<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1994
REGISTRATION NO. 33-55369
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------
FLEMING COMPANIES, INC.*
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
OKLAHOMA 48-0222760
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
P.O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
(405) 840-7200
(Address, including zip code, and telephone number, including area code of
registrant's and additional registrants' principal executive offices)
------------------------------
DAVID R. ALMOND, ESQ.
Senior Vice President, General Counsel and Secretary
Fleming Companies, Inc.
P.O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
(405) 840-7200
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
JOHN M. MEE, ESQ. ROHAN S. WEERASINGHE, ESQ.
BRICE E. TARZWELL, ESQ. Shearman & Sterling
McAfee & Taft 599 Lexington Avenue
A Professional Corporation New York, New York 10022
Tenth Floor, Two Leadership Square (212) 848-4000
Oklahoma City, Oklahoma 73102
(405) 235-9621
</TABLE>
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE DATE ON WHICH THIS REGISTRATION STATEMENT
BECOMES EFFECTIVE.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
CLASS OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE REGISTRATION FEE(2)
<S> <C> <C> <C> <C>
% Senior Notes due 2001................................ $350,000,000 100% $350,000,000 $120,690
Floating Rate Senior Notes due 2001....................... $150,000,000 100% $150,000,000 $ 51,724
Guarantees of % Senior Notes due 2001 and Floating Rate
Senior Notes due 2001.................................... (3) (3) (3) (3)
Total................................................... $500,000,000 100% $500,000,000 $172,414(4)
<FN>
(1) Estimated solely for the purpose of determining the registration fee.
(2) Fee calculated pursuant to Rule 457.
(3) Pursuant to Rule 457(n), no registration fee is required with respect to
the Guarantees of the obligations under the Notes registered hereby.
(4) Paid previously.
</TABLE>
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
------------------------------
* Information regarding additional registrants is contained in the Table of
Additional Registrants.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
EXACT NAME OF SUBSIDIARY GUARANTOR JURISDICTION I.R.S. EMPLOYER
REGISTRANTS AS SPECIFIED IN OF INCORPORATION IDENTIFICATION
THEIR RESPECTIVE CHARTERS OR ORGANIZATION NO.
- --------------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
ATI, Inc................................................................... Oklahoma 73-0126010
Badger Markets, Inc........................................................ Wisconsin 39-1392782
Baker's Supermarkets, Inc.................................................. Nebraska 73-1410861
Ball Motor Service, Inc.................................................... Wisconsin 39-0896605
Boogaart Stores of Nebraska, Inc........................................... Nebraska 47-2599109
Central Park Super Duper, Inc.............................................. New York 16-1350721
Commercial Cold/Dry Storage Company........................................ Tennessee 62-1239715
*Consumers Markets, Inc.................................................... Missouri 44-0559460
D.L. Food Stores, Inc...................................................... Alabama 63-0357472
Del-Arrow Super Duper, Inc................................................. New York 16-1318599
Festival Foods, Inc........................................................ Minnesota 36-3591728
Fleming Direct Sales Corporation........................................... Nevada 93-1118722
Fleming Foods East, Inc.................................................... Pennsylvania 23-0596890
Fleming Foods of Alabama, Inc.............................................. Alabama 63-0373291
Fleming Foods of Ohio, Inc................................................. Ohio 34-0392460
Fleming Foods of Tennessee, Inc............................................ Tennessee 74-2282765
Fleming Foods of Texas, Inc................................................ Nevada 75-2402768
Fleming Foods of Virginia, Inc............................................. Virginia 54-0461469
Fleming Foods South, Inc................................................... Oklahoma 73-1430549
Fleming Foods West, Inc.................................................... Nevada 94-1679203
Fleming Foreign Sales Corporation.......................................... Barbados 98-0129721
Fleming Franchising, Inc................................................... Delaware 62-1335997
Fleming Holdings, Inc...................................................... Delaware 91-0986128
Fleming International Ltd.................................................. Oklahoma 73-1414701
Fleming Site Media, Inc.................................................... Oklahoma 73-1405812
Fleming Supermarkets of Florida, Inc....................................... Florida 65-0418543
Fleming Technology Leasing Company, Inc.................................... Missouri 73-1189558
Fleming Transportation Service, Inc........................................ Oklahoma 73-1126039
Food Brands, Inc........................................................... Kansas 48-0692802
Food-4-Less, Inc........................................................... Nebraska 47-0609604
Food Holdings, Inc......................................................... Delaware 73-1349644
Food Saver of Iowa, Inc.................................................... Iowa 42-1298410
Gateway Development Co., Inc............................................... Wisconsin 39-6079409
Gateway Food Distributors, Inc............................................. Minnesota 41-0954921
Gateway Foods, Inc......................................................... Wisconsin 39-0299330
Gateway Foods of Altoona, Inc.............................................. Pennsylvania 23-0547920
Gateway Foods of Pennsylvania, Inc......................................... Delaware 23-1008570
Gateway Foods of Twin Ports, Inc........................................... Wisconsin 39-1641725
Gateway Foods Service Corporation.......................................... Wisconsin 39-1144794
Grand Central Leasing Corporation.......................................... Kansas 48-0673885
Great Bend Supermarkets, Inc............................................... Kansas 48-1028769
Hub City Transportation, Inc............................................... Wisconsin 39-1604519
Kensington and Harlem, Inc................................................. Delaware 16-1428567
LAS, Inc................................................................... Oklahoma 73-1410261
Ladysmith East IGA, Inc.................................................... Wisconsin 39-1501077
Ladysmith IGA, Inc......................................................... Wisconsin 39-1409373
Lake Markets, Inc.......................................................... Minnesota 41-1449957
M&H Desoto, Inc............................................................ Mississippi 62-0903343
M&H Financial Corp......................................................... Tennessee 62-0889723
<FN>
- ------------------------
* See Appendix A.
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
EXACT NAME OF SUBSIDIARY GUARANTOR JURISDICTION I.R.S. EMPLOYER
REGISTRANTS AS SPECIFIED IN OF INCORPORATION IDENTIFICATION
THEIR RESPECTIVE CHARTERS OR ORGANIZATION NO.
- --------------------------------------------------------------------------- ----------------- ---------------
<S> <C> <C>
M&H Realty Corp............................................................ Tennessee 62-1168154
Malone & Hyde, Inc......................................................... Delaware 62-1279199
Malone & Hyde of Lafayette, Inc............................................ Louisiana 72-0574747
Manitowoc IGA, Inc......................................................... Wisconsin 39-1544734
Moberly Foods, Inc......................................................... Missouri 43-1120227
Mt. Morris Super Duper, Inc................................................ New York 16-1063852
Niagara Falls Super Duper, Inc............................................. New York 16-1132456
Northern Supermarkets of Oregon, Inc....................................... Oregon 93-1135076
Northgate Plaza, Inc....................................................... Wisconsin 39-1533204
109 West Main Street, Inc.................................................. Delaware 25-1697115
121 East Main Street, Inc.................................................. Delaware 16-1428666
Peshtigo IGA, Inc.......................................................... Wisconsin 39-1544266
Piggly Wiggly Corporation.................................................. Delaware 62-1133312
Quality Incentive Company, Inc............................................. Delaware 62-1483214
Rainbow Transportation Services, Inc....................................... Wisconsin 39-1505024
Route 16, Inc.............................................................. Delaware 16-1428582
Route 219, Inc............................................................. Delaware 25-1697117
Route 417, Inc............................................................. Delaware 16-1428584
Richland Center IGA, Inc................................................... Wisconsin 39-1489453
Scrivner, Inc.............................................................. Delaware 73-0439200
Scrivner-Food Holdings, Inc................................................ Delaware 73-1349645
Scrivner of Alabama, Inc................................................... Alabama 63-0379196
Scrivner of Illinois, Inc.................................................. Illinois 37-0357850
Scrivner of Iowa, Inc...................................................... Iowa 42-0981509
Scrivner of Kansas, Inc.................................................... Kansas 48-0720029
Scrivner of New York, Inc.................................................. New York 16-0434760
Scrivner of North Carolina, Inc............................................ North Carolina 56-0796492
Scrivner of Pennsylvania, Inc.............................................. Pennsylvania 23-1095670
Scrivner of Tennessee, Inc................................................. Tennessee 62-0320600
Scrivner of Texas, Inc..................................................... Texas 74-0658440
Scrivner Super Stores of Illinois, Inc..................................... Illinois 37-1079445
Scrivner Super Stores of Iowa, Inc......................................... Iowa 37-1249001
Scrivner Transportation, Inc............................................... Oklahoma 73-1288028
Sehon Foods, Inc........................................................... Ohio 31-0893908
Selected Products, Inc..................................................... Texas 76-0333631
Sentry Markets, Inc........................................................ Wisconsin 39-0851989
SmarTrans, Inc............................................................. Delaware 13-2656567
South Ogden Super Duper, Inc............................................... New York 16-1019769
Southern Supermarkets, Inc................................................. Oklahoma 73-1121580
Southern Supermarkets, Inc................................................. Texas 74-1491634
Southern Supermarkets of Louisiana, Inc.................................... Louisiana 72-1208940
Star Groceries, Inc........................................................ Texas 74-2645278
Store Equipment, Inc....................................................... Wisconsin 39-6047178
Sundries Service, Inc...................................................... Alabama 63-0620777
Switzer Foods, Inc......................................................... Kansas 74-2493457
35 Church Street, Inc...................................................... Delaware 16-1428583
Thompson Food Basket, Inc.................................................. Illinois 37-0762020
29 Super Market, Inc....................................................... Wisconsin 39-0892198
27 Slayton Avenue, Inc..................................................... Delaware 16-1428669
WPC, Inc................................................................... Oklahoma 73-1186896
</TABLE>
(ii)
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 5, 1994
P R O S P E C T U S
$500,000,000
[LOGO]
$350,000,000 % SENIOR NOTES DUE 2001
$150,000,000 FLOATING RATE SENIOR NOTES DUE 2001
-----------------
Interest on the % Senior Notes due 2001 (the "Fixed Rate Notes") will be
payable semiannually on and of each year, commencing ,
1995. Up to 20% of the initial aggregate principal amount of the Fixed Rate
Notes may be redeemed by Fleming Companies, Inc. ("Fleming" or the "Company") at
any time on or prior to , 1997 within 180 days of a Public Equity
Offering (as defined) with the net proceeds from such offering at a redemption
price equal to % of the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of redemption; PROVIDED that, after giving
effect to such redemption, at least $200 million aggregate principal amount of
the Fixed Rate Notes remains outstanding. Upon a Change of Control Triggering
Event (as defined), in certain circumstances each holder of the Notes will have
the right to require the Company to purchase all outstanding Fixed Rate Notes of
such holder at 101% of the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of purchase. In addition, the Fixed Rate
Notes may be redeemed, in whole or in part, at any time on or after
, 1999 at the redemption prices set forth herein, together with
accrued and unpaid interest, if any, to the date of redemption.
Interest on the Floating Rate Senior Notes due 2001 (the "Floating Rate
Notes") will be payable quarterly on , , and of each
year, commencing , 1995. The Floating Rate Notes may be redeemed by
the Company, in whole or in part, on any interest payment date on or after
, 1995 through and including , 1999 at a
redemption price equal to 100.5% of the principal amount thereof and after
, 1999 at a redemption price equal to 100% of the principal
amount thereof, in each case together with accrued and unpaid interest, if any,
to the date of redemption. Upon a Change of Control Triggering Event, in certain
circumstances each holder of the Notes will have the right to require the
Company to purchase all outstanding Floating Rate Notes of such holder at 101%
of the principal amount thereof, together with accrued and unpaid interest, if
any, to the date of purchase. In addition, mandatory sinking fund payments will
retire, prior to maturity, $1 million principal amount of Floating Rate Notes in
each of 1999 and 2000.
