.1. Corporate Existence, Etc 11
Section 5.2. Insurance 11
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with
Laws 11
Section 5.4. Maintenance, Etc 12
Section 5.5. Nature of Business 12
Section 5.6. Consolidated Tangible Net Worth 12
Section 5.7. Limitations on Indebtedness 12
Section 5.8. Limitation on Liens 14
Section 5.9. Mergers, Consolidations and Sales of Assets 16
Section 5.10.Redesignation of Subsidiaries 20
Section 5.11.Repurchase of Notes 21
Section 5.12.Transactions with Affiliates 21
Section 5.13.Termination of Pension Plans 21
Section 5.14.Reports and Rights of Inspection 21
Section 6. Events of Default and Remedies Therefor 24
Section 6.1. Events of Default 24
Section 6.2. Notice to Holders 26
Section 6.3. Acceleration of Maturities 26
Section 6.4. Rescission of Acceleration 27
Section 7. Amendments, Waivers and Consents 28
Section 7.1. Consent Required 28
Section 7.2. Solicitation of Holders 28
Section 7.3. Effect of Amendment or Waiver; Scope of Consent 29
Section 8. Interpretation of Agreement; Definitions 29
Section 8.1. Definitions 29
Section 8.2. Accounting Principles 40
Section 8.3. Directly or Indirectly 40
Section 9. Miscellaneous 40
Section 9.1. Registered Notes 40
Section 9.2. Exchange of Notes 40
Section 9.3. Loss, Theft, Etc. of Notes 41
Section 9.4. Expenses, Stamp Tax Indemnity 41
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative 42
Section 9.6. Notices 42
Section 9.7. Successors and Assigns 42
Section 9.8. Substitution of Purchaser 42
Section 9.9. Survival of Covenants and Representations 43
Section 9.10.Severability 43
Section 9.11.Governing Law 43
Section 9.12.Submission to Jurisdiction 43
Section 9.13.Reproduction of Documents 43
Section 9.14.Captions 44
Signature 45
Attachments to Note Agreement:
Schedule I _ Names and Addresses of Purchasers and Amounts of
Commitments
Schedule II _ Description of Funded Debt, Capitalized Leases, Liens
Securing Funded Debt and Intangibles included in
Consolidated Tangible Net Worth as of the Closing Date
Schedule III _ Description of Restricted Subsidiaries and Unrestricted
Subsidiaries of the Company
Exhibit A-1 _ Form of 6.44% Senior Notes, Series 1993-E, due
December 1, 2005
Exhibit A-2 _ Form of 6.54% Senior Notes, Series 1993-F, due
December 1, 2007
Exhibit A-3 _ Form of 6.69% Senior Notes, Series 1993-G, due
December 1, 2010
Exhibit A-4 _ Form of 6.94% Senior Notes, Series 1993-H due December
1, 2015
Exhibit B _ Representations and Warranties of the Company
Exhibit C _ Description of Special Counsel's Closing Opinion
Exhibit D _ Description of Closing Opinion of Independent Counsel
to the Company
Exhibit E _ Description of Closing Opinion of the General Counsel
to the Company
Exhibit F _ Subordination Provisions Applicable to Subordinated
Funded Debt
Smith's Food & Drug Centers, Inc.
1550 South Redwood Road
Salt Lake City, Utah 84104
Note Agreement
Re: $81,000,000 6.44% Senior Notes, Series 1993-E,
Due December 1, 2005,
$21,000,000 6.54% Senior Notes, Series 1993-F,
Due December 1, 2007,
$35,000,000 6.69% Senior Notes, Series 1993-G,
Due December 1, 2010
and
$13,000,000 6.94% Senior Notes, Series 1993-H,
Due December 1, 2015
Dated as of
November 1, 1993
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Smith's Food & Drug Centers, Inc., a Delaware
corporation (the "Company"), agrees with you as follows:
Section1.Description of Notes and Commitment.
Section1.1.Description of Notes. (a) The Company will authorize the issue
and sale of its 6.44% Senior Notes, Series 1993-E, due December 1, 2005
(the "Series 1993-E Notes") in an aggregate principal amount equal to
$81,000,000, its 6.54% Senior Notes, Series 1993-F, due December 1, 2007
(the "Series 1993-F Notes") in an aggregate principal amount equal to
$21,000,000, its 6.69% Senior Notes, Series 1993-G, due December 1, 2010
(the "Series 1993-G Notes") in an aggregate principal amount equal to
$35,000,000 and its 6.94% Senior Notes, Series 1993-H, due December 1, 2015
(the "Series 1993-H Notes") in an aggregate principal equal to $13,000,000.
The Series 1993-E Notes, the Series 1993-F Notes, the Series 1993-G Notes
and the Series 1993-H Notes are hereinafter collectively referred to as the
"Notes".
(b) The Series 1993-E Notes will be dated the date of issue, will
bear interest from such date at the rate of 6.44% per annum, payable semi-
annually on the first day of each June and December in each year
(commencing on the first such day after the date of issue) and at maturity
and will bear interest on overdue principal (including any overdue optional
prepayment of principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate
after the date due, whether by acceleration or otherwise, until paid. The
Series 1993-E Notes shall mature on December 1, 2005 and shall be
substantially in the form attached hereto as Exhibit A-1. The
Series 1993-F Notes will be dated the date of issue, will bear interest
from such date at the rate of 6.54% per annum payable semi-annually on the
first day of each June and December in each year (commencing on the first
such day after the date of issue) and at maturity and will bear interest on
overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on
any overdue installment of interest at the Overdue Rate after the date due,
whether by acceleration or otherwise, until paid. The Series 1993-F Notes
shall mature on December 1, 2007 and shall be substantially in the form
attached hereto as Exhibit A-2. The Series 1993-G Notes will be dated the
date of issue, will bear interest from such date at the rate of 6.69% per
annum, payable semi-annually on the first day of each June and December in
each year (commencing on the first such day after the date of issue) and at
maturity and will bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to
the extent legally enforceable) on any overdue installment of interest at
the Overdue Rate after the date due, whether by acceleration or otherwise,
until paid. The Series 1993-G Notes shall mature on December 1, 2010 and
shall be substantially in the form attached hereto as Exhibit A-3. The
Series 1993-H Notes will be dated the date of issue, will bear interest
from such date at the rate of 6.94% per annum, payable semiannually on the
first day of each June and December in each year (commencing on the first
such day after the date of issue) and at maturity and will bear interest on
overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on
any overdue installment of interest at the overdue rate after the date due,
whether by acceleration or otherwise, until paid. The Series 1993-H Notes
will mature on December 1, 2015 and shall be substantially in the form
attached hereto as Exhibit A-4. Interest on the Notes shall be computed on
the basis of a 360-day year of twelve 30-day months. The Notes are not
subject to prepayment or redemption at the option of the Company prior to
their expressed maturity dates except on the terms and conditions and in
the amounts and with the premium, if any, set forth in 2 of this
Agreement. The term "Notes" as used herein shall include each Note
delivered pursuant to this Agreement and the separate agreements with the
other purchasers named in Schedule I. You and the other purchasers named
in Schedule I are hereinafter sometimes referred to as the "Purchasers".
The terms which are capitalized herein shall have the meanings set forth in
8.1.
Section1.2.Commitment, Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter
set forth, the Company agrees to issue and sell to you, and you agree to
purchase from the Company, Notes of the series and in the principal amount
set forth opposite your name on Schedule I hereto at a price of 100% of the
principal amount thereof on the Closing Date.
The Notes will be delivered to you on December 1, 1993 (the "Closing
Date"). Delivery of the Notes on the Closing Date will be made at the
offices of Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603, against payment therefor in Federal Reserve or other funds current
and immediately available at the principal office of Zions First National
Bank in the amount of the purchase price at 10:00 A.M., Salt Lake City,
Utah time. The Notes delivered to you will be delivered to you in the form
of a single registered Note for the full amount of your purchase (unless
different denominations are specified by you), registered in your name or
in the name of such nominee, as may be specified in Schedule I attached
hereto and in substantially the form attached hereto as Exhibit A-1,
Exhibit A-2, Exhibit A-3 or Exhibit A-4, as the case may be.
Section1.3.Other Agreements. Simultaneously with the execution and
delivery of this Agreement, the Company is entering into similar agreements
with the other Purchasers under which such other Purchasers agree to
purchase from the Company the principal amount of Notes set opposite such
Purchasers' names in Schedule I, and your obligation and the obligations of
the Company hereunder are subject to the execution and delivery of the
similar agreements by the other Purchasers. This Agreement and said
similar agreements with the other Purchasers are herein collectively
referred to as the "Agreements". The obligations of each Purchaser shall
be several and not joint and no Purchaser shall be liable or responsible
for the acts of any other Purchaser.
Section2.Prepayment of Notes.
No prepayment of the Notes may be made except to the extent and in the
manner expressly provided in this Agreement.
Section2.1.Required Prepayments. In addition to paying the entire
outstanding principal amount and the interest due on the Notes on the
maturity dates thereof, the Company agrees it will prepay and apply and
there shall become due and payable the following sums in respect of the
aggregate principal indebtedness evidenced by the Notes:
Series 1993-E Notes
Applicable Amount of
Required Payment Dates Required Principal Payments
December 1, 2001 $16,200,000
December 1, 2002 $16,200,000
December 1, 2003 $16,200,000
December 1, 2004 $16,200,000
Series 1993-F Notes
Applicable Amount of
Required Payment Dates Required Principal Payments
December 1, 2003 $4,200,000
December 1, 2004 $4,200,000
December 1, 2005 $4,200,000
December 1, 2006 $4,200,000
Series 1993-G Notes
Applicable Amount of
Required Payment Dates Required Principal Payments
December 1, 2006 $7,000,000
December 1, 2007 $7,000,000
December 1, 2008 $7,000,000
December 1, 2009 $7,000,000
Series 1993-H Notes
Applicable Amount of
Required Payment Dates Required Principal Payments
December 1, 2011 $2,600,000
December 1, 2012 $2,600,000
December 1, 2013 $2,600,000
December 1, 2014 $2,600,000
No premium shall be payable in connection with any required prepayment
made pursuant to this 2.1. Any payment of less than all of any series of
Notes pursuant to the provisions of any other section hereof shall not
relieve the Company of the obligation to make required payments or
prepayments on such series of Notes in accordance with the terms of this
2.1.
In the event that the Company shall prepay less than all of the Notes
pursuant to 2.2 hereof, the amounts of the prepayments required by this
2.1 shall be reduced in the same proportion that the principal amount of
the Notes outstanding immediately preceding such partial prepayment has
been reduced by such partial prepayment to the end that the remaining
prepayments required to be made pursuant to the provisions of this 2.1 on
the Notes remaining outstanding will result in the same proportionate rate
of prepayment as if the Notes had not been so prepaid.
Section2.2.Optional Prepayment with Premium. In addition to the payments
required by 2.1, upon compliance with 2.4, the Company shall be entitled,
at any time and from time to time, to prepay the outstanding Notes, either
in whole or in part (but if in part then in a minimum principal amount of
$500,000) by payment of the principal amount of the Notes, or portion
thereof to be prepaid, and accrued interest thereon to the date of such
prepayment, together with a premium equal to the Make-Whole Amount,
determined as of two Business Days prior to the date of such prepayment
pursuant to this 2.2.
Section2.3.Prepayment of Notes upon Change of Control. (a) In the event
that any Change of Control (as hereinafter defined) shall occur or the
Company shall have knowledge of any proposed Change of Control, the Company
will give written notice (the "Company Notice") of such fact in the manner
provided in 9.6 hereof to the holders of the Notes. The Company Notice
shall be delivered promptly upon receipt of such knowledge by the Company
and in any event no later than three Business Days following the occurrence
of any Change of Control. The Company Notice shall (1) describe the facts
and circumstances of such Change of Control in reasonable detail, (2) make
reference to this 2.3 and the right of the holders of the Notes to require
prepayment on the terms and conditions provided for in this 2.3, (3) offer
in writing to prepay the outstanding Notes, together with accrued interest
to the date of prepayment and a premium equal to the then applicable Make-
Whole Amount and (4) specify a date for such prepayment (the "Change of
Control Prepayment Date"), which Change of Control Prepayment Date shall be
not more than 90 days nor less than 30 days following the date of such
Company Notice. Each holder of the then outstanding Notes shall have the
right to accept such offer and require prepayment in full of the Notes held
by such holder by written notice to the Company (a "Noteholder Notice")
given not later than 20 days after receipt of the Company Notice. Not
later than two Business Days prior to the Change of Control Prepayment
Date, the Company shall provide each holder of a Note which has so accepted
such offer of prepayment written notice of the premium, if any, payable in
connection with such prepayment and, whether or not any premium is payable,
a reasonably detailed computation of the Make-Whole Amount including a copy
of "Page 500" on the Telerate Service or the Statistical Release used in
connection with such computation. The Company shall on the Change of
Control Prepayment Date prepay in full all of the Notes held by holders
which have so accepted such offer of prepayment. The prepayment price of
the Notes payable upon the occurrence of any Change of Control shall be an
amount equal to 100% of the outstanding principal amount of the Notes so to
be prepaid and accrued interest thereon to the date of such prepayment,
together with a premium equal to the then applicable Make-Whole Amount
determined as of two Business Days prior to such Change of Control
Prepayment Date.
