<PAGE> 1
As filed with the Securities and Exchange Commission on January 25, 1994
Registration No. 33- 51097
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
______________
SMITH'S FOOD & DRUG CENTERS, INC.
(Exact Name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
DELAWARE 87-0258768
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
</TABLE>
1550 SOUTH REDWOOD ROAD
SALT LAKE CITY, UTAH 84104
(801) 974-1400
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
______________
MICHAEL C. FREI, ESQ.
1550 SOUTH REDWOOD ROAD
SALT LAKE CITY, UTAH 84104
(801) 974-1494
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
______________
with copies to:
<TABLE>
<S> <C>
JOHN A. GARRATY, JR., ESQ. JOEL S. KLAPERMAN, ESQ.
Kelley Drye & Warren Shearman & Sterling
101 Park Avenue 599 Lexington Avenue
New York, New York 10178 New York, New York 10022
</TABLE>
______________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: From time to time, as determined by market conditions, after the
effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: /x/
______________
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
<PAGE> 2
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED JANUARY 25, 1994
SMITH'S FOOD & DRUG CENTERS, INC.
PASS THROUGH CERTIFICATES
___________________________________
Up to $300,000,000 aggregate principal amount of Pass Through
Certificates (the "Certificates") (or such greater amount if Certificates are
issued at an original issue discount as shall result in aggregate proceeds of
$300,000,000) may be offered for sale from time to time pursuant to this
Prospectus and related Prospectus Supplements (as defined below). Certificates
may be issued in one or more series in amounts, at prices and on terms to be
determined at the time of the offering. In respect of each offering of
Certificates, a separate Smith's Food & Drug Centers Pass Through Trust for
each series of Certificates being offered (each, a "Trust") will be formed
pursuant to the Pass Through Trust Agreement (the "Basic Agreement") and the
supplement thereto (a "Trust Supplement") relating to such Trust between
Smith's Food & Drug Centers, Inc. (the "Company") and Wilmington Trust Company
(the "Pass Through Trustee"), as trustee under each Trust. Each Certificate in
a series will represent a fractional undivided interest in the related Trust
and will have no rights, benefits or interest in respect of any other Trust.
The property of each Trust will consist of notes issued (a) on a nonrecourse
basis by the trustees of an owner trust (each, an "Owner Trustee") pursuant to
separate leveraged lease transactions to finance or refinance a portion of the
cost to such Owner Trustee or Owner Trustees of one or more real properties,
including improvements thereon (each, a "Leased Property" and collectively, the
"Leased Properties"), which have been or will be leased to the Company (the
"Leased Property Notes"), or (b) with recourse to the Company to finance or
refinance all or a portion of the cost of one or more real properties,
including improvements thereon (each, an "Owned Property" and collectively, the
"Owned Properties" and, together with the Leased Properties, each, a "Property"
and collectively, the "Properties"), which have been or will be purchased and
owned by the Company (the "Owned Property Notes" and, together with the Leased
Property Notes, the "Notes").
Certain specific terms of the particular Certificates in respect of
which this Prospectus is being delivered are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement") including, where
applicable, the specific designation, form, aggregate principal amount, initial
public offering price and distribution dates relating to such Certificates, the
Trust or Trusts relating to such Certificates, the Notes to be purchased by
such Trust or Trusts, the Properties relating to such Notes, the leveraged
lease transactions or financing arrangements, as the case may be, relating to
such Notes and other special terms relating to such Certificates and the net
proceeds from the offering of such Certificates. If so specified in the
applicable Prospectus Supplement, the Certificates may be issued in accordance
with a book-entry system in registered form only.
Notes may be issued in respect of a Property in one or more series,
each series having its own interest rate and final maturity date. A Trust will
purchase all of each series of Notes relating to each Property and having an
interest rate equal to the interest rate applicable to the Certificates issued
by such Trust and maturity dates occurring on or before the final distribution
date applicable to such Certificates. Interest paid on the Notes held in each
Trust will be passed through to the holders of the Certificates relating to
such Trust on the dates and at the rate per annum set forth in the Prospectus
Supplement relating to such Certificates until the final distribution date for
such Trust. Principal paid on the Notes held in each Trust will be passed
through to the holders of the Certificates relating to such Trust in scheduled
amounts on the dates set forth in the Prospectus Supplement relating to such
Certificates until the final distribution date for such Trust.
The Notes issued with respect to each Property will be secured by a
mortgage on such Property and, in the case of each Leased Property, by a
security interest in the lease relating to such Leased Property, including the
right to receive rentals payable in respect of such Leased Property by the
Company. Although neither the Certificates nor the Leased Property Notes will
be direct obligations of, or guaranteed by, the Company, the amounts
unconditionally payable by the Company pursuant to the lease related to each
Leased Property will be sufficient to pay in full when due all payments
required to be made on the related Leased Property Notes.
_______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
_______________________________
The Certificates may be sold to or through underwriters, through
dealers or agents or directly to purchasers. The accompanying Prospectus
Supplement sets forth the names of any underwriters, dealers or agents involved
in the sale of the Certificates in respect of which this Prospectus is being
delivered and any applicable fee, commission or discount arrangements with
them. See "Plan of Distribution."
This Prospectus may not be used to consummate sales of Certificates
unless accompanied by a Prospectus Supplement.
_______________________________
MORGAN STANLEY & CO.
Incorporated
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
January __, 1994.
<PAGE> 3
{COVER PAGE CONTINUED}
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME SUCH AMENDMENT TO THE REGISTRATION
STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT BE ACCEPTED PRIOR TO
THE TIME SUCH AMENDMENT TO THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 4
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at prescribed rates at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
Room 1024, as well as at the Commission's Regional Offices located at
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661,
Suite 1400, and Seven World Trade Center, New York, New York 10048, Suite 1300.
Copies of such material may be obtained by mail from the Public Reference
Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Company's Class B Common Stock is listed on the New York
Stock Exchange and reports, proxy statements and other information regarding
the Company can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus does not contain all of the
information included in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Reference is made to such Registration Statement and to the exhibits relating
thereto for further information with respect to the Company and the
Certificates offered hereby.
REPORTS TO CERTIFICATEHOLDERS BY THE PASS THROUGH TRUSTEE
Wilmington Trust Company, as trustee for the holders of the
Certificates with respect to each Trust, pursuant to the Basic Agreement and
the related Trust Supplement, will provide such holders certain periodic
statements concerning distributions made with respect to such Trust. See
"Description of the Pass Through Certificates - Reports to Certificateholders."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant
to the Exchange Act and are incorporated by reference in this Prospectus:
1. the Company's Annual Report on Form 10-K for the fiscal year
ended January 2, 1993 (which incorporated certain portions of the Company's
1992 Annual Report to Stockholders and Proxy Statement relating to the 1993
Annual Meeting of Stockholders); and
2. the Company's Quarterly Reports on Form 10-Q for the quarters
ended April 3, 1993, July 3, 1993 and October 2, 1993.
All documents filed by the Company pursuant to section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Certificates offered
-2-
<PAGE> 5
hereby shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein, or
contained in this Prospectus, shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all documents incorporated herein by reference, other than
exhibits to such documents (unless such exhibits are specifically incorporated
by reference into such documents). Requests for such copies should be directed
to Smith's Food & Drug Centers, Inc., P.O. Box 30550, Salt Lake City, Utah
84130, telephone (801) 974-1400, Attention: Investor Relations.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 2
Reports to Certificateholders by the
Pass Through Trustee . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents
By Reference . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 4
Formation of the Trusts . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 4
Use of Proceeds and Structure of Transaction . . . .. . . . . . . . . . . . . . . . 5
Ratio of Earnings to Fixed Charges . . . . . . . . .. . . . . . . . . . . . . . . . 6
Description of the Certificates . . . . . . . . . . .. . . . . . . . . . . . . . . . 6
Description of the Notes . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 17
Certain Federal Income Tax Consequences . . . . . . .. . . . . . . . . . . . . . . . 20
Certain Delaware Taxes . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 24
ERISA Considerations . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 25
Plan of Distribution . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 25
Legal Matters . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 26
Experts . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 26
</TABLE>
-3-
<PAGE> 6
THE COMPANY
The Company is a leading regional supermarket and drug store chain,
which operated 129 stores as of January 1, 1994 in Arizona, California, Idaho,
Nevada, New Mexico, Texas, Utah and Wyoming.
The Company develops, owns and operates combination food and drug
centers which offer a full selection of supermarket food items, a wide
assortment of nonfood and drug items and a number of specialty departments.
Primary food products sold in the stores include groceries, meat, poultry,
produce, dairy products, delicatessen items, prepared foods, bakery products,
frozen foods and take-out foods, as well as specialty fish, meat and cheese.
Nonfood items available in the stores include full-line pharmacy and related
over-the-counter drug items, health and beauty aids, video rentals, in-store
banking services, housewares, toys, camera/photo department items, one-hour
photo processing, cosmetics and other general merchandise. The Company's 129
stores at January 1, 1994 consisted of 115 large combination food and drug
centers averaging 69,200 square feet, 12 superstores averaging 40,500 square
feet and two conventional stores averaging 26,000 square feet.
The combination stores range in size from 45,000 to 86,000 square feet
and offer a complete line of supermarket, nonfood and drug products. These
stores feature modern, attractive layouts with wide aisles and well-lighted
spaces to facilitate convenient shopping, a variety of specialty departments
and centralized, highly automated checkout facilities. The superstores range
in size from 30,000 to 45,000 square feet and have the appearance of a large
supermarket augmented with a significant amount of nonfood and drug
merchandise. Generally the superstores have fewer and more limited specialty
departments than the combination stores. The conventional stores have the
appearance of traditional supermarkets.
The Company offers customers a broad product selection at everyday low
prices combined with quality customer service in large, modern, attractive food
and drug centers with ample parking. Customers are able to fill a substantial
portion of their daily and weekly shopping needs at one convenient location.
The Company promotes its reputation as a low price competitor in its market
areas through a policy of everyday low pricing. Management attributes much of
the Company's success to combining broad product selection and everyday low
prices with quality customer service.
The Company's primary focus in existing markets has been on increasing
sales volume by opening stores in adjacent or ancillary markets. The Company
also has focused on new markets. During 1993, the Company opened 11
combination stores in the following states: eight in California and one each
in New Mexico, Texas and Utah. The Company has selected Southern and Central
California as its primary area of expansion. It has in progress an expansion
program which calls for up to 60 stores in the Southern and Central California
markets prior to mid-1997, of which 26 were open and operating on January 1,
1994. The Company plans to open an additional 12 to 15 stores at locations
primarily in Southern and Central California during 1994.
The Company was founded in 1948 and reincorporated under Delaware law
in 1989. The principal executive offices are located at 1550 South Redwood
Road, Salt Lake City, Utah 84104, and its telephone number is (801) 974-1400.
As used herein, the "Company" refers to Smith's Food & Drug Centers, Inc. and
its subsidiaries and predecessors, unless the context otherwise requires. The
Company's Class B Common Stock is traded on the New York Stock Exchange under
the symbol "SFD."
FORMATION OF THE TRUSTS
In respect of each offering of Certificates, one or more Trusts will
be formed, and the related Certificates issued, pursuant to separate Trust
Supplements to be entered into between the Pass Through Trustee and the
-4-
<PAGE> 7
Company in accordance with the terms of the Basic Agreement. Concurrently with
the execution and delivery of each Trust Supplement, the Pass Through Trustee,
on behalf of the Trust formed thereby, will enter into a separate financing
agreement (each such financing agreement being herein referred to as a
"Participation Agreement") relating to one or more of the Properties described
in the applicable Prospectus Supplement. Pursuant to the applicable
Participation Agreement or Participation Agreements, the Pass Through Trustee,
on behalf of each Trust, will purchase all of the series of Notes relating to
the relevant Properties and having an interest rate equal to the interest rate
payable by such Trust on the Certificates that will be issued by such Trust.
The maturity dates of the Notes acquired by each Trust will occur on or before
the final distribution date applicable to the Certificates that will be issued
by such Trust. The Pass Through Trustee will distribute the amount of payments
of principal, premium, if any, and interest received by it as holder of the
Notes to the Certificateholders of the Trust in which such Notes are held. See
"Description of the Certificates" and "Description of the Notes."
USE OF PROCEEDS AND STRUCTURE OF TRANSACTION
The Certificates offered pursuant to any Prospectus Supplement will be
issued in order to facilitate (a) the financing or refinancing of the debt
portion and, in certain cases, the refinancing of some of the equity portion of
one or more separate leveraged lease transactions entered into by the Company,
as lessee, with respect to one or more Leased Properties, as described in the
applicable Prospectus Supplement, and (b) the financing or refinancing of the
aggregate principal amount of debt to be issued by the Company in respect of
one or more Owned Properties, as described in the applicable Prospectus
Supplement.
The proceeds from the sale of the Certificates offered pursuant to any
Prospectus Supplement will be used by the Pass Through Trustee on behalf of the
applicable Trust or Trusts to purchase (a) Leased Property Notes issued by the
related Owner Trustee or Owner Trustees to finance or refinance a portion (as
specified in the applicable Prospectus Supplement) of the cost of the related
Leased Property or Leased Properties and/or (b) Owned Property Notes issued by
the Company to finance or refinance all or a portion (as specified in the
applicable Prospectus Supplement) of the cost of the related Owned Property or
Owned Properties. Any portion of the proceeds from the sale of Certificates
not used by the Pass Through Trustee to purchase Notes on or prior to the date
specified therefor in the applicable Prospectus Supplement will be distributed
on a Special Distribution Date (as hereinafter defined) to the applicable
Certificateholders, together with interest, but without premium. See
"Description of Certificates - Special Distribution Upon Unavailability of
Property."
The Leased Property Notes with respect to each Leased Property will be
issued under separate Trust Indenture and Security Agreements (the "Leased
Property Indentures") between Wilmington Trust Company, as trustee thereunder
(in such capacity, herein referred to as the "Loan Trustee"), and an
institution specified in the related Prospectus Supplement acting not in its
individual capacity (except as expressly set forth therein) but solely as owner
trustee (an "Owner Trustee") of a separate trust for the benefit of one or more
institutional investors (each, an "Owner Participant"). With respect to each
Leased Property, the related Owner Participant will have provided or will
provide from sources other than the Leased Property Notes a portion (as
specified in the applicable Prospectus Supplement) of the cost of such Leased
Property. No Owner Participant, however, will be personally liable for any
amount payable under the related Leased Property Indenture or the Leased
Property Notes issued thereunder. Simultaneously with the acquisition of each
Leased Property, the related Owner Trustee leased or will lease such Leased
Property to the Company pursuant to a separate lease agreement (each, a
"Lease"). The Owned Property Notes will be issued under separate Trust
Indenture and Security Agreements (the "Owned Property Indentures" and
together, with any Leased Property Indentures, the "Indentures") between the
applicable Loan Trustee and the Company.
-5-
<PAGE> 8
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
for the Company for the periods indicated.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
----------------------- ------------------------------------------------------------------
October 2, October 3, January 2, December 28, December 29, December 30, December 31,
1993 1992 1993 1991 1990 1989 1988
---------- ---------- ---------- ------------ ------------ ------------ ------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges . . . . 2.06x 2.58x 2.51x 2.44x 2.36x 2.13x 1.82x
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consist of income before provision for income taxes and fixed
charges (excluding interest capitalized). For purposes of computing the ratio
of earnings to fixed charges, "fixed charges" consist of interest, amortized
debt expense and the portion of operating lease rentals that are representative
of the interest factor.
DESCRIPTION OF THE CERTIFICATES
In connection with each offering of Certificates, one or more separate
Trusts will be formed and one or more series of Certificates will be issued
pursuant to the Basic Agreement and one or more separate Trust Supplements to
be entered into between the Company and the Pass Through Trustee. The
statements made under this caption are summaries and reference is made to the
detailed provisions of the Basic Agreement, which has been filed as an exhibit
to the Registration Statement and which will be qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Such summaries
relate to the Basic Agreement and each of the Trust Supplements, the Trusts to
be formed thereby and the Certificates to be issued by each Trust except to the
extent, if any, described in the applicable Prospectus Supplement. The
Prospectus Supplement that accompanies this Prospectus contains a glossary of
the terms used with respect to the specific series of Certificates being
offered thereby. The Trust Supplement relating to each series of Certificates
and the forms of the related Participation Agreement and Indenture and, if the
Certificates relate to any Leased Property, the related Lease or Leases and
trust agreement entered into by the Owner Participant and the Owner Trustee
with respect to such related Leased Property (a "Trust Agreement") will be
filed as exhibits to a Current Report on Form 8-K, Quarterly Report on Form
10-Q or Annual Report on Form 10-K to be filed by the Company with the
Commission following the issuance of such series of Certificates. Citations to
the relevant sections of the Basic Agreement appear below in parentheses unless
otherwise indicated.
The Certificates offered pursuant to this Prospectus will be limited
to $300,000,000 aggregate principal amount (or such greater amount if
Certificates are issued at an original issue discount as shall result in
aggregate proceeds of $300,000,000).
Certain provisions of the description of the Certificates in this
Prospectus do not necessarily apply to one Certificate of each Trust which may
be issued in a denomination of less than $1,000.