The Fixed Rate Notes and the Floating Rate Notes (collectively, the "Notes")
offered hereby (the "Offering") will be unsecured senior obligations of the
Company, ranking PARI PASSU with all other existing and future senior
indebtedness of the Company and senior in right of payment to any future
indebtedness of the Company that is expressly subordinated to senior
indebtedness of the Company. The Notes, however, will be effectively
subordinated to secured senior indebtedness of the Company with respect to the
assets securing such indebtedness, including indebtedness under the Company's
bank credit agreement (the "Credit Agreement"), which is secured by the capital
stock of substantially all of the Company's subsidiaries, and substantially all
of the inventory and accounts receivable of the Company and its subsidiaries,
and indebtedness under two prior indentures (the "Prior Indentures"), which is
secured by a portion of such collateral. The payment of principal of, premium,
if any, and interest on the Notes is unconditionally guaranteed on an unsecured
senior basis (the "Note Guarantees") by substantially all of the Company's
subsidiaries (the "Subsidiary Guarantors"). The Note Guarantees will rank PARI
PASSU with all other existing and future senior indebtedness of the Subsidiary
Guarantors, and senior in right of payment to any future indebtedness of the
Subsidiary Guarantors that is expressly subordinated to senior indebtedness of
the Subsidiary Guarantors. The Note Guarantees, however, will be effectively
subordinated to secured senior indebtedness of the Subsidiary Guarantors under
the Prior Indentures and the Credit Agreement, each of which is guaranteed by
substantially all of the Subsidiary Guarantors. See "Description of the Notes."
As of October 1, 1994, after giving PRO FORMA effect to the Offering and the use
of proceeds therefrom, senior indebtedness of the Company and its subsidiaries
(including obligations under capitalized leases) would have been approximately
$2.07 billion, of which $1.57 billion would have been secured indebtedness. As
of October 1, 1994, after giving PRO FORMA effect to the Offering and the use of
proceeds therefrom, the Subsidiary Guarantors would have had approximately $1.51
billion of senior indebtedness outstanding (including guarantees with respect to
the Notes and the Credit Agreement and excluding obligations under capitalized
leases), of which $1.00 billion would have been secured indebtedness. As of
October 1, 1994, after giving PRO FORMA effect to the Offering and the use of
proceeds therefrom, the total amount of indebtedness of the Company and its
subsidiaries (including obligations under capitalized leases) ranking PARI PASSU
with the Notes would have been approximately $2.07 billion.
SEE "INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS WHICH
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN EVALUATING AN INVESTMENT IN THE
NOTES.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
<S> <C> <C> <C>
Per Fixed Rate Note................ % % %
Total.............................. $ $ $
Per Floating Rate Note............. % % %
Total.............................. $ $ $
<FN>
(1) Plus accrued interest, if any, from , 1994.
(2) The Company and the Subsidiary Guarantors have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $1,250,000.
</TABLE>
---------------------------
The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters and certain other conditions. The
Underwriters reserve the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the Notes
will be made in New York, New York on or about , 1994. The
offerings of the Fixed Rate Notes and the Floating Rate Notes, respectively, are
not conditioned upon each other.
---------------------------
MERRILL LYNCH & CO. J.P. MORGAN SECURITIES INC.
------------
The date of this Prospectus is , 1994.
<PAGE>
[MAP TO COME]
<PAGE>
AVAILABLE INFORMATION
Fleming is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at 7 World Trade Center, 13th Floor, New York, New York 10048 and Suite
1400, Northwestern Atrium Center, 14th Floor, 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained by mail from the Public
Reference Section of the Commission at prescribed rates at the principal office
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, such reports, proxy statements and information concerning
the Company can be inspected and copied at the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005, the Pacific Stock Exchange, Inc., 301
Pine Street, San Francisco, California 94104 and the Chicago Stock Exchange, 440
South LaSalle Street, Chicago, Illinois 60605.
The Company and the Subsidiary Guarantors have filed with the Commission a
registration statement on Form S-3 (herein, together with all amendments and
exhibits, referred to as the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus does not contain all
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
25, 1993, the Company's Quarterly Reports on Form 10-Q for the quarters ended
April 16, July 9 and October 1, 1994 (as amended by Form 10-Q/A on November 16,
1994), and the Company's Current Reports on Form 8-K dated July 19 (as amended
by Form 8-K/A on September 2, 1994), September 23, October 19 and November 30,
1994 filed under the Exchange Act (File No. 1-8140) are hereby incorporated in
this Prospectus by reference. All documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination of the
Offering described herein shall be deemed to be incorporated in this Prospectus
and to be a part hereof from the date of the filing of such document. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained herein or in any other
subsequently filed document which is also incorporated or deemed to be
incorporated by reference modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
(without exhibits unless such exhibits are specifically incorporated by
reference into such document) of any or all documents incorporated by reference
in this Prospectus. Written requests or requests by telephone for such copies
should be directed to David R. Almond, Senior Vice President, General Counsel
and Secretary, Fleming Companies, Inc., P.O. Box 26647, Oklahoma City, Oklahoma
73126 (telephone (405) 840-7200).
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
3
<PAGE>
APPENDIX B
DESCRIPTION OF PRINTED MATERIAL
Page 2 Map of United States showing location of company operated
distribution centers, retail chains and headquarters.
Letterhead "Fleming Companies, Inc." displayed above map.
Inside Back Color photographs of three distribution centers and three
Prospectus retail stores, each with a caption identifying the location
Cover appearing below the photograph.
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS DOES NOT PURPORT TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL
STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS.
UNLESS THE CONTEXT REQUIRES OTHERWISE, THE TERM "SCRIVNER GROUP" REFERS TO
HANIEL CORPORATION ("HANIEL") AND ITS SOLE DIRECT SUBSIDIARY, SCRIVNER, INC.,
AND SCRIVNER, INC.'S SUBSIDIARIES; THE TERMS "FLEMING" AND THE "COMPANY" REFER
TO FLEMING COMPANIES, INC. AND ITS SUBSIDIARIES, INCLUDING THE SCRIVNER GROUP
AFTER THE DATE OF THE ACQUISITION OF THE SCRIVNER GROUP (JULY 19, 1994). UNLESS
OTHERWISE INDICATED, PRO FORMA INFORMATION GIVES EFFECT TO SUCH ACQUISITION.
THE COMPANY
GENERAL
The Company is a recognized leader in the food marketing and distribution
industry with both wholesale and retail operations. The Company is the largest
food wholesaler in the United States as a result of the acquisition of the
Scrivner Group in July 1994 (the "Acquisition"), based on PRO FORMA 1993 net
sales of approximately $19 billion. The Company serves as the principal source
of supply for approximately 10,000 retail food stores, including approximately
3,700 supermarkets (defined as any retail food store with annual sales of at
least $2 million) which represented approximately 13% of all supermarkets in the
United States at year-end 1993 and totaled approximately 97 million square feet
in size. The Company serves food stores of various sizes operating in a wide
variety of formats, including conventional full-service stores, supercenters,
price impact stores (including warehouse stores), combination stores (which
typically carry a higher proportion of non-food items) and convenience stores.
With customers in 43 states, the Company services a geographically diverse area.
The Company's wholesale operations offer a wide variety of national brand and
private label products, including groceries, meat, dairy and delicatessen
products, frozen foods, produce, bakery goods and a variety of general
merchandise and related items. In addition, the Company offers a wide range of
support services to its customers to help them compete more effectively with
other food retailers in their respective markets. Such services include store
development and expansion services, merchandising and marketing assistance,
advertising, consumer education programs, retail electronic services and
employee training.
In addition to its wholesale operations, the Company has a significant
presence in food retailing, owning and operating 345 retail food stores,
including 283 supermarkets with an aggregate of approximately 9.5 million square
feet. Company-owned stores operate under a number of names and vary in format
from super warehouse stores and conventional supermarkets to convenience stores.
PRO FORMA 1993 net sales from retail operations were approximately $3 billion.
The Company believes it is one of the 20 largest food retailers in the United
States based on PRO FORMA net sales.
COMPETITIVE STRENGTHS
Fleming's net sales grew from approximately $5 billion in 1983 to
approximately $13 billion in 1993, largely as a result of acquisitions of
wholesale food distributors and operations. After giving PRO FORMA effect to the
Acquisition, the Company's 1993 net sales were approximately $19 billion. The
Company believes that its position as a leader in the food marketing and
distribution industry is attributable to a number of competitive strengths,
including the following:
SIZE. As the largest food wholesaler in the United States, the Company has
substantial purchasing power and is able to realize significant economies of
scale.
DIVERSE CUSTOMER BASE. In 1993, chains and multiple-store independent
operators represented 40% and 33%, respectively, of Fleming's net sales,
with the balance comprised of sales to single-store independent operators
and Fleming-owned stores. Approximately one-third of the Scrivner Group's
1993 net sales were to Scrivner Group-owned stores, with the balance
comprised of sales to multi-store independent operators, single-store
operators and chains. In addition, with customers in 43 states, the
Company's sales are geographically dispersed.
EXPERTISE IN PRIVATE LABEL PRODUCTS AND PERISHABLES. The Company offers a
wide range of private label products and perishables and has developed
extensive expertise in handling, marketing and distributing these products.
The Company believes that these products are an important element in
attracting and
4
<PAGE>
retaining consumers. This expertise has permitted the Company to derive 41%
of 1993 PRO FORMA net sales from the sale of perishables. In addition,
private label products and certain perishables (such as produce, frozen
foods and bakery goods) generally produce higher margins than other food
categories.
EFFICIENT DISTRIBUTION NETWORK. Fleming has successfully integrated the
operations of previously acquired food wholesalers, thereby developing an
efficient distribution network, and has recorded 19 consecutive years of
warehouse productivity increases. The Company aggressively pursues
opportunities for the consolidation of distribution centers, seeking to
eliminate duplicative operations and facilities and achieve greater
efficiencies. In addition, the Company believes it is an industry leader in
the development and application of advanced distribution technology.
LONG-TERM SUPPLY CONTRACTS. The Company pursues various means of obtaining
future business, including the formation of alliances with retailers. In
particular, the Company has focused on retailers with demonstrated operating
success, including operators of alternative formats such as warehouse stores
and supercenters. The Company has long-term supply contracts with a number
of its major customers. For example, in December 1993, the Company signed a
six-year supply agreement with Kmart Corporation ("Kmart") to serve its new
Super Kmart Centers in areas where the Company has distribution facilities.
MANAGEMENT TEAM. The Company is led by an experienced management team
comprised of individuals who combine many years in the food marketing and
distribution industry. See "Management."
BUSINESS STRATEGY
The Company's strategy is to maintain and strengthen its position in food
marketing and distribution by: (i) consolidating distribution centers into
larger, more efficient centers and eliminating functions that do not add
economic value; (ii) maximizing the Company's substantial purchasing power;
(iii) building and maintaining long-term alliances with successful retailers,
including both traditional and alternative format operators; (iv) remaining at
the forefront of technology-driven distribution systems; (v) continuing to
capitalize on the Company's expertise in handling private label products and
perishables; and (vi) focusing on the profitability of Company-owned stores on a
stand-alone basis and increasing net sales of such stores through internal
growth and, in the long term, selective acquisitions.
The Company has begun implementing a number of the steps outlined above,
beginning with an announced plan to consolidate facilities, reorganize
management and reengineer operations. See "Investment Considerations -- Response
to a Changing Industry," "Management's Discussion and Analysis -- The
Consolidation, Reorganization and Reengineering Plan" and "Business -- Business
Strategy" and "-- The Consolidation, Reorganization and Reengineering Plan."
THE ACQUISITION
In July 1994, pursuant to a stock purchase agreement between Fleming and
Franz Haniel & Cie. GmbH, Fleming acquired all of the outstanding stock of
Haniel. Haniel, its sole direct subsidiary, Scrivner, Inc., and Scrivner, Inc.'s
subsidiaries are collectively referred to herein as the "Scrivner Group."
Fleming paid $388 million in cash and refinanced substantially all of the
Scrivner Group's existing indebtedness (approximately $670 million in aggregate
principal amount and premium). In connection with the Acquisition, Fleming
refinanced approximately $340 million in aggregate principal amount of its own
indebtedness.
