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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) October 2, 1995
SUPERVALU INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-5418 41-0617000
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
11840 Valley View Road
Eden Prairie, Minnesota 55344
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 828-4000
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On October 2, 1995, the Registrant entered into a Distribution
Agreement dated October 2, 1995 between the Registrant and Goldman, Sachs & Co.,
BT Securities Corporation, Citicorp Securities, Inc. and J.P. Morgan Securities
Inc. pursuant to which the Registrant may offer from time to time its Medium-
Term Notes, Series B (the "Notes") at an aggregate initial offering price not to
exceed $400,000,000.
The Notes are the subject of a Registration Statement on Form S-3
(File No. 33-56415) filed by the Registrant with the Securities and Exchange
Commission.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
1.1 Distribution Agreement dated October 2, 1995 between the
Registrant and Goldman, Sachs & Co., BT Securities Corporation,
Citicorp Securities, Inc. and J.P. Morgan Securities Inc.,
including the form of Terms Agreement, relating to the
Registrant's Medium-Term Notes, Series B (the "Notes").
4.1 Third Supplemental Indenture dated as of September 1, 1995
between the Registrant and Bankers Trust Company, as Trustee, to
Indenture dated as of July 1, 1987 between the Registrant and
Bankers Trust Company, as Trustee.
4.2 Officers' Certificate and Authentication Order dated October 2,
1995 relating to the Notes, including the forms of Notes.
10.1 Credit Agreement dated as of May 26, 1995 among the Company,
the Banks named therein and Citibank, N.A., as Agent.
12.1 Ratio of Earnings to Fixed Charges.
99.1 Press Release of the Registrant dated September 21, 1995.
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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: October 2, 1995
SUPERVALU INC.
By: /s/ Kim M. Erickson
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Kim M. Erickson
Vice President and Treasurer
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EXHIBIT INDEX
1.1 Distribution Agreement dated October 2, 1995 between the Registrant and
Goldman, Sachs & Co., BT Securities Corporation, Citicorp Securities, Inc.
and J.P. Morgan Securities Inc., including the form of Terms Agreement,
relating to the Registrant's Medium-Term Notes, Series B (the "Notes").
4.1 Third Supplemental Indenture dated as of September 1, 1995 between the
Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of
July 1, 1987 between the Registrant and Bankers Trust Company, as Trustee.
4.2 Officers' Certificate and Authentication Order dated October 2, 1995
relating to the Notes, including the forms of Notes.
10.1 Credit Agreement dated as of May 26, 1995 among the Company, the Banks
named therein and Citibank, N.A., as Agent.
12.1 Ratio of Earnings to Fixed Charges.
99.1 Press Release of the Registrant dated September 21, 1995.
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EXHIBIT 1.1
SUPERVALU INC.
U.S. $400,000,000
Medium-Term Notes, Series B
Distribution Agreement
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October 2, 1995
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
BT Securities Corporation
130 Liberty Street
New York, New York 10006
Citicorp Securities, Inc.
399 Park Avenue
New York, New York 10043
J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
SUPERVALU INC., a Delaware corporation (the "Company"), proposes to issue
and sell from time to time its Medium-Term Notes, Series B (the "Securities") in
an aggregate amount up to U.S. $400,000,000, or its equivalent in another
currency or composite currency, and agrees with each of you (individually, an
"Agent," and collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof. This Distribution
Agreement shall not be construed to create either an obligation
on the part of the Company to sell any Securities or an obligation
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of the Agents to purchase Securities as principal.
The Securities will be issued under an indenture, dated as of July 1, 1987,
as supplemented by the First Supplemental Indenture dated as of August 1, 1990,
the Second Supplemental Indenture dated as of October 1, 1992 and the Third
Supplemental Indenture dated as of September 1, 1995 (as so supplemented, the
"Indenture"), between the Company and Bankers Trust Company, as Trustee (the
"Trustee"). The Securities shall have the maturity ranges, interest rates, if
any, redemption provisions and other terms set forth in the Prospectus referred
to below as it may be amended or supplemented from time to time. The Securities
will be issued, and the terms and rights thereof established, from time to time
by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) A registration statement on Form S-3 (File No. 33-56415) in
respect of a total of U.S. $400,000,000 aggregate amount of debt securities
of the Company, including the Securities, has been filed under the
Securities Act of 1933, as amended (the "Act"), with the Securities and
Exchange Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to such Agent, excluding exhibits to such registration
statement but including all documents incorporated by reference in the
prospectus included therein, and such registration statement in such form
has been declared effective by the Commission and no stop order suspending
the effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules
and regulations of the Commission under the Act, being hereinafter called a
"Preliminary Prospectus"; the various parts of such registration statement,
including all exhibits thereto and the documents incorporated by reference
in the prospectus contained in such registration statement at the time such
part of such registration statement became effective but excluding Form
T-1, each as amended at the time such part of such registration statement
became effective, being hereinafter collectively called the "Registration
Statement"; the prospectus (including, if applicable, any prospectus
supplement) relating to the Securities, in the form in which it has most
recently been filed or transmitted for filing with the Commission on or
prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under the
Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus, including any supplement to the
Prospectus that sets forth only the terms of a particular issue of the
Securities (a "Pricing Supplement"), shall be deemed to refer to and
include any documents filed after the date of such Preliminary Prospectus
or Prospectus, as the case may be,
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under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated therein by reference; any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed to
refer to and include the Prospectus as amended or supplemented (including
any applicable Pricing Supplement filed in accordance with Section 4(a)
hereof) in relation to Securities to be sold pursuant to this Agreement, in
the form filed or transmitted for filing with the Commission pursuant to
Rule 424(b) under the Act and in accordance with Section 4(a) hereof,
including any documents incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus, or any amendment or supplement thereto, when
such documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
the Statement of Eligibility of the Trustee on Form T-1 or to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by any Agent expressly for
use in the Prospectus as amended or supplemented to relate to a particular
issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date in case of the Registration Statement and any amendment
thereto and as of the applicable filing date in the case of the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
the Statement of Eligibility of the Trustee on Form T-1 or to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company
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by any Agent expressly for use in the Prospectus as amended or supplemented
to relate to a particular issuance of Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (except for
issuances of capital stock pursuant to employee or director stock plans,
purchases of common stock pursuant to the common stock repurchase program
and other increases or decreases in capital stock of less than $5,000,000
in the aggregate) or increase in long-term debt (except for any increases
of less than $50,000,000 in the aggregate) of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The authorized capital stock of the Company is as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable;
(g) The Securities have been duly authorized, and, when issued and
delivered pursuant to this Agreement and any Terms Agreement, will have
been duly executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture, which will be substantially in the form
filed or incorporated by reference as an exhibit to the Registration
Statement; the Indenture has been duly authorized by the Company and
qualified under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; the Indenture conforms, and the Securities of
any particular issuance of Securities will conform, in all material
respects, to the descriptions thereof contained in the Prospectus as
amended or supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities and the compliance by the
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Company with all of the provisions of the Securities, the Indenture, this
Agreement and any Terms Agreement, and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under,
any material indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject (as any such agreement or instrument may be amended or modified,
taking into account any waiver obtained), nor will such action result in
any violation of the provisions of the Restated Certificate of
Incorporation or the By-Laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or with
any court or governmental agency or body is required for the solicitation
of offers to purchase Securities, the issue and sale of the Securities or
the consummation by the Company of the transactions contemplated by this
Agreement, any Terms Agreement or the Indenture, except such as have been,
or will have been prior to the Commencement Date (as defined in Section 3
hereof), obtained under the Act or the Trust Indenture Act and such
consents, approvals, authorizations, registrations or qualifications as may
be required under securities or Blue Sky laws of any state or foreign
jurisdiction in connection with the solicitation by such Agent of offers to
purchase Securities from the Company and with purchases of Securities by
such Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(i) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(j) Immediately after any sale of Securities by the Company hereunder
or under any Terms Agreement, the aggregate amount of Securities which
shall have been issued and sold by the Company hereunder or under any Terms
Agreement and of any debt securities of the Company (other than such
Securities) that shall have been issued and sold pursuant to the
Registration Statement will not exceed the amount of debt securities
registered under the Registration Statement; and
(k) All issued and outstanding shares of capital stock of Supermarket
Operators of America Inc., a Delaware corporation ("SOA"), are owned
directly by the Company, and all issued and outstanding shares of capital
stock of SUPERVALU Holdings, Inc., a Missouri corporation ("Holdings"),
and, except as set forth in the
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Prospectus, ShopKo Stores, Inc., a Minnesota corporation, are owned
directly by SOA, in each case free and clear of all liens, encumbrances,
equities and claims.
2. (a) On the basis of the representations and warranties, and subject
to the terms and conditions herein set forth, each of the Agents hereby
severally and not jointly agrees, as agent of the Company, to use its
reasonable efforts to solicit and receive offers to purchase the Securities
from the Company upon the terms and conditions set forth in the Prospectus
as amended or supplemented from time to time. The appointment of the
Agents hereunder is not exclusive and the Company may from time to time
offer Securities for sale otherwise than to or through an Agent; provided,
however, that so long as this Agreement is in effect the Company will not
appoint any other agent for the purpose of soliciting purchases of the
Securities on a continuous basis. It is understood, however, that if from
time to time the Company is approached by a prospective agent offering to
solicit a specific purchase of Securities, the Company may engage such
agent with respect to such specific purchase, provided that (i) such agent
is engaged on terms substantially similar (including the same commission
schedule) to the applicable terms of this Agreement (which may be
accomplished by the execution of a letter agreement between the Company and
such prospective agent substantially in the form of Annex IV hereto) and
(ii) the Agents are given notice of such purchase promptly after it is
agreed to. Each Agent is acting in connection with the Securities
individually and not collectively or jointly. The Company reserves the
right to sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf, and, in the case of any such sale not resulting
from a solicitation made by any Agent, no commission will be payable with
respect to such sale. These provisions shall not limit Section 4(f) hereof
or any similar provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities,
the solicitation of offers to purchase Securities and the payment in each
case therefor shall be as set forth in the Administrative Procedure
attached hereto as Annex II as it may be amended from time to time by
written agreement between the Agents and the Company (the "Administrative
Procedure"). The provisions of the Administrative Procedure shall apply to
all transactions contemplated hereunder other than those made pursuant to a
Terms Agreement. Each Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed by
each of them in the Administrative Procedure. The Company will furnish to
the Trustee a copy of the Administrative Procedure as from time to time in
effect.
The Company reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Securities. As soon as
practicable, but in any event not later than one business day in New York
City after receipt of notice from the Company, the Agents will forthwith
suspend solicitation of offers to purchase Securities from the Company
until such time as the Company has advised the Agents that such
solicitation
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may be resumed. During such period, the Company shall not be
required to comply with the provisions of Sections 4(i), 4(j) and 4(k).
Upon advising the Agents that such solicitation may be resumed, however,
the Company shall simultaneously provide the documents required to be
delivered by Sections 4(i), 4(j) and 4(k), and the Agents shall have no
obligation to solicit offers to purchase the Securities until such
documents have been received by the Agents. In addition, any failure by
the Company to comply with its obligations hereunder, including without
limitation its obligations to deliver the documents required by Sections
4(i), 4(j) and 4(k), shall automatically terminate the Agents obligations
hereunder, including without limitation its obligations to solicit offers
to purchase the Securities hereunder as agent or to purchase Securities
hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following
applicable percentage of the principal amount of such Security sold:
<TABLE>
<CAPTION>
Commission (percentage of
aggregate principal amount
Range of Maturities of Securities sold)
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<S> <C>
From 9 months to less than 1 year............ .125%
From 1 year to less than 18 months........... .150%
From 18 months to less than 2 years.......... .200%
From 2 years to less than 3 years............ .250%
From 3 years to less than 4 years............ .350%
From 4 years to less than 5 years............ .450%
From 5 years to less than 6 years............ .500%
From 6 years to less than 7 years............ .550%
From 7 years to less than 10 years........... .600%
From 10 years to less than 15 years.......... .625%
From 15 years to less than 20 years.......... .675%
From 20 years to 30 years.................... .750%
</TABLE>
(b) Each sale of Securities to any Agent as principal shall be made
in accordance with the terms of this Agreement and (unless the Company and
such Agent shall otherwise agree) a Terms Agreement that will provide for
the sale of such Securities to and the purchase thereof by such Agent.
A Terms Agreement may also specify certain provisions relating to the
reoffering of such Securities by such Agent. The commitment of any Agent
to purchase Securities as principal, whether pursuant to a Terms Agreement
or
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otherwise, shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Securities to be purchased by any
Agent pursuant thereto, the price to be paid to the Company for such
Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the
Securities and the time and date and place of delivery of and payment for
such Securities. Such Terms Agreement shall also specify any requirements
for opinions of counsel, accountants' letters and officers' certificates
pursuant to Section 4 hereof.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue
and delivery of such Securities and payment therefor shall be as set forth
in the Administrative Procedure. For each such sale of Securities to an
Agent as principal that is not made pursuant to a Terms Agreement, the
Company agrees to pay such Agent a commission (or grant an equivalent
discount) as provided in Section 2(a) hereof and in accordance with the
schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement
or in accordance with the Administrative Procedure, is referred to herein
as a "Time of Delivery."
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such
Security in, or to residents of, the country issuing such currency (or, if
such Security is denominated in a composite currency, in any country
issuing a currency comprising a portion of such composite currency), except
as permitted by applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof on
the Commencement Date (as defined below) shall be delivered to the Agents at the
offices of Dorsey & Whitney P.L.L.P., 220 South Sixth Street, Minneapolis,
Minnesota, at 11:00 a.m., New York City time, on the date of this Agreement,
which date and time of such delivery may be postponed by agreement between the
Agents and the Company but in no event shall be later than the day prior to the
date on which solicitation of offers to purchase Securities is commenced or on
which any Terms Agreement is executed (such time and date being referred to
herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall
be disapproved by any Agent promptly after reasonable notice thereof or (B)
after the date of any Terms
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Agreement or other agreement by an Agent to purchase Securities as
principal and prior to the related Time of Delivery which shall be
disapproved by any Agent party to such Terms Agreement or so purchasing as
principal promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant to
this Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and to file such Pricing Supplement
pursuant to Rule 424(b) under the Act not later than the close of business
of the Commission on the fifth business day after the date on which such
Pricing Supplement is first used; (iii) to make no amendment or supplement
to the Registration Statement or Prospectus (other than any Pricing
Supplement, any supplement relating to an offering of securities other than
the Securities, or any periodic report filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus) at any time prior to
having afforded each Agent a reasonable opportunity to review and comment
thereon; (iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities, and during such same period to
advise such Agent, promptly after the Company receives notice thereof, of
the time when any amendment to the Registration Statement has been filed or
has become effective or any supplement to the Prospectus or any amended
Prospectus (other than any Pricing Supplement that relates to Securities
not purchased through or by such Agent) has been filed with the Commission,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amendment or supplement of the Registration Statement or Prospectus
or for additional information; and (v) in the event of the issuance of any
such stop order or of any such order preventing or suspending the use of
any such prospectus or suspending any such qualification to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as such Agent may request
and to comply with such laws so as to permit the continuance of sales and
dealings therein for as long as may be necessary to complete the
distribution or sale of the Securities; provided, however, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus as each time
amended or supplemented, other than any Pricing Supplement (except as
provided in the
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Administrative Procedure), in the form in which it is filed with the
Commission pursuant to Rule 424 under the Act, and with copies of the
documents incorporated by reference therein, all in such quantities as such
Agent may reasonably request from time to time; and, if the delivery of a
prospectus is required at any time in connection with the offering or sale
of the Securities (including Securities purchased from the Company by such
Agent as principal) and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify such Agent and request such Agent, in its
capacity as agent of the Company, to suspend solicitation of offers to
purchase Securities from the Company (and, if so notified, such Agent shall
forthwith cease such solicitations); and if the Company shall decide to
amend or supplement the Registration Statement or the Prospectus as then
amended or supplemented, to so advise such Agent promptly by telephone
(with confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the Registration
Statement or the Prospectus as then amended or supplemented that will
correct such statement or omission or effect such compliance; provided,
however, that if during such same period such Agent continues to own
Securities purchased from the Company by such Agent as principal or such
Agent is otherwise required to deliver a prospectus in respect of
transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date of the Registration Statement, (ii) the effective date of
each post-effective amendment to the Registration Statement, and (iii) the
date of each filing by the Company with the Commission of an Annual Report
on Form 10-K that is incorporated by reference in the Registration
Statement, an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission thereunder (including, at the option of
the Company, Rule 158);
(e) During the period this Agreement is in effect with respect to any
Agent, to furnish to such Agent copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to such Agent (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed (except registration statements filed with the Commission
on Form S-8 and reports of the Company' employee benefit plans filed with
the
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Commission on Form 11-K); and (ii) such additional information concerning
the business and financial condition of the Company as such Agent may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and
continuing to and including the later of (i) the termination of trading
restrictions for the Securities purchased thereunder, as notified to the
Company by such Agent and (ii) the related Time of Delivery, the Company
will not, without the prior written consent of such Agent, offer, sell,
contract to sell or otherwise dispose of any debt securities of the Company
which both mature more than 9 months after such Time of Delivery and have
terms which are substantially similar to the Securities which are the
subject of such Terms Agreement or other agreement;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the
Company of a Terms Agreement with such Agent, shall be deemed to be an
affirmation to such Agent that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and
correct as of the date of such acceptance or of such Terms Agreement, as
the case may be, as though made at and as of such date, and an undertaking
that such representations and warranties will be true and correct as of the
settlement date for the Securities relating to such acceptance or as of the
Time of Delivery relating to such sale, as the case may be, as though made
at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented relating to such Securities);
(h) That each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies
the delivery of an opinion or opinions by Sullivan & Cromwell, counsel to
the Agents, as a condition to the purchase of Securities pursuant to such
Terms Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to
such Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus and each time the Company sells Securities to
such Agent as principal pursuant to a Terms Agreement and such Terms
Agreement specifies the delivery of
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an opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or
cause to be furnished forthwith to such Agent a written opinion of Dorsey &
Whitney P.L.L.P., counsel for the Company, or other counsel for the Company
satisfactory to such Agent, dated the date of such amendment, supplement,
incorporation or Time of Delivery relating to such sale, as the case may
be, in form satisfactory to such Agent in its reasonable judgment, to the
effect that such Agent may rely on the opinion of such counsel referred to
in Section 6(c) hereof which was last furnished to such Agent to the same
extent as though it were dated the date of such letter authorizing reliance
(except that the statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such opinion, an opinion of the
same tenor as the opinion of such counsel referred to in Section 6(c)
hereof but modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the
Act or the Exchange Act is incorporated by reference into the Prospectus,
in either case to set forth financial information included in or derived
from the Company's consolidated financial statements or accounting records,
and each time the Company sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of a letter under this Section 4(j) as a condition to the purchase
of Securities pursuant to such Terms Agreement, the Company shall cause the
independent certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement forthwith to furnish such Agent a
letter, dated the date of such amendment, supplement, incorporation or Time
of Delivery relating to such sale, as the case may be, in form satisfactory
to such Agent in its reasonable judgment, of the same tenor as the letter
referred to in Section 6(d) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Company, to the extent such financial statements
and other information are available as of a date not more than five
business days prior to the date of such letter; provided, however, that,
with respect to any financial information or other matter, such letter may
reconfirm as true and correct at such date as though made at and as of such
date, rather than repeat, statements with respect to such financial
information or other matter made in the letter referred to in Section 6(d)
hereof which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time
a document filed under the Act or the Exchange Act is incorporated by
reference into the Prospectus, and each time the Company sells Securities
to such Agent as principal
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<PAGE>
pursuant to a Terms Agreement and the applicable Terms Agreement specifies
the delivery of a certificate under this Section 4(k) as a condition to the
purchase of Securities pursuant to such Terms Agreement, the Company shall
furnish or cause to be furnished forthwith to such Agent a certificate,
dated the date of such supplement, amendment, incorporation or Time of
Delivery relating to such sale, as the case may be, in such form and
executed by such officers of the Company as shall be satisfactory to such
Agent in its reasonable judgment, to the effect that the statements
contained in the certificate referred to in Section 6(h) hereof which was
last furnished to such Agent are true and correct at such date as though
made at and as of such date (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate, certificates of
the same tenor as the certificates referred to in said Section 6(h) but
modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and
(l) To offer to any person who has agreed to purchase Securities as
the result of an offer to purchase solicited by such Agent the right to
refuse to purchase and pay for such Securities if, on the related
settlement date fixed pursuant to the Administrative Procedure, any
condition set forth in Section 6(a), 6(e) or 6(g) hereof shall not have
been satisfied (it being understood that the judgment of such person with
respect to the impracticability or inadvisability of such purchase of
Securities shall be substituted, for purposes of this Section 4(l), for the
respective judgments of an Agent with respect to certain matters referred
to in such Sections 6(a), 6(e) and 6(g), and that such Agent shall have no
duty or obligation whatsoever to exercise the judgment permitted under such
Sections 6(a), 6(e)and 6(g) on behalf of any such person).
5. The Company covenants and agrees with each Agent that the Company will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the reasonable fees and expenses of counsel for the Agents incurred
in connection with the establishment of the program contemplated hereby, any
opinions to be rendered by such counsel hereunder and the transactions
contemplated hereunder (up to a maximum amount of $65,000 with respect to the
establishment of the program and related opinions); (iii) the cost of printing,
preparing by word processor or reproducing this Agreement, any Terms Agreement,
any Indenture, any Blue Sky and Legal Investment Memoranda and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iv) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including the fees and disbursements of counsel for the
Company in connection with such qualification and in connection with the Blue
Sky and Legal Investment
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<PAGE>
Surveys; (v) any fees charged by securities rating services for rating the
Securities; (vi) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vii) the cost of preparing the Securities; (viii) the fees and
expenses of any Trustee and any agent of any Trustee and any transfer or paying
agent of the Company and the fees and disbursements of counsel for any Trustee
or such agent in connection with any Indenture and the Securities; (ix) any
advertising expenses connected with the solicitation of offers to purchase and
the sale of Securities so long as such advertising expenses have been approved
in advance by the Company; and (x) all other costs and expenses incident to the
performance of the Company's obligations hereunder which are not otherwise
specifically provided for in this Section. Except as provided in Sections 7 and
8 hereof, each Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated in such Terms Agreement by
reference) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with respect
to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; (ii) no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
(iii) all requests for additional information on the part of the Commission
shall have been complied with to the reasonable satisfaction of such Agent;
(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished
to such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to the incorporation of the Company, the validity of the
Indenture, the Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as such Agent may
reasonably request, and (ii) if and to the extent requested by such Agent,
with respect to each applicable date referred to in Section 4(h) hereof
that is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, an opinion or opinions, dated such applicable date, to the
effect that such Agent may
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<PAGE>
rely on the opinion or opinions which were last furnished to such Agent
pursuant to this Section 6(b) to the same extent as though it or they were
dated the date of such letter authorizing reliance (except that the
statements in such last opinion or opinions shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented
to such date) or, in any case, in lieu of such an opinion or opinions, an
opinion or opinions of the same tenor as the opinion or opinions referred
to in clause (i) but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date; and in each case
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Dorsey & Whitney P.L.L.P., counsel for the Company, or other
counsel for the Company satisfactory to such Agent, shall have furnished to
such Agent their written opinion, dated the Commencement Date and each
applicable date referred to in Section 4(i) hereof that is on or prior to
such Solicitation Time or Time of Delivery, as the case may be, in form and
substance satisfactory to such Agent, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus as amended or supplemented;
(ii) The authorized capital stock of the Company is as set forth in
the Prospectus as amended or supplemented;
(iii) Holdings has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Missouri, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; and all issued and
outstanding shares of capital stock of Holdings are owned directly by SOA and
all issued and outstanding shares of capital stock of SOA are owned directly by
the Company, in each case free and clear of all liens, encumbrances, equities
and claims which have been perfected by possession or filing under the Uniform
Commercial Code (in the form in which it is then in effect in the State of
Minnesota) or with respect to which any federal or state tax lien filing has
been made in the State of Minnesota, and such counsel has no reason to believe
that any such ownership by SOA or the Company, as the case may be, is subject to
any other lien, encumbrance, equity or claim;
(iv) To the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
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<PAGE>
or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the consolidated financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, taken as a whole; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(v) This Agreement and any applicable Terms Agreement have been duly
authorized, executed and delivered by the Company;
(vi) The Securities have been duly authorized and, when duly executed,
authenticated, issued and delivered by the Company, will constitute valid and
legally binding obligations of the Company entitled to the benefits provided by
the Indenture; and the Indenture conforms and the Securities will conform in all
material respects to the descriptions thereof in the Prospectus as amended or
supplemented;
(vii) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Indenture has been duly qualified under the Trust Indenture Act;
(viii) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture, this
Agreement and any applicable Terms Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel (after reasonable inquiry) and
material to the Company to which the Company is a party or by which the Company
is bound or to which any of the property or assets of the Company is subject (as
any such agreement or instrument may be amended or modified, taking into account
any waiver obtained), nor will such action result in any violation of the
provisions of the Restated Certificate of Incorporation, as amended, or the By-
Laws of the Company or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its properties; provided, however, that, for the
purposes of this paragraph (viii), such counsel need not express any opinion
with respect to Federal or state securities laws, or other antifraud laws,
fraudulent transfer laws, the Employee Retirement Income
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<PAGE>
Security Act of 1974 and related laws, laws that restrict transactions between
United States persons and citizens or residents of certain foreign countries and
state laws relating to the payment of dividends or the redemption or repurchase
of stock;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is required
for the solicitation of offers to purchase Securities, the issue and sale of the
Securities or the consummation by the Company of the other transactions
contemplated by this Agreement, any applicable Terms Agreement, or the
Indenture, except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under securities or Blue Sky laws of any state
or foreign jurisdiction in connection with the solicitation by the Agents of
offers to purchase Securities from the Company and with purchases of Securities
by an Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(x) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and related
schedules or other financial data therein, as to which such counsel need express
no opinion), when they became effective or were filed with the Commission, as
the case may be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and such counsel has no reason to
believe that any of such documents, when they became effective or were so filed,
as the case may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of other documents
which were filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading; and
(xi) The Registration Statement and the Prospectus as amended and
supplemented and any further amendments and supplements thereto made by the
Company prior to the date of such opinion (other than the financial statements
and related schedules or other financial data therein, as to which such counsel
need express no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the rules and
regulations thereunder; although such counsel does not assume any responsibility
for the accuracy, completeness or fairness of the statements
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<PAGE>
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (vi) of this Section 6(c), such
counsel has no reason to believe that, as of its effective date, the
Registration Statement or any amendment or supplement thereto made by the
Company prior to the date of such opinion (other than the financial
statements and related schedules or other financial data therein, as to
which such counsel need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading
or that, as of the date of such opinion, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Company prior to the date of such opinion (other than the financial
statements and related schedules or other financial data therein, as to
which such counsel need express no opinion) contains an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
such counsel does not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or
the Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required.
(d) Not later than 10:00 a.m., New York City time, on the Commencement
Date and on each applicable date referred to in Section 4(j) hereof that is
on or prior to such Solicitation Time or Time of Delivery, as the case may
be, the independent certified public accountants who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have
furnished to such Agent a letter, dated the Commencement Date or such
applicable date, as the case may be, in form and substance satisfactory to
such Agent, to the effect set forth in Annex III hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented on or prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus as amended or supplemented on
or prior to the date of the Pricing Supplement relating to the Securities
to be delivered at the relevant Time of Delivery and (ii) since the
respective dates as of which information is given in the Prospectus as
amended or supplemented on or prior to the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of Delivery
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there shall not have been any change in the capital stock (except for
issuances of capital stock pursuant to employee or director stock plans,
purchases of common stock pursuant to the common stock repurchase program
and other increases or decreases in capital stock of less than $5,000,000
in the aggregate) or increase in long-term debt (except for any increases
of less than $50,000,000 in the aggregate) of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented on or prior to the date of the Pricing Supplement relating to
the Securities to be delivered at the relevant Time of Delivery, the effect
of which, in any such case described in clause (i) or (ii), is in the
judgment of such Agent so material and adverse as to make it impracticable
or inadvisable to proceed with the solicitation by such Agent of offers to
purchase Securities from the Company or the purchase by such Agent of
Securities from the Company as principal, as the case may be, on the terms
and in the manner contemplated in the Prospectus as amended or supplemented
on or prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery;
(f) On or after the date hereof, (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities;
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
New York Stock Exchange; (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; (iii) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this clause
(iii) in the judgment of such Agent makes it impracticable or inadvisable
to proceed with the solicitation of offers to purchase Securities or the
purchase of Securities from the Company as principal, pursuant to the
applicable Terms Agreement or otherwise, as the case may be, on the terms
and in the manner contemplated in the Prospectus as amended or
supplemented; and
(h) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement Date
and each applicable date referred to in Section 4(k) hereof that is on or
prior to such Solicitation Time or Time of Delivery, as the case may be, in
such form and executed by such officers of the Company as shall be
satisfactory to such Agent, as to the
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accuracy of the representations and warranties of the Company herein at and
as of the Commencement Date or such applicable date, as the case may be, as
to the performance by the Company of all of its obligations hereunder to be
performed at or prior to the Commencement Date or such applicable date, as
the case may be, as to the matters set forth in subsections (a) and (e) of
this Section 6, and as to such other matters as such Agent may reasonably
request.
(i) With respect to any Security denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any
Security the principal or interest of which is indexed to such currency,
currencies or composite currency, there shall not have occurred a
suspension or material limitation in foreign exchange trading in such
currency, currencies or composite currency by a major international bank, a
general moratorium on commercial banking activities in the country or
countries issuing such currency, currencies or composite currency, the
outbreak or escalation of hostilities involving, the occurrence of any
material adverse change in the existing financial, political or economic
conditions of, or the declaration of war or a national emergency by, the
country or countries issuing such currency, currencies or composite
currency or the imposition or proposal of exchange controls by any
governmental authority in the country or countries issuing such currency,
currencies or composite currency; and
7. (a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse such Agent for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement,
the Prospectus, the Prospectus as amended or supplemented or any other
prospectus relating to the Securities, or any such amendment or supplement,
in reliance upon and in conformity with written information furnished to
the Company by such Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or
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actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to
the Securities, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and each Agent on the other from the offering of the Securities to
which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the
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indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and each Agent on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of Securities (before
deducting expenses) received by the Company bear to the total commissions
or discounts received by such Agent in respect thereof. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or by any Agent on the
other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Company and each Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by per capita
allocation (even if all Agents were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), an Agent shall not be required to
contribute any amount in excess of the amount by which the total public
offering price at which the Securities purchased by or through it were sold
exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of each of the Agents under
this subsection (d) to contribute are several in proportion to the
respective purchases made by or through it to which such loss, claim,
damage or liability (or action in respect thereof) relates and are not
joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Agent within the meaning of the Act; and the obligations of
each Agent under this Section 7 shall be in addition to any liability which
such Agent may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning
-22-
<PAGE>
of the Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise), is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations, warranties
and other statements by any Agent and the Company set forth in or made pursuant
to this Agreement shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Agent or any controlling person of any Agent, or the Company, or any
officer or director or any controlling person of the Company, and shall survive
each delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 7, Section 8 and Section 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advice hereunder
shall be in writing, or by telephone if promptly confirmed in writing, and if to
Goldman, Sachs & Co. shall be sufficient in all respects when delivered or sent
by facsimile transmission, overnight express service or certified mail to 85
Broad Street, New York, New York 10004, Facsimile Transmission No. (212) 363-
7609, Attention: Credit Department; and if to BT Securities Corporation shall
be sufficient in all respects when delivered or sent by facsimile transmission,
overnight express service or certified mail to 130 Liberty Street, New York, New
York 10006, Facsimile Transmission No. _________, Attention: ______________;
and
-23-
<PAGE>
if to Citicorp Securities, Inc. shall be sufficient in all respects when
delivered or sent by facsimile transmission, overnight express service or
certified mail to 399 Park Avenue, New York, New York 10043, Facsimile
Transmission No. _________, Attention: ______________; and if to J.P. Morgan
Securities Inc. shall be sufficient in all respects when delivered or sent by
facsimile transmission, overnight express service or certified mail to 60 Wall
Street, New York, New York 10260, Facsimile Transmission No. _________,
Attention: ______________; and if to the Company shall be sufficient in all
respects when delivered or sent by facsimile transmission, overnight express
service or certified mail to SUPERVALU INC., 11840 Valley View Road, Eden
Prairie, Minnesota 55344, Facsimile Transmission No. (612) 828-4576, Attention:
Treasurer.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective personal representatives, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign by reason of
such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
office of the Commission in Washington, D.C. is normally open for business.
14. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be an original, but all of such respective counterparts shall
together constitute one and the same instrument.
-24-
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us five counterparts thereof, whereupon this letter and the acceptance
by each of you shall constitute a binding agreement between the Company and each
of you in accordance with its terms.
Very truly yours,
SUPERVALU INC.
/s/ Kim M. Erickson
By:__________________________
Accepted in New York, New York,
as of the date hereof:
/s/ Goldman, Sachs & Co.
______________________________
Goldman, Sachs & Co.
BT Securities Corporation
/s/ Jacques de Saint Phalle
By:____________________________
Citicorp Securities, Inc.
/s/ Kimberly A. Conyngham
By:____________________________
J.P. Morgan Securities Inc.
/s/ Margaret Brody
By:____________________________
-25-
<PAGE>
ANNEX I
SUPERVALU INC.
Medium-Term Notes, Series B
Terms Agreement
---------------
________, 1995
[Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004]
[BT Securities Corporation
130 Liberty Street
New York, New York 10006]
[Citicorp Securities, Inc.
399 Park Avenue
New York, New York 10043]
[J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260]
Ladies and Gentlemen:
SUPERVALU INC. (the "Company") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated October 2,
1995 (the "Distribution Agreement"), between the Company on the one hand and
Goldman, Sachs & Co., BT Securities Corporation, Citicorp Securities, Inc. and
J.P. Morgan Securities Inc. (the "Agents") on the other, to issue and sell to
[Goldman, Sachs & Co.], [BT Securities Corporation], [Citicorp Securities, Inc.]
and [J.P. Morgan Securities Inc.] the securities specified in the Schedule
hereto (the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents, as agents
of the Company, of offers to purchase Securities is incorporated herein by
reference in its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if
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<PAGE>
such provisions had been set forth in full herein. Nothing contained herein or
in the Distribution Agreement shall make any party hereto an agent of the
Company or make such party subject to the provisions therein relating to the
solicitation of offers to purchase securities from the Company, solely by virtue
of its execution of this Terms Agreement. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement, except that each representation and warranty in
Section 1 of the Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the date of the
Distribution Agreement in relation to the Prospectus (as therein defined), and
also a representation and a warranty as of the date of this Terms Agreement in
relation to the Prospectus as amended and supplemented to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Goldman, Sachs & Co.], [BT Securities Corporation], [Citicorp
Securities, Inc.] and [J.P. Morgan Securities Inc.] and [Goldman, Sachs & Co.],
[BT Securities Corporation], [Citicorp Securities, Inc.] and [J.P. Morgan
Securities Inc.] agree[s] to purchase from the Company, the Purchased
Securities, at the time and place, in the principal amount and at the purchase
price set forth in the Schedule hereto.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us three counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
SUPERVALU INC.
By
-------------------------
Accepted:
[
-----------------------------
Goldman, Sachs & Co.]
[BT Securities Corporation
By:______________________]
[Citicorp Securities, Inc.
By:______________________]
[J.P. Morgan Securities Inc.
By:______________________]
I-3
<PAGE>
Schedule to Annex I
Title of Purchased Securities:
- -----------------------------
[ %] Medium-Term Notes, Series B
Specified Currency (if other than U.S. dollars):
- -----------------------------------------------
Aggregate Principal Amount:
- --------------------------
[$ or units of the Specified Currency indicated
above]
[Price to Public]:
- -----------------
Purchase Price by [insert names of agents]:
- ------------------------------------------
[ %] of the principal amount of the Purchased Securities [, plus
accrued interest from _____ to _____] [and accrued amortization, if any, from
_______ to _______]
Method of and Specified Funds for Payment of Purchase Price:
- -----------------------------------------------------------
[By certified or official bank check or checks, payable to the order of the
Company, in [[New York] Clearing House] [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next day]
[immediately available] funds]
Indenture:
- ---------
Indenture, dated as of July 1, 1987, as supplemented, between the Company
and Bankers Trust Company, as Trustee
Form of Purchased Securities:
- ----------------------------
[Registered form only] [Temporary global security, to be followed by
definitive securities in registered form] [Global form only]
Time of Delivery:
- ----------------
Closing Location:
- ----------------
Maturity:
- --------
I-4
<PAGE>
Denominations (if other than U.S. dollars):
- ------------------------------------------
I-5
<PAGE>
Interest Rate:
- -------------
[Fixed Rate Note: %]
[Floating Rate Note:
Interest Rate Basis:
Index Maturity:
Spread or Spread Multiplier:
Maximum Rate: %
Minimum Rate: %
Initial Interest Rate: %
Interest Reset Dates:
Calculation Dates:
Interest Determination Dates:
Record Dates:
Calculation Agent (if other than Bankers Trust Company):]
Interest Payment Dates:
- ----------------------
[months and dates]
[Indexed Note:
------------
Indexed Currency or Commodity:
Base Rate:]
Documents to be Delivered:
- -------------------------
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents referred to in Section
4(h).]
