EXHIBIT 1.1
SUPERVALU INC.
U.S. $400,000,000
Medium-Term Notes, Series B
Distribution Agreement
----------------------
October 2, 1995
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
BT Securities Corporation
130 Liberty Street
New York, New York 10006
Citicorp Securities, Inc.
399 Park Avenue
New York, New York 10043
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
SUPERVALU INC., a Delaware corporation (the "Company"), proposes to issue
and sell from time to time its Medium-Term Notes, Series B (the "Securities") in
an aggregate amount up to U.S. $400,000,000, or its equivalent in another
currency or composite currency, and agrees with each of you (individually, an
"Agent," and collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation
on the part of the Company to sell any Securities or an obligation
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of the Agents to purchase Securities as principal.
The Securities will be issued under an indenture, dated as of July 1, 1987,
as supplemented by the First Supplemental Indenture dated as of August 1, 1990,
the Second Supplemental Indenture dated as of October 1, 1992 and the Third
Supplemental Indenture dated as of September 1, 1995 (as so supplemented, the
"Indenture"), between the Company and Bankers Trust Company, as Trustee (the
"Trustee"). The Securities shall have the maturity ranges, interest rates, if
any, redemption provisions and other terms set forth in the Prospectus referred
to below as it may be amended or supplemented from time to time. The Securities
will be issued, and the terms and rights thereof established, from time to time
by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) A registration statement on Form S-3 (File No. 33-56415) in
respect of a total of U.S. $400,000,000 aggregate amount of debt securities
of the Company, including the Securities, has been filed under the
Securities Act of 1933, as amended (the "Act"), with the Securities and
Exchange Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to such Agent, excluding exhibits to such registration
statement but including all documents incorporated by reference in the
prospectus included therein, and such registration statement in such form
has been declared effective by the Commission and no stop order suspending
the effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act, being hereinafter called a
"Preliminary Prospectus"; the various parts of such registration statement,
including all exhibits thereto and the documents incorporated by reference
in the prospectus contained in such registration statement at the time such
part of such registration statement became effective but excluding Form
T-1, each as amended at the time such part of such registration statement
became effective, being hereinafter collectively called the "Registration
Statement"; the prospectus (including, if applicable, any prospectus
supplement) relating to the Securities, in the form in which it has most
recently been filed or transmitted for filing with the Commission on or
prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus, including any supplement to the
Prospectus that sets forth only the terms of a particular issue of the
Securities (a "Pricing Supplement"), shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be,
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under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated therein by reference; any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to and include the Prospectus as amended or supplemented (including
any applicable Pricing Supplement filed in accordance with Section 4(a)
hereof) in relation to Securities to be sold pursuant to this Agreement, in
the form filed or transmitted for filing with the Commission pursuant to
Rule 424(b) under the Act and in accordance with Section 4(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, or any amendment or supplement thereto, when
such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
the Statement of Eligibility of the Trustee on Form T-1 or to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent expressly for
use in the Prospectus as amended or supplemented to relate to a particular
issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date in case of the Registration Statement and any amendment
thereto and as of the applicable filing date in the case of the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
the Statement of Eligibility of the Trustee on Form T-1 or to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company
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by any Agent expressly for use in the Prospectus as amended or supplemented
to relate to a particular issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (except for
issuances of capital stock pursuant to employee or director stock plans,
purchases of common stock pursuant to the common stock repurchase program
and other increases or decreases in capital stock of less than $5,000,000
in the aggregate) or increase in long-term debt (except for any increases
of less than $50,000,000 in the aggregate) of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The authorized capital stock of the Company is as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(g) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement, will have
been duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture, which will be substantially in the form
filed or incorporated by reference as an exhibit to the Registration
Statement; the Indenture has been duly authorized by the Company and
qualified under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; the Indenture conforms, and the Securities of
any particular issuance of Securities will conform, in all material
respects, to the descriptions thereof contained in the Prospectus as
amended or supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities and the compliance by the
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Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject (as any such agreement or instrument may be amended or modified,
taking into account any waiver obtained), nor will such action result in
any violation of the provisions of the Restated Certificate of
Incorporation or the By-Laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with
any court or governmental agency or body is required for the solicitation
of offers to purchase Securities, the issue and sale of the Securities or
the consummation by the Company of the transactions contemplated by this
Agreement, any Terms Agreement or the Indenture, except such as have been,
or will have been prior to the Commencement Date (as defined in Section 3
hereof), obtained under the Act or the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under securities or Blue Sky laws of any state or foreign
jurisdiction in connection with the solicitation by such Agent of offers to
purchase Securities from the Company and with purchases of Securities by
such Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(i) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(j) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which
shall have been issued and sold by the Company hereunder or under any Terms
Agreement and of any debt securities of the Company (other than such
Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement; and
(k) All issued and outstanding shares of capital stock of Supermarket
Operators of America Inc., a Delaware corporation ("SOA"), are owned
directly by the Company, and all issued and outstanding shares of capital
stock of SUPERVALU Holdings, Inc., a Missouri corporation ("Holdings"),
and, except as set forth in the
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Prospectus, ShopKo Stores, Inc., a Minnesota corporation, are owned
directly by SOA, in each case free and clear of all liens, encumbrances,
equities and claims.
