Exhibit 4.3
FORM OF EXCHANGE NOTES
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
therein.
CUSIP NO.: [ ]
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SHOPPERS FOOD WAREHOUSE CORP.
9 3/4% SENIOR NOTE DUE 2004
No. 1 $200,000,000
SHOPPERS FOOD WAREHOUSE CORP., a Delaware corporation (the "Company,"
which term includes any successor corporation), for value received promises to
pay to Cede & Co. or registered assigns the principal sum of Two Hundred Million
Dollars ($200,000,000), on June 15, 2004.
Interest Payment Dates: June 15 and December 15.
Record Dates: May 31 and November 30.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers.
Dated: [ ]
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Attest: SHOPPERS FOOD WAREHOUSE CORP.
By:
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Name: Name:
Title: Title:
Certificate of Authentication
This is one of the 9 3/4% Senior Notes due 2004 referred to in the
within-mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
Dated: [ ]
--------------- By:
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Authorized Signatory
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SHOPPERS FOOD WAREHOUSE CORP.
9 3/4% SENIOR NOTE DUE 2004
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Indenture, dated as of June 26, 1997 (the
"Indenture"), and as amended from time to time, by and among Shoppers Food
Warehouse Corp., a Delaware corporation (the "Company"), SFW Holding Corp., a
Delaware corporation (the "Guarantor") and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee").
1. INTEREST.
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(a) The Company promises to pay interest on the principal
amount of this Security at a rate of 9.75% per annum. The
Company shall further pay the Liquidated Damages payable
pursuant to Section 5 of the Registration Rights Agreement. The
Company will pay interest and Liquidated Damages, if any, semi-
annually in arrears on June 15 and December 15 of each year, or
if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the
Securities will accrue from the most recent date on which
interest has been paid or, if no interest has been paid, from
June 26, 1997; provided, however, that if there is no existing
Default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date;
provided further, however, that the first Interest Payment Date
shall be December 15, 1997.
(b) To the extent lawful, the Company shall pay interest
(including post-petition interest in any proceeding under any
Bankruptcy Law) on (i) overdue principal, premium, if any, and
Liquidated Damages, if any, at the rate borne by the Securities,
compounded semiannually; and (ii) overdue installments of
interest, and Liquidated Damages, if any (without regard to any
applicable grace period) at the same rate, compounded
semiannually.
(c) Interest will be computed on the basis of a 360-day year
of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Securities
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to the Persons who are registered Holders at the close of business on the May
31 and November 30 next preceding the applicable Interest Payment Date, even
if such Securities are cancelled after such record date and on or before such
Interest Payment Date. The Securities will be payable as to principal,
interest and Liquidated Damages, if any, at the office or agency of the
Company maintained for such purpose within the City and State of New York,
or, at the option of the Company, payment of interest or Liquidated Damages,
if any, may be made by check mailed to the Holders at their addresses set
forth in the register of Holders, and provided that payment by wire transfer
of immediately available funds or Federal funds check will be required with
respect to principal of and interest and Liquidated Damages, if any, on the
Global Security. Such payment shall be in currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee under the
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Indenture will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company or any of
its Subsidiaries may, subject to certain exceptions, act in any such
capacity.
4. INDENTURE. The Company issued the Securities under the Indenture.
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Each Holder, by accepting the Securities, agrees to be bound by all the terms
and provisions of the Indenture, as the same may be amended from time to time
in accordance with its terms. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 7aaa-77bbbb)
("TIA"). The Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of such terms. Except
as provided in Paragraph 6 hereof, the Securities are general unsecured
obligations of the Company limited to $200 million in aggregate principal
amount, plus amounts, if any, sufficient to pay interest, premium and
Liquidated Damages, if any, on outstanding Securities as set forth in
Paragraph 2 hereof. Payment on each Security and performance by the Company
within applicable grace periods of the other Obligations is guaranteed by the
Guarantor pursuant to Article 10 of the Indenture. In order to secure the
Obligations, the Guarantor has granted a security interest in the Collateral
to the Trustee for the benefit of the Holders pursuant to the Indenture.