(b) Without limiting the foregoing, notwithstanding any failure on
the part of the Company to give the Company Notice herein required as a
result of the occurrence of a Change of Control, each holder of the Notes
shall have the right by delivery of written notice to the Company to
require the Company to prepay, and the Company will prepay in full, such
holder's Notes, together with accrued interest thereon to the date of
prepayment and a premium equal to the then applicable Make-Whole Amount;
provided that such holder of the Notes shall so notify the Company of its
election to require the Company to prepay its Notes in accordance with this
2.3(b) within 90 days after such holder has actual knowledge of any such
Change of Control. Notice of any required prepayment pursuant to this
2.3(b) shall be delivered by any holder of the Notes which was entitled
to, but did not receive, such Company Notice to the Company after such
holder has actual knowledge of such Change of Control. On the date (the
"Change of Control Delayed Prepayment Date") designated in such holder's
notice (which shall be not more than 90 days nor less than 30 days
following the date of such holder's notice), the Company shall prepay in
full all of the Notes held by such holder, together with accrued interest
thereon to the date of prepayment and a premium equal to the then
applicable Make-Whole Amount. If the holder of any Note gives any notice
pursuant to this 2.3(b), the Company shall give a Company Notice within
three Business Days of receipt of such notice and identify the Change of
Control Delayed Prepayment Date to all holders of the Notes and each of
such holders shall then and thereupon have the right to accept the
Company's offer to prepay in full the Notes held by such holder and require
prepayment of such Notes by delivery of a Noteholder Notice within 20 days
following receipt of such Company Notice; provided only that any date for
prepayment of such holder's Notes shall be the Change of Control Delayed
Prepayment Date. Not later than two Business Days prior to the Change of
Control Delayed Prepayment Date, the Company shall provide each holder of a
Note which has so accepted such offer of prepayment written notice of the
premium, if any, payable in connection with such prepayment and, whether or
not any premium is payable, a reasonably detailed computation of the Make-
Whole Amount including a copy of "Page 500" on the Telerate Service or the
Statistical Release used in connection with such computation. On the
Change of Control Delayed Prepayment Date, the Company shall prepay in full
the Notes of each holder thereof which has accepted such offer of
prepayment at a prepayment price equal to 100% of the outstanding principal
amount of the Notes so to be prepaid and accrued interest thereon to the
date of such prepayment, together with a premium equal to the then
applicable Make-Whole Amount determined as of two Business Days prior to
the date of such prepayment pursuant to this 2.3(b).
(c) As used in this 2.3, a "Change of Control" of the Company shall
occur when (1)(i) the Company enters into a binding written commitment with
an Acquiring Person to permit such Acquiring Person to acquire, directly or
indirectly, beneficial ownership of more than 50% of the total voting power
of the Voting Stock of the Company then outstanding, or (ii) there has been
a successful completion of a tender offer or exchange offer that results in
an Acquiring Person, directly or indirectly, beneficially owning more than
50% of the total voting power of the Voting Stock of the Company then
outstanding, or (iii) an Acquiring Person, directly or indirectly, becomes
the beneficial owner of more than 50% of the total voting power of the
Voting Stock of the Company then outstanding or (iv) there has been a
merger between the Company and any other Person, a consolidation of the
Company with any other Person, or an acquisition of any other Person by the
Company or a Subsidiary of the Company, if immediately after such event, an
Acquiring Person shall then hold more than 50% of the total voting power of
the Voting Stock of the Company outstanding immediately after giving effect
to such merger, consolidation or acquisition, or (v) the capital stock of
the Company is no longer Publicly Traded, if in connection therewith and
after giving effect thereto the aggregate voting power of the Voting Stock
of the Company owned or controlled by the Smith Control Group is less than
90% of the aggregate voting power of the Voting Stock of the Company owned
or controlled by the Smith Control Group immediately prior to the last date
such capital stock was Publicly Traded and (2) immediately after giving
effect thereto either (i) the long-term debt rating of such Acquiring
Person, or, with respect to clause (c)(1)(v), the Company, shall be below
"BBB-" by Standard & Poor's Corporation or "Baa3" by Moody's Investors
Service, Inc. or (ii) if the long-term debt of such Acquiring Person, or,
with respect to clause (c)(1)(v), the Company, shall for any reason
whatsoever not be rated by Standard & Poor's Corporation and Moody's
Investors Service, Inc. then, within 90 days after the occurrence of any
event described in clause (c)(1), such Acquiring Person, or, with respect
to clause (c)(1)(v), the Company, shall not have received a rating on each
series of the Notes of at least "BBB-" by Standard & Poor's Corporation or
"Baa3" by Moody's Investors Service, Inc.
The term "Acquiring Person" shall mean a "person" or "group of
persons" within the meaning of Section 13(d) and 14(d) of the Securities
and Exchange Act of 1934, as amended; provided that notwithstanding the
foregoing, "Acquiring Person" shall not be deemed to include any member of
the Smith Control Group unless such member has, directly or indirectly,
disposed of, sold or otherwise transferred to, or encumbered or restricted
(whether by means of voting trust agreement or otherwise) for the benefit
of, an Acquiring Person, all or any portion of the voting power of the
Voting Stock of the Company directly or indirectly owned or controlled by
such member or such member directly or indirectly acquiesces in, consents
to or votes all or any portion of the voting power of the Voting Stock of
the Company directly or indirectly owned or controlled by such member for
the taking of any action which, directly or indirectly, constitutes or
would result in a Change of Control, in which event such member of the
Smith Control Group shall be deemed to constitute an Acquiring Person to
the extent of the voting power of the Voting Stock of the Company owned or
controlled by such member.
The term "Management" shall mean, without duplication, all officers
and directors and shareholders of the Company's Class A stock who are not
within the definition of Smith Family and who are employed on a full-time
basis by the Company on the date immediately preceding the date of any such
Change of Control.
The term "Publicly Traded" shall mean the trading of any capital stock
of the Company in any over-the-counter securities market (including the
National Association of Securities Dealers Automated Quotations System) or
the listing for trading of any capital stock of the Company on the NASDAQ
National Market System or any regionally or nationally recognized
Securities exchange.
The term "Smith Control Group" shall mean collectively, the Smith
Family and Management.
The term "Smith Family" shall mean all, or any combination of, or any
of the spouse of D. Glen Smith, each of his three sons, Jeffrey P. Smith,
Richard D. Smith and Fred L. Smith and any trusts established for the
benefit of the natural children or stepchildren of Jeffrey P. Smith,
Richard D. Smith or Fred L. Smith; provided that the power to vote any
shares of the Company's stock held in such trusts shall have been granted
to all, or any combination of, or any of Jeffrey P. Smith, Richard D.
Smith, Fred L. Smith or the spouse of D. Glen Smith.
Section2.4.Notice of Optional Prepayments. The Company will give notice of
any prepayment of the Notes pursuant to 2.2 to each holder thereof not
less than 30 days nor more than 60 days before the date fixed for such
optional prepayment specifying (a) such date, (b) the principal amount of
the holder's Notes to be prepaid on such date, (c) that a premium may be
payable, (d) the date when such premium will be calculated, (e) the
estimated premium, (f) whether or not a premium is payable, a reasonably
detailed calculation of the Make-Whole Amount including a copy of "Page
500" on the Telerate Service or the Statistical Release used in connection
with such computation, and (g) the accrued interest applicable to the
prepayment. Such notice of prepayment shall also certify all facts, if
any, which are conditions precedent to any such prepayment. Notice of
prepayment having been so given, the aggregate principal amount of the
Notes specified in such notice, together with accrued interest thereon and
the premium, if any, payable with respect thereto shall become due and
payable on the prepayment date specified in said notice. Not later than
two Business Days prior to the prepayment date specified in such notice,
the Company shall provide each holder of a Note written notice of the
premium, if any, payable in connection with such prepayment and, whether or
not any premium is payable, a reasonably detailed computation of the Make-
Whole Amount including a copy of "Page 500" on the Telerate Service or the
Statistical Release used in connection with such computation.
Section2.5.Application of Prepayments. Except in the case of prepayment of
the Notes pursuant to 2.3, all partial prepayments shall be applied on all
outstanding Notes ratably in accordance with the unpaid principal amounts
thereof.
Section2.6.Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by
you or your nominee or owned by any subsequent Institutional Holder which
has given written notice to the Company requesting that the provisions of
this 2.6 shall apply, the Company will pay punctually when due the
principal thereof, interest thereon and premium, if any, due with respect
to said principal, without any presentment thereof, directly to you, to
your nominee or to such subsequent Institutional Holder at your address or
your nominee's address set forth in Schedule I hereto or such other address
as you, your nominee or such subsequent Institutional Holder may from time
to time designate in writing to the Company or, if a bank account with a
United States bank is designated for you or your nominee on Schedule I
hereto or in any written notice to the Company from you, from your nominee
or from any such subsequent Institutional Holder, the Company will make
such payments in immediately available Federal funds to such bank account,
marked for attention as indicated, or in such other manner or to such other
account in any United States bank as you, your nominee or any such
subsequent Institutional Holder may from time to time direct in writing.
Section3.Representations.
Section3.1.Representations of the Company. The Company represents and
warrants that all representations and warranties set forth in Exhibit B are
true and correct as of the date hereof and are incorporated herein by
reference with the same force and effect as though herein set forth in
full.
Section3.2.Representations of the Purchaser. (a) You represent, and in
entering into this Agreement the Company understands, that you are
acquiring the Notes for the purpose of investment and not with a view to
the distribution thereof, and that you have no present intention of
selling, negotiating or otherwise disposing of the Notes; it being
understood, however, that the disposition of your property shall at all
times be and remain within your control.
(b) You further represent that: (1) no part of the funds to be used
by you to purchase the Notes constitutes assets allocated to any separate
account maintained by you; or (2) no part of the funds to be used by you to
purchase the Notes constitutes assets allocated to any separate account
maintained by you such that the application of such funds constitutes a
prohibited transaction under Section 406 of ERISA; or (3) all or a part of
such funds constitute assets of one or more separate accounts, trusts or a
commingled pension trust maintained by you, and you have disclosed to the
Company the names of such employee benefit plans whose assets in such
separate account or accounts or pension trusts exceed 10% of the total
assets or are expected to exceed 10% of the total assets of such account or
accounts or trusts as of the date of such purchase and the Company has
advised you in writing (and in making the representations set forth in this
clause (3) you are relying on such advice) that the Company is not a party-
in-interest nor are the Notes employer securities with respect to the
particular employee benefit plan disclosed to the Company by you as
aforesaid (for the purpose of this clause (3), all employee benefit plans
maintained by the same employer or employee organization are deemed to be a
single plan). As used in this 3.2(b), the terms "separate account,"
"party-in-interest," "employer securities," and "employee benefit plan"
shall have the respective meanings assigned to them in ERISA.
Section4.Closing Conditions.
Section4.1.Conditions. Your obligation to purchase the Notes on the
Closing Date set forth opposite your name on Schedule I hereto shall be
subject to the performance by the Company of its agreements hereunder which
by the terms hereof are to be performed at or prior to the time of delivery
of the Notes and to the following further conditions precedent:
(a) Closing Certificate. You shall have received a certificate
dated the Closing Date, signed by Robert D. Bolinder as Executive Vice
President, Corporate Planning and Development or Matthew G. Tezak as
Senior Vice President and Chief Financial Officer of the Company, the
truth and accuracy of which shall be a condition to your obligation to
purchase the Notes proposed to be sold to you and to the effect that
(1) the representations and warranties of the Company set forth in
Exhibit B hereto are true and correct on and with respect to the
Closing Date, (2) the Company has performed all of its obligations
hereunder which are to be performed on or prior to the Closing Date,
and (3) no Default or Event of Default has occurred and is continuing.
(b) Legal Opinions. You shall have received from Chapman and
Cutler, your special counsel in this transaction, from Ray, Quinney &
Nebeker, independent counsel for the Company and from Michael C. Frei,
Esq., General Counsel to the Company, their respective opinions dated
the Closing Date, in form and substance satisfactory to you, and
covering the matters set forth in Exhibits C, D and E, respectively,
hereto.
(c) Company's Existence and Authority. On or prior to the
Closing Date, you shall have received, in form and substance
satisfactory to you and your special counsel, such documents and
evidence with respect to the Company as you may reasonably request in
order to establish the existence and good standing of the Company and
the authorization of the transactions contemplated by this Agreement;
provided that any certificates of public officials delivered pursuant
to this 4.1(c) shall be dated no more than two weeks prior to the
Closing Date.
(d) Related Transactions. The Company shall have consummated
the sale of the entire principal amount of the Notes scheduled to be
sold on the Closing Date pursuant to the Agreements.
(e) Private Placement Number. On or prior to the Closing Date,
special counsel to the Purchasers of the Notes shall have received
from Standard & Poor's CUSIP Service Bureau, as agent for the National
Association of Insurance Commissioners, private placement numbers for
each series of the Notes.
(f) Funding Instructions. At least three Business Days prior to
the Closing Date, you shall have received written instructions
executed by a Responsible Officer of the Company known to you
directing the manner of the payment of funds and setting forth (1) the
name and address of the transferee bank, (2) such transferee bank's
ABA number, (3) the account name and number into which the purchase
price for the Notes is to be deposited, and (4) the name and telephone
number of the account representative responsible for verifying receipt
of such funds.
(g) Legality of Investment. The Notes to be purchased by you
shall be a legal investment for you under the laws of each
jurisdiction to which you may be subject (without resort to any so-
called "basket provisions" to such laws).
