<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 11, 1999
SAFEWAY INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-00041 94-3019135
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification Number)
</TABLE>
5918 Stoneridge Mall Road, Pleasanton, California 94588
-------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(925) 467-3000
----------------------------------------------------
(Registrants' telephone number, including area code)
N/A
-------------------------------------------------------------
(former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS
DEBT OFFERING
On September 13, 1999, we completed an underwritten offering of
$600,000,000 aggregate principal amount of our 7% Notes Due 2002 (the "3-Year
Notes"), $400,000,000 aggregate principal amount of our 7-1/4% Notes Due 2004
(the "5-Year Notes") and $500,000,000 aggregate principal amount of our 7-1/2%
Notes Due 2009 (the "10-Year Notes" and, together with the 3-Year Notes, the
5-Year Notes and the 10-Year Notes, the "Securities") under our Registration
Statement on Form S-3, filed with the Securities and Exchange Commission (the
"Commission") on July 30, 1999 (File No. 333-84201), as amended by Amendment No.
1 filed with the Commission on August 10, 1999 (as amended, the "Registration
Statement") (which Registration Statement also constitutes, pursuant to Rule 429
under the Securities Act of 1933, as amended, Post-Effective Amendment No. 1 to
Registration Statement No. 333-65903, as amended), a Prospectus, dated August
10, 1999, and the related Prospectus Supplement, dated September 8, 1999,
relating to our offer and sale of the Securities.
The sale of the Securities was underwritten by Morgan Stanley & Co.
Incorporated, Banc of America Securities LLC, Chase Securities Inc., Salomon
Smith Barney Inc., Credit Suisse First Boston Corporation, Deutsche Bank
Securities Inc., Goldman, Sachs & Co., Lehman Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Utendahl Capital Partners, L.P. pursuant
to an Underwriting Agreement, dated September 8, 1999. The terms and conditions
of the Securities and related matters are set forth in the Indenture, dated as
of September 10, 1997, between us and The Bank of New York, as trustee (the
"Indenture") and, pursuant to Sections 2.2 and 10.4 of the Indenture, the
Officers' Certificate filed as Exhibit 4.2 hereto.
CONSUMMATION OF MERGER WITH RANDALL'S FOOD MARKETS, INC.
Effective September 11, 1999, we completed our acquisition of Randall's
Food Markets, Inc. Randall's Food Markets, Inc. is now a wholly-owned subsidiary
of Safeway. To complete the acquisition, we paid approximately $755 million in
cash and issued approximately 12.7 million shares of our common stock.
<PAGE> 3
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) The following exhibits are filed as part of this Report:
1 Underwriting Agreement, dated September 8, 1999, among Safeway
Inc. and by Morgan Stanley & Co. Incorporated, Banc of America
Securities LLC, Chase Securities Inc., Salomon Smith Barney
Inc., Credit Suisse First Boston Corporation, Deutsche Bank
Securities Inc., Goldman, Sachs & Co., Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Utendahl
Capital Partners, L.P.
4.1 Indenture, dated as of September 10, 1997, between Safeway Inc.
and The Bank of New York, as Trustee (incorporated by reference
to Exhibit 4.1 to the Registrant's Form 8-K dated September 10,
1997).
4.2 Officers' Certificate, dated as of September 13, 1999, pursuant
to Sections 2.2 and 10.4 of the Indenture.
4.3 Form of 7% Note Due 2002.
4.4 Form of 7 1/4% Note Due 2004.
4.5 Form of 7 1/2% Note Due 2009.
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 14, 1999
SAFEWAY INC.
By: /s/ David Weed
---------------------------------
David Weed
Executive Vice President and
Chief Financial Officer
<PAGE> 5
EXHIBIT INDEX
Exhibits
1 Underwriting Agreement, dated September 8, 1999, among Safeway Inc. and
Morgan Stanley & Co. Incorporated, Banc of America Securities LLC, Chase
Securities Inc., Salomon Smith Barney Inc., Credit Suisse First Boston
Corporation, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Utendahl Capital Partners, L.P.
4.1 Indenture, dated as of September 10, 1997, between Safeway Inc. and The
Bank of New York, as Trustee (incorporated by reference to Exhibit 4.1
to the Registrant's Form 8-K dated September 10, 1997).
4.2 Officers' Certificate, dated as of September 13, 1999, pursuant to
Sections 2.2 and 10.4 of the Indenture.
4.3 Form of 7% Note Due 2002.
4.4 Form of 7 1/4% Note Due 2004.
4.5 Form of 7 1/2% Note Due 2009.
<PAGE> 1
EXHIBIT 1
$1,500,000,000
SAFEWAY INC.
$600,000,000 7% NOTES DUE 2002
$400,000,000 7 1/4% NOTES DUE 2004
$500,000,000 7 1/2% NOTES DUE 2009
UNDERWRITING AGREEMENT
September 8, 1999
<PAGE> 2
September 8, 1999
Morgan Stanley & Co. Incorporated
Banc of America Securities LLC
Chase Securities Inc.
Salomon Smith Barney Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Utendahl Capital Partners, L.P.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Safeway Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters") $600,000,000 aggregate principal amount of its 7% Notes Due 2002
(the "Notes Due 2002"), $400,000,000 aggregate principal amount of its 7-1/4%
Notes Due 2004 (the "Notes Due 2004") and $500,000,000 aggregate principal
amount of its 7-1/2% Notes Due 2009 (the "Notes Due 2009") (collectively, the
"Securities") to be issued pursuant to the provisions of an Indenture dated as
of September 10, 1997 (the "Indenture") between the Company and The Bank of New
York, as Trustee (the "Trustee").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (Registration No. 333-84201), including a
prospectus, relating to the Securities and has filed with, or transmitted for
filing to, or shall promptly hereafter file with or transmit for filing to, the
Commission (i) a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Securities pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), and (ii) a related
prospectus dated August 10, 1999 (the "Basic Prospectus"). The registration
statement, as amended, constitutes post-effective amendment No. 1 to the
Company's registration statement (Registration No. 333-65903), as amended. The
term "Registration Statement" means the registration statement (Registration No.
333-84201), as amended to the date of this Agreement. If the Company has filed
or files an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the Prospectus Supplement. The term "preliminary prospectus" means
a preliminary prospectus supplement specifically relating to the Securities,
together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus," and "preliminary prospectus" shall include in each
case the documents
<PAGE> 3
incorporated by reference therein, and the term "Registration Statement" shall
include the documents incorporated or deemed to be incorporated by reference
therein. The terms "supplement," "amendment" and "amend" as used herein shall
include all documents deemed to be incorporated by reference in the Prospectus
that are filed subsequent to the date of the Basic Prospectus by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement (other than any Rule 462
Registration Statement) has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) The Registration Statement, when it became effective, did
not contain and such Registration Statement, as amended or supplemented,
if applicable, will 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, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this Section 1(b) do not apply (A) to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter expressly for use therein or (B)
to that part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) (the "Form T-1") under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the
Trustee.
(c) 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 in all material respects with the Securities Act
and applicable rules and regulations of the Commission thereunder
(except to the extent that any preliminary prospectus supplement did not
so comply in a manner corrected in the Prospectus); and no order
preventing or suspending the use of any preliminary prospectus has been
issued by the Commission.
(d) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and any further documents so
filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all
material respects to the
2
<PAGE> 4
requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder.