The Acquisition of the Scrivner Group significantly enhanced the Company's
position as a leader in the food marketing and distribution industry. As a
result of its dramatically increased size, in terms of both retail stores served
and Company-owned stores, the Company believes it has gained substantial
purchasing power. Fleming acquired 179 Scrivner Group-owned stores as a result
of the Acquisition. The Company benefits from the Scrivner Group's product mix
which, like Fleming's, is favorably weighted toward perishables and private
label products. In addition, the Acquisition has resulted in a broader, more
geographically diverse customer base with a larger Company-owned retail network.
The Company believes it will be able to utilize the best features of both
Fleming's and Scrivner's investments in technology, a crucial element for the
long-term success of a food marketing and distribution company. The Company
expects to realize substantial savings through facilities consolidation and
reductions in corporate overhead.
5
<PAGE>
To finance the Acquisition and to provide future working capital, the
Company entered into a $2.2 billion credit facility (the "Credit Agreement")
with a group of banks led by Morgan Guaranty Trust Company of New York ("Morgan
Guaranty"). To secure its obligations under the Credit Agreement, the Company
pledged the capital stock of substantially all of its subsidiaries and
substantially all of the inventory and accounts receivable of the Company and
its subsidiaries. A portion of the collateral was also pledged for the equal and
ratable benefit of the holders of debt issued under two prior indentures (the
"Prior Indentures"). See "Certain Other Obligations." The collateral will be
released upon the earlier to occur of the repayment of the borrowings under the
Credit Agreement and the cancellation of the commitments thereunder or the date
on which the Company's senior unsecured debt receives investment grade ratings
from both Standard & Poor's Ratings Group and Moody's Investors Service, Inc.
See "The Credit Agreement."
THE OFFERING
<TABLE>
<S> <C>
NOTES OFFERED
Fixed Rate Notes................ $350,000,000 aggregate principal amount of % Senior
Notes due 2001; and
Floating Rate Notes............. $150,000,000 aggregate principal amount of Floating Rate
Senior Notes due 2001.
FIXED RATE NOTES
Maturity Date................... , 2001.
Interest Payment Dates.......... and of each year, commencing ,
1995.
Optional Redemption............. The Company may redeem up to 20% of the initial
aggregate principal amount of the Fixed Rate Notes at
any time on or prior to , 1997, within 180
days of a Public Equity Offering with the net proceeds
of such offering, at a redemption price equal to % of
the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of redemption;
PROVIDED that, after having given effect to such
redemption, at least $200 million aggregate principal
amount of the Fixed Rate Notes remains outstanding. In
addition, the Company may redeem the Fixed Rate Notes,
in whole or in part, at any time on or after
, 1999, at the redemption prices set forth
herein, together with accrued and unpaid interest, if
any, to the date of redemption. See "Description of the
Notes -- Terms Specific to the Fixed Rate Notes --
OPTIONAL REDEMPTION."
FLOATING RATE NOTES
Maturity Date................... , 2001.
Interest Rate................... % per annum from , 1994 through and including
, 1995 and thereafter at a rate per annum,
determined quarterly, equal to the Applicable LIBOR
Rate. See "Description of the Notes -- Terms Specific to
the Floating Rate Notes -- MATURITY, INTEREST AND
PRINCIPAL."
Interest Payment Dates.......... , , and
of each year, commencing , 1995.
Optional Redemption............. The Company may redeem the Floating Rate Notes, in whole
or in part, on any Interest Payment Date on or after
, 1995 through and including ,
1999, at a redemption price equal to 100.5% of the
principal amount thereof, and after , 1999 at
a redemption price equal to 100% of the principal amount
thereof, in each case together with accrued and
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
unpaid interest, if any, to the date of redemption. See
"Description of the Notes -- Terms Specific to the
Floating Rate Notes -- OPTIONAL REDEMPTION."
TERMS COMMON TO FIXED RATE NOTES
AND FLOATING RATE NOTES
Change of Control............... Upon the occurrence of a Change of Control Triggering
Event (as defined in the indentures pursuant to which
the Notes will be issued; the "Senior Note Indentures"),
and after satisfaction by the Company of the
requirements described below, each holder of the Notes
will have the right to require the Company to purchase
all of such holder's Notes at a price equal to 101% of
the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of purchase. Prior
to mailing the notice of a Change of Control Triggering
Event to holders of the Notes, the Senior Note
Indentures require the Company to retire all amounts
outstanding under the Credit Agreement, or to obtain any
necessary consent thereunder. Failure to do so within
the time limits prescribed by the Senior Note Indentures
would constitute a default by the Company under the
Senior Note Indentures and would entitle the holders to
accelerate the obligations due under the Notes. If a
Change of Control Triggering Event occurs, there can be
no assurance that the Company will have available funds
sufficient to redeem the Notes. Each of the Credit
Agreement and the Prior Indentures requires the Company
to repay the Indebtedness under the Credit Agreement
($1.55 billion as of November 1, 1994) and purchase the
outstanding Indebtedness under the Prior Indentures
($196 million as of November 1, 1994), respectively, in
the event of a change of control. If purchase of the
Notes, repayment of the Indebtedness under the Credit
Agreement and purchase of the outstanding Indebtedness
under the Prior Indentures were all triggered at the
same time, it is possible that the Company would be
unable to satisfy these obligations. One of the events
which constitutes a Change of Control Triggering Event
under the Senior Note Indentures is the disposition of
"all or substantially all" of the Company's assets. This
term has not been interpreted under New York law to
represent a specific quantitative test. As a
consequence, in the event holders of the Notes elect to
require the Company to purchase the Notes and the
Company elects to contest such election, there can be no
assurance as to how a court interpreting New York law
would interpret the phrase. See "Description of the
Notes -- Certain Covenants -- PURCHASE OF NOTES UPON A
CHANGE OF CONTROL TRIGGERING EVENT."
Ranking......................... The Notes are unsecured senior obligations of the
Company, and will rank PARI PASSU with all other
existing and future Senior Indebtedness of the Company
and senior in right of payment to any future
Indebtedness of the Company that is expressly
subordinated to Senior Indebtedness of the Company. The
Notes are effectively subordinated to secured Senior
Indebtedness of the Company with respect to the assets
securing such indebtedness, including Indebtedness under
the Credit Agreement, which is secured by the capital
stock of substantially
</TABLE>
7
<PAGE>
<TABLE>
<S> <C>
all of the Company's subsidiaries and substantially all
of the inventory and accounts receivable of the Company
and its subsidiaries, and Indebtedness under the Prior
Indentures which is secured by a portion of such
collateral. See "The Credit Agreement," "Description of
the Notes -- Ranking" and "Certain Other Obligations."
As of October 1, 1994, after giving PRO FORMA effect to
the Offering and the use of proceeds therefrom, Senior
Indebtedness of the Company (including obligations under
capitalized leases) would have been approximately $2.07
billion, of which $1.57 billion would have been secured
Senior Indebtedness. As of October 1, 1994, after giving
PRO FORMA effect to the Offering and the use of proceeds
therefrom, the total amount of indebtedness of the
Company and its subsidiaries (including obligations
under capitalized leases) ranking PARI PASSU with the
Notes would have been approximately $2.07 billion.
Guarantees...................... The payment of principal of, premium, if any, and
interest on the Notes is unconditionally guaranteed on
an unsecured senior basis (the "Note Guarantees") by
substantially all of the Company's subsidiaries (the
"Subsidiary Guarantors"). Each Note Guarantee ranks PARI
PASSU with all other existing and future Senior
Indebtedness of the Subsidiary Guarantor issuing such
Note Guarantee and senior in right of payment to any
future Indebtedness of such Subsidiary Guarantor that is
expressly subordinated to Senior Indebtedness of such
Subsidiary Guarantor. However, the Note Guarantees are
effectively subordinated to secured Senior Indebtedness
of the Note Guarantors under the Prior Indentures and
the Credit Agreement, the obligations under each of
which are also guaranteed by substantially all of the
Subsidiary Guarantors. See "Description of the Notes --
Ranking" and "-- Guarantees." As of October 1, 1994,
after giving PRO FORMA effect to the Offering and the
use of proceeds therefrom, Senior Indebtedness of the
Subsidiary Guarantors (including guarantees with respect
to the Notes and the Credit Agreement and excluding
obligations under capitalized leases) would have been
approximately $1.51 billion, of which $1.00 billion
would have been secured Senior Indebtedness. As of
October 1, 1994, after giving PRO FORMA effect to the
Offering and the use of proceeds therefrom, the total
amount of indebtedness (excluding obligations under
capitalized leases) of the Subsidiary Guarantors ranking
PARI PASSU with the Notes would have been approximately
$1.51 billion.
Covenants....................... The Senior Note Indentures contain certain covenants,
including, without limitation: (i) limitation on
restricted payments; (ii) limitation on liens; (iii)
requirements for additional guarantees; and (iv)
restrictions on consolidations, mergers and sale of
substantially all assets. In addition, the Company will
be prohibited from incurring additional Indebtedness
(other than Permitted Indebtedness and without regard to
ranking) if after such incurrence the Consolidated Fixed
Charge Coverage Ratio for the immediately preceding four
fiscal quarters, calculated on a
</TABLE>
8
<PAGE>
<TABLE>
<S> <C>
PRO FORMA basis, does not meet or exceed 1.75 to 1. See
"Description of the Notes -- Certain Covenants" and "--
Consolidation, Merger, Sale of Assets."
Use of Proceeds................. The net proceeds of the Offering will be used by the
Company to reduce a portion of the indebtedness incurred
under the Credit Agreement in connection with the
Acquisition. See "Use of Proceeds."
Absence of Public Market........ There is no public trading market for the Notes, and the
Company does not intend to apply for listing of the
Notes on any securities exchange or quotation of the
Notes on any inter-dealer quotation system. The Company
has been advised by the Underwriters that, following the
completion of the initial offering of the Notes, the
Underwriters presently intend to make a market in the
Notes although the Underwriters are under no obligation
to do so and may discontinue any market making at any
time without notice. No assurances can be given as to
the liquidity of the trading markets for the Notes or
that active trading markets for the Notes will develop.
If active public trading markets for the Notes do not
develop, the market prices and liquidity of the Notes
may be adversely affected.
</TABLE>
INVESTMENT CONSIDERATIONS
For a discussion of certain factors which should be considered by
prospective investors in evaluating an investment in the Notes, see "Investment
Considerations."
9
<PAGE>
SUMMARY FINANCIAL INFORMATION
Set forth below and on the following pages is summary PRO FORMA financial
information for the Company and summary historical financial information for
Fleming and the Scrivner Group. Fleming's consolidated financial statements are
prepared on the basis of a 52 or 53 week year, ending on the last Saturday in
December. Fleming's first fiscal quarter contains 16 weeks and each subsequent
quarter contains 12 weeks; the additional week in each 53 week year is added to
the fourth fiscal quarter. The Scrivner Group's financial information is derived
from Haniel's consolidated financial statements which are prepared on a calendar
year basis.
THE COMPANY -- PRO FORMA
The unaudited PRO FORMA financial information for the Company set forth
below has been derived from the unaudited PRO FORMA financial information
included elsewhere in this Prospectus and gives effect to the Acquisition and
the financing thereof and the Offering and the use of proceeds therefrom, as if
they had occurred at the beginning of the periods presented. The unaudited PRO
FORMA financial information does not necessarily represent what the Company's
results of operations would have been if the Acquisition and the financing
thereof and the Offering and the use of proceeds therefrom had actually been
completed on the dates indicated, and are not intended to project the Company's
results of operations for any future period. The following summary PRO FORMA
financial information should be read in conjunction with the consolidated
financial statements of Fleming and Haniel and related notes thereto and the
unaudited PRO FORMA financial information for the Company included elsewhere in
this Prospectus.