-6-
<PAGE> 9
GENERAL
Each Certificate will represent a fractional undivided interest in the
Trust created by the Trust Supplement pursuant to which such Certificate was
issued and all payments and distributions with respect thereto shall be made
only from the related Trust Property (as defined below). The property of each
Trust (the "Trust Property") will include the Notes held in such Trust, all
monies at any time paid thereon and all monies due and to become due thereon
and funds from time to time deposited with the Pass Through Trustee in accounts
relating to such Trust. Unless otherwise specified in the applicable
Prospectus Supplement, Certificates will be issued in minimum denominations of
$1,000 or any integral multiple thereof. (Sections 2.01 and 3.01) The
Certificates do not represent an interest in or obligation of the Company, the
Pass Through Trustee, any Owner Trustee in its individual capacity, any Owner
Participant, or any affiliate of any thereof.
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for a description of the specific series of Certificates being
offered thereby, including: (1) the specific designation and title of such
Certificates; (2) the Regular Distribution Dates (as hereinafter defined) and
Special Distribution Dates (as hereinafter defined) applicable to such
Certificates; (3) the specific form of such Certificates, including whether or
not such Certificates are to be issued in accordance with a book-entry system,
in registered form or in bearer form; (4) a description of the Notes to be
purchased by the related Trust, including the period or periods within which,
the price or prices at which and the terms and conditions upon which such
Certificates may or must be redeemed, in whole or in part, by the Company or,
with respect to Leased Property Notes, the related Owner Trustee; (5) a
description of the related Property or Properties, including whether each such
Property is a Leased Property or an Owned Property; (6) a description of the
related Participation Agreement and Indenture, including a description of the
events of default thereunder, the remedies exercisable upon the occurrence of
such events of default and any limitations on the exercise of such remedies
with respect to such Notes; (7) if such Certificates relate to a Leased
Property or Leased Properties, a description of the related Lease or Leases and
Trust Agreement, including (a) the names of the related Owner Trustee, (b) a
description of the events of default under the related Lease or Leases, the
remedies exercisable upon the occurrence of such events of default and any
limitations on the exercise of such remedies with respect to such Leased
Property Notes and (c) the rights of the related Owner Trustee, if any, and/or
Owner Participant, if any, to cure failures of the Company to pay rent under
the related Lease or Leases; (8) the extent, if any, to which the provisions of
the operative documents applicable to such Notes may be amended by the parties
thereto without the consent of the holders of, or only upon the consent of the
holders of a specified percentage of aggregate principal amount of, such Notes;
and (9) any other special terms pertaining to such Certificates.
BOOK-ENTRY REGISTRATION
General. If so specified in the applicable Prospectus Supplement, the
Certificates of each Trust may be issued in fully registered form pursuant to a
book-entry system. In the event that the Certificates of any series are issued
pursuant to a book-entry system, such Certificates will be registered in the
name of Cede & Co. ("Cede") as the nominee of The Depository Trust Company
("DTC"). No person acquiring an interest in such Certificates (a "Certificate
Owner") will be entitled to receive a certificate representing such person's
interest in such Certificates, except as set forth below under "Definitive
Certificates." Unless and until Definitive Certificates are issued under the
limited circumstances described herein, all references to actions by
Certificateholders shall refer to actions taken by DTC upon instructions from
DTC Participants (as defined below), and all references herein to
distributions, notices, reports and statements to Certificateholders shall
refer, as the case may be, to distributions, notices, reports and statements to
DTC or Cede, as the registered holder of such Certificates, or to DTC
Participants for distribution to Certificate Owners in accordance with DTC
procedures. (Section 3.09)
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to section 17A of the Exchange Act. DTC
was created to hold securities for its participants ("DTC Participants") and to
facilitate the
-7-
<PAGE> 10
clearance and settlement of securities transactions between DTC Participants
through electronic book-entries, thereby eliminating the need for physical
transfer of certificates. DTC Participants include securities brokers and
dealers, banks, trust companies and clearing corporations. Indirect access to
the DTC system also is available to others such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
DTC Participant either directly or indirectly ("Indirect Participants").
Persons that are not DTC Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other interests
in, the Certificates may do so only through DTC Participants and Indirect
Participants. In addition, Certificate Owners will receive all distributions
of principal and interest from the Pass Through Trustee through DTC
Participants or Indirect Participants, as the case may be. Under a book-entry
format, Certificate Owners may experience some delay in their receipt of
payments, since such payments will be forwarded by the Pass Through Trustee to
Cede, as nominee for DTC. DTC will forward such payments in same-day funds to
DTC Participants who are credited with ownership of the Certificates in amounts
proportionate to the principal amount of each such DTC Participant's respective
holdings of beneficial interest in the Certificates. DTC Participants will
thereafter forward payments to Indirect Participants or Certificate Owners, as
the case may be, in accordance with customary industry practices. The
forwarding of such distributions to the Certificate Owners will be the
responsibility of DTC Participants. Unless and until the Definitive
Certificates are issued under the limited circumstances described herein, the
only "Certificateholder," as such term is used in the Basic Agreement, will be
Cede, as nominee of DTC. Certificate Owners will not be recognized by the Pass
Through Trustee as Certificateholders, and Certificate Owners will be permitted
to exercise the rights of Certificateholders only indirectly through DTC and
DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book- entry transfers
of the Certificates among DTC Participants on whose behalf it acts with respect
to the Certificates and to receive and transmit distributions of principal,
premium, if any, and interest with respect to the Certificates. DTC
Participants and Indirect Participants with which Certificate Owners have
accounts with respect to the Certificates similarly are required to make
book-entry transfers and receive and transmit such payments on behalf of their
respective customers. Accordingly, although Certificate Owners will not
possess the Certificates, the Rules provide a mechanism by which Certificate
Owners will receive payments and will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn
act on behalf of Indirect Participants, the ability of a Certificate Owner to
pledge the Certificates to persons or entities that do not participate in the
DTC system, or to otherwise act with respect to such Certificates, may be
limited due to the lack of physical certificates for such Certificates.
DTC will take any action permitted to be taken by a Certificateholder
under the Basic Agreement only at the direction of one or more DTC Participants
to whose accounts with DTC the Certificates are credited. Additionally, DTC
has advised the Company that in the event any action requires approval by
Certificateholders of a certain percentage of beneficial interest in each
Trust, DTC will take such action only at the direction of and on behalf of DTC
Participants whose holders include undivided interests that satisfy any such
percentage. DTC may take conflicting actions with respect to other undivided
interests to the extent that such actions are taken on behalf of DTC
Participants whose holders include such undivided interests.
Neither the Company nor the Pass Through Trustee will have any
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Certificates held by Cede, as nominee
for DTC, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The foregoing information concerning DTC and DTC's book-entry system
has been obtained from sources the Company believes to be reliable. The
Company, however, has not undertaken any independent verification thereof.
-8-
<PAGE> 11
Definitive Certificates. Certificates will be issued in certificated
form ("Definitive Certificates") to Certificate Owners or their nominees,
rather than to DTC or its nominee, only if (i) the Company advises the Pass
Through Trustee in writing that DTC (or a successor thereto) is no longer
willing or able to discharge properly its responsibilities as depository with
respect to such Certificates and the Company is unable to locate a qualified
successor, (ii) the Company, at its option, advises the Pass Through Trustee in
writing of its election to terminate the book-entry system through DTC (or a
successor thereto) or (iii) after the occurrence of an Event of Default (as
hereinafter defined) Certificate Owners with fractional undivided interests
aggregating not less than a majority in interest in such Trust advise the Pass
Through Trustee, the Company and DTC through DTC Participants in writing that
the continuation of a book-entry system through DTC (or a successor thereto) is
no longer in the Certificate Owners' best interest. (Section 3.09)
Upon the occurrence of any event described in the immediately
preceding paragraph, the Pass Through Trustee will be required to notify all
Certificate Owners through DTC Participants of the availability of Definitive
Certificates. Upon surrender by DTC of the certificates representing the
Certificates and receipt of instructions for re-registration, the Pass Through
Trustee will reissue the Certificates as Definitive Certificates to Certificate
Owners. (Section 3.09)
Distributions of principal, premium, if any, and interest with respect
to Certificates will thereafter be made by the Pass Through Trustee directly,
in accordance with the procedures set forth in the Basic Agreement and the
applicable Trust Supplements, to holders in whose names the Definitive
Certificates were registered at the close of business on the applicable record
date. Such distributions will be made by check mailed to the address of such
holder as it appears on the register maintained by the Pass Through Trustee.
The final payment on any Certificate, however, will be made only upon
presentation and surrender of such Certificate at the office or agency
specified in the notice of final distribution to Certificateholders. (Sections
4.02 and 11.01)
Definitive Certificates will be freely transferable and exchangeable
at the office of the Pass Through Trustee upon compliance with the requirements
set forth in the Basic Agreement and the applicable Trust Supplements. No
service charge will be imposed for any registration of transfer or exchange,
but payment of a sum sufficient to cover any tax or other governmental charge
will be required. (Section 3.04)
Same-Day Settlement and Payment. So long as the Certificates are
registered in the name of Cede, as nominee for DTC, all payments made by the
Company to the Loan Trustee (as assignee of the Owner Trustee) under any Lease
will be in immediately available funds. Such payments, including the final
distribution of principal with respect to the Certificates of any Trust, will
be passed through to DTC in immediately available funds.
Secondary trading in long-term notes and debentures of corporate
issuers is generally settled in clearing-house or next-day funds. In contrast,
secondary trading in pass through certificates (such as the Certificates
offered hereby) is generally settled in immediately available or same-day
funds. Any Certificates registered in the name of Cede, as nominee for DTC,
will trade in DTC's Same-Day Funds Settlement System until maturity, and
secondary market trading activity in the Certificates will therefore be
required by DTC to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in same-day funds on trading
activity in the Certificates.
PAYMENTS AND DISTRIBUTIONS
Payments of principal, premium, if any, and interest with respect to
the Notes held in each Trust will be distributed by the Pass Through Trustee to
the Certificateholders of such Trust on the dates specified in the applicable
Prospectus Supplement, except in certain cases when some or all of such Notes
are in default. See "Events of Default and Certain Rights Upon an Event of
Default." Payments of principal of, and interest on, the unpaid principal
amount of the Notes held in each Trust will be scheduled to be received by the
Pass Through Trustee on the dates specified in the applicable
-9-
<PAGE> 12
Prospectus Supplement (such scheduled payments of interest and principal on the
Notes are herein referred to as "Scheduled Payments," and the dates specified
in the applicable Prospectus Supplement are herein referred to as "Regular
Distribution Dates"). See "Description of the Notes - General." Each holder
of Certificates of each Trust will be entitled to receive a pro rata share of
any distribution in respect of Scheduled Payments of principal and interest
made on the Notes held in such Trust.
Payments of principal, premium, if any, and interest received by the
Pass Through Trustee on account of the early redemption, if any, of Notes, and
payments, other than Scheduled Payments received on a Regular Distribution
Date, received by the Pass Through Trustee following a default in respect of
Notes ("Special Payments") will be distributed to the Certificateholders of the
related Trust on the date determined pursuant to the applicable Prospectus
Supplement (a "Special Distribution Date"). The Pass Through Trustee will mail
notice to the Certificateholders of record of the applicable Trust not less
than 20 days prior to the Special Distribution Date on which any Special
Payment is scheduled to be distributed by the Pass Through Trustee stating such
anticipated Special Distribution Date. (Section 4.02)
POOL FACTORS
Unless there has been an early redemption, a purchase of Notes by the
related Owner Trustee after an Indenture Default (as defined below) or a
default in the payment of principal or interest in respect of one or more
issues of Notes held in a Trust, as described in the applicable Prospectus
Supplement or below in "Events of Default and Certain Rights Upon an Event of
Default," the Pool Factor (as defined below) for each Trust will decline in
proportion to the scheduled repayments of principal on the Notes held in such
Trust, as described in the applicable Prospectus Supplement. In the event of
such redemption, purchase or default, the Pool Factor and the Pool Balance (as
defined below) of each Trust so affected will be recomputed after giving effect
thereto and notice thereof will be mailed to the Certificateholders of such
Trust. Each Trust will have a separate Pool Factor.
The "Pool Balance" for each Trust indicates, as of any date, the
aggregate unpaid principal amount of the Notes held in such Trust on such date
plus any amounts in respect of principal on such Notes held by the Pass Through
Trustee and not yet distributed. The Pool Balance for each Trust as of any
Regular Distribution Date or Special Distribution Date shall be computed after
giving effect to the payment of principal, if any, on the Notes held in such
Trust and distribution thereof to be made on that date.
The "Pool Factor" for each Trust as of any Regular Distribution Date
or Special Distribution Date is the quotient (rounded to the seventh decimal
place) computed by dividing (i) the Pool Balance by (ii) the aggregate original
principal amount of the Notes held in such Trust. The Pool Factor for each
Trust as of any Regular Distribution Date or Special Distribution Date shall be
computed after giving effect to the payment of principal, if any, on the Notes
held in such Trust and distribution thereof to be made on that date. The Pool
Factor for each Trust will initially (or, if applicable, after the accretion of
the original issue discount at which the Certificates of such Trust were
issued) be 1.0000000; thereafter, the Pool Factor for each Trust will decline
as described above to reflect reductions in the Pool Balance of such Trust.
The amount of a Certificateholder's pro rata share of the Pool Balance of a
Trust can be determined by multiplying the original denomination of the
holders' Certificate of such Trust by the Pool Factor for such Trust as of the
applicable Regular Distribution Date or Special Distribution Date. The Pool
Factor and the Pool Balance for each Trust will be identified in a statement
mailed to Certificateholders of such Trust on each Regular Distribution Date
and Special Distribution Date.
REPORTS TO CERTIFICATEHOLDERS
On each Regular Distribution Date and Special Distribution Date, the
Pass Through Trustee will include with each distribution of a Scheduled Payment
or Special Payment to Certificateholders of the related Trust a statement,
giving effect to such distribution to be made on such Regular Distribution Date
or Special Distribution Date, setting forth the following information (per
$1,000 aggregate principal amount of Certificates for such Trust, as to (i) and
(ii) below):
-10-
<PAGE> 13
(i) the amount of such distribution allocable to principal and the
amount allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor for such Trust. (Section
4.03(a))
So long as the Certificates are registered in the name of Cede, as
nominee for DTC, on the record date prior to each Regular Distribution Date and
Special Distribution Date the Pass Through Trustee will request from DTC a
Securities Position Listing setting forth the names of all DTC Participants
reflected on DTC's books as holding interests in the Certificates on such
record date. On each Regular Distribution Date and Special Distribution Date,
the Pass Through Trustee will mail to each such DTC Participant the statement
described above and will make available additional copies as requested by such
DTC Participant for forwarding to Certificate Owners. (Section 3.09)
In addition, after the end of each calendar year the Pass Through
Trustee will prepare for each Certificateholder of each Trust at any time
during the preceding calendar year a report containing the sum of the amounts
determined pursuant to clauses (i) and (ii) above with respect to the Trust for
such calendar year or, in the event such person was a Certificateholder during
only a portion of such calendar year, for the applicable portion of such
calendar year, and such other items as are readily available to the Pass
Through Trustee and which a Certificateholder shall reasonably request as
necessary for the purpose of such Certificateholder's preparation of its
federal income tax returns. (Section 4.03(b)) Such report and such other
items shall be prepared on the basis of information supplied to the Pass
Through Trustee by the DTC Participants and shall be delivered by the Pass
Through Trustee to such DTC Participants to be available for forwarding by such
DTC Participants to Certificate Owners in the manner described above.
At such time, if any, as the Certificates are issued in the form of
Definitive Certificates, the Pass Through Trustee will prepare and deliver the
information described above to each Certificateholder of record of each Trust
as the name and period of beneficial ownership of such Certificateholder
appears on the records of the registrar of the Certificates.
VOTING OF NOTES
The Pass Through Trustee, as holder of the Notes held in each Trust,
has the right to vote and give consents and waivers with respect to such Notes
under the related Indenture. The Basic Agreement sets forth the circumstances
in which the Pass Through Trustee shall direct any action or cast any vote as
the holder of the Notes held in the applicable Trust at its own discretion and
the circumstances in which the Pass Through Trustee shall seek instructions
from the Certificateholders of such Trust. Prior to an Event of Default (as
defined below) with respect to any Trust, the principal amount of the Notes
held in such Trust directing any action or being voted for or against any
proposal shall be in proportion to the principal amount of Certificates held by
the Certificateholders of such Trust taking the corresponding positions.
(Sections 6.01 and 11.01)
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
An event of default under the Basic Agreement (an "Event of Default")
is defined as the occurrence and continuance of an event of default under one
or more of the Indentures (an "Indenture Default"). The Indenture Defaults
under an Indenture will be described in the applicable Prospectus Supplement
and, with respect to each Leased Property, will include an event of default
under the related Lease (a "Lease Event of Default"). Since the Notes issued
under an Indenture may be held in more than one Trust, a continuing Indenture
Default under such Indenture would result in an Event of Default under each
such Trust. However, unless specified in the applicable Prospectus Supplement,
there will be no cross-default provisions in the Indentures, and events
resulting in an Indenture Default under any particular Indenture will not
necessarily
-11-
<PAGE> 14
result in an Indenture Default occurring under any other Indenture. If an
Indenture Default occurs in fewer than all of the Indentures, notwithstanding
the treatment of Notes issued under any Indenture under which an Indenture
Default has occurred, payments of principal and interest on the Notes issued
pursuant to Indentures with respect to which an Indenture Default has not
occurred will continue to be distributed to the Certificateholders as
originally scheduled.