(e) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its properties
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in the State of
California and in each other jurisdiction in which such qualification is
required, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(f) Each subsidiary, if any, of the Company which is a
"significant subsidiary" as defined in Rule 405 of Regulation C of the
Securities Act (each a "Significant Subsidiary") has been duly
incorporated and is validly existing as a corporation and in good
standing under the laws of the jurisdiction of its incorporation.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The Indenture 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 (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally and (ii) rights of acceleration,
if any, and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(i) The Securities have been duly authorized by the Company and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and legally binding
obligations of the Company, enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and (ii) rights of acceleration, if any, and
the availability of equitable remedies may be limited by equitable
principles of general applicability.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Securities will not result in any violation of the
Restated Certificate of Incorporation or the By-Laws of the Company or
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 any statute or any order, rule or regulation of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency having
jurisdiction over the Company is required for the performance by the
Company of its obligations under this Agreement, the Indenture and the
Securities,
3
<PAGE> 5
except such as may be required under the Securities Act and the rules
and regulations thereunder, and the Exchange Act and the rules and
regulations thereunder, the Trust Indenture Act and the securities or
Blue Sky laws of the various states in connection with the offer and
sale of the Securities.
(k) The financial statements (together with the related notes
thereto) incorporated by reference in the Registration Statement and the
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of and at the dates indicated and the
results of their operations for the periods specified, except as
otherwise disclosed therein; and except as otherwise stated therein or
in the Registration Statement and the Prospectus, said financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis.
(l) 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.
(m) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending or, to the Company's
knowledge, 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.
(n) The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
2. AGREEMENT TO SELL AND PURCHASE. The Company hereby agrees 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 Securities set forth in Schedule I
hereto opposite its name at a purchase price of 99.277% of the principal amount
of the Notes Due 2002, 99.139% of the principal amount of the Notes Due 2004 and
98.768% of the principal amount of the Notes Due 2009.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Securities as soon after this Agreement has become effective as in your
judgment is advisable. The Company is further advised by you that the Securities
are to be offered to the public initially at 99.627%, in the case of the Notes
Due 2002, 99.739%, in the case of the Notes Due 2004 and 99.418%, in the case of
the Notes Due 2009, of their respective principal amounts (the "Public Offering
Prices") plus, in each case, accrued interest, if any, from September 13, 1999
to the date of payment and delivery, and to certain dealers selected by you at a
price that represents a concession not in
4
<PAGE> 6
excess of .250%, in the case of the Notes Due 2002, .350%, in the case of the
Notes Due 2004, and .400%, in the case of the Note Due 2009, of their respective
principal amounts under the applicable Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of .125%, in the case of the Notes Due 2002, .250%, in the case of the Notes Due
2004, and .250%, in the case of the Notes Due 2009, of their respective
principal amounts to any Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Securities shall be
made in Federal or other immediately available funds to an account designated by
the Company at 7:00 A.M., California time, on September 13, 1999, or at such
other time on the same or such other date, not later than September 22, 1999, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date."
Payment for the Securities shall be made against delivery to you
for the respective accounts of the several Underwriters of global certificates
representing the Securities registered in the name of Cede & Co. with any
transfer taxes payable in connection with the transfer of the Securities to the
Underwriters duly paid.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligation
of the Company to sell the Securities to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Securities are
subject to the following conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading, 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 Prospectus that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and 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 in all material respects with all of
the agreements and satisfied in all material respects all of the
conditions on its part to be performed or satisfied hereunder on or
before the Closing Date (the officer signing and delivering such
certificate may rely upon his or her knowledge as to proceedings
threatened).
5
<PAGE> 7
(c) Latham & Watkins, counsel for the Company, shall have
furnished to you their written opinion dated the Closing Date, in form
and substance satisfactory to you, to the effect that:
(i) the Company has been duly incorporated and is
validly existing and in good standing under the laws of the
State of Delaware with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus;
(ii) this Agreement has been duly authorized, executed
and delivered by the Company;
(iii) the Indenture has been (a) duly qualified under
the Trust Indenture Act and (b) duly authorized, executed and
delivered by the Company and is a legally valid and binding
agreement of the Company, enforceable in accordance with its
terms;
(iv) the Securities have been duly authorized and
executed by the Company and, when duly authenticated by the
Trustee in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will be legally valid and binding
obligations of the Company, enforceable in accordance with their
terms;
(v) the issue and sale of the Securities being delivered
at the Closing Date by the Company and the compliance by the
Company with the provisions of this Agreement and the Indenture
will not result in the violation by the Company of its Restated
Certificate of Incorporation or By-laws or any federal, New York
or California statute, rule or regulation known to such counsel
to be applicable to the Company (other than federal securities
laws, which are specifically addressed elsewhere in such
counsel's opinion, or state securities laws, as to which such
counsel need not express an opinion) or result in a material
breach or violation of any of the terms or provisions of, or
constitute a default under, any of the indentures relating to
the 9.30% Senior Secured Debentures due 2007, 10% Senior Notes
due 2002, 10% Senior Subordinated Notes due 2001, 9.875% Senior
Subordinated Debentures due 2007, 9.65% Senior Subordinated
Debentures due 2004, 6.85% Senior Notes due 2004, 7.00% Senior
Notes due 2007, 7.45% Senior Debentures due 2027, 5-3/4% Notes
Due 2000, 5-7/8% Notes Due 2001, 6.05% Notes Due 2003 or 6-1/2%
Notes Due 2008, or the bank credit agreement between the Company
and a consortium of banks led by Bankers Trust Company;
(vi) no consent, approval, authorization or order of, or
filing with, any federal, New York or California court or
governmental agency or body is required for the issue and sale
of the Securities except such as have been obtained under the
Securities Act and such as may be required under state
securities laws in connection with the purchase and distribution
of the Securities by the Underwriters as to which such counsel
need not express an opinion;
6
<PAGE> 8
(vii) each document incorporated by reference in the
Prospectus (other than the financial statements, schedules and
other financial data included or incorporated by reference
therein, as to which such counsel need express no opinion), when
it became effective or was filed with the Commission, as the
case may be, appeared on its face to comply as to form in all
material respects with the requirements of the Exchange Act and
the applicable rules and regulations of the Commission
thereunder. In passing upon the compliance as to form of each of
such documents, such counsel may assume that the statements made
and incorporated by reference therein are correct and complete;
(viii) the statements in the Prospectus under the
captions "Description of the Securities" and "Description of
Debt Securities" in each case insofar as such statements
constitute summaries of legal matters are accurate in all
material respects and the Securities conform in all material
respects to the description thereof in the Prospectus;
(ix) the Company is not an "investment company" as such
term is defined in the Investment Company Act of 1940, as
amended;
(x) the Registration Statement and the Prospectus (in
each case excluding the documents incorporated by reference
therein, and except for financial statements, schedules and
other financial data included or incorporated by reference
therein, and excluding the Form T-1, as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements for registration statements on
Form S-3 under the Securities Act and the applicable rules and
regulations of the Commission thereunder. In passing upon the
compliance as to form of the Registration Statement and the
Prospectus, such counsel may assume that the statements made and
incorporated by reference therein are correct and complete; and
(xi) the Registration Statement has become effective
under the Securities Act and, to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act and no
proceedings therefor have been initiated by the Commission; and
the Prospectus has been filed in accordance with Rule 424(b)
under the Securities Act.
In addition, such counsel shall state that they have
participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company, and your
representatives, at which the contents of the Registration
Statement and the Prospectus and related matters were discussed
and, although such counsel is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration
Statement and the Prospectus and such counsel has not made any
independent check or verification thereof (except as set forth
in paragraph (viii) above), during the course of such
participation, no facts came to such counsel's
7
<PAGE> 9
attention that caused such counsel to believe that the
Registration Statement (including the documents incorporated by
reference therein), at the time it became effective, contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus
(including the documents incorporated by reference therein), as
of the date of the Prospectus Supplement or as of the Closing
Date, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; it being understood
that such counsel need express no belief with respect to the
financial statements, schedules and other financial data
included in the Registration Statement or the Prospectus or
incorporated by reference therein or with respect to the Form
T-1.