[(2) The opinion or opinions of counsel to the Company referred to in Section
4(i).]
[(3) The accountants' letter referred to in Section 4(j).]
[(4) The officers' certificate referred to in Section 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
- ----------------------------------------------------------------
I-6
<PAGE>
ANNEX II
SUPERVALU INC.
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated October 2, 1995 (the "Distribution Agreement"),
between SUPERVALU INC. (the "Company") and Goldman, Sachs & Co., BT Securities
Corporation, Citicorp Securities, Inc. and J.P. Morgan Securities Inc.
(together, the "Agents"), to which this Administrative Procedure is attached as
Annex II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented or the Indenture as amended or supplemented. To the
extent any procedure set forth below conflicts with the provisions of the
Securities, the Indenture or the Distribution Agreement, the relevant provisions
of the Securities, the Indenture or the Distribution Agreement shall control.
The procedures to be followed with respect to the settlement of sales of
Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. The terms and settlement details related to a
purchase of Securities by an Agent, as principal, from the Company will be set
forth in a Terms Agreement pursuant to the Distribution Agreement, unless the
Company and such Agent otherwise agree as provided in Section 2(b) of the
Distribution Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An Agent, in
relation to a purchase of a Security by a purchaser solicited by such Agent, is
referred to herein as the "Selling Agent" and, in relation to a purchase of a
Security by such Agent as principal other than pursuant to a Terms Agreement, as
the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with whom
such Agent is to communicate regarding offers to purchase Securities and the
related settlement details.
Each Security will be issued only in fully registered form and will be
represented by either a global certificate (a "Global Security") delivered to
the Trustee, as custodian for The Depository Trust Company (the "Depositary")
and recorded in the book-entry system maintained by the Depositary (a "Book-
Entry Security") or a certificate (a "Certificated Security") delivered to a
person designated by an Agent as set forth in the applicable Pricing Supplement.
An owner of a Book-Entry Security will not be entitled to receive a certificate
representing such a Security, except as provided in the Indenture or the
Prospectus as amended or supplemented.
II-1
<PAGE>
Book-Entry Securities will be issued in accordance with the Administrative
Procedure set forth in Part I hereof, and Certificated Securities will be issued
in accordance with the Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
- -----------------------------------------------------------
In connection with the qualification of the Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation from the Company and the Trustee to the Depositary, dated the
date hereof, and a Medium-Term Note Certificate Agreement between the Trustee
and the Depositary, dated as of October 21, 1988 (the "Certificate Agreement"),
and its obligations as a participant in the Depositary, including the
Depositary's Same-Day Funds Settlement System ("SDFS").
Posting Rates by the Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry Securities that
may be sold as a result of the solicitation of offers by an Agent. The Company
may establish a fixed set of interest rates and maturities for an offering
period ("posting"). If the Company decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by the Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Book-Entry Securities as a
Purchasing Agent. The Company will have the sole right to accept offers to
purchase Book-Entry Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Agent or Purchasing Agent, as the case
may be, of its acceptance or rejection of an offer to purchase Book-Entry
Securities. If the Company accepts an offer to purchase Book-Entry Securities,
it will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Trustee.
Communication of Sale Information to the Company by Agent and Settlement
Procedures:
A. After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate promptly, but in no event
later than
II-2
<PAGE>
the time set forth under "Settlement Procedure Timetable" below, the
following details of the terms of such offer (the "Sale Information") to the
Company by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be purchased;
(2) If a Fixed Rate Book-Entry Security, the interest rate, initial
interest payment date, Interest Payment Dates and Regular Record Dates;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency (it being
understood that currently the Depositary accepts deposits of Global Securities
denominated in U.S. dollars only) and the Exchange Rate Agent;
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Book-Entry Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption Commencement Date;
(12) If a Floating Rate Book-Entry Security, such of the following as are
applicable:
II-3
<PAGE>
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) If a Renewable Note, a Note with respect to which the Company has the
option to reset the interest rate or the Spread and/or Spread Multiplier, or a
Note with respect to which the Company has the option to extend the Maturity
Date, the applicable terms;
(16) Book-Entry Security; and
(17) Selling Agent or Purchasing Agent.
B. After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Trustee by facsimile transmission or other acceptable written
means. The Company will assign a CUSIP number to the Global Security from a
list of CUSIP numbers previously obtained by the Company representing such Book-
Entry Security and then advise the Trustee and the Selling Agent or Purchasing
Agent, as the case may be, of such CUSIP number.
C. The Trustee will enter a pending deposit message through the
Depositary's Participant Terminal System, providing the following settlement
information to the Depositary, and the Depositary shall forward such information
to such Agent and Standard & Poor's Corporation:
II-4
<PAGE>
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing such Book-Entry
Security;
(3) Whether such Global Security will represent any other Book-Entry
Security (to the extent known at such time);
(4) Number of the participant account maintained by the Depositary on
behalf of the Selling Agent or Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry Security, number of
days by which such date succeeds the record date for the Depositary's purposes
(or, in the case of Floating Rate Securities which reset daily or weekly, the
date five calendar days immediately preceding the applicable Interest Payment
Date and, in the case of all other Book-Entry Securities, the Regular Record
Date, as defined in the Security) and, if calculable at that time, the amount of
interest payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global Security
previously delivered by the Company representing such Book-Entry Security.
E. The Depositary will credit such Book-Entry Security to the Trustee's
participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary to (i) debit such Book-
Entry Security to the Trustee's participant account and credit such Book-Entry
Security to such Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account for an amount
equal to the price of such Book-Entry Security less such Agent's commission.
The entry of such a deliver order shall constitute a representation and warranty
by the Trustee to the Depositary that (a) the Global Security representing such
Book-Entry Security has been issued and authenticated and (b) the Trustee is
holding such Global Security pursuant to the Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the Depositary's
Participant Terminal System instructing the Depositary (i) to debit such Book-
Entry Security to such Agent's participant account and credit such Book-Entry
Security to the participant accounts of the Participants with respect to such
Book-Entry Security and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such Agent for an amount equal
to the price of such Book-Entry Security.
II-5
<PAGE>
H. Transfers of funds in accordance with SDFS deliver orders described in
Settlement Procedures "F" and "G" will be settled in accordance with SDFS
operating procedures in effect on the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will transfer to
the account of the Company maintained at Bankers Trust Company, New York, New
York, or such other account as the Company may have previously specified to the
Trustee, in funds available for immediate use in the amount transferred to the
Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to the Company a statement setting
forth the principal amount of Book-Entry Securities outstanding as of that date
under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry Security to
the purchaser either by transmitting to the Participants with respect to such
Book-Entry Security a confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written confirmation to such
purchaser.
L. The Depositary will, at any time, upon request of the Company or the
Trustee, promptly furnish to the Company or the Trustee a list of the names and
addresses of the participants for whom the Depositary has credited Book-Entry
Securities.
Preparation of Pricing Supplement:
If the Company accepts an offer to purchase a Book-Entry Security, it will
prepare a Pricing Supplement reflecting the terms of such Book-Entry Security
and arrange to have delivered to the Selling Agent or Purchasing Agent, as the
case may be, at least ten copies of such Pricing Supplement, not later than 5:00
p.m., New York City time, on the Business Day following the Trade Date (as
defined below), or if the Company and the purchaser agree to settlement on the
Business Day following the date of acceptance of such offer, not later than
noon, New York City time, on such date. The Company will arrange to have ten
Pricing Supplements filed with the Commission not later than the close of
business of the Commission on the fifth Business Day following the date on which
such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation
II-6
<PAGE>
of sale or (b) the Book-Entry Security.
Date of Settlement:
The receipt by the Company of immediately available funds in payment for a
Book-Entry Security and the authentication and issuance of the Global Security
representing such Book-Entry Security shall constitute "settlement" with respect
to such Book-Entry Security. All orders of Book-Entry Securities solicited by a
Selling Agent or made by a Purchasing Agent and accepted by the Company on a
particular date (the "Trade Date") will be settled on a date (the "Settlement
Date") which is the third Business Day after the Trade Date pursuant to the
"Settlement Procedure Timetable" set forth below, unless the Company and the
purchaser agree to settlement on another Business Day which shall be no earlier
than the next Business Day after the Trade Date.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent and
accepted by the Company for settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "I" set forth above shall be completed
as soon as possible but not later than the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE
- --------- TIME
----
A 5:00 p.m. on the Business Day following the Trade Date or 10:00
a.m. on the Business Day prior to the Settlement Date,
whichever is earlier
B 12:00 noon on the second Business Day immediately preceding the
Settlement Date
C 2:00 p.m. on the second Business Day immediately preceding the
Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
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<PAGE>
If the initial interest rate for a Floating Rate Book-Entry Security has
not been determined at the time that Settlement Procedure "A" is completed,
Settlement Procedures "B" and "C" shall be completed as soon as such rate has
been determined but no later than 2:00 p.m. on the second Business Day
immediately preceding the Settlement Date. Settlement Procedure "H" is subject
to extension in accordance with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating procedures in effect on the
Settlement Date.
If settlement of a Book-Entry Security is rescheduled or canceled, the
Trustee, upon obtaining knowledge thereof, will deliver to the Depositary,
through the Depositary's Participant Terminal System, a cancellation message to
such effect by no later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect to a Book-
Entry Security pursuant to Settlement Procedure "F", the Trustee may deliver to
the Depositary, through the Depositary's Participant Terminal System, as soon as
practicable a withdrawal message instructing the Depositary to debit such Book-
Entry Security to the Trustee's participant account, provided that the Trustee's
participant account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to the principal
amount to be debited. If a withdrawal message is processed with respect to all
the Book-Entry Securities represented by a Global Security, the Trustee will
mark such Global Security "canceled", make appropriate entries in the Trustee's
records and send such canceled Global Security to the Company. The CUSIP number
assigned to such Global Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned. If a withdrawal message
is processed with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which shall represent such
Book-Entry Security or Securities and shall be canceled immediately after
issuance and the other of which shall represent the remaining Book-Entry
Securities previously represented by the surrendered Global Security and shall
bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely paid to the
participants with respect to such Book-Entry Security by the beneficial
purchaser thereof (or a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser), such participants and, in turn,
the Agent for such Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry Security to
such participant's account and crediting such Book-Entry Security to such
Agent's account and then debiting such Book-Entry Security to such Agent's
participant account and crediting such Book-Entry Security to the Trustee's
participant account and shall notify the Company and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify the Company of
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<PAGE>
such order and the Company shall transfer to such Agent funds available for
immediate use in an amount equal to the price of such Book-Entry Security which
was credited to the account of the Company maintained at the Trustee in
accordance with Settlement Procedure I, and (ii) deliver the withdrawal message
and take the related actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than default by the applicable
Agent to perform its obligations hereunder or under the Distribution Agreement,
the Company will reimburse such Agent on an equitable basis for the loss of its
use of funds during the period when the funds were credited to the account of
the Company.
Notwithstanding the foregoing, upon any failure to settle with respect to a
Book-Entry Security, the Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event of a failure to settle
with respect to one or more, but not all, of the Book-Entry Securities to have
been represented by a Global Security, the Trustee will provide, in accordance
with Settlement Procedure "D", for the authentication and issuance of a Global
Security representing the other Book-Entry Securities to have been represented
by such Global Security and will make appropriate entries in its records. The
Company will, from time to time, furnish the Trustee with a sufficient quantity
of Securities.
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
- --------------------------------------------------------------
Posting Rates by Company:
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Certificated Securities
that may be sold as a result of the solicitation of offers by an Agent. The
Company may establish a fixed set of interest rates and maturities for an
offering period ("posting"). If the Company decides to change already posted
rates, it will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by Company:
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Certificated Securities,
other than those rejected by such Agent. Each Agent may, in its discretion
reasonably exercised, reject any offer received by it in whole or in part. Each
Agent also may make offers to the Company to purchase Certificated Securities as
a Purchasing Agent. The Company will have the sole right to accept offers to
purchase Certificated Securities and may reject any such offer in whole or in
part.
The Company will promptly notify the Selling Agent or Purchasing Agent, as
the case may be, of its acceptance or rejection of an offer to purchase
Certificated Securities. If the Company accepts an offer to purchase
Certificated Securities, it will confirm such acceptance in writing to the
Selling Agent or Purchasing Agent, as the case may be, and the Trustee.
II-9
<PAGE>
Communication of Sale Information to Company by Agent:
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal Amount of Certificated Securities to be purchased;
(2) If a Fixed Rate Certificated Security, the interest rate, initial
interest payment date, Interest Payment Dates and Regular Record Dates;
(3) Trade Date;
(4) Settlement Date;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than U.S.
dollars, the applicable Exchange Rate for such Specified Currency and the
Exchange Rate Agent;
(7) Indexed Currency, the Base Rate and the Exchange Rate Determination
Date, if applicable;
(8) Issue Price;
(9) Selling Agent's commission or Purchasing Agent's discount, as the case
may be;
(10) Net Proceeds to the Company;
(11) If a redeemable Certificated Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption Price shall decline (but
not below par) on each anniversary of the Redemption Commencement Date;
(12) If a Floating Rate Certificated Security, such of the following as are
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applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the registered
owner(s);
(14) Denomination of certificates to be delivered at settlement;
(15) If a Renewable Note, a Note with respect to which the Company has the
option to reset the interest rate or the Spread and/or Spread Multiplier, or a
Note with respect to which the Company has the option to extend the Maturity
Date, the applicable terms;
(16) Certificated Security; and
(17) Selling Agent or Purchasing Agent.
Preparation of Pricing Supplement by Company:
If the Company accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such Certificated
Security and arrange to have delivered to the Selling Agent or Purchasing Agent,
as the case may be, at least ten copies of such Pricing Supplement, not later
than 5:00 p.m., New York City time, on the Business Day following the Trade
Date, or if the Company and the purchaser agree to settlement on the date of
acceptance of such offer, not later than noon, New York City time, on such date.
The Company will arrange to have ten Pricing Supplements filed with the
Commission not
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<PAGE>
later than the close of business of the Commission on the fifth Business Day
following the date on which such Pricing Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling Agent:
The Selling Agent will deliver to the purchaser of a Certificated Security
a written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Certificated Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the confirmation of sale or
(b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling Agent or made
by a Purchasing Agent and accepted by the Company will be settled on a date (the
"Settlement Date") which is the third Business Day after the date of acceptance
of such offer, unless the Company and the purchaser agree to settlement (a) on
another Business Day after the acceptance of such offer or (b) with respect to
an offer accepted by the Company prior to 10:00 a.m., New York City time, on the
date of such acceptance.
Instruction from Company to Trustee for Preparation of Certificated Securities:
After receiving the Sale Information from the Selling Agent or Purchasing
Agent, as the case may be, the Company will communicate such Sale Information to
the Trustee by telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means.
The Company will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the Certificated Securities
no later than 2:15 p.m., New York City time, on the Settlement Date. Such
instruction will be given by the Company prior to 9:00 a.m., New York City time,
on the Business Day immediately preceding the Settlement Date unless the
Settlement Date is the date of acceptance by the Company of the offer to
purchase Certificated Securities in which case such instruction will be given by
the Company by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee and Receipt of
Payment Therefor:
The Trustee will prepare each Certificated Security and appropriate
receipts that will serve as the documentary control of the transaction.
In the case of a sale of Certificated Securities to a purchaser solicited
by a Selling
II-12
<PAGE>
Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the Selling Agent for
the benefit of the purchaser of such Certificated Securities against delivery by
the Selling Agent of a receipt therefor. On the Settlement Date the Selling
Agent will deliver payment for such Certificated Securities in immediately
available funds to the Company in an amount equal to the issue price of the
Certificated Securities less the Selling Agent's commission; provided that the
Selling Agent reserves the right to withhold payment for which it has not
received funds from the purchaser. The Company shall not use any proceeds
advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing Agent, the
Trustee will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Certificated Securities to the Purchasing Agent against delivery of payment
for such Certificated Securities in immediately available funds to the Company
in an amount equal to the issue price of the Certificated Securities less the
Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make payment to the
Selling Agent for a Certificated Security, the Selling Agent will promptly
notify the Trustee and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the Trustee, the
Company will return to the Selling Agent an amount equal to the amount
previously paid to the Company in respect of such Certificated Security. The
Company will reimburse the Selling Agent on an equitable basis for its loss of
the use of funds during the period when they were credited to the account of the
Company.
The Trustee will cancel the Certificated Security in respect of which the
failure occurred, make appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the Certificated Security.
II-13
<PAGE>
ANNEX III
Accountants' Letter
-------------------
Pursuant to Section 4(j) and Section 6(d), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) by them and included or
incorporated by reference in the Registration Statement or the Prospectus comply
as to form in all material respects with the applicable accounting requirements
of the Act or the Exchange Act, as applicable, and the related published rules
and regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon, copies
of which have been furnished to the Agents;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of earnings, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or included
in the Company's Quarterly Reports on Form 10-Q incorporated by reference into
the Prospectus as indicated in their reports thereon copies of which have been
separately furnished to the Agents; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to believe that
the unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and regulations;
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<PAGE>
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for five such fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the unaudited financial statements and other information referred to below, a
reading of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of earnings,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (ii) any material modifications should
be made to the unaudited condensed consolidated statements of earnings,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items
were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included or
incorporated by reference in the Company's Annual
III-2
<PAGE>
Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially consistent with the
basis for the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock pursuant to employee and
director stock plans, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding
on the date of the latest balance sheet included or incorporated by
reference in the Prospectus, or repurchases of common stock pursuant to the
repurchase program) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items specified by the
Agents, or any increases in any items specified by the Agents, in each case
as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Agents, or any
increases in any items specified by the Agents, in each case as compared
with the comparable period of the preceding year and with any other period
of corresponding length specified by the Agents, except in each case for
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have
III-3
<PAGE>
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the Agents which are
derived from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by reference),
or in Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Agents or in documents incorporated by reference in the
Prospectus specified by the Agents, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Distribution Agreement as of the Commencement Date referred to in
Section 6(d) thereof and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) as of the date of the
amendment, supplement, incorporation or the Time of Delivery relating to the
Terms Agreement requiring the delivery of such letter under Section 4(j)
thereof.
III-4
<PAGE>
ANNEX IV
[Name and address of Agent]
Re: $ ,000,000 Medium-Term Notes, Series B
Pricing Supplement Number: ____
Settlement Date: _________
(See Attached Term Sheet)
Ladies and Gentlemen:
Reference is made to the Distribution Agreement dated October 2, 1995
(the "Agreement") pertaining to up to U.S. $400,000,000 aggregate amount of
Medium-Term Notes, Series B (the "Notes") to be offered from time to time by
SUPERVALU INC. (the "Company"). The provisions of the Agreement (a copy of
which has been previously provided to you) are hereby incorporated by reference
and each of the representations and warranties set forth therein shall be deemed
to have been made to you as of the date hereof. Subject to the terms as set
forth therein, the Company hereby appoints you as an Agent (as such term is
defined in the Agreement) of the Company for the purposes of soliciting one
offer to purchase Notes from the Company containing the terms as set forth in
the above referenced Pricing Supplement. This appointment is effective as to
and extends only to the one transaction which you are presenting to the Company
(see attached Term Sheet) and the Agreement shall automatically be terminated as
to you upon the earlier to occur of (i) payment made in full to the Company for
the Notes sold pursuant to the offer presented or (ii) the Company or you
determine not to proceed with the transaction. Upon such termination of the
Agreement by the Company, neither you nor the Company shall have any liability
to the other except as provided in those sections of the Agreement referenced in
Section 10 thereof. You agree to be bound by, and comply with, all of the
provisions of the Agreement applicable to Agents thereunder.
[As a condition precedent to your obligation to consummate the
transaction referred to above, you shall receive the following: (i) the
opinions of counsel, dated __________ [recent date or most recent periodic
update] pursuant to Sections 4(h) and 4(i) of the Agreement; (ii) an Officer's
Certificate dated _______________[recent date], pursuant to Section 4(k) of the
Agreement; (iii) a letter from [Accountant] dated _________________ [recent date
or most recent periodic update] delivered pursuant to Section 4(j) of the
Agreement; and (iv) a copy of the resolutions adopted by the Company with
respect to the form of Note evidencing the securities described in the above
referenced Pricing Supplement, certified by an appropriate officer of the
Company.]
IV-1
<PAGE>
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, whereupon this letter shall constitute
a binding agreement between the Company and you in accordance with its terms.
SUPERVALU INC.
By ________________________
Agreed and Accepted as of the date hereof:
_____________________________
By __________________________
IV-2
<PAGE>
EXHIBIT 4.1
================================================================================
SUPERVALU INC.,
ISSUER
AND
BANKERS TRUST COMPANY,
TRUSTEE
----------------------------------
THIRD SUPPLEMENTAL INDENTURE
TO
INDENTURE DATED AS OF JULY 1, 1987, AS AMENDED BY THE FIRST SUPPLEMENTAL
INDENTURE DATED AS OF AUGUST 1, 1990 AND THE SECOND SUPPLEMENTAL INDENTURE DATED
AS OF OCTOBER 1, 1992
- --------------------------------------------------------------------------------
DATED AS OF SEPTEMBER 1, 1995
================================================================================
<PAGE>
THIRD SUPPLEMENTAL INDENTURE, dated as of September 1, 1995, between
SUPERVALU INC. (formerly Super Valu Stores, Inc.), a corporation duly organized
and existing under the laws of the State of Delaware (herein called the
"Company"), having its principal office at 11840 Valley View Road, Eden Prairie,
Minnesota 55344, and BANKERS TRUST COMPANY, a banking corporation duly organized
and existing under the laws of the State of New York, as Trustee (herein called
the "Trustee").
RECITALS
The Company has heretofore executed and delivered to the Trustee a
certain Indenture, dated as of July 1, 1987, as amended by that certain First
Supplemental Indenture, dated as of August 1, 1990, and that certain Second
Supplemental Indenture, dated as of October 1, 1992 (said Indenture, as so
amended, being herein called the "Indenture"), pursuant to which one or more
series of unsecured debentures, notes or other evidences of indebtedness of the
Company (herein called the "Securities") may be issued from time to time. All
terms used in this Third Supplemental Indenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
The Company desires and has requested the Trustee to join with it in
the execution and delivery of this Third Supplemental Indenture for the purpose
of amending certain operating and financial covenants of the Company with
respect to series of Securities to be issued by the Company subsequent to the
date hereof.
Section 901(9) of the Indenture provides that a supplemental indenture
may be entered into by the Company and the Trustee without the consent of any
Holders to make provisions with respect to matters arising under the Indenture
which do not adversely affect the interests of the Holders of Securities of any
series in any material respect.
The Company has furnished the Trustee with (i) an Opinion of Counsel
stating that the execution of this Third Supplemental Indenture is authorized or
permitted by the Indenture and (ii) a copy of the resolutions of its Board of
Directors certified by its Secretary, pursuant to which this Third Supplemental
Indenture has been authorized.
All things necessary to make this Third Supplemental Indenture a valid
agreement of the Company and the Trustee and a valid amendment of and supplement
to the Indenture have been done.
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<PAGE>
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities and any coupons appertaining thereto by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities of any series thereof or of any coupons appertaining
thereto, as follows:
ARTICLE ONE
SECTION 101. Subsection (b) of Section 1007 of the Indenture is
hereby amended in its entirety as follows:
"(b) The provisions of Subsection (a) of this Section 1007 shall not
apply (x) when a determination is made in respect of any series of Securities
issued prior to October 1, 1992, to the issuance, assumption or guarantee by the
Company or any Domestic Subsidiary of Debt secured by a mortgage which would
otherwise be subject to the foregoing restrictions up to an aggregate amount
which, together with all other Debt of the Company and its Domestic Subsidiaries
secured by mortgages (other than mortgages permitted by Subsection (a) of this
Section 1007) which would otherwise be subject to the foregoing restrictions and
the Value of all Sale and Lease-back Transactions in existence at such time
(other than any Sale and Lease-back Transaction which if such Sale and Lease-
back Transaction had been a mortgage, would have been permitted by clause (i) of
Section 1007(a) and other than Sale and Lease-back Transactions as to which
application of amounts have been made in accordance with clause (b) of Section
1008) does not at the time exceed 5% of Consolidated Net Tangible Assets, (y)
when a determination is made in respect of any series of Securities issued on or
after October 1, 1992 and prior to September 1, 1995, to the issuance,
assumption or guarantee by the Company or any Domestic Subsidiary of Debt
secured by a mortgage which would otherwise be subject to the foregoing
restrictions up to an aggregate amount which, together with all other Debt of
the Company and its Domestic Subsidiaries secured by mortgages (other than
mortgages permitted by Subsection (a) of this Section 1007) which would
otherwise be subject to the foregoing restrictions and the Value of all Sale and
Lease-back Transactions in existence at such time (other than any Sale and
Lease-back Transaction which if such Sale and Lease-back Transaction had been a
mortgage, would have been permitted by clause (i) of Section 1007(a) and other
than Sale and Lease-back Transactions as to
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<PAGE>
which application of amounts have been made in accordance with clause (b) of
Section 1008) does not at the time exceed 10% of Consolidated Net Tangible
Assets and (z) when a determination is made in respect of any series of
Securities issued on or after September 1, 1995, to the issuance, assumption or
guarantee by the Company or any Domestic Subsidiary of Debt secured by a
mortgage which would otherwise be subject to the foregoing restrictions up to an
aggregate amount which, together with all other Debt of the Company and its
Domestic Subsidiaries secured by mortgages (other than mortgages permitted by
Subsection (a) of this Section 1007) which would otherwise be subject to the
foregoing restrictions and the Value of all Sale and Lease-back Transactions in
existence at such time (other than any Sale and Lease-back Transaction which if
such Sale and Lease-back Transaction had been a mortgage, would have been
permitted by clause (i) of Section 1007(a) and other than Sale and Lease-back
Transactions as to which application of amounts have been made in accordance
with clause (b) of Section 1008) does not at the time exceed the greater of
$200,000,000 or 10% of Consolidated Net Tangible Assets."
SECTION 102. The Company hereby certifies that the amendments to the
Indenture set forth in this Third Supplemental Indenture do not adversely affect
in any material respect the interests of the Holders of Securities of any series
issued prior to November 1, 1994. The Company hereby covenants and agrees that
(a) the Company shall comply with Sections 1007 and 1008 of the Indenture, as
amended by Section 101 of this Third Supplemental Indenture, as they apply by
their terms to Securities of any series and (b) the Company shall confirm to the
Trustee annually its compliance with Sections 1007 and 1008 of the Indenture, as
amended by Section 101 of this Third Supplemental Indenture, as they apply by
their terms to Securities of any series, in the certificate referred to in
Section 704(4) of the Indenture; provided however, that, consistent with the
provisions of paragraph (4) of Section 501 of the Indenture, a default in the
performance, or breach, of the covenants set forth in Sections 1007 and 1008 of
the Indenture, as amended by Section 101 of this Third Supplemental Indenture,
as they apply by their terms to Securities of any series, shall constitute such
a default or breach only with respect to Securities of such series.
ARTICLE TWO
SECTION 201. For all purposes of this Third Supplemental Indenture,
except as otherwise herein expressly provided or unless the context otherwise
requires: (i) the terms and expressions used herein shall have the same
meanings as corresponding terms and expressions used in the Indenture; and (ii)
the words "herein," "hereof" and "hereby" and other words of similar import used
in this Third Supplemental Indenture refer to this Third
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<PAGE>
Supplemental Indenture as a whole and not to any particular section hereof.
SECTION 202. Except as expressly amended hereby, the Indenture is in
all respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect.
SECTION 203. This Third Supplemental Indenture shall form a part of
the Indenture for all purposes, and every Holder of Securities heretofore or
hereafter authenticated and delivered shall be bound hereby.
SECTION 204. This Third Supplemental Indenture may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, and all of such counterparts shall together constitute one and the
same instrument.
SECTION 205. The Trustee makes no representation as to the validity
or sufficiency of this Third Supplemental Indenture.
SECTION 206. The Recitals contained herein shall be taken as the
statements of the Company and the Trustee assumes no responsibility for their
correctness.
SECTION 207. This instrument shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with the laws of the State of New York.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Third
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
SUPERVALU INC.
[SEAL]
By /s/ Kim M. Erickson
________________________________
Name: Kim M. Erickson
Title: Vice President and Treasurer
Attest:
By /s/ Theresa H. Johnson
_______________________________________
Name: Theresa H. Johnson
Title: Corporate Secretary
BANKERS TRUST COMPANY
[SEAL]
By /s/ Susan Johnson
_________________________________
Name: Susan Johnson
Title: Assistant Vice President
Attest:
By /s/ Terence Rawlins
_________________________________________
Name: Terence Rawlins
Title: Assistant Treasurer
-6-
<PAGE>
STATE OF MINNESOTA )
: ss.:
COUNTY OF HENNEPIN )
On the 29th of September, 1995, before me personally came Kim M.
Erickson, to me known, who, being by me duly sworn, did depose and say that she
is Vice President and Treasurer of SUPERVALU INC., one of the corporations
described in and which executed the foregoing instrument; that she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that she signed her name thereto by like authority.
Nancy L. Leonard
----------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 29th of September, 1995, before me personally came Susan
Johnson, to me known, who, being by me duly sworn, did depose and say that she
is Assistant Vice President of Bankers Trust Company, one of the corporations
described in and which executed the foregoing instrument; that she knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that she signed her name thereto by like authority.
Margaret Bereza
----------------------------
Notary Public
-7-
<PAGE>
EXHIBIT 4.2
SUPERVALU INC.
Officers' Certificate and Authentication Order
----------------------------------------------
For Medium-Term Notes, Series B
-------------------------------
Pursuant to the Indenture dated as of July 1, 1987 between SUPERVALU
INC. (the "Company") and Bankers Trust Company, as trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture dated as of August 1, 1990, the
Second Supplemental Indenture dated as of October 1, 1992 and the Third
Supplemental Indenture dated as of September 1, 1995 (as so supplemented, the
"Indenture") and resolutions adopted by the Board of Directors of the Company on
June 29, 1994, this Officers' Certificate and Authentication Order is being
delivered to the Trustee to establish the terms of a series of Securities in
accordance with Section 301 of the Indenture, to establish the forms of the
Securities of such series in accordance with Section 201 of the Indenture and to
establish procedures for the authentication and delivery of specific Securities
of such series from time to time pursuant to Section 303 of the Indenture.
Capitalized terms used but not defined herein and defined in the
Indenture shall have the respective meanings ascribed to them in the Indenture.
All conditions precedent provided for in the Indenture relating to the
establishment of (i) a series of Securities, (ii) the forms of such series of
Securities and (iii) the procedures for the authentication and delivery of such
series of Securities have been complied with.
A. Establishment of Series pursuant to Section 301 of Indenture.
------------------------------------------------------------
There is hereby established pursuant to Section 301 of the Indenture a
series of Securities which shall have the following terms:
(1) The series of Securities hereby being authorized shall bear the
title "Medium-Term Notes, Series B" (referred to herein as the "Notes").
(2) The aggregate principal amount of the Notes of such series which
may be authenticated and delivered under the Indenture and pursuant to this
Officers' Certificate is limited to $400,000,000 or the equivalent thereof in
foreign currencies or composite currencies as specified (the "Specified
Currency") in the applicable Authentication Certificate (as defined in Section C
below) or, in the case of Original Issue Discount Notes (as defined below), such
principal amount as will result in an aggregate initial offering price as
specified in the applicable Authentication Certificate not to exceed such amount
(except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes of such series pursuant to
Section 304, 305, 306, 906 or 1107 of the Indenture
<PAGE>
and except for any Notes which, pursuant to Section 303 of the Indenture, are
deemed never to have been authenticated and delivered thereunder) as such amount
may be reduced by the issuance of other series of the Securities.
(3) The Notes shall be issuable only as Registered Securities. The
Notes shall not be issuable in temporary global form. Each Note will be
represented by either a Global Security registered in the name of the Depositary
or its nominee (each Note represented by a Global Security being herein referred
to as a "Book-Entry Note") or a certificate issued in definitive registered
form, without coupons (a "Certificated Note"), as set forth in the applicable
Authentication Certificate. Unless otherwise specified in the applicable
Authentication Certificate, The Depository Trust Company will act as Depositary,
and the circumstances under which a Global Security may be exchanged for
Certificated Notes registered in the name of, and any transfer of a Global
Security may be registered to, a Person other than the Depositary or its nominee
shall be as provided in Section 305 of the Indenture.
(4) Interest will be payable to the person in whose name a Note (or
any predecessor Note) is registered at the close of business on the Regular
Record Date (as defined below) next preceding each Interest Payment Date (as
defined below); provided, however, that interest payable on the Maturity Date
(as defined below) or upon redemption or repayment on any Note will be payable
to the person to whom principal shall be payable. The first payment of any
interest on any Note originally issued after a Regular Record Date and on or
before an Interest Payment Date will be made on the Interest Payment Date
following the next succeeding Regular Record Date to the registered owner on
such next succeeding Regular Record Date. Any interest which is payable, but
not punctually paid or duly provided for, on any Interest Payment Date will be
payable to the person and in the manner specified in Section 307 of the
Indenture.
(5) Unless previously redeemed or repaid, the principal of each Note
will be payable on the date from 9 months to 30 years from its date of issue, as
specified in such Note and in the applicable Authentication Certificate (the
"Maturity Date"). If the Maturity Date (or date of redemption or repayment) of
any Note would fall on a day that is not a Market Day (as defined below), the
payment of principal may be made on the next succeeding Market Day (or, in the
case of a LIBOR Note, if such day falls in the next calendar month, the next
preceding Market Day), and no interest on such payment will accrue for the
period from and after the Maturity Date (or the date of redemption or
repayment). The term "Market Day" means (a) with respect to any Note (other
than any LIBOR Note (as defined below)), any Business Day (as defined below),
and (b) with respect to any LIBOR Note, any such Business Day which is also a
London Business Day (as defined below). The term "London Business Day" means
any day on which dealing in deposits in U.S. dollars are transacted in the
London interbank market. The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is (i) not a day on which banking
institutions in The City of New York generally are authorized or obligated
-2-
<PAGE>
by law or executive order to close, and (ii) if the Note is denominated in a
Specified Currency (as defined below) other than U.S. dollars, not a day on
which banking institutions are authorized or obligated by law or executive order
to close in the financial center of the country issuing the Specified Currency
(which in the case of European Currency Units ("ECUs") shall be Luxembourg, in
which case "Business Day" shall not include any day that is a non-ECU clearing
day as determined by the ECU Banking Association in Paris).
If so provided in the applicable Authentication Certificate, the Company
will have the option to extend the Maturity Date of any Note for one or more
periods (each an "Extension Period") up to but not beyond the date (the "Final
Maturity Date") set forth in the such Authentication Certificate. Such
Authentication Certificate will indicate such option and the basis or formula,
if any, for setting the interest rate, in the case of a Fixed Rate Note, or the
Spread and/or Spread Multiplier, in the case of a Floating Rate Note, applicable
to any such Extension Period.
If so provided in the applicable Authentication Certificate, Notes may be
issued which mature on an Interest Payment Date (as defined below) specified in
the such Authentication Certificate occurring in or prior to the twelfth month
following the original issue date of such Notes unless the term of all or any
portion of any such Note is renewed in accordance with the procedures described
in such Authentication Certificate (a "Renewable Note").
(6) Unless otherwise indicated in the applicable Authentication
Certificate, each Note will bear interest at either (i) a fixed rate (a "Fixed
Rate Note"), which may be zero in the case of Notes issued at a discount from
the principal amount payable at the Maturity Date thereof (a "Zero Coupon Note")
or (ii) a floating rate (a "Floating Rate Note") determined by reference to one
or more of the interest rate formulas which may be adjusted by adding or
subtracting the Spread or multiplying by the Spread Multiplier (each term as
defined below).
Notes may be issued as "Indexed Notes," with the amount of principal
payable at the Maturity Date, or the amount of interest payable on an Interest
Payment Date, to be determined by reference to a currency exchange rate,
composite currency, commodity price or other financial or non-financial index as
set forth in the applicable Authentication Certificate.
Notes may be issued as "Amortizing Notes," for which payments of principal
and interest are made in installments over the life of the Note. Interest on
each Amortizing Note will be computed on the basis of a 360-day year of twelve
30-day months. Payments with respect to Amortizing Notes will be applied first
to interest due and payable thereon and then to the reduction of the unpaid
principal amount thereof. A table setting forth repayment information in
respect of each Amortizing Note will be provided in the applicable
Authentication Certificate.