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA 40 WEEKS ENDED
YEAR ENDED OCTOBER 1,
DECEMBER 25, 1993 1994
----------------- --------------
(DOLLARS IN MILLIONS)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA(A):
Net sales............................... $ 19,109 $ 14,281
Cost of sales(b)........................ 17,497 13,058
Selling and administrative expense(b)... 1,314 1,048
Facilities consolidation and
restructuring charge................... 108 --
------- -------
Income from operations.................. 190 175
Interest expense........................ 193 141
Interest income(c)...................... 69 51
Losses from equity investments.......... 12 11
------- -------
Earnings before taxes................... 54 74
Taxes on income......................... 28 37
------- -------
Earnings before extraordinary item(d)... $ 26 $ 37
------- -------
------- -------
OTHER DATA:
EBITDA(e)............................... $ 528(f) $ 367
Depreciation and amortization........... 174 141
Capital expenditures.................... 108 107
Total debt, including capitalized
leases(g).............................. -- 2,074
Ratio of EBITDA to interest expense..... 2.74x 2.60x
Ratio of earnings to fixed charges(h)... 1.23x 1.43x
<FN>
- ------------------------------
(a) No adjustments have been made to reflect any potential cost savings that
the Company may realize from the Company's plan to consolidate additional
facilities, reorganize management and reengineer operations or which may
result from the Acquisition. See "Management's Discussion and Analysis" and
"Business -- Business Strategy" and "-- The Consolidation, Reorganization
and Reengineering Plan."
(b) PRO FORMA statement of operations data for cost of sales and selling and
administrative expense are affected by classification differences between
Fleming's and Haniel's consolidated financial statements. Certain costs and
expenses included in determining cost of sales for Fleming are classified
as selling, operating and administrative expenses in Haniel's consolidated
financial statements. Subsequent to the Acquisition, account classification
will be conformed to that used by Fleming.
(c) Consists primarily of interest earned on notes receivable from customers.
Also includes income generated from direct financing leases of retail
stores and related equipment.
(d) In 1993, the Company realized an extraordinary after-tax loss of $2.3
million related to the early retirement of indebtedness.
(e) EBITDA represents earnings before extraordinary item before taking into
consideration interest expense, income taxes, depreciation and
amortization, equity investment results and facilities consolidation and
restructuring charge. EBITDA should not be considered as an alternative
measure of the Company's net income, operating performance, cash flow or
liquidity. It is included herein to provide additional information related
to the Company's ability to service debt. The Senior Note Indentures
contain covenants limiting the incurrence of Indebtedness (other than
Permitted Indebtedness) and the making of certain Restricted Payments (as
defined) unless a minimum required consolidated fixed charge coverage
ratio, calculated on a PRO FORMA basis, is met. This ratio, which
approximates EBITDA divided by consolidated interest expense, is 1.75 to 1.
For illustrative purposes, based on PRO FORMA consolidated interest expense
of $193 million for the year ended December 25, 1993, the minimum EBITDA
required for the Company to incur additional Indebtedness (other than
Permitted Indebtedness), to pay dividends or to make certain other
Restricted Payments, was $338 million.
(f) PRO FORMA 1993 EBITDA has been reduced by $13 million to reflect certain
non-recurring items recorded in Fleming's selling and administrative
expense.
(g) Total debt, including capitalized leases, is calculated as if the Offering
and the use of proceeds therefrom had occurred on October 1, 1994. See
"Capitalization."
(h) For purposes of computing this ratio, earnings consist of earnings before
income taxes and fixed charges. Fixed charges consist of interest expense,
including amortization of deferred debt issuance costs, and one-third of
rental expense (the portion considered representative of the interest
factor).
</TABLE>
10
<PAGE>
FLEMING -- HISTORICAL
The following table sets forth certain historical financial information for
Fleming as of and for the periods indicated. The historical balance sheet and
statement of operations data as of and for the years ended the last Saturday in
December 1989 through 1993 have been derived from audited consolidated financial
statements of Fleming. The historical balance sheet and income statement data as
of and for the three quarters (40 weeks) ended October 2, 1993 and October 1,
1994 have been derived from the unaudited consolidated condensed financial
statements of Fleming. The table should be read in conjunction with "Selected
Financial Information," "Management's Discussion and Analysis" and Fleming's
consolidated financial statements and related notes thereto included elsewhere
in this Prospectus.
<TABLE>
<CAPTION>
40 WEEKS ENDED
---------------------
YEAR ENDED LAST SATURDAY IN DECEMBER, OCTOBER
------------------------------------------------------------------ OCTOBER 2, 1,
1989 1990 1991 1992 1993 1993 1994(A)
---------- ---------- ---------- ---------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN MILLIONS)
STATEMENT OF OPERATIONS DATA:
Net sales..................... $ 11,992 $ 11,884 $ 12,851 $ 12,894 $ 13,092 $ 9,946 $11,057
Gross margin.................. 690 683 748 727 765 588 762
Selling and administrative
expense...................... 508 473 537 495 558 417 635
Facilities consolidation and
restructuring charge(b)...... -- -- 67 -- 108 7 --
Income from operations........ 182 210 144 232 99 164 127
Interest expense.............. 96 94 93 81 78 59 76
Interest income(c)............ 57 55 61 59 63 48 47
Earnings before taxes......... 139 165 104 195 72 147 87
Earnings before extraordinary
items and accounting
change(d).................... 80 97 64 119 37 85 46
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital............... $ 363 $ 377 $ 424 $ 528 $ 442 $ 409 $ 454
Total assets.................. 2,689 2,768 2,958 3,118 3,103 3,141 4,624
Total debt, including
capitalized leases........... 1,009 1,012 989 1,086 1,078 1,055 2,064
Shareholders' equity.......... 742 814 949 1,060 1,060 1,119 1,079
OTHER DATA:
EBITDA(e)(f).................. $ 303 $ 342 $ 378 $ 380 $ 358 $ 283 $ 276
Depreciation and
amortization................. 78 83 91 94 101 77 102
Capital expenditures.......... 105 51 65 62 53 32 82
Ratio of EBITDA to interest
expense...................... 3.16x 3.64x 4.06x 4.69x 4.59x 4.80x 3.63x
Ratio of earnings to fixed
charges(g)................... 2.14x 2.40x 1.89x 2.85x 1.71x 2.90x 1.90x
<FN>
- ------------------------------
(a) Includes the Scrivner Group since the Acquisition.
(b) See further discussion contained in "Management's Discussion and Analysis
-- The Consolidation, Reorganization and Reengineering Plan."
(c) Consists primarily of interest earned on notes receivable from customers.
Also includes income generated from direct financing leases of retail
stores and related equipment.
(d) In 1992 and 1993, the Company recorded extraordinary after-tax losses of
$5.9 million and $2.3 million, respectively, related to the early
retirement of indebtedness. In 1991, the Company recognized a $9.3 million
charge to net earnings in connection with the adoption of SFAS No. 106 --
Employers' Accounting for Postretirement Benefits Other Than Pensions.
(e) EBITDA represents earnings before extraordinary items and accounting change
before taking into consideration interest expense, income taxes,
depreciation and amortization, equity investment results and facilities
consolidation and restructuring charge. EBITDA should not be considered as
an alternative measure of the Company's net income, operating performance,
cash flow or liquidity. It is included herein to provide additional
information related to the Company's ability to service debt. The Senior
Note Indentures contain covenants limiting the incurrence of Indebtedness
(other than Permitted Indebtedness) and the making of certain Restricted
Payments unless a minimum required consolidated fixed charge coverage
ratio, calculated on a PRO FORMA basis, is met. This ratio, which
approximates EBITDA divided by consolidated interest expense, is 1.75 to 1.
For illustrative purposes, based on PRO FORMA consolidated interest expense
of $193 million for the year ended December 25, 1993, the minimum EBITDA
required for the Company to incur additional Indebtedness (other than
Permitted Indebtedness), to pay dividends or to make certain other
Restricted Payments, was $338 million.
(f) In 1989 and 1990, EBITDA has been reduced to reflect non-recurring pre-tax
gains of approximately $14 million and $6 million, respectively, that
resulted from selling minority equity positions in a former subsidiary. In
1991, EBITDA has been increased by $15 million to reflect non-recurring
pre-tax charges related to litigation settlements and the write-down of a
non-operating asset. In 1992, EBITDA has been reduced to reflect a $5
million non-recurring pre-tax gain related to a litigation settlement. For
each of the year ended December 1993 and the 40 weeks ended October 2,
1993, EBITDA has been reduced by $13 million to reflect the net effect of
certain non-recurring items. All such non-recurring items were recorded in
selling and administrative expense for the relevant period.
(g) For purposes of computing this ratio, earnings consist of earnings before
income taxes and fixed charges. Fixed charges consist of interest expense,
including amortization of deferred debt issuance costs, and one-third of
rental expense (the portion considered representative of the interest
factor).
</TABLE>
11
<PAGE>
THE SCRIVNER GROUP -- HISTORICAL
The following table sets forth certain historical financial information for
the Scrivner Group as of and for the periods indicated. The historical balance
sheet and statement of operations data as of and for the years ended December
31, 1989 through 1993 have been derived from the audited consolidated financial
statements of Haniel. The historical balance sheet and statement of operations
data as of and for the six months ended June 30, 1993 and 1994 have been derived
from the unaudited consolidated financial statements of Haniel. The table should
be read in conjunction with "Selected Financial Information", "Management's
Discussion and Analysis -- Analysis of the Scrivner Group's Historical Results
of Operations" and the Haniel consolidated financial statements and related
notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------- --------------
1989 1990 1991 1992 1993 1993 1994
------ ------ ------ ------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................................................. $3,765 $5,602 $5,606 $5,685 $6,017 $3,238 $3,224
Gross margin(a)....................................................... 458 748 771 792 849 454 462
Selling, operating and administrative expense(a)...................... 401 646 661 687 752 401 411
Income from operations................................................ 57 102 110 105 97 53 51
Interest expense...................................................... 36 82 72 62 56 31 28
Interest income(b).................................................... 4 7 6 6 6 3 4
Earnings before taxes................................................. 25 27 44 49 47 25 27
Net earnings.......................................................... 13 14 22 25 25 13 13
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital....................................................... $ 194 $ 171 $ 118 $ 234 $ 208 $ 264 $ 198
Total assets.......................................................... 1,347 1,392 1,375 1,387 1,372 1,408 1,317
Total debt, including capitalized leases.............................. 751 759 651 721 662 743 620
Shareholder's equity.................................................. 175 189 211 242 267 254 280
OTHER DATA:
EBITDA(c)............................................................. $ 96 $ 166 $ 175 $ 170 $ 168 $ 91 $ 90
Depreciation and amortization......................................... 35 57 59 59 65 35 35
Capital expenditures.................................................. 50 62 49 42 55 31 25
Ratio of EBITDA to interest expense................................... 2.67x 2.02x 2.43x 2.74x 3.00x 2.94x 3.21x
Ratio of earnings to fixed charges(d)................................. 1.64x 1.30x 1.54x 1.64x 1.65x 1.64x 1.73x
<FN>
- ------------------------------
(a) Certain costs and expenses that Fleming includes in determining its gross
margin are classified as selling, operating and administrative expenses in
Haniel's consolidated financial statements.
(b) Consists primarily of interest earned on notes receivable from customers.
Also includes income generated from direct financing leases of retail
stores and related equipment.
(c) EBITDA represents earnings before taking into consideration interest
expense, income taxes, and depreciation and amortization. EBITDA should not
be considered as an alternative measure of the Scrivner Group's net income,
operating performance, cash flow or liquidity. It is included herein to
provide additional information related to the Scrivner Group's ability to
service debt.
(d) For purposes of computing this ratio, earnings consist of earnings before
income taxes and fixed charges. Fixed charges consist of interest expense,
including amortization of deferred debt issuance costs, and one-third of
rental expense (the portion considered representative of the interest
factor).
</TABLE>
12
<PAGE>
INVESTMENT CONSIDERATIONS
In addition to the other information contained in this Prospectus,
prospective investors should consider carefully the following factors before
purchasing the Notes offered hereby.