In rendering such opinion, such counsel may state that
they express an opinion only as to federal securities laws, New
York and California law and the General Corporation Law of the
State of Delaware. Such opinion may also be subject to customary
assumptions and limitations, including that opinions on
enforceability may be subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights and
remedies of creditors; (ii) the effect of general principles of
equity, whether enforcement is considered in a proceeding in
equity or law, and the discretion of the court before which any
proceeding therefor may be brought; (iii) the unenforceability
under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution
to a party with respect to a liability where such
indemnification or contribution is contrary to public policy;
(iv) such counsel need not express an opinion concerning the
enforceability of the waiver of rights or defenses contained in
Section 4.4 of the Indenture and (v) such counsel need not
express an opinion with respect to Sections 10.15 and 10.16 of
the Indenture.
(d) Michael C. Ross, Senior Vice President, General Counsel and
Secretary of the Company, shall have furnished to you his written
opinion, dated the Closing Date, in form and substance satisfactory to
you, to the effect that:
(i) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which its
ownership or lease of substantial properties or the conduct of
its business requires such qualification, and in which the
failure to be so qualified and in good standing would have a
material adverse effect upon the Company and its subsidiaries
considered as a whole;
(ii) based solely on certificates from public officials,
each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a
8
<PAGE> 10
corporation in good standing under the laws of its jurisdiction
of incorporation, has corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Prospectus, and to the best of his knowledge
has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws
of each other jurisdiction in which its ownership or lease of
substantial properties or the conduct of its business requires
such qualification, and in which failure to be so qualified and
in good standing would have a material adverse effect upon the
Company and its subsidiaries considered as a whole; and all of
the issued and outstanding capital stock of each such
Significant Subsidiary has been duly authorized and validly
issued and is fully paid and non-assessable, and the capital
stock owned by the Company in each such subsidiary is owned by
the Company free and clear of any mortgage, pledge, lien,
encumbrance, claim or equity;
(iii) to the best of such counsel's knowledge there are
no legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is
the subject, required to be described in the Prospectus, which
are not described as required; and
(iv) the issue and sale of the Securities being
delivered at the Closing Date by the Company and the application
of the net proceeds therefrom as contemplated under "Use of
Proceeds" in the Prospectus, and the compliance by the Company
with all of the provisions of this Agreement will not conflict
with or result in a material breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument relating to indebtedness in excess of
$25 million to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject.
(e) The Underwriters shall have received on the Closing Date an
opinion of Brown & Wood LLP, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in the first clause of
subparagraph (i), subparagraphs (ii), (iii), (iv), (viii) (but only as
to the opinion that the Securities conform in all material respects to
the description thereof in the Prospectus), (x), (xi) and the
penultimate paragraph of paragraph (c) above and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters.
The opinions of Latham & Watkins and Michael C. Ross
described in paragraphs (c) and (d) above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(f) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type
9
<PAGE> 11
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;
provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(g) At the date of this Agreement, the Company shall have
furnished for review by the Underwriters copies of such further
information, certificates and documents as they may reasonably request.
(h) If the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement shall have become effective by 10:00
p.m., Washington, D.C. time, on the date of this Agreement.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and documents
incorporated by reference and to each Underwriter a copy of the
Registration Statement (without exhibits thereto but including documents
incorporated by reference) and to furnish to you in New York City
without charge prior to 5:00 p.m. local time on the business day next
succeeding the date of this Agreement, and during the period mentioned
in paragraph (c) below, as many copies of the Prospectus, any documents
incorporated therein by reference, and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
(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 reasonably object, and to file with the
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters 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 counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith 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 Securities 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.
10
<PAGE> 12
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earnings statement that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(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
substantially similar to the Securities (other than (i) the Securities,
(ii) commercial paper issued in the ordinary course of business or (iii)
the redemption or retirement of any debt securities of Randall's Food
Markets, Inc., a Texas corporation), without the prior written consent
of Morgan Stanley & Co. Incorporated.
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company's counsel and Company's accountants in
connection with the registration and delivery of the Securities under
the Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers
in the quantities hereinabove specified, (ii) the preparation, issuance
and delivery of the Securities; (iii) the fees and disbursements of the
Trustee and its counsel; (iv) all expenses in connection with the
qualification of the Securities for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with any Blue Sky memorandum, (v) the printing and delivery to the
Underwriters of copies of any Blue Sky memorandum; (vi) any fees charged
by rating agencies for the rating of the Securities; (vii) the cost of
printing certificates representing the Securities, (viii) the costs and
expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered by the Company in connection with
the road show, (ix) all other costs and expenses of the Company in
connection with the performance of its obligations hereunder for which
provision is not otherwise made in this Section and (x) any other costs
and expenses of others in connection with the performance of the
Company's obligations hereunder which have been previously approved by
the Company. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale
11
<PAGE> 13
of any of the Securities by them, the costs and expenses of the
Underwriters relating to investor presentations on any "road shows"
undertaken in connection with the marketing of the Shares and any
advertising expenses connected with any offers they may make.
7. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
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;
provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Securities, or any person controlling
such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities.
(b) 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 through you expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
(c) 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 paragraph (a) or (b) of
this Section 7, 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
12
<PAGE> 14
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 paragraph
(a) above, and by the Company, in the case of parties indemnified
pursuant to paragraph (b) above. 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 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.
(d) To the extent the indemnification provided for in paragraph
(a) or (b) of this Section 7 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 Securities 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
13
<PAGE> 15
received by the Company on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the aggregate net
proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the aggregate 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 Securities. The relative fault of the Company on
the one hand and 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' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amounts of Securities they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be
just or equitable if contribution pursuant to this Section 7 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 paragraph (d) of this Section 7. 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 Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Securities 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 Section
7 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.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements 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 Securities.
8. TERMINATION. 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 Closing Date (i) trading generally shall have
been suspended or materially limited on or
14
<PAGE> 16
by, as the case may be, either of the New York Stock Exchange or the National
Association of Securities Dealers, Inc., (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
or California shall have been declared by either Federal or New York State or
California 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 Securities on the terms and in the manner contemplated in the
Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities 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 Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the principal amount of
Securities set forth opposite their respective names in Schedule I bear to the
principal amount of Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities 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 Securities that any Underwriter has agreed to purchase
pursuant to this Agreement be increased pursuant to this Section 9 by an amount
in excess of one-ninth of such principal amount of Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
principal amount of Securities 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 Securities are not made within 36 hours after such default,
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
15
<PAGE> 17
hereunder; provided, however, that no such reimbursement shall be required with
respect to a termination of this Agreement by the Underwriters pursuant to
Section 8 or this Section 9.
10. COUNTERPARTS. 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.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
16
<PAGE> 18
12. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
SAFEWAY INC.
By: /s/ MICHAEL C. ROSS
---------------------------------
Name: Michael C. Ross
Title: Senior Vice President
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
Banc of America Securities LLC
Chase Securities Inc.
Salomon Smith Barney Inc.
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Utendahl Capital Partners, L.P.
Acting severally on behalf of themselves and the several Underwriters named
herein.