-3-
<PAGE>
The Authentication Certificate relating to each Note will specify: (i)
whether such Note is a Fixed Rate Note or a Floating Rate Note; (ii) if such
Note is a Fixed Rate Note, the rate per annum at which such Note will bear
interest, if any, and the Interest Payment Dates and the Regular Record Dates,
if different from those set forth below; (iii) if such Note is a Floating Rate
Note, the interest rate basis (the "Interest Rate Basis") for each such Floating
Rate Note which will be (a) the Commercial Paper Rate, in which case such Note
will be a Commercial Paper Rate Note, (b) the Prime Rate, in which case such
Note will be a Prime Rate Note, (c) the London Inter-Bank Offered Rate
("LIBOR"), in which case such Note will be a LIBOR Note, (d) the Treasury Rate,
in which case such Note will be a Treasury Rate Note, (e) the CD Rate, in which
case such Note will be a CD Rate Note, (f) the Federal Funds Rate, in which case
such Note will be a Federal Funds Rate Note, (g) the CMT Rate, in which case
such Note will be a CMT Rate Note, or (h) such other interest rate formula as is
set forth in such Authentication Certificate, and, if applicable, the
Calculation Agent, the Index Maturity, the Spread or Spread Multiplier, the
Maximum Rate, the Minimum Rate, the Initial Interest Rate, the Interest Payment
Dates, the Regular Record Dates, the Calculation Date, the Interest
Determination Date and the Interest Reset Date with respect to such Floating
Rate Note (as all such terms are defined below); (iv) whether such Note is an
Original Discount Note, and if so, the yield to maturity; (v) whether such Note
is an Indexed Note, and if so, the amount of interest payable on an Interest
Payment Date, as determined by reference to the applicable index; (vi) whether
such Note is an Amortizing Note, and if so, repayment information with respect
to installments of principal and interest; (vii) whether any Note is a Renewable
Note, and if so, the renewal dates; (viii) whether the Company has the
option to reset the interest rate, in the case of a Fixed Rate Note, or to reset
the Spread and/or Spread Multiplier, in the case of a Floating Rate Note, and if
so, the date or dates on which such interest rate or such Spread and/or Spread
Multiplier, as the case may be, may be reset and the basis or formula, if any,
for such resetting; and (ix) whether the Company will have the option to extend
the Maturity Date of any Note for one or more Extension Periods up to but not
beyond the Final Maturity Date, and if so, the basis or formula, if any, for
setting the interest rate, in the case of a Fixed Rate Note, or the Spread
and/or Spread Multiplier, in the case of a Floating Rate Note, applicable to any
such Extension Period.
FIXED RATE NOTES
Each Fixed Rate Note (except any Zero Coupon Note) will bear interest from
its date of issue or from the most recent Interest Payment Date to which
interest on such Note has been paid or duly provided for at the fixed rate per
annum stated on the face thereof and in the applicable Authentication
Certificate until the principal thereof is paid or made available for payment.
Unless otherwise specified in the applicable Authentication Certificate,
interest on such Fixed Rate Note will be payable semi-annually each February 1
and August 1 (each an "Interest Payment Date") and at the Maturity Date or upon
earlier redemption or repayment. Unless otherwise indicated in the applicable
Authentication Certificate, the "Regular Record Date" with respect to any Fixed
Rate Note shall be the January 15 and July 15 (whether or not a Market Day) next
preceding the February 1 and August 1 Interest
-4-
<PAGE>
Payment Dates. Each payment of interest in respect of an Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date.
Interest on Fixed Rate Notes will be computed on the basis of a 360-day year of
twelve 30-day months. If any Interest Payment Date or the Maturity Date (or the
date of redemption or repayment) of any Fixed Rate Note falls on a day that is
not a Market Day, the payment will be made on the next Market Day as if it were
made on the date such payment was due, and no interest will accrue on the amount
so payable for the period from and after such Interest Payment Date or the
Maturity Date (or the date of redemption or repayment), as the case may be.
FLOATING RATE NOTES
Each Floating Rate Note will bear interest from its date of issue, at the
rate per annum determined pursuant to the interest rate formula stated therein
and in the applicable Authentication Certificate until the principal thereof is
paid or made available for payment.
The interest rate for each Floating Rate Note will be determined by
reference to an interest rate formula which may be adjusted by adding or
subtracting the Spread and/or multiplying by the Spread Multiplier. A Floating
Rate Note may also have either or both of the following: (a) a maximum
numerical interest rate limitation, or ceiling, on the rate of interest which
may accrue during any interest period (a "Maximum Rate"); and (b) a minimum
numerical interest rate limitation, or floor, on the rate of interest which may
accrue during any interest period (a "Minimum Rate"). The "Spread" is the
number of basis points specified in the applicable Authentication Certificate as
being applicable to the interest rate for such Note, and the "Spread Multiplier"
is the percentage specified in the applicable Authentication Certificate as
being applicable to the interest rate for such Note. "Index Maturity" means,
with respect to a Floating Rate Note, the period to maturity of the instrument
or obligation on which the interest rate formula is based, as specified in the
applicable Authentication Certificate.
The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset
Date"), as specified in the applicable Authentication Certificate. The Interest
Reset Date will be, in the case of Floating Rate Notes which reset daily, each
Business Day; in the case of Floating Rate Notes (other than Treasury Rate
Notes) which reset weekly, the Wednesday of each week; in the case of Treasury
Rate Notes which reset weekly, the Tuesday of each week; in the case of Floating
Rate Notes which reset monthly, the third Wednesday of each month; in the case
of Floating Rate Notes which reset quarterly, the third Wednesday of March,
June, September and December; in the case of Floating Rate Notes which reset
semi-annually, the third Wednesday of two months of each year as specified in
the applicable Authentication Certificate; and in the case of Floating Rate
Notes which reset annually, the third Wednesday of one month of each year as
specified in the applicable Authentication Certificate; provided, however, that
the interest rate in effect from the date of issue to the first Interest Reset
Date with respect to a Floating Rate Note will be the Initial Interest Rate (as
set forth in the
-5-
<PAGE>
applicable Authentication Certificate). If any Interest Reset Date for any
Floating Rate Note would otherwise be a day that is not a Market Day with
respect to such Floating Rate Note, the Interest Reset Date for such Floating
Rate Note shall be postponed to the next day that is a Market Day with respect
to such Floating Rate Note, except that in the case of a LIBOR Note, if such
Market Day is in the next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Market Day.
The Interest Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination Date"),
for a Prime Rate Note (the "Prime Rate Interest Determination Date"), for a CD
Rate Note (the "CD Rate Interest Determination Date"), for a Federal Funds Rate
Note (the "Federal Funds Rate Interest Determination Date") and for a CMT Rate
Note (the "CMT Rate Interest Determination Date") will be the second Market Day
preceding such Interest Reset Date. The Interest Determination Date pertaining
to an Interest Reset Date for a LIBOR Note (the "LIBOR Interest Determination
Date") will be the second London Business Day preceding such Interest Reset
Date. The Interest Determination Date pertaining to an Interest Reset Date for
a Treasury Rate Note (the "Treasury Interest Determination Date") will be the
day of the week in which such Interest Reset Date falls on which Treasury bills
would normally be auctioned. If, as the result of a legal holiday, an auction
is so held on the preceding Friday, such Friday will be the Treasury Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on any Interest Reset Date for a
Treasury Rate Note, then such Interest Reset Date shall instead be the first
Market Day immediately following such auction date.
Payments of interest on any Floating Rate Note with respect to any Interest
Payment Date will include interest accrued to but excluding such Interest
Payment Date; provided, however, that if the Interest Reset Dates with respect
to any Floating Rate Note are daily or weekly, interest payable on such Note on
any Interest Payment Date, other than interest payable on the date on which
principal on such Note is payable, unless otherwise specified in the applicable
Authentication Certificate, will include interest accrued through but excluding
the day following the next preceding Regular Record Date.
With respect to a Floating Rate Note, accrued interest from the date of
issue or from the last date to which interest has been paid is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day from the date of issue, or from the last date to which
interest has been paid, to but excluding the date for which accrued interest is
being calculated. The interest factor (expressed as a decimal) for each such
day is computed by dividing the interest rate (expressed as a decimal)
applicable to such date by 360, in the case of Commercial Paper Rate Notes,
Prime Rate Notes, LIBOR Notes, CD Rate Notes or Federal Funds Rate Notes, or by
the actual number of days in the year, in the case of Treasury Rate Notes or CMT
Rate Notes.
-6-
<PAGE>
Unless otherwise indicated in the applicable Authentication Certificate,
the "Regular Record Date" with respect to any Floating Rate Note shall be the
date 15 calendar days prior to each Interest Payment Date, whether or not such
date shall be a Business Day.
Unless otherwise indicated in the applicable Authentication Certificate and
except as provided below, interest will be payable: (i) in the case of Floating
Rate Notes which reset daily or weekly, on the third Wednesday of March, June,
September and December of each year; (ii) in the case of Floating Rate Notes
which reset monthly, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year (as indicated in
the applicable Authentication Certificate); (iii) in the case of Floating Rate
Notes which reset quarterly, on the third Wednesday of March, June, September
and December of each year; (iv) in the case of Floating Rate Notes which reset
semi-annually, on the third Wednesday of the two months of each year specified
in the applicable Authentication Certificate; and (v) in the case of Floating
Rate Notes which reset annually, on the third Wednesday of the month specified
in the applicable Authentication Certificate (each an "Interest Payment Date"),
and in each case, at the Maturity Date. If any Interest Payment Date for any
Floating Rate Note would fall on a day that is not a Market Day with respect to
such Note, such Interest Payment Date will be the following day that is a Market
Day with respect to such Note and interest will accrue to such Market Day,
except that, in the case of a LIBOR Note, if such Market Day is in the next
succeeding calendar month, such Interest Payment Date will be the immediately
preceding day that is a Market Day with respect to such LIBOR Note. If the
Maturity Date (or date of redemption or repayment) of any Floating Rate Note
would fall on a day that is not a Market Day, the payment of interest and
principal (and premium, if any) may be made on the next succeeding Market Day
(or, the case of a LIBOR Note, if such day falls in the next calendar month, the
next preceding day), and no interest on such payment will accrue for the period
from and after the Maturity Date (or the date of redemption or repayment).
All percentages resulting from any calculations referred to herein will be
rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all U.S. dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent or more being rounded upwards).
In addition to any maximum interest rate which may be applicable to any
Floating Rate Note pursuant to the above provisions, the interest rate on the
Floating Rate Notes will in no event be higher than the maximum rate permitted
by New York law, as the same may be modified by United States law of general
application.
The calculation agent (the "Calculation Agent") with respect to any
Floating Rate Notes will be specified in the applicable Authentication
Certificate. The Calculation Agent's determination of the interest rate with
respect to any Floating Rate Note will be final and
-7-
<PAGE>
binding in the absence of manifest error.
COMMERCIAL PAPER RATE NOTES. Commercial Paper Rate Notes will bear
interest at the interest rates (calculated with reference to the Commercial
Paper Rate and the Spread and/or Spread Multiplier, if any) and will be payable
on the dates specified on the face of the Commercial Paper Rate Note and in the
applicable Authentication Certificate. Unless otherwise indicated in the
applicable Authentication Certificate, the "Calculation Date" pertaining to a
Commercial Paper Interest Determination Date will be the tenth day after such
Commercial Paper Interest Determination Date or, if any such day is not a Market
Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Authentication Certificate,
"Commercial Paper Rate" means, with respect to any Interest Reset Date, the
Money Market Yield (calculated as described below) of the per annum rate (quoted
on a bank discount basis) for the relevant Commercial Paper Interest
Determination Date for commercial paper having the specified Index Maturity as
published by the Board of Governors of the Federal Reserve System in
"Statistical Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper." In the event that such rate
is not published prior to 9:00 a.m. New York City time, on the relevant
Calculation Date, then the Commercial Paper Rate with respect to such Interest
Reset Date shall be the Money Market Yield of such rate on such Commercial Paper
Interest Determination Date for commercial paper having the specified Index
Maturity as published by the Federal Reserve Bank of New York in its daily
statistical release, "Composite 3:30 p.m. Quotations for United States
Government Securities" or any successor publication published by the Federal
Reserve Bank of New York ("Composite Quotations") under the heading "Commercial
Paper." If by 3:00 p.m., New York City time, on such Calculation Date such rate
is not yet published in either H.15(519) or Composite Quotations, the Commercial
Paper Rate with respect to such Interest Reset Date shall be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean of
the offered per annum rates (quoted on a bank discount basis), as of 11:00 a.m.,
New York City time, on such Commercial Paper Interest Determination Date, of
three leading dealers of commercial paper in The City of New York selected by
the Calculation Agent for commercial paper of the specified Index Maturity
placed for an industrial issuer whose bond rating is "AA," or the equivalent,
from a nationally recognized statistical rating agency; provided, however, that
if fewer than three dealers selected as aforesaid by the Calculation Agent are
quoting as mentioned in this sentence, the Commercial Paper Rate with respect to
such Interest Reset Date will be the Commercial Paper Rate in effect on such
Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
-8-
<PAGE>
D x 360
Money Market Yield = 100 x -------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the period from the Interest Reset Date to but excluding the day that
numerically corresponds to such Interest Reset Date (or, if there is not any
such numerically corresponding day, the last day) in the calendar month that is
the number of months corresponding to the specified Index Maturity after the
month in which such Interest Reset Date falls.
PRIME RATE NOTES. Prime Rate Notes will bear interest at the interest
rates (calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any), and will be payable on the dates specified on the face of
the Prime Rate Note and in the applicable Authentication Certificate. Unless
otherwise indicated in the applicable Authentication Certificate, the
"Calculation Date" pertaining to a Prime Rate Interest Determination Date will
be the tenth day after such Prime Rate Interest Determination Date or, if any
such day is not a Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Authentication Certificate,
"Prime Rate" means, with respect to any Interest Reset Date, the rate set forth
for the relevant Prime Rate Interest Determination Date in H.15(519) under the
heading "Bank Prime Loan." In the event that such rate is not published prior
to 9:00 a.m., New York City time, on the relevant Calculation Date, then the
Prime Rate with respect to such Interest Reset Date will be the arithmetic mean
of the rates of interest publicly announced by each bank that appears on the
display designated as page "NYMF" on the Reuters Monitor Money Rates Service (or
such other page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks)
("Reuters Screen NYMF Page") as such bank's prime rate or base lending rate as
in effect for such Prime Rate Interest Determination Date. If fewer than four
such rates appear on the Reuters Screen NYMF Page on such Prime Rate Interest
Determination Date, the Prime Rate with respect to such Interest Reset Date will
be the arithmetic mean of the prime rates or base lending rates (quoted on the
basis of the actual number of days in the year divided by a 360-day year) as of
the close of business on such Prime Rate Interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent; provided,
however, that if fewer than three banks selected as aforesaid by the Calculation
Agent are quoting as mentioned in this sentence, the Prime Rate with respect to
such Interest Reset Date will be the Prime Rate in effect on such Prime Rate
Interest Determination Date.
LIBOR NOTES. LIBOR Notes will bear interest at the interest rates
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any), and will be payable on the dates specified on the face of the LIBOR Note
and in the applicable Authentication Certificate.
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<PAGE>
Unless otherwise indicated in the applicable Authentication Certificate,
LIBOR, with respect to any Interest Reset Date, will be determined by the
Calculation Agent in accordance with the following provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will
be determined on the basis of the offered rates for deposits in the Index
Currency (as defined below) having the Index Maturity designated in the
applicable Authentication Certificate, commencing on the second Business
Day immediately following that LIBOR Interest Determination Date, that
appear as of 11:00 a.m., London time, on that LIBOR Interest Determination
Date on the display screen designated "Page 3750" by Telerate Data Service,
or such other page as may replace such page on that service or such other
service or services as may be nominated by the British Bankers' Association
for the purpose of displaying London interbank offered rates for deposits
in the relevant Index Currency ("Telerate Page 3750"). If no such rate
appears on Telerate Page 3750, then LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of the offered rates (unless
the display referred to below by its terms provides only for a single rate,
in which case such single rate shall be used) for deposits in the London
interbank market in the Index Currency having the Index Maturity designated
in the applicable Authentication Certificate and commencing on the second
Business Day immediately following such LIBOR Interest Determination Date
that appear on the display on the Reuters Monitor Money Rates Service for
the purpose of displaying the London interbank offered rates of major banks
for the applicable Index Currency as of 11:00 a.m., London time, on such
LIBOR Interest Determination Date, if at least two such offered rates
appear (unless, as aforesaid, only a single rate is required). If fewer
than two such rates appear (or, if such display by its terms provides for
only a single rate, in which case if no such rate appears), then LIBOR in
respect of such LIBOR Interest Determination Date will be determined as if
the parties had specified the rate described in clause (ii) below.
(ii) If LIBOR with respect to a LIBOR Interest Determination Date is
to be determined pursuant to this clause (ii), the Calculation Agent will
request the principal London offices of each of three major reference banks
in the London interbank market, as selected by the Calculation Agent, to
provide the Calculation Agent with its offered quotation for deposits in
the Index Currency for the period of the Index Maturity designated in the
applicable Authentication Certificate, commencing on the second London
Business Day immediately following such LIBOR Interest Determination Date,
the prime banks in the London interbank market at approximately 11:00 a.m.,
London time, on such LIBOR Interest Determination Date and in a principal
amount that is representative for a single transaction in such Index
Currency in such market at such time. If at least two such quotations are
provided, LIBOR determined on such LIBOR Interest Determination Date will
be the arithmetic mean of such quotations. If fewer than two quotations
are provided, LIBOR determined on such LIBOR Interest Determination Date
will be the arithmetic mean
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<PAGE>
of the rates quoted at approximately 11:00 a.m., or such other time
specified in the applicable Authentication Certificate, in the applicable
Principal Financial Center (as defined below), on such LIBOR Interest
Determination Date by three major banks in such Principal Financial Center
selected by the Calculation Agent for loans in the Index Currency to
leading European banks, having the Index Maturity designated in the
applicable Authentication Certificate and in a principal amount that is
representative for a single transaction in such Index Currency in such
market at such time; provided, however, that if the banks so selected by
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined on such LIBOR Interest Determination Date will be LIBOR in
effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Authentication Certificate as the currency for which
LIBOR shall be calculated. If no such currency is specified in the applicable
Authentication Certificate, the Index Currency shall be United States dollars.
"Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to United
States dollars, Deutsche marks, Italian lira, Swiss francs, Dutch guilders and
ECUs, the Principal Financial Center shall be The City of New York, Frankfurt,
Milan, Zurich, Amsterdam and Luxembourg, respectively.
TREASURY RATE NOTES. Treasury Rate Notes will bear interest at the
interest rates (calculated with reference to the Treasury Rate and the Spread
and/or Spread Multiplier, if any) and will be payable on the dates specified on
the face of the Treasury Rate Note and in the applicable Authentication
Certificate. Unless otherwise specified in the applicable Authentication
Certificate, the "Calculation Date" with respect to a Treasury Interest
Determination Date will be the tenth day after such Treasury Interest
Determination Date or, if any such day is not a Market Day, the next succeeding
Market Day.
Unless otherwise indicated in the applicable Authentication Certificate,
"Treasury Rate" means, with respect to any Interest Reset Date, the rate for the
auction on the relevant Treasury Interest Determination Date of direct
obligations of the United States ("Treasury bills") having the specified Index
Maturity as published in H.15(519) under the heading "United States Government
Securities--Treasury Bills--auction average (investment)" or, if not so
published by 9:00 a.m., New York City time, on the relevant Calculation Date,
the auction average rate (expressed as a bond equivalent on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis) for such
auction as otherwise announced by the United States Department of the Treasury.
In the event that the results of such auction of Treasury bills having the
specified Index Maturity are not published or reported as provided above by
3:00 p.m., New York City time, on such Calculation Date, or if no such auction
is held during such week, then the Treasury Rate shall be the rate set forth in
H.15(519) for the
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<PAGE>
relevant Treasury Rate Interest Determination Date for the specified Index
Maturity under the heading "United States Government Securities--Treasury Bills
- --Secondary Market." In the event such rate is not so published by 3:00 p.m.,
New York City time, on the relevant Calculation Date, the Treasury Rate with
respect to such Interest Reset Date shall be calculated by the Calculation Agent
and shall be a yield to maturity (expressed as a bond equivalent on the basis of
a year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates as of approximately 3:30 p.m.,
New York City time, on such Treasury Interest Determination Date, of three
primary United States government securities dealers in The City of New York
selected by the Calculation Agent for the issue of Treasury bills with a
remaining maturity closest to the specified Index Maturity; provided, however,
that if fewer than three dealers selected as aforesaid by the Calculation Agent
are quoting as mentioned in this sentence, the Treasury Rate with respect to
such Interest Reset Date will be the Treasury Rate in effect on such Treasury
Interest Determination Date.
CD RATE NOTES. CD Rate Notes will bear interest at the interest rates
(calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any), and will be payable on the dates specified on the face of
the CD Rate Note and in the applicable Authentication Certificate. Unless
otherwise indicated in the applicable Authentication Certificate, the
"Calculation Date" pertaining to a CD Rate Interest Determination Date will be
the tenth day after such CD Rate Interest Determination Date or, if such day is
not a Market Day, the next succeeding Market Day.
Unless otherwise indicated in the applicable Authentication Certificate,
"CD Rate" means, with respect to any Interest Reset Date, the rate for the
relevant CD Rate Interest Determination Date for negotiable certificates of
deposit having the specified Index Maturity as published in H.15(519) under the
heading "CDs (Secondary Market)." In the event that such rate is not published
prior to 9:00 a.m., New York City time, on the relevant Calculation Date, then
the CD Rate with respect to such Interest Reset Date shall be the rate on such
CD Rate Interest Determination Date for negotiable certificates of deposit
having the specified Index Maturity as published in Composite Quotations under
the heading "Certificates of Deposit." If by 3:00 p.m., New York City time, on
such Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, the CD Rate with respect to such Interest Reset Date shall
be calculated by the Calculation Agent and shall be the arithmetic mean of the
secondary market offered rates, as of 10:00 a.m., New York City time, on such CD
Rate Interest Determination Date, of three leading nonbank dealers of negotiable
U.S. dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks with a remaining maturity closest to the specified Index
Maturity in a denomination of U.S. $5,000,000; provided, however, that if fewer
than three dealers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the CD Rate with respect to such Interest Reset Date
will be the CD Rate in effect on such CD Rate Interest Determination Date.
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<PAGE>
FEDERAL FUNDS RATE NOTES. Federal Funds Rate Notes will bear interest at
the interest rates (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any), and will be payable on the dates
specified on the face of the Federal Funds Rate Note and in the applicable
Authentication Certificate. Unless otherwise indicated in the applicable
Authentication Certificate, the "Calculation Date" pertaining to a Federal Funds
Interest Determination Date will be the tenth day after such Federal Funds
Interest Determination Date or, if such day is not a Market Day, the next
succeeding Market Day.
Unless otherwise indicated in the applicable Authentication Certificate,
"Federal Funds Rate" means, with respect to any Interest Reset Date, the rate on
the relevant Federal Funds Interest Determination Date for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)." In the
event that such rate is not published prior to 9:00 a.m., New York City time, on
the relevant Calculation Date, then the Federal Funds Rate with respect to such
Interest Reset Date will be the rate on such Federal Funds Interest
Determination Date for Federal Funds as published in Composite Quotations under
the heading "Federal Funds/Effective Rate." If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, the Federal Funds Rate with respect to such Interest Reset
Date shall be calculated by the Calculation Agent and shall be the arithmetic
mean of the rates, as of 9:00 a.m., New York City time, on such Federal Funds
Interest Determination Date, for the last transaction in overnight Federal Funds
arranged by three leading brokers of Federal Funds transactions in The City of
New York selected by the Calculation Agent; provided, however, that if fewer
than three brokers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Federal Funds Rate with respect to such Interest
Reset Date will be the Federal Funds Rate in effect on such Federal Funds
Interest Determination Date.
CMT RATE NOTES. CMT Rate Notes will bear interest at the interest rates
(calculated with reference to the CMT Rate and the Spread and/or Spread
Multiplier, if any) and will be payable on the dates specified on the face of
the CMT Rate Note and in the applicable Authentication Certificate. Unless
otherwise specified in the applicable Authentication Certificate, the
"Calculation Date" with respect to a CMT Interest Determination Date will be the
tenth day after such CMT Interest Determination Date or, if any such day is not
a Market Day, the next succeeding Market Day.
Unless otherwise specified in the applicable Authentication Certificate,
"CMT Rate" means, with respect to any CMT Interest Determination Date, the rate
displayed on the Designated CMT Telerate Page (as defined below) under the
caption ". . . Treasury Constant Maturities . . . Federal Reserve Board Release
H.15 . . . Mondays Approximately 3:45 p.m.," under the column for the Designated
CMT Maturity Index (as defined below) for (i) if the Designated CMT Telerate
Page is 7055, the rate on such CMT Interest Determination Date and (ii) if the
Designated CMT Telerate Page is 7052, the week or the month, as applicable,
ended immediately preceding the week in which the related CMT Interest
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<PAGE>
Determination Date occurs. If such rate is no longer displayed on the relevant
page, or is not displayed prior to 3:00 p.m., New York City time, on the
relevant Calculation Date, then the CMT Rate with respect to such CMT Interest
Determination Date will be such Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published, or, is not published by 3:00 p.m., New York City
time, on such Calculation Date, then the CMT Rate for such CMT Interest
Determination Date will be such Treasury Constant Maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate for the CMT
Interest Determination Date will be calculated by the Calculation Agent and will
be a yield to maturity, based on the arithmetic mean of the secondary market
closing offer side prices as of approximately 3:30 p.m., New York City time on
the CMT Interest Determination Date reported, according to their written
records, by three leading primary United States government securities dealers
(each, a "Reference Dealer") in The City of New York selected by the Calculation
Agent (from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent cannot obtain three such Treasury notes quotations, the CMT
Rate for such CMT Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 p.m., New
York City time, on the CMT Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least $100,000,000. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided
however, that if fewer than three Reference Dealers selected by the Calculation
Agent are quoting as described herein, the CMT Rate will be the CMT Rate in
effect on such CMT Interest Determination Date. If two Treasury notes with an
original maturity as described in the third preceding sentence have remaining
terms to maturity equally close to the Designated CMT Maturity Index, the quotes
for the CMT Rate Note with the shorter remaining term to
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<PAGE>
maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Authentication Certificate (or
any other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Authentication Certificate, the
Designated CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Authentication Certificate with respect to which the
CMT Rate will be calculated. If no such maturity is specified in the applicable
Authentication Certificate, the Designated CMT Maturity Index shall be 2 years.
(7) Payment of the principal of (and premium, if any) and any interest
due with respect to any Certificated Note at the Maturity Date or upon
redemption or repayment thereof to be made in U.S. dollars will be made in
immediately available funds upon surrender of such Note at the Corporate Trust
Office of the Trustee in The City of New York, provided that the Certificated
Note is presented to the Paying Agent in time for the Paying Agent to make such
payments in such funds in accordance with its normal procedures. Payments of
interest with respect to Certificated Notes to be made in U.S. dollars other
than at the Maturity Date or upon redemption or repayment thereof will be made
by check mailed to the address of the person entitled thereto as it appears in
the Security Register or by wire transfer to such account as may have been
appropriately designated by such Person.
Unless otherwise specified in the applicable Authentication Certificate,
payments of interest and principal (and premium, if any) with respect to any
Certificated Note to be made in a Specified Currency other than U.S. dollars
will be made by wire transfer of immediately available funds to such account
with a bank located in the country issuing the Specified Currency (or, with
respect to Certificated Notes denominated in ECUs, to an ECU account) or other
jurisdiction acceptable to the Company and the Trustee as shall have been
designated at least ten Business Days prior to the Interest Payment Date or the
Maturity Date, as the case may be, by the registered Holder of such Note on the
relevant Regular Record Date or the Maturity Date, provided that, in the case of
payment of principal (and premium, if any) and any interest due at the Maturity
Date, the Certificated Note is presented to the Paying Agent in time for the
Paying Agent to make such payments in such funds in accordance with its normal
procedures. Such designation shall be made by filing the appropriate
information in writing with the Trustee at its Corporate Trust Office in The
City of New York and, unless revoked, any such designation made with respect to
any Certificated Note by a registered Holder will remain in effect with respect
to any further payments with respect to
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<PAGE>
such Note payable to such Holder. If a payment with respect to any such Note
cannot be made by wire transfer because the required designation has not been
received by the Trustee on or before the requisite date or for any other reason,
a notice will be mailed to the Holder at its registered address requesting a
designation pursuant to which such wire transfer can be made and, upon the
Trustee's receipt of such a designation, such payment will be made within five
Business Days of such receipt. The Company will pay any administrative costs
imposed by banks in connection with making payments by wire transfer, but any
tax, assessment or governmental charge imposed upon payments will be borne by
the Holders of the Notes in respect of which payments are made.
Payment of principal of and any premium and interest on Book-Entry Notes
represented by any Global Security will be made to the Depositary or its
nominee, as the case may be, as the sole registered owner and the sole Holder of
the Book-Entry Notes represented thereby for all purposes under the Indenture.
Certificated Notes may be presented for registration of transfer or
exchange at the Corporate Trust Office of the Trustee in The City of New York.
(8) Unless an initial date on which a Note may be redeemed by the
Company (a "Redemption Commencement Date") is specified in the applicable
Authentication Certificate, the Notes shall not be redeemable prior to their
Maturity Date. If a Redemption Commencement Date is so specified with respect
to any Note, the applicable Authentication Certificate shall also specify one or
more redemption prices (expressed as a percentage of the principal amount of
such Note) ("Redemption Prices") and the redemption period or periods
("Redemption Periods") during which such Redemption Prices shall apply. Unless
otherwise specified in the applicable Authentication Certificate, any such Note
shall be redeemable at the option of the Company at any time on or after such
specified Redemption Commencement Date, as a whole or from time to time in part,
at the specified Redemption Price applicable to the Redemption Period during
which such Note is to be redeemed, together with interest accrued to the date on
which such Note is redeemed.
(9) Unless otherwise specified in the applicable Authentication
Certificate, the Notes will not be subject to any sinking fund and, unless a
date on which a Note may be repayable at the option of the Holder thereof (each
a "Repayment Date") is specified in the applicable Authentication Certificate,
the Notes will not be repayable at the option of a holder prior to their
Maturity Date. If a Repayment Date is so specified with respect to any Note,
the applicable Authentication Certificate will also specify one or more
repayment prices (expressed as a percentage of the principal amount of such
Note) ("Repayment Prices"), the repayment period or periods ("Repayment
Periods") during which such Repayment Prices shall apply and any other terms of
such repayment. Unless otherwise specified in the Authentication Certificate,
any such Note shall be repayable at the option of the Holder thereof (as
specified in such Authentication
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<PAGE>
Certificate) at any time on or after such specified Repayment Date for a limited
period (as specified in such Authentication Certificate), at the specified
Repayment Price applicable to the Repayment Period during which such Note may be
repaid, together with interest accrued to the date on which such Note is repaid.
(10) Unless otherwise specified in the applicable Authentication
Certificate, the authorized denominations of any Note denominated in U.S.
dollars will be $100,000 and integral multiples of $1,000 in excess thereof.
The authorized denominations of any Note denominated in other than U.S. dollars
will be the amount of the Specified Currency for such Note equivalent, at the
noon buying rate for cable transfers in The City of New York for such Specified
Currency (the "Exchange Rate") on the first Business Day next preceding the date
on which the Company accepts the offer to purchase such Note, to U.S. $100,000
(rounded down to an integral multiple of 1,000 units of such Specified Currency)
and any greater amount that is an integral multiple of 1,000 units of such
Specified Currency.
(11) Each Note will be denominated in a Specified Currency as
specified on the face thereof and in the applicable Authentication Certificate,
which may include U.S. dollars, Australian dollars, New Zealand dollars,
Canadian dollars, Danish kroner, Italian lire, ECUs or any other currency set
forth in the applicable Authentication Certificate.
(12) Notes may be issued with the principal amount payable at the
Maturity Date or upon redemption or repayment, or the amount of interest payable
on an Interest Payment Date, to be determined by reference to a currency
exchange rate, composite currency, commodity price or other financial or non-
financial index as set forth in the applicable Authentication Certificate.
Holders of Indexed Notes may receive a principal amount at the Maturity Date
that is greater than or less than the face amount of such Notes depending upon
the value at the Maturity Date of the applicable index. Information as to the
methods for determining the principal amount payable at the Maturity Date or the
amount of interest payable on an interest payment date, as the case may be, and
any currency or commodity market to which principal or interest is indexed will
be set forth in the applicable Authentication Certificate.
(13) A Note may be issued as an "Original Issue Discount Note," which
is a Note, including any Zero Coupon Note, issued at a price lower than the
principal amount thereof and which provides that upon redemption, repayment or
acceleration of the Maturity Date thereof an amount less than the principal
thereof shall become due and payable. In the event of redemption, repayment or
acceleration of the Maturity Date of an Original Issue Discount Note, the amount
payable to the Holder of such Note upon such redemption, repayment or
acceleration will be determined in accordance with the terms of the Note, but
will be an amount less than the amount payable at the Maturity Date of such
Note.
(14) Unless otherwise specified in the applicable Authentication
Certificate, payments of principal of (and premium, if any) and interest on all
Fixed Rate Notes and Floating Rate Notes will be made in the applicable
Specified Currency; provided, however,
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<PAGE>
that payments of principal (and premium, if any) and interest on Notes
denominated in other than U.S. dollars will nevertheless be made in U.S. dollars
(i) at the option of the Holders thereof under the procedures described in the
two following paragraphs and (ii) at the option of the Company in the case of
imposition of exchange controls or other circumstances beyond the control of the
Company as described in the third following paragraph.
Unless otherwise specified in the applicable Authentication Certificate,
and except as provided in the next paragraph, payments of interest and principal
(and premium, if any) with respect to any Note denominated in other than U.S.
dollars will be made in U.S. dollars if the registered Holder of such Note on
the relevant Regular Record Date or at the Maturity Date, as the case may be,
has transmitted a written request for such payment in U.S. dollars to the
Trustee at its Corporate Trust Office in The City of New York on or prior to
such Regular Record Date or the date 15 days prior to the Maturity Date, as the
case may be. Such request may be in writing (mailed or hand delivered) or by
cable or telex or, if promptly confirmed in writing, by other form of facsimile
transmission. Any such request made with respect to any Note by a registered
Holder will remain in effect with respect to any further payments of interest
and principal (and premium, if any) with respect to such Note payable to such
Holder, unless such request is revoked on or prior to the relevant Regular
Record Date or the date 15 days prior to the Maturity Date, as the case may be.
Unless otherwise specified in the applicable Authentication Certificate,
the U.S. dollar amount to be received by a Holder of a Note denominated in other
than U.S. dollars who elects to receive payment in U.S. dollars will be based on
the highest bid quotation in The City of New York received by the exchange rate
agent for the Notes designated in the applicable Authentication Certificate (the
"Exchange Rate Agent") as of 11:00 a.m., New York City time, on the second
Business Day next preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent) for the
purchase by the quoting dealer of the Specified Currency for U.S. dollars for
settlement on such payment date in the aggregate amount of the Specified
Currency payable to all Holders of Notes electing to receive U.S. dollar
payments and at which the applicable dealer commits to execute a contract. If
three such bid quotations are not available on the second Business Day preceding
the date of payment of principal (and premium, if any) or interest with respect
to any Note, such payment will be made in the Specified Currency. All currency
exchange costs associated with any payment in U.S. dollars on any such Note will
be borne by the Holder thereof by deductions from such payment.
If the principal of (and premium, if any) or interest on any Note is
payable in other than U.S. dollars and such Specified Currency is not available
due to the imposition of exchange controls or other circumstances beyond the
control of the Company, the Company will be entitled to satisfy its obligations
to Holders of the Notes by making such payment in U.S. dollars on the basis of
the most recently available Exchange Rate. Any payment made under such
circumstances in U.S. dollars where the required payment is in other than U.S.
dollars will not constitute an Event of Default under the Indenture.
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<PAGE>
(15) Unless otherwise specified in the applicable Authentication
Certificate, the Company shall not pay any additional amounts on Notes held by a
Person who is a United States Alien in respect of any tax, assessment or
governmental charge withheld or deducted.
(16) If principal of or any premium or interest on any Note is
denominated or payable in a Specified Currency other than U.S. dollars, the
applicable Authentication Certificate will set forth whether and under what
terms and conditions the Company may be discharged from obligations pursuant to
Sections 403 and 1011 of the Indenture with respect to such Notes.
(17) Subject to the terms of the Indenture and the resolutions and
authorizations referred to in the first paragraph hereof, the Notes shall have
such other terms (which may be in addition to or different from the terms set
forth herein) as are specified in the applicable Authentication Certificate.
B. Establishment of Note Forms pursuant to Section 201 of Indenture.
It is hereby established pursuant to Section 201 of the Indenture that
Notes denominated in U.S. dollars (whether Book-Entry Notes or Certificated
Notes) shall be substantially in the forms attached as Exhibits A, B, C and D
hereto, unless a different form is provided in the applicable Authentication
Certificate (which Authentication Certificate shall be an "Officers'
Certificate" satisfying the requirements of Section 201 of the Indenture). The
Notes shall have such additional terms as shall be set forth in the applicable
Authentication Certificate and delivered to the Trustee or its authenticating
agent. Upon receipt (including by facsimile) of such an Authentication
Certificate, the Trustee or its authenticating agent is hereby instructed to
insert such terms on the face of the Notes relating thereto.
C. Establishment or Procedures for Authentication and Delivery of
Notes Pursuant to Section 303 of Indenture.