2. (a) On the basis of the representations and warranties, and subject
to the terms and conditions herein set forth, each of the Agents hereby
severally and not jointly agrees, as agent of the Company, to use its
reasonable efforts to solicit and receive offers to purchase the Securities
from the Company upon the terms and conditions set forth in the Prospectus
as amended or supplemented from time to time. The appointment of the
Agents hereunder is not exclusive and the Company may from time to time
offer Securities for sale otherwise than to or through an Agent; provided,
however, that so long as this Agreement is in effect the Company will not
appoint any other agent for the purpose of soliciting purchases of the
Securities on a continuous basis. It is understood, however, that if from
time to time the Company is approached by a prospective agent offering to
solicit a specific purchase of Securities, the Company may engage such
agent with respect to such specific purchase, provided that (i) such agent
is engaged on terms substantially similar (including the same commission
schedule) to the applicable terms of this Agreement (which may be
accomplished by the execution of a letter agreement between the Company and
such prospective agent substantially in the form of Annex IV hereto) and
(ii) the Agents are given notice of such purchase promptly after it is
agreed to. Each Agent is acting in connection with the Securities
individually and not collectively or jointly. The Company reserves the
right to sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf, and, in the case of any such sale not resulting
from a solicitation made by any Agent, no commission will be payable with
respect to such sale. These provisions shall not limit Section 4(f) hereof
or any similar provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each
case therefor shall be as set forth in the Administrative Procedure
attached hereto as Annex II as it may be amended from time to time by
written agreement between the Agents and the Company (the "Administrative
Procedure"). The provisions of the Administrative Procedure shall apply to
all transactions contemplated hereunder other than those made pursuant to a
Terms Agreement. Each Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed by
each of them in the Administrative Procedure. The Company will furnish to
the Trustee a copy of the Administrative Procedure as from time to time in
effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New York
City after receipt of notice from the Company, the Agents will forthwith
suspend solicitation of offers to purchase Securities from the Company
until such time as the Company has advised the Agents that such
solicitation
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may be resumed. During such period, the Company shall not be
required to comply with the provisions of Sections 4(i), 4(j) and 4(k).
Upon advising the Agents that such solicitation may be resumed, however,
the Company shall simultaneously provide the documents required to be
delivered by Sections 4(i), 4(j) and 4(k), and the Agents shall have no
obligation to solicit offers to purchase the Securities until such
documents have been received by the Agents. In addition, any failure by
the Company to comply with its obligations hereunder, including without
limitation its obligations to deliver the documents required by Sections
4(i), 4(j) and 4(k), shall automatically terminate the Agents obligations
hereunder, including without limitation its obligations to solicit offers
to purchase the Securities hereunder as agent or to purchase Securities
hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following
applicable percentage of the principal amount of such Security sold:
Commission (percentage of
aggregate principal amount
Range of Maturities of Securities sold)
------------------- --------------------------
From 9 months to less than 1 year............ .125%
From 1 year to less than 18 months........... .150%
From 18 months to less than 2 years.......... .200%
From 2 years to less than 3 years............ .250%
From 3 years to less than 4 years............ .350%
From 4 years to less than 5 years............ .450%
From 5 years to less than 6 years............ .500%
From 6 years to less than 7 years............ .550%
From 7 years to less than 10 years........... .600%
From 10 years to less than 15 years.......... .625%
From 15 years to less than 20 years.......... .675%
From 20 years to 30 years.................... .750%
(b) Each sale of Securities to any Agent as principal shall be made
in accordance with the terms of this Agreement and (unless the Company and
such Agent shall otherwise agree) a Terms Agreement that will provide for
the sale of such Securities to and the purchase thereof by such Agent.
A Terms Agreement may also specify certain provisions relating to the
reoffering of such Securities by such Agent. The commitment of any Agent
to purchase Securities as principal, whether pursuant to a Terms Agreement
or
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otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Securities to be purchased by any
Agent pursuant thereto, the price to be paid to the Company for such
Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the
Securities and the time and date and place of delivery of and payment for
such Securities. Such Terms Agreement shall also specify any requirements
for opinions of counsel, accountants' letters and officers' certificates
pursuant to Section 4 hereof.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue
and delivery of such Securities and payment therefor shall be as set forth
in the Administrative Procedure. For each such sale of Securities to an
Agent as principal that is not made pursuant to a Terms Agreement, the
Company agrees to pay such Agent a commission (or grant an equivalent
discount) as provided in Section 2(a) hereof and in accordance with the
schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement
or in accordance with the Administrative Procedure, is referred to herein
as a "Time of Delivery."