By: Morgan Stanley & Co. Incorporated
By: /s/ HAROLD J. HENDERSHOT III
---------------------------------
Name: Harold J. Hendershot III
Title: Vice President
17
<PAGE> 19
SCHEDULE I
<TABLE>
<CAPTION>
Principal Principal Principal
Amount of Amount of Amount of
Notes Due 2002 Notes Due 2004 Notes Due 2009
Underwriter to be Purchased to be Purchased to be Purchased
----------- --------------- --------------- ---------------
<S> <C> <C> <C>
Morgan Stanley & Co. Incorporated $186,000,000 124,000,000 155,000,000
Banc of America Securities LLC 72,000,000 48,000,000 60,000,000
Chase Securities Inc. 72,000,000 48,000,000 60,000,000
Salomon Smith Barney Inc. 72,000,000 48,000,000 60,000,000
Credit Suisse First Boston 36,000,000 24,000,000 30,000,000
Corporation
Deutsche Bank Securities Inc. 36,000,000 24,000,000 30,000,000
Goldman, Sachs & Co. 36,000,000 24,000,000 30,000,000
Lehman Brothers Inc. 36,000,000 24,000,000 30,000,000
Merrill Lynch, Pierce, Fenner & 36,000,000 24,000,000 30,000,000
Smith Incorporated
Utendahl Capital Partners, L.P. 18,000,000 12,000,000 15,000,000
------------ ------------ ------------
Total $600,000,000 $400,000,000 $500,000,000
============ ============ ============
</TABLE>
<PAGE> 1
EXHIBIT 4.2
SAFEWAY INC.
OFFICERS' CERTIFICATE PURSUANT TO
SECTIONS 2.2 AND 10.4 OF THE INDENTURE
David Weed and Melissa C. Plaisance do hereby certify that they
are the Executive Vice President and Chief Financial Officer, and the Senior
Vice President Finance and Public Affairs, respectively, of Safeway Inc., a
Delaware corporation (the "Company"), and do further certify, pursuant to
resolutions of the Board of Directors of the Company adopted on July 20, 1999
(the "Resolutions"), and in accordance with Sections 2.2 and 10.4 of the
Indenture (the "Indenture") dated as of September 10, 1997 between the Company
and The Bank of New York, as trustee (the "Trustee"), as follows:
1. Attached hereto as Annex A is a true and correct copy of a
specimen note (the "Form of 3-Year Note") representing the Company's 7%
Notes Due 2002 (the "3-Year Notes"); attached hereto as Annex B is a
true and correct copy of a specimen note (the "Form of 5-Year Note")
representing the Company's 7 1/4% Notes Due 2004 (the "5-Year Notes");
and attached hereto as Annex C is a true and correct copy of a specimen
note (the "Form of 10-Year Note") representing the Company's 7 1/2%
Notes Due 2009 (the "10-Year Notes"). The Form of 3-Year Note, the Form
of 5-Year Note and the Form of 10-Year Note are herein collectively
referred to as the "Forms of Notes." Each of the 3-Year Notes, the
5-Year Notes and the 10-Year Notes are a separate series of Securities
under the Indenture and are referred to herein collectively as the
"Notes."
2. The Forms of Notes set forth certain of the terms required to
be set forth in this certificate pursuant to Section 2.2 of the
Indenture, and said terms are incorporated herein by reference. The
3-Year Notes were issued at the initial public offering price of 99.627%
of principal amount, the 5-Year Notes were issued at the initial public
offering price of 99.739% of principal amount and the 10-Year Notes were
issued at the initial public offering price of 99.418% of principal
amount.
3. In addition to the covenants set forth in Article IV of the
Indenture, each of the 3-Year Notes, the 5-Year Notes and the 10-Year
Notes shall include the following additional covenants, and such
additional covenants shall be subject to covenant defeasance pursuant to
Section 8.4 of the Indenture:
"Section 4.7 Limitation on Liens.
The Company shall not, nor shall it permit any of its
Subsidiaries to, create, incur, or permit to exist, any Lien on any of
their respective properties or assets, whether now owned or hereafter
acquired, or upon any income or profits therefrom, in order to secure
any Indebtedness of the Company, without effectively providing that each
series of Notes shall be equally and ratably secured until such time as
such Indebtedness is no longer secured by such Lien, except: (i) Liens
existing as of September 13, 1999 (the "Closing Date"); (ii) Liens
granted after the Closing Date on any assets or properties of the
Company or any of its Subsidiaries securing Indebtedness of the Company
created in favor of the Holders of Notes of such series; (iii) Liens
securing Indebtedness of the Company which is incurred to extend, renew
or refinance Indebtedness which is secured by Liens permitted to be
incurred under the Indenture; provided that such Liens do not extend to
or cover any property or assets of the Company or any of its
Subsidiaries other than the property or assets securing the Indebtedness
being refinanced and that the principal amount of such Indebtedness does
not exceed the
<PAGE> 2
principal amount of the Indebtedness being refinanced; (iv) Permitted
Liens; and (v) Liens created in substitution of or as replacements for
any Liens permitted by the preceding clauses (i) through (iv), provided
that, based on a good faith determination of an officer of the Company,
the property or asset encumbered under any such substitute or
replacement Lien is substantially similar in nature to the property or
asset encumbered by the otherwise permitted Lien which is being
replaced.
Notwithstanding the foregoing, the Company and any Subsidiary of
the Company may, without securing any series of Notes, create, incur or
permit to exist Liens which would otherwise be subject to the
restrictions set forth in the preceding paragraph, if after giving
effect thereto and at the time of determination, Exempted Debt does not
exceed the greater of (i) 10% of Consolidated Net Tangible Assets or
(ii) $350,000,000.
Section 4.8 Limitation on Sale and Lease-Back Transactions.
The Company shall not, nor shall it permit any of its
Subsidiaries to, enter into any sale and lease-back transaction for the
sale and leasing back of any property or asset, whether now owned or
hereafter acquired, of the Company or any of its Subsidiaries (except
such transactions (i) entered into prior to the Closing Date or (ii) for
the sale and leasing back of any property or asset by a Subsidiary of
the Company to the Company or (iii) involving leases for less than three
years or (iv) in which the lease for the property or asset is entered
into within 120 days after the later of the date of acquisition,
completion of construction or commencement of full operations of such
property or asset) unless (a) the Company or such Subsidiary would be
entitled under Section 4.7 to create, incur or permit to exist a Lien on
the assets to be leased in an amount at least equal to the Attributable
Liens in respect of such transaction without equally and ratably
securing the Notes of any series or (b) the proceeds of the sale of the
assets to be leased are at least equal to their fair market value and
the proceeds are applied to the purchase or acquisition (or in the case
of real property, the construction) of assets or to the repayment of
Indebtedness of the Company or a Subsidiary of the Company which by its
terms matures not earlier than one year after the date of such
repayment."
4. In addition to the Events of Default set forth in Section 6.1
of the Indenture, each of the 3-Year Notes, the 5-Year Notes and the
10-Year Notes shall include the following additional Event of Default,
which shall be deemed an Event of Default under Section 6.1(g) of the
Indenture:
"acceleration of $150,000,000 or more, individually or in the
aggregate, in principal amount of Indebtedness of the Company under the
terms of the instrument under which such Indebtedness is issued or
secured, except as a result of compliance with applicable laws, orders
or decrees, if such Indebtedness shall not have been discharged or such
acceleration is not annulled within 10 days after written notice."