It is hereby ordered pursuant to Section 303 of the Indenture that
Notes may be authenticated from time to time by the Trustee and issued in an
aggregate principal amount not to exceed the amount set forth in Section A(2)
above, in accordance with the Administrative Procedure attached hereto as
Exhibit E (the "Administrative Procedure") and upon receipt by the Trustee
(including by facsimile) of an Authentication Certificate supplemental to this
Officers' Certificate and Authentication Order, in substantially the form
attached as Exhibit F hereto (an "Authentication Certificate"), setting forth
the information specified or contemplated therein for the particular Notes to be
authenticated and issued. Each Authentication Certificate shall be signed by
the Chief Executive Officer, the Chief
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Financial Officer or the Treasurer of the Company. The Company hereby directs
the Trustee to perform its duties under the Administrative Procedure and agrees
and confirms that the Trustee shall be indemnified by the Company for its acts
and omissions in connection with the Administrative Procedure pursuant to
Section 607(3) of the Indenture in accordance with the terms of such Section.
Dated: October 2, 1995
SUPERVALU INC.
By /s/ Jeffrey C. Girard
______________________________________
Jeffrey C. Girard
Executive Vice President and
Chief Financial Officer
By /s/ Kim M. Erickson
______________________________________
Kim M. Erickson
Vice President and Treasurer
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<PAGE>
REGISTERED REGISTERED
SUPERVALU INC. Principal Amount:
No. BA- Medium-Term Note, Series B $
(Fixed Rate Note) CUSIP
No.
[INSERT IF THE SECURITY IS TO BE A GLOBAL SECURITY -- UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), 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 DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC, AS DEPOSITARY FOR
THIS SERIES OF SECURITIES (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY.
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 NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.]
ORIGINAL ISSUE DATE: MATURITY DATE:
INTEREST RATE: REDEMPTION TERMS:
OTHER TERMS: REPAYMENT TERMS:
SUPERVALU INC., a corporation duly organized and existing under the laws
of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to _____________________________ or registered assigns,
the principal sum of _____________________________ United States Dollars
($_________) on the Maturity Date shown above or, together with any premium
thereon, upon any applicable Redemption Date or Repayment Date shown above,
and to pay interest thereon from the Original Issue Date shown above or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, on each February 1 and August 1 in each year or such other
dates, if any, as are
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<PAGE>
specified under "Other Terms" above (the "Interest Payment Dates"), and on the
Maturity Date, commencing with the Interest Payment Date immediately following
the Original Issue Date, at the rate per annum equal to the Interest Rate
shown above, until the principal hereof is paid or made available for payment,
and (to the extent that the payment of such interest shall be legally
enforceable) at the rate per annum equal to the Interest Rate shown above on
any overdue principal and on any overdue installment of interest; provided,
however, that if the Original Issue Date is after a Regular Record Date and on
or before the immediately following Interest Payment Date interest payments
will commence on the Interest Payment Date following the next succeeding
Regular Record Date. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Note (or one or more predecessor
Notes) is registered at the close of business on the Regular Record Date for
such interest, which shall, unless otherwise specified under "Other Terms"
above, be the January 15 and July 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date; provided, however,
that interest payable on the Maturity Date of this Note or any applicable
Redemption Date or Repayment Date that is not an Interest Payment Date shall
be payable to the Person to whom principal shall be payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the registered
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to the
Holder of this Note not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
If a Redemption Commencement Date or periods within which Redemption
Dates may occur and the related Redemption Prices (expressed as percentages of
the principal amount of this Note) are set forth above under "Redemption
Terms", this Note is subject to redemption, in whole or in part, at the option
of the Company prior to the Maturity Date upon not less than 30 nor more than
60 days' notice.
Payment of principal of (and premium, if any) and any interest due on any
Note of this series (that is not a Global Security) at maturity or upon
redemption or repayment will be made in immediately available funds upon
surrender of the Note at the Corporate Trust Office of the Trustee in the City
of New York, or such other office or agency of the Company maintained for that
purpose in the City of New York, provided that the Note is presented to the
Paying Agent in time for the Paying Agent to make such payments in such funds
in accordance with its normal procedures. Payments of interest due on any
Note of this series (that is not a Global Security) other than at maturity or
upon redemption or repayment will be made by check mailed to the address of
the person entitled thereto as it appears in the Security Register or by wire
transfer to such account as may have been appropriately designated by such
person.
Payment of principal of (and premium, if any) and interest due on any
Global Security
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<PAGE>
will be made to the Depositary or its nominee, as the case may be, as the sole
registered owner and the sole Holder of the Global Security for all purposes
under the Indenture.
Payment of the principal of (and premium, if any) and interest on this
Note will be made 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.
Reference is hereby made to the further provisions of this Note set forth
below, 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 or
on behalf of the Trustee referred to below, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[SEAL] SUPERVALU INC.
By
------------------------
Title:
Attest:
------------------------
Title:
Dated:
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<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENICATION
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By
------------------------
Authorized Signatory
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<PAGE>
SUPERVALU INC.
Medium-Term Note, Series B
(Fixed Rate Note)
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued or to be issued in one or more series
under an Indenture, dated as of July 1, 1987, as amended and supplemented by
the First Supplemental Indenture thereto, dated as of August 1, 1990, the
Second Supplemental Indenture thereto, dated as of October 1, 1992, and the
Third Supplemental Indenture thereto, dated as of September 1, 1995 (the
Indenture, as so amended and supplemented, being herein called the
"Indenture"), between the Company and Bankers Trust Company, as Trustee
(herein called 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 Notes (as defined below) and of the terms upon which the
Notes are, and are to be, authenticated and delivered. This Note is one of
the series designated as Medium-Term Notes, Series B (the "Notes"). By the
terms of the Indenture, Securities, which may vary as to date, amount,
Maturity Date, interest rate or method of calculating the interest rate and in
other respects as therein provided, may be issued in an unlimited principal
amount.
Unless otherwise set forth above, under "Other Terms", the Notes of this
series are issuable only in registered form without coupons, in denominations
of $100,000 and integral multiples of $1,000 in excess thereof. The Notes of
this series may be issued, in whole or in part, in the form of one or more
Global Securities bearing the legend specified in the Indenture regarding
certain restrictions on registration of transfer and exchange and issued to
the Depositary or its nominee and registered in the name of the Depositary or
such nominee. As provided in the Indenture, and subject to certain
limitations (including, if this Note is a Global Security, certain additional
limitations) therein set forth, Notes of this series in definitive registered
form are exchangeable for a like aggregate principal amount of Notes of this
series and of like tenor of a different authorized denomination, as requested
by the Holder surrendering the same.
Payments of interest hereon with respect to any Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date.
Interest hereon shall be computed on the basis of a 360-day year of twelve
30-day months.
In the event that any Interest Payment Date or the Maturity Date or any
applicable Redemption Date or Repayment Date is not a Business Day, the
interest and, with respect to the Maturity Date or any applicable Redemption
Date or Repayment Date, principal (and premium, if any) otherwise payable on
such date will be made on the next Business Day as if it were made on the date
such payment was due, and no interest will accrue on the amount so payable for
the period from and after such Interest Payment Date or the Maturity Date or
any applicable
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<PAGE>
Redemption Date or Repayment Date.
If a Redemption Commencement Date or periods within which Redemption
Dates may occur and the related Redemption Prices (expressed as percentages of
the principal amount of this Note) are set forth above under "Redemption
Terms", this Note is subject to redemption prior to the Maturity Date, on any
Redemption Date so specified or occurring within any period so specified, as a
whole or in part, at the election of the Company, at the applicable Redemption
Price so specified, together in the case of any such redemption with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to such Redemption Date will be
payable in the case of any such redemption to the Holder of this Note (or one
or more predecessor Notes) at the close of business on the relevant Regular
Record Dates referred to above, all as provided in the Indenture. Notice of
redemption will be given by mail to the Holder of this Note not less than 30
nor more than 60 days prior to the date fixed for redemption, all as provided
in the Indenture. In the event of redemption of this Note in part only, a new
Note of this series and of like tenor of an authorized denomination for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
Unless otherwise specified under "Other Terms" above, this Note will not
be subject to any sinking fund.
If a Repayment Date or periods within which Repayment Dates may occur and
the related Repayment Prices (expressed as percentages of the principal amount
of this Note) are set forth above under "Repayment Terms", this Note is
subject to repayment at the option of the Holder hereof prior to the Maturity
Date upon such terms as are set forth above under "Repayment Terms". In the
event of repayment of this Note in part only, a new Note of this series and of
like tenor of an authorized denomination for the portion hereof not repaid
will be issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to Notes of this series shall occur
and be continuing, the principal of the Notes of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
Company's obligations in respect of (i) the entire indebtedness of this Note
or (ii) certain restrictive covenants with respect to this Note, in each case
upon compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of at least a majority in principal amount of the
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<PAGE>
Notes at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Notes of each series at the time Outstanding, on
behalf of the Holders of all Notes of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note or Notes 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 Note.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not
less than 25% in principal amount of the Outstanding Notes of this series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Outstanding Notes of this series a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of or interest on this
Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, if this Note is a Global Security, the limitations set forth on
the first page hereof) therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer at the Corporate Trust Office of the Trustee in the
City of New York, or such other office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this Note are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar, duly executed
by, the Holder hereof or such Holder's attorney duly authorized in writing,
and thereupon one or more new Notes of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the
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<PAGE>
contrary.
This Note may have such additional or different terms as are set forth
above under "Other Terms". Any terms so set forth shall be deemed to modify
and/or supersede, as necessary, any other terms set forth in this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription above, shall be
construed as though they were written out in full according to applicable laws
or regulations.
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT--_______________Custodian_______________
(Cust)
(Minor)
under Uniform Gift to Minors Act
------------------------------------------------
(State)
Additional abbreviations may be used though not in the above list.
-10-
<PAGE>
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)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated: ______________________________________________
Signature Guaranteed
- --------------------------------------- -------------------------------
NOTICE: The signature to this
assignment must correspond
with the name as written upon
the face of the within
Note in every particular,
without alteration or
enlargement or any change whatever.
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<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Note (or portion thereof specified below) pursuant to its
terms at the applicable Repayment Price, together with interest to the
Repayment Date, to the undersigned at
(Please Print or Typewrite Name and Address of the Undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the undersigned elects to have
repaid:
__________________________________________________________;
and specify the denomination or denominations (which shall not be less than
the minimum authorized denomination) of the Notes to be issued to the
undersigned for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the
portion not being repaid):_____________________________.
Dated:___________________ ___________________________
NOTICE: The signature to this assignment must correspond with the name
as written upon the within Note in every particular, without alteration or
enlargement or any change whatever.
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<PAGE>
REGISTERED REGISTERED
SUPERVALU INC. Principal Amount:
No. BB- Medium-Term Note, Series B $
(Global Floating Rate Note) CUSIP
No.
[INSERT IF THE SECURITY IS TO BE A GLOBAL SECURITY -- UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), 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 DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC, AS DEPOSITARY FOR
THIS SERIES OF SECURITIES (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY.
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 NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.]
ORIGINAL ISSUE DATE: MATURITY DATE:
INITIAL INTEREST RATE: SPREAD:
INTEREST RATE BASIS: SPREAD MULTIPLIER:
REDEMPTION TERMS:
[ ] COMMERCIAL PAPER RATE
[ ] PRIME RATE
[ ] LIBOR
[ ] TREASURY RATE REPAYMENT TERMS:
[ ] CD RATE
[ ] FEDERAL FUNDS RATE
[ ] CMT RATE
DESIGNATED CMT TELERATE CALCULATION AGENT:
PAGE:
DESIGNATED CMT MATURITY
INDEX:
[ ] OTHER (SEE "OTHER TERMS") OTHER TERMS:
INDEX MATURITY:
MAXIMUM INTEREST RATE:
MINIMUM INTEREST RATE:
INTEREST RESET DATES:
INTEREST PAYMENT DATES:
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<PAGE>
SUPERVALU INC., a corporation duly organized and existing under the laws of
Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to _____________________________ or registered assigns,
the principal sum of _____________________________ United States Dollars
($_________) on the Maturity Date shown above or, together with any premium
thereon, upon any applicable Redemption Date or Repayment Date shown above,
and to pay interest thereon from the Original Issue Date shown above or,
except as otherwise specified below, from the most recent Interest Payment
Date to which interest has been paid or duly provided for, on each Interest
Payment Date shown above, and on the Maturity Date, commencing with the
Interest Payment Date immediately following the Original Issue Date, at the
rate per annum determined in accordance with the provisions below relating to
the applicable Interest Rate Basis specified above, until the principal hereof
is paid or made available for payment, and (to the extent that the payment of
such interest shall be legally enforceable) at the rate per annum equal to the
Interest Rate shown above on any overdue principal and on any overdue
installment of interest; provided, however, that if the Original Issue Date is
after a Regular Record Date and on or before the immediately following
Interest Payment Date, interest payments will commence on the Interest Payment
Date following the next succeeding Regular Record Date. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Note (or one or more predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest, which shall, unless
otherwise specified under "Other Terms" above, be the fifteenth calendar day
(whether or not a Market Day (as defined below)) next preceding such Interest
Payment Date; provided, however, that interest payable on the Maturity Date of
this Note or any applicable Redemption Date or Repayment Date that is not an
Interest Payment Date shall be payable to the Person to whom principal shall
be payable. Except as otherwise provided in the Indenture, any such interest
not so punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holder on such Regular Record Date and may either be
paid to the Person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof
shall be given to the Holder of this Note not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
If a Redemption Commencement Date or periods within which Redemption Dates
may occur and the related Redemption Prices (expressed as percentages of the
principal amount of this Note) are set forth above under "Redemption Terms",
this Note is subject to redemption, in whole or in part, at the option of the
Company prior to the Maturity Date upon not less than 30 nor more than 60
days' notice.
Payment of principal of (and premium, if any) and any interest due on any
Note of this series (that is not a Global Security) at maturity or upon
redemption or repayment will be made in immediately available funds upon
surrender of the Note at the Corporate Trust Office of the Trustee in the City
of New York, or such other office or agency of the Company maintained for
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<PAGE>
that purpose in the City of New York, provided that the Note is presented to
the Paying Agent in time for the Paying Agent to make such payments in such
funds in accordance with its normal procedures. Payments of interest due on
any Note of this series (that is not a Global Security) other than at maturity
or upon redemption or repayment will be made by check mailed to the address of
the person entitled thereto as it appears in the Security Register or by wire
transfer to such account as may have been appropriately designated by such
person.
Payment of principal of (and premium, if any) and interest due on any
Global Security will be made to the Depositary or its nominee, as the case may
be, as the sole registered owner and the sole Holder of the Global Security
for all purposes under the Indenture.
Payment of the principal of (and premium, if any) and interest on this Note
will be made 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.
Reference is hereby made to the further provisions of this Note set forth
below, 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 or on
behalf of the Trustee referred to below, directly or through an Authenticating
Agent, by manual signature of an authorized signatory, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[SEAL] SUPERVALU INC.
By ________________________
Title:
Attest:
________________________
Title:
Dated:
-4-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By ________________________
Authorized Signatory
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<PAGE>
SUPERVALU INC.
Medium-Term Note, Series B
(Floating Rate Note)
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued or to be issued in one or more series
under an Indenture dated as of July 1, 1987, as amended and supplemented by
the First Supplemental Indenture thereto, dated as of August 1, 1990, the
Second Supplemental Indenture thereto, dated as of October 1, 1992, and the
Third Supplemental Indenture thereto, dated as of September 1, 1995 (the
Indenture, as so amended and supplemented, being herein called the
"Indenture"), between the Company and Bankers Trust Company, as Trustee
(herein called 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 Notes (as defined below) and the terms upon which the Notes
are, and are to be, authenticated and delivered. This Note is one of the
series designated as Medium-Term Notes, Serices B (the "Notes"). By the terms
of the Indenture, Securities, which may vary as to date, amount, Maturity
Date, interest rate or method of calculating the interest rate and in other
respects as therein provided, may be issued in an unlimited principal amount.
Unless otherwise set forth above under "Other Terms", the Notes of this
series are issuable only in registered form without coupons, in denominations
of $100,000 and integral multiples of $1,000 in excess thereof. The Notes of
this series may be issued, in whole or in part, in the form of one or more
Global Securities bearing the legend specified in the Indenture regarding
certain restrictions on registration of transfer and exchange and issued to
the Depositary or its nominee and registered in the name of the Depositary or
such nominee. As provided in the Indenture, and subject to certain
limitations (including, if this Note is a Global Security, certain additional
limitations) therein set forth, Notes of this series are in definitive
registered form exchangeable for a like aggregate principal amount of Notes of
this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
Payments of interest hereon with respect to any Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date;
provided, however, that if the Interest Reset Dates with respect to this Note
are daily or weekly, interest payable on this Note on any Interest Payment
Date, other than interest payable on the date on which principal on this Note
is payable, unless otherwise specified above under "Other Terms", will include
interest accrued through but excluding the day following the next preceding
Regular Record Date.
In the event that any Interest Payment Date or the Maturity Date or any
applicable Redemption Date or Repayment Date is not a Market Day, the payment
of interest and, with respect to the Maturity Date or any applicable
Redemption Date or Repayment Date, principal (and premium, if any) otherwise
payable on such date will be made on the next Market Day, as if it were made
on the date such payment was due, and no interest will accrue on the amount
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<PAGE>
so payable for the period from and after such Interest Payment Date or the
Maturity Date or any applicable Redemption Date or Repayment Date, except
that, in the case of an Interest Payment Date for a LIBOR Note, if such next
Market Day is in the next succeeding calendar month, the payment of interest
shall be made on the immediately preceding Market Day.
REDEMPTION AND REPAYMENT
If a Redemption Commencement Date or periods within which Redemption
Dates may occur and the related Redemption Prices (expressed as percentages of
the principal amount of this Note) are set forth above under "Redemption
Terms", this Note is subject to redemption prior to the Maturity Date, on any
Redemption Date so specified or occurring within any period so specified, as a
whole or in part, at the election of the Company, at the applicable Redemption
Price so specified, together in the case of any such redemption with accrued
interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to such Redemption Date will be
payable in the case of any such redemption to the Holder of this Note (or one
or more predecessor Notes) at the close of business on the relevant Regular
Record Dates referred to above, all as provided in the Indenture. Notice of
redemption will be given by mail to the Holder of this Note not less than 30
nor more than 60 days prior to the date fixed for redemption, all as provided
in the Indenture. In the event of redemption of this Note in part only, a new
Note of this series and of like tenor of an authorized denomination for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
Unless otherwise specified under "Other Terms" above, this Note will not
be subject to any sinking fund.
If a Repayment Date or periods within which Repayment Dates may occur and
the related Repayment Prices (expressed as percentages of the principal amount
of this Note) are set forth above under "Repayment Terms", this Note is
subject to repayment at the option of the Holder hereof prior to the Maturity
Date upon such terms as are set forth above under "Repayment Terms". In the
event of repayment of this Note in part only, a new Note of this series and of
like tenor of an authorized denomination for the portion hereof not repaid
will be issued in the name of the Holder hereof upon the cancellation hereof.
INTEREST PROVISIONS
Commencing with the Interest Reset Date specified above, first following
the Original Issue Date specified above, the rate at which this Note bears
interest will be reset daily, weekly, monthly, quarterly, semi-annually or
annually (the date on which each such reset occurs, an "Interest Reset Date").
The Interest Reset Date will be as follows: in the case of Notes which are
reset daily, each Market Day; in the case of Notes (other than Treasury Rate
Notes) which are reset weekly, Wednesday of each week; in the case of Treasury
Rate Notes which are reset weekly, Tuesday of each week; in the case of Notes
which are reset monthly, the third Wednesday of each month; in the case of
Notes which are reset quarterly, the third Wednesday of March, June, September
and December of each year; in the case of Notes which are reset
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semi-annually, the third Wednesday of the two months of each year as indicated
above, by the Interest Reset Dates; and in the case of Notes which are reset
annually, the third Wednesday of the month of each year as indicated above, by
the Interest Reset Dates. Unless otherwise specified above, the interest rate
determined with respect to any Interest Determination Date (as defined below)
will become effective on and as of the next succeeding Interest Reset Date;
provided, however, that the interest rate in effect from the date of issue to
the first Interest Reset Date with respect to this Note (the "Initial Interest
Rate") will be as set forth above. If any Interest Reset Date for any Note
would otherwise be a day that is not Market Day, such Interest Reset Date
shall be postponed to the next day that is a Market Day, except that in the
case of a LIBOR Note, if such Market Day is in the next succeeding calendar
month, such Interest Reset Date shall be the immediately preceding Market Day.
Subject to applicable provisions of law and except as specified herein, on
each Interest Reset Date the rate of interest on this Note shall be the rate
determined in accordance with the provisions of the applicable heading below.
As used herein, the term "Market Day" means (a) with respect to any Note
(other than any LIBOR Note), any Business Day, and (b) with respect to any
LIBOR Note, any such Business Day which is also a London Business Day. The
term "London Business Day" means any day on which dealing in deposits in U.S.
dollars are transacted in the London interbank market.
DETERMINATION OF COMMERCIAL PAPER RATE
If the Interest Rate Basis specified above is the Commercial Paper Rate,
this Note is a "Commercial Paper Rate Note" and the interest rate with respect
to this Note shall be the Commercial Paper Rate plus or minus the Spread, if
any, or multiplied by the Spread Multiplier, if any, as specified above, as
determined on the applicable Commercial Paper Interest Determination Date (as
defined below). Unless otherwise specified above under "Other Terms", the
"Calculation Date" pertaining to a Commercial Paper Interest Determination
Date will be the tenth day after such Commercial Paper Interest Determination
Date or, if any such day is not a Market Day, the next succeeding Market Day.
Unless otherwise specified above under "Other Terms", "Commercial Paper
Rate" means, with respect to any Interest Reset Date, the Money Market Yield
(calculated as described below) of the per annum rate (quoted on a bank
discount basis) for the relevant Commercial Paper Interest Determination Date
for commercial paper having the Index Maturity specified above as published by
the Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" or any successor publication of the Board
of Governors of the Federal Reserve System ("H.15(519)") under the heading
"Commercial Paper." In the event that such rate is not published prior to
9:00 a.m. New York City time, on the relevant Calculation Date, then the
Commercial Paper Rate with respect to such Interest Reset Date shall be the
Money Market Yield of such rate on such Commercial Paper Interest
Determination Date for commercial paper having the Index Maturity specified
above as published by the Federal Reserve Bank of New York in its daily
statistical release, "Composite 3:30 p.m. Quotations for United States
Government Securities" or any successor publication published by the Federal
Reserve Bank of New York ("Composite Quotations") under the
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heading "Commercial Paper." If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, the Commercial Paper Rate with respect to such Interest
Reset Date shall be calculated by the Calculation Agent (as defined below) and
shall be the Money Market Yield of the arithmetic mean of the offered per
annum rates (quoted on a bank discount basis), as of 11:00 a.m., New York City
time, on such Commercial Paper Interest Determination Date, of three leading
dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the specified Index Maturity placed
for an industrial issuer whose bond rating is "AA," or the equivalent, from a
nationally recognized statistical rating agency; provided, however, that if
fewer than three dealers selected as aforesaid by the Calculation Agent are
quoting as mentioned in this sentence, the Commercial Paper Rate with respect
to such Interest Reset Date will be the Commercial Paper Rate in effect on
such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield expressed as a percentage
calculated in accordance with the following formula:
Money Market Yield = 100 x D x 360
------------------
360 - (D x M)
where "D" refers to the per annum rate for the commercial paper, quoted on a
bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the period from the Interest Reset Date to but excluding the
day that numerically corresponds to such Interest Reset Date (or, if there is
not any such numerically corresponding day, the last day) in the calendar
month that is the number of months corresponding to the specified Index
Maturity after the month in which such Interest Reset Date falls.
DETERMINATION OF PRIME RATE
If the Interest Rate Basis specified above is the Prime Rate, this Note
is a "Prime Rate Note" and the interest rate with respect to this Note shall
be the Prime Rate plus or minus the Spread, if any, or multiplied by the
Spread Multiplier, if any, as specified above, as determined on the applicable
Prime Rate Interest Determination Date (as defined below). Unless otherwise
specified above under "Other Terms", the "Calculation Date" pertaining to a
Prime Rate Interest Determination Date will be the tenth day after such Prime
Rate Interest Determination Date or, if any such day is not a Market Day, the
next succeeding Market Day.
Unless otherwise specified above under "Other Terms", "Prime Rate" means,
with respect to any Interest Reset Date, the rate set forth for the relevant
Prime Rate Interest Determination Date in H.15(519) under the heading "Bank
Prime Loan." In the event that such rate is not published prior to 9:00 a.m.,
New York City time, on the relevant Calculation Date, then the Prime Rate with
respect to such Interest Reset Date will be the arithmetic mean of the rates
of interest publicly announced by each bank that appears on the display
designated as page "NYMF" on the Reuters Monitor Money Rates Service (or such
other page as may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United States banks)
("Reuters Screen NYMF Page") as such bank's prime rate or base
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lending rate as in effect for such Prime Rate Interest Determination Date.
If fewer than four such rates appear on the Reuters Screen NYMF Page on such
Prime Rate Interest Determination Date, the Prime Rate with respect to such
Interest Reset Date will be the arithmetic mean of the prime rates or base
lending rates (quoted on the basis of the actual number of days in the year
divided by a 360-day year) as of the close of business on such Prime Rate
Interest Determination Date by three major banks in The City of New York
selected by the Calculation Agent; provided, however, that if fewer than three
banks selected as aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Prime Rate with respect to such Interest Reset Date will
be the Prime Rate in effect on such Prime Rate Interest Determination Date.
DETERMINATION OF LIBOR
If the Interest Rate Basis specified above is LIBOR, this Note is a
"LIBOR Note" and the interest rate with respect to this Note shall be LIBOR
plus or minus the Spread, if any, or multiplied by the Spread Multiplier, if
any, as specified above, as determined on the applicable LIBOR Interest
Determination Date (as defined below).
Unless otherwise specified above under "Other Terms", "LIBOR", with
respect to any Interest Reset Date, will be determined by the Calculation
Agent in accordance with the following provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will be
determined on the basis of the offered rates for deposits in the Index
Currency (as defined below) having the Index Maturity specified above,
commencing on the second Market Day immediately following that LIBOR Interest
Determination Date, that appear as of 11:00 a.m., London time, on that LIBOR
Interest Determination Date on the display screen designated "Page 3750" by
Telerate Data Service, or such other page as may replace such page on that
service or such other service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates for deposits in the relevant Index Currency ("Telerate Page 3750"). If
no such rate appears on Telerate Page 3750, then LIBOR in respect of that
LIBOR Interest Determination Date will be the arithmetic mean of the offered
rates (unless the display referred to below by its terms provides only for a
single rate, in which case such single rate shall be used) for deposits in the
London interbank market in the Index Currency having the Index Maturity
specified above and commencing on the second Market Day immediately following
such LIBOR Interest Determination Date that appear on the display on the
Reuters Monitor Money Rates Service for the purpose of displaying the London
interbank offered rates of major banks for the applicable Index Currency as of
11:00 a.m., London time, on such LIBOR Interest Determination Date, if at
least two such offered rates appear (unless, as aforesaid, only a single rate
is required). If fewer than two such rates appear (or, if such display by its
terms provides for only a single rate, in which case if no such rate appears),
then LIBOR in respect of such LIBOR Interest Determination Date will be
determined as if the parties had specified the rate described in clause (ii)
below.
(ii) If LIBOR with respect to a LIBOR Interest Determination Date is to
be determined pursuant to this clause (ii), the Calculation Agent will request
the principal London offices of
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each of three major reference banks in the London interbank market, as
selected by the Calculation Agent, to provide the Calculation Agent with its
offered quotation for deposits in the Index Currency for the period of the
Index Maturity specified above, commencing on the second London Market Day
immediately following such LIBOR Interest Determination Date, the prime banks
in the London interbank market at approximately 11:00 a.m., London time, on
such LIBOR Interest Determination Date and in a principal amount that is
representative for a single transaction in such Index Currency in such market
at such time. If at least two such quotations are provided, LIBOR determined
on such LIBOR Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two quotations are provided, LIBOR determined on
such LIBOR Interest Determination Date will be the arithmetic mean of the
rates quoted at approximately 11:00 a.m., (or such other time specified
above), in the applicable Principal Financial Center (as defined below), on
such LIBOR Interest Determination Date by three major banks in such Principal
Financial Center selected by the Calculation Agent for loans in the Index
Currency to leading European banks, having the Index Maturity specified above
and in a principal amount that is representative for a single transaction in
such Index Currency in such market at such time; provided, however, that if
the banks so selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR determined on such LIBOR Interest Determination Date will
be LIBOR in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency (including composite currencies)
specified above as the currency for which LIBOR shall be calculated. If no
such currency is specified above, the Index Currency shall be United States
dollars.
"Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to United
States dollars, Deutsche marks, Italian lira, Swiss francs, Dutch guilders and
ECUs, the Principal Financial Center shall be The City of New York, Frankfurt,
Milan, Zurich, Amsterdam and Luxembourg, respectively.
DETERMINATION OF TREASURY RATE
If the Interest Rate Basis specified above with respect to any Interest
Period is the Treasury Rate, this Note is a "Treasury Rate Note" with respect
to such Interest Period and the interest rate with respect to this Note for
any Interest Reset Date relating to such Interest Period shall be the Treasury
Rate plus or minus the Spread, if any, or multiplied by the Spread Multiplier,
if any, as specified above, as determined on the applicable Treasury Interest
Determination Date (as defined below). Unless otherwise specified above under
"Other Terms", the "Calculation Date" pertaining to a Treasury Interest
Determination Date will be the tenth day after such Treasury Interest
Determination Date or, if any such day is not a Market Day, the next
succeeding Market Day.
Unless otherwise specified above under "Other Terms", "Treasury Rate"
means, with respect to any Interest Reset Date, the rate for the auction on
the relevant Treasury Interest Determination Date of direct obligations of the
United States ("Treasury bills") having the specified Index Maturity as
published in H.15(519) under the heading "United States Government Securities-
-Treasury Bills--auction average (investment)" or, if not so published
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by 9:00 a.m., New York City time, on the relevant Calculation Date, the
auction average rate (expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) for such auction
as otherwise announced by the United States Department of the Treasury. In
the event that the results of such auction of Treasury bills having the
specified Index Maturity are not published or reported as provided above by
3:00 p.m., New York City time, on such Calculation Date, or if no such auction
is held during such week, then the Treasury Rate shall be the rate set forth
in H.15(519) for the relevant Treasury Rate Interest Determination Date for
the specified Index Maturity under the heading "United States Government
Securities--Treasury Bills--Secondary Market." In the event such rate is not
so published by 3:00 p.m., New York City time, on the relevant Calculation
Date, the Treasury Rate with respect to such Interest Reset Date shall be
calculated by the Calculation Agent and shall be a yield to maturity
(expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates as of approximately 3:30 p.m., New York City time,
on such Treasury Interest Determination Date, of three primary United States
government securities dealers in The City of New York selected by the
Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the specified Index Maturity; provided, however, that if fewer than
three dealers selected as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Treasury Rate with respect to such Interest
Reset Date will be the Treasury Rate in effect on such Treasury Interest
Determination Date.
DETERMINATION OF THE CD RATE
If the Interest Rate Basis specified above is the CD Rate, this Note is a
"CD Rate Note" and the interest rate with respect to this Note shall be the CD
Rate plus or minus the Spread, if any, or multiplied by the Spread Multiplier,
if any, as specified above, as determined on the applicable CD Interest
Determination Date (as defined below). Unless otherwise specified above under
"Other Terms", the "Calculation Date" pertaining to a CD Rate Determination
Date will be the tenth day after such CD Rate Interest Determination Date or,
if any such day is not a Market Day, the next succeeding Market Day.
Unless otherwise specified above under "Other Terms", "CD Rate" means,
with respect to any Interest Reset Date, the rate for the relevant CD Rate
Interest Determination Date for negotiable certificates of deposit having the
specified Index Maturity as published in H.15(519) under the heading "CDs
(Secondary Market)." In the event that such rate is not published prior to
9:00 a.m., New York City time, on the relevant Calculation Date, then the CD
Rate with respect to such Interest Reset Date shall be the rate on such CD
Rate Interest Determination Date for negotiable certificates of deposit having
the specified Index Maturity as published in Composite Quotations under the
heading "Certificates of Deposit." If by 3:00 p.m., New York City time, on
such Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, the CD Rate with respect to such Interest Reset Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean
of the secondary market offered rates, as of 10:00 a.m., New York City time,
on such CD Rate Interest Determination Date, of three leading nonbank dealers
of negotiable U.S. dollar certificates of deposit in The City of New York
selected by the Calculation Agent for negotiable certificates of deposit of
major United States
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money market banks with a remaining maturity closest to the specified Index
Maturity in a denomination of U.S. $5,000,000; provided, however, that if
fewer than three dealers selected as aforesaid by the Calculation Agent are
quoting as mentioned in this sentence, the CD Rate with respect to such
Interest Reset Date will be the CD Rate in effect on such CD Rate Interest
Determination Date.
DETERMINATION OF FEDERAL FUNDS RATE
If the Interest Rate Basis specified above is the Federal Funds Rate,
this Note is a "Federal Funds Rate Note" and the interest rate with respect to
this Note shall be the Federal Funds Rate plus or minus the Spread, if any, or
multiplied by the Spread Multiplier, if any, as specified above, as determined
on the applicable Federal Funds Interest Determination Date (as defined
below). Unless otherwise specified above under "Other Terms", the
"Calculation Date" pertaining to a Federal Funds Interest Determination Date
will be the tenth day after such Federal Funds Interest Determination Date or,
if any such day is not a Market Day, the next succeeding Market Day.
Unless otherwise specified above under "Other Terms", "Federal Funds
Rate" means, with respect to any Interest Reset Date, the rate on the relevant
Federal Funds Interest Determination Date for Federal Funds as published in
H.15(519) under the heading "Federal Funds (Effective)." In the event that
such rate is not published prior to 9:00 a.m., New York City time, on the
relevant Calculation Date, then the Federal Funds Rate with respect to such
Interest Reset Date will be the rate on such Federal Funds Interest
Determination Date for Federal Funds as published in Composite Quotations
under the heading "Federal Funds/Effective Rate." If by 3:00 p.m., New York
City time, on such Calculation Date such rate is not published in either
H.15(519) or Composite Quotations, the Federal Funds Rate with respect to such
Interest Reset Date shall be calculated by the Calculation Agent and shall be
the arithmetic mean of the rates, as of 9:00 a.m., New York City time, on such
Federal Funds Interest Determination Date, for the last transaction in
overnight Federal Funds arranged by three leading brokers of Federal Funds
transactions in The City of New York selected by the Calculation Agent;
provided, however, that if fewer than three brokers selected as aforesaid by
the Calculation Agent are quoting as mentioned in this sentence, the Federal
Funds Rate with respect to such Interest Reset Date will be the Federal Funds
Rate in effect on such Federal Funds Interest Determination Date.
DETERMINATION OF CMT RATE
If the Interest Rate Basis specified above is the CMT Rate, this Note is
a "CMT Rate Note" and the interest rate with respect to this Note shall be the
CMT Rate plus or minus the Spread, if any, or multiplied by the Spread
Multiplier, if any, as specified above, as determined on the applicable CMT
Interest Determination Date (as defined below). Unless otherwise specified
above under "Other Terms," the "Calculation Date" with respect to a CMT
Interest Determination Date will be the tenth day after such CMT Interest
Determination Date, or, if any such day is not a Market Day, the next
succeeding Market Day.
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Unless otherwise specified above, "CMT Rate" means, with respect to any
CMT Interest Determination Date, the rate displayed on the Designated CMT
Telerate Page (as defined below) under the caption ". . . Treasury Constant
Maturities . . . Federal Reserve Board Release H.15 . . . Mondays
Approximately 3:45 p.m.," under the column for the Designated CMT Maturity
Index (as defined below) for (i) if the Designated CMT Telerate Page is 7055,
the rate on such CMT Interest Determination Date and (ii) if the Designated
CMT Telerate Page is 7052, the week or the month, as applicable, ended
immediately preceding the week in which the related CMT Interest Determination
Date occurs. If such rate is no longer displayed on the relevant page, or is
not displayed prior to 3:00 p.m., New York City time, on the relevant
Calculation Date, then the CMT Rate with respect to such CMT Interest
Determination Date will be such Treasury Constant Maturity rate for the
Designated CMT Maturity Index as published in the relevant H.15(519). If such
rate is no longer published, or, is not published by 3:00 p.m., New York City
time, on such Calculation Date, then the CMT Rate for such CMT Interest
Determination Date will be such Treasury Constant Maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided
by 3:00 p.m., New York City time, on the related Calculation Date, then the
CMT Rate for the CMT Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic
mean of the secondary market closing offer side prices as of approximately
3:30 p.m., New York City time on the CMT Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest quotation (or, in
the event of equality, one of the lowest)), for the most recently issued
direct noncallable fixed rate obligations of the United States ("Treasury
notes") with an original maturity of approximately the Designated CMT Maturity
Index and a remaining term to maturity of not less than such Designated CMT
Maturity Index minus one year. If the Calculation Agent cannot obtain three
such Treasury notes quotations, the CMT Rate for such CMT Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity based on the arithmetic mean of the secondary market offer
side prices as of approximately 3:30 p.m., New York City time, on the CMT
Interest Determination Date of three Reference Dealers in The City of New York
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for Treasury notes with an original maturity of the number of years
that is the next highest to the Designated CMT Maturity Index and a remaining
term to maturity closest to the Designated CMT Maturity Index and in an amount
of at least $100,000,000. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the
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CMT Rate will be the CMT Rate in effect on such CMT Interest Determination
Date. If two Treasury notes with an original maturity as described in the
third preceding sentence have remaining terms to maturity equally close to the
Designated CMT Maturity Index, the quotes for the CMT Rate Note with the
shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service on the page designated in the applicable Pricing Supplement
(or any other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519).