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such
Security in, or to residents of, the country issuing such currency (or, if
such Security is denominated in a composite currency, in any country
issuing a currency comprising a portion of such composite currency), except
as permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Dorsey & Whitney P.L.L.P., 220 South Sixth Street, Minneapolis,
Minnesota, at 11:00 a.m., New York City time, on the date of this Agreement,
which date and time of such delivery may be postponed by agreement between the
Agents and the Company but in no event shall be later than the day prior to the
date on which solicitation of offers to purchase Securities is commenced or on
which any Terms Agreement is executed (such time and date being referred to
herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall
be disapproved by any Agent promptly after reasonable notice thereof or (B)
after the date of any Terms
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Agreement or other agreement by an Agent to purchase Securities as
principal and prior to the related Time of Delivery which shall be
disapproved by any Agent party to such Terms Agreement or so purchasing as
principal promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant to
this Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b) under the Act not later than the close of business
of the Commission on the fifth business day after the date on which such
Pricing Supplement is first used; (iii) to make no amendment or supplement
to the Registration Statement or Prospectus (other than any Pricing
Supplement, any supplement relating to an offering of securities other than
the Securities, or any periodic report filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus) at any time prior to
having afforded each Agent a reasonable opportunity to review and comment
thereon; (iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities, and during such same period to
advise such Agent, promptly after the Company receives notice thereof, of
the time when any amendment to the Registration Statement has been filed or
has become effective or any supplement to the Prospectus or any amended
Prospectus (other than any Pricing Supplement that relates to Securities
not purchased through or by such Agent) has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amendment or supplement of the Registration Statement or Prospectus
or for additional information; and (v) in the event of the issuance of any
such stop order or of any such order preventing or suspending the use of
any such prospectus or suspending any such qualification to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as such Agent may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein for as long as may be necessary to complete the
distribution or sale of the Securities; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the
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Administrative Procedure), in the form in which it is filed with the
Commission pursuant to Rule 424 under the Act, and with copies of the
documents incorporated by reference therein, all in such quantities as such
Agent may reasonably request from time to time; and, if the delivery of a
prospectus is required at any time in connection with the offering or sale
of the Securities (including Securities purchased from the Company by such
Agent as principal) and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such Agent shall
forthwith cease such solicitations); and if the Company shall decide to
amend or supplement the Registration Statement or the Prospectus as then
amended or supplemented, to so advise such Agent promptly by telephone
(with confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented that will
correct such statement or omission or effect such compliance; provided,
however, that if during such same period such Agent continues to own
Securities purchased from the Company by such Agent as principal or such
Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date of the Registration Statement, (ii) the effective date of
each post-effective amendment to the Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an Annual Report
on Form 10-K that is incorporated by reference in the Registration
Statement, an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) During the period this Agreement is in effect with respect to any
Agent, to furnish to such Agent copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to such Agent (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed (except registration statements filed with the Commission
on Form S-8 and reports of the Company' employee benefit plans filed with
the
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Commission on Form 11-K); and (ii) such additional information concerning
the business and financial condition of the Company as such Agent may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and
continuing to and including the later of (i) the termination of trading
restrictions for the Securities purchased thereunder, as notified to the
Company by such Agent and (ii) the related Time of Delivery, the Company
will not, without the prior written consent of such Agent, offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
which both mature more than 9 months after such Time of Delivery and have
terms which are substantially similar to the Securities which are the
subject of such Terms Agreement or other agreement;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the
Company of a Terms Agreement with such Agent, shall be deemed to be an
affirmation to such Agent that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and
correct as of the date of such acceptance or of such Terms Agreement, as
the case may be, as though made at and as of such date, and an undertaking
that such representations and warranties will be true and correct as of the
settlement date for the Securities relating to such acceptance or as of the
Time of Delivery relating to such sale, as the case may be, as though made
at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented relating to such Securities);
(h) That each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies
the delivery of an opinion or opinions by Sullivan & Cromwell, counsel to
the Agents, as a condition to the purchase of Securities pursuant to such
Terms Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to
such Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities to
such Agent as principal pursuant to a Terms Agreement and such Terms
Agreement specifies the delivery of
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an opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or
cause to be furnished forthwith to such Agent a written opinion of Dorsey &
Whitney P.L.L.P., counsel for the Company, or other counsel for the Company
satisfactory to such Agent, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the case may
be, in form satisfactory to such Agent in its reasonable judgment, to the
effect that such Agent may rely on the opinion of such counsel referred to
in Section 6(c) hereof which was last furnished to such Agent to the same
extent as though it were dated the date of such letter authorizing reliance
(except that the statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such opinion, an opinion of the
same tenor as the opinion of such counsel referred to in Section 6(c)
hereof but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the
Act or the Exchange Act is incorporated by reference into the Prospectus,
in either case to set forth financial information included in or derived
from the Company's consolidated financial statements or accounting records,
and each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of a letter under this Section 4(j) as a condition to the purchase
of Securities pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement forthwith to furnish such Agent a
letter, dated the date of such amendment, supplement, incorporation or Time
of Delivery relating to such sale, as the case may be, in form satisfactory
to such Agent in its reasonable judgment, of the same tenor as the letter
referred to in Section 6(d) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Company, to the extent such financial statements
and other information are available as of a date not more than five
business days prior to the date of such letter; provided, however, that,
with respect to any financial information or other matter, such letter may
reconfirm as true and correct at such date as though made at and as of such
date, rather than repeat, statements with respect to such financial
information or other matter made in the letter referred to in Section 6(d)
hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, and each time the Company sells Securities
to such Agent as principal
-12-
pursuant to a Terms Agreement and the applicable Terms Agreement specifies
the delivery of a certificate under this Section 4(k) as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company shall
furnish or cause to be furnished forthwith to such Agent a certificate,
dated the date of such supplement, amendment, incorporation or Time of
Delivery relating to such sale, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such
Agent in its reasonable judgment, to the effect that the statements
contained in the certificate referred to in Section 6(h) hereof which was
last furnished to such Agent are true and correct at such date as though
made at and as of such date (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate, certificates of
the same tenor as the certificates referred to in said Section 6(h) but
modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and
(l) To offer to any person who has agreed to purchase Securities as
the result of an offer to purchase solicited by such Agent the right to
refuse to purchase and pay for such Securities if, on the related
settlement date fixed pursuant to the Administrative Procedure, any
condition set forth in Section 6(a), 6(e) or 6(g) hereof shall not have
been satisfied (it being understood that the judgment of such person with
respect to the impracticability or inadvisability of such purchase of
Securities shall be substituted, for purposes of this Section 4(l), for the
respective judgments of an Agent with respect to certain matters referred
to in such Sections 6(a), 6(e) and 6(g), and that such Agent shall have no
duty or obligation whatsoever to exercise the judgment permitted under such
Sections 6(a), 6(e)and 6(g) on behalf of any such person).