(h) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and
all documents necessary to the consummation thereof, shall be
reasonably satisfactory in form and substance to you and your special
counsel, and you shall have received a copy (executed or certified as
may be appropriate) of all legal documents or proceedings taken in
connection with the consummation of said transactions.
Section4.2.Waiver of Conditions. If on the Closing Date the Company fails
to tender to you the Notes to be issued to you on such date or if the
conditions specified in 4.1 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this Agreement.
Without limiting the foregoing, if the conditions specified in 4.1 have
not been fulfilled, you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion determine.
Nothing in this 4.2 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
Section5.Company Covenants.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section5.1.Corporate Existence, Etc. The Company will preserve and keep in
full force and effect, and will cause each Significant Restricted
Subsidiary to preserve and keep in full force and effect, its corporate
existence and all licenses and permits necessary to the proper conduct of
its business, provided that the foregoing shall not prevent any transaction
permitted by 5.9.
Section5.2.Insurance. The Company will maintain, and will cause each
Significant Restricted Subsidiary to maintain, insurance coverage by
financially sound and reputable insurers and in such forms and amounts and
against such risks as are maintained by prudent corporations of established
reputation engaged in the same or a similar business, owning and operating
similar properties and, in the case of the Company, having a consolidated
net worth determined in accordance with GAAP similar to the Consolidated
Net Worth of the Company at the time in question.
Section5.3.Taxes, Claims for Labor and Materials; Compliance with Laws.
(a) The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all taxes, assessments
and governmental charges or levies imposed upon the Company or such
Restricted Subsidiary, respectively, or upon or in respect of all or any
part of the property or business of the Company or such Restricted
Subsidiary, all trade accounts payable in accordance with usual and
customary business terms, and all claims for work, labor or materials,
which are due and which if unpaid might become a Lien upon any property of
the Company or such Restricted Subsidiary; provided the Company or such
Restricted Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (1) the validity,
applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent (i) the forfeiture or
sale of any property of the Company or such Restricted Subsidiary the
forfeiture or sale of which could materially affect adversely the
properties, business, prospects, ongoing profitability or condition
(financial or otherwise) of the Company and its Restricted Subsidiaries or
(ii) any material interference with the use thereof by the Company or such
Restricted Subsidiary, and (2) the Company or such Restricted Subsidiary
shall set aside on its books, adequate reserves with respect thereto.
(b) The Company shall promptly comply and shall cause each Restricted
Subsidiary to comply with all laws, ordinances or governmental rules and
regulations to which it is subject including, without limitation, the
Occupational Safety and Health Act of 1970, as amended and ERISA, the
violation of which could materially affect adversely the properties,
business, prospects, ongoing profitability or condition (financial or
otherwise) of the Company and its Restricted Subsidiaries.
(c) The Company shall promptly comply and shall cause each Restricted
Subsidiary to comply in all material respects with all applicable
Environmental Laws, now in existence or applicable in the future, if,
individually or in the aggregate, failure to comply therewith would
materially affect adversely the properties, business, prospects, ongoing
profitability or condition (financial or otherwise) of the Company and its
Restricted Subsidiaries.
(d) The Company will not, and will not permit any of its Restricted
Subsidiaries to, cause or allow any Hazardous Substance to be present at
any time on, in, under or above any real property or any part thereof in
which the Company or any Restricted Subsidiary has a direct interest
(including, without limitation, ownership thereof or any arrangement for
the lease, rental or other use thereof, or the retention of any mortgage or
security interest therein or thereon), except in a manner and to the extent
that it is in compliance in all material respects with all applicable
Environmental Laws and in a manner that will not materially affect
adversely the properties, business, prospects, ongoing profitability or
condition (financial or otherwise) of the Company and its Restricted
Subsidiaries.
Section5.4.Maintenance, Etc. The Company will maintain, preserve and keep,
and will cause each Restricted Subsidiary to maintain, preserve and keep,
its properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working
order and from time to time will make all necessary repairs, replacements,
renewals and additions so that at all times the efficiency thereof shall be
maintained.
Section5.5.Nature of Business. Neither the Company nor any Restricted
Subsidiary will engage in any business if, as a result, the nature of the
business, taken on a consolidated basis, which would then be engaged in by
the Company and its Restricted Subsidiaries would be substantially
different than distributing, either at retail or wholesale, food and drug
store products, and operating businesses involving the manufacture,
distribution or sale of consumer products and services.
Section5.6.Consolidated Tangible Net Worth. The Company will at all times
keep and maintain Consolidated Tangible Net Worth at an amount not less
than the sum of (a) $350,000,000 plus (b) 20% of Consolidated Net Income
computed on a cumulative basis for each of the elapsed fiscal years ending
after December 28, 1991; provided that notwithstanding that Consolidated
Net Income for any such elapsed fiscal year may be a deficit figure, no
reduction as a result thereof shall be made in the sum to be maintained
pursuant hereto.
Section5.7.Limitations on Indebtedness. (a) The Company will not create,
assume, guarantee or otherwise incur or in any manner be or become liable
in respect of any Funded Debt and will not permit any Restricted Subsidiary
to, create, assume, guarantee or otherwise incur or in any manner be or
become liable in respect of any Indebtedness, except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company and Indebtedness of Restricted
Subsidiaries outstanding as of the Closing Date and described on
Schedule II hereto;
(3) additional Funded Debt of the Company and Indebtedness of
its Restricted Subsidiaries provided that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof:
(i) the ratio of Net Income Available for Fixed Charges for
the immediately preceding four consecutive fiscal quarter period
to Pro Forma Fixed Charges for such four consecutive fiscal
quarter period (assuming such additional Funded Debt to be so
created, issued, assumed, guaranteed or incurred is to be
outstanding for the entirety of such four fiscal quarters) shall
be not less than 1.45 to 1.00;
(ii) in the case of the issuance of any Funded Debt of the
Company secured by Liens solely permitted by 5.8(j) or the
issuance of Indebtedness of a Restricted Subsidiary (other than
Indebtedness of a Restricted Subsidiary secured by Liens
permitted by 5.8(g)), the sum of (A) all Funded Debt of the
Company secured by Liens solely permitted by 5.8(j) and (B) the
aggregate amount of all Indebtedness of Restricted Subsidiaries
incurred in accordance with the provisions of this clause (ii)
would not exceed 10% of Consolidated Tangible Capitalization; and
(iii) no Default or Event of Default would exist;
(4) Subordinated Funded Debt of the Company to a Wholly-owned
Restricted Subsidiary; and
(5) Funded Debt of a Restricted Subsidiary to the Company or to
another Restricted Subsidiary.
(b) Funded Debt issued or incurred in accordance with the limitations
of 5.7(a)(2) may be renewed, extended or refunded (without any increase in
principal amount remaining unpaid at the time of such renewal, extension or
refunding), provided that at the time of such renewal, extension or
refunding and after giving effect thereto (1) no Default or Event of
Default would exist and (2) and the Company would be permitted by the
provisions of 5.7(a)(3)(i) to incur at least $1.00 of additional Funded
Debt.
(c) The Company may acquire any corporation with existing
Indebtedness and designate such corporation as a Restricted Subsidiary,
provided that at the time of acquisition of such corporation and
immediately after giving effect thereto (1) no Default or Event of Default
would exist and (2) the Company would be permitted by the provisions of
5.7(a)(3)(i) to incur at least $1.00 of additional Funded Debt.
Section5.8.Limitation on Liens. The Company will not, and will not permit
any Restricted Subsidiary to, create or incur, or suffer to be incurred or
to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer
any property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general creditors,
or acquire or agree to acquire, or permit any Restricted Subsidiary to
acquire, any property or assets upon conditional sales agreements or other
title retention devices, except:
(a) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics
and materialmen, provided that payment thereof is not at the time
required by 5.3;
(b) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted Subsidiary
shall at any time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured and for which
the Company or such Restricted Subsidiary shall have set aside on its
books, adequate reserves with respect thereto;
(c) Liens incidental to the conduct of business or the ownership
of properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens)
and Liens to secure the performance of bids, tenders or trade
contracts, or to secure statutory obligations, surety or appeal bonds
or other Liens of like general nature incurred in the ordinary course
of business and not in connection with the borrowing of money,
provided in each case the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate actions or
proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company and its Restricted Subsidiaries;
(e) leases on real property owned by the Company or any
Restricted Subsidiary wherein the Company or such Restricted
Subsidiary is the lessor; provided that (1) the rentals payable under
any such lease are for fair rental value and (2) any such lease is
entered into in (i) an "arm's length" transaction and (ii) the
ordinary course of the Company's or such Restricted Subsidiary's
business;
(f) Liens existing as of the Closing Date and described on
Schedule II hereto;
(g) Liens created or incurred after the Closing Date given to
secure the payment of the purchase price incurred in connection with
the acquisition, construction or improvement of fixed assets useful
and intended to be used in carrying on the business of the Company or
a Restricted Subsidiary, including Liens existing on such fixed assets
at the time of acquisition thereof or at the time of acquisition by
the Company or a Restricted Subsidiary of any business entity then
owning such fixed assets, whether or not such existing Liens were
given to secure the payment of the purchase price of the fixed assets
to which they attach, so long as such existing Liens were not
incurred, extended or renewed in contemplation of such acquisition,
provided that (1) the Lien shall attach solely to the fixed assets
acquired, purchased, constructed or improved, (2) such Lien shall have
been created or incurred within 270 days of the date of acquisition or
purchase or the date of completion of construction or improvements, as
the case may be, (3) at the time of acquisition, construction or
improvement of such fixed assets, the aggregate amount remaining
unpaid on all Indebtedness secured by Liens on such fixed assets,
whether or not assumed by the Company or a Restricted Subsidiary,
shall not exceed an amount equal to the lesser of the total purchase
price or fair market value at the time of acquisition of such fixed
assets (as determined in good faith by the Board of Directors of the
Company), and (4) all such Indebtedness shall have been incurred
within the limitations provided in 5.7(a)(3)(i) and (iii);
(h) Liens created or incurred after the Closing Date on the
fixed assets or capital stock of any corporation at the time such
corporation becomes a Restricted Subsidiary given to secure the
payment of the purchase price incurred in connection with the
acquisition of such corporation by the Company or a Restricted
Subsidiary; provided that (1) the Lien shall attach solely to the
fixed assets or capital stock acquired or purchased, (2) such Lien
shall have been created or incurred substantially concurrently with
such acquisition or purchase, (3) at the time of such acquisition or
purchase of such corporation the aggregate amount of Indebtedness
secured by such Liens (whether or not assumed by the Company or any
Restricted Subsidiary) shall not exceed an amount equal to the lesser
of the purchase price or fair market value of such fixed assets or
capital stock at the time of such acquisition or purchase thereof (as
determined in good faith by the Board of Directors of the Company),
and (4) all Indebtedness secured by such Liens shall have been
incurred within the limitations provided in 5.7(a)(3)(i) and (iii);
(i) Liens existing on the fixed assets of any Subsidiary on the
date the Company designates such Subsidiary as a Restricted
Subsidiary; provided that all Indebtedness secured by such Liens shall
have been incurred within the applicable limitations provided in
5.7(c);
(j) Liens created or incurred after the Closing Date given to
secure Funded Debt of the Company or Indebtedness of any Restricted
Subsidiary in addition to the Liens permitted by the preceding
clauses (a) through (i) hereof; provided that all of such Indebtedness
shall have been incurred within the limitations provided in
5.7(a)(3)(i), (ii) and (iii); and
(k) any extension, renewal or replacement of any Lien permitted
by the preceding clauses (f) through (j), inclusive, hereof in respect
of the same property theretofore subject to such Lien in connection
with the extension, renewal or refunding of the Indebtedness secured
thereby; provided that (1) such Lien shall attach solely to the same
such property, (2) the principal amount of Indebtedness secured by
such Lien shall not have been increased, (3) no Default or Event of
Default would exist and (4) after giving effect to any such extension,
renewal or replacement, the Company would be permitted by the
provisions of 5.7(a)(3)(i) to incur at least $1.00 of additional
Funded Debt.