If no such page is specified in the applicable Pricing Supplement, the
Designated CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years)
specified in the applicable Pricing Supplement with respect to which the CMT
Rate will be calculated. If no such maturity is specified in the applicable
Pricing Supplement, the Designated CMT Maturity Index shall be 2 years.
GENERAL
Notwithstanding the determination of the interest rate as provided above,
the interest rate on this Note shall not be greater than the Maximum Interest
Rate, if any, or less than the Minimum Interest Rate, if any, specified above.
The interest rate on this Note will in no event be higher than the maximum
rate permitted by New York law as the same may be modified by United States
law of general application.
On or before the Calculation Date, Bankers Trust Company or any other
Calculation Agent specified above, as Calculation Agent (the "Calculation
Agent"), will determine the interest rate in accordance with the foregoing.
Upon the request of the Holder of this Note, the Calculation Agent will
provide the interest rate then in effect, and, if determined, the interest
rate which will become effective on the next Interest Reset Date with respect
to this Note. The Calculation Agent's determination of any interest rate will
be final and binding in the absence of manifest error. Accrued interest from
the Original Issue Date or from the last date to which interest has been paid
will be calculated by multiplying the face amount of the Note by an accrued
interest factor. Such accrued interest factor is computed by adding the
interest factor calculated for each day from the date of issue, or from the
last date to which interest has been paid, to but excluding the date for which
accrued interest is being calculated. The interest factor (expressed as a
decimal) for each such day is computed by dividing the interest rate
(expressed as a decimal) applicable to such date by 360, in the case of
Commercial Paper Rate Notes, Prime Rate Notes, LIBOR Notes, CD Rate Notes or
Federal Funds Rate Notes, or by the actual number of days in the year, in the
case of Treasury Rate Notes or CMT Rate Notes.
Unless otherwise specified above under "Other Terms", the Interest
Determination Date pertaining to an Interest Reset Date for a Commercial Paper
Rate Note (the "Commercial Paper Interest Determination Date"), for a Prime
Rate Note (the "Prime Rate Interest Determination
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Date"), for a CD Rate Note (the "CD Rate Interest Determination Date"), for a
Federal Funds Rate Note (the "Federal Funds Rate Interest Determination Date")
and for a CMT Rate Note (the "CMT Rate Interest Determination Date") will be
the second Market Day preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date for a LIBOR Note (the
"LIBOR Interest Determination Date") will be the second London Market Day
preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day of the week in which such
Interest Reset Date falls on which Treasury bills would normally be auctioned.
If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Treasury Interest Determination Date
pertaining to the Interest Reset Date occurring in the next succeeding week.
If an auction date shall fall on any Interest Reset Date for a Treasury Rate
Note, then such Interest Reset Date shall instead be the first Market Day
immediately following such auction date.
Unless otherwise specified above under "Other Terms", all percentages
resulting from any calculations on this Note will be rounded, if necessary, to
the next higher one hundred-thousandth of one percentage point, with five one-
millionths of one percentage point rounded upward (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655); and all U.S. dollar
amounts used in or resulting from such calculations on this Note will be
rounded to the nearest cent (with one-half cent being rounded upwards).
MISCELLANEOUS PROVISIONS
If an Event of Default with respect to Notes of this series shall occur
and be continuing, the principal of the Notes of this Series may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
Company's obligations in respect of (i) the entire indebtedness of this Note
or (ii) certain restrictive covenants with respect to this Note, in each case
upon compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of at least a majority in principal amount of the
Notes at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Notes of each series at the time Outstanding, on
behalf of the Holders of all Notes of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note or Notes issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
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As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not
less than 25% in principal amount of the Outstanding Notes of this series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Outstanding Notes of this series a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of or interest on this
Note on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, if this Note is a Global Security, the limitations set forth on
the first page hereof) therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer at the Corporate Trust Office of the Trustee in the
City of New York, or such other office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this Note are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar, duly executed
by the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Notes of this series and of like tenor of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note may have such additional or different terms as are set forth
above under "Other Terms". Any terms so set forth shall be deemed to modify
and/or supersede, as necessary, any other terms set forth in this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
-17-
<PAGE>
All terms used in this Note which are defined in the Indenture shall have
the respective meanings assigned to them in the Indenture.
-18-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription above, shall be
construed as though they were written out in full according to applicable laws
or regulations.
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
UNF GIFT MIN ACT-- Custodian
--------------- ---------------
(Cust)
(Minor)
under Uniform Gift to Minors Act
-------------------------------------------
(State)
Additional abbreviations may be used though not in the above list.
---------------------------------
-19-
<PAGE>
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)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
----------------------------------
Signature Guaranteed
-----------------------------------------
-----------------------------------------
NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the within Note
in every particular, without alteration or
-20-
<PAGE>
enlargement or any change whatever.
-21-
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Note (or portion thereof specified below) pursuant to its
terms at the applicable Repayment Price, together with interest to the
Repayment Date, to the undersigned at
(Please Print or Typewrite Name and Address of the Undersigned)
If less than the entire principal amount of the within Note is to be repaid;
specify the portion thereof which the undersigned elects to have repaid:
----------------------------------------------------;
and specify the denomination or denominations (which shall not be less than
the minimum authorized denomination) of the Notes to be issued to the
undersigned for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the
portion not being repaid):
-------------------------------.
Dated:
------------------- ---------------------------
---------------------------
NOTICE: The signature to this assignment must correspond with the name
as written upon the within Note in every particular, without alteration or
enlargement or any change whatever.
-22-
<PAGE>
REGISTERED REGISTERED
SUPERVALU INC. Principal Amount:
No. BC- Medium-Term Note, Series B $
(Original Issue Discount Zero Coupon Note) CUSIP
No.
[INSERT IF THE SECURITY IS TO BE A GLOBAL SECURITY --UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), 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 DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC, AS DEPOSITARY FOR
THIS SERIES OF SECURITIES (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY.
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 NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.]
ORIGINAL ISSUE DATE: MATURITY DATE:
OTHER TERMS: REDEMPTION TERMS:
ORIGINAL ISSUE DISCOUNT: REPAYMENT TERMS:
YIELD TO MATURITY:
SUPERVALU INC., a corporation duly organized and existing under the laws of
Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to _____________________________ or registered assigns,
the principal sum of _____________________________ United States Dollars
($_________) on the Maturity Date shown above or, together with any premium
thereon, upon any applicable Redemption Date or Repayment Date shown above.
-1-
<PAGE>
The principal of this Note shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or
repayment or at the Maturity Date, and in such case the overdue principal of
this Note shall bear interest at a rate which is equivalent to the yield to
maturity stated above (to the extent that the payment of such interest shall
be legally enforceable), which shall accrue from the Maturity Date or the date
payment is due upon acceleration or redemption or repayment, as the case may
be, to the date payment of such principal has been made or duly provided for.
Interest on any overdue principal shall be payable upon demand. Any such
interest on any overdue principal that is not so paid on demand shall bear
interest at the same rate as the interest on the overdue principal (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.
If a Redemption Commencement Date or periods within which Redemption Dates
may occur and the related Redemption Prices (unless otherwise specified above
under "Other Terms", expressed as percentages of the Amortized Face Amount (as
defined below) of this Note) are set forth above under "Redemption Terms",
this Note is subject to redemption, in whole or in part, at the option of the
Company prior to the Maturity Date upon not less than 30 nor more than 60
days' notice.
Payment of principal of (and premium, if any) and any interest due on any
Note of this series (that is not a Global Security) at maturity or upon
redemption or repayment will be made in immediately available funds upon
surrender of the Note at the Corporate Trust Office of the Trustee in the City
of New York, or such other office or agency of the Company maintained for that
purpose in the City of New York, provided that the Note is presented to the
Paying Agent in time for the Paying Agent to make such payments in such funds
in accordance with its normal procedures. Payments of any interest due on any
Note of this series (that is not a Global Security) other than at maturity or
upon redemption or repayment will be made by check mailed to the address of
the person entitled thereto as it appears in the Security Register or by wire
transfer to such account as may have been appropriately designated by such
person.
Payment of principal of (and premium, if any) and interest due on any
Global Security will be made to the Depository or its nominee, as the case may
be, as the sole registered owner and the sole Holder of the Global Security
for all purposes under the Indenture.
Payment of the principal of (and premium, if any) and any interest on this
Note will be made 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.
Reference is hereby made to the further provisions of this Note set forth
below, 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 or on
behalf of the Trustee referred to below, directly or through an Authenticating
Agent, by manual signature of an authorized signatory, this Note shall not be
entitled to any benefit under the Indenture or
-2-
<PAGE>
be valid or obligatory for any purpose.
-3-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[SEAL] SUPERVALU INC.
By
------------------------
Title:
Attest:
------------------------
Title:
Dated:
-4-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By
------------------------
Authorized Signatory
-5-
<PAGE>
SUPERVALU INC.
Medium-Term Note, Series B
(Original Issue Discount Zero Coupon Note)
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued or to be issued in one or more series
under an Indenture, dated as of July 1, 1987, as amended and supplemented by
the First Supplemental Indenture thereto, dated as of August 1, 1990, the
Second Supplemental Indenture thereto, dated as of October 1, 1992, and the
Third Supplemental Indenture thereto, dated as of September 1, 1995 (the
Indenture, as so amended and supplemented, being herein called the
"Indenture"), between the Company and Bankers Trust Company, as Trustee
(herein called 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 Notes (as defined below) and of the terms upon which the
Notes are, and are to be, authenticated and delivered. This Note is one of
the series designated as Medium-Term Notes, Series B (the "Notes"). By the
terms of the Indenture, Securities, which may vary as to date, amount,
Maturity Date, interest rate or method of calculating the interest rate and in
other respects as therein provided may be issued in an unlimited principal
amount.
Unless otherwise set forth above under "Other Terms", the Notes of this
series are issuable only in registered form without coupons, in denominations
of $100,000 and integral multiples of $1,000 in excess thereof. The Notes of
this series may be issued, in whole or in part, in the form of one or more
Global Securities bearing the legend specified in the Indenture regarding
certain restrictions on registration of transfer and exchange and issued to
the Depositary or its nominee and registered in the name of the Depositary or
such nominee. As provided in the Indenture, and subject to certain
limitations (including, if this Note is a Global Security, certain additional
limitations) therein set forth, Notes of this series in definitive registered
form are exchangeable for a like aggregate principal amount of Notes of this
series and of like tenor of a different authorized denomination, as requested
by the Holder surrendering the same.
In the event that the Maturity Date or any applicable Redemption Date or
Repayment Date is not a Business Day, the payment of principal (and premium,
if any) otherwise payable on such date will be made on the next Business Day
as if it were made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after the Maturity
Date or any applicable Redemption Date or Repayment Date.
If a Redemption Commencement Date or periods within which Redemption
Dates may occur and the related Redemption Prices (unless otherwise specified
above under "Other Terms", expressed as percentages of the Amortized Face
Amount (as defined below) of this Note) are set forth above under "Redemption
Terms", this Note is subject to redemption prior to the Maturity Date, on any
Redemption Date so specified or occurring within any period so specified, as a
-6-
<PAGE>
whole or in part, at the election of the Company at the applicable Redemption
Price so specified. Notice of redemption will be given by mail to the Holder
of this Note not less than 30 nor more than 60 days prior to the date for
redemption, all as provided in this Indenture. In the event of redemption
of this Note in part only, a new Note of this series and of like tenor of an
authorized denomination for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
Unless otherwise specified under "Other Terms" above, this Note will not
be subject to any sinking fund.
If a Repayment Date or periods within which Repayment Dates may occur and
the related Repayment Prices (unless otherwise specified above under "Other
Terms", expressed as percentages of the Amortized Face Amount of this Note)
are set forth above under "Repayment Terms", this Note is subject to repayment
at the option of the Holder hereof prior to the Maturity Date upon such terms
as are set forth above under "Repayment Terms". In the event of repayment of
this Note in part only, a new Note of this series and of like tenor of an
authorized denomination for the portion hereof not repaid will be issued in
the name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to this Note shall occur and be
continuing, a lesser amount than the principal amount due at the Stated
Maturity of this Note may (subject to the conditions set forth in the
Indenture) be declared due and payable in the manner and with the effect
provided in the Indenture. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on this Note shall
terminate.
The amount due and payable on this Note in the event that the principal
amount hereof is declared due and payable prior to the Stated Maturity or in
the event that this Note is redeemed or repaid shall, unless otherwise
indicated above under "Other Terms", be the Amortized Face Amount (as defined
below) of this Note or, in the case of redemption or repayment, the specified
percentage of the Amortized Face Amount of this Note on the day such payment
is due and payable, as determined by the Company, plus any accrued but unpaid
"qualified stated interest" payments (as defined in the Treasury Regulations
(the "Regulations") Section 1.1273-1(c) issued by the Treasury Department in
January 1994 ).
The "Amortized Face Amount" of this Note shall be the amount equal to the
sum of (i) the issue price (as defined below) of this Note and (ii) that
portion of the difference between the issue price and the principal amount of
this Note that has been amortized at the Stated Yield (as defined below) of
this Note (computed in accordance with Section 1272(a)(4) of the Internal
Revenue Code of 1986, as amended, and Section 1.1275-1(b) of the Regulations,
in each case as in effect on the Original Issue Date of this Note) at the date
as of which the Amortized Face Amount is calculated, but in no event can the
Amortized Face Amount exceed the principal amount of this Note due at the
Stated Maturity hereof. As used in the preceding sentence, the
-7-
<PAGE>
term "issue price" means the principal amount of this Note due at the Stated
Maturity hereof less the Original Issue Discount of this Note specified above.
The term "Stated Yield" of this Note means the Yield to Maturity specified
above for the period from the Original Issue Date of this Note specified
above, to the Stated Maturity hereof based on the issue price and principal
amount payable at the Stated Maturity hereof.
The Indenture contains provisions for defeasance at any time of the
Company's obligations in respect of (i) the entire indebtedness of this Note
or (ii) certain restrictive covenants with respect to this Note, in each case
upon compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of at least a majority in principal amount of the
Notes at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Notes of each series at the time Outstanding, on
behalf of the Holders of all Notes of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note or Notes 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 Note.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not
less than 25% in principal amount of the Outstanding Notes of this series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Outstanding Notes of this series a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of or interest on this
Note on or after the respective due dates expressed herein.
In determining whether the Holders of the requisite principal amount of
the Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or whether a quorum
is present at a meeting of Holders of Notes, the principal amount of any
Original Issue Discount Note that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable as of the
date of such determination upon acceleration of the Maturity thereof.
No reference herein to the Indenture and no provision of this Note or of
the Indenture
-8-
<PAGE>
shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal (and premium, if any) of this
Note at the times, places and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations
(including, if this Note is a Global Security, the limitations set forth on
the first page hereof) therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer at the Corporate Trust Office of the Trustee in the
City of New York, or such other office or agency of the Company in any place
where the principal (and premium, if any) of this Note is payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Notes of this series of like tenor of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note may have such additional or different terms as are set forth
above, under "Other Terms". Any terms so set forth shall be deemed to modify
and/or supersede, as necessary, any other terms set forth in this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
All terms used in this Note which are defined in the Indenture shall have
the respective meanings assigned to them in the Indenture.
9
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription above, shall be
construed as though they were written out in full according to applicable laws
or regulations.
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT-- Custodian
-------------- ---------------
(Cust)
(Minor)
under Uniform Gift to Minors Act
----------------------------------------
(State)
Additional abbreviations may be used though not in the above list.
-10-
<PAGE>
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)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
-----------------------------
Signature Guaranteed
------------------------------------
------------------------------------
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the
within Note in every particular, without alteration
or enlargement or any change whatever.
-11-
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Note (or portion thereof specified below) pursuant to its
terms at the applicable Repayment Price, together with interest to the
Repayment Date, to the undersigned at
(Please Print or Typewrite Name and Address of the Undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the undersigned elects to have
repaid: __________________________________________________________;
and specify the denomination or denominations (which shall not be less than
the minimum authorized denomination) of the Notes to be issued to the
undersigned for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the
portion not being repaid):_____________________________.
Dated:
------------------- ---------------------------
--------------------------
NOTICE: The signature to this assignment must correspond with the name
as written upon the within Note in every particular, without alteration or
enlargement or any change whatever.
-12-
<PAGE>
REGISTERED REGISTERED
SUPERVALU INC. Principal Amount:
No. BD- Medium-Term Note, Series B $
(Original Issue Discount Fixed Rate Note) CUSIP
No.
[INSERT IF THE SECURITY IS TO BE A GLOBAL SECURITY -- UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), 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 DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC, AS DEPOSITARY FOR
THIS SERIES OF SECURITIES (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY.
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 NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.]
ORIGINAL ISSUE DATE: MATURITY DATE:
INTEREST RATE: REDEMPTION TERMS:
OTHER TERMS: REPAYMENT TERMS:
ORIGINAL ISSUE DISCOUNT: YIELD TO MATURITY:
[__] ORIGINAL ISSUE DISCOUNT NOTE SUBJECT TO "SPECIAL PROVISIONS" BELOW
[__] ORIGINAL ISSUE DISCOUNT NOTE FOR FEDERAL INCOME TAX PURPOSES ONLY
-1-
<PAGE>
SUPERVALU INC., a corporation duly organized and existing under the laws
of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to _____________________________ or registered assigns,
the principal sum of _____________________________ United States Dollars
($_________) on the Maturity Date shown above or, together with any premium
thereon, upon any applicable Redemption Date or Repayment Date shown above
(subject to the "Special Provisions" below, if applicable), and to pay
interest on such principal sum from the Original Issue Date shown above or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually in arrears on each February 1 and August 1 in
each year or such other dates, if any, as are specified under "Other Terms"
above (the "Interest Payment Dates"), and on the Maturity Date, commencing
with the Interest Payment Date immediately following the Original Issue Date,
at the rate per annum equal to the Interest Rate shown above, until the
principal hereof is paid or made available for payment, and (to the extent
that the payment of such interest shall be legally enforceable) at the rate
per annum equal to the Interest Rate shown above on any overdue principal and
on any overdue installment of interest; provided, however, that if the
Original Issue Date is after a Regular Record Date and on or before the
immediately following Interest Payment Date, interest payments will commence
on the Interest Payment Date following the next succeeding Regular Record
Date. The interest so payable, and punctually paid or duly provided for, any
Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the Regular Record Date for such
interest, which shall, unless otherwise specified above under "Other Terms",
be the January 15 and July 15 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date; provided, however, that
interest payable on the Maturity Date of this Note or any applicable
Redemption Date or Repayment Date that is not an Interest Payment Date shall
be payable to the Person to whom principal shall be payable. Except as
otherwise provided in the Indenture, any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the registered
Holder on such Regular Record Date and may either be paid to the Person in
whose name this Note (or one or more predecessor Notes) is registered at the
close of business on a Special Record Date for the payment of such defaulted
interest to be fixed by the Trustee, notice whereof shall be given to the
Holder of this Note not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may be listed, and
upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
If a Redemption Commencement Date or periods within which Redemption
Dates may occur and the related Redemption Prices (unless otherwise specified
above under "Other Terms", expressed as percentages of the principal amount of
this Note if this Note is an Original Issue Discount Note for federal income
tax purposes only as shown above and as percentages of the Amortized Face
Amount (as defined below) of this Note if this Note is an Original Issue
Discount Note subject to the "Special Provisions" below as shown above) are
set forth above under "Redemption Terms", this Note is subject to redemption,
in whole or in part, at the option of the Company prior to the Maturity Date
upon not less than 30 nor more than 60 days' notice.
-2-
<PAGE>
Payment of principal of (and premium, if any) and any interest due on any
Note of this series (that is not a Global Security) at maturity or upon
redemption or repayment will be made in immediately available funds upon
surrender of the Note at the Corporate Trust Office of the Trustee in the City
of New York, or such other office or agency of the Company maintained for that
purpose in the City of New York, provided that the Note is presented to the
Paying Agent in time for the Paying Agent to make such payments in such funds
in accordance with its normal procedures. Payments of interest due on any
Note of this series (that is not a Global Security) other than at maturity or
upon redemption or repayment will be made by check mailed to the address of
the person entitled thereto as it appears in the Security Register or by wire
transfer to such account as may have been appropriately designated by such
person.
Payment of principal of (and premium, if any) and interest due on any
Global Security will be made to the Depositary or its nominee, as the case may
be, as the sole registered owner and the sole Holder of the Global Security
for all purposes under the Indenture.
Payment of the principal of (and premium, if any) and interest on this
Note will be made 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.
Reference is hereby made to the further provisions of this Note set forth
below, 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 or
on behalf of the Trustee referred to below, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-3-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
[SEAL] SUPERVALU INC.
By
------------------------
Title:
Attest:
------------------------
Title:
Dated:
-4-
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
BANKERS TRUST COMPANY,
as Trustee
By
------------------------
Authorized Signatory
-5-
<PAGE>
SUPERVALU INC.
Medium-Term Note, Series B
(Original Issue Discount Fixed Rate Note)
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued or to be issued in one or more series
under an Indenture, dated as of July 1, 1987, as amended and supplemented by
the First Supplemental Indenture thereto, dated as of August 1, 1990, the
Second Supplemental Indenture thereto, dated as of October 1, 1992 and the
Third Supplemental Indenture thereto, dated as of September 1, 1995 (the
Indenture, as so amended and supplemented, being herein called the
"Indenture"), between the Company and Bankers Trust Company, as Trustee
(herein called 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 Notes and of the terms upon which the Notes are, and are to
be, authenticated and delivered. This Note is one of the series designated as
Medium-Term Notes, Series B (the "Notes"). By the terms of the Indenture,
Securities, which may vary as to date, amount, Maturity Date, interest rate or
method of calculating the interest rate and in other respects as therein
provided, may be issued in an unlimited principal amount.
Unless otherwise set forth above under "Other Terms", the Notes of this
series are issuable only in registered form without coupons in denominations
of $100,000 and integral multiples of $1,000 in excess thereof. The Notes of
this series may be issued, in whole or in part, in the form of one or more
Global Securities bearing the legend specified in the Indenture regarding
certain restrictions on registration of transfer and exchange and issued to
the Depositary or its nominee and registered in the name of the Depositary or
such nominee. As provided in the Indenture, and subject to certain
limitations (including, if this Note is a Global Security, certain additional
limitations) therein set forth, Notes of this series in definitive registered
form are exchangeable for a like aggregate principal amount of Notes of this
series and of like tenor of a different authorized denomination, as requested
by the Holder surrendering the same.
Payments of interest hereon with respect to any Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date.
Interest hereon shall be computed on the basis of a 360-day year of twelve 30-
day months.
In the event that any Interest Payment Date or the Maturity Date or any
applicable Redemption Date or Repayment Date is not a Business Day, the
interest and, with respect to the Maturity Date or any applicable Redemption
Date or Repayment Date, principal (and premium, if any) otherwise payable on
such date will be made on the next Business Day as if it were made on the date
such payment was due, and no interest will accrue on the amount so payable for
the period from and after such Interest Payment Date or the Maturity Date or
any applicable Redemption Date or Repayment Date.
-6-
<PAGE>
If a Redemption Commencement Date or periods within which Redemption
Dates may occur and the related Redemption Prices (unless otherwise specified
above under "Other Terms", expressed as percentages of the principal amount of
this Note if this Note is an Original Issue Discount Note for federal income
tax purposes only as shown above and as percentages of the Amortized Face
Amount (as defined below) of this Note if this Note is an Original Issue
Discount Note subject to the "Special Provisions" below as shown above) are
set forth above under "Redemption Terms", this Note is subject to redemption
prior to the Maturity Date, on any Redemption Date so specified or occurring
within any period so specified, as a whole or in part, at the election of the
Company, at the applicable Redemption Price so specified, together in the case
of any such redemption with accrued interest to the Redemption Date; provided,
however, that installments of interest whose Stated Maturity is on or prior to
such Redemption Date will be payable in the case of any such redemption to the
Holder of this Note (or one or more predecessor Notes) at the close of
business on the relevant Regular Record Dates, referred to above, all as
provided in the Indenture. Notice of redemption will be given by mail to the
Holder of this Note not less than 30 nor more than 60 days prior to the date
for redemption, all as provided for in the Indenture. In the event of
redemption of this Note in part only, a new Note of this series and of like
tenor of an authorized denomination for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
Unless otherwise specified under "Other Terms" above, this Note will note
be subject to any sinking fund.
If a Repayment Date or periods within which Repayment Dates may occur and
the related Repayment Prices (unless otherwise specified above under "Other
Terms", expressed as percentages of the principal amount of this Note if this
Note is an Original Issue Discount Note for federal income tax purposes only
as shown above and as percentages of the Amortized Face Amount of this Note if
this Note is an Original Issue Discount Note subject to the "Special
Provisions" below as shown above) are set forth above under "Repayment Terms",
this Note is subject to repayment at the option of the Holder hereof prior to
the Maturity Date upon such terms as are set forth above under "Repayment
Terms". In the event of repayment of this Note in part only, a new Note of
this series and of like tenor of an authorized denomination for the portion
hereof not repaid will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to this Note shall occur and be
continuing, a lesser amount than the principal amount due at the Stated
Maturity of this Note may be declared due and payable in the manner and with
the effect provided in the Indenture. Upon payment (i) of the amount of
principal so declared due and payable and (ii) of interest on any overdue
principal and overdue interest (in each case to the extent that the payment of
such interest shall be legally enforceable), all of the Company's obligations
in respect of the payment of the principal of and interest, if any, on this
Note shall terminate.
The Indenture contains provisions for defeasance at any time of the
Company's obligations in respect of (i) the entire indebtedness of this Note
or (ii) certain restrictive
-7-
<PAGE>
covenants with respect to this Note, in each case upon compliance with certain
conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of at least a majority in principal amount of the
Notes at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Notes of each series at the time Outstanding, on
behalf of the Holders of all Notes of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note 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 Note.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Note of this series will have any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default with respect to this series, the Holders of not
less than 25% in principal amount of the Outstanding Notes of this series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Outstanding Notes of this series a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days; provided,
however, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of or interest on this
Note on or after the respective due dates expressed herein.
In determining whether the Holders of the requisite principal amount of
the Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or whether a quorum
is present at a meeting of Holders of Notes, the principal amount of any
Original Issue Discount Note that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable as of the
date of such determination upon acceleration of the Maturity thereof.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal (and premium, if any) of and
interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, if this Note is a Global Security, the limitations set forth on
the first page hereof) therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration
-8-
<PAGE>
of transfer at the Corporate Trust Office of the Trustee in the
City of New York, or such other office or agency of the Company in any place
where the principal of (and premium, if any) and interest on this Note are
payable, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Security Registrar, duly executed
by, the Holder hereof or such Holder's attorney duly authorized in writing,
and thereupon one or more new Notes of this series and of like tenor of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note may have such additional or different terms as are set forth
above, under "Other Terms". Any terms so set forth shall be deemed to modify
and/or supersede, as necessary, any other terms set forth in this Note.
This Note shall be governed by and construed in accordance with the laws
of the State of New York.
All terms used in this Note which are defined in the Indenture shall have
the respective meanings assigned to them in the Indenture.
SPECIAL PROVISIONS
Unless otherwise indicated above under "Other Terms", if this Note is an
Original Issue Discount Fixed Rate Note subject to these Special Provisions,
as indicated above, the amount due and payable on this Note in the event that
the principal amount hereof is declared due and payable prior to the Stated
Maturity hereof or in the event that this Note is redeemed or repaid shall be
the Amortized Face Amount (as defined below) of this Note or, in the case of
redemption or repayment, the specified percentage of the Amortized Face Amount
of this Note on the date such payment is due and payable as determined by the
Company, plus any accrued but unpaid "qualified stated interest" payments (as
defined in the Treasury Regulations (the "Regulations") Section 1.1273-1(c)
issued by the Treasury Department in January 1994).
The "Amortized Face Amount" of this Note shall be the amount equal to the
sum of (i) the issue price (as defined below) of this Note and (ii) that
portion of the difference between the issue price and the principal amount of
this Note that has been amortized at the Stated Yield (as defined below) of
this Note (computed in accordance with Section 1272(a)(4) of the Internal
-9-
<PAGE>
Revenue Code of 1986, as amended, and Section 1.1275-1(b) of the Regulations,
in each case as in effect on the Original Issue Date of this Note) at the date
as of which the Amortized Face Amount is calculated, but in no event can the
Amortized Face Amount exceed the principal amount of this Note due at the
Stated Maturity hereof. As used in the preceding sentence, the term "issue
price" means the principal amount of this Note due at the Stated Maturity
hereof less the Original Issue Discount of this Note specified above. The
term "Stated Yield" of this Note means the Yield to Maturity specified above
for the period from the Original Issue Date of this Note specified above, to
the Stated Maturity hereof based on the issue price and principal amount
payable at the Stated Maturity hereof.
-10-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription above, shall be
construed as though they were written out in full according to applicable laws
or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
UNIF GIFT MIN ACT-- Custodian
-------------- --------------
(Cust)
(Minor)
under Uniform Gift to Minors Act
--------------------------------------
(State)
Additional abbreviations may be used though not in the above list.
-11-
<PAGE>
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)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
---------------------------
Signature Guaranteed
---------------------------------
---------------------------------
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the
within Note in every particular, without alteration
or enlargement or any change whatever.
-12-
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Note (or portion thereof specified below) pursuant to its
terms at the applicable Repayment Price, together with interest to the
Repayment Date, to the undersigned at
(Please Print or Typewrite Name and Address of the Undersigned)
If less than the entire principal amount of the within Note is to be
repaid, specify the portion thereof which the undersigned elects to have
repaid: __________________________________________________________;
and specify the denomination or denominations (which shall not be less than
the minimum authorized denomination) of the Notes to be issued to the
undersigned for the portion of the within Note not being repaid (in the
absence of any such specification, one such Note will be issued for the
portion not being repaid):_____________________________.
Dated:
------------------- ---------------------------
---------------------------
NOTICE: The signature to this assignment must correspond with the name
as written upon the within Note in every particular, without alteration or
enlargement or any change whatever.
-13-
<PAGE>
EXHIBIT 10.1
COPY AS EXECUTED
U.S. $400,000,000
CREDIT AGREEMENT
Dated as of May 26, 1995
Among
SUPERVALU INC.,
as Borrower,
-- --------
and
THE BANKS NAMED HEREIN,
as Banks,
-- -----
and
CITIBANK, N.A.,
as Agent,
-- -----
and
FIRST BANK NATIONAL ASSOCIATION,
NATIONSBANK, N.A. (CAROLINAS),
PNC BANK, NATIONAL ASSOCIATION
and THE FUJI BANK, LIMITED, CHICAGO BRANCH,
as Co-Agents,
-- ---------
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
ROYAL BANK OF CANADA
and SHAWMUT BANK, N.A.,
as Lead Managers
-- ---- --------
<PAGE>
T A B L E O F C O N T E N T S
- - - - - - - - - - - - - - -
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
<TABLE>
<CAPTION>
Section Page
<S> <C>
1.01. Certain Defined Terms................................... 1
1.02. Computation of Time Periods............................. 13
1.03. Accounting Terms........................................ 13
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The A Advances.......................................... 13
2.02. Making the A Advances................................... 13
2.03. The B Advances.......................................... 15
2.04. Fees.................................................... 19
2.05. Termination or Reduction of the Commitments............. 19
2.06. Repayment of A Advances................................. 19
2.07. Interest on Advances.................................... 19
2.08. Additional Interest on Eurodollar Rate Advances......... 20
2.09. Interest Rate Determination............................. 20
2.10. Voluntary Conversion of A Advances...................... 22
2.11. Prepayments of A Advances............................... 22
2.12. Increased Costs......................................... 22
2.13. Illegality.............................................. 24
2.14. Payments and Computations............................... 24
2.15. Sharing of Payments, Etc................................ 25
2.16. Taxes................................................... 26
2.17. Use of Proceeds......................................... 28
</TABLE>
<PAGE>
ii
<TABLE>
<CAPTION>
Section Page
- ------- ----
ARTICLE III
CONDITIONS OF LENDING
<S> <C> <C>
3.01. Conditions Precedent to the Effectiveness of Sections 2.01 and 2.03... 29
3.02. Conditions Precedent to Each A Borrowing.............................. 31
3.03. Conditions Precedent to Each B Borrowing.............................. 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower........................ 32
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants................................................. 36
5.02. Negative Covenants.................................................... 39
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default..................................................... 44
ARTICLE VII
THE AGENT
</TABLE>
<PAGE>
iii
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
7.01. Authorization and Action.................... 47
7.02. Agent's Reliance, Etc....................... 47
7.03. Citibank and Affiliates..................... 48
7.04. Lender Credit Decision...................... 48
7.05. Indemnification............................. 48
7.06. Successor Agent............................. 49
</TABLE>
ARTICLE VIII
MISCELLANEOUS
<TABLE>
<CAPTION>
<S> <C>
8.01. Amendments, Etc............................. 49
8.02. Notices, Etc................................ 50
8.03. No Waiver; Remedies......................... 50
8.04. Costs and Expenses.......................... 50
8.05. Right of Setoff............................. 51
8.06. Binding Effect.............................. 52
8.07. Assignments and Participations.............. 52
8.08. Indemnification............................. 55
8.09. Governing Law; Submission to Jurisdiction... 55
8.10. Execution in Counterparts................... 56
8.11. Confidentiality............................. 56
8.12. WAIVER OF JURY TRIAL, ETC................... 56
</TABLE>
<PAGE>
iv
Schedule I - List of Applicable Lending Offices
Schedule II - Litigation
Schedule III - Existing Subsidiary Debt
Exhibit A-1 - Form of A Note
Exhibit A-2 - Form of B Note
Exhibit B-1 - Notice of A Borrowing
Exhibit B-2 - Notice of B Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of Dorsey & Whitney, Special Counsel for the
Borrower
Exhibit E - Form of Opinion of John Breedlove, Region Counsel of the Borrower
Exhibit F - Form of Opinion of Shearman & Sterling, Special New York Counsel
to the Agent
<PAGE>
CREDIT AGREEMENT
Dated as of May 26, 1995
SUPERVALU INC., a Delaware corporation (the "Borrower"), the banks
(the "Banks") listed on the signature pages hereof, CITIBANK, N.A. ("Citibank"),
as agent (the "Agent"), FIRST BANK NATIONAL ASSOCIATION, NATIONSBANK, N.A.
(CAROLINAS), PNC BANK, NATIONAL ASSOCIATION and THE FUJI BANK, LIMITED, CHICAGO
BRANCH, as co-agents (the "Co-Agents"), and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, ROYAL BANK OF CANADA and SHAWMUT BANK, N.A., as Lead Managers (the "Lead
Managers"), for the Lenders hereunder, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"A Advance" means an advance by a Lender to the Borrower as part of an
A Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance,
each of which shall be a "Type" of A Advance.
"A Borrowing" means a borrowing consisting of simultaneous A Advances
of the same Type made by each of the Lenders pursuant to Section 2.01.
"A Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-1 hereto, evidencing
the aggregate indebtedness of the Borrower to such Lender resulting from
the A Advances made by such Lender.
"Advance" means an A Advance or a B Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For the purposes
of this definition, "control" (including, with correlative meanings, the
terms "controlling", "controlled by" and "under common control with") as
used with respect to any Person or group of Persons, shall mean possession,
directly or indirectly, of the power to
<PAGE>
2
direct or cause the direction of management and policies of such Person,
whether through the ownership of voting securities, by contract or
otherwise.
"Applicable Facility Fee Rate" means, for any period, a percentage per
annum equal to the percentage set forth below determined by reference to
the higher of (x) the rating of the Borrower's long-term, senior unsecured
Debt from S&P or (y) the rating of the Borrower's long-term, senior
unsecured Debt from Moody's, in each case as in effect from time to time
during such period:
<TABLE>
<CAPTION>
- --------------------------------- ---------------------------------
Borrower's Applicable
Long-Term Senior Facility Fee Rate
Unsecured Debt Rating
S&P or Moody's
- --------------------------------- ---------------------------------
<S> <C>
Level 1
-------
A+ or A1 .090%
- --------------------------------- ---------------------------------
Level 2
-------
Lower than A+ or A1
but at least A- or A3 .100%
- --------------------------------- ---------------------------------
Level 3
-------
Lower than A- or A3
but at least BBB or Baa2 .125%
- --------------------------------- ---------------------------------
Level 4
-------
Below BBB or Baa2 .200%
- --------------------------------- ---------------------------------
</TABLE>
provided that if, at any time, no rating is available from S&P, Moody's or
any other nationally recognized statistical rating organization designated
by the Borrower and approved in writing by the Majority Lenders, the
Applicable Facility Fee Rate shall be .200%.