With respect to each Leased Property, the applicable Owner Trustee and
Owner Participant will, under the related Indenture, have the right under
certain circumstances to cure Indenture Defaults that result from the
occurrence of a Lease Event of Default under the related Lease. If the Owner
Trustee or the Owner Participant exercises such cure right, the Indenture
Default and, consequently, the Event of Default with respect to the related
Trust will be deemed to have been cured.
The Basic Agreement provides that as long as an Indenture Default
under any Indenture relating to the Notes held in a Trust shall have occurred
and be continuing the Pass Through Trustee of such Trust may, but shall be
under no duty to, vote all of the Notes issued under such Indenture in such
Trust and, upon the direction of the holders of Certificates evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust, shall vote a corresponding majority of such Notes in favor of
directing the Loan Trustee to declare the unpaid principal amount of all Notes
issued under such Indenture and any accrued and unpaid interest thereon to be
due and payable. The Basic Agreement also provides that if an Indenture
Default under such Indenture relating to the Notes held in a Trust shall have
occurred and be continuing the Pass Through Trustee of such Trust may, and upon
the direction of the holders of Certificates evidencing fractional undivided
interests aggregating not less than a majority in interest of such Trust shall,
vote all of the Notes issued under such Indenture that are held in such Trust
in favor of directing the Loan Trustee as to the time, method and place of
conducting any proceeding for any remedy available to the Loan Trustee or of
exercising any trust or power conferred on the Loan Trustee under such
Indenture. (Sections 6.01 and 6.04)
The ability of the Certificateholders of any Trust to cause the Loan
Trustee with respect to any Notes held in such Trust to accelerate the Notes
under the related Indenture or to direct the exercise of remedies by the Loan
Trustee under the related Indenture will depend, in part, upon the proportion
between the aggregate principal amount of the Notes outstanding under such
Indenture and held in such Trust and the aggregate principal amount of all
Notes outstanding under such Indenture. Each Trust will hold Notes with
different terms from the Notes held in other Trusts and, therefore, the
Certificateholders of one Trust may have divergent or conflicting interests
from those of the Certificateholders of the other Trusts holding Notes
outstanding under the same Indenture. In addition, so long as the same
institution acts as Pass Through Trustee of each Trust, in the absence of
instructions from the Certificateholders of any such Trust, the Pass Through
Trustee for such Trust could for the same reason be faced with a potential
conflict of interest upon an Indenture Default. In such event, the Pass
Through Trustee has indicated that it would resign as trustee of one or all of
such Trusts, and a successor trustee would be appointed in accordance with the
terms of the Basic Agreement.
As an additional remedy, if an Indenture Default shall have occurred
and be continuing, the Basic Agreement provides that the Pass Through Trustee
of any Trust holding Notes issued under such Indenture may, but shall be under
no duty to, and upon the direction of the holders of Certificates evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust shall, sell for cash to any person all or part of such Notes.
(Sections 6.01 and 6.02) Any proceeds received by the Pass Through Trustee
upon any such sale of Notes shall be deposited in an account established by the
Pass Through Trustee for the benefit of the Certificateholders of such Trust
for the deposit of such Special Payments (the "Special Payments Account") and
shall be distributed to such Certificateholders on a Special Distribution Date.
(Sections 4.01 and 4.02) The market for Notes in default may be very limited,
and there can be no assurance that they could be sold for a reasonable price.
Furthermore, so long as the same institution acts as Pass Through Trustee of
multiple Trusts, it may be faced with a conflict in deciding from which Trust
to sell Notes to available buyers. If the Pass Through Trustee sells any Notes
with respect to which an Indenture Default exists for less than their
outstanding principal amount, the Certificateholders of such Trust will receive
a smaller amount of principal distributions than anticipated and will not have
any claim for the shortfall against the Company, any Owner Trustee or Owner
Participant or the Pass
-12-
<PAGE> 15
Through Trustee. Furthermore, neither the Pass Through Trustee nor the
Certificateholders of such Trust could take any action with respect to any
remaining Notes held in such Trust so long as no Indenture Defaults exist with
respect thereto.
Any amount, other than Scheduled Payments received on a Regular
Distribution Date, distributed to the Pass Through Trustee of any Trust by the
Loan Trustee under any Indenture on account of the Notes held in such Trust
following an Indenture Default under such Indenture shall be deposited in the
Special Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. In addition,
if, following an Indenture Default, the applicable Owner Trustee exercises its
option to redeem or purchase the outstanding Notes issued under such Indenture
as described in the related Prospectus Supplement, the price paid by such Owner
Trustee to the Pass Through Trustee of any Trust for the Notes issued under
such Indenture and held in such Trust shall be deposited in the Special
Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. (Sections
4.01, 4.02 and 6.02)
Any funds representing payments received with respect to any Notes
held in a Trust in default, or the proceeds from the sale by the Pass Through
Trustee of any such Notes, held by the Pass Through Trustee in the Special
Payments Account for such Trust shall, to the extent practicable, be invested
and reinvested by the Pass Through Trustee in Permitted Investments (as defined
herein) pending the distribution of such funds on a Special Distribution Date.
Permitted Investments are defined as obligations of the United States or
agencies or instrumentalities thereof the payment of which is backed by the
full faith and credit of the United States and which mature in not more than 60
days or such lesser time as is required for the distribution of any such funds
on a Special Distribution Date. (Sections 1.01 and 4.04)
The Basic Agreement provides that the Pass Through Trustee of each
Trust shall, as promptly as practicable and, in any event, within 90 days,
after the occurrence of a default in respect of such Trust, if such default is
actually known to a responsible officer of the Pass Through Trustee, give to
the Certificateholders of such Trust notice, transmitted by mail, of all
uncured or unwaived defaults with respect to such Trust known to it, provided
that, except in the case of default in the payment of principal, premium, if
any, or interest on any of the Notes held in such Trust, the Pass Through
Trustee shall be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interests of such
Certificateholders. (Section 7.01)
The Basic Agreement contains a provision entitling the Pass Through
Trustee of each Trust, subject to the duty of the Pass Through Trustee during a
default to act with the required standard of care, to be offered reasonable
security or indemnity by the Certificateholders of such Trust before proceeding
to exercise any right or power under the Basic Agreement at the request of such
Certificateholders. (Section 7.02)
In certain cases, the holders of Certificates of a Trust evidencing
fractional undivided interests aggregating not less than a majority in interest
of such Trust may on behalf of all Certificateholders of such Trust waive, or
instruct the Loan Trustee to waive, any past default or Event of Default with
respect to such Trust and thereby annul any direction given by such
Certificateholders to the applicable Loan Trustee with respect thereto, except
(i) a default in the deposit of any Scheduled Payment or Special Payment or in
the distribution thereof, (ii) a default in payment of the principal, premium,
if any, or interest with respect to any of the Notes held in such Trust and
(iii) a default in respect of any covenant or provision of the Basic Agreement
or the related Trust Supplement that cannot be modified or amended without the
consent of each Certificateholder of such Trust affected thereby. (Section
6.05) Each Indenture will provide that, with certain exceptions, the holders
of a majority in aggregate unpaid principal amount of the Notes issued
thereunder may on behalf of all such holders waive any past default or
Indenture Default thereunder. In the event of a waiver with respect to a Trust
as described above, the principal amount of the Notes issued under the related
Indenture held in such Trust shall be counted as waived in the determination of
the majority in aggregate unpaid principal amount of Notes required to waive a
default or an Indenture Default. Therefore, if the Certificateholders of a
Trust or Trusts waive a past default or Event of Default such that the
principal amount of the Notes held either individually in such Trust or in the
aggregate in such Trusts constitutes the required majority in aggregate unpaid
principal amount under the applicable Indenture, such past default or Indenture
Default shall be waived.
-13-
<PAGE> 16
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
The Company will be prohibited from consolidating with or merging into
any other corporation or transferring substantially all of its assets as an
entirety to any other entity unless (i) the surviving successor or transferee
entity shall expressly assume all of the obligations of the Company contained
in the Basic Agreement and in all Trust Supplements, Indentures and
Participation Agreements and, with respect to the Leased Property Notes, Leases
and any other operative documents; (ii) immediately after giving effect to such
transaction no Indenture Default (with respect to Owned Property Notes) or
Lease Event of Default (with respect to Leased Property Notes) shall have
occurred and be continuing; and (iii) the Company shall have delivered a
certificate and an opinion of counsel indicating that such transaction, in
effect, complies with such conditions. (Section 5.02(a))
The Basic Agreement does not and, except as otherwise described in the
applicable Prospectus Supplement, the Indentures will not contain any covenants
or provisions which may afford the Pass Through Trustee or Certificateholders
protection in the event of a highly leveraged transaction, including
transactions effected by management or affiliates, which may or may not result
in a change of control of the Company. No other instrument or agreement
currently evidencing other indebtedness of the Company contains covenants or
provisions affording holders of such indebtedness protection in the event of a
change in control of the Company.
MODIFICATION OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting the Company and the
Pass Through Trustee of each Trust to enter into a supplemental trust
agreement, without the consent of any of the Certificateholders of such Trust,
(i) to provide for the formation of such Trust and the issuance of a series of
Certificates, (ii) to evidence the succession of another corporation to the
Company and the assumption by such corporation of the Company's obligations
under the Basic Agreement and the applicable Trust Supplement, (iii) to add to
the covenants of the Company for the benefit of such Certificateholders or to
surrender any right or power in the Basic Agreement or the applicable Trust
Supplement conferred upon the Company, (iv) to correct or supplement any
defective or inconsistent provision of the Basic Agreement or the applicable
Trust Supplement or to make any other provisions with respect to matters or
questions arising thereunder, provided such action shall not adversely affect
the interests of such Certificateholders, or to cure any ambiguity or correct
any mistake, (v) to modify, eliminate or add to the provisions of the Basic
Agreement to the extent as shall be necessary to continue the qualification of
the Basic Agreement (including any supplemental agreement) under the Trust
Indenture Act and to add to the Basic Agreement such other provisions as may be
expressly permitted by the Trust Indenture Act, (vi) to provide for a successor
Pass Through Trustee or to add to or change any provision of the Basic
Agreement or the applicable Trust Supplement as shall be necessary to
facilitate the administration of the Trusts thereunder by more than one Trustee
and (vii) to make any other amendments or modifications to the Basic Agreement,
provided such amendments or modifications shall only apply to Certificates
issued thereafter. (Section 9.01)
The Basic Agreement also contains provisions permitting the Company
and the Pass Through Trustee of each Trust, with the consent of the holders of
Certificates of such Trust evidencing fractional undivided interests
aggregating not less than a majority in interest of such Trust and, with
respect to any Leased Property, the consent of the applicable Owner Trustee
(such consent not to be reasonably withheld), to execute supplemental trust
agreements adding any provisions to or changing or eliminating any of the
provisions of the Basic Agreement, to the extent relating to such Trust, and
the applicable Trust Supplement, or modifying the rights of the
Certificateholders, except that no such supplemental trust agreement may,
without the consent of the holder of each Certificate so affected thereby, (a)
reduce in any manner the amount of, or delay the timing of, receipt by the
Trustee of payments on the Notes held in such Trust or distributions in respect
of any Certificate related to such Trust, or change the date or place of any
payment in respect of any Certificate, or make distributions payable in coin or
currency other than that provided for in such Certificates, or impair the right
of any Certificateholder of such Trust to institute suit for the enforcement of
any such payment when due, (b) permit the disposition of any Note held in such
Trust, except as provided in the Basic Agreement or the applicable Trust
Supplement, or
-14-
<PAGE> 17
otherwise deprive any Certificateholder of the benefit of the ownership of the
applicable Notes, (c) reduce the percentage of the aggregate fractional
undivided interests of the Trust provided for in the Basic Agreement or the
applicable Trust Supplement, the consent of the holders of which is required
for any such supplemental trust agreement or for any waiver provided for in the
Basic Agreement or such Trust Supplement or (d) modify any of the provisions
relating to the rights of the Certificateholders in respect of the waiver of
events of default or receipt of payment. (Section 9.02)
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
In the event that the Pass Through Trustee, as the holder of any Notes
held in a Trust, receives a request for its consent to any amendment,
modification or waiver under the Indenture or other documents relating to such
Notes (including any Lease), the Pass Through Trustee shall send a notice of
such proposed amendment, modification or waiver to each Certificateholder of
record of such Trust as of the date of such notice. The Pass Through Trustee
shall request instructions from the Certificateholders of such Trust as to
whether or not to consent to such amendment, modification or waiver. The Pass
Through Trustee shall vote or consent with respect to such Notes in such Trust
in the same proportions as the Certificates of such Trust were actually voted
by the holders thereof by a certain date. Notwithstanding the foregoing, if an
Event of Default in respect of such Trust shall have occurred and be
continuing, the Pass Through Trustee may, in the absence of instructions from
Certificateholders holding a majority in interest of such Trust, in its own
discretion consent to such amendment, modification or waiver and may so notify
the relevant Loan Trustee. (Section 10.01)
TERMINATION OF THE TRUSTS
Each Trust will terminate upon the distribution to Certificateholders
of such Trust of all amounts required to be distributed to them pursuant to the
Basic Agreement and the applicable Trust Supplement and the disposition of all
property held in such Trust. The Pass Through Trustee will send to each
Certificateholder of record of such Trust notice of the termination of such
Trust, the amount of the proposed final payment and the proposed date for the
distribution of such final payment for such Trust. The final distribution to
any Certificateholder of such Trust will be made only upon surrender of such
Certificateholder's Certificates at the office or agency of the Pass Through
Trustee specified in such notice of termination. (Section 11.01)
DELAYED PURCHASE
In the event that, on the delivery date of any Certificates, all of
the proceeds from the sale of such Certificates are not used to purchase the
Notes contemplated to be held in the related Trust, such Notes may be purchased
by the Pass Through Trustee at any time on or prior to the date specified in
the applicable Prospectus Supplement. In such event, the Pass Through Trustee
will hold the proceeds from the sale of such Certificates not used to purchase
Notes in an escrow account pending the purchase of the Notes not so purchased.
Such proceeds will be invested at the direction and risk of, and for the
account of, the Company in certain specified investments, which may include:
(i) obligations of, or guaranteed by, the United States Government or agencies
thereof, (ii) open market commercial paper of any corporation incorporated
under the laws of the United States of America or any State thereof rated at
least P-2 or its equivalent by Moody's Investors Service, Inc. or at least A-2
or its equivalent by Standard & Poor's Corporation, (iii) certificates of
deposit issued by commercial banks organized under the laws of the United
States or of any political subdivision thereof having a combined capital and
surplus in excess of $500,000,000 which banks or their holding companies have a
rating of A or its equivalent by Moody's Investors Service, Inc. or Standard &
Poor's Corporation; provided, however, that the aggregate amount at any one
time so invested in certificates of deposit issued by any one bank shall not
exceed 5% of such bank's capital and surplus, (iv) U.S. dollar denominated
offshore certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in (iii) or any subsidiary thereof and (v) repurchase
agreements with any financial institution having combined capital and surplus
of at least $500,000,000 with any of the obligations described in (i)
-15-
<PAGE> 18
through (iv) as collateral; provided that if all of the above investments are
unavailable, the entire amounts to be invested may be used to purchase federal
funds from an entity described in clause (iii) above; and provided further that
no investment shall be eligible as a "specified investment" unless the final
maturity date or date of return of such investment is on or before (x) the
scheduled date for the purchase of such Notes, or (y) if no date has been
scheduled for the purchase of such Notes, the next business day, or (z) if the
Company has given notice that such Notes will not be purchased, the next
applicable Special Distribution Date. Earnings on such investments in the
escrow account for each Trust will be paid to the Company periodically, and the
Company will be responsible for any losses. (Section 2.02(b))
On the next Regular Distribution Date specified in the applicable
Prospectus Supplement, the Company will pay to the Pass Through Trustee an
amount equal to the interest that would have accrued on any Notes purchased
after the date of the issuance of such Certificates from the date of the
issuance of such Certificates to, but excluding, the date of the purchase of
such Notes by the Pass Through Trustee. (Section 2.02(b))
SPECIAL DISTRIBUTION UPON UNAVAILABILITY OF PROPERTY
To the extent, due to a casualty to, or other event causing the
unavailability of, a Property, that the full amount of the proceeds from the
sale of any Certificates held in the escrow account referred to above is not
used to purchase Notes on or prior to the date specified in the applicable
Prospectus Supplement, an amount equal to the unused proceeds will be
distributed by the Pass Through Trustee of the related Trust to the
Certificateholders of record of such Trust on a pro rata basis upon not less
than 20 days' prior notice to them as a Special Distribution Date together with
interest thereon at a rate equal to the rate applicable to such Certificates,
but without premium, and the Company will pay to the Pass Through Trustee on
such date an amount equal to such interest. (Section 2.02(b))
THE PASS THROUGH TRUSTEE
Wilmington Trust Company will be the Pass Through Trustee for each
series of Certificates and will be the Loan Trustee for each of the Indentures
under which the Notes are issued.