LEVERAGE AND DEBT SERVICE
The Company incurred substantial indebtedness in connection with the
financing of the Acquisition and is subject to substantial repayment
obligations. As of October 1, 1994, the Company had total indebtedness
(including capitalized lease obligations) of approximately $2.06 billion and
shareholders' equity of approximately $1.08 billion (on a PRO FORMA basis after
giving effect to the Offering and the use of proceeds therefrom, $2.07 billion
and $1.08 billion, respectively). Although the Company is subject to restrictive
covenants under the Senior Note Indentures and the Credit Agreements (see "--
Restrictive Covenants"), there remains significant borrowing capacity under such
agreements. Although the Company has no present plans to pursue acquisitions, it
may borrow additional amounts to do so in the future, resulting in increased
leverage. See "Use of Proceeds" and "Capitalization."
The degree to which the Company is leveraged could have important
consequences to the holders of the Notes, including: (i) the Company's ability
to obtain additional financing for working capital or other purposes in the
future may be limited; (ii) a substantial portion of the Company's cash flow
from operations will be dedicated to the payment of the principal of and
interest on its indebtedness, thereby reducing funds available for operations;
(iii) certain of the Company's borrowings, including the Floating Rate Notes and
all borrowings under the Credit Agreement, will be at variable rates of interest
(subject to the requirement that the Company enter into interest rate protection
agreements for a substantial portion of its borrowings under the Credit
Agreement; see "The Credit Agreement") which could cause the Company to be
vulnerable to increases in interest rates; (iv) the Company may be more
vulnerable to economic downturns and be limited in its ability to withstand
competitive pressures; and (v) all of the indebtedness incurred in connection
with the Credit Agreement will become due prior to the maturity of the Notes
(except for the first $1 million due in connection with the sinking fund
established for the benefit of the Floating Rate Notes). The Company's ability
to make scheduled payments of the principal of, premium, if any, or interest on,
or to refinance, its indebtedness will depend on its future operating
performance and cash flow, which are subject to prevailing economic conditions,
prevailing interest rate levels, and financial, competitive, business and other
factors, many of which are beyond its control. See "Management's Discussion and
Analysis" and "Description of the Notes -- Certain Covenants -- PURCHASE OF
NOTES UPON A CHANGE OF CONTROL TRIGGERING EVENT."
Although the Company conducts substantial operations at the parent company
level, the majority of operations are conducted by the Company's subsidiaries.
In order to access funds generated by subsidiary operations, the Company must
either cause such subsidiaries to declare dividends or otherwise must borrow the
funds pursuant to intercompany credit transactions. There are currently no
agreements which restrict any of the subsidiaries' ability to declare dividends
or lend funds to the Company, and the Credit Agreement prohibits such
agreements. The Company believes that, based upon current levels of operations,
it should be able to meet its debt service obligations, including principal and
interest payments on the Notes, when due. If the Company cannot generate
sufficient cash flow from operations to meet its obligations, the Company might
be required to refinance its indebtedness. There can be no assurance that a
refinancing could be effected on satisfactory terms or would be permitted by the
terms of the Credit Agreement, the Prior Indentures or the Senior Note
Indentures.
RESTRICTIVE COVENANTS
The Credit Agreement and the Senior Note Indentures contain numerous
restrictive covenants which limit the discretion of the Company's management
with respect to certain business matters. These covenants place significant
restrictions on, among other things, the ability of the Company and the
Subsidiary Guarantors to incur additional indebtedness, to create liens or other
encumbrances, to make certain payments, investments, loans and guarantees and to
sell or otherwise dispose of a substantial portion of assets to, or merge or
consolidate with, another entity which is not controlled by the Company. See
"The Credit Agreement" and "Description of the Notes -- Certain Covenants" and
"-- Consolidation, Merger, Sale of Assets." The Credit Agreement also contains a
number of financial covenants which require the Company to
13
<PAGE>
meet certain financial ratios and tests. See "Management's Discussion and
Analysis -- Liquidity and Capital Resources" and "The Credit Agreement." A
failure to comply with the obligations contained in the Credit Agreement or the
Senior Note Indentures, if not cured or waived, could permit acceleration of the
related indebtedness and acceleration of indebtedness under other instruments
which contain cross-acceleration or cross-default provisions. If the Company
were obligated to repay all of its senior debt at one time, there is no
assurance that the Company would have sufficient cash to do so or that the
Company could successfully refinance such indebtedness. Other indebtedness of
the Company and its subsidiaries that may be incurred in the future may contain
financial or other covenants more restrictive than those applicable to the
Credit Agreement and the Notes.
ASSET ENCUMBRANCES
The Notes will not be secured by any of the Company's assets or any of the
Subsidiary Guarantor's assets. The obligations of the Company under the Credit
Agreement are secured by the capital stock of substantially all of the Company's
subsidiaries and substantially all of the inventory and accounts receivable of
the Company and its subsidiaries. The obligations of the Company under the Prior
Indentures are secured by the capital stock and the inter-company indebtedness
(including inter-company accounts receivable) of substantially all of the
Company's subsidiaries. If the Company becomes insolvent or is liquidated, or if
payment under the Credit Agreement or other secured indebtedness is accelerated,
the lenders under the Credit Agreement, the Prior Indentures and any other
instruments defining the rights of lenders of secured indebtedness would be
entitled to exercise the remedies available to a secured lender under applicable
law so long as such security remains in place. Accordingly, such lenders may
have a prior claim on a substantial portion of the assets of the Company and its
subsidiaries.
ABILITY TO INTEGRATE THE SCRIVNER GROUP; PROFITABILITY OF COMPANY-OWNED STORES
The Acquisition represents a dramatic increase in the size and complexity of
the Company. Future operations and earnings will be largely dependent upon the
Company's ability to integrate the Scrivner Group effectively. The Company must
identify and close duplicative facilities, while retaining and transferring
related business, and must reduce combined administrative costs and expenses.
There can be no assurance that the Company will successfully integrate the
Scrivner Group, and a failure to do so could have a material adverse effect on
the Company's results of operations and financial condition. Additionally,
integration of the Scrivner Group and servicing the indebtedness incurred in
connection with the Acquisition may limit the Company's ability to successfully
pursue acquisition opportunities for the foreseeable future.
In addition, certain stores acquired in the Acquisition, as well as certain
other Company-owned stores, are not profitable on a stand-alone basis. The
Company has developed a specific retail strategy to improve the profitability of
its retail operations. Failure to implement this strategy successfully could
lead to the continued underperformance of the combined retail operations. See
"Management's Discussion and Analysis."
RESPONSE TO A CHANGING INDUSTRY
The food marketing and distribution industry is undergoing accelerated
change as producers, manufacturers, distributors and retailers seek to lower
costs and increase services in an increasingly competitive environment of
relatively static over-all demand. Alternative format food stores (such as
warehouse stores and supercenters) have gained retail food market share at the
expense of traditional supermarket operators, including independent grocers,
many of whom are customers of the Company. Vendors, seeking to ensure that more
of their promotional dollars are used by retailers to increase sales volume,
increasingly direct promotional dollars to large self-distributing chains. The
Company believes that these changes have led to reduced margins and lower
profitability among many of its customers and at the Company itself. In response
to these changes and to feedback from its customers, the Company has initiated a
consolidation, reorganization and reengineering plan to redesign the way in
which the Company markets, distributes and prices its products and services. The
Company will seek to become the low-cost provider of its products by changing
its pricing practices across most of its product line so as to pass through to
its customers promotional fees and allowances received from vendors while fully
recovering its expenses and realizing an adequate return. Additionally, the
Company plans to unbundle certain services and provide only those services which
its
14
<PAGE>
customers want and for which they are willing to pay. See "Business -- The
Consolidation, Reorganization and Reengineering Plan." The Company believes that
its ultimate success will depend on its ability to reduce costs significantly
throughout its operations. Failure to achieve significant cost reductions could
result in reduced margins and profitability. Failure to achieve sufficient
customer receptiveness to the reengineering plan or delays in its implementation
could result in diminished sales and margins while the Company seeks alternative
solutions. Failure to develop a successful response to changing market
conditions over the long-term could have a material adverse effect on the
Company's business as well as the Company's results of operations and financial
condition.
POTENTIAL CREDIT LOSSES FROM INVESTMENTS IN RETAILERS
The Company provides subleases and extends loans to and makes investments in
many of its retail customers, often in conjunction with the establishment of
long-term supply agreements with such customers. Loans to customers are
generally not investment grade and, along with equity investments in such
customers, are highly illiquid. In recent years, the Company has experienced
increasing losses associated with these activities. Credit loss expenses,
including losses from receivables and investments in customers, increased to $49
million for the 40 weeks ended October 1, 1994 from $30 million for the
comparable 1993 period and increased to $52 million for fiscal year 1993 from
$28 million for fiscal year 1992. These increasing losses are due to the
combined effects on customers' financial conditions of sluggish retail sales,
intensified retail competition and lack of food price inflation. At October 1,
1994, the Company's total of loans to customers and equity investments in
customers was $507 million. Such amount excludes investments in customers
through direct financing leases, lease guarantees, operating leases, credit
extensions for inventory purchases and the recourse portion of notes sold
evidencing such loans. During fiscal year 1993, 1992 and 1991, Fleming sold,
with limited recourse, $68 million, $45 million and $82 million, respectively,
of notes evidencing loans to its customers. See "Management's Discussion and
Analysis," "Business -- Capital Invested in Customers" and Fleming's
consolidated financial statements and the notes thereto included elsewhere in
this Prospectus. Although the Company has begun to de-emphasize credit
extensions to and investments in customers, there can be no assurances that
credit losses from existing or future investments or commitments will not have a
material adverse effect on the Company's results of operations or financial
condition.
COMPETITION
The food marketing and distribution industry is highly competitive. The
Company faces competition from national, regional and local food distributors on
the basis of price, quality and assortment, schedules and reliability of
deliveries and the range and quality of services provided. The Company also
competes with retail supermarket chains that provide their own distribution
function, purchasing directly from producers and distributing products to their
supermarkets for sale to the consumer.
In its retail operations, the Company competes with other food outlets on
the basis of price, quality and assortment, store location and format, sales
promotions, advertising, availability of parking, hours of operation and store
appeal. Traditional mass merchandisers have gained a growing foothold with
alternative store formats, such as warehouse stores and supercenters, which
depend on concentrated buying power and low-cost distribution technology. Market
share of stores with alternative formats is expected to continue to grow in the
future. To meet the challenges of a rapidly changing and highly competitive
retail environment, the Company must maintain operational flexibility and
develop effective strategies across many market segments.
In addition, food wholesalers have competed by their willingness to invest
capital in their customers. The Company has determined to de-emphasize loans to
and investments in its customers and to enter into such arrangements only with
customers who have demonstrated their ability to be successful operators. The
Company's new practice may cause it to lose business to competitors.
DEPENDENCE ON ECONOMIC CONDITIONS
The slow pace of industry growth and lack of food price inflation have
dampened the Company's sales growth in recent years. In addition, the Company's
distribution centers and retail stores are subject to
15
<PAGE>
regional and local economic conditions. While the Company supplies products and
services in 43 states, there can be no assurance that future regional or local
economic downturns will not have a material adverse effect on the Company's
results of operations and financial condition.
CERTAIN LITIGATION
A subsidiary of the Company has been named in two related legal actions,
each alleging, among other things, that certain former employees of subsidiaries
of the Company participated in fraudulent activities by taking money for
confirming "diverting" transactions (a practice involving arbitraging in food
and other goods to profit from price differentials given by manufacturers to
different retailers and wholesalers) which had not occurred. The allegations
include, among other causes of action, common law fraud, breach of contract,
negligence, conversion and civil theft, and violation of the federal Racketeer
Influenced and Corrupt Organizations Act and comparable state statutes.
Plaintiffs seek damages, treble damages, attorneys' fees, costs, expenses and
other appropriate relief. While the amount of damages sought under most claims
is not specified, plaintiffs allege that hundreds of millions of dollars were
lost as a result of the allegations contained in the complaint. The Company
denies the allegations of the complaint and will vigorously defend the actions.