"Applicable Interest Rate Margin" means, for any Interest Period, a
percentage per annum equal to the percentage set forth below determined by
reference to the higher of (x) the rating of the Borrower's long-term,
senior unsecured Debt from S&P or (y) the rating of the Borrower's long-
term, senior unsecured Debt from Moody's, in each case as in effect on the
first day of such Interest Period:
- --------------------------------- ---------------------------------
Applicable Interest Rate Margin
<PAGE>
3
<TABLE>
<CAPTION>
- --------------------------------- ---------------------------------
(basis points)
Borrower's
Long-Term Senior
Unsecured Debt Rating
S&P or Moody's
---------------------------------
If less than If 50% or
50% of the greater of
Lenders' the Lenders'
Commitments Commitments
are drawn are drawn
- --------------------------------- ---------------------------------
<S> <C> <C>
Level 1
-------
A+ or A1 .160% .210%
- -------------------------------- ---------------------------------
Level 2
-------
Lower than A+ or A1 .175% .250%
but at least A- or A3
- -------------------------------- ---------------------------------
Level 3
-------
Lower than A- or A3 .200% .300%
but at least BBB or Baa2
- -------------------------------- ---------------------------------
Level 4 .350% .500%
-------
Below BBB or Baa2
- -------------------------------- ---------------------------------
</TABLE>
provided that if, at any time, no rating is available from S&P, Moody's or
any other nationally recognized statistical rating organization designated
by the Borrower and approved in writing by the Majority Lenders, the
Applicable Interest Rate Margin for such Interest Period shall be .350% if
less than 50% of the Lenders' Commitments are drawn and .500% if 50% or
greater of the Lenders' Commitments are drawn.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance, such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance
and, in the case of a B Advance, the office of such Lender notified by such
Lender to the Agent as its Applicable Lending Office with respect to such B
Advance.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit C hereto.
<PAGE>
4
"B Advance" means an advance by a Lender to the Borrower as part of a
B Borrowing resulting from the auction bidding procedure described in
Section 2.03.
"B Borrowing" means a borrowing consisting of simultaneous B Advances
from each of the Lenders whose offer to make one or more B Advances as part
of such borrowing has been accepted by the Borrower under the auction
bidding procedure described in Section 2.03.
"B Note" means a promissory note of the Borrower payable to the order
of any Lender, in substantially the form of Exhibit A-2 hereto, evidencing
the indebtedness of the Borrower to such Lender resulting from a B Advance
made by such Lender.
"B Reduction" has the meaning specified in Section 2.01.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall
at all times be equal to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) 1/2 of one percent per annum above the latest three-week
moving average of secondary market morning offering rates in the
United States for three-month certificates of deposit of major United
States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day is not a
Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by
the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, in either case
adjusted to the nearest 1/16 of one percent or, if there is no nearest
1/16 of one percent, to the next higher 1/16 of one percent; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
<PAGE>
5
"Base Rate Advance" means an A Advance that bears interest as provided
in Section 2.07(a)(i).
"Borrowing" means an A Borrowing or a B Borrowing.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market.
"Capital Lease" shall mean a lease meeting one or more of the criteria
set forth in paragraph 7 of the Statement of Financial Accounting Standards
No. 13 of the Financial Accounting Standards Board (as in effect from time
to time or as set forth in a statement of generally accepted accounting
principles superseding such paragraph 7).
"Commitment" has the meaning specified in Section 2.01.
"Consolidated" refers to the consolidation of accounts of the Borrower
and its Subsidiaries in accordance with generally accepted accounting
principles, including principles of consolidation, consistently applied.
"Convert", "Conversion" and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.09
or 2.10.
"Current Supervalu Credit Agreement" means the Credit Agreement dated
as of October 26, 1992, as amended, supplemented or otherwise modified,
among the Borrower, the banks parties thereto, Citibank, as agent, Bankers
Trust Company, PNC Bank, National Association (formerly known as Pittsburgh
National Bank) and Nationsbank, N.A. (Carolinas) (formerly known as
Nationsbank of North Carolina, N.A.), as co-agents, and First Bank National
Association, as lead manager.
"Debt" of any Person means (i) indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services that
exceed, on an individual basis, $1,000,000 (for any obligation or group of
related obligations), (iv) the present value of all obligations of such
Person as lessee under leases which
<PAGE>
6
shall have been or should be, in accordance with generally accepted
accounting principles, recorded as Capital Leases and (v) all obligations
of such Person under direct or indirect guaranties in respect of, and all
obligations (contingent or otherwise) of such Person to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to
in clauses (i) through (iv) above.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Effective Date" means the first date on which the conditions set
forth in Section 3.01 applicable to the effectiveness of Sections 2.01 and
2.03 have been satisfied.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any State thereof, and having total assets in
excess of $1,000,000,000; (ii) a savings and loan association or savings
bank organized under the laws of the United States, or any State thereof,
and having total assets in excess of $1,000,000,000; (iii) a commercial
bank organized under the laws of any other country which is a member of the
OECD or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow, or a
political subdivision of any such country, and having total assets in
excess of $1,000,000,000, provided that such bank is acting through such
bank's branch or agency located in the United States; (iv) the central bank
of any country which is a member of the OECD; (v) a commercial finance
company organized under the laws of the United States, or any State
thereof, and having total assets in excess of $1,000,000,000; (vi) any
Lender; (vii) an Affiliate of any Lender; and (viii) such other bank,
company, financial institution or fund to which the Borrower shall consent;
provided, however, that notwithstanding anything to the contrary set forth
in this Agreement, no Person that is organized under the laws of a
jurisdiction outside the United States shall be an Eligible Assignee if, at
the time of an assignment pursuant to Section 8.07, such Person would be
subject to United States interest withholding tax at a rate greater than
zero; provided further, however, that
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7
neither the Borrower nor any Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
noncompliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement relating to
any Environmental Law, Environmental Permit or Hazardous Material or
arising from alleged injury or threat of injury to health, safety or the
environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, clean up, removal, response, remedial
or other actions or damages and (b) by any governmental or regulatory
authority or any third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance relating to the
environment, health, safety or Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of such Person's controlled
group, or under common control with such Person, within the meaning of
Section 414 of the Internal Revenue Code of 1986, as amended from time to
time.
"ERISA Event" with respect to any Person means (a) the occurrence of a
material reportable event, within the meaning of Section 4043 of ERISA,
with respect to any Plan of such Person or any of its ERISA Affiliates,
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC; (b) the application for a minimum funding waiver with
respect to any Plan of such Person or any of its ERISA Affiliates; (c) the
provision by the administrator of any Plan of such Person or any of its
ERISA Affiliates of a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a
plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of such
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8
Person or any of its ERISA Affiliates in the circumstances described in
Section 4062(e) of ERISA; (e) the withdrawal by such Person or any of its
ERISA Affiliates from a Multiple Employer Plan during a plan year for which
it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the failure by such Person or any of its ERISA Affiliates to make a
payment to a Plan if the conditions for the imposition of a lien under
Section 302(f)(1) of ERISA are satisfied; (g) the adoption of an amendment
to a Plan of such Person or any of its ERISA Affiliates requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan of such
Person or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA
(other than subsection (a)(4) thereof), or the occurrence of any event or
condition described in Section 4042 of ERISA that could constitute grounds
for the termination of, or the appointment of a trustee to administer, such
Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same A Borrowing, an interest rate per
annum equal to the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by the principal
office of each of the Reference Banks in London, England to prime banks in
the London interbank market at 11:00 A.M. (London time) two (2) Business
Days before the first day of such Interest Period in an amount
substantially equal to the greater of (i) $1,000,000 and (ii) such
Reference Bank's Eurodollar Rate Advance comprising part of such A
Borrowing, and for a period equal to such Interest Period. The Eurodollar
Rate for any Interest Period for each Eurodollar Rate Advance comprising
part of the same A Borrowing shall be determined by the Agent on the basis
of applicable rates furnished to and received by the Agent from the
Reference Banks two (2) Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.09.
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9
"Eurodollar Rate Advance" means an A Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" of any Lender for any Interest
Period for any Eurodollar Rate Advance means the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those
days in such Interest Period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for such
Lender with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three Federal funds brokers of nationally recognized standing
selected by it.
"Financial Officer" means, for any Person, the chief executive
officer, the chief financial officer, the chief accounting officer, the
treasurer or the controller of such Person.
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-
containing materials, radon gas and any other chemicals, materials or
substances designated, classified or regulated as being "hazardous" or
"toxic", or words of similar import, under any federal, state, local or
foreign statute, law, ordinance, rule, regulation, code, order, judgment,
decree or judicial or agency interpretation, policy or guidance.
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10
"Insufficiency" means, with respect to any Plan of the Borrower or any
of its ERISA Affiliates, the amount, if any, of "unfunded benefit
liabilities" (as defined in Section 4001(a)(18) of ERISA) for such Plan.
"Interest Period" means, for each A Advance comprising part of the
same A Borrowing, the period commencing on the date of such A Advance or
the date of the Conversion of any A Advance into such an A Advance and
ending on the last day of the period selected by the Borrower pursuant to
the provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the
last day of the period selected by the Borrower pursuant to the provisions
below. The duration of each such Interest Period for an A Borrowing shall
be (a) in the case of Base Rate Advances, 30 days and (b) in the case of
Eurodollar Rate Advances, 1, 2, 3 or 6 months and, if available to all
Lenders, 9 or 12 months, in each case as the Borrower may, upon notice
received by the Agent not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the first day of such Interest Period, select;
provided, however, that:
(i) the duration of any Interest Period which commences before
the Termination Date and would otherwise end after such date shall end
on such date;
(ii) Interest Periods commencing on the same date for A Advances
comprising part of the same A Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, in the case of any Interest Period for a
Eurodollar Rate Advance, that, if such extension would cause the last
day of such Interest Period to occur in the next following calendar
month, the last day of such Interest Period shall occur on the next
preceding Business Day; and
(iv) whenever the first day of any Interest Period for any
Eurodollar Rate Advance occurs on a day of an initial calendar month
for which there is no numerically corresponding day in the calendar
month that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such succeeding
calendar month.
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11
"Lenders" means the Banks and each Eligible Assignee that shall become
a party hereto pursuant to Section 8.07(a), (b) and (c).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement
concerning property, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of way or
other encumbrance on title to real property.
"Loan Documents" means this Agreement and the Notes.
"Majority Lenders" means at any time Lenders holding at least 51% of
the then aggregate unpaid principal amount of the A Notes held by Lenders,
or, if no such principal amount is then outstanding, Lenders having at
least 51% of the Commitments.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which such Person or any of its
ERISA Affiliates is making or accruing an obligation to make contributions,
or has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one
Person other than such Person and its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
"Net Earnings" means the Consolidated net income of the Borrower and
its Subsidiaries before the payment of dividends on the capital stock of
the Borrower determined in accordance with generally accepted accounting
principles, consistently applied.
"Net Worth" means the excess of total assets over total liabilities,
total assets and total liabilities each to be determined in accordance with
generally accepted accounting principles, consistently applied.
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12
"Note" means an A Note or a B Note.
"Notice of A Borrowing" has the meaning specified in Section 2.02(a).
"Notice of B Borrowing" has the meaning specified in Section 2.03(a).
"OECD" means the Organization for Economic Cooperation and
Development.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
corporation thereto.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture or other entity, or a government or any political subdivision
or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Reference Banks" means Citibank, NationsBank, N.A. (Carolinas) and
Morgan Guaranty Trust Company of New York or any successor Reference Bank
appointed pursuant to Section 2.09(d).
"Register" has the meaning specified in Section 8.07(e).
"S&P" means Standard & Poor's Rating Group, a division of McGraw-Hill,
Inc.
"Signing Date" means the later of (i) May 26, 1995 and (ii) the date
on which counterparts of this Agreement are executed by the Borrower and,
as notified to the Borrower by the Agent, each of the Banks.
"Single Employer Plan" of any Person means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and no Person other
than such Person and its ERISA Affiliates or (b) was so maintained and in
respect of which such Person or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan has been or
were to be terminated.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than
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13
50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits
of such limited liability company, partnership or joint venture or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Tangible Net Worth" means the excess of total assets over total
liabilities, total assets and total liabilities each to be determined in
accordance with generally accepted accounting principles, consistently
applied, excluding, however, from the determination of total assets (i)
goodwill, organizational expenses, research and development expenses,
trademarks, trade names, copyrights, patents, patent applications, licenses
and rights in any thereof, and other similar intangibles, (ii) all
unamortized debt discount and expense and (iii) any items not included in
clauses (i) and (ii) above which are treated as intangibles in conformity
with generally accepted accounting principles.
"Termination Date" means the earlier of May 26, 2000 and the date of
termination in whole of the Commitments pursuant to Section 2.05 or 6.01.
"Total Capital" means, as of any date, the sum of (a) Consolidated
Debt and (b) Consolidated Net Worth.
"Type" of Advance shall mean Base Rate Advance or Eurodollar Rate
Advance.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
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14
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistently applied.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The A Advances. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make A Advances to the Borrower
from time to time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate amount not to exceed at any time
outstanding the amount set forth opposite such Lender's name on the signature
pages hereof or, if such Lender has entered into any Assignment and Acceptance,
set forth for such Lender in the Register maintained by the Agent pursuant to
Section 8.07(e), as such amount may be reduced pursuant to Section 2.05 (such
Lender's "Commitment"), provided that the aggregate amount of the Commitments of
the Lenders shall be deemed used from time to time to the extent of the
aggregate amount of the B Advances then outstanding and such deemed use of the
aggregate amount of the Commitments shall be applied to the Lenders ratably
according to their respective Commitments (such deemed use of the aggregate
amount of the Commitments being a "B Reduction"). Each A Borrowing shall be in
an aggregate amount not less than $20,000,000 or an integral multiple of
$1,000,000 in excess thereof (or, if less, an aggregate amount equal to the
difference between the aggregate amount of a proposed B Borrowing requested by
the Borrower and the aggregate amount of B Advances offered to be made by the
Lenders and accepted by the Borrower in respect of such B Borrowing, if such B
Borrowing is made on the same date as such A Borrowing) and shall consist of A
Advances of the same Type made on the same day by the Lenders ratably according
to their respective Commitments. Within the limits of each Lender's Commitment,
the Borrower may from time to time borrow under this Section 2.01, prepay
pursuant to Section 2.11(b) and reborrow under this Section 2.01.
SECTION 2.02. Making the A Advances. (a) Each A Borrowing shall be
made on notice, given not later than 11:00 A.M. (New York City time) (i) on the
same Business Day as the proposed A Borrowing in the case of an A Borrowing
consisting of Base Rate Advances or (ii) on the third Business Day prior to the
date of the proposed A Borrowing in the case of an A Borrowing consisting of
Eurodollar Rate Advances, by the Borrower to the Agent, which shall give to each
Lender prompt notice thereof by telecopier, telex or cable. Each such notice of
an A Borrowing (a "Notice of A Borrowing") shall be by telecopier, telex or
cable, confirmed immediately in writing, in
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15
substantially the form of Exhibit B-1 hereto, specifying therein the requested
(i) date of such A Borrowing, (ii) Type of A Advances comprising such A
Borrowing, (iii) aggregate amount of such A Borrowing, and (iv) in the case of
an A Borrowing comprised of Eurodollar Rate Advances, the initial Interest
Period for each such A Advance. Each Lender shall, before 1:00 P.M. (New York
City time) on the date of such A Borrowing, make available for the account of
its Applicable Lending Office to the Agent at its address referred to in Section
8.02, in same day funds, such Lender's ratable portion of such A Borrowing.
After the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will make such funds available to
the Borrower at the Agent's aforesaid address not later than 2:00 P.M. (New York
City time) on such date.
(b) Anything in subsection (a) above to the contrary notwithstanding,
the Borrower may not select Eurodollar Rate Advances for any A Borrowing if the
aggregate amount of such A Borrowing is less than $20,000,000.
(c) Each Notice of A Borrowing shall be irrevocable and binding on the
Borrower. In the case of any A Borrowing that the related Notice of A Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by such Lender
as a result of any failure to fulfill on or before the date specified in such
Notice of A Borrowing for such A Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the A
Advance to be made by such Lender as part of such A Borrowing when such A
Advance, as a result of such failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender (i) by
12:00 Noon on the date of any A Borrowing in the case of any A Borrowing
consisting of Base Rate Advances or (ii) by 12:00 Noon on the Business Day prior
to the date of any A Borrowing consisting of Eurodollar Rate Advances that such
Lender will not make available to the Agent such Lender's ratable portion of
such A Borrowing, the Agent may assume that such Lender has made such portion
available to the Agent on the date of such A Borrowing in accordance with
subsection (a) of this Section 2.02 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such ratable
portion available to the Agent, such Lender and the Borrower severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to A Advances
comprising
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16
such A Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Lender's A Advance as part of such A Borrowing for
purposes of this Agreement.
(e) The failure of any Lender to make the A Advance to be made by it
as part of any A Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its A Advance on the date of such A Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the A
Advance to be made by such other Lender on the date of any A Borrowing.
SECTION 2.03. The B Advances. (a) Each Lender severally agrees that
the Borrower may make B Borrowings under this Section 2.03 from time to time on
any Business Day during the period from the date hereof until the date occurring
15 days prior to the Termination Date in the manner set forth below; provided
that, following the making of each B Borrowing, the aggregate amount of the
Advances then outstanding shall not exceed the aggregate amount of the
Commitments of the Lenders (computed without regard to any B Reduction).
(i) The Borrower may request a B Borrowing under this Section 2.03 by
delivering to the Agent, by telecopier, telex or cable, confirmed
immediately in writing, a notice of a B Borrowing (a "Notice of B
Borrowing"), in substantially the form of Exhibit B-2 hereto, specifying
therein the date and aggregate amount of the proposed B Borrowing, the
maturity date for repayment of each B Advance to be made as part of such B
Borrowing (which maturity date may be (i) 14 to 180 days after the date of
the B Borrowing in the case of fixed rate B Borrowings and (ii) 30 to 180
days after the date of the B Borrowing in the case of floating rate B
Borrowings, but in either case may not be later than the Termination Date),
the interest payment date or dates relating thereto, and any other terms to
be applicable to such B Borrowing, not later than 10:00 A.M. (New York City
time) (A) at least one (1) Business Day prior to the date of the proposed B
Borrowing, if the Borrower shall specify in the Notice of B Borrowing that
the rates of interest to be offered by the Lenders shall be fixed rates per
annum and (B) at least four (4) Business Days prior to the date of the
proposed B Borrowing, if the Borrower shall specify in the Notice of B
Borrowing that the rates of interest to be offered by the Lenders shall be
floating rates per annum. The Agent shall in turn promptly notify by
telecopy each Lender of each request for a B Borrowing received by it from
the Borrower by sending such Lender a copy of the related Notice of B
Borrowing.
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17
(ii) Each Lender may, if, in its sole discretion, it elects to do so,
irrevocably offer to make one or more B Advances to the Borrower as part of
such proposed B Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion (but conforming to the Borrower's Notice of B
Borrowing in respect thereof), by notifying the Agent (which shall give
prompt notice thereof to the Borrower), before 10:00 A.M. (New York City
time) (A) on the date of such proposed B Borrowing, in the case of a Notice
of B Borrowing delivered pursuant to clause (A) of paragraph (i) above and
(B) three (3) Business Days before the date of such proposed B Borrowing,
in the case of a Notice of B Borrowing delivered pursuant to clause (B) of
paragraph (i) above, of the minimum amount and maximum amount of each B
Advance which such Lender would be willing to make as part of such proposed
B Borrowing (which amounts may exceed such Lender's Commitment), the rate
or rates of interest therefor and such Lender's Applicable Lending Office
with respect to such B Advance; provided that, if the Agent in its capacity
as a Lender shall, in its sole discretion, elect to make any such offer, it
shall notify the Borrower of such offer before 9:00 A.M. (New York City
time) on the date on which notice of such election is to be given to the
Agent by the other Lenders. Unless the Agent shall have received notice
from a Lender before 10:00 A.M. in accordance with the immediately
preceding sentence, the Agent and the Borrower may assume that such Lender
has elected not to make such an offer pursuant to this Section 2.03(a)(ii).
(iii) The Borrower shall (A) before 11:00 A.M. (New York City time)
on the date of such proposed B Borrowing, in the case of a Notice of B
Borrowing delivered pursuant to clause (A) of paragraph (i) above and (B)
before 1:00 P.M. (New York City time) on the Business Day that is three (3)
Business Days before the date of such proposed B Borrowing, in the case of
a Notice of B Borrowing delivered pursuant to clause (B) of paragraph (i)
above, either:
(x) cancel such B Borrowing by giving the Agent notice to that
effect, or
(y) accept one or more of the offers made by any Lender or
Lenders pursuant to paragraph (ii) above, in its sole discretion, by
giving notice to the Agent of the amount of each B Advance (which
amount shall be equal to or greater than the minimum amount, and equal
to or less than the maximum amount, notified to the Borrower by the
Agent on behalf of such Lender for such B Advance pursuant to
paragraph (ii) above) to be made by each Lender as part of such B
Borrowing, and
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18
reject any remaining offers made by Lenders pursuant to paragraph (ii)
above by giving the Agent notice to that effect.
The acceptance of offers by the Borrower pursuant to this clause
(B) shall be on the basis of ascending rates of interest contained in the
offers made by Lenders pursuant to paragraph (ii) above; provided that, in
the event that two or more of such offers contain the same rate of interest
for a greater aggregate principal amount than the amount specified in such
Notice of B Borrowing (less the aggregate principal amount of all such
offers containing lower rates of interest that have been accepted by the
Borrower pursuant to this clause (B)), the Borrower shall have sole
discretion (subject to any minimum and maximum amount specified in any such
offer) to accept one or more of the offers at such rate of interest and to
reject any remaining offers at such rate of interest.
(iv) If the Borrower notifies the Agent that such B Borrowing is
cancelled pursuant to paragraph (iii)(x) above, the Agent shall give prompt
notice thereof to the Lenders and such B Borrowing shall not be made.
(v) If the Borrower accepts one or more of the offers made by any
Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent shall in
turn promptly notify (A) each Lender that has made an offer as described in
paragraph (ii) above, of the date and aggregate amount of such B Borrowing
and whether or not any offer or offers made by such Lender pursuant to
paragraph (ii) above have been accepted by the Borrower, (B) each Lender
that is to make a B Advance as part of such B Borrowing, of the amount of
each B Advance to be made by such Lender as part of such B Borrowing and
(C) each Lender that is to make a B Advance as part of such B Borrowing,
upon receipt, that the Agent has received forms of documents appearing to
fulfill the applicable conditions set forth in Article III. Each Lender
that is to make a B Advance as part of such B Borrowing shall, before 12:00
noon (New York City time) on the date of such B Borrowing specified in the
notice received from the Agent pursuant to clause (A) of the preceding
sentence or any later time when such Lender shall have received notice from
the Agent pursuant to clause (C) of the preceding sentence, make available
for the account of its Applicable Lending Office to the Agent at its
address referred to in Section 8.02 such Lender's portion of such B
Borrowing, in same day funds. Upon fulfillment of the applicable
conditions set forth in Article III and after receipt by the Agent of such
funds, the Agent will make such funds available to the Borrower at the
Agent's aforesaid address. Promptly after each B Borrowing the Agent will
notify each Lender of the amount of the B Borrowing, the consequent B
Reduction and the dates upon which such B Reduction commenced and will
terminate.
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19
(vi) If the Borrower notifies the Agent that it accepts one or more of
the offers made by any Lender or Lenders pursuant to paragraph (iii)(y)
above, such notice of acceptance shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost
or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in the related Notice of B Borrowing for such
B Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (including loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the B Advance to be
made by such Lender as part of such B Borrowing when such B Advance, as a
result of such failure, is not made on such date.
(b) Each B Borrowing shall be in an aggregate amount not less than
$15,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each B Borrowing, the Borrower shall be in compliance
with the limitation set forth in the proviso to the first sentence of subsection
(a) above.
(c) Within the limits and on the conditions set forth in this Section
2.03, the Borrower may from time to time borrow under this Section 2.03, repay
or prepay pursuant to subsection (d) below, and reborrow under this Section
2.03, provided that a B Borrowing shall not be made within three (3) Business
Days of the date of any other B Borrowing.
(d) The Borrower shall repay to the Agent for the account of each
Lender that has made a B Advance, or each other holder of a B Note, on the
maturity date of each B Advance (such maturity date being that specified by the
Borrower for repayment of such B Advance in the related Notice of B Borrowing
delivered pursuant to subsection (a)(i) above and provided in the B Note
evidencing such B Advance), the then unpaid principal amount of such B Advance.
The Borrower shall have no right to prepay any principal amount of any B Advance
unless, and then only on the terms, specified by the Borrower for such B Advance
in the related Notice of B Borrowing delivered pursuant to subsection (a)(i)
above and set forth in the B Note evidencing such B Advance.
(e) The Borrower shall pay interest on the unpaid principal amount of
each B Advance from the date of such B Advance to the date the principal amount
of such B Advance is repaid in full, at the rate of interest for such B Advance
specified by the Lender making such B Advance in its notice with respect thereto
delivered pursuant to subsection (a)(ii) above, payable on the interest payment
date or dates specified by the Borrower for such B Advance in the related Notice
of B Borrowing delivered
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20
pursuant to subsection (a)(i) above, as provided in the B Note evidencing such B
Advance.
(f) The indebtedness of the Borrower resulting from each B Advance
made to the Borrower as part of a B Borrowing shall be evidenced by a separate B
Note of the Borrower payable to the order of the Lender making such B Advance.
Upon the repayment in full of the indebtedness of Borrower resulting from such B
Advance, the holder of the B Note evidencing such indebtedness shall return such
B Note to the Borrower at its address specified pursuant to Section 8.02.
SECTION 2.04. Fees. (a) Facility Fee. The Borrower agrees to pay
to the Agent for the account of each Lender a facility fee on the amount of such
Lender's Commitment (whether used or unused and without giving effect to any B
Reductions) from the Signing Date in the case of each Bank or, in the case of
each other Lender, from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender until the Termination Date,
payable on the first day of each March, June, September and December during the
term of such Lender's Commitment, commencing September 1, 1995, and on the
Termination Date, at a rate per annum equal to the Applicable Facility Fee Rate
in effect from time to time.
(b) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees, and at such times, as set forth in the letter dated May 1,
1995 between the Borrower and the Agent.
SECTION 2.05. Termination or Reduction of the Commitments. Voluntary
Reduction. The Borrower shall have the right, upon at least three (3) Business
Days' notice to the Agent, to terminate in whole or reduce ratably in part the
unused portions of the respective Commitments of the Lenders, provided that the
aggregate amount of the Commitments of the Lenders shall not be reduced to an
amount that is less than the aggregate principal amount of the Advances then
outstanding; and provided further that each partial reduction shall be in the
aggregate amount of $25,000,000 or an integral multiple of $1,000,000 in excess
thereof.
SECTION 2.06. Repayment of A Advances. The Borrower shall repay the
principal amount of each A Advance made by each Lender in accordance with the A
Note to the order of such Lender.
SECTION 2.07. Interest on Advances. (a) Ordinary Interest on A
Advances. The Borrower shall pay interest on the unpaid principal amount of
each A Advance made by each Lender from the date of such A Advance until such
principal amount shall be paid in full, at the following rates per annum:
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21
(i) Base Rate Advances. If such A Advance is a Base Rate Advance, a
rate per annum equal at all times to, from the date hereof to the
Termination Date, the Base Rate in effect from time to time, payable
monthly on the last day of each Interest Period and on the date such Base
Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. If such A Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during each Interest Period
for such A Advance to the sum of (x) the Eurodollar Rate for such Interest
Period for such A Advance plus (y) the Applicable Interest Rate Margin,
payable on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day that occurs
during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be
Converted or paid in full.
(b) Default Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance that is not paid when due and on the unpaid
amount of all interest, fees and other amounts payable hereunder that is not
paid when due, payable on demand, at a rate per annum equal at all times to 2%
per annum above the Base Rate in effect from time to time.
SECTION 2.08. Additional Interest on Eurodollar Rate Advances. The
Borrower shall pay to each Lender, so long as such Lender shall be required
under regulations of the Board of Governors of the Federal Reserve System to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid principal
amount of each Eurodollar Rate Advance of such Lender, from the date of such A
Advance until such principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such A Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period,
payable on each date on which interest is payable on such A Advance. Such
additional interest shall be determined by such Lender and notified in writing
to the Borrower through the Agent.
SECTION 2.09. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose of determining
each Eurodollar Rate. If any one or more of the Reference Banks shall not
furnish such timely information to the Agent for the purpose of determining any
such interest rate,
<PAGE>
22
the Agent shall determine such interest rate on the basis of timely information
furnished by the remaining Reference Banks.
(b) The Agent shall give prompt notice to the Borrower and the Lenders
of the applicable interest rate determined by the Agent for purposes of Section
2.07(a)(i) or (ii), and the applicable rate, if any, furnished by each Reference
Bank for the purpose of determining the applicable interest rate under Section
2.07(a)(ii).
(c) If fewer than two Reference Banks furnish timely information to
the Agent for determining the Eurodollar Rate for any Eurodollar Rate Advances,
(i) the Agent shall forthwith notify the Borrower and the Lenders that
the interest rate cannot be determined for such Eurodollar Rate Advances,
(ii) each such Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance (or if
such Advance is then a Base Rate Advance, will continue as a Base Rate
Advance) and
(iii) the obligation of the Lenders to make, or to Convert A Advances
into, Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that two or more Reference Banks have
furnished timely information to the Agent for the purpose of determining
the Eurodollar Rate.
(d) If any Reference Bank shall fail to furnish timely information to
the Agent pursuant to this Section 2.09 the Borrower may, with the consent of
the Agent (which consent shall not be unreasonably withheld), appoint another
Lender as a replacement for such Reference Bank.
(e) If, with respect to any Eurodollar Rate Advances, the Majority
Lenders notify the Agent that the Eurodollar Rate for any Interest Period for
such Advances will not adequately reflect the cost to such Majority Lenders of
making, funding or maintaining their respective Eurodollar Rate Advances for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon
(i) each Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Advance and
(ii) the obligation of the Lenders to make, or to Convert A Advances
into, Eurodollar Rate Advances shall be suspended until the Agent shall
notify
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23
the Borrower and the Lenders that the circumstances causing such suspension
no longer exist.
(f) If the Borrower shall fail to select a new Interest Period for any
outstanding Eurodollar Rate Advances in accordance with the provisions contained
in the definition of "Interest Period" in Section 1.01, the Agent will forthwith
so notify the Borrower and the Lenders and such Advances will automatically, on
the last day of the then existing Interest Period therefor, Convert into Base
Rate Advances.
(g) On the date on which the aggregate unpaid principal amount of A
Advances comprising any A Borrowing shall be reduced, by payment or prepayment
or otherwise, to less than $20,000,000, such A Advances shall, if they are
Eurodollar Rate Advances, automatically Convert into Base Rate Advances, and on
and after such date the right of the Borrower to Convert such A Advances into
Eurodollar Rate Advances shall terminate; provided, however, that, if and so
long as each such A Advance shall be of the same Type and have the same Interest
Period as A Advances comprising another A Borrowing or other A Borrowings, and
the aggregate unpaid principal amount of all such A Advances shall equal or
exceed $20,000,000, the Borrower shall have the right to continue all such A
Advances as, or to Convert all such A Advances into, Advances of such Type
having such Interest Period.
SECTION 2.10. Voluntary Conversion of A Advances. The Borrower may
on any Business Day, upon notice given to the Agent not later than 11:00 A.M.
(New York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.09 and 2.13, Convert all
A Advances of one Type comprising the same A Borrowing into A Advances of the
other Type; provided, however, that any Conversion of any Eurodollar Rate
Advances into Base Rate Advances shall be made on, and only on, the last day of
an Interest Period for such Eurodollar Rate Advances and any Conversion of Base
Rate Advances into Eurodollar Rate Advances shall be in an amount not less than
$20,000,000; and provided further, however, that the Borrower shall not convert
any Base Rate Advances into Eurodollar Rate Advances if a Default has occurred
and is continuing. Each such notice of a Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii) the
A Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the initial Interest Period for each such A Advance.
Each notice of Conversion shall be irrevocable and binding on the Borrower.
SECTION 2.11. Prepayments of A Advances. (a) The Borrower shall
have no right to prepay any principal amount of any A Advances other than as
provided in subsection (b) below.
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24
(b) The Borrower may, upon at least one (1) Business Day's notice in
the case of Base Rate Advances, and three (3) Business Days' notice in the case
of Eurodollar Rate Advances to the Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amounts of the A Advances comprising
part of the same A Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid;
provided, however, that (x) each partial prepayment shall be in an aggregate
principal amount not less than $1,000,000 or an integral multiple thereof and
(y) in the case of any such prepayment of a Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect thereof pursuant
to Section 8.04(b).
SECTION 2.12. Increased Costs. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law, regulation, rule or
guideline promulgated or made after the date this Agreement is executed and
delivered by the Borrower or (ii) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law) promulgated or made after the date this Agreement is executed and
delivered by the Borrower, there shall be any increase in the cost to any Lender
of agreeing to make or making, funding or maintaining Eurodollar Rate Advances,
then the Borrower shall from time to time, upon written demand by such Lender
(with a copy of such written demand to the Agent), pay to the Agent for the
account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost. A certificate, made in good faith and in reasonable
detail, as to the amount of such increased cost, submitted to the Borrower and
the Agent by such Lender, shall, except for demonstrable or calculation error,
be conclusive and binding for all purposes.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) promulgated or
made after the date this Agreement is executed and delivered by the Borrower
affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and that
the amount of such capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of this type, then,
within 30 days after written notice and demand from such Lender (with a copy of
such demand to the Agent), the Borrower shall immediately pay to the Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines
<PAGE>
25
such increase in capital to be allocable to the existence of such Lender's
commitment to lend hereunder; provided that the Borrower shall not be obligated
to pay any such additional amounts that are attributable to the period (the
"Excluded Period") ending 90 days prior to the Borrower's receipt of such
written notice; provided further, however, that to the extent such additional
amounts accrue during the Excluded Period because of the retroactive effect of
the applicable law, rule, regulation, guideline or request promulgated during
the 90 day period prior to the Borrower's receipt of such written notice, the
limitation set forth in the foregoing proviso shall not apply. A certificate,
made in good faith and in reasonable detail, as to such amounts submitted to the
Borrower and the Agent by such Lender shall, except for demonstrable or
calculation error, be conclusive and binding for all purposes.
(c) Any Lender claiming any additional amounts payable pursuant to
this Section 2.12 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
lending office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(d) Any Lender claiming any additional amounts payable pursuant to
this Section 2.12 shall, if no Default has occurred and is continuing, upon the
request of the Borrower delivered to such Lender and the Agent, assign, pursuant
to and in accordance with the provisions of Section 8.07, all of its rights and
obligations under this Agreement and under the Notes to an Eligible Assignee
selected by the Borrower in consideration for (i) the payment by such assignee
to the assigning Lender of the principal of, and interest accrued and unpaid to
the date of such assignment on, the Note or Notes of such Lender, (ii) the
payment by the Borrower to the assigning Lender of any and all other amounts
owing to such Lender under any provision of this Agreement accrued and unpaid to
the date of such assignment and (iii) the Borrower's release of the assigning
Lender from any further obligation or liability under this Agreement. The
processing and recordation fee required under Section 8.07(a) for such
assignment shall be paid by the Borrower. Notwithstanding anything to the
contrary in this Section 2.12(d), in no event shall the replacement of any
Lender result in a decrease or reallocation of the aggregate Commitments without
the written consent of the Majority Lenders.
SECTION 2.13. Illegality. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances
<PAGE>
26
or to fund or maintain Eurodollar Rate Advances hereunder, (i) the obligation of
such Lender to make, or to Convert A Advances into, Eurodollar Rate Advances
shall be suspended until such Lender shall notify the Borrower and the Agent
that the circumstances causing such suspension no longer exist and (ii) the
Borrower shall, on the last day of the Interest Period then applicable thereto
or, if it is unlawful for such Lender to maintain such Eurodollar Advances for
the balance of any such Interest Period, on the last day on which the Borrower
has been notified by such Lender that such Eurodollar Advances may be lawfully
maintained, Convert all Eurodollar Rate Advances of such Lender then outstanding
into Base Rate Advances in accordance with Section 2.10.
SECTION 2.14. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes not later than 12:00 Noon (New
York City time) on the day when due in U.S. dollars to the Agent at its address
referred to in Section 8.02 in same day funds. The Agent will promptly
thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than amounts payable
pursuant to Section 2.03, 2.08, 2.12, 2.16 or 8.04(b)) to the Lenders for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) All computations of interest based on the Base Rate shall be made
by the Agent on the basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Eurodollar Rate or the Federal Funds
Rate (for all purposes other than the calculation of the Base Rate) and of
facility fees shall be made by the Agent, and all computations of interest
pursuant to Section 2.08 shall be made by a Lender, on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest or
facility fees are payable. Each determination by the Agent (or, in the case of
Section 2.08, by a Lender) of an interest rate hereunder shall be conclusive and
binding for all purposes, absent calculation or demonstrable error.