Section5.9.Mergers, Consolidations and Sales of Assets. (a) The Company
will not, and will not permit any Restricted Subsidiary to, consolidate
with or be a party to a merger with any other Person, or sell, lease or
otherwise dispose of all or substantially all of its assets; provided that:
(1) any Restricted Subsidiary may merge or consolidate with or
into the Company or any other Restricted Subsidiary so long as in any
merger or consolidation involving the Company, the Company shall be
the surviving or continuing corporation;
(2) any Restricted Subsidiary may merge or consolidate with any
other corporation so long as such Restricted Subsidiary shall be the
surviving or continuing corporation and at the time of such merger or
consolidation and immediately after giving effect thereto, (i) no
Default or Event of Default would exist and (ii) the Company would be
permitted by the provisions of 5.7(a)(3)(i) to incur at least $1.00
of additional Funded Debt;
(3) any Restricted Subsidiary may merge or consolidate into any
other corporation; provided that at the time of such merger or
consolidation and after giving effect thereto, (i) no Default or Event
of Default would exist, (ii) the Company would be permitted by the
provisions of 5.7(a)(3)(i) to incur at least $1.00 of additional
Funded Debt and (iii) the disposition of such Restricted Subsidiary's
assets or capital stock would be permitted by the provisions of
5.9(b) or (c);
(4) the Company may merge or consolidate with any other
corporation if (i) the corporation which results from such merger or
consolidation (the "surviving corporation") is organized under the
laws of any State of the United States or the District of Columbia,
(ii) the due and punctual payment of the principal of, premium, if
any, and interest on all of the Notes, according to their tenor, and
the due and punctual performance and observation of all of the
covenants in the Notes and this Agreement to be performed or observed
by the Company are expressly assumed in writing by the surviving
corporation and the surviving corporation shall furnish the holders of
the Notes an opinion of counsel satisfactory to such holders to the
effect that the instrument of assumption has been duly authorized,
executed and delivered and constitutes the legal, valid and binding
contract and agreement of the surviving corporation enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles, and (iii) at the time of such
consolidation or merger and immediately after giving effect thereto,
(A) no Default or Event of Default would exist and (B) the surviving
corporation would be permitted by the provisions of 5.7(a)(3)(i) to
incur at least $1.00 of additional Funded Debt;
(5) the Company may sell or otherwise dispose of all or
substantially all of its assets (other than stock and Indebtedness of
a Subsidiary, which may only be sold or otherwise disposed of pursuant
to 5.9(c)) to any Person for consideration which represents the fair
market value (as determined in good faith by the Board of Directors of
the Company, a copy of such determination, certified by the Secretary
or an Assistant Secretary of the Company, having been furnished to the
holders of the Notes) at the time of such sale or other disposition if
(i) the acquiring Person is a corporation organized under the laws of
any State of the United States or District of Columbia, (ii) the due
and punctual payment of the principal of, premium, if any, and
interest on all the Notes, according to their tenor, and the due and
punctual performance and observance of all of the covenants in the
Notes and in this Agreement to be performed or observed by the Company
are expressly assumed in writing by the acquiring corporation and the
acquiring corporation shall furnish the holders of the Notes an
opinion of counsel satisfactory to such holders to the effect that the
instrument of assumption has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract and
agreement of such acquiring corporation enforceable in accordance with
its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by
general equitable principles, and (iii) at the time of such sale or
disposition and immediately after giving effect thereto, (A) no
Default or Event of Default would exist and (B) the acquiring
corporation would be permitted by the provisions of 5.7(a)(3)(i) to
incur at least $1.00 of additional Funded Debt.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of,
assets (except assets sold in the ordinary course of business for fair
market value and except as provided in 5.9(a)(5)); provided that the
foregoing restrictions do not apply to:
(1) the sale, lease, transfer or other disposition of assets of
a Restricted Subsidiary to the Company or another Restricted
Subsidiary; or
(2) the sale, lease, transfer or other disposition of any asset
of the Company or a Restricted Subsidiary the book value of which at
the time of such sale, lease, transfer or other disposition shall be
less than $5,000,000; provided that in the opinion of the Company's
Chief Executive Officer (i) the sale is for fair value and is in the
best interests of the Company and (ii) such sale, lease, transfer or
other disposition is not part of a plan by the Company to divest
itself of assets (in which event such sale, lease, transfer or other
disposition shall be made within the limitations of 5.9(b)(4) or
5.9(c)(3)); or
(3) the sale or transfer of assets of the Company or a
Restricted Subsidiary whenever it is determined in the good faith
judgment of the Company's Chief Executive Officer that such assets are
obsolete, worn out or without economic value to the Company or any of
its Restricted Subsidiaries; or
(4) the sale of assets for cash or other property to a Person or
Persons other than an Affiliate if all of the following conditions are
met:
(i) such assets (valued at net book value) do not, together
with all other assets of the Company and its Restricted
Subsidiaries previously disposed of during the same fiscal year
(other than in the ordinary course of business), exceed 10% of
Consolidated Total Assets determined as of the end of the
immediately preceding fiscal quarter;
(ii) in the opinion of the Company's Chief Executive
Officer, the sale is for fair value and is in the best interests
of the Company; and
(iii) immediately after the consummation of the transaction
and after giving effect thereto, (A) no Default or Event of
Default would exist, and (B) the Company would be permitted by
the provisions of 5.7(a)(3)(i) to incur at least $1.00 of
additional Funded Debt;
provided, however, that notwithstanding 5.9(b)(4)(i), the Company may
sell or otherwise dispose of assets (valued at net book value) which,
together with all other assets of the Company and its Restricted
Subsidiaries similarly valued and previously disposed of during the
same fiscal year, would exceed 10% of Consolidated Total Assets if
(A) the Company has otherwise satisfied the requirements of
5.9(b)(4)(ii) and (iii), (B) immediately after giving effect to such
sale or other disposition, the ratio of Consolidated Free Fixed Assets
to unsecured Consolidated Senior Funded Debt would not be less than
1.25 to 1.00, and (C) the Company shall apply an amount equal to that
portion of the proceeds from all such sales or other dispositions in
excess of 10% of Consolidated Total Assets (determined as of the end
of the immediately preceding fiscal quarter) within twelve months of
the date of such sale or other disposition (x) to the acquisition of
fixed assets useful and intended to be used in the operations of the
Company and its Restricted Subsidiaries as contemplated by 5.5 (as
determined in good faith by the Chief Executive Officer of the
Company) and having a fair market value (as determined in good faith
by the Chief Executive Officer of the Company) at least equal to that
of the assets so sold or otherwise disposed of or (y) with respect to
the sale of assets secured by Liens permitted by 5.8 hereof, first,
to the prepayment (including any applicable prepayment premium) of
Senior Funded Debt of the Company secured by such Liens and second, to
the prepayment (including any applicable prepayment premium) of
unsecured Senior Funded Debt of the Company or (z) with respect to the
sale of assets not secured by Liens permitted by 5.8, to the
prepayment (including any applicable prepayment premium) of unsecured
Senior Funded Debt of the Company, it being understood and agreed by
the Company that any such proceeds paid and applied to the prepayment
of the Notes shall be prepaid as and to the extent provided in 2.2.
Computations pursuant to this 5.9(b) shall include dispositions made
pursuant to 5.9(c) and computations pursuant to 5.9(c) shall include
dispositions made pursuant to this 5.9(b).
(c) The Company will not, and will not permit any Restricted
Subsidiary to, sell, pledge or otherwise dispose of any shares of the stock
(including as "stock" for the purposes of this Section any options or
warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of a Restricted Subsidiary (said stock, options,
warrants and other Securities herein called "Subsidiary Stock") or any
Indebtedness of any Restricted Subsidiary, nor will any Restricted
Subsidiary issue, sell, pledge or otherwise dispose of any shares of its
own Subsidiary Stock, provided that the foregoing restrictions do not apply
to:
(1) the issue of directors' qualifying shares; or
(2) the issue of Subsidiary Stock to the Company or to a Wholly-
owned Restricted Subsidiary; and
(3) the sale or other disposition at one time to a Person (other
than directly or indirectly to an Affiliate) of the entire Investment
of the Company and its other Restricted Subsidiaries in any Restricted
Subsidiary if all of the following conditions are met; provided,
however, clause (ii) hereof shall only apply to the sale of
Significant Restricted Subsidiaries:
(i) such assets (valued at net book value) of the
Restricted Subsidiary do not, together with all other assets of
the Company and its Restricted Subsidiaries previously disposed
of during the same fiscal year (other than in the ordinary course
of business), exceed 10% of Consolidated Total Assets determined
as of the immediately preceding fiscal quarter;
(ii) in the opinion of the Company's Board of Directors, the
sale is for fair value and is in the best interests of the
Company;
(iii) immediately after the consummation of the transaction
and after giving effect thereto, such Restricted Subsidiary shall
have no Indebtedness of or continuing Investment in the capital
stock of the Company or of any Restricted Subsidiary and any such
Indebtedness or Investment shall have been discharged or
acquired, as the case may be, by the Company or a Restricted
Subsidiary; and
(iv) immediately after the consummation of the transaction
and after giving effect thereto, (A) no Default or Event of
Default would exist, and (B) the Company would be permitted by
the provisions of 5.7(a)(3)(i) to incur at least $1.00 of
additional Funded Debt;
provided, however, that notwithstanding 5.9(c)(3)(i), the Company may
sell or otherwise dispose of assets (valued at net book value) which,
together with all other assets of the Company and its Restricted
Subsidiaries similarly valued and previously disposed of during the
same fiscal year, would exceed 10% of Consolidated Total Assets if
(A) the Company has otherwise satisfied the requirements of
5.9(c)(3)(ii), (iii) and (iv), (B) immediately after giving effect to
such sale or other disposition, the ratio of Consolidated Free Fixed
Assets to unsecured Consolidated Senior Funded Debt would not be less
than 1.25 to 1.00, and (C) the Company shall apply an amount equal to
that portion of the proceeds from all such sales or other dispositions
in excess of 10% of Consolidated Total Assets (determined as of the
end of the immediately preceding fiscal quarter) within twelve months
of the date of such sale or other disposition (x) to the acquisition
of fixed assets useful and intended to be used in the operations of
the Company and its Restricted Subsidiaries as contemplated by 5.5
(as determined in good faith by the Chief Executive Officer of the
Company) and having a fair market value (as determined in good faith
by the Chief Executive Officer of the Company) at least equal to that
of the assets so sold or otherwise disposed of or (y) with respect to
the sale of assets secured by Liens permitted by 5.8 hereof, first,
to the prepayment (including any applicable prepayment premium) of
Senior Funded Debt of the Company secured by such Liens and second, to
the prepayment (including any applicable prepayment premium) of
unsecured Senior Funded Debt of the Company or (z) with respect to the
sale of assets not secured by Liens permitted by 5.8 hereof, to the
prepayment (including any applicable prepayment premium) of unsecured
Senior Funded Debt of the Company, it being understood and agreed by
the Company that any such proceeds paid and applied to the prepayment
of the Notes shall be prepaid as and to the extent provided in 2.2.
Computations pursuant to this 5.9(c) shall include dispositions made
pursuant to 5.9(b) and computations pursuant to 5.9(b) shall include
dispositions made pursuant to this 5.9(c).
Section5.10.Redesignation of Subsidiaries. (a) The Company may designate
any Restricted Subsidiary as an Unrestricted Subsidiary if, immediately
after giving effect thereto, (1) no Default or Event of Default would
exist, (2) the Company would be permitted by the provisions of 5.7(a)(3)
to incur at least $1.00 of additional Funded Debt and (3) such Restricted
Subsidiary would not have a continuing Investment in the capital stock or
other Securities of the Company or any other Restricted Subsidiary;
provided, however, that once a Subsidiary has its designation as a
Restricted Subsidiary withdrawn, such Subsidiary may no longer be
designated as a Restricted Subsidiary as set forth in paragraph (b) below.
(b) The Company may designate any Unrestricted Subsidiary as a
Restricted Subsidiary if, immediately after giving affect thereto, (1) such
Subsidiary is in compliance with all covenants of this Agreement applicable
to Restricted Subsidiaries, (2) no Default or Event of Default would exist,
and (3) the Company would be permitted by the provisions of 5.7(a)(3) to
incur at least $1.00 of additional Funded Debt provided, however, that once
a Subsidiary has had its designation as an Unrestricted Subsidiary
withdrawn, such Subsidiary may no longer be designated as an Unrestricted
Subsidiary as set forth in paragraph (a) above.
Each change in the designation of a Subsidiary shall be made by
resolution of the Board of Directors of the Company and the Company shall
within 30 days after such action give written notice thereof to the holders
of the Notes.
Section5.11.Repurchase of Notes. Neither the Company nor any Restricted
Subsidiary or Affiliate, directly or indirectly, may repurchase or make any
offer to repurchase any Notes unless an offer has been made to repurchase
Notes, pro rata, from all holders of the Notes at the same time and upon
the same terms. In case the Company repurchases or otherwise acquires any
Notes, such Notes shall immediately thereafter be cancelled and no Notes
shall be issued in substitution therefor. Without limiting the foregoing,
upon the purchase or other acquisition of any Notes by the Company, any
Restricted Subsidiary or any Affiliate, such Notes shall no longer be
outstanding for purposes of any section of this Agreement relating to the
taking by the holders of the Notes of any actions with respect hereto,
including, without limitation, 6.3, 6.4 and 7.1.
Section5.12.Transactions with Affiliates. The Company will not, and will
not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except in the ordinary
course of and pursuant to the reasonable requirements of the Company's or
such Restricted Subsidiary's business and upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than would be
obtained in a comparable arm's-length transaction with a Person other than
an Affiliate.
Section5.13.Termination of Pension Plans. The Company will not and will
not permit any Subsidiary to withdraw from any Multiemployer Plan or permit
any employee benefit plan maintained by it to be terminated if such
withdrawal or termination could result in withdrawal liability (as
described in Part 1 of Subtitle E of Title IV of ERISA) or the imposition
of a Lien on any property of the Company or any Subsidiary pursuant to
Section 4068 of ERISA.