The litigation is in its preliminary stages, and the ultimate outcome cannot be
determined. Furthermore, the Company is unable to predict a potential range of
monetary exposure to the Company. Based on the recovery sought, an unfavorable
judgment could have a material adverse effect on the Company. See "Business --
Certain Legal Proceedings."
LABOR RELATIONS
Almost half of the Company's approximately 43,000 full and part-time
associates are covered by collective bargaining agreements with the
International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, the United Food and Commercial Workers, the International
Longshoremen's and Warehousemen's Union and the Retail Warehouse and Department
Store Union. The Company has 95 such agreements, which expire at various times
throughout the next five years. While the Company believes that relations with
its associates are satisfactory, a prolonged labor dispute could have a material
adverse effect on the Company's business as well as the Company's results of
operations and financial condition.
FRAUDULENT CONVEYANCE CONSIDERATIONS
Each Subsidiary Guarantor's guarantee of the obligations of the Company
under the Notes may be subject to review under relevant federal and state
fraudulent conveyance statutes (the "fraudulent conveyance statutes") in a
bankruptcy, reorganization or rehabilitation case or similar proceeding or a
lawsuit by or on behalf of unpaid creditors of such Subsidiary Guarantor. If a
court were to find under relevant fraudulent conveyance statutes that, at the
time the Notes were issued, (a) a Subsidiary Guarantor guaranteed the Notes with
the intent of hindering, delaying or defrauding current or future creditors or
(b) (i) a Subsidiary Guarantor received less than reasonably equivalent value or
fair consideration for guaranteeing the Notes and (ii) (A) was insolvent or was
rendered insolvent by reason of such Note Guarantee, (B) was engaged, or about
to engage, in a business or transaction for which its assets constituted
unreasonably small capital, (C) intended to incur, or believed that it would
incur, obligations beyond its ability to pay as such obligations matured (as all
of the foregoing terms are defined in or interpreted under such fraudulent
conveyance statutes) or (D) was a defendant in an action for money damages, or
had a judgment for money damages docketed against it (if, in either case, after
final judgment, the judgment is unsatisfied), such court could avoid or
subordinate such Note Guarantee to presently existing and future indebtedness of
such Subsidiary Guarantor and take other action detrimental to the holders of
the Notes, including, under certain circumstances, invalidating such Note
Guarantee.
The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the federal or state law that is being applied in any such
proceeding. Generally, however, a Subsidiary Guarantor would be considered
insolvent if, at the time it incurs the obligations constituting a Note
Guarantee, either (i) the fair market value (or fair saleable value) of its
assets is less than the amount required to pay the
16
<PAGE>
probable liability on its total existing indebtedness and liabilities (including
contingent liabilities) as they become absolute and mature or (ii) it is
incurring obligations beyond its ability to pay as such obligations mature or
become due.
The Boards of Directors and management of the Company and each Subsidiary
Guarantor believe that at the time of issuance of the Notes and the Note
Guarantees, each Subsidiary Guarantor (i) will be (a) neither insolvent nor
rendered insolvent thereby, (b) in possession of sufficient capital to meet its
obligations as the same mature or become due and to operate its business
effectively and (c) incurring obligations within its ability to pay as the same
mature or become due and (ii) will have sufficient assets to satisfy any
probable money judgment against it in any pending action. There can be no
assurance, however, that such beliefs will prove to be correct or that a court
passing on such questions would reach the same conclusions.
ABSENCE OF A PUBLIC MARKET FOR THE NOTES
There is no public trading market for the Notes, and the Company does not
intend to apply for listing of the Notes on any securities exchange or quotation
of the Notes on any inter-dealer quotation system. The Company has been advised
by the Underwriters that, following the completion of the initial offering of
the Notes, the Underwriters presently intend to make a market in the Notes,
although the Underwriters are under no obligation to do so and may discontinue
any market making at any time without notice. No assurances can be given as to
the liquidity of the trading markets for the Notes or that active trading
markets for the Notes will develop. If active public trading markets for the
Notes do not develop, the market prices and liquidity of the Notes may be
adversely affected.
17
<PAGE>
THE COMPANY
The Company is a recognized leader in the food marketing and distribution
industry and is the largest food wholesaler in the United States. Fleming's net
sales grew from approximately $5 billion in 1983 to approximately $13 billion in
1993, largely as a result of acquisitions of wholesale food distributors and
operations. After giving PRO FORMA effect to the acquisition of the Scrivner
Group in July 1994 (the "Acquisition"), the Company's 1993 net sales were
approximately $19 billion.
The Company serves as the principal source of supply for approximately
10,000 retail food stores including approximately 3,700 supermarkets (retail
food stores with annual sales of at least $2 million), which represented
approximately 13% of all supermarkets in the United States at year-end 1993 and
totaled approximately 97 million square feet in size. In addition to its
wholesale operations, the Company has a significant presence in food retailing,
owning and operating 345 retail food stores, including 283 supermarkets (which
are included in the totals set forth above) with an aggregate of 9.5 million
square feet. The Company-owned stores operate under a number of names and vary
in format from super warehouse stores and conventional supermarkets to
convenience stores. PRO FORMA 1993 net sales from retail operations were
approximately $3 billion. The Company believes it is one of the 20 largest food
retailers in the United States based on PRO FORMA net sales.
Fleming was incorporated in Kansas in 1915 and was reincorporated as an
Oklahoma corporation in 1981. The mailing address of the Company's principal
executive office is P.O. Box 26647, Oklahoma City, Oklahoma 73126, and its
telephone number is (405) 840-7200.
USE OF PROCEEDS
The proceeds to the Company from the Offering are estimated to be
approximately $489 million, net of the Underwriters' discount and certain fees
and expenses relating to the Offering. The Company intends to apply the entire
net proceeds of the Offering, together with borrowings under the Company's
revolving credit facility of the Credit Agreement, to retire Tranche B of the
Credit Agreement, a loan facility maturing in July 1996 under which indebtedness
was incurred in connection with the Acquisition ("Tranche B"). As of November 1,
1994, borrowings of $500 million were outstanding under Tranche B at an interest
rate of 6.0%. See "Management's Discussion and Analysis -- Liquidity and Capital
Resources," "The Credit Agreement" and "Underwriting."
18
<PAGE>
CAPITALIZATION
The following table sets forth the historical capitalization of the Company
as of October 1, 1994 and as adjusted to give PRO FORMA effect to the Offering
and the use of proceeds therefrom. See "Use of Proceeds" and Fleming's
consolidated financial statements and the related notes thereto included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AS OF OCTOBER 1, 1994
--------------------------
PRO FORMA
THE COMPANY FOR THE
HISTORICAL OFFERING
------------- -----------
(DOLLARS IN MILLIONS)
<S> <C> <C>
SHORT-TERM DEBT(A): $ 109 $ 108(b)
------ -----------
------ -----------
LONG-TERM DEBT, EXCLUDING CURRENT MATURITIES:
Bank debt(c).................................................................. $ 1,413 $ 957(b)
The Fixed Rate Notes(c)....................................................... -- 350
The Floating Rate Notes(c).................................................... -- 150
Long-term obligations under capital leases.................................... 353 353
Other long-term debt.......................................................... 188 156(b)
------ -----------
Total long-term debt(d)..................................................... 1,954 1,966
------ -----------
SHAREHOLDERS' EQUITY
Common stock, $2.50 par value 100,000,000 shares authorized; 37,403,000 shares
issued and outstanding....................................................... 93 93
Capital in excess of par value................................................ 493 493
Reinvested earnings........................................................... 505 505
Less guarantee of ESOP debt................................................... (12) (12)
------ -----------
Total shareholders' equity.................................................. 1,079 1,079
------ -----------
Total capitalization.......................................................... $ 3,033 $3,045
------ -----------
------ -----------
<FN>
- ------------------------
(a) Consists of current maturities of long-term debt and current obligations
under capital leases.
(b) On August 16, 1994, the Company made an offer to purchase up to $97.0
million aggregate principal amount of a series of Medium-Term Notes in
accordance with the terms of the indenture under which they were issued.
The offer expired on October 21, 1994, with $33 million of such Notes
tendered. The Company financed the purchase by drawing additional amounts
under the revolving credit facility of the Credit Agreement. See "Certain
Other Obligations."
(c) The offerings of the Fixed Rate Notes and the Floating Rate Notes,
respectively, are not conditioned upon each other. If either such offering
is not completed, a portion of Tranche B of the Credit Agreement will
remain outstanding.
(d) As of October 1, 1994, the Company also had $130 million of contingent
obligations under undrawn letters of credit, primarily related to insurance
reserves associated with its normal risk management activities.
</TABLE>
19
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The unaudited PRO FORMA financial information set forth below presents the
PRO FORMA statement of operations of the Company for the 40 weeks ended October
1, 1994 as if the Acquisition and the financing thereof and the Offering and the
use of proceeds therefrom had occurred on December 26, 1993 and the PRO FORMA
statement of operations of the Company for the year ended December 25, 1993 as
if the Acquisition and the financing thereof and the Offering and the use of
proceeds therefrom had occurred on December 27, 1992.
The unaudited PRO FORMA financial information has been prepared on the basis
of assumptions described in the notes thereto and includes assumptions relating
to the allocation of the consideration paid for the Scrivner Group to the assets
and liabilities of the Scrivner Group based on preliminary estimates of their
respective fair values. The actual allocation of such consideration may differ
from that reflected in the PRO FORMA financial statements after valuation and
other studies are completed. The Acquisition has been accounted for using the
purchase method of accounting.
The unaudited PRO FORMA financial information does not necessarily represent
what the Company's results of operations would have been if the Acquisition and
the financing thereof and the Offering and the use of proceeds therefrom had
actually been completed as of the dates indicated, and are not intended to
project the Company's results of operations for any future period. In addition,
such information does not reflect any of the potential cost savings that the
Company may realize from the Acquisition, including those from increased buying
power, facilities consolidation and reduced corporate overhead. Nor does such
information reflect potential cost savings from the Company's plan to
consolidate additional facilities, reorganize management and reengineer
operations. See "Management's Discussion and Analysis" and "Business -- Business
Strategy" and "-- The Consolidation, Reorganization and Reengineering Plan."
The unaudited PRO FORMA financial information should be read in conjunction
with the consolidated financial statements of Fleming and Haniel and the related
notes thereto included elsewhere in this Prospectus.
20
<PAGE>
PRO FORMA STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
INTERIM PERIOD ENDED 1994(A)
--------------------------------------------------
THE SCRIVNER
FLEMING GROUP ADJUSTMENTS PRO FORMA
------- -------------- ----------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(B):
Net sales............................................................. $11,057 $3,224 $ $14,281
Cost of sales(c)...................................................... 10,295 2,762 1(d) 13,058
Selling and administrative expense(c)................................. 635 411 1(d) 1,048
2(e)
(1)(f)
------- ------ --- ---------
Income from operations................................................ 127 51 (3) 175
Interest expense...................................................... 76 28 37(g) 141
Interest income(h).................................................... 47 4 51
Losses from equity investments........................................ 11 -- 11
------- ------ --- ---------
Earnings before taxes................................................. 87 27 (40) 74
Taxes on income....................................................... 41 14 (18)(i) 37
------- ------ --- ---------
Net earnings.......................................................... $ 46 $ 13 $(22) $ 37
------- ------ --- ---------
------- ------ --- ---------
OTHER DATA:
EBITDA(j)............................................................. $ 276 $ 90 $ 367
Depreciation and amortization......................................... 102 35 141
Capital expenditures.................................................. 82 25 107
Ratio of EBITDA to interest expense................................... 3.63x 3.21x 2.60x
Ratio of earnings to fixed charges(k)................................. 1.90x 1.73x 1.43x
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR ENDED 1993(A)
-------------------------------------------------
THE SCRIVNER
FLEMING GROUP ADJUSTMENTS PRO FORMA
------- -------------- ----------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(B):
Net sales.................................................................. $13,092 $6,017 $ $19,109
Cost of sales(c)........................................................... 12,327 5,168 2(d) 17,497
Selling and administrative expense(c)...................................... 558 752 2(d) 1,314
4(e)
(2)(f)
Facilities consolidation and restructuring charge.......................... 108 -- 108
------- ------ --- ---------
Income from operations..................................................... 99 97 (6) 190
Interest expense........................................................... 78 56 59(g) 193
Interest income(h)......................................................... 63 6 69
Losses from equity investments............................................. 12 -- 12
------- ------ --- ---------
Earnings before taxes...................................................... 72 47 (65) 54
Taxes on income............................................................ 35 22 (29)(i) 28
------- ------ --- ---------
Earnings before extraordinary item(l)...................................... $ 37 $ 25 $(36) $ 26
------- ------ --- ---------
------- ------ --- ---------
OTHER DATA:
EBITDA(j).................................................................. $ 358(m) $ 168 $ 528(m)
Depreciation and amortization.............................................. 101 65 174
Capital expenditures....................................................... 53 55 108
Ratio of EBITDA to interest expense........................................ 4.59x 3.00x 2.74x
Ratio of earnings to fixed charges(k)...................................... 1.71x 1.65x 1.23x
(FOOTNOTES ON FOLLOWING PAGE)
</TABLE>
21
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
<FN>
NOTES TO PRO FORMA STATEMENTS OF OPERATIONS
(a) PRO FORMA statement of operations data have been prepared by combining the
consolidated statement of operations of Fleming for the 40 weeks ended
October 1, 1994 and the fiscal year ended December 25, 1993 with the
consolidated statement of operations of the Scrivner Group for the six
months ended June 30, 1994 and the year ended December 31, 1993,
respectively, assuming the Acquisition and the financing thereof and the
Offering and use of proceeds therefrom occurred at the beginning of the
respective periods. The Acquisition has been accounted for using the
purchase method of accounting.