With certain exceptions, the Pass Through Trustee makes no
representations as to the validity or sufficiency of the Basic Agreement, the
Trust Supplements, the Certificates, the Notes, the Indentures, the Leases or
other related documents. The Pass Through Trustee shall not be liable, with
respect to any series of Certificates, for any action taken or omitted to be
taken by it in good faith in accordance with the direction of the holders of a
majority in interest of outstanding Certificates of such series issued under
the Basic Agreement. Subject to such provisions, such Pass Through Trustee
shall be under no obligation to exercise any of its rights or powers under the
Basic Agreement at the request of any holders of Certificates issued thereunder
unless they shall have offered to the Pass Through Trustee indemnity
satisfactory to it. The Basic Agreement provides that the Pass Through Trustee
in its individual or any other capacity may acquire and hold Certificates
issued thereunder and, subject to certain conditions, may otherwise deal with
the Company and any Owner Trustee with the same rights it would have if it were
not the Pass Through Trustee. (Sections 7.02, 7.03 and 7.04)
The Pass Through Trustee may resign with respect to any or all of the
Trusts at any time, in which event the Company will be obligated to appoint a
successor trustee for such Trust or Trusts. If the Pass Through Trustee ceases
to be eligible to continue as Pass Through Trustee with respect to a Trust or
becomes incapable of acting as Pass Through Trustee or becomes insolvent, the
Company may remove such Pass Through Trustee, or any holder of the Certificates
of such Trust for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of such Pass Through Trustee and the appointment of a successor
trustee. Any resignation or removal of the Pass Through Trustee with respect
to a Trust and appointment of a successor trustee for such Trust does not
become effective until acceptance of the appointment by the successor trustee.
(Section 7.08) Pursuant to such resignation and successor trustee provisions,
it is possible
-16-
<PAGE> 19
that a different trustee could be appointed to act as the successor trustee
with respect to each Trust. All references in this Prospectus to the Pass
Through Trustee should be read to take into account the possibility that the
Trusts could have different successor trustees in the event of such a
resignation or removal.
The Basic Agreement provides that the Company will pay the Pass
Through Trustee's fees and expenses. (Section 7.06)
DESCRIPTION OF THE NOTES
The statements made under this caption are summaries and reference is
made to the entire Prospectus and the detailed information appearing in the
applicable Prospectus Supplement. Such summaries relate to the Notes and
Indenture relating to each Property in respect of which such Notes are to be
issued except to the extent, if any, described in the applicable Prospectus
Supplement. Where no distinction is made under this caption between the Leased
Property Notes and the Owned Property Notes or between their respective
Indentures, such statements refer to any Notes and any Indenture.
GENERAL
All Notes issued under the same Indenture will relate to a single
Property. The Notes with respect to each Property will be issued under a
separate Indenture either (a) between the related Owner Trustee of a trust for
the benefit of the Owner Participant who is the beneficial owner of such
Property and the related Loan Trustee or (b) between the Company and the
related Loan Trustee.
With respect to each Leased Property, the related Owner Trustee has
acquired or will acquire such Leased Property from the Company, has granted or
will grant a mortgage in the properties comprising such Leased Property to the
related Loan Trustee as security for the payments of the related Leased
Property Notes, and has leased or will lease such Leased Property to the
Company pursuant to the related Lease which has been or will be assigned to the
related Loan Trustee. Pursuant to the Lease related to each Leased Property,
the Company will be obligated to make or cause to be made rental and other
payments to the related Loan Trustee on behalf of the related Owner Trustee in
amounts that will be sufficient to make payments of the principal, interest and
premium, if any, required to be made in respect of such Leased Property Notes
when and as due and payable.
The rental obligations of the Company under each Lease and the
obligations of the Company under each Owned Property Indenture and under the
Owned Property Notes will be the general obligations of the Company. Except in
certain circumstances involving the Company's purchase of Leased Property and
the assumption of the Leased Property Notes related thereto, the Leased
Property Notes are not direct obligations of or guaranteed by the Company.
PRINCIPAL AND INTEREST PAYMENTS
Interest paid on the Notes held in each Trust will be passed through
to the Certificateholders of such Trust on the dates and at the rate per annum
set forth in the applicable Prospectus Supplement until the final distribution
for such Trust. Principal paid on the Notes held in each Trust will be passed
through to the Certificateholders of such Trust in scheduled amounts on the
dates set forth in the applicable Prospectus Supplement until the final
distribution date for such Trust. See "Description of the Certificates -
General."
If any date scheduled for any payment of principal, premium, if any,
or interest with respect to the Notes is not a business day, such payment will
be made on the next succeeding business day without any additional interest.
-17-
<PAGE> 20
SECURITY
The Leased Property Notes will be secured by (i) an assignment by the
related Owner Trustee to the related Loan Trustee of such Owner Trustee's
rights (except for certain rights, including those described below) under the
Lease with respect to each related Leased Property, including the right to
receive payments of rent thereunder and (ii) a mortgage granted to such Loan
Trustee of each such Leased Property, subject to the rights of the Company
under each related Lease. Under the terms of each Lease, the Company's
obligations in respect of the related Leased Property will be those of a lessee
under a "net lease." Accordingly, the Company will be obligated, among other
things and at its expense, to pay all costs and expenses of operating and
maintaining the Leased Properties.
The Owned Property Notes will be secured by a mortgage granted to the
related Loan Trustee of certain of the Company's rights with respect to the
related Owned Properties. Under the terms of each Owned Property Indenture,
the Company will be obligated, among other things and at its expense, to pay
all costs and expenses of operating and maintaining the related Owned Property.
The Notes are not cross-collateralized and consequently the Notes
issued in respect of any one Property will not be secured by any other Property
or, in the case of Leased Property Notes, the Lease or Leases related thereto.
Unless and until an Indenture Default with respect to a Leased Property has
occurred and is continuing, the related Loan Trustee may not exercise any of
the rights of the related Owner Trustee under the related Lease. With respect
to each Leased Property, the assignment by the related Owner Trustee to the
related Loan Trustee of its rights under the related Lease will exclude, among
other things, rights of such Owner Trustee and the related Owner Participant
relating to indemnification by the Company for certain matters, insurance
proceeds payable to such Owner Trustee in its individual capacity and to such
Owner Participant under liability insurance maintained by the Company pursuant
to such Lease or by such Owner Trustee or such Owner Participant, insurance
proceeds payable to such Owner Trustee in its individual capacity or to such
Owner Participant under certain casualty insurance maintained by such Owner
Trustee or such Owner Participant pursuant to such Lease and any rights of such
Owner Participant or such Owner Trustee to enforce payment of the foregoing
amounts and their respective rights to the proceeds of the foregoing.
The Company will, at its expense, maintain or cause to be maintained
insurance covering each Property with coverage limits and on terms and
conditions as are specified in the applicable Prospectus Supplement.
Funds, if any, held from time to time by the Loan Trustee with respect
to any Property, including funds held as the result of an event of loss to such
Property or, with respect to any Leased Property, termination of
-18-
<PAGE> 21
the Lease related thereto, will be invested and reinvested by such Loan
Trustee. Such investment and reinvestment will be at the direction of the
Company (except, with respect to a Leased Property, in the case of a Lease
Event of Default under the related Lease or, with respect to an Owned Property,
in the case of an Indenture Default under the related Indenture) in certain
investments described in the related Indenture. The net amount of any loss
resulting from any such investments will be paid by the Company.
CONSEQUENCES OF THE COMPANY'S BANKRUPTCY
If the Company were to become a debtor in a liquidation or
reorganization case under Title 11 of the United States Code (the "Bankruptcy
Code"), the Company or its bankruptcy trustee could seek to reject any or all
outstanding Leases. Rejection of any Lease would constitute a breach of such
Lease and, as provided in applicable non-bankruptcy law, deprive the Company of
the use of the related Leased Property. If any Lease were rejected, rental
payments thereunder would terminate, thereby leaving the related Owner Trustee
or Loan Trustee without regular rent payments and with a claim for damages to
pay amounts due under the Leased Property Notes issued in respect of the
related Leased Property. There can be no assurance that any such claim for
damages would, if the bankruptcy court treated such Lease as a true lease and
authorized its rejection, be sufficient to provide for the repayment of the
Leased Property Notes issued under the Indenture related to such Lease. Under
section 502(b)(6) of the Bankruptcy Code, a claim by a lessor for damages
resulting from the rejection by a debtor of a lease of real property is limited
to an amount equal to the rent reserved under the lease, without acceleration,
for the greater of one year or 15 percent (but not more than three years) of
the remaining term of the lease, plus rent already due but unpaid. Regardless
of any limitation of damages pursuant to section 506(b)(6) of the Bankruptcy
Code, the related Loan Trustee could also realize upon its lien on and security
interest in the related Leased Property, which would not be affected by such
rejection, to recover any additional unpaid amounts on the Leased Property
Notes.
PAYMENTS AND LIMITATION OF LIABILITY
Each Leased Property will be leased separately by the related Owner
Trustee to the Company pursuant to the related Lease for a term commencing on
the delivery date thereof to such Owner Trustee and expiring on a date not
earlier than the latest maturity date of the related Leased Property Notes,
unless previously terminated as permitted by the terms of the related Lease.
The basic rent and other payments under each such Lease will be payable by the
Company in accordance with the terms specified in the applicable Prospectus
Supplement, and will be assigned by the related Owner Trustee under the related
Indenture to provide the funds necessary to pay principal of, premium, if any,
and interest due from such Owner Trustee on the Leased Property Notes issued
under such Indenture. In certain cases, the basic rent payments under a Lease
may be adjusted, but each Lease will provide that under no circumstances will
rent payments by the Company with respect to any Leased Property be less than
the scheduled payments on the related Leased Property Notes. The balance of
any basic rent payment under any Lease, after payment of amounts due on the
Leased Property Notes issued under the Indenture corresponding to such Lease,
will be paid over to the applicable Owner Participant. The Company's
obligation to pay rent and to cause other payments to be made under each Lease
will be general obligations of the Company.
With respect to the Leased Property Notes, except in certain
circumstances involving the Company's purchase of a Leased Property and the
assumption of the Leased Property Notes related thereto, the Leased Property
Notes will not be obligations of, or guaranteed by, the Company. With respect
to the Leased Property Notes, none of the Owner Trustees, the Owner
Participants or the Loan Trustees shall be personally liable to any holder of
such Leased Property Notes for amounts payable under such Leased Property
Notes, or, except as provided in the Indentures relating thereto in the case of
the Owner Trustees and the Loan Trustees, for any liability under such
Indentures. Except in the circumstances referred to above, all amounts payable
under any Leased Property Notes (other than payments made in connection with an
optional redemption or purchase by the related Owner Trustee or the related
Owner Participant) will be made only from the assets subject to the lien of the
related Indenture with
-19-
<PAGE> 22
respect to such Leased Property or the income and proceeds received by the
related Loan Trustee therefrom (including rent payable by the Company under the
related Lease).
With respect to the Leased Property Notes, except as otherwise
provided in the related Indentures, no Owner Trustee shall be personally liable
for any amount payable or for any statement, representation, warranty,
agreement or obligation under such Indentures or under such Leased Property
Notes except for its own willful misconduct or gross negligence. None of the
Owner Participants shall have any duty or responsibility under the Leased
Property Indentures or Leased Property Notes to the related Loan Trustee or to
any holder of any such Leased Property Note.
The Company's obligations under each Owned Property Indenture and
under the Owned Property Notes will be general obligations of the Company.
DEFEASANCE OF THE INDENTURES AND THE NOTES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable Prospectus Supplement,
the applicable Indenture provides that the obligations of the related Loan
Trustee and, with respect to any Leased Property Notes, the related Owner
Trustee or, with respect to any Owned Property Notes, the Company under the
applicable Indenture shall be deemed to have been discharged and paid in full
(except for certain obligations, including the obligations to register the
transfer or exchange of Notes, to replace stolen, lost, destroyed or mutilated
Notes and to maintain paying agencies and hold money for payment in trust) on
the 91st day after the date of irrevocable deposit with the related Loan
Trustee of money or certain obligations of the Unites States or any agency or
instrumentality thereof the payment of which is backed by the full faith and
credit of the United States which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an aggregate amount sufficient to pay when due (including as a consequence
of redemption in respect of which notice is given on or prior to the date of
such deposit) principal of, premium, if any, and interest on all Notes issued
thereunder in accordance with the terms of such Indenture. Such discharge may
occur only if, among other things, there has been published by the Internal
Revenue Service a ruling to the effect that holders of such Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same time as would
have been the case if such deposit, defeasance and discharge had not occurred.
Upon such defeasance, or upon payment in full of the principal of,
premium, if any, and interest on all Notes issued under any Indenture on the
maturity date therefor or deposit with the applicable Loan Trustee of money
sufficient therefor no earlier than one year prior to the date of such
maturity, the holders of such Notes will have no beneficial interest in or
other rights with respect to the related Property or other assets subject to
the lien of such Indenture and such lien shall terminate.
ASSUMPTION OF OBLIGATIONS BY THE COMPANY
Unless otherwise specified in the applicable Prospectus Supplement
with respect to any Leased Property, upon the exercise by the Company of any
purchase options it may have under the related Lease prior to the end of the
term of such Lease, the Company may assume on a full recourse basis all of the
obligations of the Owner Trustee (other than its obligations in its individual
capacity) under the Indenture with respect to such Leased Property, including
the obligations to make payments in respect of the related Leased Property
Notes. In such event, certain relevant provisions of the related Lease,
including (among others) provisions relating to maintenance, possession and use
of such Leased Property, liens, insurance and events of default will be
incorporated into such Indenture, and the Leased Property Notes issued pursuant
thereto will not be redeemed and will continue to be secured by such Leased
Property.
-20-
<PAGE> 23
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of the anticipated material
United States federal income tax consequences of the purchase, ownership and
disposition of the Certificates and should be read in conjunction with any
additional discussion of federal income tax consequences included in the
applicable Prospectus Supplement. The discussion is based on laws,
regulations, rulings and decisions, all as in effect on the date of this
Prospectus and all of which are subject to change or different interpretations,
which may be retroactive. The discussion below does not purport to address all
of the federal income tax consequences that may be applicable to all categories
of investors, some of which (for example, banks, tax exempt organizations,
insurance companies and foreign investors) may be subject to special rules.
The statements of law and legal conclusions set forth herein have been
confirmed by the opinion of Kelley Drye & Warren, special counsel to the
Company, as qualified therein and herein. Certain of the anticipated federal
income tax consequences discussed herein are based on proposed Treasury
Regulations, which are subject to change and are not binding authority until
adopted as final or temporary regulations. As a result, definitive guidance
cannot be provided regarding all of the federal income tax consequences to
Certificate Owners or to the Trusts. In addition, there can be no assurance
that the Internal Revenue Service ("IRS") or the courts would not take
positions different from those discussed herein which would be materially
adverse to investors. Investors should consult their own tax advisors in
determining the federal, state, local, foreign and any other tax consequences
to them of the purchase, ownership and disposition of the Certificates,
including the advisability of making any election discussed below. The Trusts
are not indemnified for any federal income taxes that may be imposed upon them,
and the imposition of any such taxes could result in a reduction in the amounts
available for distribution to the Certificate Owners of the affected Trust.
GENERAL
Based upon an interpretation of analogous authorities under currently
applicable law, the Trusts should not be classified as associations taxable as
corporations, but, rather, should be classified as grantor trusts under
Subpart E, Part I of Subchapter J of the Internal Revenue Code of 1986, as
amended (the "Code"), and each Certificate Owner of each Trust should be
treated as the owner of a pro rata undivided interest in each of the Notes or
any other property held by such Trust.
Section 7701(i) of the Code provides that "taxable mortgage pools"
will be taxed as corporations notwithstanding other provisions of the Code. An
entity will be treated as a taxable mortgage pool only if (i) substantially all
of the entity's assets consist of debt obligations more than 50% of which
consist of real estate mortgages; (ii) the entity is the obligor under debt
obligations with two or more maturities; and (iii) under the terms of the debt
obligations (or underlying arrangement) under which the entity is the obligor,
payments on the debt obligations bear a relationship to payments on the debt
obligations held by the entity. Proposed Treasury Regulations under Code
section 7701(i) provide that for purposes of applying the taxable mortgage pool
rules, ownership interests in entities that are classified as trusts under the
"investment trust" rules of Treasury Regulation section 301.7701-4(c) will not
be treated as debt obligations
-21-
<PAGE> 24
of such trusts. The Trusts herein are expected to qualify as such trusts, and
the Proposed Regulations would confirm that the taxable mortgage pool rules do
not apply to the Trusts.
Each Certificate Owner should be required to report on its federal
income tax return its pro rata share of the entire income from the Notes or any
other property held by the related Trust, in accordance with such Certificate
Owner's method of accounting. A Certificate Owner using the cash method of
accounting must take into account its pro rata share of income as and when
received (or deemed received) by the Pass Through Trustee. A Certificate Owner
using an accrual method of accounting must take into account its pro rata share
of income as it accrues or is received by the Pass Through Trustee, whichever
is earlier.