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27
(c) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or facility fee, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in full to the
Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the A Advances owing to it (other than
pursuant to Section 2.08, 2.12, 2.16 or 8.04(b)) in excess of its ratable share
of payments on account of the A Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
the A Advances owing to them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them, provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.15
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
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SECTION 2.16. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.14,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, net income
taxes that are imposed by the United States and franchise taxes and net income
taxes that are imposed on such Lender or the Agent by the state or foreign
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, franchise taxes and net income taxes that are imposed on such Lender by
the state or foreign jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.16) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.16) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender or the Agent (as the case may be) makes written demand
therefor.
(d) Each Lender shall, at the time of any written demand for
indemnification as set forth in subsection (c) above, provide to the Borrower a
receipt for, or other evidence of the payment of, Taxes or Other Taxes to be
indemnified under this Section 2.16.
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29
(e) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Agent, at its address referred to in Section 8.02,
appropriate evidence of payment thereof.
(f) For purposes of this Section 2.16, the terms "United States" and
"United States person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code of 1986, as amended from time to time.
(g) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long thereafter as such Lender remains lawfully able
to do so), provide the Agent and the Borrower with Internal Revenue Service form
1001 or 4224, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or entitled
to a reduced rate of United States withholding tax on payments of interest
pursuant to this Agreement or the Notes. If the form provided by a Lender at
the time such Lender first becomes a party to this Agreement indicates a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Lender
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such form; provided, however, that, if at the date of
the Assignment and Acceptance pursuant to which a Lender assignee becomes a
party to this Agreement, the Lender assignor was entitled to payments under
subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to the extent such tax results in liability
for such payments, the term Taxes shall include (in addition to withholding
taxes that may be imposed in the future or other amounts otherwise includable in
Taxes) United States interest withholding tax, if any, applicable with respect
to the Lender assignee on such date.
(h) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form described in subsection (g)
(other than if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under subsection (g)), such Lender shall not be
entitled to indemnification under subsection (a) or (c) with respect to Taxes
imposed by the United States; provided, however, that, should a Lender become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrower shall take such steps as such Lender shall reasonably request to
assist such Lender to recover such Taxes.
<PAGE>
30
(i) Any Lender claiming any additional amounts payable pursuant to
this Section 2.16 shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
lending office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.
(j) In the event the Borrower is required pursuant to this Section
2.16 to pay any amount to any Lender or the Agent or on the behalf of any of
them to any taxing authority, such Lender shall, if no Default has occurred and
is continuing, upon the request of the Borrower delivered to such Lender and the
Agent, assign, pursuant to and in accordance with the provisions of Section
8.07, all of its rights and obligations under this Agreement and under the Notes
to an Eligible Assignee selected by the Borrower in consideration for (i) the
payment by such assignee to the assigning Lender of the principal of, and
interest accrued and unpaid to the date of such assignment on, the Note or Notes
of such Lender, (ii) the payment by the Borrower to the assigning Lender of any
and all other amounts owing to such Lender under any provision of this Agreement
accrued and unpaid to the date of such assignment and (iii) the Borrower's
release of the assigning Lender from any further obligation or liability under
this Agreement. The processing and recordation fee required under Section
8.07(a) for such assignment shall be paid by the Borrower. Notwithstanding
anything to the contrary in this Section 2.16(j), in no event shall the
replacement of any Lender result in a decrease or reallocation of the aggregate
Commitments without the written consent of the Majority Lenders.
Section 2.17. Use of Proceeds. The proceeds of the Advances shall be
available, and the Borrower agrees that it will use such proceeds, solely for
the general corporate purposes of the Borrower and its Subsidiaries.
<PAGE>
31
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Effectiveness of Sections
2.01 and 2.03. The effectiveness of Sections 2.01 and 2.03 is subject to the
following conditions precedent:
(a) This Agreement (including all schedules, exhibits, certificates
and opinions delivered pursuant hereto) shall be in full force and effect
and shall not have been terminated.
(b) There shall have occurred no material adverse change in the
condition (financial or otherwise) or results of operations of the Borrower
and its Subsidiaries, taken as a whole, since February 26, 1994, provided,
however, that without limiting the generality of the foregoing, the
restructuring charge of $244,000,000 taken in the third quarter of the
Borrower's 1995 fiscal year shall not be deemed to constitute a material
adverse change for purposes of this Section 3.01(b).
(c) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
could reasonably be expected to result in a material adverse change in the
condition (financial or otherwise) or results of operations or prospects of
the Borrower and its Subsidiaries, taken as a whole, other than the
matters described on Schedule II hereto (the "Disclosed Litigation") or
(ii) purports to affect the legality, validity or enforceability of this
Agreement or any Note or the consummation of the transactions contemplated
hereby, and there shall have been no adverse change in the status, or
financial effect on the Borrower or any of its Subsidiaries, of the
Disclosed Litigation from that described on Schedule II hereto.
(d) All governmental and third party consents and approvals necessary
in connection with the transactions contemplated hereby shall have been
obtained (without the imposition of any conditions that are not acceptable
to the Lenders) and shall remain in effect, and no law or regulation shall
be applicable that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
<PAGE>
32
(e) The Borrower shall have notified each Lender and the Agent in
writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and expenses of the
Agent that have been billed (including the accrued fees and expenses of
counsel to the Agent).
(g) The Agent shall have received on or before the Effective Date the
following, each dated such date, in form and substance satisfactory to the
Agent and (except for the Notes) in sufficient copies for each Lender:
(i) the A Notes payable to the order of the Lenders,
respectively,
(ii) certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement and the Notes, and
of all documents evidencing other necessary corporate action and
government approvals, if any, with respect to this Agreement and the
Notes,
(iii) a certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Agreement and the
Notes and the other documents to be delivered hereunder,
(iv) a copy of a certificate of the Secretary of State of the
State of Delaware (as of a date reasonably near the Effective Date)
that (a) attached thereto is a true and correct copy of the Borrower's
charter and each amendment thereto, (b) such amendments are the only
amendments to the Borrower's charter on file in his office, (c) the
Borrower has paid all franchise taxes to the date of such certificate
and (d) the Borrower is duly incorporated and in good standing under
the laws of Delaware,
(v) a certificate of the Borrower, signed by its President or a
Vice President and its Secretary or any Assistant Secretary, dated the
Effective Date, certifying (a) as to the absence of any amendments to
the charter of the Borrower since the date of the Secretary of State's
certificate from the State of Delaware, (b) that attached is a true
and correct copy of the by-laws of the Borrower as in effect on the
Effective Date, (c) as to the due incorporation and good standing of
the Borrower as a corporation organized under the laws of the state of
Delaware, and
<PAGE>
33
the absence of any proceeding for the dissolution or liquidation of
the Borrower, (d) as to the truth and correctness of the
representations and warranties contained in Section 4.01 of this
Agreement as though made on and as of the Effective Date and (e) as to
the absence of any event occurring and continuing, or resulting from
the effectiveness of Sections 2.01 and 2.03, if any, that constitutes
a Default,
(vi) a favorable opinion of Dorsey & Whitney, special counsel for
the Borrower, substantially in the form of Exhibit D hereto and as to
such other matters as any Lender through the Agent may reasonably
request,
(vii) a favorable opinion of John Breedlove, Region Counsel of
the Borrower, substantially in the form of Exhibit E hereto and as to
such other matters as any Lender through the Agent may reasonably
request,
(viii) a favorable opinion of Shearman & Sterling, special New
York counsel to the Agent, substantially in the form of Exhibit F
hereto,
(ix) evidence of the termination of the commitments under the
Current Supervalu Credit Agreement, and payment of all amounts owing
thereunder, and
(x) such other approvals, opinions or documents as any Lender,
through the Agent, may reasonably request.
SECTION 3.02. Conditions Precedent to Each A Borrowing. The
obligation of each Lender to make an A Advance on the occasion of each A
Borrowing (including the initial A Borrowing) resulting in an increase in the
aggregate amount of outstanding A Advances shall be subject to the further
conditions precedent that on the date of such A Borrowing the following
statements shall be true (and each of the giving of the applicable Notice of A
Borrowing and the acceptance by the Borrower of the proceeds of such A Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such A Borrowing such statements are true):
(i) the representations and warranties contained in Section 4.01
(excluding that contained in the last sentence of subsection (e) thereof)
are correct on and as of the date of such A Borrowing, before and after
giving effect to such A Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and
<PAGE>
34
(ii) no event has occurred and is continuing, or would result from
such A Borrowing or from the application of the proceeds therefrom, which
constitutes a Default.
SECTION 3.03. Conditions Precedent to Each B Borrowing. The
obligation of each Lender that is to make a B Advance on the occasion of a B
Borrowing (including the initial B Borrowing) to make such B Advance as part of
such B Borrowing is subject to the conditions precedent that (i) the Agent shall
have received the written confirmatory Notice of B Borrowing with respect
thereto, (ii) (x) in the case of any B Borrowing (except as otherwise set forth
in subclause (y) below), on or before the date of such B Borrowing, but prior to
such B Borrowing, and (y) in the case of same day, fixed rate B Borrowings,
promptly after any such B Borrowing, the Agent shall have received a B Note
payable to the order of such Lender for each of the one or more B Advances to be
made by such Lender as part of such B Borrowing, in a principal amount equal to
the principal amount of the B Advance to be evidenced thereby and otherwise on
such terms as were agreed to for such B Advance in accordance with Section 2.03
and (iii) on the date of such B Borrowing the following statements shall be true
(and each of the giving of the applicable Notice of B Borrowing and the
acceptance by the Borrower of the proceeds of such B Borrowing shall constitute
a representation and warranty by the Borrower that on the date of such B
Borrowing such statements are true):
(a) the representations and warranties contained in Section 4.01
(excluding that contained in the last sentence of subsection (e) thereof)
are correct on and as of the date of such B Borrowing, before and after
giving effect to such B Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date,
(b) no event has occurred and is continuing, or would result from such
B Borrowing or from the application of the proceeds therefrom, which
constitutes a Default and
(c) no event has occurred and no circumstance exists as a result of
which the information concerning the Borrower that has been provided to the
Agent and each Lender by the Borrower in connection herewith would include
an untrue statement of a material fact or omit to state any material fact
or any fact necessary to make the statements contained therein, in the
light of the circumstances under which they were made, not misleading.
<PAGE>
35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the Notes, and the consummation of the transactions
contemplated hereunder, are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, and do not (a)
contravene the Borrower's charter or by-laws, (b) violate any law, rule,
regulation, order, writ, judgment, determination or award binding on or
affecting the Borrower or (c) conflict with or result in the breach of, or
constitute a default under, any agreement or instrument binding on or
affecting the Borrower.
(c) This Agreement has been, and each of the Notes when delivered
hereunder will have been, duly executed and delivered by the Borrower.
This Agreement is, and the Notes when delivered hereunder will be, legal,
valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their respective terms.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body, or any third
party that is a party to any agreement or instrument binding on the
Borrower is required for the due execution, delivery or performance by the
Borrower of this Agreement or the Notes, or for the consummation of the
transactions contemplated by this Agreement.
(e) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at February 26, 1994, and the related statements of income
and retained earnings of the Borrower and its Subsidiaries for the fiscal
year then ended, accompanied by an opinion of DeLoitte & Touche, LLP,
independent public accountants, and the Consolidated balance sheet of the
Borrower and its Subsidiaries as at December 3, 1994, and the related
statements of income and retained earnings of the Borrower and its
Subsidiaries for the three fiscal quarters then ended, duly certified by a
Financial Officer of the Borrower, copies
<PAGE>
36
of which have been furnished to each Lender, fairly present, subject, in
the case of said balance sheet as at December 3, 1994, and said statements
of income and retained earnings for the three fiscal quarters then ended,
to year-end audit adjustments, the Consolidated financial condition of the
Borrower and its Subsidiaries as at such dates and the Consolidated results
of the operations of the Borrower and its Subsidiaries for the periods
ended on such dates, all in accordance with generally accepted accounting
principles consistently applied. Since February 26, 1994, there has been no
material adverse change in such condition or operations, provided, however,
that without limiting the generality of the foregoing, the restructuring
charge of $244,000,000 taken in the third quarter of the Borrower's 1995
fiscal year shall not be deemed to constitute a material adverse change for
purposes of this Section 4.01(e).
(f) Except as set forth on Schedule II, there is no pending or
threatened action, suit, investigation, litigation or proceeding,
including, without limitation, any Environmental Action, affecting the
Borrower or any of its Subsidiaries before any court, governmental agency
or arbitrator, that (a) is likely to result in a material adverse change in
the condition (financial or otherwise) or results of operations or
prospects of the Borrower and its Subsidiaries, taken as a whole, or (b)
purports to affect the legality, validity or enforceability of this
Agreement or any Note or the consummation of the transactions contemplated
hereby.
(g) (i) No information, exhibit or report furnished by or on behalf of
the Borrower to the Agent or any Lender in connection with the negotiation
of the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not misleading
in light of the circumstances under which such statements were made; and
(ii) all financial projections that have been provided by or on behalf of
the Borrower to the Agent or any Lender were prepared in good faith based
on reasonable assumptions (it being understood that such projections are
subject to significant uncertainties and contingencies beyond the
Borrower's control, and that no assurance can be given that the projections
will be realized).
(h) Following application of the proceeds of each Advance, not more
than 25 percent of the value of the assets (either of the Borrower only or
of the Borrower and its Subsidiaries on a Consolidated basis) subject to
the provisions of Section 5.02(a) or Section 5.02(c) or subject to any
restriction contained in any agreement or instrument between the Borrower
and any Lender or any Affiliate of any Lender relating to Debt and within
the scope of Section 6.01(d) will be
<PAGE>
37
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System).
(i) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan of the Borrower or any of its ERISA Affiliates
that has resulted in or is reasonably likely to result in a material
liability of the Borrower or any of its ERISA Affiliates.
(j) Schedule B (Actuarial Information) to the 1994 annual report (Form
5500 Series) for each Plan of the Borrower or any of its ERISA Affiliates,
copies of which have been filed with the Internal Revenue Service and
furnished to the Lenders, is complete and accurate and fairly presents the
funding status of such Plan, and since the date of such Schedule B there
has been no material adverse change in such funding status.
(k) Neither the Borrower nor any of its ERISA Affiliates has incurred
or is reasonably expected to incur any material Withdrawal Liability to any
Multiemployer Plan.
(l) Neither the Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA, and no such
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, within the meaning of Title IV of ERISA, if as a result thereof
the Borrower or any of its ERISA Affiliates would incur or would reasonably
be expected to incur, any material liability.
(m) The aggregate annualized amount paid (including, without
limitation, the cost of insurance premiums) with respect to post-retirement
benefits under Welfare Plans for which the Borrower and its Subsidiaries
are liable does not exceed $8,000,000.
(n) Each of the Borrower and its Subsidiaries has filed or caused to
be filed all tax returns which are required to be filed, and all taxes
related to such returns and any assessments made against it or any of its
respective properties and all other taxes, fees or other charges imposed on
it or any of its respective properties by any governmental authority (other
than those the amount or validity of which is contested in good faith by
appropriate proceedings and with respect to which reserves in conformity
with generally accepted accounting principles have been provided on the
books of the Borrower or its Subsidiaries as the case
<PAGE>
38
may be) have been paid, except to the extent the failure to make such
filings or payments would not have a material adverse effect on the
condition (financial or otherwise) or results of operations or prospects of
the Borrower and its Subsidiaries, taken as a whole.
(o) Neither the Borrower nor any of its Subsidiaries is an "investment
company", or an "affiliated person" of, or "promotor" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
(p) The operations and properties of the Borrower and each of its
Subsidiaries comply in all material respects with all Environmental Laws,
all necessary Environmental Permits have been obtained and are in effect
for the operations and properties of the Borrower and its Subsidiaries and
the Borrower and its Subsidiaries are in compliance in all material
respects with all such Environmental Permits, except to the extent that any
such non-compliance or failure to obtain any necessary permits could not
reasonably be expected to result in a material adverse change in the
condition (financial or otherwise) or results of operations of the Borrower
and its Subsidiaries, taken as a whole. No circumstances exist that could
be reasonably likely to (i) form the basis of an Environmental Action
against the Borrower or any of its Subsidiaries or any of their respective
properties that could have a material adverse effect on the condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries, taken as a whole, or (ii) cause any such property to be
subject to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law that could have a material adverse effect on
the condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries, taken as a whole.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Note shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will, unless the Majority Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Payment of Taxes, Etc. Comply, and cause
each of its Subsidiaries to comply, in all material respects, with all
material applicable laws (including, without limitation, ERISA), rules,
regulations and
<PAGE>
39
orders, such compliance to include, without limitation, paying and
discharging before the same become delinquent all taxes, assessments and
governmental charges imposed upon it or upon its property except to the
extent contested in good faith and for which appropriate reserves have been
made in accordance with generally accepted accounting principles.
(b) Preservation of Corporate Existence, Etc. Preserve and maintain
its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Borrower may consummate any merger or
consolidation permitted under Section 5.02(b), and provided further that
the Borrower shall not be required to preserve any right or franchise if
the Borrower shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower and that the loss
thereof is not disadvantageous in any material respect to the Borrower.
(c) Keeping of Books. Keep, and cause each Subsidiary to keep, proper
books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the
Borrower and each Subsidiary in order to permit the Borrower to prepare
Consolidated financial statements of the Borrower in accordance with
generally accepted accounting principles in effect from time to time.
(d) Tangible Net Worth. Maintain Consolidated Tangible Net Worth of
the Borrower and its Subsidiaries, during each fiscal year of the Borrower
ending after the fiscal year ended February 26, 1995, of not less than the
sum of (A) $493,262,158 plus (B) an amount equal to sixty percent (60%) of
the positive Consolidated Net Earnings of the Borrower and its Subsidiaries
on a cumulative basis for each of the complete fiscal years of the Borrower
after the fiscal year ended February 26, 1995; provided that the minimum
Consolidated Tangible Net Worth required under this Section 5.01(d) shall
be adjusted in accordance with generally accepted accounting principles to
eliminate any increase or decrease in Tangible Net Worth attributable to
(x) the sale by the Borrower of its remaining interest in ShopKo Stores
Inc. and (y) purchases by the Borrower after February 26, 1995 of up to
5,000,000 shares of its outstanding common stock, $1.00 par value per
share, based on the purchase price thereof in an aggregate amount not to
exceed $150,000,000.
(e) Leverage Ratio. Maintain at all times a ratio of Consolidated
Debt to Total Capital of not more than the amount set forth below during
each period set forth below:
<PAGE>
40
Period Ratio
---------------------------------- -----
From the date of
this Agreement - 2/28/97 .65:1
3/1/97 - and thereafter .63:1
(f) Reporting Requirements. Furnish to the Lenders:
(i) (x) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Borrower, the Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statements
of income and retained earnings of the Borrower and its Subsidiaries
for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, duly certified by a Financial
Officer of the Borrower as having been prepared in accordance with
generally accepted accounting principles;
(y) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, a copy of the
Consolidated annual report for such year for the Borrower and its
Subsidiaries, containing Consolidated financial statements for such
year, certified in a manner acceptable to the Majority Lenders by
Deloitte & Touche or other nationally recognized independent public
accountants; and
(z) together with each delivery of financial statements required
by clauses (x) and (y) above, a certificate of a Financial Officer (A)
stating that the signer has reviewed or caused to be reviewed under
his or her supervision the terms of this Agreement and the Notes and
the transactions and condition of the Borrower and its Subsidiaries
during the accounting period covered by such financial statements and
that such review has not disclosed the existence as at the date of
such certificate of any condition or event that constitutes a Default,
and (B) setting forth (except to the extent specifically set forth in
such financial statements) information in reasonable detail necessary
to demonstrate the Borrower's compliance as at the end of such
accounting period with Sections 5.01(d) and 5.01(e) (including, but
not limited to, in the case of Section 5.01(e), a description of and
amounts comprising the elements of Consolidated Debt, each determined
in accordance with generally accepted accounting principles);
<PAGE>
41
(ii) as soon as possible and in any event within five (5) days
after any Financial Officer of the Borrower has knowledge of the
occurrence of each Default continuing on the date of such statement, a
statement of a Financial Officer of the Borrower setting forth the
details of such Default and the action which the Borrower has taken
and proposes to take with respect thereto;
(iii) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to any of its shareholders, and
copies of all reports and registration statements which the Borrower
or any Subsidiary files with the Securities and Exchange Commission or
any national securities exchange;
(iv) promptly and in any event within 30 days after the filing
thereof with the Internal Revenue Service, copies of each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan of the Borrower or any of its ERISA Affiliates,
provided that this clause (iv) shall apply only to the extent that the
total "current liability" indicated on any such Schedule B exceeds
$2,000,000;
(v) promptly and in any event within 10 days after the Borrower
or any of its ERISA Affiliates knows or has reason to know that any
ERISA Event has occurred, a statement of a Financial Officer of the
Borrower describing such ERISA Event and the action, if any, which the
Borrower or such ERISA Affiliate proposes to take with respect
thereto;
(vi) promptly and in any event within two Business Days after
receipt thereof by the Borrower or any of its ERISA Affiliates, copies
of each notice from the PBGC stating its intention to terminate any
Plan of the Borrower or any of its ERISA Affiliates or to have a
trustee appointed to administer any Plan of the Borrower or any of its
ERISA Affiliates;
(vii) promptly and in any event within five Business Days after
receipt thereof by the Borrower or any of its ERISA Affiliates from
the sponsor of a Multiemployer Plan of the Borrower or any of its
ERISA Affiliates, a copy of each notice received by the Borrower or
any of its ERISA Affiliates concerning (a) (x) the imposition of
Withdrawal Liability in an amount exceeding $2,000,000 by a
Multiemployer Plan of the Borrower or any of its ERISA Affiliates or
(y) the reorganization or termination, within the meaning of Title IV
of ERISA, of any Multiemployer Plan of the Borrower or any of its
ERISA Affiliates that has resulted or is
<PAGE>
42
reasonably expected to result in a liability of the Borrower or any of
its ERISA Affiliates in an amount exceeding $2,000,000 and (b) the
amount of liability incurred, or that may be incurred, by the Borrower
or any of its ERISA Affiliates in connection with any event described
in subclause (x) or (y) above;
(viii) promptly after commencement thereof, notice of all
actions and proceedings before any court, governmental agency or
arbitrator affecting the Borrower or any of its Subsidiaries of the
type described in Section 4.01(f); and
(ix) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(g) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted; provided however that
neither the Borrower nor any of its Subsidiaries shall be required to
maintain or preserve any properties if the Borrower determines, in its
reasonable business judgment, that the maintenance and preservation thereof
is no longer desirable in the conduct of the business of the Borrower or
such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrower or such Subsidiary.
SECTION 5.02. Negative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not,
without the written consent of the Majority Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien upon or with respect to
any of its properties, whether now owned or hereafter acquired, or assign,
or permit any
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43
of its Subsidiaries to assign, any right to receive income, in each case to
secure or provide for the payment of any Debt of any Person, other than:
(i) purchase money Liens upon or in any property acquired or held
by the Borrower or any Subsidiary of the Borrower in the ordinary
course of business to secure the purchase price of such property, or
(ii) in the case of the Borrower, purchase money Liens to secure
Debt incurred solely for the purpose of financing the acquisition of
any real property, fixtures or equipment acquired by the Borrower with
the proceeds of such Debt, or
(iii) in the case of any Subsidiary of the Borrower, purchase
money Liens to secure Debt incurred by such Subsidiary solely to
finance the purchase price of real property, fixtures or equipment to
the extent permitted pursuant to clause (ii) of Section 5.02(d),
provided that no such Lien shall secure greater than 75% of the fair
market value of the real property, fixtures or equipment purchased
with such Debt as reasonably determined at the time of the creation of
such Lien by the authorized officers or Board of Directors of the
Borrower, as the case may be, in a manner consistent with the
Borrower's standard procedure, or
(iv) in the case of any Subsidiary of the Borrower, purchase
money Liens to secure Debt assumed by such Subsidiary solely in
connection with the acquisition of real property, fixtures or
equipment to the extent permitted pursuant to clause (iii) of Section
5.02(d), provided that no such Lien shall secure greater than 75% of
the fair market value of the real property, fixtures or equipment so
acquired as reasonably determined at the time of the assumption of
such Debt by the authorized officers or Board of Directors of the
Borrower, as the case may be, in a manner consistent with the
Borrower's standard procedure, or
(v) in the case of any Subsidiary of the Borrower, Liens to
secure Debt assumed solely in connection with an acquisition to the
extent permitted pursuant to clause (iv) of Section 5.02(d), provided
that no such Lien shall secure greater than 75% of the fair market
value of the assets of the Person so acquired by such Subsidiary as
reasonably determined at the time of the assumption of such Debt by
the authorized officers or Board of Directors of the Borrower, as the
case may be, in a manner consistent with the Borrower's standard
procedure (excluding from the determination of the fair market value
of the assets of the
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44
acquired Person all amounts attributable to intangible assets thereof
including, but not limited to, goodwill, licenses and rights in any
thereof, trade names, trademarks and other similar intangibles), or
(vi) in the case of the Borrower, Liens existing on property at
the time of the acquisition thereof by the Borrower (other than any
such Lien created in contemplation of such acquisition that was not
incurred to finance the acquisition of such property), or
(vii) Any extensions, renewals or replacements of any of the
Liens permitted by subclauses (i) through (vi) above or subclause (x)
below for the same or a lesser amount, provided, however, that no such
Liens shall extend to or cover any properties not theretofore subject
to the Lien being extended, renewed or replaced, or
(viii) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings and for which appropriate
reserves have been made in accordance with generally accepted
accounting principles, or
(ix) Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in
connection with the borrowing of money or the obtaining of advances or
credit, and which do not in the aggregate materially detract from the
value of its property or assets or materially impair the use thereof
in the operation of its business, or
(x) Liens existing on the date hereof, or
(xi) other Liens securing Debt which, together with any Debt
incurred solely pursuant to clause (viii) of Section 5.02(d), does not
exceed $100,000,000 in aggregate principal amount at any time
outstanding.
(b) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or permit any of its
Subsidiaries to do so, except that:
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45
(i) any Subsidiary of the Borrower may merge or consolidate with
or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with any one or more other
Subsidiaries of the Borrower,
(ii) the Borrower or any Subsidiary of the Borrower may sell,
lease, transfer or otherwise dispose of any of its assets to the
Borrower or any Subsidiary of the Borrower, as the case may be,
(iii) the Borrower or any Subsidiary of the Borrower may merge
with any other corporation, provided that the Borrower or such
Subsidiary shall be the continuing or surviving corporation, and
(iv) the Borrower may engage in transactions permitted by Section
5.02(c),
provided that, in the case of each transaction permitted under this Section
5.02(b), at the time of such proposed transaction and immediately after
giving effect to such proposed transaction, no Default shall have occurred
and be continuing.
(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, its assets, or grant any option or other right to purchase,
lease or otherwise acquire its assets, other than:
(i) sales of inventory in the ordinary course of its business,
(ii) any sale of assets in a transaction authorized by
subsections (b) (i), (ii) or (iii) of this Section 5.02,
(iii) the sale of the Borrower's remaining interest in ShopKo
Stores Inc.,
(iv) sales of notes receivable payable to the Borrower or any
Subsidiary of the Borrower to the extent such sales are accounted for
as true sales in accordance with generally accepted accounting
principles and
(v) other sales, leases, transfers or other dispositions of
assets of the Borrower or any of its Subsidiaries not to exceed in the
aggregate
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46
10% of the Consolidated assets of the Borrower and its Subsidiaries
for all such sales, leases, transfers or other dispositions, provided
that the Consolidated assets of the Borrower and its Subsidiaries
shall be determined at the time of any such sale, lease, transfer or
other disposition by reference to the most recent financial statements
of the Borrower delivered pursuant to Section 5.01(f)(i)(x) or (y)
(excluding from this amount the sale by the Borrower of its remaining
interest in ShopKo Stores, Inc.).
(d) Debt of Subsidiaries. Permit any of its Subsidiaries to create,
incur, assume or suffer to exist any Debt, other than:
(i) Debt owed to the Borrower or to a wholly owned Subsidiary of
the Borrower, provided that in no event shall any Subsidiary of the
Borrower be permitted to create, incur, assume or suffer to exist any
Debt to the Borrower as a result of, or in connection with, the sale,
lease, transfer or other disposition of assets by the Borrower to such
Subsidiary,
(ii) Debt incurred to finance the purchase price of real
property, fixtures or equipment acquired by such Subsidiary from a
Person other than the Borrower or any other Subsidiary of the
Borrower, provided that such real property, fixtures or equipment
shall be purchased on an arm's-length basis and at a fair market value
as reasonably determined at the time of such acquisition by the
authorized officers or the Board of Directors of the Borrower, as the
case may be, in a manner consistent with the Borrower's standard
procedures,
(iii) secured Debt assumed by such Subsidiary in connection
with the acquisition of real property, fixtures or equipment which
Debt (x) is secured only by such property and (y) is outstanding at
the time of the acquisition of such property and not incurred to
finance the acquisition thereof, provided that the aggregate of all
such Debt assumed in any such acquisition or related acquisitions
shall not exceed 75% of the fair market value of the property,
fixtures or equipment so acquired and by which such Debt is secured as
reasonably determined at the time of each such acquisition by the
authorized officers or the Board of Directors of the Borrower, as the
case may be, in a manner consistent with the Borrower's standard
procedures,
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47
(iv) secured Debt of a Person that is acquired by the Borrower or
a Subsidiary of the Borrower, which Person will be, upon such
acquisition, a Subsidiary of the Borrower and which Debt (x) is
secured only by the assets of such Person and (y) is outstanding at
the time of the acquisition of such Person and not incurred to finance
the acquisition thereof, provided that the aggregate of all such Debt
assumed in any such acquisition or related acquisitions shall not
exceed 75% of the fair market value of the assets of such Person as
reasonably determined at the time of the assumption of such Debt by
the authorized officers or the Board of Directors of the Borrower, as
the case may be, in a manner consistent with the Borrower's standard
procedures (excluding from the determination of the fair market value
of the acquired Person all amounts attributable to intangible assets
thereof including, but not limited to, goodwill, licenses and rights
in any thereof, trade names, trademarks and other similar
intangibles),
(v) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(vi) Debt existing on the date hereof, including Debt of the
Subsidiaries of the Borrower for borrowed money in a principal amount
of $5,000,000 or greater as set forth on Schedule III,
(vii) any extension, refinancing, or renewal of any of the Debt
specified in subclauses (i) through (iv) and subclause (vi) of this
subsection (d) not resulting in an increase in the principal amount of
such Debt so extended, refinanced, or renewed and
(viii) other Debt not to exceed $50,000,000 in aggregate
principal amount at any time outstanding, provided that the aggregate
amount permitted under this clause (viii), together with the aggregate
amount of Debt secured by Liens permitted solely pursuant to clause
(xi) of Section 5.02(a), shall not exceed $100,000,000 in aggregate
principal amount at any time outstanding.
ARTICLE VI
EVENTS OF DEFAULT
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48
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay (i) any principal of any Note when
the same becomes due and payable; (ii) any interest on any Note or any
other amount due hereunder (other than as set forth in clause (iii) of this
subsection (a)), in each case within three (3) days of the date on which
the same becomes due and payable; or (iii) fees required to be paid
pursuant to Section 2.04, and amounts due under Section 8.08, in each case
within three (3) days of notice thereof; or
(b) Any written representation or warranty made by the Borrower (or
any of its officers) herein or in connection with this Agreement shall
prove to have been incorrect in any material respect when made; or
(c) The Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.01(d), 5.01(e) or 5.02, or
(ii) any other term, covenant or agreement contained in this Agreement on
its part to be performed or observed if the failure to perform or observe
such other term, covenant or agreement shall remain unremedied for thirty
(30) days after the earliest of: (i) the date written notice thereof shall
have been given to the Borrower by the Agent or any Lender; (ii) the date
written notice thereof shall have been given by the Borrower to the Agent
or any Lender; and (iii) the date by which the Borrower was required to
have delivered to the Lenders the statement required under Section
5.01(f)(ii); or
(d) The Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal amount of at least $10,000,000 in the aggregate (but excluding
Debt evidenced by the Notes) of the Borrower or such Subsidiary (as the
case may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or the Borrower or
any of its Subsidiaries shall fail to be in compliance with any covenant
measuring the Borrower's or such Subsidiary's financial performance under
any agreement or instrument relating to any Debt outstanding in a principal
amount of at least $10,000,000 in the aggregate (but excluding Debt
evidenced by the Notes) and such failure shall continue after the
applicable grace period, if any, specified in such agreement or instrument,
if the effect of such event or condition is to accelerate or to permit the
acceleration of, the maturity of such Debt; or any Debt outstanding in a
principal amount of at
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49
least $10,000,000 in the aggregate (but excluding Debt evidenced by the
Notes) shall be declared to be due and payable, or required to be prepaid
(other than by a required prepayment), redeemed, purchased or defeased, or
an offer to prepay, redeem, purchase or defease such Debt shall be required
to be made, in each case prior to the stated maturity thereof; or
(e) The Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for
it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of sixty (60)
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of
a receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Borrower or any of
its Subsidiaries shall take any corporate action to authorize any of the
actions set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$25,000,000 or otherwise materially adverse to the business, condition
(financial or otherwise), results of operations or prospects of the
Borrower and its Subsidiaries taken as a whole shall be rendered against
the Borrower or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of ten (10) consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) any ERISA Event shall have occurred with respect to a Plan of the
Borrower or any of its ERISA Affiliates and the sum (determined as of the
date of occurrence of such ERISA Event) of the Insufficiency of such Plan
and the Insufficiency of any and all other Plans of the Borrower and its
ERISA Affiliates with respect to which an ERISA Event shall have occurred
and then exist (or the liability of the Borrower and its ERISA Affiliates
related to such ERISA Event) exceeds $25,000,000; or
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50
(h) the Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of
its ERISA Affiliates that it has incurred Withdrawal Liability to such
Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower and its
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $10,000,000 or requires payments exceeding
$1,000,000 per annum; or
(i) the Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan of the Borrower or any of
its ERISA Affiliates that such Multiemployer Plan is in reorganization or
is being terminated, within the meaning of Title IV of ERISA, and as a
result of such reorganization or termination the aggregate annual
contributions of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will
be increased over the amounts contributed to such Multiemployer Plans for
the plan year of each such Multiemployer Plan immediately preceding the
plan year in which such reorganization or termination occurs by an amount
exceeding $1,000,000;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Majority Lenders, by notice to the Borrower, declare the Notes,
all interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that, in the event of an
actual or deemed entry of an order for relief with respect to the Borrower under
the Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances
shall automatically be terminated and (B) the Notes, all such interest and all
such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
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51
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (ii) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement on the part of the Borrower
or to inspect the property (including the books and records) of the Borrower;
(v) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram,
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52
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Notes issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Borrower, any of its Subsidiaries and any Person who may
do business with or own securities of the Borrower or any such Subsidiary, all
as if Citibank were not the Agent and without any duty to account therefor to
the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent, any other Lender, any
Co-Agent or any Lead Manager and based on the financial statements referred to
in Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent, any other Lender, any Co-Agent or any Lead
Manager and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably according to the
respective principal amounts of the A Notes then held by each of them (or if no
A Notes are at the time outstanding or if any A Notes are held by Persons that
are not Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement,
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse the Agent promptly upon demand for its ratable share of any out-of-
pocket expenses (including counsel fees and expenses) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of
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53
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by the Borrower.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the A Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, 3.02 or 3.03, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the A Notes or any
fees or other amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the A Notes or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the A Notes, or the number of Lenders,
that shall be required for the Lenders or any of them to take any action
hereunder or (f) amend this Section 8.01; and provided further that no
amendment, waiver or consent shall, unless
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54
in writing and signed by the Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Agent under this Agreement
or any Note.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered, if to the Borrower, at its address at 11840 Valley View
Road, Eden Prairie, MN 55344, Attention: Treasurer with a copy to the Corporate
Secretary of the Borrower, at the aforesaid address; if to any Bank, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at 399 Park Avenue, New York, New York 10043, Attention: Bank Loan
Syndication, with a copy to One Court Square, Seventh Floor, Zone One, Long
Island City, New York 11120, Attention: Bank Loan Syndication; or as to the
Borrower or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Agent. All such notices and communications shall, when
mailed, telecopied, telegraphed, telexed or cabled, be effective when deposited
in the mails, telecopied, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, except that notices
and communications to the Agent pursuant to Article II or VII shall not be
effective until received by the Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, modification and amendment of this Agreement,
the Notes and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under this Agreement. The Borrower further agrees
to pay on demand all reasonable costs and expenses, if any (including, without
limitation, reasonable counsel fees and expenses) of the Agent and the Lenders,
in connection with the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement, the Notes and the other documents
to be delivered hereunder, including, without limitation, reasonable
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55
counsel fees and expenses in connection with the enforcement of rights under
this Section 8.04(a).
(b) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance, or any B Advance which bears interest based on a rate per annum at
which deposits in U.S. dollars are offered to prime banks in the London
interbank market, is made by the Borrower to or for the account of a Lender
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.09(g), 2.11 or 2.13 or
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon written demand by such Lender (with a
copy of such demand to the Agent), pay to the Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment or
Conversion, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Section 2.16 shall survive the payment in full of principal and interest
hereunder and under the Notes.