Section5.14.Reports and Rights of Inspection. (a) The Company will keep,
and will cause each Restricted Subsidiary to keep, proper books of record
and account in which full and correct entries will be made of all dealings
or transactions of, or in relation to, the business and affairs of the
Company or such Restricted Subsidiary, in accordance with GAAP consistently
applied (except for changes disclosed in the financial statements furnished
to you pursuant to this 5.14(a) and concurred in by the independent public
accountants referred to in 5.14(a)(2) hereof), and will furnish to you so
long as you are the holder of any Note and to each other Institutional
Holder of the then outstanding Notes (in duplicate if so specified below or
otherwise requested), and in the case of the financial statements delivered
pursuant to paragraph 5.14(a)(2), to the Securities Valuation Office,
National Association of Insurance Commissioners, 195 Broadway, Suite 1903,
New York, New York 10007:
(1) Quarterly Statements. As soon as available and in any event
within 60 days after the end of each quarterly fiscal period (except
the last) of each fiscal year, copies of:
(i) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated
figures for the fiscal year then most recently ended,
(ii) consolidated statements of income of the Company and
its Restricted Subsidiaries for such quarterly fiscal period and
for the portion of the fiscal year ending with such quarterly
fiscal period, in each case setting forth in comparative form the
consolidated figures for the corresponding periods of the
preceding fiscal year, and
(iii) consolidated statements of cash flows of the Company
and its Restricted Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the corresponding
period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company;
(2) Annual Statements. As soon as available and in any event
within 120 days after the close of each fiscal year of the Company,
copies of:
(i) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year, and
(ii) consolidated statements of income and retained earnings
and cash flows of the Company and its Restricted Subsidiaries for
such fiscal year,
in each case setting forth in comparative form the consolidated
figures for the preceding fiscal year, all in reasonable detail and
accompanied by a report thereon containing an opinion unqualified as
to scope limitations imposed by the Company and otherwise without
qualification except as therein noted, of a firm of independent public
accountants of recognized national standing selected by the Company to
the effect that the consolidated financial statements present fairly,
in all material respects, the consolidated financial position of the
Company and its Restricted Subsidiaries as of the end of the fiscal
year being reported on and the consolidated results of the operations
and cash flows for said year in conformity with GAAP and that the
examination of such accountants in connection with such financial
statements has been conducted in accordance with generally accepted
auditing standards and included such tests of the accounting records
and such other auditing procedures as said accountants deemed
necessary in the circumstances;
(3) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the
books of the Company or any Restricted Subsidiary and any management
letter received from such accountants with respect to such interim or
special audits;
(4) SEC and Other Reports. Promptly upon their becoming
available and in any event no later than the date on which such
information is distributed to the Company's stockholders, one copy of
each financial statement, report, notice or proxy statement sent by
the Company to stockholders generally and of each regular or periodic
report, and any final registration statement or prospectus filed by
the Company or any Subsidiary with any Securities exchange or the
Securities and Exchange Commission or any successor agency;
(5) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (i) a Reportable Event with respect to any Plan;
(ii) the institution of any steps by the Company, any ERISA Affiliate,
the PBGC or any other Person to terminate any Plan; (iii) the
institution of any steps by the Company or any ERISA Affiliate to
withdraw from any Plan; (iv) a non-exempt "prohibited transaction"
within the meaning of Section 406 of ERISA in connection with any
Plan; (v) any material increase in the contingent liability of the
Company or any Restricted Subsidiary with respect to any post-
retirement welfare liability; or (vi) the taking of any action by, or
the threatening of the taking of any action by, the Internal Revenue
Service, the Department of Labor or the PBGC with respect to any of
the foregoing;
(6) Officer's Certificates. Within the periods provided in
paragraphs (1) and (2) above, a certificate of an authorized financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the information
and computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the requirements of 5.6
through 5.9 at the end of the period covered by the financial
statements then being furnished, and (ii) whether there existed as of
the date of such financial statements and whether, to the best of such
officer's knowledge, there exists on the date of the certificate or
existed at any time during the period covered by such financial
statements any Default or Event of Default and, if any such condition
or event exists on the date of the certificate, specifying the nature
and period of existence thereof and the action the Company is taking
and proposes to take with respect thereto;
(7) Accountant's Certificates. Within the period provided in
paragraph (2) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they
have reviewed this Agreement in connection with making their audit and
not solely for the purposes of compliance with this 5.14(a)(7), and
stating further whether, in making such audit, anything came to their
attention that caused them to believe that the Company had failed in
compliance or continues to be in noncompliance with the terms,
covenants, provisions and conditions of this Agreement insofar as the
same relate, pertain to or involve accounting matters or
determinations and if such condition or event then exists, specifying
the nature and period of existence thereof;
(8) Rule 144A. Except at such times as the Company is a
reporting company under Section 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended, or has complied with the
requirements for the exemption from registration under the Securities
and Exchange Act of 1934, as amended, set forth in Rule 12g3-2(b)
under such Act, such financial or other information as any holder of
the Notes or any Person designated by such holder may reasonably
determine is required to permit such holder to comply with the
requirements of Rule 144A promulgated under the Act in connection with
the resale by it of the Notes, in any such case promptly after the
same is requested; and
(9) Requested Information. With reasonable promptness, such
other data and information as you or any such Institutional Holder may
reasonably request.
(b) Without limiting the foregoing, the Company will permit you, so
long as you are the holder of any Note, and each Institutional Holder of
the then outstanding Notes (or such Persons as either you or such
Institutional Holder may designate), to visit and inspect, under the
Company's guidance, any of the properties of the Company or any Restricted
Subsidiary, to examine all of their books of account, records, reports and
other papers, to make copies and extracts therefrom and to discuss their
respective affairs, finances and accounts with their respective officers,
employees, and, after prior written notice thereof to the Company,
independent public accountants (and by this provision the Company
authorizes said accountants to discuss with you the finances and affairs of
the Company and its Restricted Subsidiaries) all at such reasonable times
and as often as may be reasonably requested. Subject to the provisions of
6.3 and 9.4 hereof, any visitation shall be at your sole expense or the
sole expense of any such Institutional Holder.
Section6.Events of Default and Remedies Therefor.
Section6.1.Events of Default. Any one or more of the following shall
constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue
for more than five Business Days; or
(b) Default shall occur in the making of any required prepayment
on any of the Notes as provided in 2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or premium, if any, thereon at the expressed
or any accelerated maturity date or at any date fixed for prepayment;
or
(d) Default shall occur in the observance or performance of any
covenant or agreement contained in 5.5 through 5.13 or 5.14(b); or
(e) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied within 30 days
after the earlier of (1) the day on which a Responsible Officer of the
Company first obtains knowledge of such Default, or (2) the day on
which written notice thereof is given to the Company by the holder of
any Note; provided that in the case of any Default pursuant to this
6.1(e) which cannot with due diligence be cured within such 30-day
period, if the Company shall proceed promptly to cure the same and
thereafter prosecute the curing of such Default with due diligence,
the time within which to cure such Default shall be extended for such
period as may be necessary but in no event more than 60 additional
days; or
(f) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of
the principal of or interest on any Indebtedness for borrowed money
(other than the Notes) under any indenture, agreement or other
instrument under which any Indebtedness for borrowed money of the
Company or any Restricted Subsidiary aggregating $10,000,000 or more
is outstanding and such default or event shall occur at the maturity
of, or result in the acceleration of, any Indebtedness for borrowed
money of the Company or any Restricted Subsidiary outstanding
thereunder and such acceleration shall not have been rescinded or
annulled; or
(g) Default or the happening of any event shall occur under any
indenture, agreement or other instrument under which any Indebtedness
for borrowed money of the Company or any Restricted Subsidiary
aggregating $10,000,000 or more is outstanding and such default or
event shall occur at the maturity of, or result in the acceleration
of, any Indebtedness for borrowed money of the Company or any
Restricted Subsidiary outstanding thereunder and such acceleration
shall not have been rescinded or annulled; or
(h) Any representation or warranty made by the Company herein,
or made by the Company in any statement or certificate furnished by
the Company in connection with the consummation of the issuance and
delivery of the Notes or furnished by the Company pursuant hereto, is
untrue in any material respect as of the date of the issuance or
making thereof; or
(i) Final judgment or final judgments for the payment of money
aggregating in excess of $10,000,000 (excluding for purposes of such
determination the amount of any insurance proceeds received by, or
paid on behalf of, the Company or any Restricted Subsidiary in respect
of such judgment or judgments) is or are outstanding against the
Company or any Restricted Subsidiary or against any property or assets
of either and any one of such judgments has remained unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period of
which is the lesser of (i) 60 days from the date of its entry or
(ii) the amount of days (not less than 30 days) from the date of its
entry which are required to elapse prior to a judgment creditor in
such jurisdiction being permitted to execute upon such final judgment;
or
(j) A custodian, liquidator, trustee or receiver is appointed
for the Company or any Restricted Subsidiary or for the major part of
the property of either and is not discharged within 30 days after such
appointment; or
(k) The Company or any Significant Restricted Subsidiary becomes
insolvent or bankrupt, is generally not paying its debts as they
become due or makes an assignment for the benefit of creditors, or the
Company or any Restricted Subsidiary applies for or consents to the
appointment of a custodian, liquidator, trustee or receiver for the
Company or such Restricted Subsidiary or for the major part of the
property of either; or
(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Restricted Subsidiary and, if instituted
against the Company or any Restricted Subsidiary, are consented to or
are not dismissed within 30 days after such institution.
Section6.2.Notice to Holders. When any Default or Event of Default
described in the foregoing 6.1 has occurred, or if the holder of any Note
or of any other evidence of Indebtedness for borrowed money of the Company
gives any notice or takes any other action with respect to a claimed
default, the Company agrees to give notice within three Business Days of
such event to all holders of the Notes then outstanding.
Section6.3.Acceleration of Maturities. When any Event of Default described
in paragraph (a), (b) or (c) of 6.1 has happened and is continuing, any
holder of any Note may, by written notice to the Company in the manner
provided in 9.6, declare the entire principal and all interest accrued on
the Notes held by such holder to be, and such Notes shall five Business
Days from the date of such written notice become, forthwith due and
payable, without any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived and when any Event of
Default described in paragraphs (a) through (i), inclusive, of said 6.1
has happened, the holder or holders of 66-2/3% or more of the principal
amount of Notes at the time outstanding may, by written notice to the
Company in the manner provided in 9.6, declare the entire principal and
all interest accrued on all Notes to be, and all Notes shall five Business
Days from the date of such written notice become, forthwith due and
payable, without any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived. Notwithstanding the
foregoing, if at any time the Company or any Restricted Subsidiary shall
have outstanding unsecured indebtedness for borrowed money which matures
more than 365 days from the date of origin thereof (other than letters of
credit for the benefit of the Company or any Restricted Subsidiary) that
may become due and payable fewer than five Business Days from the date of
notice of acceleration thereof, then the number of Business Days after
which the Notes shall become due and payable after written notice of
acceleration thereof, pursuant to this 6.3, shall be reduced to such fewer
amount of Business Days. When any Event of Default described in
paragraph (j), (k) or (l) of 6.1 has occurred, then all outstanding Notes
shall immediately become due and payable without presentment, demand or
notice of any kind. Upon the Notes becoming due and payable as a result of
any Event of Default as aforesaid, the Company will forthwith pay to the
holders of the Notes the entire principal and interest accrued on the Notes
and, to the extent not prohibited by applicable law, an amount as
liquidated damages for the loss of the bargain evidenced hereby (and not as
a penalty) equal to the Make-Whole Amount, determined as of the date on
which the Notes shall so become due and payable; provided, however, no Make-
Whole Amount shall be due and payable if, within four Business Days after
the Notes have been declared due and payable pursuant to this 6.3, the
Company shall have satisfied the requirements of 6.4(a) through (c),
inclusive, and shall have given notice thereof in the manner set forth in
59.6 to each of the holders of the Notes then outstanding. Anything
contained in the proviso in the preceding sentence notwithstanding and
provided that this sentence shall relate exclusively to said proviso, if
the Notes shall be paid pursuant to this 6.3 without premium on or after
the fifth Business Day after the Notes have been so declared due and
payable and such payment shall for any reason whatsoever subsequently be
set aside upon the bankruptcy, insolvency, dissolution or reorganization of
the Company, the Company agrees that there shall then and thereupon become
due and owing the principal, interest and Make-Whole Amount, if any, on the
Notes heretofore so paid. No course of dealing on the part of the holder
or holders of any Notes nor any delay or failure on the part of any holder
of Notes to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and remedies. The Company
further agrees, to the extent permitted by law, to pay to the holder or
holders of the Notes all costs and expenses incurred by them in the
collection of any Notes or in connection with any amendments, waivers or
consents, including, without limitation, any amendments, waivers or
consents resulting from any work-out, renegotiation or restructuring upon
any Default hereunder or thereon, including reasonable compensation to such
holder's or holders' attorneys for all services rendered in connection
therewith.
Section6.4.Rescission of Acceleration. The provisions of 6.3 are subject
to the condition that if the principal of and accrued interest on any
outstanding Note has been declared immediately due and payable by reason of
the occurrence of any Event of Default described in paragraphs (a) through
(c), inclusive, of 6.1, with respect to such Note, the holder of such Note
may, and if the principal and accrued interest on all outstanding Notes
have been declared immediately due and payable by reason of the occurrence
of any Event of Default described in paragraphs (a) through (i), inclusive,
of 6.1, the holders of 66-2/3% in aggregate principal amount of the Notes
then outstanding may, by written instrument filed with the Company, rescind
and annul such declaration and the consequences thereof, provided that at
the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under 6.3) shall have
been duly paid; and
(c) each and every Default and Event of Default shall have been
made good, cured or waived pursuant to 7.1;
and provided further, that no such rescission and annulment shall
(1) extend to or affect any subsequent Default or Event of Default or
impair any right consequent thereto or (2) extend to or affect any
declaration by any holder of any Note pursuant to the first sentence of
6.3 unless and to the extent such holder has rescinded and annulled such
declaration.
Section7.Amendments, Waivers and Consents.