A purchaser of a Certificate should be treated as purchasing an
interest in each Note and any other property in the related Trust at a price
determined by allocating the purchase price paid for the Certificate among such
Notes and other property in proportion to their fair market values at the time
of purchase of the Certificate. Unless otherwise indicated in a Prospectus
Supplement, it is believed that when all the Notes have been acquired by the
related Trust the purchase price paid for a Certificate by an original
purchaser of a Certificate should be allocated among the Notes in the related
Trust in proportion to their respective principal amounts.
ORIGINAL ISSUE DISCOUNT
The Notes may be issued with original issue discount ("OID"), which
may require Certificate Owners to include such OID in gross income in advance
of the receipt of the cash attributable to such income. The Prospectus
Supplement will state whether any Notes to be held by the related Trust will be
issued with OID. In general, a Note will be considered to be issued with OID
(subject to a de minimis exception) to the extent the "stated redemption price
at maturity" of such Note is greater than its "issue price." The stated
redemption price at maturity of a debt instrument generally will equal all
payments due under the debt instrument at any time, other than payments of
"qualified stated interest," which is defined as interest payments calculated
on the basis of a single fixed rate of interest that is actually and
unconditionally payable at fixed, periodic intervals of one year or less over
the entire term of the debt instrument. The issue price of the Notes will
equal the price paid therefor by the related Trusts, which will equal the
offering price at which the Certificates are sold to the public.
-22-
<PAGE> 25
The amount of OID to be included in income in any tax period with
respect to a Note will be determined using a constant yield to maturity method.
Any amounts included in income as OID will increase a Certificate Owner's
adjusted tax basis with regard to its interest in the Note.
Some Notes may be issued with maturity dates of not more than one year
from the date of issue. The OID provisions of the Code do not generally apply
to such short-term obligations; however, the Code provisions applicable to such
short-term obligations may require taxpayers to include amounts in income prior
to the receipt of cash. In general, section 1281 of the Code requires an
accrual method taxpayer to include OID in income on a straight-line basis over
the term of the obligation (or, if the holder so elects, on a constant interest
basis). A Certificate Owner may elect to include in income "acquisition
discount" rather than OID with respect to its interest in a Note constituting a
short-term obligation. The amount of a Note's acquisition discount will equal
the excess of its stated redemption price at maturity over the holder's basis
in the Note, and would be included in income pursuant to the accrual rules
discussed above. Once made, an election to utilize acquisition discount rather
than OID would apply to all non-governmental debt obligations with a term of
one year or less acquired by such Certificate Owner on or after the first day
of the first taxable year to which the election applies, unless the IRS
consents to a revocation of the election.
The above discussion regarding OID is based on proposed Treasury
Regulations promulgated under the OID provisions of the Code (the "Proposed OID
Regulations"), as revised. Certificate Owners should be aware, however, that
the IRS may further revise the Proposed OID Regulations, and that any such
further revision could prescribe different tax treatment from that described
herein.
Subsequent purchasers of Certificates will be required to include OID
in income, but the amount to be reported will depend on the amount paid for
each such Certificate by the subsequent purchaser, as allocated to the Notes
held by the related Trust. Section 1272(a)(7) of the Code provides that the
amount of OID required to be reported on an interest in a Note may be reduced
if the subsequent purchaser pays an "acquisition premium" for such interest.
SALES OF CERTIFICATES
A Certificate Owner that sells a Certificate should thus recognize
gain or loss equal to the difference between its adjusted tax basis in each
asset held by the related Trust and the amount realized on the sale (except to
the extent attributable to accrued interest, which should be taxable as
ordinary income). The amount realized on the sale of a Certificate should be
apportioned among the assets of the related Trust according to their relative
fair market values. Subject to the market discount rules discussed below, any
such gain or loss will be capital gain or loss if the asset was held as a
capital asset and will be long-term capital gain or loss if the asset was held
for more than one year. See "Certain Federal Income Tax Consequences - Market
Discount." Net capital gain (the excess of net long-term capital gain over net
short-term capital loss) of individuals is, under certain circumstances, taxed
at lower rates than items of ordinary income.
-23-
<PAGE> 26
MARKET DISCOUNT
Purchasers of Certificates should be aware that the resale of such
Certificates may be affected by the market discount provisions of the Code. In
general, if any Certificate Owner's interest in a Note held by the related
Trust is acquired at a "market discount" (i.e., subject to a de minimis
exception, a price below the Note's stated redemption price at maturity or, in
the case of an interest in a Note with OID, the issue price plus the original
issue discount includible in the income of all prior holders of such
Certificate with respect to that Note), the Certificate Owner should be subject
to the market discount rules of sections 1276 to 1278 of the Code with regard
to its interest in the Note.
In the case of a sale or certain other dispositions of indebtedness
subject to the market discount rules, section 1276 of the Code requires that
gain, if any, from such sale or disposition be treated as ordinary income to
the extent such gain represents market discount that has accrued during the
period in which the indebtedness was held.
In the case of a partial principal payment on indebtedness subject to
the market discount rules, section 1276 of the Code requires that such payment
be included in gross income as ordinary income to the extent such payment does
not exceed the market discount that has accrued during the period such
indebtedness was held. The amount of any accrued market discount later
required to be included in income upon a disposition, or subsequent partial
principal payment, will be reduced by the amount of accrued market discount
previously included in income.
Generally, market discount accrues under a straight line method, or,
at the election of the taxpayer, a constant interest method. However, in the
case of installment obligations the manner in which market discount is to be
accrued has been left to Treasury Regulations not yet issued (unless a
Prospectus Supplement indicates otherwise). Until such Treasury Regulations
are issued, the explanatory Conference Committee Report to the Tax Reform Act
of 1986 (the "Conference Report") indicates that holders of installment
obligations with market discount may elect to accrue market discount either on
the basis of a constant interest rate or as follows: the amount of market
discount that is deemed to accrue is the amount of market discount that bears
the same ratio to the total amount of remaining market discount that the amount
of stated interest paid in the accrual period (or, if such obligation has OID,
the OID for the period) bears to the total amount of stated interest remaining
to be paid on the installment obligation as of the beginning of such period
(or, if such obligation has OID, the total remaining OID at the beginning of
the period).
Under section 1277 of the Code, if in any taxable year interest paid
or accrued on indebtedness incurred or continued to purchase or carry
indebtedness subject to the market discount rules exceeds the interest
currently includible in income with respect to such indebtedness, deduction of
the excess interest must be deferred to the extent of the market discount
allocable to the taxable year. The deferred portion of any interest expense
will generally be deductible when such market discount is included in income
upon the sale or other disposition (including repayment) of the indebtedness.
Section 1278 of the Code allows a taxpayer to make an election to
include market discount in gross income currently, through the use of either
the straight-line inclusion method or the constant interest method. If such
election is made, the rules of sections 1276 and 1277 (described above) will
not apply to the taxpayer. Once made, such an election applies to all market
discount debt instruments acquired by the taxpayer during or after the taxable
year for which the election is made, and may not be revoked without the consent
of the IRS. If an election is made to include market discount in income
currently, the taxpayer's basis in such debt instrument is increased by the
market discount thereon as it is includible in income.
PREMIUM
-24-
<PAGE> 27
A Certificate Owner should generally be considered to have acquired an
interest in a Note at a premium to the extent the purchaser's tax basis
allocable to such interest exceeds the remaining principal amount of the Note
allocable to such interest. In such event, a Certificate Owner that holds a
Certificate as a capital asset may elect under section 171 of the Code to
amortize that premium as an offset to interest income with corresponding
reductions in the Certificate Owner's tax basis in that Note. Generally, such
amortization is on a constant yield basis. However, in the case of installment
obligations, the Conference Report indicates a Congressional intent that
amortization will be in accordance with the same rules that will apply to the
accrual of market discount on installment obligations. See "Certain Federal
Income Tax Consequences - Market Discount."
It is not clear under the Code how amortizable bond premium should be
treated when there is the possibility of early redemption or when the amount of
the redemption premium is unknown. In addition, it is not clear how any
unamortized bond premium remaining at the time of an early call should be
treated under the Code. Because of the lack of certainty in this area,
Certificate Owners should consult their own tax advisors as to the amount and
treatment of any amortizable bond premium. If a Certificate Owner acquired a
Certificate at a premium and elects to amortize such premium, and the IRS
successfully challenged the amount of amortization claimed for a particular
period, then such Certificate Owner would not be able to offset interest income
on the Certificate for such period with the amount of such disallowed
amortization.
INFORMATION REPORTING
Information reports will be made by the Trustee to the IRS, and to
Certificate Owners that are not exempt from the reporting requirements,
annually or as otherwise required with respect to interest paid (or OID
accrued, if any) on the Certificates.
BACKUP WITHHOLDING
Payments made on the Certificates, and proceeds from the sale of the
Certificates to or through certain brokers, may be subject to a "backup"
withholding tax of 31% unless the Certificate Owner complies with certain
reporting procedures or is exempt from such requirements under section 3406 of
the Code. Any such withheld amounts are allowed as a credit against the
Certificate Owner's federal income tax. Furthermore, certain penalties may be
imposed by the IRS on a Certificate Owner who is required to supply information
but who does not do so in the proper manner.
THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO A PARTICULAR CERTIFICATE OWNER IN LIGHT OF ITS
CIRCUMSTANCES AND INCOME TAX SITUATION. EACH CERTIFICATE OWNER SHOULD CONSULT
ITS TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH CERTIFICATE OWNER
OF THE OWNERSHIP AND DISPOSITION OF THE CERTIFICATES, INCLUDING THE PROPRIETY
OF MAKING ANY ELECTION DESCRIBED ABOVE AND THE APPLICATION AND EFFECT OF STATE,
LOCAL, FOREIGN AND OTHER TAX LAWS.
CERTAIN DELAWARE TAXES
The Pass Through Trustee is a Delaware banking corporation with its
principal trust office in Wilmington, Delaware. Richards Layton & Finger,
counsel to the Pass Through Trustee, has advised the Company that, in its
opinion, under currently applicable Delaware law, assuming that the Trusts will
not be taxable as corporations, but, rather, will be classified as grantor
trusts under subpart E, Part I of Subchapter J of the Code, (i) the Trusts will
not be subject to any tax (including without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or doing
business tax), fee or other
-25-
<PAGE> 28
governmental charge under the laws of the State of Delaware or any political
subdivision thereof and (ii) Certificate Owners that are not residents of or
otherwise subject to tax in the State of Delaware will not be subject to any
tax (including, without limitation, net or gross income, tangible or intangible
property, net worth, capital, franchise or doing business tax), fee or other
governmental charge under the laws of the State of Delaware or any political
subdivision thereof as a result of purchasing, holding (including receiving
payments with respect to) or selling a Certificate. Neither the Trusts nor the
Certificate Owners will be indemnified for any state or local taxes imposed on
them, and the imposition of any such taxes on a Trust could result in a
reduction in the amounts available for distribution to the Certificate Owners
of such Trust. In general, should a Certificate Owner or a Trust be subject to
any state or local tax which would not be imposed if the Pass Through Trustee
were located in a different jurisdiction in the United States, the Pass Through
Trustee will resign and a new Pass Through Trustee in such other jurisdiction
will be appointed.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement,
the Certificates may, subject to certain legal restrictions, be purchased and
held by an employee benefit plan (a "Plan") subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or an individual
retirement account or an employee benefit plan subject to section 4975 of the
Code. A fiduciary of a Plan must determine that the purchase and holding of a
Certificate is consistent with its fiduciary duties under ERISA and does not
result in a non- exempt prohibited transaction as defined in section 406 of
ERISA or section 4975 of the Code. Employee benefit plans which are
governmental plans (as defined in section 3(32) of ERISA) and certain church
plans (as defined in section 3(33) of ERISA) are not subject to Title I of
ERISA or section 4975 of the Code. The Certificates may, subject to certain
legal restrictions, be purchased and held by such plans.
PLAN OF DISTRIBUTION
The Certificates being offered hereby may be sold in any one or more
of the following ways from time to time by Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co. and Salomon Brothers Inc (the "Distributors") acting as:
(i) agent or (ii) underwriters. In addition, the Certificates may be sold
directly to purchasers.
The distribution of the Certificates may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In the event the Distributors act as agent, any commission payable by
the Company to the Distributors will be set forth, in the applicable Prospectus
Supplement. Unless otherwise indicated in such Prospectus Supplement, any such
Distributor will be acting on a best efforts basis for the period of its
appointment. Any such Distributor may be deemed to be an underwriter, as that
term is defined in the Securities Act, of the Certificates so offered and sold.
If the Certificates are sold by means of an underwritten offering, the
Company will execute an underwriting agreement with the Distributors, and the
terms of the transaction, including commissions, discounts and any other
compensation of the Distributors and dealers, if any, will be set forth in the
Prospectus Supplement which will be used by the Distributors to make offers and
sales of the Certificates in respect of which this Prospectus is delivered to
the public. If Distributors are utilized in the sale of the Certificates in
respect of which this Prospectus is delivered, the Certificates will be
acquired by the Distributors for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at
fixed public offering prices or at varying prices determined by the
Distributors at the time of sale. The Certificates may be offered to the
public either through underwriting syndicates represented by the Distributors
or directly by the Distributors. If the Distributors are utilized in the sale
of the Certificates, unless otherwise indicated in the Prospectus Supplement,
the underwriting
-26-
<PAGE> 29
agreement will provide that the obligations of the Distributors are subject to
certain conditions precedent and that the Distributors with respect to a sale
of the Certificates will be obligated to purchase all such Certificates if any
are purchased. The Company does not intend to apply for listing of the
Certificates on a national securities exchange. If the Certificates are sold
by means of an underwritten offering, the Distributors may make a market in the
Certificates as permitted by applicable laws and regulations. No Distributor
would be obligated, however, to make a market in the Certificates and any such
market making could be discontinued at any time at the sole discretion of such
Distributor. Accordingly, no assurance can be given as to the liquidity of, or
trading markets for, the Certificates.
If a dealer is utilized in the sale of the Certificates in respect of
which this Prospectus is delivered, such Certificates will be sold to the
dealer as principal. The dealer may then resell such Certificates to the
public at varying prices to be determined by such dealer at the time of resale.
Any such dealer may be deemed to be an underwriter, as such term is defined in
the Securities Act, of the Certificates so offered and sold. The name of the
dealer and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Offers to purchase the Certificates may be solicited directly and the
sale thereof may be made directly to institutional investors or others, who may
be deemed to be underwriters within the meaning of the Securities Act with
respect to any resale thereof. The terms of any such sales will be described
in the Prospectus Supplement relating thereto.
The Distributors may be entitled under relevant agreements to
indemnification or contribution by the Company against certain liabilities,
including liabilities under the Securities Act and may engage in transactions
with, or perform services for, the Company and the Company's subsidiaries in
the ordinary course of business.
LEGAL MATTERS
The validity of the Certificates offered hereby will be passed upon
for the Company by Kelley Drye & Warren, a New York partnership including
professional corporations, 101 Park Avenue, New York, New York 10178, and for
any agents or underwriters by Shearman & Sterling, 599 Lexington Avenue, New
York, New York 10022. Unless otherwise indicated in the applicable Prospectus
Supplement, both Kelley Drye & Warren and Shearman & Sterling will rely on the
opinion of Richards Layton & Finger, counsel for Wilmington Trust Company,
individually and as Pass Through Trustee for the Certificates of each Trust, as
to certain matters relating to the authorization, execution and delivery of
such Certificates by, and the valid and binding effect thereof on, such Pass
Through Trustee.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in this Prospectus and elsewhere in the Registration Statement have
been audited by Ernst & Young, independent auditors, for the periods indicated
in their reports with respect thereto and have been incorporated by reference
herein in reliance upon such reports given upon the authority of said firm as
experts in accounting and auditing.
-27-
<PAGE> 30
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with
the issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All amounts are estimated except the
Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . . $103,449
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . 100,000
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . . . . . . 20,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . 200,000
Trustee's fees and expenses . . . . . . . . . . . . . . . . . . . . . . 20,000
Printing and engraving expenses . . . . . . . . . . . . . . . . . . . . 60,000
Rating agency fees . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000
----------
Total . . . . . . . . . . . $ 753,449
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Company's By-laws provides for indemnification of
directors and officers to the full extent permissible under section 145 of the
Delaware General Corporation Law (the "GCL"). Section 145 of the GCL generally
grants corporations the power to indemnify their directors, officers, employees
and agents of a corporation in accordance with the provisions thereof.
The Company enters into indemnification agreements with each of its
executive officers and directors. Each such Indemnification Agreement provides
for indemnification of officers and directors of the Company to the greatest
extent permitted by the GCL and additionally provides (i) that such persons
shall be indemnified for amounts paid in settlement of derivative actions, (ii)
for advances of investigation and litigation expenses subject to repayment if
indemnification is disallowed, (iii) that indemnification is available unless
the board of directors or independent legal counsel or the stockholders
determine that the relevant standards of conduct were not satisfied, with the
Company bearing the burden of providing same in any suit for indemnification,
and (iv) for payment to such persons of expenses incurred in connection with
the successful prosection of an action for indemnification, in whole or in
part, of any amount not timely paid (generally within 30 days of demand) by the
Company.