5. In addition to the definitions set forth in Article I of the
Indenture, each of the 3-Year Notes, the 5-Year Notes and 10-Year Notes
shall include the following additional definitions, which, in the event
of a conflict with the definition of terms in the Indenture, shall
control:
"Attributable Liens" means in connection with a sale and
lease-back transaction the lesser of (a) the fair market value of the
assets subject to such transaction and (b) the present
2
<PAGE> 3
value (discounted at a rate per annum equal to the average interest
borne by all outstanding Securities issued under the Indenture
determined on a weighted average basis and compounded semi-annually) of
the obligations of the lessee for rental payments during the term of the
related lease.
"Bank Credit Agreement" means the Credit Agreement dated as of
April 8, 1997 among the Company, The Vons Companies, Inc. and Canada
Safeway Limited, as borrowers, Bankers Trust Company, as administrative
agent, The Chase Manhattan Bank, as syndication agent, The Bank of Nova
Scotia and Bank of America National Trust and Savings Association, as
documentation agents, and the other lenders which are parties thereto,
as amended and as such agreement may be amended (including any
amendment, restatement and successors thereof), supplemented or
otherwise modified from time to time, including any increase in the
principal amount of the obligations thereunder.
"Capital Lease" means any Indebtedness represented by a lease
obligation of a person incurred with respect to real property or
equipment acquired or leased by such person and used in its business
that is required to be recorded as a capital lease in accordance with
GAAP.
"Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Subsidiaries (less applicable
depreciation, amortization and other valuation reserves) after deducting
therefrom (i) all current liabilities of the Company and its
Subsidiaries and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expenses and other like intangibles,
determined on a consolidated basis in accordance with GAAP.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against
fluctuations in currency values.
"Exempted Debt" means the sum of the following as of the date of
determination: (i) Indebtedness of the Company incurred after the
Closing Date and secured by Liens not otherwise permitted by the first
sentence under Section 4.7, and (ii) Attributable Liens of the Company
and its Subsidiaries in respect of sale and lease-back transactions
entered into after the Closing Date, other than sale and lease-back
transactions permitted by the limitation on sale and lease-back
transactions set forth under Section 4.8. For purposes of determining
whether or not a sale and lease-back transaction is "permitted" by
Section 4.8, the last paragraph under Section 4.7 (creating an exception
for Exempted Debt) will be disregarded.
"Indebtedness" of any person means, without duplication, any
indebtedness, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements with respect thereto) or
representing the balance deferred and unpaid of the purchase price of
any property (including pursuant to Capital Leases), except any such
balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness would appear as a liability
upon a balance sheet of such person prepared on a consolidated basis in
accordance with GAAP (but does not include contingent liabilities which
appear only in a footnote to a balance sheet), and shall also include,
to the extent not otherwise included, the guaranty of items which would
be included within this definition.
3
<PAGE> 4
"Interest Swap Obligations" means the obligations of any person
pursuant to any interest rate swap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect
such person or any of its Subsidiaries against fluctuations in interest
rates.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; provided that, as to any such arrangement in corporate form, such
corporation shall not, as to any person of which such corporation is a
Subsidiary, be considered to be a Joint Venture to which such person is
a party.
"Lien" means any lien, security interest, charge or encumbrance
of any kind (including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement to give
any security interest).
"Permitted Liens" means (i) Liens securing Indebtedness of the
Company under the Bank Credit Agreement and any initial or subsequent
renewal, extension, refinancing, replacement or refunding thereof; (ii)
Liens on accounts receivable, merchandise inventory, equipment, and
patents, trademarks, trade names and other intangibles, securing
Indebtedness of the Company; (iii) Liens on any asset of the Company,
any Subsidiary of the Company, or any Joint Venture to which the Company
or any of its Subsidiaries is a party, created solely to secure
obligations incurred to finance the refurbishment, improvement or
construction of such asset, which obligations are incurred no later than
24 months after completion of such refurbishment, improvement or
construction, and all renewals, extensions, refinancings, replacements
or refundings of such obligations; (iv)(a) Liens given to secure the
payment of the purchase price incurred in connection with the
acquisition (including acquisition through merger or consolidation) of
property (including shares of stock), including Capital Lease
transactions in connection with any such acquisition, and (b) Liens
existing on property at the time of acquisition thereof or at the time
of acquisition by the Company or a Subsidiary of the Company of any
person then owning such property whether or not such existing Liens were
given to secure the payment of the purchase price of the property to
which they attach; provided that, with respect to clause (a), the Liens
shall be given within 24 months after such acquisition and shall attach
solely to the property acquired or purchased and any improvements then
or thereafter placed thereon; (v) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (vi) Liens upon
specific items of inventory or other goods and proceeds of any person
securing such person's obligations in respect of bankers' acceptances
issued or created for the account of such person to facilitate the
purchase, shipment or storage of such inventory or other goods; (vii)
Liens securing reimbursement obligations with respect to letters of
credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (viii) Liens on
key-man life insurance policies granted to secure Indebtedness of the
Company against the cash surrender value thereof; (ix) Liens encumbering
customary initial deposits and margin deposits and other Liens in the
ordinary course of business, in each case securing Indebtedness of the
Company under Interest Swap Obligations and Currency Agreements and
forward contract, option, futures contracts, futures options or similar
agreements or arrangements designed to protect the Company or any of its
Subsidiaries from fluctuations in interest rates, currencies or the
price of commodities; (x) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary
course of business; and (xi) Liens in favor of the Company or any
Subsidiary of the Company.
4
<PAGE> 5
6. Each of the undersigned is authorized to approve the form,
terms and conditions of the Notes pursuant to the Resolutions.
7. Attached hereto as Annex D is a true and correct copy of the
Resolutions.
8. The Notes shall be issued as Global Securities (subject to
exchange for definitive certificated Notes under the circumstances
provided in the Indenture) and The Depository Trust Company shall be
Depository for the Notes.
9. Attached hereto as Annex E are true and correct copies of the
letter addressed to the Trustee entitling the Trustee to rely on the
Opinion of Counsel attached thereto, which Opinion relates to the
Securities and complies with Section 10.4(b) of the Indenture.
10. Each of the undersigned has reviewed the provisions of the
Indenture, including the covenants and conditions precedent pertaining
to the issuance of the Notes.
11. In connection with this certificate each of the undersigned
has examined documents, corporate records and certificates and has
spoken with other officers of the Company.
12. Each of the undersigned has made such examination and
investigation as is necessary to enable the undersigned to express an
informed opinion as to whether or not the covenants and conditions
precedent of the Indenture pertaining to the issuance of the Notes have
been satisfied.
13. In our opinion all of the covenants and conditions precedent
provided for in the Indenture for the issuance of the Notes have been
satisfied.
Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the Indenture or the Notes, as the
case may be.
5
<PAGE> 6
IN WITNESS WHEREOF, each of the undersigned officers has
executed this certificate this 13th day of September 1999.
/s/ DAVID WEED
------------------------------------
Name: David Weed
Title: Executive Vice President and
Chief Financial Officer
/s/ MELISSA C. PLAISANCE
------------------------------------
Name: Melissa C. Plaisance
Title: Senior Vice President
<PAGE> 1
EXHIBIT 4.3
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE THEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SAFEWAY INC.
7% Note Due 2002
No. R- $
CUSIP No. 786514 AX7
SAFEWAY INC., a Delaware corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received promises to pay to
,or registered assigns,
the principal sum of
DOLLARS
on September 15, 2002 and to pay interest thereon from September 13, 1999, or
the most recent interest payment date to which interest has been paid or
provided for, as the case may be, payable on March 15 and September 15 of each
year, commencing March 15, 2000, at the rate of 7% per annum, until the
principal hereof is paid or made available for payment, and (to the extent that
the payment of such interest is permitted by law) to pay interest at the rate
per annum borne by this Security on any overdue principal and on any overdue
installment of interest until paid. The interest so payable, and punctually paid
or duly provided for, on any interest payment date will be paid to the person in
whose name this Security (or one or more predecessor Securities) is registered
at the close of business on the regular record date for such
1
<PAGE> 2
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such interest payment date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such regular record date and may either be paid to the
person in whose name this Security (or one or more predecessor Securities) is
registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Company, notice whereof shall be
given to the Trustee and the Holders not less than 10 days prior to such special
record date, or be paid at any time in any other lawful manner. Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.