5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the reasonable fees and expenses of counsel for the Agents incurred
in connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and the transactions
contemplated hereunder (up to a maximum amount of $65,000 with respect to the
establishment of the program and related opinions); (iii) the cost of printing,
preparing by word processor or reproducing this Agreement, any Terms Agreement,
any Indenture, any Blue Sky and Legal Investment Memoranda and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iv) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including the fees and disbursements of counsel for the
Company in connection with such qualification and in connection with the Blue
Sky and Legal Investment
-13-
Surveys; (v) any fees charged by securities rating services for rating the
Securities; (vi) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vii) the cost of preparing the Securities; (viii) the fees and
expenses of any Trustee and any agent of any Trustee and any transfer or paying
agent of the Company and the fees and disbursements of counsel for any Trustee
or such agent in connection with any Indenture and the Securities; (ix) any
advertising expenses connected with the solicitation of offers to purchase and
the sale of Securities so long as such advertising expenses have been approved
in advance by the Company; and (x) all other costs and expenses incident to the
performance of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section. Except as provided in Sections 7 and
8 hereof, each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated in such Terms Agreement by
reference) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with respect
to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; (ii) no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
(iii) all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such Agent;
(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished
to such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to the incorporation of the Company, the validity of the
Indenture, the Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as such Agent may
reasonably request, and (ii) if and to the extent requested by such Agent,
with respect to each applicable date referred to in Section 4(h) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, an opinion or opinions, dated such applicable date, to the
effect that such Agent may
-14-
rely on the opinion or opinions which were last furnished to such Agent
pursuant to this Section 6(b) to the same extent as though it or they were
dated the date of such letter authorizing reliance (except that the
statements in such last opinion or opinions shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented
to such date) or, in any case, in lieu of such an opinion or opinions, an
opinion or opinions of the same tenor as the opinion or opinions referred
to in clause (i) but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date; and in each case
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Dorsey & Whitney P.L.L.P., counsel for the Company, or other
counsel for the Company satisfactory to such Agent, shall have furnished to
such Agent their written opinion, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in form and
substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or supplemented;
(ii) The authorized capital stock of the Company is as set forth in
the Prospectus as amended or supplemented;
(iii) Holdings has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Missouri, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; and all issued and
outstanding shares of capital stock of Holdings are owned directly by SOA and
all issued and outstanding shares of capital stock of SOA are owned directly by
the Company, in each case free and clear of all liens, encumbrances, equities
and claims which have been perfected by possession or filing under the Uniform
Commercial Code (in the form in which it is then in effect in the State of
Minnesota) or with respect to which any federal or state tax lien filing has
been made in the State of Minnesota, and such counsel has no reason to believe
that any such ownership by SOA or the Company, as the case may be, is subject to
any other lien, encumbrance, equity or claim;
(iv) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
-15-
or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(v) This Agreement and any applicable Terms Agreement have been duly
authorized, executed and delivered by the Company;
(vi) The Securities have been duly authorized and, when duly executed,
authenticated, issued and delivered by the Company, will constitute valid and
legally binding obligations of the Company entitled to the benefits provided by
the Indenture; and the Indenture conforms and the Securities will conform in all
material respects to the descriptions thereof in the Prospectus as amended or
supplemented;
(vii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Indenture has been duly qualified under the Trust Indenture Act;
(viii) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any applicable Terms Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel (after reasonable inquiry) and
material to the Company to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject (as
any such agreement or instrument may be amended or modified, taking into account
any waiver obtained), nor will such action result in any violation of the
provisions of the Restated Certificate of Incorporation, as amended, or the By-
Laws of the Company or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its properties; provided, however, that, for the
purposes of this paragraph (viii), such counsel need not express any opinion
with respect to Federal or state securities laws, or other antifraud laws,
fraudulent transfer laws, the Employee Retirement Income
-16-
Security Act of 1974 and related laws, laws that restrict transactions between
United States persons and citizens or residents of certain foreign countries and
state laws relating to the payment of dividends or the redemption or repurchase
of stock;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the solicitation of offers to purchase Securities, the issue and sale of the
Securities or the consummation by the Company of the other transactions
contemplated by this Agreement, any applicable Terms Agreement, or the
Indenture, except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under securities or Blue Sky laws of any state
or foreign jurisdiction in connection with the solicitation by the Agents of
offers to purchase Securities from the Company and with purchases of Securities
by an Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(x) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules or other financial data therein, as to which such counsel need express
no opinion), when they became effective or were filed with the Commission, as
the case may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and such counsel has no reason to
believe that any of such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading; and
(xi) The Registration Statement and the Prospectus as amended and
supplemented and any further amendments and supplements thereto made by the
Company prior to the date of such opinion (other than the financial statements
and related schedules or other financial data therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules and
regulations thereunder; although such counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements
-17-
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (vi) of this Section 6(c), such
counsel has no reason to believe that, as of its effective date, the
Registration Statement or any amendment or supplement thereto made by the
Company prior to the date of such opinion (other than the financial
statements and related schedules or other financial data therein, as to
which such counsel need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading
or that, as of the date of such opinion, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Company prior to the date of such opinion (other than the financial
statements and related schedules or other financial data therein, as to
which such counsel need express no opinion) contains an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
such counsel does not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or
the Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required.