5. REDEMPTION AT THE COMPANY'S OPTION. The Securities are redeemable, in
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whole or in part, at the option of the Company at any time on or after June
15, 2001, at the redemption prices (expressed as a percentage of the
principal amount redeemed) set forth below (the "Optional Redemption Price"),
plus any accrued and unpaid interest to the date of redemption, if redeemed
during the period indicated:
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Year Optional Redemption Price
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June 15, 2001 through June 14, 2002 ........... 104.875%
June 15, 2002 through June 14, 2003 .......... 102.4375%
June 15, 2003 and thereafter ............... 100%
In addition, until June 15, 2000, the Company may, at its option, use
the net cash proceeds of one or more Equity Offerings to redeem up to an
aggregate of 35% (up to 10% if the Special Mandatory Redemption described in
Paragraph 6 hereof has occurred) of the principal amount of the Securities
originally issued, at a redemption price equal to 109.75% of the principal
amount thereof, plus any accrued and unpaid interest thereon to the date of
redemption; provided, however, that at least 65% of the principal amount of
the Securities originally issued remains outstanding immediately after the
occurrence of such redemption and; provided, further, that any such
redemption shall reduce, on a dollar for dollar basis, the principal amount
of the Securities required to be redeemed pursuant to the Special Mandatory
Redemption.
6. SPECIAL MANDATORY REDEMPTION. If, on or prior to June 30, 1998, the
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closing of a Settlement has not occurred or the Company has not paid to Dart
the Restricted Proceeds to fund a Settlement, Securities in an aggregate
principal amount of $50,000,000 (subject to reduction pursuant to Paragraph 5
above) shall be redeemed pursuant to a Special Mandatory Redemption at any
time on or prior to August 14, 1998, at 101% of the principal amount thereof,
plus any accrued and unpaid interest thereon to the date of redemption. Any
Special Mandatory Redemption shall be paid using the Restricted Proceeds
(including any interest or other profit earned thereon).
The Company shall deposit $50,000,000 of the proceeds from the
Offering with the Trustee in the Restricted Account simultaneously with
receipt of payment therefor on the Issue Date. All amounts so deposited will
be held by the Trustee pursuant to the Pledge Agreement as collateral to
secure the obligations of the Company under the Securities, subject to
release from the Restricted Account as set forth in the Pledge Agreement. The
Pledge Agreement provides that on or prior to June 30, 1998, the Restricted
Proceeds may be released to the Company only to make a payment to Dart for
purposes of funding a Settlement. The Pledge Agreement further provides that,
prior to the release to the Company of the Restricted Proceeds from the
Restricted Account for the purpose of funding a Settlement, an Officers'
Certificate must be delivered to the Trustee stating that the closing of a
Settlement is occurring simultaneously with the release of the Restricted
Proceeds. Upon receipt of such Officers' Certificate, the Trustee will
release the Restricted Proceeds held pursuant to the Pledge Agreement to the
Company and the Pledge Agreement will terminate. Following such release of
the Restricted Proceeds, including any interest or profit earned thereon,
from the Restricted Account and termination of the Pledge Agreement, all of
the Securities will be unsecured obligations of the Company.
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Pending release of the Restricted Proceeds from the Restricted Account
pursuant to the Pledge Agreement either to make a payment to Dart to fund a
Settlement or to fund the Special Mandatory Redemption, the Restricted
Proceeds shall be invested in Cash Equivalents as directed by the Company. If
a Special Mandatory Redemption occurs, then any interest or other profit
earned on the Restricted Proceeds shall be used to fund the Special Mandatory
Redemption (including any accrued and unpaid interest on the Securities that
are redeemed), except that any amount in the Restricted Account not needed to
fund the Special Mandatory Redemption may be used by the Company for general
corporate purposes (including payment of interest on the Securities). If the
Restricted Proceeds are released to the Company from the Restricted Account
and used to make a payment to Dart to fund a Settlement, then any interest or
other profit earned on the Restricted Proceeds may be used by the Company for
general corporate purposes (including payment of interest on the Securities).