Section7.1.Consent Required. Any term, covenant, agreement or condition of
this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular
instance and either retroactively or prospectively), if the Company shall
have obtained the consent in writing of the holders of at least 66-2/3% in
aggregate principal amount of outstanding Notes; provided that without the
written consent of the holders of all of the Notes then outstanding, no
such amendment or waiver shall be effective (a) which will change the time
of payment (including any prepayment required by 2.1 or 2.3) of the
principal of, premium, if any, or the interest on any Note or reduce the
principal amount thereof or reduce the rate of interest thereon, or
(b) which will change the method of calculating the Make-Whole Amount, or
(c) which will change any of the provisions with respect to optional
prepayments, or (d) which will change the percentage of holders of the
Notes required to consent to any such amendment or waiver of any of the
provisions of this 7 or 6 or 5.11.
Section7.2.Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each holder of Notes (irrespective of
the amount of Notes then owned by it) shall be informed thereof by the
Company and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it
to make an informed decision with respect thereto. The Company will not,
directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise, to any
holder of Notes as consideration for or as an inducement to entering into
by any holder of Notes of any waiver or amendment of any of the terms and
provisions of this Agreement or the Notes unless such remuneration is
concurrently offered, on the same terms, ratably to the holders of all
Notes then outstanding. Promptly and in any event within 30 days of the
date of execution and delivery of any such waiver or amendment, the Company
shall provide a true, correct and complete copy thereof to each of the
holders of the Notes.
Section7.3.Effect of Amendment or Waiver; Scope of Consent. (a) Any such
amendment or waiver shall apply equally to all of the holders of the Notes
and shall be binding upon them, upon each future holder of any Note and
upon the Company, whether or not such Note shall have been marked to
indicate such amendment or waiver. No such amendment or waiver shall
extend to or affect any obligation not expressly amended or waived or
impair any right consequent thereon.
(b) Any consent to an amendment or waiver given pursuant to this 7.3
by a holder of a Note which has (1) transferred or agreed to transfer all
or a portion of its Notes to the Company, any Subsidiary or any Affiliate
of the Company and (2) provided such consent as a condition to such
transfer, shall be valid and binding only upon such holder. Any amendment
or waiver which becomes effective only with such consent (and the consents
of all other holders of the Notes which were acquired under the same or
similar conditions) shall be valid and binding only upon such holder or
holders.
Section8.Interpretation of Agreement; Definitions.
Section8.1.Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"Acquiring Person" shall have the meaning set forth in 2.3(c).
"Affiliate" shall mean any Person (other than a Restricted Subsidiary)
(a) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, the
Company, (b) which beneficially owns or holds 5% or more of any class of
the Voting Stock of the Company or (c) 5% or more of the Voting Stock (or
in the case of a Person which is not a corporation, 5% or more of the
equity interest) of which is beneficially owned or held by the Company or a
Subsidiary. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of Voting Stock, by
contract or otherwise.
"Agreements" shall have the meaning set forth in 1.3.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in New York, New York or Salt Lake City, Utah are
required by law to close.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated
balance sheet of the lessee and its subsidiaries in accordance with GAAP.
"Change of Control" shall have the meaning set forth in 2.3(c).
"Change of Control Delayed Prepayment Date" shall have the meaning set
forth in 2.3(b).
"Change of Control Prepayment Date" shall have the meaning set forth
in 2.3(a).
"Closing Date" shall have the meaning set forth in 1.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations from time to time promulgated thereunder.
"Company" shall mean Smith's Food & Drug Centers, Inc., a Delaware
corporation, and any Person who succeeds to all, or substantially all, of
the assets and business of Smith's Food & Drug Centers, Inc. pursuant to
the provisions 5.9.
"Company Notice" shall have the meaning set forth in 2.3(a).
"Consolidated Free Fixed Assets" shall mean as of the date of any
determination thereof (a) Consolidated Total Assets of the Company (valued
at net book value) less (b) the sum of (1) the book value of all assets of
the Company and its Restricted Subsidiaries properly classified as "current
assets" or "intangible assets" in accordance with GAAP, (2) deferred assets
and prepaid expenses and (3) the book value of all property and assets
which are subject to Liens created, incurred, granted or assumed by the
Company or any of its Restricted Subsidiaries other than (i) Liens upon
assets described in the foregoing clause (b)(1) and (ii) Liens permitted by
5.8(a) through (e), inclusive.
"Consolidated Funded Debt" shall mean all Funded Debt of the Company
and its Restricted Subsidiaries, determined on a consolidated basis
eliminating intercompany items.
"Consolidated Net Income" for any period shall mean the gross revenues
of the Company and its Restricted Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined
on a consolidated basis after eliminating earnings or losses attributable
to outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such
excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary accrued
prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have
been acquired in any manner by the Company or any Restricted
Subsidiary, realized by such corporation prior to the date of such
acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Company or a Restricted
Subsidiary shall have consolidated or which shall have merged into or
with the Company or a Restricted Subsidiary prior to the date of such
consolidation or merger;
(f) net earnings of any business entity (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been
received by the Company or such Restricted Subsidiary in the form of
cash distributions;
(g) any portion of the net earnings of any Restricted Subsidiary
which for any reason is unavailable for payment of dividends to the
Company or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the
amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of
the Company or any Restricted Subsidiary;
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been
made from income arising during such period; and
(l) any other extraordinary gain or loss.
"Consolidated Net Worth" shall mean, as of the date of any
determination thereof, the amount of the capital stock accounts (net of
treasury stock, at cost) plus (or minus in the case of a deficit) the
surplus and retained earnings of the Company and its Restricted
Subsidiaries.
"Consolidated Senior Funded Debt" shall mean all Senior Funded Debt of
the Company and its Restricted Subsidiaries, determined on a consolidated
basis after eliminating intercompany items.
"Consolidated Tangible Capitalization" shall mean the sum of
(a) Consolidated Funded Debt, plus (b) Consolidated Tangible Net Worth.
"Consolidated Tangible Net Worth" shall mean, as of the date of any
determination thereof, the sum of:
(a) Consolidated Net Worth;
Minus
(b) the net book value, after deducting any reserves applicable
thereto, of all items of the following character which are included in
the assets of the Company and its Restricted Subsidiaries, to wit:
(1) the incremental increase in an asset resulting from any
reappraisal, revaluation or write-up of assets; and
(2) (i) unamortized debt discount and expense and
(ii) goodwill, organization or experimental expenses, patents,
patent applications, permits, trademarks, trade names,
copyrights, licenses, research and development expenses,
franchises and other like intangibles acquired by the Company or
any of its Restricted Subsidiaries after the Closing Date (other
than existing intangibles described on Schedule II hereto);
all determined in accordance with GAAP.
"Consolidated Total Assets" shall mean as of the date of any
determination thereof the total amount of all assets of the Company and its
Restricted Subsidiaries determined, on a consolidated basis, in accordance
with GAAP.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default.
"Environmental Law" shall mean any past, present or future Federal,
state, local or foreign statutory or common law, and any regulation, code,
plan, order, decree, judgment, court opinion, permit, grant, franchise,
concession, restriction, agreement or injunction issued, entered,
promulgated or approved under any thereof, in any such case relating to
(a) the environment or human health or safety, including without
limitation, any law relating to emissions, discharges, releases or
threatened releases of Hazardous Substances into the environment
(including, without limitation, air, surface water, groundwater or land) of
polychlorinated biphenyls, asbestos, fractious petroleum, petroleum
derivatives or by-products, or (b) the manufacture, generation, refining,
processing, distribution, management, use, sale, treatment, receipt,
storage, disposal, transport, arranging for transport, or handling of
Hazardous Substances, including without limitation the following: the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of
1986, the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of
1984, the Hazardous Materials Transportation Act, as amended, the Federal
Water Pollution Control Act, as amended by the Clean Water Act of 1976, the
Safe Drinking Water Control Act, the Clean Air Act of 1966, as amended, the
Toxic Substances Control Act of 1976, the Occupational Safety and Health
Act of 1977, as amended, the Emergency Planning and Community Right-to-Know
Act of 1986, the National Environmental Policy Act of 1975, the Oil
Pollution Act of 1990 and any similar or implementing state law, and any
state statute and any further amendments to these laws providing for
financial responsibility for cleanup or other actions with respect to the
release or threatened release of Hazardous Substances or crude oil, or any
fraction thereof and all rules, regulations, guidance documents and
publication promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to also refer to
any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in
section 414(b) and 414(c), respectively, of the Code or Section 4001 of
ERISA.
"Event of Default" shall have the meaning set forth in 6.1.
"Fixed Charges" for any period shall mean on a consolidated basis the
sum of (a) all Rentals (other than Rentals on Capitalized Leases) payable
during such period by the Company and its Restricted Subsidiaries, and
(b) all Interest Charges on all Indebtedness (including the interest
component of Rentals on Capitalized Leases) of the Company and its
Restricted Subsidiaries payable during such period.
"Funded Debt" of any Person shall mean, without duplication, (a) all
Indebtedness of such Person for borrowed money or which has been incurred
in connection with the acquisition of assets in each case having a final
maturity of one or more than one year from the date of origin thereof (or
which is renewable or extendible at the option of the obligor for a period
or periods more than one year from the date of origin), including all
payments in respect thereof that are required to be made within one year
from the date of any determination of Funded Debt, whether or not the
obligation to make such payments shall constitute a current liability of
the obligor under GAAP, (b) all Rentals payable in respect of Capitalized
Leases of such Person, (c) all Guaranties by such Person and (d) all
letters of credit by such Person (other than letters of credit used to
finance purchases of inventory in the ordinary course of business or used
to finance the cost of construction of improvements to property which
property is otherwise subject to a construction contract).
"Funding Subsidiary" shall have the meaning set forth in 9.8.
"GAAP" shall mean generally accepted accounting principles applicable
in the United States at the time in question.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Indebtedness, dividend or other obligation of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (a) to purchase
such Indebtedness or obligation or any property or assets constituting
security therefor, (b) to advance or supply funds (1) for the purchase or
payment of such Indebtedness or obligation, (2) to maintain working capital
or other balance sheet conditions or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation,
(c) to lease property or to purchase Securities or other property or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or (d) otherwise to assure the
owner of the Indebtedness or obligation of the primary obligor against loss
in respect thereof. For the purposes of all computations made under this
Agreement, a Guaranty in respect of any Indebtedness for borrowed money
shall be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty
in respect of any other obligation or liability or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.
"Hazardous Substance" shall mean any contaminant, pollutant or toxic
or hazardous substance, and any substance that is defined or listed as a
hazardous, toxic or dangerous substance under any Environmental Law or that
is otherwise regulated or prohibited under any Environmental Law as a
hazardous, toxic or dangerous substance, including any substance which is:
(a) defined as a hazardous substance under Section 311 of the Federal Water
Pollution Control Act (33 U.S.C. 1317) as amended; (b) regulated as a
hazardous waste under Section 1004 or Section 3001 of the Federal Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act (42 U.S.C. 6901 et seq.), as amended; (c) defined as a hazardous
substance under Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. 9601 et seq.), as amended, or
(d) defined or regulated as a hazardous substance or hazardous waste under
any rules or regulations promulgated under any of the foregoing statutes.
"Indebtedness" of any Person shall mean and include all obligations of
such Person which in accordance with GAAP shall be classified upon a
balance sheet of such Person as liabilities of such Person, and in any
event shall include all (a) obligations of such Person for borrowed money
evidenced by bonds, debentures, notes or similar Securities or which has
been incurred in connection with the acquisition of property or assets,
(b) obligations secured by any Lien upon property, assets or services owned
by such Person, even though such Person has not assumed or become liable
for the payment of such obligations, (c) obligations created or arising
under any conditional sale or other title retention agreement with respect
to property acquired by such Person, notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such agreement in
the event of default are limited to repossession or sale of property,
(d) Rentals payable in respect of Capitalized Leases, (e) letters of credit
by such Person (other than letters of credit used to finance purchases of
inventory in the ordinary course of business or used to finance the cost of
construction of improvements to property which property is otherwise
subject to a construction contract), and (f) Guaranties of obligations of
others of the character referred to in this definition.
"Institutional Holder" shall mean any of the following Persons:
(a) any bank, savings and loan association, savings institution, trust
company or national banking association, acting for its own account or in a
fiduciary capacity, (b) any charitable foundation, (c) any insurance
company, (d) any fraternal benefit society, (e) any pension, retirement or
profit sharing trust or fund within the meaning of Title I of ERISA or for
which any bank, trust company, national banking association or investment
adviser registered under the Investment Advisers Act of 1940, as amended,
is acting as trustee or agent, (f) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any broker or dealer
registered under the Securities Exchange Act of 1934, as amended, or any
investment adviser registered under the Investment Adviser Act of 1940, as
amended, (i) any government, any public employees' pension or retirement
system, or any other government agency supervising the investment of public
funds, (j) any venture capital operating company as defined in 29 CFR
2510.3-101(d), (k) any other entity all of the equity owners of which are
Institutional Holders or (l) any other Person which may be within the
definition of "qualified institutional buyer" as such term is used in
Rule 144A, as from time to time in effect, promulgated under the Securities
Act of 1933, as amended.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Indebtedness
(including, without limitation, payment-in-kind, zero coupon and other like
Securities) for which such calculations are being made. Computations of
Interest Charges on a pro forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the date of any
determination.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly, in any Person, whether by
acquisition of shares of capital stock, Indebtedness or other obligations
or Securities or by loan, advance, capital contribution or otherwise.