Principal of and interest on the Securities will be payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, the transfer of the
Securities will be registrable, the Securities may be presented for exchange,
and notices and demands to or upon the Company in respect of this Security and
the Indenture may be served, at the office or agency of the Company maintained
for such purpose (which initially will be the Corporate Trust Office of the
Trustee located at 101 Barclay Street, Floor 21W, New York, New York 10286,
Attention: Corporate Trust Administration); provided that, unless all of the
outstanding Securities are Global Securities, the Company will at all times
maintain an office or agency for such purposes in the Borough of Manhattan, The
City of New York; and provided, further, that, except as provided in the next
sentence, payment of interest may, at the option of the Company, be made by
check mailed to the address of the person entitled thereto. If this Security is
a Global Security, the interest payable on this Security will be paid to Cede &
Co., the nominee of the Depositary, or its registered assigns as the registered
owner of this Security, by wire transfer of immediately available funds on each
of the applicable interest payment dates.
Reference is hereby made to the further provisions of this
Security which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
Date: September , 1999
TRUSTEE'S CERTIFICATE SAFEWAY INC.
OF AUTHENTICATION
This is one of the 7% Notes due September 15, 2002 described in the
within-mentioned Indenture.
THE BANK OF NEW YORK
BY BY BY
AUTHORIZED SIGNATORY ASSISTANT SENIOR VICE PRESIDENT
SECRETARY
3
<PAGE> 4
SAFEWAY INC.
7% Note Due 2002
1. General.
This Security is one of a duly authorized series of securities of the
Company issued and to be issued under an Indenture, dated as of September 10,
1997, as amended, modified or supplemented from time to time (the "Indenture"),
between the Company and The Bank of New York, as Trustee (the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited (except as
otherwise provided in the Indenture) in aggregate principal amount to
$600,000,000 (herein called the "Securities"). All terms used but not defined in
this Security shall have the meanings assigned to them in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay principal of and interest on this Security
at the times, places and rate, and in the coin or currency, herein prescribed.
2. Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by the Officers' Certificate dated September
13, 1999 delivered pursuant thereto and the TIA. The Securities are subject to
all such terms, and the Securityholders are referred to the Indenture and said
Act for a statement of them.
3. Sinking Fund.
The Securities are not subject to any sinking fund and the Securities
are not subject to redemption or repurchase by the Company at the option of the
Holders.
4. Redemption.
The Securities are not redeemable prior to maturity.
5. Denominations; Transfer; Exchange.
This Security is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer, or the exchange for an equal principal
amount, of this Security is registrable with the Registrar upon surrender of
this Security for registration of transfer at the office or agency of the
Registrar.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may, subject to certain exceptions, require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
6. Persons Deemed Owners.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder in whose name this Security is registered as the owner thereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
4
<PAGE> 5
7. Unclaimed Money.
The Trustee and any Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
8. Defeasance Prior to Maturity.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Securities or (ii) certain covenants and Events of Default
with respect to the Securities, in each case upon compliance with certain
conditions set forth therein.
9. Amendment; Supplement; Waiver.
Subject to certain limitations described in the Indenture, the Indenture
permits the Company and the Trustee to enter into a supplemental indenture with
the written consent of the Holders of at least a majority in principal amount of
the outstanding Securities (including consents obtained in connection with a
tender offer or exchange offer for the Securities), for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Securityholders. Subject to certain limitations described in the
Indenture, the Holders of at least a majority in principal amount of the
outstanding Securities by notice to the Trustee (including consents obtained in
connection with a tender offer or exchange offer for the Securities) may waive
compliance by the Company with any provision of the Indenture or the Securities.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
10. Restrictive Covenants.
The Indenture imposes certain limitations on the Company's and its
Subsidiaries' ability to create or incur certain Liens on any of their
respective properties or assets and to enter into certain sale and lease-back
transactions and on the Company's ability to engage in mergers or consolidations
or the conveyance, transfer or lease of all or substantially all of its
properties and assets. These limitations are subject to a number of important
qualifications and exceptions and reference is made to the Indenture for a
description thereof.
11. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the principal of
the Securities may be declared (or, in certain cases, shall ipso facto become)
due and payable in the manner and with the effect provided in the Indenture.
12. Proceedings.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding,
judicial or otherwise, with respect to the Indenture or for the appointment of a
receiver or trustee, or for any other remedy under the Indenture, unless such
Holder shall have previously given the Trustee written notice of a continuing
Event of Default with respect to the Securities and unless also the Holders of
at least a majority in principal amount of the Securities at the time
outstanding shall have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceedings as trustee, and the Trustee shall
not have received from the Holders of a majority in principal amount of
Securities at the time outstanding a direction inconsistent with such request,
and shall have failed to institute such proceeding, within 60 days. The
foregoing shall not apply
5
<PAGE> 6
to any suit instituted by the Holder of this Security for the enforcement of any
payment of the principal hereof or any interest hereon on or after the
respective due dates expressed herein.
13. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may deal with the Company or an Affiliate of the Company with the same
rights it would have if it were not Trustee.
14. No Recourse Against Others.
A past, present or future director, officer, employee, shareholder or
incorporator, as such, of the Company or any successor corporation shall not
have any liability for any obligations of the Company under this Security or the
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration of issuance of the Securities.
15. Governing Law.
The internal laws of the State of New York shall govern the Indenture
and the Securities.
6
<PAGE> 7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - _____ Custodian ______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------
| |
________________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
________________________________________________________________________________
this Security and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________, Attorney,
to transfer this Security on the books of the Trustee, with full power of
substitution in the premises.
Dated:_____________________ _______________________________________
____________________________________
Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of
this Security in every particular,
without alteration or enlargement or
any change whatsoever.
7
<PAGE> 1
EXHIBIT 4.4
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE THEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SAFEWAY INC.
7 1/4% Note Due 2004
No. R- $
CUSIP No. 786514 AY5
SAFEWAY INC., a Delaware corporation (the "Company," which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received promises to pay to
, or registered assigns,
the principal sum of
DOLLARS
on September 15, 2004 and to pay interest thereon from September 13, 1999, or
the most recent interest payment date to which interest has been paid or
provided for, as the case may be, payable on March 15 and September 15 of each
year, commencing March 15, 2000, at the rate of 7 1/4% per annum, until the
principal hereof is paid or made available for payment, and (to the extent that
the payment of such interest is permitted by law) to pay interest at the rate
per annum borne by this Security on any overdue principal and on any overdue
installment of interest until paid. The interest so payable, and punctually paid
or duly provided for, on any interest payment date will be paid to the person in
whose name this Security (or one or more predecessor Securities) is registered
at the close of business on the regular record date for such
1
<PAGE> 2
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such interest payment date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such regular record date and may either be paid to the
person in whose name this Security (or one or more predecessor Securities) is
registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Company, notice whereof shall be
given to the Trustee and the Holders not less than 10 days prior to such special
record date, or be paid at any time in any other lawful manner. Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.