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
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days but not more than 60 days before the redemption date to each Holder
whose Securities are to be redeemed at its registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Securities held by a Holder are to be
redeemed. On and after the redemption date, interest ceases to accrue on
Securities or portions thereof called for redemption as long as the Company
has deposited with the Paying Agent funds in satisfaction of the redemption
price pursuant to the Indenture. If Securities are redeemed subsequent to a
record date with respect to any Interest Payment Date specified above and on
or prior to such Interest Payment Date, then any accrued interest on such
Securities will be paid to the Holders in whose names such Securities are
registered at the close of business on such record date.
8. CHANGE IN CONTROL OFFER. If a Change in Control occurs, each Holder
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shall have the right to require the Company to repurchase all of such
Holder's Securities, or any portion thereof that is an integral multiple of
$1,000, for cash at a price equal to 101% of the principal amount of such
Securities to be repurchased, plus any accrued and unpaid interest, if any,
to the Repurchase Date. Within 30 days after the occurrence of a Change in
Control, the Company shall mail a notice to each Holder setting forth the
procedures governing the Change in Control repurchase right as required by
the Indenture. A Holder may tender or refrain from tendering all or any
portion of his or her Securities at his or her discretion by completing the
form entitled "OPTION OF HOLDER TO ELECT PURCHASE" appearing on this Security
and delivering such form, together with the Securities with respect to which
the repurchase right is being exercised, duly endorsed for transfer to the
Company, to the Trustee within 30 days after receipt of the Company Notice.
Any portion of Securities tendered must be in integral multiples of $1,000.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered
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form, without coupons, in denominations of $1,000 and integral multiples of
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$1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption, except for the unredeemed portion of any Security
being redeemed in part. Also, it need not exchange or register the transfer
of any Securities for a period of 15 days before a selection of Securities to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Security may be
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treated as its owner for all purposes.
11. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
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Indenture or the Securities may be amended with the consent of the Holders of
at least a majority in aggregate principal amount of the Securities then
outstanding. Without the consent of any Holder, the Company and the Trustee
may amend, waive or supplement the Indenture or the Securities to (i) cure
any ambiguity, defect or inconsistency, (ii) mortgage, pledge, hypothecate or
grant a security interest in favor of the Trustee as additional security for
the payment and performance of the obligations under the Indenture, in any
property or assets, including any which is required to be mortgaged, pledged
or hypothecated, or in which a security interest is required to be granted,
to the Trustee, (iii) make any change that does not adversely affect the
rights of any Holder, (iv) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power conferred upon the
Company under the Indenture, or to provide any additional rights or benefits
to the Holders, (v) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the obligations of the
Company hereunder and under the Indenture, (vi) to set out the form of the
Exchange Notes and to set forth such other matters as are necessary in
connection with the Exchange Offer that do not adversely affect the rights of
any Holder, or (vii) to maintain the qualification of the Indenture under the
TIA.
12. DEFAULTS AND REMEDIES. An Event of Default is: default for 30 days in
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payment of interest on the Securities; default in payment of principal or
premium, if any, on the Securities when due (including a default in the
obligation to effectuate the Special Mandatory Redemption as described in
Paragraph 6 hereof or in payment upon the exercise by a Holder of its right
to require repurchase of its Securities pursuant to Paragraph 8 hereof);
failure by the Company or the Guarantor for 30 days after notice to it to
comply with any of its other agreements or covenants in the Indenture or the
Pledge Agreement; certain defaults under and accelerations prior to maturity
of other indebtedness; certain final judgments which remain undischarged;
certain events of bankruptcy or insolvency; and the cessation of the
Indenture (or, prior to the termination in accordance with its terms, the
Pledge Agreement) to be in full force and
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effect or to provide the Trustee, in any material respect, the Liens, rights,
powers and privileges purported to be created thereby. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25%
in aggregate principal amount of the outstanding Securities may declare all
the Securities to be due and payable immediately, except that in the case of
an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Securities become due and payable without further action or
notice. Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their best
interests. The Company must furnish an annual compliance certificate to the
Trustee.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
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other capacity, may make loans to, accept deposits from and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
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incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation, including with respect to any certificates
delivered hereunder or thereunder from any such Person. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
15. AUTHENTICATION. This Security shall not be valid until authenticated
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by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
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Holder or an assignee, such as: TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
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addition to the rights provided to Holders of Securities under the Indenture,
Holders of Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement referred to above.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may
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be made to:
Shoppers Food Warehouse Corp.