"Lease" shall mean any lease of real property (other than a
Capitalized Lease and any lease between the Company and a Restricted
Subsidiary or between any Restricted Subsidiaries) regardless of the
duration of the term thereof and any lease of personal property (other than
a Capitalized Lease and any lease between the Company and a Restricted
Subsidiary or between any Restricted Subsidiaries) having an original term,
including any period for which the lease may be renewed or extended at the
option of the lessor, of more than three years.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and
including but not limited to the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "Lien"
shall include reservations, exceptions, encroachments, easements, rights-of-
way, covenants, conditions, restrictions, leases and other title exceptions
and encumbrances (including, with respect to stock, stockholder agreements,
voting trust agreements, buy-back agreements and all similar arrangements)
affecting property. For the purposes of this Agreement, the Company or a
Restricted Subsidiary shall be deemed to be the owner of any property which
it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate present
values as of the date of such prepayment of each dollar of principal being
prepaid (taking into account the application of such prepayment required by
2.1, if any,) and the amount of interest (exclusive of interest accrued to
the date of prepayment) that would have been payable in respect of such
dollar if such prepayment had not been made, determined by discounting such
amounts semiannually at the Reinvestment Rate from the respective dates on
which they would have been payable, over (b) 100% of the principal amount
of the Notes being prepaid at the date such Notes are to be prepaid. If
the applicable Reinvestment Rate at the time of determination of the Make-
Whole Amount is equal to or higher than 6.44% in the case of any payment or
prepayment of the Series 1993-E Notes, 6.54% in the case of any payment or
prepayment of the Series 1993-F Notes, 6.69% in the case of any payment or
prepayment of the Series 1993-G Notes or 6.94% in the case of any payment
or prepayment of the Series 1993-H Notes, the Make-Whole Amount for any
payment or prepayment of Notes of such series is zero. For purposes of any
determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean .50%, plus the yield reported, as
of 10:00 a.m. (New York, New York time) on the Business Day next
preceding the date of prepayment or payment of the Notes on the
display designated as "Page 500" on the Telerate Service (or such
other display as may replace "Page 500" on the Telerate Service) for
actively traded U.S. Treasury Securities having a maturity
corresponding to the series of Notes then being prepaid or paid as of
the date of prepayment or payment or if such yield shall not be
reported as of such time or if the yields reported as of such time are
not ascertainable in accordance with the preceding clause, then the
arithmetic mean of the yields for the two columns under the heading
"Week Ending" published in the Statistical Release under the caption
"Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the Weighted Average Life to Maturity
of the principal being prepaid (taking into account the application of
such prepayment required by 2.1, if any). If no maturity exactly
corresponds to such Weighted Average Life to Maturity, yields for the
published maturity next longer than the Weighted Average Life to
Maturity and for the published maturity next shorter than the Weighted
Average Life to Maturity shall be calculated pursuant to the Telerate
Service or the Statistical Release, as the case may be, and the
Reinvestment Rate shall be interpolated from such yields on a straight-
line basis, rounding in each of such relevant periods to the nearest
month. For the purposes of calculating the Reinvestment Rate, the
most recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used if required by
the first sentence of the definition of Reinvestment Rate.
"Statistical Release" shall mean the then most recently published
statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve System
and which establishes yields on actively traded U.S. Government
Securities adjusted to constant maturities or, if such statistical
release is not published at the time of any determination hereunder,
then such other reasonably comparable index which shall be designated
by the holders of 66-2/3% in aggregate principal amount of the
outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (1) multiplying (i) the
remainder of (A) the amount of principal that would have become due on
each scheduled payment date if such prepayment had not been made, less
(B) the amount of principal on the Notes scheduled to become due on
such date after giving effect to such prepayment and the application
thereof in accordance with the provisions of 2.1, if any, by (ii) the
number of years (calculated to the nearest one-twelfth) which will
elapse between the date of determination and such scheduled payment
date, and (2) totalling the products obtained in (1).
"Management" shall have the meaning set forth in 2.3(c).
"Minority Interests" shall mean any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required
by law) that are not owned by the Company and/or one or more of its
Restricted Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary or
involuntary liquidating value of such preferred stock, whichever is
greater, and by valuing Minority Interests constituting common stock at the
book value of capital and surplus applicable thereto adjusted, if
necessary, to reflect any changes from the book value of such common stock
required by the foregoing method of valuing Minority Interests in preferred
stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Income Available for Fixed Charges" for any period shall mean the
sum of (a) Consolidated Net Income during such period plus (to the extent
deducted in determining Consolidated Net Income), (b) all provisions for
any Federal, state or other income taxes made by the Company and its
Restricted Subsidiaries during such period and (c) Fixed Charges of the
Company and its Restricted Subsidiaries during such period.
"Notes" shall have the meaning set forth in 1.1.
"Noteholder Notice" shall have the meaning set forth in 2.3(a).
"Overdue Rate" shall mean (a) in the case of the Series 1993-E Notes
8.44%, (b) in the case of the Series 1993-F Notes 8.54% (c) in the case of
the Series 1993-G Notes 8.69% and (d) in the case of the Series 1993-H
Notes 8.94%.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" means a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability.
"Pro Forma Fixed Charges" for any period shall mean, as of the date of
any determination thereof, the maximum aggregate amount of Fixed Charges
which would have become payable by the Company and its Restricted
Subsidiaries in such period determined on a pro forma basis giving effect
as of the beginning of such period to the incurrence of any Funded Debt
thereof (including Rentals on Capitalized Leases) and the concurrent
retirement of outstanding Funded Debt or termination of any Capitalized
Leases thereof.
"Purchasers" shall have the meaning set forth in 1.1.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee
is obligated to make to the lessor on termination of the Lease or
Capitalized Lease or surrender of the property) payable by the Company or a
Restricted Subsidiary, as lessee or sublessee under a Lease or Capitalized
Lease of real or personal property (less, in the case of any determination
of Fixed Charges, any rents received by the Company or such Restricted
Subsidiary as sublessor under any sublease of the same such real or
personal property). Fixed rents under any so-called "percentage leases"
shall be computed solely on the basis of the minimum rents, if any,
required to be paid by the lessee regardless of sales volume or gross
revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Responsible Officer" shall mean the Chairman of the Board and Chief
Executive Officer, the President and the Chief Operating Officer, the
Executive Vice President and Chief Financial Officer or the Senior Vice
President, Finance and Treasurer of the Company.
"Restricted Subsidiary" shall mean each Subsidiary (a) 80% or more (by
number of votes) of the Voting Stock of which is legally and beneficially
owned by the Company, (b) which conducts substantially all of its business
and has substantially all of its assets within the United States of
America, (c) which is organized under the laws of the United States or any
State thereof and (d) which has not been designated as an Unrestricted
Subsidiary on Schedule III attached hereto or in accordance with 5.10 of
this Agreement.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Funded Debt" shall mean all Consolidated Funded Debt, other
than Subordinated Funded Debt.
"Significant Restricted Subsidiary" shall mean each Restricted
Subsidiary which meets any of the following conditions:
(a) the Company's and its other Restricted Subsidiaries'
Investments in such Restricted Subsidiary exceed the lesser of 1% of
the Consolidated Total Assets as of the end of the most recently
completed fiscal year or $1,000,000; or
(b) the Company's and its other Restricted Subsidiaries'
proportionate share of the total assets (after eliminating
intercompany items) of such Restricted Subsidiary determined in
accordance with GAAP exceeds the lesser of 1% of the Consolidated
Total Assets as of the end of the most recently completed fiscal year
or $1,000,000; or
(c) the Company's and its other Restricted Subsidiaries' equity
in the income from continuing operations before income taxes,
extraordinary items and cumulative effect of a change in accounting
principle of such Restricted Subsidiary exceeds the lesser of 1% of
such income of the Company and its Restricted Subsidiaries for the
most recently completed fiscal year or $1,000,000.
"Smith Family" shall have the meaning set forth in 2.3(c).
"Subordinated Funded Debt" shall mean all unsecured Funded Debt of the
Company which (a) has a final maturity later than December 1, 2015, (b) is
not subject to repayment prior to December 1, 2015, whether by means of a
sinking fund, periodic maturities, required prepayments or other analogous
payments or otherwise, (c) by its express terms prohibits optional
prepayments in whole or in part prior to December 1, 2015 and (d) is at all
times evidenced by a written instrument or instruments containing
subordination provisions substantially in the form set forth in Exhibit F
attached hereto providing for the subordination thereof to other
Indebtedness of the Company, including, without limitation, the Notes, or
such other provisions as may be approved in writing by the holders of not
less than 100% in aggregate principal amount of the outstanding Notes.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of votes) of
the Voting Stock shall be beneficially owned, directly or indirectly, by
such parent corporation. The term "Subsidiary" shall mean a subsidiary of
the Company.
"Unrestricted Subsidiary" shall mean any Subsidiary or Restricted
Subsidiary which is designated as an Unrestricted Subsidiary in Schedule
III attached hereto or in accordance with 5.10 of this Agreement.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock
(except shares required as directors' qualifying shares) and all
Indebtedness for borrowed money of such Subsidiary shall be owned by the
Company and/or one or more of its Wholly-owned Subsidiaries.
Section8.2.Accounting Principles. Where the character or amount of any
asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required
to be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP, to the extent applicable, except where such
principles are inconsistent with the requirements of this Agreement.
Section8.3.Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
Section9.Miscellaneous.
Section9.1.Registered Notes. The Company shall cause to be kept at its
principal office a register for the registration and transfer of the Notes,
and the Company will register or transfer or cause to be registered or
transferred, as hereinafter provided any Note issued pursuant to this
Agreement.
At any time and from time to time the holder of any Note which has
been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing.
The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any Note shall be made to or upon the written order of such
registered holder.
Section9.2.Exchange of Notes. At any time and from time to time, upon not
less than ten days' notice to that effect given by the holder of any Note
initially delivered or of any Note substituted therefor pursuant to 9.1,
this 9.2 or 9.3, and, upon surrender of such Note at its office, the
Company will deliver in exchange therefor, without expense to such holder,
except as set forth below, a Note for the same aggregate principal amount
as the then unpaid principal amount of the Note so surrendered, or Notes in
the denomination of $100,000 (or such lesser amount as shall constitute
100% of the Notes of such holder) or any amount in excess thereof as such
holder shall specify, dated as of the date to which interest has been paid
on the Note so surrendered or, if such surrender is prior to the payment of
any interest thereon, then dated as of the date of issue, registered in the
name of such Person or Persons as may be designated by such holder, and
otherwise of the same form and tenor as the Notes so surrendered for
exchange. The Company may require the payment of a sum sufficient to cover
any stamp tax or governmental charge imposed upon such exchange or
transfer.
Section9.3.Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction
of any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will make and
deliver without expense to the holder thereof, a new Note, of like tenor,
in lieu of such lost, stolen, destroyed or mutilated Note. If the
Purchaser or any subsequent Institutional Holder is the owner of any such
lost, stolen or destroyed Note, then the affidavit of an authorized officer
of such owner, setting forth the fact of loss, theft or destruction and of
its ownership of such Note at the time of such loss, theft or destruction
shall be accepted as satisfactory evidence thereof and no further indemnity
shall be required as a condition to the execution and delivery of a new
Note other than the written agreement of such owner to indemnify the
Company.
Section9.4.Expenses, Stamp Tax Indemnity. Whether or not the transactions
herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the reasonable charges
and disbursements of Chapman and Cutler, your special counsel, duplicating
and printing costs and charges for shipping the Notes, adequately insured
to you at your home office or at such other place as you may designate, and
all such expenses relating to any amendments, waivers or consents pursuant
to the provisions hereof (whether or not the same are actually executed and
delivered), including, without limitation, any amendments, waivers, or
consents resulting from any work-out, renegotiation or restructuring
relating to the performance by the Company of its obligations under this
Agreement and the Notes. The Company also agrees to pay reasonable
attorney's fees incurred by a holder of the Notes in evaluating any
controversy and enforcing such holders rights and remedies under this
Agreement. The Company also agrees that it will pay and save you harmless
against any and all liability with respect to stamp and other taxes, if
any, which may be payable or which may be determined to be payable in
connection with the execution and delivery of this Agreement or the Notes,
whether or not any Notes are then outstanding. The Company agrees to
protect and indemnify you against any liability for any and all brokerage
fees and commissions payable or claimed to be payable to any Person in
connection with the transactions contemplated by this Agreement. Without
limiting the foregoing, the Company agrees to pay the cost of obtaining the
private placement numbers for each series of Notes and authorizes the
submission of such information as may be required by Standard & Poor's
CUSIP Service Bureau for the purposes of obtaining such numbers.
Section9.5.Powers and Rights Not Waived; Remedies Cumulative. No delay or
failure on the part of the holder of any Note in the exercise of any power
or right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights
or remedies any such holder would otherwise have.
Section9.6.Notices. All communications provided for hereunder shall be in
writing and, if to you, delivered by facsimile communication and delivered
or mailed prepaid by registered or certified mail or overnight air courier,
in each case addressed to you at your address appearing on Schedule I to
this Agreement or such other address as you or the subsequent holder of any
Note initially issued to you may designate to the Company in writing, and
if to the Company, delivered or mailed by registered or certified mail or
overnight air courier, or by facsimile communication, to the Company at
1550 South Redwood Road, Salt Lake City, Utah 84104, Attention: Executive
Vice President, Corporate Planning and Development or to such other address
as the Company may in writing designate to you or to a subsequent holder of
the Note initially issued to you; provided, however, that a notice to you
by overnight air courier shall only be effective if delivered to you at a
street address designated for such purpose in Schedule I, and a notice to
you by facsimile communication shall only be effective if made by confirmed
transmission to you at a telephone number designated for such purpose in
Schedule I, or, in either case, as you or a subsequent holder of any Note
initially issued to you may designate to the Company in writing.