Principal of and interest on the Securities will be payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, the transfer of the
Securities will be registrable, the Securities may be presented for exchange,
and notices and demands to or upon the Company in respect of this Security and
the Indenture may be served, at the office or agency of the Company maintained
for such purpose (which initially will be the Corporate Trust Office of the
Trustee located at 101 Barclay Street, Floor 21W, New York, New York 10286,
Attention: Corporate Trust Administration); provided that, unless all of the
outstanding Securities are Global Securities, the Company will at all times
maintain an office or agency for such purposes in the Borough of Manhattan, The
City of New York; and provided, further, that, except as provided in the next
sentence, payment of interest may, at the option of the Company, be made by
check mailed to the address of the person entitled thereto. If this Security is
a Global Security, the interest payable on this Security will be paid to Cede &
Co., the nominee of the Depositary, or its registered assigns as the registered
owner of this Security, by wire transfer of immediately available funds on each
of the applicable interest payment dates.
Reference is hereby made to the further provisions of this
Security which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
Date: September , 1999
TRUSTEE'S CERTIFICATE SAFEWAY INC.
OF AUTHENTICATION
This is one of the 7 1/4% Notes due September 15, 2004 described in the
within-mentioned Indenture.
THE BANK OF NEW YORK
BY BY BY
AUTHORIZED SIGNATORY ASSISTANT SENIOR VICE PRESIDENT
SECRETARY
3
<PAGE> 4
SAFEWAY INC.
7 1/4% Note Due 2004
1. General.
This Security is one of a duly authorized series of securities of the
Company issued and to be issued under an Indenture, dated as of September 10,
1997, as amended, modified or supplemented from time to time (the "Indenture"),
between the Company and The Bank of New York, as Trustee (the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited (except as
otherwise provided in the Indenture) in aggregate principal amount to
$400,000,000 (herein called the "Securities"). All terms used but not defined in
this Security shall have the meanings assigned to them in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay principal of and interest on this Security
at the times, places and rate, and in the coin or currency, herein prescribed.
2. Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by the Officers' Certificate dated September
13, 1999 delivered pursuant thereto and the TIA. The Securities are subject to
all such terms, and the Securityholders are referred to the Indenture and said
Act for a statement of them.
3. Sinking Fund.
The Securities are not subject to any sinking fund and the Securities
are not subject to redemption or repurchase by the Company at the option of the
Holders.
4. Redemption.
The Securities are redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of the Securities to be redeemed or (ii) as determined by
an Independent Investment Banker, the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including any portion
of such payments of interest accrued as of the date of redemption) discounted to
the redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate plus 12.5 basis points,
plus, in each case, accrued and unpaid interest thereon to the date of
redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date: (i)
the yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month); or
(ii) if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the
4
<PAGE> 5
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date. The Adjusted
Treasury Rate shall be calculated on the third Business Day preceding the
redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities ("Remaining Life").
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for the applicable redemption date, after excluding
the highest and lowest Reference Treasury Dealer Quotations, or (2) if the
Independent Investment Banker obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means (i) each of Morgan Stanley & Co.
Incorporated, Banc of America Securities LLC, Chase Securities Inc. and Salomon
Smith Barney Inc. and their respective successors; provided, however, that if
any of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer and (ii) any other Primary
Treasury Dealer selected by the Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of the Securities to be
redeemed.
5. Denominations; Transfer; Exchange.
This Security is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer, or the exchange for an equal principal
amount, of this Security is registrable with the Registrar upon surrender of
this Security for registration of transfer at the office or agency of the
Registrar.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may, subject to certain exceptions, require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
6. Persons Deemed Owners.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder in whose name this Security is registered as the owner thereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
5
<PAGE> 6
7. Unclaimed Money.
The Trustee and any Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
8. Defeasance Prior to Maturity.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Securities or (ii) certain covenants and Events of Default
with respect to the Securities, in each case upon compliance with certain
conditions set forth therein.
9. Amendment; Supplement; Waiver.
Subject to certain limitations described in the Indenture, the Indenture
permits the Company and the Trustee to enter into a supplemental indenture with
the written consent of the Holders of at least a majority in principal amount of
the outstanding Securities (including consents obtained in connection with a
tender offer or exchange offer for the Securities), for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Securityholders. Subject to certain limitations described in the
Indenture, the Holders of at least a majority in principal amount of the
outstanding Securities by notice to the Trustee (including consents obtained in
connection with a tender offer or exchange offer for the Securities) may waive
compliance by the Company with any provision of the Indenture or the Securities.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
10. Restrictive Covenants.
The Indenture imposes certain limitations on the Company's and its
Subsidiaries' ability to create or incur certain Liens on any of their
respective properties or assets and to enter into certain sale and lease-back
transactions and on the Company's ability to engage in mergers or consolidations
or the conveyance, transfer or lease of all or substantially all of its
properties and assets. These limitations are subject to a number of important
qualifications and exceptions and reference is made to the Indenture for a
description thereof.
11. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the principal of
the Securities may be declared (or, in certain cases, shall ipso facto become)
due and payable in the manner and with the effect provided in the Indenture.
12. Proceedings.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding,
judicial or otherwise, with respect to the Indenture or for the appointment of a
receiver or trustee, or for any other remedy under the Indenture, unless such
Holder shall have previously given the Trustee written notice of a continuing
Event of Default with respect to the Securities and unless also the Holders of
at least a majority in principal amount of the Securities at the time
outstanding shall have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceedings as trustee, and the Trustee shall
not have received from the Holders of a majority in principal amount of
Securities at the time outstanding a direction inconsistent with such request,
and shall have failed to institute such proceeding, within 60 days. The
foregoing shall not apply
6
<PAGE> 7
to any suit instituted by the Holder of this Security for the enforcement of any
payment of the principal hereof or any interest hereon on or after the
respective due dates expressed herein.
13. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may deal with the Company or an Affiliate of the Company with the same
rights it would have if it were not Trustee.
14. No Recourse Against Others.
A past, present or future director, officer, employee, shareholder or
incorporator, as such, of the Company or any successor corporation shall not
have any liability for any obligations of the Company under this Security or the
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration of issuance of the Securities.
15. Governing Law.
The internal laws of the State of New York shall govern the Indenture
and the Securities.
7
<PAGE> 8
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian ______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------
| |
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
this Security and all rights thereunder hereby irrevocably constituting and
appointing
___________________________________________________________________, Attorney,
to transfer this Security on the books of the Trustee, with full power of
substitution in the premises.
Dated:_____________________ _______________________________________
____________________________________
Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of
this Security in every particular,
without alteration or enlargement or
any change whatsoever.
8
<PAGE> 1
EXHIBIT 4.5
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE THEREOF. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO
A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
SAFEWAY INC.
7 1/2% Note Due 2009
No. R- $
CUSIP No. 786514 AZ2
SAFEWAY INC., a Delaware corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received promises to pay to
, or registered assigns,
the principal sum of
DOLLARS
on September 15, 2009 and to pay interest thereon from September 13, 1999, or
the most recent interest payment date to which interest has been paid or
provided for, as the case may be, payable on March 15 and September 15 of each
year, commencing March 15, 2000, at the rate of 7 1/2% per annum, until the
principal hereof is paid or made available for payment, and (to the extent that
the payment of such interest is permitted by law) to pay interest at the rate
per annum borne by this Security on any overdue principal and on any overdue
installment of interest until paid. The interest so payable, and punctually paid
or duly provided for, on any interest payment date will be paid to the person in
whose name this Security (or one or more predecessor Securities) is registered
at the close of business on the regular record date for such
1
<PAGE> 2
interest, which shall be the March 1 or September 1 (whether or not a Business
Day), as the case may be, next preceding such interest payment date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such regular record date and may either be paid to the
person in whose name this Security (or one or more predecessor Securities) is
registered at the close of business on a special record date for the payment of
such defaulted interest to be fixed by the Company, notice whereof shall be
given to the Trustee and the Holders not less than 10 days prior to such special
record date, or be paid at any time in any other lawful manner. Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.