4600 Forbes Blvd.
Lanham, MD 20706
Attention: President
18. GOVERNING LAW. The Laws of the State of New York shall govern this
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Security and the Indenture, without regard to principles of conflicts of law.
19. ADJUSTMENTS. This Global Security shall represent such of the
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outstanding Securities as shall be specified herein and shall represent the
aggregate amount of outstanding Securities from time to time endorsed hereon and
the aggregate amount of outstanding Securities represented hereby may from time
to time be reduced or increased, as appropriate, by adjustments made on the
records of the Trustee, as custodian for the Depository, to reflect exchanges
and redemptions. Any endorsement of this Global Security to reflect the amount
of any increase or decrease in the amount of outstanding Securities represented
hereby shall be made by the Trustee or the Securities Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
hereof as required in Section 2.6 of the Indenture.
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GUARANTEE
SFW Holding Corp., a Delaware corporation, hereby unconditionally guarantees to
the Holder of the Security upon which this guarantee is endorsed the due and
punctual payment, as set forth in the Indenture pursuant to which such Security
and this guarantee were issued, of the principal of, premium (if any) and
interest on such Security when and as the same shall become due and payable for
any reason according to the terms of such Security and Article 10 of the
Indenture. The guarantee of the Security upon which this guarantee is endorsed
will not become effective until the Trustee signs the certificate of
authentication on such Security.
SFW HOLDING CORP.
By:
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Name:
Title:
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FORM OF ASSIGNMENT
I or we assign this Security to
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type name, address and ZIP Code of assignee)
Please insert Social Security or other
identifying number of assignee
- -----------------------------
and irrevocably appoint _____________________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
Dated: Signed:
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- --------------------------------------------------------------------------------
(Sign exactly as your name appears on the front of this Security)
Signature Guarantee:
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In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the SEC of
the effectiveness of a registration statement under the Securities Act of 1933,
as amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) the second anniversary of the Issue Date (provided, however,
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that neither the Company nor any affiliate of the Company has held any
beneficial interest in such Security, or portion thereof, at any time on or
prior to the second anniversary of the Issue Date), the undersigned confirms
that it has not utilized any general solicitation or general advertising in
connection with the transfer and that this Security is being transferred:
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(Check One)
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(1) _____ to the Company or a Subsidiary thereof; or
(2) _____ pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) _____ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) _____ outside the United States to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(5) _____ pursuant to the exemption from registration provided by Rule 144
under the Securities act; or
(6) _____ pursuant to an effective registration statement under the Securities
Act; or
(7) _____ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided that if box (3), (4), (5) or (7) is
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checked, the Company or the Trustee may require, prior to registering any such
transfer of the Securities, in its sole discretion, such legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.17 of the Indenture shall have
been satisfied.
Dated: Signed:
------------------------- (Sign exactly as name appears
on the other side of this
Security)
Signature Guarantee:
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TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which if exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
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NOTICE: To be executed by an
executive officer
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.9 or Section 4.19 of the Indenture, check the appropriate
box below:
[_] Section 4.9 (Change in Control)
[_] Section 4.19 (Asset Sale)
If you want to elect to have only part of the Security purchased by
the Company pursuant to Section 4.9 or Section 4.19, state the amount you elect
to have purchased: $
Date: Your Signature:
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(Sign exactly as your name appears on the
face of this Security)
Tax Identification No.:
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Signature Guarantee:
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