SECTION 8.05. Right of Setoff. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and the Agent are hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or the Agent to or
for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
any Note held by such Lender or the Agent, whether or not such Lender or the
Agent shall have made any demand under this Agreement or such Note and although
such obligations may be unmatured. Each Lender and the Agent agree promptly to
notify the Borrower after any such set-off and application made by such Lender
or the Agent, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Lender and the
Agent under this Section 8.05 are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which such Lender and
the Agent may have.
<PAGE>
56
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions set forth in Section 3.01) when it shall have
been executed by the Borrower and the Agent and when the Agent shall have been
notified by each Bank that such Bank has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Agent and each Lender
and their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
at any time, with the consent of the Borrower (which consent shall not be
unreasonably withheld), assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the A Advances owing to it and
the A Note or Notes held by it); provided, however, that (i) the Borrower's
consent shall not be required in the case of an assignment to another Lender or
to an Affiliate of any existing Lender, (ii) each such assignment shall be of a
constant, and not a varying, percentage of all rights and obligations under this
Agreement (other than any right to make B Advances, B Advances owing to it or B
Notes), (iii) the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall, without the
consent of the Borrower and the Agent, in no event be less than the lesser of
(x) such Lender's Commitment and (y) $10,000,000 or an integral multiple of
$1,000,000 in excess thereof, provided that no such limitations shall apply in
the case of an assignment to an existing Lender or any Affiliate thereof, (iv)
no assigning Lender shall, after giving effect to any such assignment, and as
determined on the effective date of the Assignment and Acceptance with respect
thereto, retain a Commitment hereunder of less than $10,000,000, (v) each such
assignment shall be to an Eligible Assignee and (vi) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance (which
acceptance shall not constitute a consent) and recording in the Register, an
Assignment and Acceptance, together with any A Note or Notes subject to such
assignment and a processing and recordation fee of $2,500. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all
<PAGE>
57
or the remaining portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender, any other Lender, any Co-Agent
or any Lead Manager and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are required to be performed
by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that such assignee is an Eligible
Assignee, together with any A Note or Notes subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five (5) Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered A Note or Notes
a new A Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder, a new
<PAGE>
58
A Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new A Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered A
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A-1
hereto.
(d) Each Lender may assign to one or more banks or other entities any
B Note or Notes held by it.
(e) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders
and, the Commitment of, and principal amount of the A Advances owing to, each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note or Notes held by it); provided, however,
that (i) such Lender's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of any such Note for all purposes of this Agreement, (iv) such Lender shall
retain the right to consent or agree to any amendment or waiver of the
provisions of this Agreement without the need to obtain the consent or agreement
of its participants except with respect to any amendments or waivers that would
reduce the principal, interest, fees or other amounts payable hereunder or
postpone any date fixed for the payment thereof, and (v) the Borrower, the Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement.
(g) Any Lender may, in connection with any assignment, or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or
<PAGE>
59
proposed assignee or participant shall agree to preserve the confidentiality of
any confidential information relating to the Borrower received by it from such
Lender in accordance with Section 8.11.
(h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
(i) Notwithstanding anything to the contrary in this Section 8.07 or
otherwise in this Agreement, no Lender may assign all or any portion of its
rights and obligations under this Agreement (including, without limitation, any
B Note) or sell participations in all or a portion of its rights and obligations
under this Agreement if such assignment or sale would require the Borrower to
file a registration statement with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, or apply to qualify this Agreement, the
Notes or any other evidence of its obligations to any Lender, assignee or
participant under the blue sky law of any state.
SECTION 8.08. Indemnification. The Borrower agrees to indemnify and
hold harmless the Agent, each Lender and each of their Affiliates and their
respective directors, officers, employees, agents, advisors and representatives
(each, an "Indemnified Party"), from and against, and to promptly reimburse them
and each of them, for any and all liabilities, losses, damages, actions,
judgments, suits, claims, costs, out-of-pocket expenses (including, without
limitation, interest, penalties and all reasonable attorneys' fees and expenses)
and settlement costs that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
litigation or proceeding or governmental action or investigation (administrative
or judicial), arising out of, related to or in connection with the actual or
proposed use of the proceeds of the Advances, whether or not such investigation,
litigation or proceeding is brought by the Borrower, its directors, shareholders
or creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto or is otherwise required to respond thereto,
provided that the Borrower shall not be liable hereunder to the extent such
claim, damage, loss, liability or expense (i) arises out of any settlement made
without the Borrower's consent, which consent shall not unreasonably be
withheld, (ii) arises out of any proceeding brought against any Indemnified
Party by a security holder of such Indemnified Party based upon rights afforded
such security holder solely in its capacity as such, (iii) arises solely from
disputes among two or more Indemnified Parties, (iv) is found in a final, non-
appealable judgment of a court of competent jurisdiction to have resulted from
the gross negligence
<PAGE>
60
or willful misconduct of such Indemnified Party or (v) is found in a final, non-
appealable judgment of a court of competent jurisdiction to have resulted solely
from such Indemnified Party's breach of its obligations under the Loan
Documents.
SECTION 8.09. Governing Law; Submission to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby.
SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.11. Confidentiality. Except to the extent permitted by
this Section 8.11 or by Section 8.07(g), the Lenders shall keep confidential all
non-public information obtained by them from the Borrower pursuant to this
Agreement that has been identified as such by the Borrower; provided, however,
that Lenders may make such disclosure thereof as is required or requested by any
governmental agency or self-regulatory organization or representative thereof
with supervisory jurisdiction over it or pursuant to legal process, or as may
otherwise be required by law or court order; provided further, however, that,
unless specifically prohibited by applicable law or court order, each Lender
shall notify the Borrower of any request received by it from any governmental
agency or self-regulatory organization or representative thereof (other than any
such request in connection with an examination of such Lender by a governmental
agency or self-regulatory organization with supervisory jurisdiction over it)
for disclosure of any such non-public information prior to disclosure of such
information so that the Borrower may seek an appropriate protective order. The
Borrower authorizes each Lender to disclose to any of its Affiliates, attorneys,
auditors and accountants and any prospective Lender or participant any and all
information in such Lender's possession concerning the Borrower and any
Subsidiary of the Borrower that has been delivered to such Lender by or on
behalf of the Borrower pursuant to Section 5.01(f), provided that each such
Person shall agree to keep such information confidential in accordance with this
Section 8.11. In no event shall any Lender be obligated or required to return
any materials furnished by or on behalf of the Borrower or any of its
Subsidiaries. Notwithstanding the foregoing, this Section 8.11 shall not
<PAGE>
61
apply to any information that is or becomes generally available to the public
other than as a result of the disclosure by any Lender, participant, prospective
Lender or participant or their respective representatives.
SECTION 8.12. WAIVER OF JURY TRIAL, ETC. EACH OF THE BORROWER, THE
AGENT, THE CO-AGENTS, THE LEAD MANAGERS AND THE LENDERS HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY
OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE AGENT, ANY CO-AGENT,
ANY LEAD MANAGER OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR ENFORCEMENT THEREOF.
<PAGE>
62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
SUPERVALU INC.
By:
_________________________
Title:
CITIBANK, N.A.,
as Agent
By:
_________________________
Title:
FIRST BANK NATIONAL ASSOCIATION,
as Co-Agent
By:
_________________________
Title:
NATIONSBANK, N.A. (CAROLINAS),
as Co-Agent
By:
_________________________
Title:
PNC BANK, NATIONAL ASSOCIATION,
as Co-Agent
By:
_________________________
Title:
<PAGE>
63
THE FUJI BANK, LIMITED, CHICAGO
BRANCH,
as Co-Agent
By: __________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Lead Manager
By: ___________________________
Title:
ROYAL BANK OF CANADA,
as Lead Manager
By: ___________________________
Title:
SHAWMUT BANK, N.A.,
as Lead Manager
By: ___________________________
Title:
<PAGE>
64
Commitment Banks
- ---------- -----
$13,500,000 BANKERS TRUST COMPANY
By:
-------------------------
Title:
$13,500,000 BANK OF HAWAII
By:
-------------------------
Title:
$45,000,000 CITICORP USA, INC.
By:
-------------------------
Title:
$13,500,000 CREDIT SUISSE
By:
-------------------------
Title:
$40,000,000 FIRST BANK NATIONAL ASSOCIATION
By:
-------------------------
Title:
<PAGE>
65
Commitment Banks
- ---------- -----
$13,500,000 MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By:
-------------------------
Title:
$20,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
-------------------------
Title:
$40,000,000 NATIONSBANK, N.A. (CAROLINAS)
By:
-------------------------
Title:
$13,500,000 NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
-------------------------
Title:
$40,000,000 PNC BANK, NATIONAL ASSOCIATION
By:
-------------------------
Title:
<PAGE>
66
Commitment Banks
- ---------- -----
$20,000,000 ROYAL BANK OF CANADA
By:
-------------------------
Title:
$20,000,000 SHAWMUT BANK, N.A.
By:
-------------------------
Title:
$13,500,000 SOCIETE GENERALE
By:
-------------------------
Title:
$13,500,000 THE BOATMEN'S NATIONAL BANK
OF ST. LOUIS
By:
-------------------------
Title:
$13,500,000 THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By:
-------------------------
Title:
<PAGE>
67
Commitment Banks
- ---------- -----
$40,000,000 THE FUJI BANK, LIMITED, CHICAGO
BRANCH
By:
-------------------------
Title:
$13,500,000 THE SANWA BANK LTD.,
CHICAGO BRANCH
By:
-------------------------
Title:
$13,500,000 WACHOVIA BANK OF GEORGIA, N.A.
By:
-------------------------
Title:
<PAGE>
SCHEDULE I
LIST OF APPLICABLE
LENDING OFFICES
---------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bankers Trust Company Bankers Trust Company Bankers Trust Company
130 Liberty Street 130 Liberty Street
32nd Floor 32nd Floor
New York, NY 10006 New York, NY 10006
Attn: Katherine A. Judge Attn: Katherine A. Judge
Tel: (212) 250-4969 Tel: (212) 250-4969
Fax: (212) 250-7478 Fax: (212) 250-7478
- ---------------------------------------------------------------------------------------------------------------
Bank of Hawaii Bank of Hawaii Bank of Hawaii
130 Merchant Street 130 Merchant Street
20th Floor 20th Floor
Honolulu, Hawaii 96813 Honolulu, Hawaii 96813
Attn: Iwalani Attn: Iwalani
Sabarre-Kapika Sabarre-Kapika
Tel: (808) 484-3584 Tel: (808) 484-3584
Fax: (808) 484-3606 Fax: (808) 484-3606
- ---------------------------------------------------------------------------------------------------------------
Citicorp USA, Inc. Citicorp USA, Inc. Citicorp USA, Inc.
399 Park Avenue 399 Park Avenue
New York, NY 10043 New York, NY 10043
Attn: Rachel Heisler Attn: Rachel Heisler
</TABLE>
<PAGE>
I-2
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Tel: (212) 559-1875 Tel: (212) 559-1875
Fax: (212) 793-7585 Fax: (212) 793-7585
- ---------------------------------------------------------------------------------------------------------------
Credit Suisse Credit Suisse Credit Suisse
12 E. 49th Street 12 E. 49th Street
New York, NY 10017 New York, NY 10017
Attn: Kristin Kristinsson Attn: Kristin Kristinsson
Tel: (212) 238-5206 Tel: (212) 238-5206
Fax: (212) 238-5245 Fax: (212) 238-5245
- ---------------------------------------------------------------------------------------------------------------
First Bank National Association First Bank National Association First Bank National Association
601 Second Avenue South 601 Second Avenue South
Minneapolis, MN 55402-4302 Minneapolis, MN 55402-4302
Attn: Mark R. Olman Attn: Mark R. Olman
Tel: (612) 973-1085 Tel: (612) 973-1085
Fax: (612) 973-0825 Fax: (612) 973-0825
- ---------------------------------------------------------------------------------------------------------------
Mercantile Bank of St. Louis Mercantile Bank of St. Louis Mercantile Bank of St. Louis
721 Locust Street 721 Locust Street
St. Louis, MO 63101 St. Louis, MO 63101
Attn: John Holland Attn: John Holland
Tel: (314) 425-1315 Tel: (314) 425-1315
Fax: (314) 425-2162 Fax: (314) 425-2162
- ---------------------------------------------------------------------------------------------------------------
Morgan Guaranty Trust Company of Morgan Guaranty Trust Company of Morgan Guaranty Trust Company of
New York New York New York
c/o J.P. Morgan Services, Inc. c/o J.P. Morgan Services, Inc.
500 Stanton Christiana Road 500 Stanton Christiana Road
</TABLE>
<PAGE>
I-3
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
P.O. Box 6070 P.O. Box 6070
Newark, Delaware 19713-2107 Newark, Delaware 19713-2107
Attn: Multi-Option Unit-Loan Dept. Attn: Multi-Option Unit-Loan Dept.
Tel: (302) 634-1800 Tel: (302) 634-1800
Fax: (302) 634-1094 Fax: (302) 634-1094
- ---------------------------------------------------------------------------------------------------------------
NationsBank, N.A. (Carolinas) NationsBank, N.A. (Carolinas) NationsBank, N.A. (Carolinas)
233 South Wacker Drive 233 South Wacker Drive
Suite 2800 Suite 2800
Chicago, IL 60606-6308 Chicago, IL 60606-6308
- ---------------------------------------------------------------------------------------------------------------
Norwest Bank Minnesota, National Norwest Bank Minnesota, National Norwest Bank Minnesota, National
Association Association Association
Norwest Center Norwest Center
Sixth and Marquette Sixth and Marquette
Minneapolis, MN 55479-0085 Minneapolis, MN 55479-0085
Attn: Molly Van Metre Attn: Molly Van Metre
Tel: (612) 667-9147 Tel: (612) 667-9147
Fax: (612) 667-4145 Fax: (612) 667-4145
- ---------------------------------------------------------------------------------------------------------------
PNC Bank, National Association PNC Bank, National Association PNC Bank, National Association
Fifth Avenue & Wood Street Fifth Avenue & Wood Street
Pittsburgh, PA 15222 Pittsburgh, PA 15222
Address for notices: Address for notices:
------------------- -------------------
PNC Bank, National Association PNC Bank, National Association
</TABLE>
<PAGE>
I-4
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
500 West Madison Street 500 West Madison Street
Suite 3140 Suite 3140
Chicago, IL 60661 Chicago, IL 60661
Attn: Jon C. Otterberg Attn: Jon C. Otterberg
Tel: (312) 906-3425 Tel: (312) 906-3425
Fax: (312) 906-3420 Fax: (312) 906-3420
- ---------------------------------------------------------------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada Royal Bank of Canada
Grand Cayman (North America No. Grand Cayman (North America No. 1)
1) Branch c/o New York Branch Branch c/o New York Branch
Financial Square Financial Square
23rd Floor 23rd Floor
New York, NY 10005-3531 New York, NY 10005-3531
Attn: Manager, Loans Attn: Manager, Loans Administration
Administration Tel: (212) 428-6324
Tel: (212) 428-6324 Fax: (212) 428-2372
Fax: (212) 428-2372
With a copy to:
--------------
With a copy to:
--------------
Royal Bank of Canada
Royal Bank of Canada One North Franklin Street
One North Franklin Street Suite 700
Suite 700 Chicago, IL 60600
Chicago, IL 60600 Attn: Karen T. Hull
Attn: Karen T. Hull Tel: (312) 551-1617
Tel: (312) 551-1617 Fax: (312) 551-0805
</TABLE>
<PAGE>
I-5
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fax: (312) 551-0805
- ---------------------------------------------------------------------------------------------------------------
Shawmut Bank, N.A. Shawmut Bank, N.A. Shawmut Bank, N.A.
One Federal Street One Federal Street
Boston, MA 02211 Boston, MA 02211
Attn: Anahed Varsabedian Attn: Anahed Varsabedian
Tel: (617) 292-2609 Tel: (617) 292-2609
Fax: (617) 292-3241 Fax: (617) 292-3241
- ---------------------------------------------------------------------------------------------------------------
Societe Generale Societe Generale Societe Generale
181 West Madison Street 181 West Madison Street
Suite 3400 Suite 3400
Chicago, IL 60602 Chicago, IL 60602
Attn: Eric E.O. Siebert Attn: Eric E.O. Siebert
Tel: (312) 578-5003 Tel: (312) 578-5003
Fax: (312) 578-5099 Fax: (312) 578-5099
- ---------------------------------------------------------------------------------------------------------------
The Boatmen's National Bank of The Boatmen's National Bank of The Boatmen's National Bank of
St. Louis St. Louis St. Louis
One Boatmen's Plaza One Boatmen's Plaza
St. Louis, Missouri 63101 St. Louis, Missouri 63101
Attn: Sharron Kovach Attn: Sharron Kovach
Tel: (314) 466-6944 Tel: (314) 466-6944
Fax: (314) 466-6499 Fax: (314) 466-6499
- ---------------------------------------------------------------------------------------------------------------
The Dai-Ichi Kangyo Bank, Ltd., The Dai-Ichi Kangyo Bank, Ltd., The Dai-Ichi Kangyo Bank, Ltd.,
Chicago Branch Chicago Branch Chicago Branch
10 South Wacker Drive 10 South Wacker Drive
</TABLE>
<PAGE>
I-6
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
26th Floor 26th Floor
Chicago, IL 60606 Chicago, IL 60606
Attn: Brian Cushing Attn: Brian Cushing
Vice President, Corporate Vice President, Corporate
Banking Dept. I Banking Dept. I
Tel: (312) 715-6361 Tel: (312) 715-6361
Fax: (312) 876-2011 Fax: (312) 876-2011
- ---------------------------------------------------------------------------------------------------------------
The Fuji Bank, Limited, Chicago The Fuji Bank, Limited, Chicago The Fuji Bank, Limited, Chicago
Branch Branch Branch
225 W. Wacker Drive 225 W. Wacker Drive
Suite 2000 Suite 2000
Chicago, IL 60606 Chicago, IL 60606
Attn: Vir Guiang Attn: Vir Guiang
Tel: (312) 621-3385 Tel: (312) 621-3385
Fax: (312) 621-0539 Fax: (312) 621-0539
- ---------------------------------------------------------------------------------------------------------------
The Sanwa Bank Ltd., Chicago Branch The Sanwa Bank Ltd., Chicago The Sanwa Bank Ltd., Chicago
Branch Branch
10 South Wacker Drive 10 South Wacker Drive
31st Floor 31st Floor
Chicago, IL 60606 Chicago, IL 60606
Attn: Joe Moreno Attn: Joe Moreno
Vice President & Manager Vice President & Manager
Tel: (312) 368-3007 Tel: (312) 368-3007
Fax: (312) 346-6677 Fax: (312) 346-6677
</TABLE>
<PAGE>
I-7
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Domestic Eurodollar
Name of Bank Lending Office Lending Office
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Wachovia Bank of Georgia, N.A. Wachovia Bank of Georgia, N.A. Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E. 191 Peachtree Street, N.E.
Atlanta, GA 30303 Atlanta, GA 30303
Attn: Francis Whitington Josephic Attn: Francis Whitington Josephic
Tel: (404) 332-4132 Tel: (404) 332-4132
Fax: (404) 332-6898 Fax: (404) 332-6898
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SCHEDULE II
LITIGATION
----------
NONE
<PAGE>
EXHIBIT A-1
FORM OF A NOTE
U.S.$______________ Dated: May 26, 1995
FOR VALUE RECEIVED, the undersigned, SUPERVALU INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal sum of U.S.$[amount of the Lender's Commitment in figures] or, if
less, the aggregate principal amount of the A Advances (as defined below) made
by the Lender to the Borrower pursuant to the Credit Agreement outstanding on
the Termination Date (as defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal amount of
each A Advance from the date of such A Advance until such principal amount is
paid in full, at such interest rates, and at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, NY
10043, in same day funds. Each A Advance made by the Lender to the Borrower
pursuant to the Credit Agreement, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this Promissory Note.
This Promissory Note is one of the A Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of May 26, 1995 (as
amended or modified from time to time, the "Credit Agreement") among the
Borrower, the Lender and certain other Banks and the Co-Agents and the Lead
Managers (each as defined in the Credit Agreement) parties thereto, and
Citibank, N.A., as Agent for the Lender and such other banks. The Credit
Agreement, among other things, (i) provides for the making of advances (the "A
Advances") by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such A Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and
<PAGE>
A-1-2
also for prepayments on account of principal hereof prior to the maturity hereof
upon the terms and conditions therein specified.
<PAGE>
A-1-3
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
SUPERVALU INC.
By: ______________________________
Title:
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
================================================================================
AMOUNT OF
PRINCIPAL UNPAID
AMOUNT OF MATURITY OF PAID PRINCIPAL NOTATION
DATE ADVANCE ADVANCE OR PREPAID BALANCE MADE BY
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
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================================================================================
</TABLE>
<PAGE>
EXHIBIT A-2
FORM OF B NOTE
U.S.$____________ Dated: ______________
FOR VALUE RECEIVED, the undersigned, SUPERVALU INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_____________________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below), on
___________________, the principal amount of ______________ Dollars
($______________).
The Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:
Interest Rate: [____% per annum (calculated on the basis of a year of ____
days for the actual number of days elapsed)].
Interest Payment Date or Dates: ___________________________________________
Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent for the account of the Lender at
the office of ____________________, at ___________________________________, in
same day funds, free and clear of and without any deduction, with respect to the
payee named above, for any and all present and future taxes, deductions, charges
or withholdings, and all liabilities with respect thereto.
This Promissory Note is one of the B Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of May 26, 1995 (as
amended or modified from time to time, the "Credit Agreement") among the
Borrower, the Lender and certain other Banks and the Co-Agents and the Lead
Managers (each as defined in the Credit Agreement) parties thereto, and
Citibank, N.A., as Agent for the Lender and such other banks. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
<PAGE>
A-2-2
This Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York, United States.
SUPERVALU INC.
By: _______________________________
Title:
<PAGE>
EXHIBIT B-1
NOTICE OF A BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention: Bank Loan Syndication
Ladies and Gentlemen:
The undersigned, SUPERVALU INC., refers to the Credit Agreement, dated
as of May 26, 1995 (as amended or modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders, the Co-Agents and the Lead Managers
parties thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives
you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that
the undersigned hereby requests an A Borrowing under the Credit Agreement, and
in that connection sets forth below the information relating to such A Borrowing
(the "Proposed A Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(i) The Business Day of the Proposed A Borrowing is ____________.
(ii) The Type of A Advances comprising the Proposed A Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed A Borrowing is $___________.
<PAGE>
B-1-2
[(iv) The Interest Period for each Eurodollar Rate Advance made as part
of the Proposed A Borrowing is ____ month[s].]
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed A Borrowing:
(A) The representations and warranties contained in Section 4.01 of the
Credit Agreement (excluding that contained in the last sentence of
subsection (e) thereof) are correct on and as of the date of such A
Borrowing, before and after giving effect to such A Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date; and
(B) no event has occurred and is continuing, or would result from such
Proposed A Borrowing or from the application of the proceeds therefrom,
that constitutes a Default.
Very truly yours,
SUPERVALU INC.
By:
-----------------------------------
Title:
<PAGE>
EXHIBIT B-2
NOTICE OF B BORROWING
Citibank, N.A., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention: Bank Loan Syndication
Ladies and Gentlemen:
The undersigned, SUPERVALU INC., refers to the Credit Agreement, dated
as of May 26, 1995 (as amended or modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders, the Co-Agents and the Lead Managers
parties thereto and Citibank, N.A., as Agent for said Lenders, and hereby gives
you notice pursuant to Section 2.03 of the Credit Agreement that the undersigned
hereby requests a B Borrowing under the Credit Agreement, and in that connection
sets forth the terms on which such B Borrowing (the "Proposed B Borrowing") is
requested to be made:
(A) Date of B Borrowing _______________________________
(B) Amount of B Borrowing _______________________________
(C) Maturity Date _______________________________
(D) Interest Rate Basis _______________________________
(E) Interest Payment Date(s) _______________________________
<PAGE>
B-2-2
(F) _____________________ _______________________________
(G) _____________________ _______________________________
(H) _____________________ _______________________________
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed B Borrowing:
(a) the representations and warranties contained in Section 4.01 of
the Credit Agreement (excluding that contained in the last sentence of
subsection (e) thereof) are correct on and as of the date of such B
Borrowing, before and after giving effect to such B Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date;
(b) no event has occurred and is continuing, or would result from the
Proposed B Borrowing or from the application of the proceeds therefrom,
that constitutes a Default;
(c) no event has occurred and no circumstance exists as a result of
which the information concerning the undersigned that has been provided to
the Agent and each Lender by the undersigned in connection with the Credit
Agreement would include an untrue statement of a material fact or omit to
state any material fact or any fact necessary to make the statements
contained therein, in the light of the circumstances under which they were
made, not misleading; and
(d) the aggregate amount of the Proposed B Borrowing and all other
Borrowings to be made on the same day under the Credit Agreement is within
the aggregate amount of the unused Commitments of the Lenders.
The undersigned hereby confirms that the Proposed B Borrowing is to be
made available to it in accordance with Section 2.03(a)(v) of the Credit
Agreement.
Very truly yours,
SUPERVALU INC.
By:
-----------------------------------
Title:
<PAGE>
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________
Reference is made to the Credit Agreement dated as of May 26, 1995 (as
amended or modified from time to time, the "Credit Agreement") among SUPERVALU
INC., a Delaware corporation (the "Borrower"), the Lenders, the Co-Agents and
the Lead Managers (each as defined in the Credit Agreement) and Citibank, N.A.,
as Agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement
are used herein with the same meaning.
____________ (the "Assignor") and______________ (the "Assignee")
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the date hereof (other than in respect of B Advances and B Notes) that
represents the percentage interest specified on Schedule 1 of all outstanding
rights and obligations of the Lenders under the Credit Agreement (other than in
respect of B Advances and B Notes), including, without limitation, such interest
in the Assignor's Commitment, the A Advances owing to the Assignor, and the A
Note[s] held by the Assignor. After giving effect to such sale and assignment,
the Assignee's Commitment and the amount of the A Advances owing to the Assignee
will be as set forth in Section 2 of Schedule 1, and the Assignor's Commitment
and the amount of A Advances owing to the Assignor will be as set forth in
Section 2 of Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or
<PAGE>
C-2
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto; and (iv) attaches the A Note[s] referred to in
paragraph 1 above and requests that the Agent exchange such A Note[s] for a new
A Note payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto or new A Notes payable to the order of
the Assignee in an amount equal to the Commitment assumed by the Assignee
pursuant hereto and the Assignor in an amount equal to the Commitment retained
by the Assignor under the Credit Agreement, respectively, as specified on
Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor, any other Lender, any Co-Agent or
any Lead Manager and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender;
[and] (vi) specifies as its Domestic Lending Office (and address for notices)
and Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof[; and (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement
and the Notes or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced to zero by an applicable
tax treaty.]/++/
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, and, to the extent required under Section 8.07 of the
Credit Agreement, the Borrower's consent hereto, it will be delivered to the
Agent for acceptance (which acceptance shall not constitute a consent) and
recording by the
- -----------------------
/++/ If the Assignee is organized under the laws of a jurisdiction outside the
United States.
<PAGE>
C-3
Agent. The effective date of this Assignment and Acceptance shall be the date of
acceptance thereof by the Agent, unless otherwise specified on Schedule 1 hereto
(the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit Agreement
and the A Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the A Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
<PAGE>
C-4
Schedule 1
to
Assignment and Acceptance
Dated ________________
Section 1.
- ---------
Percentage Interest: ________%
Section 2.
- ---------
Assignee's Commitment: $_______
Aggregate Outstanding Principal
Amount of A Advances owing
to the Assignee: $_______
Assignor's Commitment after this Assignment: $_______
Aggregate Outstanding Principal Amount
of A Advances owing to the Assignor after
this Assignment: $_______
An A Note payable to the order of the Assignee
Dated: ________________
Principal amount: $_______
An A Note payable to the order of the Assignor
Dated: ________________
Principal amount: $_______
<PAGE>
C-5
Section 3.
- ---------
Effective Date*: ________________
[NAME OF ASSIGNOR]
By:
------------------------
Title:
[NAME OF ASSIGNEE]
By:
------------------------
Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
- --------------------------
* This date should be no earlier than the date of acceptance by the Agent.
<PAGE>
C-6
*[Consented to this ____ day
of _________________
SUPERVALU INC.
By:
--------------------------
Title:]
Accepted this ____ day
of _________________
[NAME OF AGENT]
By:
--------------------------
Title:
________________________
* Add if Borrower's consent is required under Section 8.07 of the Credit
Agreement.
<PAGE>
Exhibit 12.1
SUPERVALU INC. and Subsidiaries
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
(in thousands, except ratios)
Two Quarters
(28 weeks) Ended
---------------------------
September 9, September 10,
1995 1994
------------ -------------
<S> <C> <C>
Earnings before income taxes 130,627 138,530
Less undistributed earnings of ShopKo (88) (334)
------- -------
Earnings before income taxes 130,539 138,196
Interest Expense 76,890 67,955
Interest on operating leases 9,020 9,588
------- -------
216,449 215,739
======= =======
Total fixed charges 85,910 77,543
======= =======
Ratio of earnings to fixed charges 2.52 2.78
======= =======
</TABLE>
<PAGE>
Exhibit 99.1
FOR RELEASE: September 21, 1995 CONTACT: Kris Sundberg
612 828 4441
SUPERVALU INC. REPORTS SECOND QUARTER RESULTS
MINNEAPOLIS, MN SEPTEMBER 21, 1995 -- SUPERVALU INC. today reported improved
second quarter operating results for the 12-week period ended September 9, 1995.
Sales of $3.8 billion for the second quarter were even with the prior year. Net
earnings were $33.3 million compared with $33.5 million last year, and earnings
per share were $0.49 versus $0.47. After-tax expenses incurred in connection
with the company's wholesale realignment, called the ADVANTAGE project, were
$3.1 million in this year's second quarter and $1.7 million last year. Net
earnings on an operating basis for the quarter increased 4.5 percent to $35.5
million versus $34.0 million last year when excluding the ADVANTAGE expenses and
the decreased earnings contribution from ShopKo.
"We are very satisfied with these financial results considering the enormity of
the changes we have undertaken with the ADVANTAGE project and the increased
spending necessary to implement that project," said Mike Wright, SUPERVALU
chairman, president and CEO. "Though it is too early to expect an earnings
contribution from ADVANTAGE, preliminary test results of portions of the project
clearly indicate that we are on the right course to turn industry changes to our
competitive advantage. The customers participating in the testing are equally
enthused and look forward to adopting the full ADVANTAGE program."
- more -
<PAGE>
Net sales for the first half (28 weeks) were $8.8 billion compared with last
year's $8.8 billion. Net earnings were $79.2 million or $1.15 per share. Last
year the company earned $84.1 million or $1.18 per share for the same period.
Earnings were impacted primarily by expenses related to the ADVANTAGE project,
higher net interest expense, and flat sales. ShopKo's contribution decreased as
a result of generally soft sales and lower gross margins from promotional
spending designed to boost sales as well as competitive pressures on pricing.
Sales in the food distribution segment were $3.4 billion in the quarter compared
with $3.4 billion in the same period last year. Sales were affected by the
continuing impact from last year's facility consolidations and the soft retail
environment. Food price inflation as measured by the company was nearly 1
percent. Operating earnings in food distribution were $78.5 million compared
with $78.8 million in last year's second quarter.
ADVANTAGE expenses for the quarter of $4.0 million were charged to the food
distribution segment while $1.0 million were charged to unallocated corporate
expenses. Last year, however, ADVANTAGE expenses of $2.9 million were reported
in unallocated corporate expenses. Excluding these ADVANTAGE expenses, earnings
in the distribution segment would have increased 4.7 percent from $78.8 million
to $82.5 million.
Sales for the company's retail food operations were up 11.5 percent to $1.0
billion versus $904 million in last year's second quarter. These results are
due primarily to the 7-store bigg's acquisition in August 1994, new store
openings, and a 2 percent increase in same-store sales.
Operating earnings for the retail food operations were $10.5 million compared
with
$6.6 million last year. These results were affected principally by the bigg's
acquisition and the elimination of operating losses from the closing of
underperforming stores.
- - more -
<PAGE>
"As this retail restructuring phase is completed we expect a continuation of
improved operating results. This will also allow more focus on implementation
of our strategy to substantially expand our growth formats," said Wright. At
quarter end, SUPERVALU operated 291 stores principally under the names Cub
Foods, Shop 'n Save, Save-A-Lot, bigg's, Scott's Foods and Laneco.
The company also continues to purchase treasury stock as authorized in December
1994 by the board of directors. The current authorization covers 5 million
shares; over 3.6 million shares have been repurchased. These purchases are
being funded by the disposition of surplus real estate and unproductive assets.
SUPERVALU is one of the nation's leading food distributors and the 12th largest
food retailer in the nation. As of September 9, 1995, the company served
independent retailers in 48 states and operated retail food stores in 29 states.
- - 30 -
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
- ----------------------------------------------------------------------------------------------------------
SUPERVALU INC. and Subsidiaries
- ----------------------------------------------------------------------------------------------------------
(In thousands, except per share data)
Quarter-to-date (12 Weeks) Ended Year-to-Date (28 Weeks) Ended
-------------------------------- ------------------------------
Sept. 9, 1995 Sept. 10, 1994 Sept. 9, 1995 Sept. 10, 1994
- ----------------------------------------------------------------------- ------------------------------
<S> <C> <C> <C> <C>
Net sales $3,779,397 $3,773,725 $8,752,434 $8,764,840
Costs and expenses:
Cost of sales 3,427,689 3,437,488 7,940,385 7,990,435
Selling and administrative expenses 265,350 255,301 609,946 577,253
Amortization of goodwill 4,053 3,464 9,510 7,689
Interest
Interest expense 32,771 29,658 76,890 67,955
Interest income 4,503 5,792 11,595 13,447
------------------------------ ------------------------------
Interest expense, net 28,268 23,866 65,295 54,508
------------------------------ ------------------------------
Total costs and expenses 3,725,360 3,720,119 8,625,136 8,629,885
------------------------------ ------------------------------
Earnings before equity in earnings
of ShopKo and income taxes 54,037 53,606 127,298 134,955
Equity in earnings of ShopKo 861 1,282 3,329 3,575
------------------------------ ------------------------------
Earnings before income taxes 54,898 54,888 130,627 138,530
Provision for income taxes 21,620 21,373 51,398 54,402
------------------------------ ------------------------------
Net earnings $ 33,278 $ 33,515 $ 79,229 $ 84,128
============================== ==============================
Net earnings per common share $ 0.49 $ 0.47 $ 1.15 $ 1.18
Weighted average number of common
shares outstanding 68,181 71,471 68,795 71,563
Dividends declared per common share $ 0.245 $ 0.235 $ 0.480 $ 0.455
Supplemental information:
After-tax LIFO (expense) $ (2,525) $ (3,121) $ (2,317) $ (1,412)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUPERVALU INC. and Subsidiaries
Composition of Net Sales and Earnings
The following table sets forth the composition of the company's net sales and earnings.
(In thousands, except percent data)
Second Quarter (12 weeks) Ended Year-to-date (28 weeks) Ended
------------------------------- ---------------------------------
Net sales Sept. 9, 1995 Sept. 10, 1994 Sept. 9, 1995 Sept. 10, 1994
- -------------------------------------------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Food distribution $3,362,238 $3,400,992 $7,808,365 $7,934,901
89.0 % 90.1 % 89.2 % 90.5 %
Retail food 1,008,391 904,063 2,269,280 2,035,174
26.6 % 24.0 % 25.9 % 23.2 %
Sales eliminations (591,232) (531,330) (1,325,211) (1,205,235)
(15.6)% (14.1)% (15.1)% (13.7)%
----------------------------------------------------------------------
Total net sales $3,779,397 $3,773,725 $8,752,434 $8,764,840
100.0 % 100.0 % 100.0 % 100.0 %
- -----------------------------------------------------------------------------------------------------------
Earnings
- -----------------------------------------------------------------------------------------------------------
Food distribution $78,513 $78,830 $179,900 $183,323
88.2 % 92.3 % 87.2 % 88.8 %
Retail food 10,526 6,587 26,342 23,143
11.8 % 7.7 % 12.8 % 11.2 %
----------------------------------------------------------------------
Total operating earnings 89,039 85,417 206,242 206,466
100.0 % 100.0 % 100.0 % 100.0 %
Interest income 4,503 5,792 11,595 13,447
Interest expense (32,771) (29,658) (76,890) (67,955)
General corporate expenses (6,734) (7,945) (13,649) (17,003)
----------------------------------------------------------------------
Earnings before equity in earnings
of ShopKo and income taxes 54,037 53,606 127,298 134,955
Equity in earnings of ShopKo 861 1,282 3,329 3,575
Provision for income taxes (21,620) (21,373) (51,398) (54,402)
----------------------------------------------------------------------
Net earnings $33,278 $33,515 $79,229 $84,128
===========================================================================================================
Pretax LIFO (expense) ($4,192) ($5,180) ($3,846) ($2,344)
</TABLE>