Principal of and interest on the Securities will be payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts, the transfer of the
Securities will be registrable, the Securities may be presented for exchange,
and notices and demands to or upon the Company in respect of this Security and
the Indenture may be served, at the office or agency of the Company maintained
for such purpose (which initially will be the Corporate Trust Office of the
Trustee located at 101 Barclay Street, Floor 21W, New York, New York 10286,
Attention: Corporate Trust Administration); provided that, unless all of the
outstanding Securities are Global Securities, the Company will at all times
maintain an office or agency for such purposes in the Borough of Manhattan, The
City of New York; and provided, further, that, except as provided in the next
sentence, payment of interest may, at the option of the Company, be made by
check mailed to the address of the person entitled thereto. If this Security is
a Global Security, the interest payable on this Security will be paid to Cede &
Co., the nominee of the Depositary, or its registered assigns as the registered
owner of this Security, by wire transfer of immediately available funds on each
of the applicable interest payment dates.
Reference is hereby made to the further provisions of this
Security which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
2
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
Date: September , 1999
TRUSTEE'S CERTIFICATE SAFEWAY INC.
OF AUTHENTICATION
This is one of the 7 1/2% Notes due September 15, 2009 described in the
within-mentioned Indenture.
THE BANK OF NEW YORK
BY BY BY
AUTHORIZED SIGNATORY ASSISTANT SENIOR VICE PRESIDENT
SECRETARY
3
<PAGE> 4
SAFEWAY INC.
7 1/2% Note Due 2009
1. General.
This Security is one of a duly authorized series of securities of the
Company issued and to be issued under an Indenture, dated as of September 10,
1997, as amended, modified or supplemented from time to time (the "Indenture"),
between the Company and The Bank of New York, as Trustee (the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof, limited (except as
otherwise provided in the Indenture) in aggregate principal amount to
$500,000,000 (herein called the "Securities"). All terms used but not defined in
this Security shall have the meanings assigned to them in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay principal of and interest on this Security
at the times, places and rate, and in the coin or currency, herein prescribed.
2. Indenture.
The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by the Officers' Certificate dated September
13, 1999 delivered pursuant thereto and the TIA. The Securities are subject to
all such terms, and the Securityholders are referred to the Indenture and said
Act for a statement of them.
3. Sinking Fund.
The Securities are not subject to any sinking fund and the Securities
are not subject to redemption or repurchase by the Company at the option of the
Holders.
4. Redemption.
The Securities are redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of the Securities to be redeemed or (ii) as determined by
an Independent Investment Banker, the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including any portion
of such payments of interest accrued as of the date of redemption) discounted to
the redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate plus 25 basis points, plus,
in each case, accrued and unpaid interest thereon to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date: (i)
the yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication which is published weekly by
the Board of Governors of the Federal Reserve System and which establishes
yields on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Adjusted Treasury Rate shall be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month); or
(ii) if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the
4
<PAGE> 5
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date. The Adjusted
Treasury Rate shall be calculated on the third Business Day preceding the
redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Securities to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities ("Remaining Life").
"Comparable Treasury Price" means (1) the average of five Reference
Treasury Dealer Quotations for the applicable redemption date, after excluding
the highest and lowest Reference Treasury Dealer Quotations, or (2) if the
Independent Investment Banker obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Trustee after consultation with the Company.
"Reference Treasury Dealer" means (i) each of Morgan Stanley & Co.
Incorporated, Banc of America Securities LLC, Chase Securities Inc. and Salomon
Smith Barney Inc. and their respective successors; provided, however, that if
any of the foregoing shall cease to be a primary U.S. Government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer and (ii) any other Primary
Treasury Dealer selected by the Trustee after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
Business Day preceding such redemption date.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of the Securities to be
redeemed.
5. Denominations; Transfer; Exchange.
This Security is issuable only in registered form without coupons in
minimum denominations of U.S. $1,000 and integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer, or the exchange for an equal principal
amount, of this Security is registrable with the Registrar upon surrender of
this Security for registration of transfer at the office or agency of the
Registrar.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may, subject to certain exceptions, require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
6. Persons Deemed Owners.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder in whose name this Security is registered as the owner thereof for
all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
5
<PAGE> 6
7. Unclaimed Money.
The Trustee and any Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal and interest that remains
unclaimed for two years. After that, Securityholders entitled to the money must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.
8. Defeasance Prior to Maturity.
The Indenture contains provisions for defeasance of (i) the entire
indebtedness of the Securities or (ii) certain covenants and Events of Default
with respect to the Securities, in each case upon compliance with certain
conditions set forth therein.
9. Amendment; Supplement; Waiver.
Subject to certain limitations described in the Indenture, the Indenture
permits the Company and the Trustee to enter into a supplemental indenture with
the written consent of the Holders of at least a majority in principal amount of
the outstanding Securities (including consents obtained in connection with a
tender offer or exchange offer for the Securities), for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Securityholders. Subject to certain limitations described in the
Indenture, the Holders of at least a majority in principal amount of the
outstanding Securities by notice to the Trustee (including consents obtained in
connection with a tender offer or exchange offer for the Securities) may waive
compliance by the Company with any provision of the Indenture or the Securities.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
10. Restrictive Covenants.
The Indenture imposes certain limitations on the Company's and its
Subsidiaries' ability to create or incur certain Liens on any of their
respective properties or assets and to enter into certain sale and lease-back
transactions and on the Company's ability to engage in mergers or consolidations
or the conveyance, transfer or lease of all or substantially all of its
properties and assets. These limitations are subject to a number of important
qualifications and exceptions and reference is made to the Indenture for a
description thereof.
11. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the principal of
the Securities may be declared (or, in certain cases, shall ipso facto become)
due and payable in the manner and with the effect provided in the Indenture.
12. Proceedings.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding,
judicial or otherwise, with respect to the Indenture or for the appointment of a
receiver or trustee, or for any other remedy under the Indenture, unless such
Holder shall have previously given the Trustee written notice of a continuing
Event of Default with respect to the Securities and unless also the Holders of
at least a majority in principal amount of the Securities at the time
outstanding shall have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceedings as trustee, and the Trustee shall
not have received from the Holders of a majority in principal amount of
Securities at the time outstanding a direction inconsistent with such request,
and shall have failed to institute such proceeding, within 60 days. The
foregoing shall not apply
6
<PAGE> 7
to any suit instituted by the Holder of this Security for the enforcement of any
payment of the principal hereof or any interest hereon on or after the
respective due dates expressed herein.
13. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may deal with the Company or an Affiliate of the Company with the same
rights it would have if it were not Trustee.
14. No Recourse Against Others.
A past, present or future director, officer, employee, shareholder or
incorporator, as such, of the Company or any successor corporation shall not
have any liability for any obligations of the Company under this Security or the
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration of issuance of the Securities.
15. Governing Law.
The internal laws of the State of New York shall govern the Indenture
and the Securities.
7
<PAGE> 8
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Security, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian ______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act_____________________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------
| |
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
this Security and all rights thereunder hereby irrevocably constituting and
appointing
____________________________________________________________________, Attorney,
to transfer this Security on the books of the Trustee, with full power of
substitution in the premises.
Dated:_____________________ _______________________________________
____________________________________
Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of
this Security in every particular,
without alteration or enlargement or
any change whatsoever.
8