(b) No adjustments have been made to reflect any of the potential cost savings
that the Company may realize from the Acquisition, including those from
increased buying power, facilities consolidation and reduced corporate
overhead. Nor have any adjustments been made to reflect potential cost
savings from the Company's plan to consolidate additional facilities,
reorganize management and reengineer operations. See "Management's
Discussion and Analysis" and "Business -- Business Strategy" and "-- The
Consolidation, Reorganization and Reengineering Plan."
(c) PRO FORMA statement of operations data for cost of sales and selling and
administrative expense are affected by classification differences between
Fleming's and Haniel's consolidated financial statements. Certain costs and
expenses included in determining cost of sales for Fleming are classified
as selling, operating and administrative expenses in Haniel's consolidated
financial statements. Subsequent to the Acquisition, account classification
will be conformed to that used by Fleming.
(d) To depreciate the estimated increase in the fair value of property and
equipment acquired over the Scrivner Group's historical cost related to
such property and equipment. Such fair values are based on estimates made
at the time of the Acquisition. Appraisals have not yet been completed.
(e) To reflect the net adjustment resulting from (i) the elimination of the
Scrivner Group's goodwill amortization during the period, and (ii) the
amortization over forty years of the excess of cost over the fair value of
assets and liabilities acquired and assumed in the Acquisition. Such fair
values are based on estimates made at the time of the Acquisition.
Appraisals have not yet been completed.
(f) To eliminate the salaries of former Scrivner Group officers who are not
Company associates and whose functions have been assumed by Fleming
officers.
(g) To reflect the net adjustment for the interim period ended 1994 and the
fiscal year ended 1993 of (i) the elimination of interest expense
associated with approximately $611 million aggregate principal amount of
Scrivner Group indebtedness that was refinanced in connection with the
Acquisition ($26 million and $53 million, respectively); (ii) the
elimination of interest expense associated with approximately $307 million
aggregate principal amount of Fleming indebtedness that was refinanced at
the time of the Acquisition ($11 million and $19 million, respectively);
(iii) the elimination of interest expense associated with $33 million of
Fleming Medium-Term Notes which were purchased in late October 1994 ($2
million and $3 million, respectively); (iv) the net addition of interest
expense associated with indebtedness under the Credit Agreement, based on
applying the interest rates in effect on the date of the Acquisition to PRO
FORMA indebtedness outstanding prior to such date, after taking into
account the effect of interest rate protection agreements the Company has
entered into with respect to $1 billion of indebtedness ($33 million and
$77 million, respectively); (v) the addition of interest expense associated
with the Notes ($37 million and $49 million, respectively), and (vi) the
addition of amortization of deferred debt issuance costs related to the
Notes and the Credit Agreement ($6 million and $8 million, respectively).
See "Management's Discussion and Analysis -- Results of Operations --
Interest Expense."
Each incremental 25 basis point increase or decrease in the assumed
interest rate of the Fixed Rate Notes and the Floating Rate Notes would
increase or decrease annual interest expense on the Fixed Rate Notes and
the Floating Rate Notes by $875,000 and $375,000, respectively.
(h) Interest income consists primarily of interest earned on notes receivable
from customers. Also included is income generated from direct financing
leases of retail stores and related equipment.
(i) To provide for income taxes at an assumed effective rate of 47% for all
adjustments except those relating to goodwill amortization.
(j) EBITDA represents earnings before extraordinary item before taking into
consideration interest expense, income taxes, depreciation and
amortization, equity investment results and facilities consolidation and
restructuring charge. EBITDA should not be considered as an alternative
measure of net income, operating performance, cash flow or liquidity. It is
included herein to provide additional information related to the ability to
service debt. The Senior Note Indentures contain covenants limiting the
incurrence of Indebtedness (other than Permitted Indebtedness) and the
making of certain Restricted Payments unless a minimum required
consolidated fixed charge coverage ratio, calculated on a PRO FORMA basis,
is met. This ratio, which approximates EBITDA divided by consolidated
interest expense, is 1.75 to 1. For illustrative purposes, based on PRO
FORMA consolidated interest expense of $193 million for the year ended
December 25, 1993, the minimum EBITDA required for the Company to incur
additional Indebtedness (other than Permitted Indebtedness), to pay
dividends or to make certain other Restricted Payments, was $338 million.
(k) For purposes of computing this ratio, earnings consist of earnings before
income taxes and fixed charges. Fixed charges consist of interest expense,
including amortization of deferred debt issuance costs, and one-third of
rental expense (the portion considered representative of the interest
factor).
(l) In 1993, the Company realized an extraordinary after-tax loss of $2.3
million related to the early retirement of indebtedness.
(m) 1993 EBITDA has been reduced by $13 million to reflect the net effect of
certain non-recurring items recorded in selling and administrative expense.
</TABLE>
22
<PAGE>
SELECTED FINANCIAL INFORMATION
FLEMING
The following is a summary of certain financial information relating to
Fleming. The information presented below for, and as of the end of, each of the
fiscal years in the five-year period ended December 25, 1993 is derived from
audited consolidated financial statements of Fleming. In the opinion of the
Company, the unaudited financial information presented for the 40 weeks ended
October 2, 1993 and October 1, 1994 contains all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial
information included therein. Results for interim periods are not necessarily
indicative of results for the full year. This summary should be read in
conjunction with the detailed information and consolidated financial statements
of Fleming, including the notes thereto, included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
40 WEEKS ENDED
----------------------
YEAR ENDED THE LAST SATURDAY IN DECEMBER, OCTOBER OCTOBER
------------------------------------------------------------------ 2, 1,
1989 1990 1991 1992 1993 1993 1994(A)
---------- ---------- ---------- ---------- ---------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales..................... $ 11,992 $ 11,884 $ 12,851 $ 12,894 $ 13,092 $9,946 $11,057
Gross margin.................. 690 683 748 727 765 588 762
Selling and administrative
expense...................... 508 473 537 495 558 417 635
Facilities consolidation and
restructuring charge(b)...... -- -- 67 -- 108 7 --
Income from operations........ 182 210 144 232 99 164 127
Interest expense.............. 96 94 93 81 78 59 76
Interest income(c)............ 57 55 61 59 63 48 47
Earnings before taxes......... 139 165 104 195 72 147 87
Earnings before extraordinary
items and accounting
change(d).................... 80 97 64 119 37 85 46
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital............... $ 363 $ 377 $ 424 $ 528 $ 442 $ 409 $ 454
Total assets.................. 2,689 2,768 2,958 3,118 3,103 3,141 4,624
Total debt, including
capitalized leases........... 1,009 1,012 989 1,086 1,078 1,055 2,064
Shareholders' equity.......... 742 814 949 1,060 1,060 1,119 1,079
OTHER DATA:
EBITDA(e)(f).................. $ 303 $ 342 $ 378 $ 380 $ 358 $ 283 $ 276
Depreciation and
amortization................. 78 83 91 94 101 77 102
Capital expenditures.......... 105 51 65 62 53 32 82
Ratio of EBITDA to interest
expense...................... 3.16x 3.64x 4.06x 4.69x 4.59x 4.80x 3.63x
Ratio of earnings to fixed
charges(g)................... 2.14x 2.40x 1.89x 2.85x 1.71x 2.90x 1.90x
<FN>
- ------------------------------
(a) Includes the Scrivner Group since the Acquisition.
(b) See further discussion contained in "Management's Discussion and Analysis
-- The Consolidation, Reorganization and Reengineering Plan."
(c) Consists primarily of interest earned on notes receivable from customers.
Also includes income generated from direct financing leases of retail
stores and related equipment.
(d) In 1992 and 1993, the Company recorded extraordinary after-tax losses of
$5.9 million and $2.3 million, respectively, related to the early
retirement of indebtedness. In 1991, the Company recognized a $9.3 million
charge to net earnings in connection with the adoption of SFAS No. 106 --
Employers' Accounting for Post-retirement Benefits Other Than Pensions.
(e) EBITDA represents earnings before extraordinary items and accounting change
before taking into consideration interest expense, income taxes,
depreciation and amortization, equity investment results and facilities
consolidation and restructuring charge. EBITDA should not be considered as
an alternative measure of the Company's net income, operating performance,
cash flow or liquidity. It is included herein to provide additional
information related to the Company's ability to service debt. The Senior
Note Indentures contain covenants limiting the incurrence of Indebtedness
(other than Permitted Indebtedness) and the making of certain Restricted
Payments unless a minimum required consolidated fixed charge coverage
ratio, calculated on a PRO FORMA basis, is met. This ratio, which
approximates EBITDA divided by consolidated interest expense, is 1.75 to 1.
For illustrative purposes, based on PRO FORMA consolidated interest expense
of $193 million for the year ended December 25, 1993, the minimum EBITDA
required for the Company to incur additional Indebtedness (other than
Permitted Indebtedness), to pay dividends or to make certain other
Restricted Payments, was $338 million.
(f) In 1989 and 1990, EBITDA has been reduced to reflect non-recurring pre-tax
gains of approximately $14 million and $6 million, respectively, that
resulted from selling minority equity positions in a former subsidiary. In
1991, EBITDA has been increased by $15 million to reflect non-recurring
pre-tax charges related to litigation settlements and the write-down of a
non-operating asset. In 1992, EBITDA has been reduced to reflect a $5
million non-recurring pre-tax gain related to a litigation settlement. For
each of the year ended December 1993 and the 40 weeks ended October 2,
1993, EBITDA has been reduced by $13 million to reflect the net effect of
certain non-recurring items. All such non-recurring items were recorded in
selling and administrative expense for the relevant period.
(g) For purposes of computing this ratio, earnings consist of earnings before
income taxes and fixed charges. Fixed charges consist of interest expense,
including amortization of deferred debt issuance costs, and one-third of
rental expense (the portion considered representative of the interest
factor).