(d) Not later than 10:00 a.m., New York City time, on the Commencement
Date and on each applicable date referred to in Section 4(j) hereof that is
on or prior to such Solicitation Time or Time of Delivery, as the case may
be, the independent certified public accountants who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have
furnished to such Agent a letter, dated the Commencement Date or such
applicable date, as the case may be, in form and substance satisfactory to
such Agent, to the effect set forth in Annex III hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented on or prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus as amended or supplemented on
or prior to the date of the Pricing Supplement relating to the Securities
to be delivered at the relevant Time of Delivery and (ii) since the
respective dates as of which information is given in the Prospectus as
amended or supplemented on or prior to the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of Delivery
-18-
there shall not have been any change in the capital stock (except for
issuances of capital stock pursuant to employee or director stock plans,
purchases of common stock pursuant to the common stock repurchase program
and other increases or decreases in capital stock of less than $5,000,000
in the aggregate) or increase in long-term debt (except for any increases
of less than $50,000,000 in the aggregate) of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented on or prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery, the effect
of which, in any such case described in clause (i) or (ii), is in the
judgment of such Agent so material and adverse as to make it impracticable
or inadvisable to proceed with the solicitation by such Agent of offers to
purchase Securities from the Company or the purchase by such Agent of
Securities from the Company as principal, as the case may be, on the terms
and in the manner contemplated in the Prospectus as amended or supplemented
on or prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery;
(f) On or after the date hereof, (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange; (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this clause
(iii) in the judgment of such Agent makes it impracticable or inadvisable
to proceed with the solicitation of offers to purchase Securities or the
purchase of Securities from the Company as principal, pursuant to the
applicable Terms Agreement or otherwise, as the case may be, on the terms
and in the manner contemplated in the Prospectus as amended or
supplemented; and
(h) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement Date
and each applicable date referred to in Section 4(k) hereof that is on or
prior to such Solicitation Time or Time of Delivery, as the case may be, in
such form and executed by such officers of the Company as shall be
satisfactory to such Agent, as to the
-19-
accuracy of the representations and warranties of the Company herein at and
as of the Commencement Date or such applicable date, as the case may be, as
to the performance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable date, as
the case may be, as to the matters set forth in subsections (a) and (e) of
this Section 6, and as to such other matters as such Agent may reasonably
request.
(i) With respect to any Security denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any
Security the principal or interest of which is indexed to such currency,
currencies or composite currency, there shall not have occurred a
suspension or material limitation in foreign exchange trading in such
currency, currencies or composite currency by a major international bank, a
general moratorium on commercial banking activities in the country or
countries issuing such currency, currencies or composite currency, the
outbreak or escalation of hostilities involving, the occurrence of any
material adverse change in the existing financial, political or economic
conditions of, or the declaration of war or a national emergency by, the
country or countries issuing such currency, currencies or composite
currency or the imposition or proposal of exchange controls by any
governmental authority in the country or countries issuing such currency,
currencies or composite currency; and
7. (a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse such Agent for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment or supplement,
in reliance upon and in conformity with written information furnished to
the Company by such Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or
-20-
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to
the Securities, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and each Agent on the other from the offering of the Securities to
which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the
-21-
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities (before
deducting expenses) received by the Company bear to the total commissions
or discounts received by such Agent in respect thereof. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or by any Agent on the
other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Company and each Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by per capita
allocation (even if all Agents were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), an Agent shall not be required to
contribute any amount in excess of the amount by which the total public
offering price at which the Securities purchased by or through it were sold
exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of each of the Agents under
this subsection (d) to contribute are several in proportion to the
respective purchases made by or through it to which such loss, claim,
damage or liability (or action in respect thereof) relates and are not
joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Agent within the meaning of the Act; and the obligations of
each Agent under this Section 7 shall be in addition to any liability which
such Agent may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning
-22-
of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent and the Company set forth in or made pursuant
to this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 7, Section 8 and Section 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advice hereunder
shall be in writing, or by telephone if promptly confirmed in writing, and if to
Goldman, Sachs & Co. shall be sufficient in all respects when delivered or sent
by facsimile transmission, overnight express service or certified mail to 85
Broad Street, New York, New York 10004, Facsimile Transmission No. (212) 363-
7609, Attention: Credit Department; and if to BT Securities Corporation shall
be sufficient in all respects when delivered or sent by facsimile transmission,
overnight express service or certified mail to 130 Liberty Street, New York, New
York 10006, Facsimile Transmission No. _________, Attention: ______________;
and
-23-
if to Citicorp Securities, Inc. shall be sufficient in all respects when
delivered or sent by facsimile transmission, overnight express service or
certified mail to 399 Park Avenue, New York, New York 10043, Facsimile
Transmission No. _________, Attention: ______________; and if to J.P. Morgan
Securities Inc. shall be sufficient in all respects when delivered or sent by
facsimile transmission, overnight express service or certified mail to 60 Wall
Street, New York, New York 10260, Facsimile Transmission No. _________,
Attention: ______________; and if to the Company shall be sufficient in all
respects when delivered or sent by facsimile transmission, overnight express
service or certified mail to SUPERVALU INC., 11840 Valley View Road, Eden
Prairie, Minnesota 55344, Facsimile Transmission No. (612) 828-4576, Attention:
Treasurer.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective personal representatives, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign by reason of
such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
office of the Commission in Washington, D.C. is normally open for business.
14. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
-24-
If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts thereof, whereupon this letter and the acceptance
by each of you shall constitute a binding agreement between the Company and each
of you in accordance with its terms.
Very truly yours,
SUPERVALU INC.
/s/ Kim M. Erickson
By:__________________________
Accepted in New York, New York,
as of the date hereof:
/s/ Goldman, Sachs & Co.
______________________________
Goldman, Sachs & Co.
BT Securities Corporation
/s/ Jacques de Saint Phalle
By:____________________________
Citicorp Securities, Inc.
/s/ Kimberly A. Conyngham
By:____________________________
J.P. Morgan Securities Inc.
/s/ Margaret Brody
By:____________________________
-25-
ANNEX I
SUPERVALU INC.
Medium-Term Notes, Series B
Terms Agreement
---------------
________, 1995
[Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004]
[BT Securities Corporation
130 Liberty Street
New York, New York 10006]
[Citicorp Securities, Inc.
399 Park Avenue
New York, New York 10043]
[J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260]
Ladies and Gentlemen:
SUPERVALU INC. (the "Company") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated October 2,
1995 (the "Distribution Agreement"), between the Company on the one hand and
Goldman, Sachs & Co., BT Securities Corporation, Citicorp Securities, Inc. and
J.P. Morgan Securities Inc. (the "Agents") on the other, to issue and sell to
[Goldman, Sachs & Co.], [BT Securities Corporation], [Citicorp Securities, Inc.]
and [J.P. Morgan Securities Inc.] the securities specified in the Schedule
hereto (the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents, as agents
of the Company, of offers to purchase Securities is incorporated herein by
reference in its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if
I-1
such provisions had been set forth in full herein. Nothing contained herein or
in the Distribution Agreement shall make any party hereto an agent of the
Company or make such party subject to the provisions therein relating to the
solicitation of offers to purchase securities from the Company, solely by virtue
of its execution of this Terms Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement, except that each representation and warranty in
Section 1 of the Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the date of the
Distribution Agreement in relation to the Prospectus (as therein defined), and
also a representation and a warranty as of the date of this Terms Agreement in
relation to the Prospectus as amended and supplemented to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Goldman, Sachs & Co.], [BT Securities Corporation], [Citicorp
Securities, Inc.] and [J.P. Morgan Securities Inc.] and [Goldman, Sachs & Co.],
[BT Securities Corporation], [Citicorp Securities, Inc.] and [J.P. Morgan
Securities Inc.] agree[s] to purchase from the Company, the Purchased
Securities, at the time and place, in the principal amount and at the purchase
price set forth in the Schedule hereto.
I-2
If the foregoing is in accordance with your understanding, please sign and
return to us three counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
SUPERVALU INC.
By
-------------------------
Accepted:
[
-----------------------------
Goldman, Sachs & Co.]
[BT Securities Corporation
By:______________________]
[Citicorp Securities, Inc.
By:______________________]
[J.P. Morgan Securities Inc.