Section9.7.Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and shall inure to your benefit
and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes.
Section9.8.Substitution of Purchaser. You shall have the right to
substitute one of your wholly-owned subsidiaries (the "Funding Subsidiary")
as the purchaser of the Notes to be purchased by you by written notice
delivered to the Company, which notice shall be signed by you and the
Funding Subsidiary, shall be accompanied by the Funding Subsidiary's
agreement to be bound by this Agreement and by a confirmation by the
Funding Subsidiary of the accuracy with respect to it of the
representations set forth in 3.2 (subject to any exception necessary to
reflect the intention, if any, of such Funding Subsidiary to transfer to
you at a subsequent date all or any portion of the Notes to be purchased by
it). The Company agrees that, upon receipt of such notice, wherever the
words "you" or "Purchaser" are used in this Agreement, such words shall be
deemed to refer to the Funding Subsidiary in lieu of you. The Company
understands that in the event the Funding Subsidiary shall purchase the
Notes, shortly after the purchase of the Notes and pursuant to a
registration statement filed under the Securities Act of 1933, as amended,
or in a transaction exempt from the registration requirements of such Act,
the Funding Subsidiary may transfer the Notes to you or one of your
affiliates, whereupon wherever the word "you" is used in this Agreement
(other than this 9.8) such words shall be deemed to refer to you or such
affiliate, as the case may be, in lieu of the Funding Subsidiary.
Section9.9.Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with
the Closing Date, shall survive the closing and the delivery of this
Agreement and the Notes.
Section9.10.Severability. Should any part of this Agreement for any reason
be declared invalid or unenforceable, such decision shall not affect the
validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been
executed with the invalid or unenforceable portion thereof eliminated and
it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including
therein any such part, parts or portion which may, for any reason, be
hereafter declared invalid or unenforceable.
Section9.11.Governing Law. This Agreement and the Notes issued and sold
hereunder shall be governed by and construed in accordance with internal
laws of the State of New York law without regard to its conflict of laws.
Section9.12.Submission to Jurisdiction. The Company hereby expressly
waives all right to object to jurisdiction or execution in any legal action
or proceeding relating to this Agreement or the Notes which it may now or
hereafter have by reason of its domicile or by reason of any subsequent or
other domicile. The Company agrees that any legal action or proceeding
with respect to this Agreement or any Note, or any instrument, agreement or
document mentioned or contemplated herein, or to enforce any judgment
obtained against the Company in any such legal action or proceeding against
it or any of its properties or revenues may be brought by the holder of any
Note in the courts of the State of New York or of the United States of
America located in New York, New York, as the holder of any Note may elect,
and by execution and delivery of this Agreement, the Company irrevocably
submits to each such jurisdiction for such purpose only.
In addition, the Company hereby, to the extent not prohibited by
applicable law, irrevocably and unconditionally waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions, suits or proceedings arising out of or in connection with this
Agreement or the Notes brought in any of the aforesaid courts, and hereby,
to the extent not prohibited by applicable law, further irrevocably and
unconditionally waives and agrees not to plead or claim that any such
action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
Section9.13.Reproduction of Documents. This Agreement and all related
documents, including (a) consents, waivers and modifications which may be
subsequently be executed, (b) documents received by you at the closing of
your purchase of the Notes (except the Notes themselves), and (c) financial
statements, certificates and other information previously or subsequently
furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process and you may destroy any original document so reproduced. The
Company agrees and stipulates that any such reproduction shall, to the
extent permitted by applicable law, be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not the reproduction was
made by you in the regular course of business) and that any enlargement,
facsimile or further reproduction of the reproduction shall likewise be
admissible in evidence.
Section9.14.Captions. The descriptive headings of the various Sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be
executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
Smith's Food & Drug Centers, Inc.
By
Its
Accepted as of December 3, 1993.
[Variation]
By
Its
[By
Its]
Smith's Food & Drug Centers, Inc.
6.44% Senior Note, Series 1993-E,
Due December 1, 2005
No. 1993-ER- PPN 83205* BH 1
____________, ____
$
Smith's Food & Drug Centers, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the first day of December, 2005
the principal amount of
Dollars ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 6.44% per annum from the date hereof until maturity,
payable semi-annually on the first day of each June and December in each
year (commencing on the first such day after the date of issue) and at
maturity. The Company agrees to pay interest on overdue principal
(including any overdue optional prepayment of principal) and premium, if
any, and (to the extent legally enforceable) on any overdue installment of
interest, at the rate of 8.44% per annum after the due date, whether by
acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Salt Lake City, Utah in coin or currency
of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of this Note
becomes due and payable on any date which is not a Business Day, such
amount shall be payable on the immediately preceding Business Day.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in New York, New York or Salt Lake City, Utah are required by
law to close.
This Note is one of the Company's $81,000,000 aggregate principal
amount 6.44% Senior Notes, Series 1993-E, due December 1, 2005 (the
"Series 1993-E Notes") which together with the Company's $21,000,000
aggregate principal amount 6.54% Senior Notes, Series 1993-F, due
December 1, 2007 (the "Series 1993-F Notes"), the Company's $35,000,000
aggregate principal amount 6.69% Senior Notes, Series 1993-G, due
December 1, 2010 (the "Series 1993-G Notes") and the Company's $13,000,000
aggregate principal amount 6.94% Senior Notes, Series 1993-H, due
December 1, 2015 (the "Series 1993-H Notes", said Series 1993-H Notes
together with the Series 1993-E Notes the Series 1993-F Notes and the
1993-G Notes are hereinafter referred to collectively as the "Notes")
issued or to be issued under and pursuant to the terms and provisions of
the separate Note Agreements, each dated as of November 1, 1993
(collectively, the "Note Agreements"), entered into by the Company with the
original Purchasers therein referred to and this Note and the holder hereof
are entitled equally and ratably with the holders of all other Notes
outstanding under the Note Agreements to all the benefits provided for
thereby or referred to therein. Reference is hereby made to the Note
Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in
the Note Agreements.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, premium, if
any, and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
This Note and said Note Agreements are governed by and construed in
accordance with the internal laws of the State of New York without regard
to its conflict of laws.
Smith's Food & Drug Centers, Inc.
By
Its
Smith's Food & Drug Centers, Inc.
6.54% Senior Note, Series 1993-F,
Due December 1, 2007
No. 1993-FR- PPN 83205* BJ 7
____________, ____
$
Smith's Food & Drug Centers, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the first day of December, 2007
the principal amount of
Dollars ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 6.54% per annum from the date hereof until maturity,
payable semi-annually on the first day of each June and December in each
year (commencing on the first such day after the date of issue) and at
maturity. The Company agrees to pay interest on overdue principal
(including any overdue required or optional prepayment of principal) and
premium, if any, and (to the extent legally enforceable) on any overdue
installment of interest, at the rate of 8.54% per annum after the due date,
whether by acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Salt Lake City, Utah in coin or currency
of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of this Note
becomes due and payable on any date which is not a Business Day, such
amount shall be payable on the immediately preceding Business Day.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in New York, New York or Salt Lake City, Utah are required by
law to close.
This Note is one of the Company's $21,000,000 aggregate principal
amount 6.54% Senior Notes, Series 1993-F, due December 1, 2007 (the
"Series 1993-F Notes") which together with the Company's $81,000,000
aggregate principal amount 6.44% Senior Notes, Series 1993-E, due
December 1, 2005 (the "Series 1993-E Notes"), the Company's $35,000,000
aggregate principal amount 6.69% Senior Notes, Series 1993-G, due
December 1, 2010 (the "Series 1993-G Notes") and the Company's $13,000,000
aggregate principal amount 6.94% Senior Notes, Series 1993-H, due
December 1, 2015 (the "Series 1993-H Notes", said Series 1993-H Notes
together with the Series 1993-E Notes, the Series 1993-F Notes and the
Series 1993-G Notes are hereinafter referred to collectively as the
"Notes") issued under and pursuant to the terms and provisions of the
separate Note Agreements, each dated as of November 1, 1993 (collectively,
the "Note Agreements"), entered into by the Company with the original
Purchasers therein referred to and this Note and the holder hereof are
entitled equally and ratably with the holders of all other Notes
outstanding under the Note Agreements to all the benefits provided for
thereby or referred to therein. Reference is hereby made to the Note
Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in
the Note Agreements.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, premium, if
any, and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
This Note and said Note Agreements are governed by and construed in
accordance with the internal laws of the State of New York without regard
to its conflict of laws.
Smith's Food & Drug Centers, Inc.
By
Its
Smith's Food & Drug Centers, Inc.
6.69% Senior Note, Series 1993-G,
Due December 1, 2010
No. 1993-GR__ PPN 83205* BK 4
____________, ____
$
Smith's Food & Drug Centers, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the first day of December, 2010
the principal amount of
Dollars ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 6.69% per annum from the date hereof until maturity,
payable semi-annually on the first day of each June and December in each
year (commencing on the first such day after the date of issue) and at
maturity. The Company agrees to pay interest on overdue principal
(including any overdue optional prepayment of principal) and premium, if
any, and (to the extent legally enforceable) on any overdue installment of
interest, at the rate of 8.69% per annum after the due date, whether by
acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Salt Lake City, Utah in coin or currency
of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of this Note
becomes due and payable on any date which is not a Business Day, such
amount shall be payable on the immediately preceding Business Day.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in New York, New York or Salt Lake City, Utah are required by
law to close.
This Note is one of the Company's $35,000,000 aggregate principal
amount 6.69% Senior Notes, Series 1993-G, due December 1, 2010 (the
"Series 1993-G Notes") which together with the Company's $81,000,000
aggregate principal amount 6.44% Senior Notes, Series 1993-E, due
December 1, 2005 (the "Series 1993-E Notes"), the Company's $21,000,000
aggregate principal amount 6.54% Senior Notes, Series 1993-F, due
December 1, 2007 (the "Series 1993-F Notes") and the Company's $13,000,000
aggregate principal amount 6.94% Senior Notes, Series 1993-H, due
December 1, 2015 (the "Series 1993-H Notes", said Series 1993-H Notes
together with the Series 1993-E Notes, the Series 1993-F Notes and the
Series 1993-G Notes are hereinafter referred to collectively as the
"Notes") issued or to be issued under and pursuant to the terms and
provisions of the separate Note Agreements, each dated as of November 1,
1993 (collectively, the "Note Agreements"), entered into by the Company
with the original Purchasers therein referred to and this Note and the
holder hereof are entitled equally and ratably with the holders of all
other Notes outstanding under the Note Agreements to all the benefits
provided for thereby or referred to therein. Reference is hereby made to
the Note Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in
the Note Agreements.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, premium, if
any, and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
This Note and said Note Agreements are governed by and construed in
accordance with the internal laws of the State of New York without regard
to its conflict of laws.
Smith's Food & Drug Centers, Inc.
By
Its
Smith's Food & Drug Centers, Inc.
6.94% Senior Note, Series 1993-H,
Due December 1, 2015
No. 1993-1HR- PPN 83205* BL 2
____________, ____
$
Smith's Food & Drug Centers, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the first day of December, 2015
the principal amount of
Dollars ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 6.94% per annum from the date hereof until maturity,
payable semi-annually on the first day of each June and December in each
year (commencing on the first such day after the date of issue) and at
maturity. The Company agrees to pay interest on overdue principal
(including any overdue optional prepayment of principal) and premium, if
any, and (to the extent legally enforceable) on any overdue installment of
interest, at the rate of 8.94% per annum after the due date, whether by
acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Salt Lake City, Utah in coin or currency
of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of this Note
becomes due and payable on any date which is not a Business Day, such
amount shall be payable on the immediately preceding Business Day.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in New York, New York or Salt Lake City, Utah are required by
law to close.
This Note is one of the Company's $13,000,000 aggregate principal
amount 6.94% Senior Notes, Series 1993-H, due December 1, 2015 (the
"Series 1993-H Notes") which together with the Company's $81,000,000
aggregate principal amount 6.44% Senior Notes, Series 1993-E, due
December 1, 2005 (the "Series 1993-E Notes"), the Company's $21,000,000
aggregate principal amount 6.54% Senior Notes, Series 1993-F, due
December 1, 2007 (the "Series 1993-F Notes") and the Company's $35,000,000
aggregate principal amount 6.69% Senior Notes, Series 1993-G, due
December 1, 2010 (the "Series 1993-G Notes", said Series 1993-G Notes
together with the Series 1993-E Notes, the Series 1993-F Notes and the
Series 1993-H Notes are hereinafter referred to collectively as the
"Notes") issued or to be issued under and pursuant to the terms and
provisions of the separate Note Agreements, each dated as of November 1,
1993 (collectively, the "Note Agreements"), entered into by the Company
with the original Purchasers therein referred to and this Note and the
holder hereof are entitled equally and ratably with the holders of all
other Notes outstanding under the Note Agreements to all the benefits
provided for thereby or referred to therein. Reference is hereby made to
the Note Agreements for a statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in
the Note Agreements.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, premium, if
any, and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
This Note and said Note Agreements are governed by and construed in
accordance with the internal laws of the State of New York without regard
to its conflict of laws.
Smith's Food & Drug Centers, Inc.
By
Its