The Company maintains a standard form of officers' and directors'
liability insurance policy which provides coverage to the officers and
directors of the Company for certain liabilities, including certain liabilities
which may arise out of this Registration Statement.
In accordance with section 102(a)(7) of the GCL, Article VII of the
Company's Restated Certificate of Incorporation eliminates the personal
liability of directors to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director with certain limited exceptions set
forth in section 102(a)(7) of the GCL.
Reference is made to the form of Underwriting Agreement filed as
Exhibit 1 to this Registration Statement, which provides for indemnification of
directors and officers of the Company by the Underwriters against certain
liabilities.
II-1
<PAGE> 31
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<S> <C> <C>
1 - Form of Underwriting Agreement.
4.1* - Form of Pass Through Trust Agreement between the Company and the Pass Through Trustee.
4.2* - Form of Pass Through Certificate (included in Exhibit 4.1).
5.1 - Opinion of Kelley Drye & Warren, counsel for the Company.
5.2 - Opinion of Richards Layton & Finger, counsel for the Pass Through Trustee.
8 - Tax Opinion of Kelley Drye & Warren, counsel for the Company.
12* - Computation of Ratio of Earnings to Fixed Charges.
23.1 - Consent of Ernst & Young.
23.2 - Consent of Kelley Drye & Warren (included in Exhibits 5.1 and 8).
23.3 - Consent of Richards Layton & Finger (included in Exhibit 5.2).
24.1* - Power of Attorney.
25 - Statement of Eligibility of Trustee on Form T-1 (Exhibit D thereto filed pursuant to
Rule 202 of Regulation S-T).
- -------------------
</TABLE>
* Previously filed.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification for such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
II-2
<PAGE> 32
(a) to include any prospectus required by section
10(a)(3) of the Securities Act;
(b) to reflect in the prospectus any facts or
events arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in this Registration
Statement; and
(c) to include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this
Registration Statement;
(2) that, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) to remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under
the Securities Act of 1933, the information omitted from the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the
time it was declared effective.
(2) For the purpose of determining any liability
under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the Trustee to
act under subsection (a) of section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the Commission under
section 305(b)(2) of the Act.
II-3
<PAGE> 33
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Salt Lake City, State of
Utah on the 25th day of January, 1994.
SMITH'S FOOD & DRUG CENTERS, INC.
By: /s/Jeffrey P. Smith
----------------------------------
Jeffrey P. Smith
Chairman of the Board of Directors
and Chief Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/Jeffrey P. Smith* Chairman of the Board of Directors and January 25, 1994
--------------------------------------- Chief Executive Officer (Principal
Jeffrey P. Smith Executive Officer)
/s/Richard D. Smith* President and Chief Operating Officer; January 25, 1994
--------------------------------------- Director
Richard D. Smith
/s/Matthew G. Tezak* Senior Vice President and Chief January 25, 1994
--------------------------------------- Financial Officer (Principal Financial
Matthew G. Tezak and Accounting Officer)
/s/Robert D. Bolinder* Executive Vice President, Corporate January 25, 1994
--------------------------------------- Planning and Development; Director
Robert D. Bolinder
/s/Kenneth A. White* Senior Vice President, Regional Manager, January 25, 1994
--------------------------------------- California Region; Director
Kenneth A. White
</TABLE>
II-4
<PAGE> 34
<TABLE>
<S> <C> <C>
/s/Rodney H. Brady* Director January 25, 1994
---------------------------------------
Rodney H. Brady
/s/Allen P. Martindale* Director January 25, 1994
---------------------------------------
Allen P. Martindale
/s/DeLonne Anderson* Director January 25, 1994
---------------------------------------
DeLonne Anderson
/s/Alan R. Hoefer* Director January 25, 1994
---------------------------------------
Alan R. Hoefer
/s/Duane Peters* Director January 25, 1994
---------------------------------------
Duane Peters
/s/Ray V. Rose* Director January 25, 1994
---------------------------------------
Ray V. Rose
/s/Fred L. Smith* Director January 25, 1994
---------------------------------------
Fred L. Smith
/s/Sean D. Smith* Director January 25, 1994
---------------------------------------
Sean D. Smith
/s/Douglas John Tigert* Director January 25, 1994
---------------------------------------
Douglas John Tigert
*By/s/Michael C. Frei January 25, 1994
------------------------------------
Michael C. Frei,
Attorney in Fact
</TABLE>
II-5
<PAGE> 35
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description Page No.
-------- ----------- --------
<S> <C> <C>
1 - Form of Underwriting Agreement.
4.1* - Form of Pass Through Trust Agreement between the Company and the Pass Through Trustee.
4.2* - Form of Pass Through Certificate (included in Exhibit 4.1).
5.1 - Opinion of Kelley Drye & Warren, counsel for the Company.
5.2 - Opinion of Richards Layton & Finger, counsel for the Pass Through Trustee.
8 - Tax Opinion of Kelley Drye & Warren, counsel for the Company.
12* - Computation of Ratio of Earnings to Fixed Charges.
23.1 - Consent of Ernst & Young.
23.2 - Consent of Kelley Drye & Warren (included in Exhibits 5.1 and 8).
23.3 - Consent of Richards Layton & Finger (included in Exhibit 5.2).
24.1* - Power of Attorney.
25 - Statement of Eligibility of Trustee on Form T-1 (Exhibit D thereto filed pursuant to
Rule 202 of Regulation S-T).
</TABLE>
________________________________
*Previously filed.
<PAGE> 1
1/10/94 DRAFT
$______________
SMITH'S FOOD & DRUG CENTERS, INC.
PASS THROUGH CERTIFICATES, SERIES 199_-A
UNDERWRITING AGREEMENT
__________, 199_
<PAGE> 2
EXHIBIT 1
___________, 199_
Morgan Stanley & Co.
Incorporated
Goldman, Sachs & Co.
Salomon Brothers Inc
c/o Morgan Stanley & Co.
Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Smith's Food & Drug Centers, Inc., a Delaware corporation (the
"Company"), proposes that Wilmington Trust Company, a Delaware banking
corporation, as trustee (the "Pass Through Trustee") under the 199_-[A] Pass
Through Trust Agreement (the "Basic Agreement"), as it is to be supplemented by
[___] Pass Through Trust Supplements (each, a "Trust Supplement"), each between
the Company and the Pass Through Trustee (the Basic Agreement as it is to be
supplemented by each such Trust Supplement being referred to herein as a
"Designated Agreement"), issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") its pass through certificates in the
aggregate principal amounts and with the interest rates, initial distributions
dates and final distribution dates set forth on Schedule A hereto (the
"Certificates") on the terms and conditions stated herein and in Schedule II
hereto.
As used in this Agreement, capitalized terms not otherwise
defined shall have the meanings specified in the Designated Agreements or, if
not so defined therein, such capitalized terms not otherwise defined shall have
the meanings specified in the Indenture referred to in the Designated
Agreements, as amended and supplemented by [_____] Supplemental Indentures to
such Indenture to be executed on the date of the issuance of the Notes.
<PAGE> 3
2
I.
The Company represents and warrants to each of the
Underwriters that:
(a) The Company meets the requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), and
has prepared and filed on such Form with the Securities and Exchange
Commission (the "Commission") a registration statement (File No.
33-51097 (as amended at the date hereof, including the exhibits thereto
and the documents incorporated by reference therein, the "Registration
Statement") relating to certain pass through certificates (including the
Certificates) and the offering thereof from time to time in accordance
with Rule 415 under the Securities Act. The Registration Statement
includes a basic prospectus referred to below which, as supplemented
from time to time, will be used in connection with all offerings of such
pass through certificates. The Registration Statement has been declared
effective by the Commission. As provided in Section 3(a), a prospectus
supplement reflecting the terms of the Certificates, the terms of the
offering thereof and the other matters set forth therein has been
prepared and will be filed (or mailed for filing) together with the
basic prospectus referred to below pursuant to Rule 424 under the
Securities Act (such prospectus supplement, in the form first filed on
or after the date hereof pursuant to Rule 424, is herein referred to as
the "Prospectus Supplement"). The basic prospectus included in the
Registration Statement and relating to all offerings of pass through
certificates under the Registration Statement, as supplemented by the
Prospectus Supplement, is herein called the "Prospectus", except that,
if such basic prospectus is amended on or prior to the date on which the
Prospectus Supplement is first filed (or mailed for filing) pursuant to
Rule 424, the term "Prospectus" shall refer to such basic prospectus as
so amended and as supplemented by the Prospectus Supplement, in either
case including the documents filed by the Company with the Commission
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), that are incorporated by reference therein. Any
reference herein to the terms "amendment" or "supplement" with respect
to the Registration Statement, to the Prospectus or to any preliminary
prospectus shall be deemed to refer to and include any documents filed
with the Commission under the Exchange Act after the date hereof, the
date the Prospectus is filed (or mailed for filing) with the
<PAGE> 4
3
Commission, or the date of such preliminary prospectus, as the
case may be, and incorporated therein by reference pursuant to Item 12
of Form S-3 under the Securities Act.
(b) On the original effective date of the Registration
Statement, on the effective date of any post-effective amendment
thereto, and on the date of the filing by the Company of any Annual
Report on Form 10-K after the original filing of such Registration
Statement, such Registration Statement complied in all material respects
with the applicable requirements of the Securities Act and the rules and
regulations of the Commission thereunder (the "Securities Act
Regulations"), and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the applicable rules and regulations of the
Commission thereunder (the "Trust Indenture Act Regulations") and did
not include 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; the Registration Statement and any
amendments thereof, on the date hereof, and the Prospectus, and any
amendments thereof and supplements thereto, as of their respective
filing (or mailing for filing) or issue dates and at the Closing Date
(as defined below), comply and will comply in all material respects with
the requirements of the Securities Act, the Securities Act Regulations,
the Trust Indenture Act and the Trust Indenture Act Regulations, and
none of such documents, as of any such respective dates, includes or
will include an untrue statement of a material fact or omits or will
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; except that
this representation and warranty does not apply to statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company in connection with the Registration
Statement or the Prospectus or any amendment or supplement thereto by or
on behalf of you expressly for use in the Registration Statement or the
Prospectus, or to statements or omissions in that part of the
Registration Statement which constitutes the Statement of Eligibility
under the Trust Indenture Act (Form T-1) of the Trustee.
(c) The consolidated financial statements incorporated by
reference in the Registration Statement and Prospectus present fairly
the consolidated financial position of the Company and its subsidiaries
as at the dates indicated and the consolidated results of their
operations and cash flows for the periods specified and have been
prepared in conformity with generally accepted
<PAGE> 5
4
accounting principles applied on a consistent basis during the periods
involved, except as indicated therein, and the supporting schedules
incorporated by reference in the Registration Statement present fairly
the information required to be stated therein.
(d) The documents incorporated by reference in the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder.
(e) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of the State of
Delaware, has the corporate power and authority under such laws to own
its properties and conduct its business as described in the Prospectus
and is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification.
(f) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification.
(g) The execution and delivery by the Company of this
Agreement, the Basic Agreement, the Trust Supplements, the Participation
Agreement and the Leases and other Transaction Documents to which the
Company is, or is to be, a party, the consummation by the Company of the
transactions herein and therein contemplated, and the compliance by the
Company with the terms hereof and thereof do not and will not conflict
with, or result in a breach of, any of the terms or provisions of, or
constitute a default under, the Certificate of Incorporation or By-Laws,
as amended, of the Company or any of its subsidiaries or any material
indenture, mortgage, or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of their
respective properties is bound, or any applicable law, rule, regulation,
judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over
the
<PAGE> 6
5
Company or any of its subsidiaries or any of their respective
properties; and no consent, approval, authorization, order or license
of, or filing with or notice to, any government, governmental
instrumentality, regulatory body or authority or court, domestic or
foreign, is required for the valid authorization, issuance and delivery
of the Certificates and the Notes, the valid authorization, execution,
delivery and performance by the Company of this Agreement, the
Designated Agreements and the Leases and other Transaction Documents to
which the Company is, or is to be, a party, or the consummation by the
Company of the transactions contemplated by this Agreement, the
Designated Agreements and the Leases and other Transaction Documents to
which the Company is, or is to be, a party, except such as are required
under the Securities Act, the Trust Indenture Act and the securities or
Blue Sky laws of the various states.
(h) This Agreement, the Designated Agreements and the other
Transaction Documents to which the Company is, or is to be, a party,
have each been duly authorized by the Company and, when duly executed
and delivered by the Company, will constitute valid and binding
obligations of the Company. The Basic Agreement as executed is
substantially in the form filed as an exhibit to the Registration
Statement and has been duly qualified under the Trust Indenture Act. At
the Closing Date, the related Leases and other Transaction Documents to
which the Company is, or is to be, a party will constitute the valid and
binding obligations of the Company. The Certificates, the Notes, the
Indenture, the Related Supplemental Indentures, the Designated
Agreements and the Leases and other Transaction Documents to which the
Company is, or is to be, a party will conform in all material respects
to the descriptions thereof in the Prospectus.
(i) Ernst & Young, who reported on the annual consolidated
financial statements of the Company incorporated by reference in the
Registration Statement and the Prospectus, are independent auditors as
required by the Securities Act and the Securities Act Regulations.
(j) The Certificates, when duly executed, authenticated and
delivered by the Pass Through Trustee in accordance with the terms of
the respective Designated Agreement and this Agreement and any Delayed
Delivery Contracts, will be duly issued under such Designated Agreement
and, when delivered to and paid for by the
<PAGE> 7
6
Underwriters in accordance with the terms of this Agreement, will
constitute valid and binding obligations of the Pass Through Trustee;
and the holders thereof will be entitled to the benefits of the related
Designated Agreement.
(k) The Notes to be issued under each Related Supplemental
Indenture, when duly executed and delivered by the related Owner Trustee
and duly authenticated by the Loan Trustee in accordance with the terms
of such Supplemental Indenture, will be duly issued under such
Supplemental Indenture and will constitute valid and binding obligations
of such Owner Trustee; and the holders thereof will be entitled to the
benefits of the Indenture and the Related Supplemental Indenture.
(l) In the event that any of the Certificates are purchased
pursuant to Delayed Delivery Contracts, each of such Delayed Delivery
Contracts has been duly authorized by the Company and, when duly
executed and delivered by the Company, will constitute a valid and
binding obligation of the Company.
(m) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus.
(n) There are no legal or governmental proceedings pending
or threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required.
(o) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed with the Securities Act and the Securities Act
Regulations.
(p) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
<PAGE> 8
7
(q) The Company and its subsidiaries are (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(r) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its subsidiaries,
in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly
or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(s) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
II.
The Company hereby agrees to cause the Pass Through Trustee to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amounts of Certificates set forth in Schedule
I hereto opposite their names at ____% with respect to the Series 199_-[A1]
Certificates and at __% with respect to the Series 199_-[A2]
<PAGE> 9
8
Certificates of their respective principal amounts -- the purchase price --
plus accrued interest, if any, from ___________, 19__ to the date of payment
and delivery.
III.
The Company is advised by you that the Underwriters propose to
make a public offering of their respective portions of the Certificates as soon
after the Registration Statement and this Agreement have become effective as in
your judgment is advisable. The Company is further advised by you that the
Certificates are to be offered to the public initially at ____% with respect to
the Series 199_-[A1] Certificates and at __% with respect to the Series
199_-[A2] Certificates of their principal amount -- the public offering price
- -- plus accrued interest, if any, and to certain dealers selected by you at a
price that represents a concession not in excess of ____% of their principal
amount under the public offering price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of ____% of their
principal amount, to any Underwriter or to certain other dealers.
As compensation to you for your commitments and obligations
hereunder in respect of the Certificates, including your undertaking to offer
the Certificates for sale to the public, the Owner Trustee will pay, or, if the
Owner Trustee does not pay when due, the Company will pay, to you an amount
equal to $________, which constitutes the sum of the respective percentages of
the Relevant Principal Amounts of the Certificates as set forth on Schedule A
hereto. Such payment shall be made simultaneously with, and is conditioned
upon, the payment by you to the Pass Through Trustee of the purchase price of
the Certificates as specified in Article IV hereof. Payment of such
compensation shall be made by Federal funds check or other immediately
available funds to the order of Morgan Stanley & Co. Incorporated.
IV.
Payment for the Certificates shall be made by wire transfer
payable to the order of the Pass Through Trustee in immediately available funds
at the office of Wilmington Trust Company, Rodney Square North, Wilmington,
Delaware 19890 on ___________, 199_ or at such other time on the same or such
other date, not later than _________, 199_, as shall be designated in writing
by you. The time and date of such payment are hereinafter referred to as the
"Closing Date".
<PAGE> 10
9
Payment for the Certificates shall be made against delivery to
you for the respective accounts of the several Underwriters of the Certificates
registered in such names and in such denominations as you shall request in
writing not later than two full business days prior to the date of delivery,
with any transfer taxes payable in connection with the transfer of the
Certificates to the Underwriters duly paid. Each such Certificate shall be
available for inspection by the Underwriters in New York, New York, not later
than 1:00 p.m. on the Business Day two Business Days prior to the Closing Date.
V.