By:______________________]
I-3
Schedule to Annex I
Title of Purchased Securities:
- -----------------------------
[ %] Medium-Term Notes, Series B
Specified Currency (if other than U.S. dollars):
- -----------------------------------------------
Aggregate Principal Amount:
- --------------------------
[$ or units of the Specified Currency indicated
above]
[Price to Public]:
- -----------------
Purchase Price by [insert names of agents]:
- ------------------------------------------
[ %] of the principal amount of the Purchased Securities [, plus
accrued interest from _____ to _____] [and accrued amortization, if any, from
_______ to _______]
Method of and Specified Funds for Payment of Purchase Price:
- -----------------------------------------------------------
[By certified or official bank check or checks, payable to the order of the
Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next day]
[immediately available] funds]
Indenture:
- ---------
Indenture, dated as of July 1, 1987, as supplemented, between the Company
and Bankers Trust Company, as Trustee
Form of Purchased Securities:
- ----------------------------
[Registered form only] [Temporary global security, to be followed by
definitive securities in registered form] [Global form only]
Time of Delivery:
- ----------------
Closing Location:
- ----------------
Maturity:
- --------
I-4
Denominations (if other than U.S. dollars):
- ------------------------------------------
I-5
Interest Rate:
- -------------
[Fixed Rate Note: %]
[Floating Rate Note:
Interest Rate Basis:
Index Maturity:
Spread or Spread Multiplier:
Maximum Rate: %
Minimum Rate: %
Initial Interest Rate: %
Interest Reset Dates:
Calculation Dates:
Interest Determination Dates:
Record Dates:
Calculation Agent (if other than Bankers Trust Company):]
Interest Payment Dates:
- ----------------------
[months and dates]
[Indexed Note:
------------
Indexed Currency or Commodity:
Base Rate:]
Documents to be Delivered:
- -------------------------
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to in Section
4(h).]
[(2) The opinion or opinions of counsel to the Company referred to in Section
4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
- ----------------------------------------------------------------
I-6
ANNEX II
SUPERVALU INC.
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated October 2, 1995 (the "Distribution Agreement"),
between SUPERVALU INC. (the "Company") and Goldman, Sachs & Co., BT Securities
Corporation, Citicorp Securities, Inc. and J.P. Morgan Securities Inc.
(together, the "Agents"), to which this Administrative Procedure is attached as
Annex II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented or the Indenture as amended or supplemented. To the
extent any procedure set forth below conflicts with the provisions of the
Securities, the Indenture or the Distribution Agreement, the relevant provisions
of the Securities, the Indenture or the Distribution Agreement shall control.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global certificate (a "Global Security") delivered to
the Trustee, as custodian for The Depository Trust Company (the "Depositary")
and recorded in the book-entry system maintained by the Depositary (a "Book-
Entry Security") or a certificate (a "Certificated Security") delivered to a
person designated by an Agent as set forth in the applicable Pricing Supplement.
An owner of a Book-Entry Security will not be entitled to receive a certificate
representing such a Security, except as provided in the Indenture or the
Prospectus as amended or supplemented.
II-1
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- -----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of October 21, 1988 (the "Certificate Agreement"),
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the case
may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than
II-2
the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate, initial
interest payment date, Interest Payment Dates and Regular Record Dates;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency (it being
understood that currently the Depositary accepts deposits of Global Securities
denominated in U.S. dollars only) and the Exchange Rate Agent;
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption Commencement Date;
(12) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
II-3
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) If a Renewable Note, a Note with respect to which the Company has the
option to reset the interest rate or the Spread and/or Spread Multiplier, or a
Note with respect to which the Company has the option to extend the Maturity
Date, the applicable terms;
(16) Book-Entry Security; and
(17) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Company will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously obtained by the Company representing such Book-
Entry Security and then advise the Trustee and the Selling Agent or Purchasing
Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
II-4
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security, number of
days by which such date succeeds the record date for the Depositary's purposes
(or, in the case of Floating Rate Securities which reset daily or weekly, the
date five calendar days immediately preceding the applicable Interest Payment
Date and, in the case of all other Book-Entry Securities, the Regular Record
Date, as defined in the Security) and, if calculable at that time, the amount of
interest payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such Book-
Entry Security to the Trustee's participant account and credit such Book-Entry
Security to such Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Security less such Agent's commission.
The entry of such a deliver order shall constitute a representation and warranty
by the Trustee to the Depositary that (a) the Global Security representing such
Book-Entry Security has been issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such Book-
Entry Security to such Agent's participant account and credit such Book-Entry
Security to the participant accounts of the Participants with respect to such
Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
II-5
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at Bankers Trust Company, New York, New
York, or such other account as the Company may have previously specified to the
Trustee, in funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it will
prepare a Pricing Supplement reflecting the terms of such Book-Entry Security
and arrange to have delivered to the Selling Agent or Purchasing Agent, as the
case may be, at least ten copies of such Pricing Supplement, not later than 5:00
p.m., New York City time, on the Business Day following the Trade Date (as
defined below), or if the Company and the purchaser agree to settlement on the
Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation
II-6
of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment for a
Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is the third Business Day after the Trade Date pursuant to the
"Settlement Procedure Timetable" set forth below, unless the Company and the
purchaser agree to settlement on another Business Day which shall be no earlier
than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE
- --------- TIME
----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00
a.m. on the Business Day prior to the Settlement Date,
whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the
Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the
Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
II-7
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a Book-
Entry Security pursuant to Settlement Procedure "F", the Trustee may deliver to
the Depositary, through the Depositary's Participant Terminal System, as soon as
practicable a withdrawal message instructing the Depositary to debit such Book-
Entry Security to the Trustee's participant account, provided that the Trustee's
participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of
II-8
such order and the Company shall transfer to such Agent funds available for
immediate use in an amount equal to the price of such Book-Entry Security which
was credited to the account of the Company maintained at the Trustee in
accordance with Settlement Procedure I, and (ii) deliver the withdrawal message