The several obligations of the Underwriters hereunder are
subject to the following further conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the Securities Act
and no proceedings therefor shall have been instituted or threatened by
the Commission.
(b) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization", as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, of the Company and its subsidiaries, taken as a
whole, from that set forth in the Registration Statement, that,
in your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Certificates on the
terms and in the manner contemplated in the Prospectus.
(c) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and
<PAGE> 11
10
signed by an executive officer of the Company, to the effect set forth
in clause (a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and
correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to
be performed or satisfied on or before the Closing Date.
(d) You shall have received on the Closing Date an opinion of
Kelley Drye & Warren, counsel for the Company, dated the Closing Date,
to the effect that
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification;
(ii) each of the subsidiaries of the Company has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification;
(iii) this Agreement has been duly authorized, executed
and delivered by the Company;
(iv) the Certificates have been duly authorized and, when
executed, authenticated and issued in accordance with the
provisions of the respective Designated Agreements and delivered
to and paid for by the Underwriters in accordance with the terms
of this Agreement, and will be valid and binding obligations of
the Pass Through Trustee, enforceable in accordance with their
terms; and the holders of the Certificates will be entitled to
the benefits of the respective Designated Agreements;
<PAGE> 12
11
(v) the Pass Through Trust Agreement has been duly
qualified under the Trust Indenture Act and has been duly
authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable in accordance
with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally;
(vi) the execution and delivery by the Company of this
Agreement, the Certificates, the Basic Agreement and the Trust
Supplements, and the performance by the Company of its
obligations under this Agreement, the Certificates and the
Designated Agreements, will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of
the Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of
or qualification with any governmental body or agency is required
for the performance by the Company of its obligations under this
Agreement, the Certificates and the Designated Agreements, except
such as maybe required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Certificates;
(vii) the statements (1) in the Prospectus under the
captions "Description of the Notes", "Description of the
Certificates" and "Underwriters" and (2) in the Registration
Statement under Items 14 and 15, in each case insofar as such
statements constitute summaries of the legal matters, documents
and proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(viii) such counsel has reviewed the statements set forth
in the Prospectus under the caption "Certain Federal Income Tax
Consequences" and is of the opinion that the federal income tax
consequences to the Pass Through Trusts and the holders of the
Certificates are as set forth therein;
<PAGE> 13
12
(ix) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which
the Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(x) the Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended;
(xi) such counsel is of the opinion that the Company is
(i) in compliance with any and all applicable Environmental Laws,
(ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business and (iii) is in compliance with all terms and conditions
of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company;
(xii) the Registration Statement and Prospectus (except
for financial statements and schedules includedtherein as to
which such counsel need not express any opinion) comply as to
form in all material respects with the Securities Act and the
rules and regulations of the Commission thereunder, (2) believes
that (except for financial statements and schedules as to which
such counsel need not express any belief and except for that part
of the Registration Statement that constitutes the Form T-1
heretofore referred to) the Registration Statement and the
prospectus included therein at the time the Registration
Statement became effective did not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (3) believes that (except for
<PAGE> 14
13
financial statements and schedules as to which such counsel need
not express any belief) the Prospectus as of its issue date and
as of the Closing Date did not and does not contain any untrue
statement of a material fact or did not and does not omit to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading;
(xiii) each of [the Leases and the Deeds] is a valid
and binding obligation of the Company enforceable in accordance
with its respective terms subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer,
moratorium and similar laws affecting creditors rights generally
and, subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(xiv) each of [the Leases and the Deeds] is a valid
and binding obligation of the Company enforceable in accordance
with its respective terms subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer,
moratorium and similar laws affecting creditors rights generally
and, subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law); and
(xv) (A) no Pass Through Trust will be subject to
taxation in or any governmental fee or similar charge imposed by
the State of California or any political subdivision or taxing
authority thereof as a result of the transactions contemplated by
the Designated Agreements; and (B) a Certificateholder or
Certificate Owner who is not a resident of, or otherwise subject
to tax in, the will not be subject to taxation in or any
governmental fee or similar charge imposed by the State of
California or any political subdivision or taxing authority
thereof as a result of purchasing, holding (including receiving
payments with respect to) or selling a Certificate or an interest
therein.
(e) You shall have received on the Closing Date an opinion of
Shearman & Sterling, special counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in subparagraphs (iii),
(iv), (v),
<PAGE> 15
14
(vii) (but only as to the statements in the Prospectus under
"Description of the Notes", "Description of the Certificates" and
"Underwriters"), and (xii) of paragraph (d) above.
With respect to subparagraph (xii) of paragraph (d) above, Kelley
Drye & Warren and Shearman & Sterling may state that their opinion and belief
are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification except as specified.
The opinion of Kelley Drye & Warren described in paragraph (d)
above shall be rendered to you at the request of the Company and shall so state
therein.
(f) You shall have received on the Closing Date an opinion,
in form and substance satisfactory to you and to your counsel, of
Richards Layton & Finger, counsel for Wilmington Trust Company, dated
the Closing Date, to the effect that:
(i) the Pass Through Trustee is a Delaware banking
corporation duly organized and validly existing in good standing
under the laws of the State of Delaware, and has the full
corporate power, authority and legal right under the laws of the
State of Delaware pertaining to its banking, trust and fiduciary
powers to execute and deliver the Basic Agreement, each Trust
Supplement, the Certificates, the Participation Agreement, and
the other Transaction Documents to which the Pass Through Trustee
is a party, and to perform its obligations under the Designated
Agreements, the Certificates, the Participation Agreement and to
consummate the transactions contemplated by the Transaction
Documents to which the Pass Through Trustee is a party;
(ii) each of the Basic Agreement, each Trust Supplement, the
Participation Agreement and each other Transaction Document to
which the Pass Through Trustee is a party has been duly
authorized, executed and delivered by the Pass Through Trustee;
(iii) the execution and delivery by the Pass Through Trustee
of the Basic Agreement, each Trust Supplement, the Certificates,
the Participation
<PAGE> 16
15
Agreement and the other Transaction Documents to which the Pass
Through Trustee is a party, and the performance by the Pass
Through Trustee of its obligations under the Designated
Agreements, the Certificates, the Participation Agreement and the
other Transaction Documents to which the Pass Through Trustee is
a party, do not and will not contravene any provision of the
Articles of Association or by-laws of the Pass Through Trustee
and do not and will not contravene, result in a violation or
breach of, or constitute a default under, any law, rule or
regulation of the State of Delaware or any United States
governmental authority or agency regulating the banking, trust or
fiduciary powers of the Pass Through Trustee; and
(iv) neither the consent, approval, authorization or order
of, qualification or filing with, or notice to, nor the taking of
any other action in respect of, any governmental body or agency
of the State of Delaware regulating the banking, trust or
fiduciary powers of the Pass Through Trustee is required for the
execution and delivery by the Pass Through Trustee of the Basic
Agreement, each Trust Supplement, the Certificates, the
Participation Agreement and the other Transaction Documents to
which the Pass Through Trustee is a party, or for the performance
by the Pass Through Trustee of its obligations under the
Designated Agreements, the Certificates, the Participation
Agreement and other Transaction the Documents to which the Pass
Through Trustee is a party.
(g) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Ernst &
Young, independent public accountants for the Company, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(h) You shall have received each of the signed opinions addressed
to you and dated as of the Closing Date, specified in Schedule 1 to the
Participation Agreement.
<PAGE> 17
16
(i) The Company shall have furnished to you and to your counsel,
in form and substance satisfactory to such counsel, such other
documents, certificates and opinions as such counsel may reasonably
request in order to evidence the accuracy and completeness of any of the
representations, warranties or statements, the performance of any
covenant by the Company theretofore to be performed, or the compliance
with any of the conditions herein contained.
VI.
In further consideration of the agreements of the Underwriters
herein contained, the Company covenants as follows:
(a) To furnish you, without charge, four signed copies of the
Registration Statement (including exhibits thereto and documents
incorporated by reference) and four conformed copies of the Registration
Statement (without exhibits) and, during the period mentioned in
paragraph (c) below, as many copies of the Prospectus, any documents
incorporated by reference, and any supplements and amendments thereto or
to the Registration Statement as you may reasonably request. The terms
"supplement" and "amendment" or "amend" as used in this Agreement shall
include all documents subsequently filed by the Company with the
Commission pursuant to the Exchange Act that are deemed to be
incorporated by reference in the Prospectus.
(b) Before amending or supplementing the Registration Statement
or the Prospectus, to furnish to you a copy of each such proposed
amendment or supplement and not to file any such proposed amendment or
supplement to which you or your counsel reasonably object.
(c) If, during such period after the first date of the public
offering of the Certificates as in the opinion of your counsel the
Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as
a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of your counsel, it is necessary to
amend or supplement the Prospectus to comply with law, forthwith
<PAGE> 18
17
to prepare, file with the Commission and furnish, at its own expense, to
the Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Certificates may have been sold by you
on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Certificates for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection with such qualification and in
connection with (i) the determination of the eligibility of the
Certificates for investment under the laws of such jurisdictions as you
may designate and (ii) any review of the offering of the Certificates by
the National Association of Securities Dealers, Inc.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending ____________, 19__ that satisfies the
provisions of Section 11(a) of the Securities Act and the Securities Act
Regulations.
(f) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell
contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase debt securities of the Company (other
than (i) the Certificates and (ii) commercial paper issued in the
ordinary course of business) without your prior written consent.
(g) Whether or not any sale of the Certificates is
consummated, to pay, or cause the Owner Trustee to pay, the following
expenses incident to this Agreement and the Designated Agreements: (i)
the preparation, printing and distribution of this Agreement, the
Registration Statement, each preliminary prospectus, the Prospectus and
all amendments and supplements thereto, the Designated Agreements and
each of the Transaction Documents, (ii) the preparation, issuance and
delivery of the Certificates, (iii) the fees and disbursements of the
Company's counsel and accountants, (iv) the reasonable fees and expenses
of the Pass Through Trustee, the Owner
<PAGE> 19
18
Trustee and the Loan Trustee and the reasonable fees and disbursements
of counsel for the Pass Through Trustee, the Owner Trustee and the Loan
Trustee, (v) certain fees and disbursements of your counsel as
heretofore agreed and (vi) any fees charged by rating agencies for the
rating of the Certificates.
(h) The Company, during the period when a prospectus
relating to the Certificates is required to be delivered under the
Securities Act (in the opinion of your counsel), will file promptly all
documents required to be filed with the Commission pursuant to Section
13 or 14 of the Exchange Act.
VII.
The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by any Underwriter
or any such controlling person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter
<PAGE> 20
19
through you expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Morgan Stanley
& Co. Incorporated, in the case of parties indemnified pursuant to the second
preceding paragraph, and by the Company, in the case of parties indemnified
pursuant to the first preceding paragraph. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such
<PAGE> 21
20
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first or second
paragraph of this Article VII is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Certificates shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Certificates (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Certificates.
The relative fault of the Company on the one hand and of the Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Underwriters'
<PAGE> 22
21
respective obligations to contribute pursuant to this Article VII are several
in proportion to the respective principal amounts of Certificates they have
purchased hereunder, and not joint.
The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Article VII were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, 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 Article VII, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Certificates underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Article VII are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Article VII and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Certificates.
VIII.
This Agreement shall be subject to termination by notice given by
you to the Company, if (a) after the execution and delivery of this Agreement
and prior to the
<PAGE> 23
22
Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
(a)(i) through (iv), such event singly or together with any other such event
makes it, in your judgment, impracticable to market the Certificates on the
terms and in the manner contemplated in the Prospectus.
IX.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Certificates that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Certificates which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of the Certificates to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the principal
amount of Certificates set forth opposite their respective names in Schedule I
bears to the principal amount of Certificates set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Certificates which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Certificates that any
Underwriter has agreed to purchase pursuant to Article II be increased pursuant
to this Article IX by an amount in excess of one-ninth of such principal amount
of Certificates without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Certificates and the aggregate principal amount of Certificates with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Certificates are
not made within 36 hours after such default,
<PAGE> 24
23
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
This Agreement may be signed in two or more counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
<PAGE> 25
24
This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
Very truly yours,
SMITH'S FOOD & DRUG
CENTERS, INC.
By__________________________
Accepted, ____________, 19__
Morgan Stanley & Co.
Incorporated
Goldman, Sachs & Co.
Salomon Brothers Inc
By Morgan Stanley & Co.
Incorporated
By___________________________
<PAGE> 26
SCHEDULE A
to
Underwriting
Agreement
<TABLE>
<CAPTION>
Pass Through Aggregate Final
Certificate Principal Distribution
Designation Amounts Interest Rate Date
- ------------ -------- ------------- --------------
<S> <C> <C> <C>
Series 1994-A1 $ %
Series 1994-A2 $ %
</TABLE>
<PAGE> 27
SCHEDULE I
to
Underwriting
Agreement
Dated: ______, 199_
SMITH'S FOOD & DRUG CENTERS, INC.
<TABLE>
<CAPTION>
Principal Amount
Underwriters of Certificates
- ------------ ----------------
<S> <C>
Morgan Stanley & Co. Incorporated $
Goldman, Sachs & Co. $
Salomon Brothers Inc $
</TABLE>
Address for Notices:
Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
Attention: _______________
<PAGE> 28
SCHEDULE II
to
Underwriting
Agreement
Dated: ______, 199_
SMITH'S FOOD & DRUG CENTERS, INC.
Underwriting fees, discounts, commissions or other compensation: $
Closing date, time and location: _______, 199_ at 10:00 a.m., New York City
time at the offices of Shearman & Sterling, 599 Lexington Avenue, New York, New
York 10022
Location for checking Certificates: Morgan Stanley & Co. Incorporated, 1221
Avenue of the Americas, New York, New York 10020
Delayed delivery contracts:
Listing requirement:
Other terms and conditions:
<PAGE> 1
Exhibit 5.1
KELLEY DRYE & WARREN
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
(203) 324-1400
January 25, 1994
Smith's Food & Drug Centers, Inc.
1550 South Redwood Road
Salt Lake City, Utah 84104
Re: Smith's Food & Drug Centers, Inc. -
Shelf Registration of Pass Through Certificates
Ladies and Gentlemen:
We have acted as special counsel to Smith's Food & Drug Centers, Inc.,
a Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), of a shelf Registration
Statement on Form S-3 (Registration No. 33-51097), as amended (the
"Registration Statement"). The Registration Statement relates to up to $300
million aggregate principal amount of Pass Through Certificates (the "Pass
Through Certificates") that may be issued in one or more series from time to
time. Each series of Pass Through Certificates will be issued under a separate
supplement to the Pass Through Trust Agreement to be entered into by and
between the Company and Wilmington Trust Company, as Trustee (the "Trustee"),
substantially in the form filed as Exhibit 4.1 to the Registration Statement
(each as supplemented, an "Agreement"). All capitalized terms used herein and
not otherwise defined have the meanings specified in such Exhibit 4.1.
In so acting, we have examined the Company's certificate of
incorporation and by-laws, as amended to date; minutes of the Company's
corporate proceedings, as made available to us by officers of the Company; an
executed copy of such Registration Statement and all exhibits thereto in the
form filed with the Commission; originals, or copies certified or otherwise
identified to our satisfaction, of such other records, documents, certificates
and other instruments as in our judgment are necessary or appropriate to enable
us to render the within opinion; and such matters of law deemed necessary by us
in order to deliver the within opinion. In the course of our examination, we
have assumed the genuineness of all signatures, the authority of all
signatories to sign on behalf of their principals, if any; the authenticity of
all documents submitted to us as original documents and the conformity to
original documents of all documents submitted to us as certified or photostatic
copies. As to certain factual matters, we have relied upon information
furnished to us by officers of the
<PAGE> 2
Smith's Food & Drug Centers, Inc.
January 25, 1994
Page 2
Company. We have also assumed: (i) the Trustee is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it
was organized and in which such qualification is required in connection with
performance of the Agreement and consummation of the transactions contemplated
thereby and has and will have the requisite power (corporate, trust and other)
to execute, deliver and perform its obligations under each Agreement; (ii) the
execution, delivery and performance of each Agreement and the consummation of
the transactions contemplated thereby by the Trustee will not violate or result
in the breach of any term of the certificate of incorporation, by-laws or other
governing document of the Trustee; (iii) the execution, delivery and
performance of each Agreement and the consummation of the transactions
contemplated thereby by the Trustee will not violate, result in a breach of or
conflict with any law, rule, regulation, order, judgment or decree; (iv) the
persons authorizing the execution, delivery and performance of each Agreement
and consummation of the transactions contemplated thereby for the Trustee did
not violate any fiduciary or other duty owed by them; (v) no event has taken
place subsequent to the execution, delivery or performance of any Agreement or
the consummation of the transactions contemplated thereby or will take place
which would cause any such execution, delivery, performance or consummation not
to comply with any such law, rule, regulation, order, judgment, decree or duty
or which would permit the Trustee at any time thereafter to cancel, rescind or
otherwise avoid any such execution, delivery, performance or consummation; (vi)
there has been and there will be no misrepresentation, omission or deceit by
the Trustee or any other person or entity in connection with the execution,
delivery or performance of any Agreement or consummation of the transactions
contemplated thereby; (vii) the execution, delivery and performance of each
Agreement and consummation of the transactions contemplated thereby by the
Trustee will not violate, result in a breach of, conflict with or (with or
without the giving of notice or the passage of time or both) entitle any party
to terminate or call a default under any term of any contract, agreement,
instrument, lease, license, arrangement or understanding to which the Trustee
is or becomes a party or to which it or any of its properties, assets or
securityholders are or will be subject; (viii) the Trustee is not and will not
become subject to any impediment to which contracting parties generally are not
subject which would affect the opinion expressed herein; (ix) the Trustee
and the Company have received or will receive all documents and instruments
which they are required to receive under any Agreement on or before the
execution thereof; and (x) the due authorization of each Agreement and of the
execution, authentication, issuance and delivery of the Pass Through
Certificates by the Trustee.
Based upon the foregoing, we are of the following opinion with respect
to Pass Through Certificates of each series:
1. The execution and delivery by the Company of each Agreement
has been duly authorized by the Company.
<PAGE> 3
Smith's Food & Drug Centers, Inc.
January 25, 1994
Page 3
2. Assuming (a) the due execution and delivery by each of the
Company and the Trustee of the related Agreement in accordance
with the terms and conditions thereof and (b) such
Pass Through Certificates shall have been duly executed,
authenticated, issued and delivered by the Trustee and sold as
contemplated by each of the Registration Statement, the
prospectus which constitutes part of the Registration
Statement, the prospectus supplement or supplements to such
prospectus relating to such Pass Through Certificates and such
Agreement, such Agreement will constitute a valid and binding
obligation of the Trustee, enforceable against the Trustee in
accordance with its terms, and such Pass Through Certificates
will be validly issued and will be entitled to the benefits of
such Agreement.
3. Assuming the due execution and delivery by each of the Company
and the Trustee of the related Agreement in accordance with
the terms and conditions thereof, such Agreement will
constitute a legal, valid and binding obligation of the
Company, enforceable against it in accordance with its terms.
The foregoing opinion is subject to the following limitations and
qualifications:
A. We express no opinion as to the binding nature and
enforceability of any provision of any Agreement to the extent such provision
may be subject to or affected by (i) applicable bankruptcy, insolvency,
moratorium, reorganization or similar state or federal laws affecting the
rights and remedies of creditors generally (including, without limitation,
fraudulent transfer laws), regardless of whether such enforceability is
considered in a proceeding at law or in equity and (ii) general principles of
equity and equitable defenses, which may be subject to the discretion of the
court before which any proceeding in connection therewith may be brought,
regardless of whether such proceeding is at law or in equity.
B. We express no opinion with respect to the enforceability of
any provision in any Agreement providing for specific performance, injunctive
relief or other equitable remedies, regardless of whether such enforceability
is considered in a proceeding in equity or at law, and we express no opinion as
to the enforceability of any contractual choice of law provision or the
application of conflicts of law rules or principles.
<PAGE> 4
Smith's Food & Drug Centers, Inc.
January 25, 1994
Page 4
C. We have assumed that all rights and remedies will be exercised
in good faith prior to the expiration of any applicable limitations period and
otherwise in accordance with duties and standards imposed on parties to
contracts.
D. We express no opinion as to the enforceability of certain
rights and remedies set forth in any Agreement (i) to the extent such rights
and remedies may be limited by public policy considerations or court decisions
related thereto, to the extent that enforcement of any provision of any such
Agreement is inconsistent therewith, (ii) which provide for a waiver of notices
or hearings required by law (including due process requirements of law), (iii)
which provide for a waiver of defenses, (iv) which purport to make available
remedies for violations, breaches or defaults under such Agreement that are
determined by a court of competent jurisdiction to be non-material or (v) which
purport to bind or affect the right (now existing or hereafter acquired) of any
individual or entity other than the Company; however, we believe the inclusion
of the provisions described in the preceding sentence will not materially
interfere with the practical realization of the benefits or security intended
to be provided by the Agreement.
E. In rendering the opinion set forth in paragraph number 2
above, we have relied on the opinion of Richards, Layton & Finger, special
counsel to the Trustee, with respect to all matters opined to in paragraph
number 3 thereof, and our opinion is subject to all the assumptions contained
in such opinion related thereto. A copy of such opinion is set forth as
Exhibit 5.2 to the Registration Statement.
F. We express no opinion concerning any law other than the
internal laws of the State of New York applicable to transactions performed
wholly within the State of New York and the corporate law of the State of
Delaware.
This opinion is given solely for the benefit of the Company, and no
other person is entitled to rely hereon.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the use of our name under the caption "Legal
Matters" in the Prospectus relating to the Pass Through Certificates that
constitutes part of the Registration Statement. In giving such consent, we do
not thereby concede that we are within the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission thereunder.
Very truly yours,
/s/KELLEY DRYE & WARREN
<PAGE> 1
Exhibit 5.2
January 24, 1994
Smith's Food & Drug Centers, Inc.
1550 South Redwood Road
Salt Lake City, UT 84104
Re: Smith's Food & Drug Centers, Inc. -- Pass Through
Certificates; Shelf Registration
Ladies and Gentlemen:
We have acted as counsel to Wilmington Trust Company, a Delaware
banking corporation ("WTC"), in connection with the Pass Through Trust
Agreement, dated as of December 21, 1993 (the "Agreement"), between WTC, as
pass through trustee (the "Trustee") and Smith's Food & Drug Centers, Inc. (the
"Lessee"). Pursuant to the Agreement, the Trustee will issue Pass Through
Certificates in one or more series (the "Pass Through Certificates"), to be
registered with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Act"), by a Registration Statement on Form S-3, as
amended (the "Registration Statement"). This opinion is furnished pursuant to
your request. Capitalized terms used herein and not otherwise defined are used
as defined in the Agreement, except that reference herein to any document shall
mean such document as in effect on the date hereof.
We have examined originals or copies of the Agreement, the Pass Through
Certificates, the Registration Statement and originals or copies of such other
documents and such corporate records, certificates and other statements of
governmental officials and corporate officers and other representatives of the
corporations or entities referred to herein as we have deemed necessary or
appropriate for the purposes of this opinion. Moreover, as to certain facts
material to the opinions expressed herein, we have relied upon representations
and warranties contained in the documents referred to in this paragraph.
Based upon the foregoing and upon an examination of such questions of
law as we have considered necessary or appropriate, and subject to the
assumptions, exceptions and qualifications set forth below, we advise you that,
in our opinion:
1. The Agreement has been duly authorized, executed and delivered
by the Trustee.
<PAGE> 2
Smith's Food & Drug Centers, Inc.
January 24, 1994
Page 2
2. The execution, issuance, delivery and authentication by the
Trustee of the Pass Through Certificates have been duly authorized by the
Trustee.
3. With respect to the Pass Through Certificates of each series,
when (a) the Trust Supplement establishing the terms of the Pass Through
Certificates of such series and forming the related Trust shall have been duly
authorized, executed and delivered by Lessee and the Trustee in accordance with
the terms and conditions of the Agreement and (b) the Pass Through Certificates
of such series shall have been duly executed, authenticated, issued and
delivered by the Trustee and sold as contemplated by each of the Registration
Statement, the Prospectus contained in the Registration Statement (the
"Prospectus"), the supplement or supplements to the Prospectus relating to the
Pass Through Certificates of such series, the Agreement and the related Trust
Supplement, (i) the Agreement, as supplemented by the related Trust Supplement,
will constitute a valid and binding obligation of the Trustee, enforceable
against the Trustee in accordance with its terms and (ii) the Pass Through
Certificates of such series will be validly issued and will be entitled to the
benefits of the Agreement and the related Trust Supplement.
4. Under currently applicable Delaware law (i) the Trusts will not
be subject to any tax (including without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or doing
business tax), fee or other governmental charge under the laws of the State of
Delaware or any political subdivision thereof and (ii) Certificate Owners that
are not residents of or otherwise subject to tax in the State of Delaware will
not be subject to any tax (including, without limitation, net or gross income,
tangible or intangible property, net worth, capital, franchise or doing
business tax), fee or other governmental charge under the laws of the State of
Delaware or any political subdivision thereof as a result of purchasing,
holding (including receiving payments with respect to) or selling a Pass
Through Certificate.
The foregoing opinions are subject to the following assumptions,
exceptions and qualifications:
A. We are admitted to practice law in the State of Delaware and we
do not hold ourselves out as being experts on the law of any other
jurisdiction. The foregoing opinions are limited to the laws of the State of
Delaware and the federal laws of the United States of America governing the
banking or trust powers of WTC, except that we express no opinion with respect
to (i) federal securities laws, including the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the Investment
Company Act of 1940, as amended, and the Trust Indenture Act of 1939, as
amended, (ii) state securities or blue sky laws or (iii) laws, rules and
regulations applicable to the particular nature of the property acquired by the
Lessee. Insofar as the foregoing opinions relate to the validity and
enforceability of the Agreement, each Trust Supplement and each series of Pass
Through Certificates expressed to be governed by the laws of the State of New
York,
<PAGE> 3
Smith's Food & Drug Centers, Inc.
January 24, 1994
Page 3
we have assumed that each such document is legal, valid, binding and
enforceable in accordance with its terms under such laws (as to which we
express no opinion).
B. The foregoing opinions regarding enforceability are subject to
(i) applicable bankruptcy, insolvency, moratorium, reorganization,
receivership, fraudulent conveyance and similar laws relating to or affecting
the enforcement of the rights and remedies of creditors generally, and (ii)
principles of equity (regardless of whether considered and applied in a
proceeding in equity or at law).
C. We have assumed that all signatures (other than signatures of
officers of WTC) on documents examined by us are genuine, that all documents
submitted to us as originals are authentic and that all documents submitted to
us as copies or specimens conform with the originals, which facts we have not
independently verified.
D. We have assumed that the Trusts referred to in paragraph 3 will
not be taxable as corporations, but will be classified as grantor trusts under
subpart E, part 1 of Subchapter J of the Code.
E. We have assumed that Lessee has or will have full power,
authority and legal right to execute, deliver and perform the Agreement and
each Trust Supplement and that the Agreement and each Trust Supplement has been
or will be duly authorized, executed and delivered by Lessee.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the use of our name under the headings "Certain
Delaware Taxes" and "Legal Matters" in the Prospectus filed as part of the
Registration Statement. In giving the foregoing consent, we do not thereby
admit that we come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person or for any other
purpose.
Very truly yours,
/s/ Richards, Layton & Finger
EAM/PSK/djh
<PAGE> 1
Exhibit 8
KELLEY DRYE & WARREN
101 Park Avenue
New York, New York 10178
(212) 808-7800
January 25, 1994
Smith's Food & Drug Centers, Inc.
1550 South Redwood Road
Salt Lake City, Utah 84104
Re: Smith's Food & Drug Centers, Inc. -
Shelf Registration of Pass Through Certificates
Ladies and Gentlemen:
We have acted as special counsel to Smith's Food & Drug Centers, Inc.,
a Delaware corporation ("Smith's"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Act"), of a shelf Registration
Statement on Form S-3 (Registration No. 33-51097) as amended by Amendment No. 1
thereto (the "Registration Statement"). The Registration Statement relates to
up to $300 million aggregate principal amount (or such greater amount to the
extent issued at less than par) of Pass Through Certificates that may be issued
in one or more series from time to time on a delayed basis (the "Pass Through
Certificates"). Each series of Pass Through Certificates will be issued under
a separate Pass Through Trust Agreement (the "Agreement") by and between
Smith's and Wilmington Trust Company, as Trustee, substantially in the form
filed as Exhibit 4.1 to the Registration Statement.
You have requested our opinion concerning the section of the
prospectus (the "Prospectus") forming part of the Registration Statement
entitled "Certain Federal Income Tax Consequences." In connection with the
opinion rendered herein, we have examined and relied on (i) the Registration
Statement, including the Prospectus; (ii) the form of the Agreement and Pass
Through Certificates; and (iii) the remaining exhibits to the Registration
Statement. This opinion is made in reliance upon the representations made in
the Registration Statement and upon our examination of the other documents
listed above and such other documents as we have deemed necessary or
appropriate as a basis for the opinion set forth herein. We have assumed for
purposes of this opinion that the Pass Through Trusts will be formed and
operated strictly in accordance with the Registration Statement and the form of
Agreement appended thereto as an exhibit, and that the representations made in
the above documents are accurate. We have not been requested, and we have not
undertaken, to make any independent investigation to verify the accuracy of
such representations.
<PAGE> 2
In making our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies, the
authenticity of the originals of such copies, the conformity of all final
documents to documents submitted to us as drafts and the legal capacity of all
natural persons.
The following opinion is based upon the Internal Revenue Code of 1986,
as amended to the date of this letter (the "Code"), the Treasury Regulations
promulgated thereunder, current administrative positions of the Internal
Revenue Service (the "Service") contained in published Revenue Rulings and
Revenue Procedures, and existing judicial decisions. We have also considered
proposed Treasury Regulations and private rulings issued by the Service in
Private Letter Rulings and Technical Advice Memoranda, which, although they are
not precedential authority that binds the Service, do provide some indication
of how the Service may rule in a similar case.
In rendering the opinion set forth below, we have further assumed
that proposed Treasury Regulations under the taxable mortgage pool rules of
Code section 7701(i) are declaratory of existing Federal tax law affecting
entities that might be classified as taxable mortgage pools. However, these
proposed Treasury Regulations do not constitute binding authority until adopted
as final or temporary Treasury Regulations. In addition, we express no opinion
as to the laws of any jurisdiction other than the Federal income tax laws of
the United States, nor do we express any opinion, either implicitly or
otherwise, on any legal issue not expressly addressed below, or as to any issue
of fact.
Based on the foregoing, we are of the opinion that the description of
Federal income tax consequences appearing under the heading "Certain Federal
Income Tax Consequences" in the Prospectus, while not purporting to discuss all
possible Federal income tax consequences of an investment in the Certificates,
is accurate in all material respects with respect to those Federal income tax
consequences which are discussed under presently existing law, judicial
decisions and administrative interpretations, subject to the conditions and
qualifications set forth therein.
The opinion expressed in this letter is limited to authorities
existing as of the date hereof, and we assume no obligation or responsibility
to update any of the material contained herein. No assurance can be given that
forthcoming legislation, administrative changes or court decisions will not
significantly alter the conclusions reached in this opinion. Any change in the
tax laws may or may not be applied retroactively to transactions entered into
or completed prior to the adoption of such change. In addition, we cannot
provide assurance that the Service will agree with the conclusions reached in
this opinion and that, if any issue were to be litigated, the Service would not
be successful.
This opinion is given solely for the benefit of Smith's, and no other
person is entitled to rely hereon. This letter may not be quoted in whole or
in part, or otherwise referred to in any document, without our prior consent.
<PAGE> 3
Smith's Food & Drug Centers, Inc. -3- January 25, 1994
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the first paragraph under
the caption "Certain Federal Income Tax Consequences" in the Prospectus
relating to the Pass Through Certificates which constitutes part of the
Registration Statement. In giving such consent, we do not thereby concede that
we are within the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/KELLEY DRYE & WARREN
<PAGE> 1
ERNST & YOUNG
SUITE 1400
50 SOUTH MAIN
SALT LAKE CITY, UTAH 84144
(801) 350-3300
FAX: (801) 355-5813
EXHIBIT (23.1)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 33-51097) and Related Prospectus of
Smith's Food and Drug Centers, Inc. for the registration of Pass Through
Certificates and to the incorporation by reference therein of our reports dated
January 25, 1993 and March 29, 1993, with respect to the consolidated financial
statements and schedules of Smith's Food & Drug Centers, Inc. and subsidiaries
incorporated by reference and included in its Annual Report (Form 10-K) for the
year ended January 2, 1993, filed with the Securities and Exchange Commission.
Salt Lake City, Utah /s/ Ernst & Young
January 24, 1994
<PAGE> 1
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(B)(2) X
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
SMITH'S FOOD & DRUG CENTERS, INC.
(Exact name of obligor as specified in its charter)
Delaware 87-0258
(State of incorporation) (I.R.S. employer identification no.)
1550 South Redwood Road
Salt Lake City, Utah 84104
(Address of principal executive offices) (Zip Code)
Pass Through Certificates
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the
obligor is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers. Said Charter is
incorporated herein by reference to Registration No. 22-
21841/Pre-Effective Amendment No. 3 to Form T-1 filed by
Wilmington Trust Company in May, 1992, with respect to
Subordinated Notes due 2002 of Supermarkets General Holdings
Corporation.
B. By-Laws of Wilmington Trust Company. Said By-Laws are
incorporated herein by reference to Registration No.
22-21841/Pre-Effective Amendment No. 3 to Form T-1 filed by
Wilmington Trust Company in May, 1992, with respect to
Subordinated Notes due 2002 of Supermarket Generals Holdings
Corporation.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture
Act of 1939, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 21st day
of January, 1994.
WILMINGTON TRUST COMPANY
[SEAL]
By: /s/ Norma P. Closs
--------------------
Attest: /s/ Carolyn C. Daniels Name: Norma P. Closs
----------------------- Title: Vice President
Assistant Secretary
<PAGE> 3
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 21, 1994 By: /s/Norma P. Closs
---------------------
Name: Norma P. Closs
Title: Vice President