and take the related actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than default by the applicable
Agent to perform its obligations hereunder or under the Distribution Agreement,
the Company will reimburse such Agent on an equitable basis for the loss of its
use of funds during the period when the funds were credited to the account of
the Company.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Security, the Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Securities to have
been represented by a Global Security, the Trustee will provide, in accordance
with Settlement Procedure "D", for the authentication and issuance of a Global
Security representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its records. The
Company will, from time to time, furnish the Trustee with a sufficient quantity
of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent, as
the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
II-9
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate, initial
interest payment date, Interest Payment Dates and Regular Record Dates;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency and the
Exchange Rate Agent;
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption Commencement Date;
(12) If a Floating Rate Certificated Security, such of the following as are
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applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) If a Renewable Note, a Note with respect to which the Company has the
option to reset the interest rate or the Spread and/or Spread Multiplier, or a
Note with respect to which the Company has the option to extend the Maturity
Date, the applicable terms;
(16) Certificated Security; and
(17) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not
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later than the close of business of the Commission on the fifth Business Day
following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Certificated Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or made
by a Purchasing Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which is the third Business Day after the date of acceptance
of such offer, unless the Company and the purchaser agree to settlement (a) on
another Business Day after the acceptance of such offer or (b) with respect to
an offer accepted by the Company prior to 10:00 a.m., New York City time, on the
date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 9:00 a.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling
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Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission; provided that the
Selling Agent reserves the right to withhold payment for which it has not
received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
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ANNEX III
Accountants' Letter
-------------------
Pursuant to Section 4(j) and Section 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) by them and included or
incorporated by reference in the Registration Statement or the Prospectus comply
as to form in all material respects with the applicable accounting requirements
of the Act or the Exchange Act, as applicable, and the related published rules
and regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon, copies
of which have been furnished to the Agents;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of earnings, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or included
in the Company's Quarterly Reports on Form 10-Q incorporated by reference into
the Prospectus as indicated in their reports thereon copies of which have been
separately furnished to the Agents; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to believe that
the unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and regulations;
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(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for five such fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of earnings,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of earnings,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual
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Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially consistent with the
basis for the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock pursuant to employee and
director stock plans, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus, or repurchases of common stock pursuant to the
repurchase program) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Agents, or any increases in any items specified by the Agents, in each case
as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as compared
with the comparable period of the preceding year and with any other period
of corresponding length specified by the Agents, except in each case for
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have
III-3
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agents which are
derived from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by reference),
or in Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Agents or in documents incorporated by reference in the
Prospectus specified by the Agents, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(d) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as of the date of the
amendment, supplement, incorporation or the Time of Delivery relating to the
Terms Agreement requiring the delivery of such letter under Section 4(j)
thereof.
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ANNEX IV
[Name and address of Agent]
Re: $ ,000,000 Medium-Term Notes, Series B
Pricing Supplement Number: ____
Settlement Date: _________
(See Attached Term Sheet)
Ladies and Gentlemen:
Reference is made to the Distribution Agreement dated October 2, 1995
(the "Agreement") pertaining to up to U.S. $400,000,000 aggregate amount of
Medium-Term Notes, Series B (the "Notes") to be offered from time to time by
SUPERVALU INC. (the "Company"). The provisions of the Agreement (a copy of
which has been previously provided to you) are hereby incorporated by reference
and each of the representations and warranties set forth therein shall be deemed
to have been made to you as of the date hereof. Subject to the terms as set
forth therein, the Company hereby appoints you as an Agent (as such term is
defined in the Agreement) of the Company for the purposes of soliciting one
offer to purchase Notes from the Company containing the terms as set forth in
the above referenced Pricing Supplement. This appointment is effective as to
and extends only to the one transaction which you are presenting to the Company
(see attached Term Sheet) and the Agreement shall automatically be terminated as
to you upon the earlier to occur of (i) payment made in full to the Company for
the Notes sold pursuant to the offer presented or (ii) the Company or you
determine not to proceed with the transaction. Upon such termination of the
Agreement by the Company, neither you nor the Company shall have any liability
to the other except as provided in those sections of the Agreement referenced in
Section 10 thereof. You agree to be bound by, and comply with, all of the
provisions of the Agreement applicable to Agents thereunder.
[As a condition precedent to your obligation to consummate the
transaction referred to above, you shall receive the following: (i) the
opinions of counsel, dated __________ [recent date or most recent periodic
update] pursuant to Sections 4(h) and 4(i) of the Agreement; (ii) an Officer's
Certificate dated _______________[recent date], pursuant to Section 4(k) of the
Agreement; (iii) a letter from [Accountant] dated _________________ [recent date
or most recent periodic update] delivered pursuant to Section 4(j) of the
Agreement; and (iv) a copy of the resolutions adopted by the Company with
respect to the form of Note evidencing the securities described in the above
referenced Pricing Supplement, certified by an appropriate officer of the
Company.]
IV-1
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, whereupon this letter shall constitute
a binding agreement between the Company and you in accordance with its terms.
SUPERVALU INC.
By ________________________
Agreed and Accepted as of the date hereof:
_____________________________
By __________________________
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