</TABLE>
23
<PAGE>
THE SCRIVNER GROUP
The following is a summary of certain financial information relating to the
Scrivner Group. The information presented below for, and as of the end of, each
of the years in the five-year period ended December 31, 1993 is derived from the
audited consolidated financial statements of Haniel. In the opinion of the
Company, the unaudited financial information presented for the six months ended
June 30, 1993 and 1994 contains all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the financial information
included therein. Results for interim periods are not necessarily indicative of
results for the full year. The summary should be read in conjunction with the
detailed information and consolidated financial statements of Haniel, including
the notes thereto, included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
----------------------------------------------------- --------------------
1989 1990 1991 1992 1993 1993 1994
--------- --------- --------- --------- --------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales...................................... $ 3,765 $ 5,602 $ 5,606 $ 5,685 $ 6,017 $ 3,238 $ 3,224
Gross margin(a)................................ 458 748 771 792 849 454 462
Selling, operating and administrative
expense(a).................................... 401 646 661 687 752 401 411
Income from operations......................... 57 102 110 105 97 53 51
Interest expense............................... 36 82 72 62 56 31 28
Interest income(b)............................. 4 7 6 6 6 3 4
Earnings before taxes.......................... 25 27 44 49 47 25 27
Net earnings................................... 13 14 22 25 25 13 13
BALANCE SHEET DATA (AT END OF PERIOD):
Working capital................................ $ 194 $ 171 $ 118 $ 234 $ 208 $ 264 $ 198
Total assets................................... 1,347 1,392 1,375 1,387 1,372 1,408 1,317
Total debt, including capitalized
leases........................................ 751 759 651 721 662 743 620
Shareholder's equity........................... 175 189 211 242 267 254 280
OTHER DATA:
EBITDA(c)...................................... $ 96 $ 166 $ 175 $ 170 $ 168 $ 91 $ 90
Depreciation and amortization.................. 35 57 59 59 65 35 35
Capital expenditures........................... 50 62 49 42 55 31 25
Ratio of EBITDA to interest expense............ 2.67x 2.02x 2.43x 2.74x 3.00x 2.94x 3.21x
Ratio of earnings to fixed charges(d).......... 1.64x 1.30x 1.54x 1.64x 1.65x 1.64x 1.73x
<FN>
- ------------------------
(a) Certain costs and expenses that Fleming includes in determining its gross
margin are classified as selling, operating and administrative expenses in
Haniel's consolidated financial statements.
(b) Consists primarily of interest earned on notes receivable from customers.
Also includes income generated from direct financing leases of retail
stores and related equipment.
(c) EBITDA represents earnings before taking into consideration interest
expense, income taxes and depreciation and amortization. EBITDA should not
be considered as an alternative measure of the Scrivner Group's net income,
operating performance, cash flow or liquidity. It is included herein to
provide additional information related to the Scrivner Group's ability to
service debt.
(d) For purposes of computing this ratio, earnings consist of earnings before
income taxes and fixed charges. Fixed charges consist of interest expense,
including amortization of deferred debt issuance costs, and one-third of
rental expense (the portion considered representative of the interest
factor).
</TABLE>
24
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
THE CONSOLIDATION, REORGANIZATION AND REENGINEERING PLAN. In January 1994,
the Company announced the details of a plan to consolidate facilities,
restructure its organizational alignment and reengineer its operations. The
Company's objective is to improve its performance by eliminating functions and
operations that do not add economic value. Charges associated with the plan
consist of four categories: facilities consolidation, reengineering, focus on
retail stores and elimination of regional operations. The actions contemplated
by the plan will affect the Company's food and general merchandise wholesaling
operations as well as certain retailing operations. The 1993 fourth quarter
results reflect a charge of $101 million resulting from facilities
consolidation, restructuring and reengineering. This is in addition to a
provision of $7 million for facilities consolidation in the second quarter of
1993. Related cash requirements during the 40 weeks ended October 1, 1994 were
$14 million; additional cash expenditures necessary to fully implement the plan
during the next two years are estimated to total $69 million. Cash requirements
are expected to be met by internally generated cash flows and borrowings under
the Credit Agreement. The consolidation, reorganization and reengineering plan
is expected to produce estimated net pre-tax savings of $65 million per year by
1997, after full implementation. However, unforeseen events or circumstances
could cause the Company to alter planned work force reductions or facilities
consolidations, thereby delaying or reducing expected cost savings.
Facilities consolidation has resulted in the closure of four distribution
centers and is expected to result in the closure of one additional facility, the
relocation of two operations, consolidation of one center's administrative
function, and completion of the 1991 facilities consolidations. During the forty
weeks ending October 1, 1994, approximately 700 associate positions were
eliminated through facilities consolidations. Expected losses on disposition of
the related property through sale or sublease are provided for through the
estimated disposal dates.
The total provision for facilities consolidation is approximately $60
million. Estimated components include: severance costs -- $15 million; impaired
property and equipment -- $13 million; other related asset impairments and
obligations -- $11 million; lease and holding costs -- $10 million; completion
of actions contemplated in the 1991 restructuring charge -- $7 million; and
product handling and damage -- $4 million. The actions are not expected to
result in a material reduction in net sales. Transportation expense is expected
to increase as a result of trucks driving farther to serve customers. It is not
practical to estimate reduced depreciation and amortization, labor or operating
costs separately. Management anticipates that, in the aggregate, a positive
annual pre-tax earnings impact of approximately $20 million will result from
administrative expense savings and working capital and productivity improvements
once the facilities consolidation plan is fully implemented.
The costs to complete activities, including the consolidation and closure of
distribution facilities, contemplated in the 1991 restructuring charge result
principally from additional estimated costs related to dispositions of related
real estate assets, which are in process. Such costs are principally the result
of the deterioration of the California Bay Area commercial real estate market
since 1991. Increased costs to complete the 1991 facilities consolidation
actions were partially offset by a change in management's 1993 plans regarding
the consolidation of four existing facilities into a large, new facility to be
constructed in the Kansas City area; the revised plan, which calls for enlarging
and utilizing existing facilities, is expected to result in lower associated
closure costs.
The reengineering component of the charge provides for the cash costs
associated with the expected termination of 1,500 associates due to
reengineering. Annual payroll savings are projected to be approximately $40
million. The provision for reengineering is approximately $25 million.
Management believes that the benefits to operating results that will be realized
by reengineering will also apply to the Scrivner Group. Reengineering efforts
with respect to the Scrivner Group will not begin until late 1995. The
Acquisition has resulted in the rescheduling of certain aspects of the
reengineering plan due to the effort required to
25
<PAGE>
integrate the Scrivner Group. No fundamental changes to the plan have occurred.
However, the reengineering actions that will result in a significant reduction
of employees are not expected to occur until 1995. Management expects that all
actions originally contemplated in the plan will be completed.
Thirty retail supermarket locations leased or owned by the Company have been
deemed to no longer represent viable strategic sites for stores due to size,
location or age. The charge includes the present value of lease payments on
these locations, as well as holding costs until disposition, the write-off of
capital lease assets recorded for certain locations, and the expected loss on a
location closed in 1994. The charge consists principally of cash costs for lease
payments and the write-down of property. Annual savings from these actions are
expected to be $1 million. The provision for retail-related assets is
approximately $15 million.
Elimination of the Company's regional operations resulted in cash severance
payments to approximately 100 associates, as well as the transfer of
approximately 60 associates. The annual savings are expected to be $4 million,
principally in payroll costs. The provision for eliminating regional operations
is approximately $8 million, including the write-down to estimated fair value of
certain related assets.
The table presented below reflects changes to the reserves recorded in the
statements of financial position related to facilities consolidation and
restructuring.
<TABLE>
<CAPTION>
REENGINEERING/ CONSOLIDATION
SEVERANCE COSTS/ASSET
TOTAL COSTS IMPAIRMENTS
--------- --------------- -------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Charges for year ended December 28, 1991.................................. $ 67.0 $ 11.0 $ 56.0
Expenditures and write-offs............................................... (13.0) -- (13.0)
--------- ----- ------
Balance, December 28, 1991................................................ 54.0 11.0 43.0
Expenditures and write-offs............................................... (24.1) (2.8) (21.3)
--------- ----- ------
Balance, December 26, 1992................................................ 29.9 8.2 21.7
Charged to costs and expenses............................................. 107.8 25.0 82.8
Expenditures and write-offs............................................... (52.2) (8.1) (44.1)
--------- ----- ------
Balance, December 25, 1993................................................ 85.5 25.1 60.4
Expenditures and write-offs............................................... (25.2) (2.6) (22.6)
--------- ----- ------
Balance, October 1, 1994.................................................. $ 60.3 $ 22.5 $ 37.8
--------- ----- ------
--------- ----- ------
</TABLE>
THE ACQUISITION. Results beginning with the third quarter 1994 have been
materially affected by the Acquisition. In 1993, the Scrivner Group had net
sales of approximately $6 billion, income from operations of approximately $97
million and net earnings of approximately $25 million. Interest expense
increased materially as a result of the increased borrowing level and higher
interest rates due to the Acquisition. Amortization of goodwill will
significantly increase as a result of the goodwill created by the Acquisition.
As a result of the Acquisition, the Company has closed three distribution
centers and expects to close seven additional distribution centers of the 49
currently operated. The Company has identified six of such facilities, all of
which are Scrivner Group facilities; the last center to be identified may be
either a Fleming or a Scrivner Group facility. Two of the six facilities
identified, located in Blooming Prairie, Minnesota and Buffalo, New York, will
be closed in 1995. Charges related to the closing of distribution centers
operated by the Scrivner Group have been considered a direct cost of the
Acquisition and are reflected as goodwill as of October 1, 1994. Any charge
related to the closing of a distribution center operated by Fleming prior to the
Acquisition will be allocated to current period earnings. Integration of the
Scrivner Group's operations is expected to take approximately two years.
26
<PAGE>
RESULTS OF OPERATIONS
Set forth in the following table is information regarding Fleming net sales
and certain components of earnings expressed as a percentage of net sales,
before the effect of early debt retirement in 1993 and 1992, and before the
accounting change in 1991:
<TABLE>
<CAPTION>
40 WEEKS ENDED
YEAR ENDED LAST -------------------
SATURDAY IN DECEMBER, OCTOBER OCTOBER
------------------------------ 2, 1,
1991 1992 1993 1993 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales............................................................. 100.00% 100.00% 100.00% 100.00% 100.00%
Gross margin.......................................................... 5.82 5.64 5.85 5.91 6.89
Less:
Selling and administrative expense.................................. 4.18 3.84 4.27 4.20 5.74
Interest expense.................................................... 0.73 0.63 0.60 0.59 0.68
Interest income..................................................... (0.48) (0.46) (0.48) (0.48) (0.42)
Equity investment results........................................... 0.06 0.12 0.09 0.06 0.10
Facilities consolidation and restructuring charge................... 0.52 -- 0.82 0.06 --
-------- -------- -------- -------- --------
Total............................................................. 5.01 4.13 5.30 4.43 6.10
-------- -------- -------- -------- --------
Earnings before taxes................................................. 0.81 1.51 0.55 1.48 0.79
Taxes on income....................................................... 0.31 0.59 0.26 0.63 0.38
-------- -------- -------- -------- --------
Earnings before extraordinary items and accounting change............. 0.50% 0.92% 0.29% 0.85% 0.41%
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
40 WEEKS ENDED OCTOBER 2, 1993 AND OCTOBER 1, 1994
Earnings in the 40 week period ended October 1, 1994 were $46 million, a
decrease of 46% compared to 1993; earnings in the third quarter of 1994 were $3
million, down 87% from the same period in 1993. Several factors contributed to
the decline and include lack of sales growth (before the addition of Scrivner
Group sales), increased losses from Company-owned retail stores and retail
equity investments, increased credit loss expense (including a $6.5 million
expense due to the bankruptcy of a large customer), higher interest expense due
to the Acquisition, an adverse LIFO effect and a higher effective tax rate.
NET SALES. Net sales for the 40 weeks ended October 1, 1994 increased by
$1.11 billion, or 11.2%, to $11.06 billion from $9.95 billion for the comparable
period in 1993. The increase in net sales was attributable to the $1.35 billion
of net sales generated by Scrivner Group operations since the Acquisition.
Without the Scrivner Group, net sales would have declined by $238 million, or
2.4%, due to several factors, none of which was individually material to net
sales, including: the expiration of the temporary agreement with Albertson's,
Inc. as its distribution center came on line, the sale of the Royal New Jersey
distribution center, the loss of a customer at one of the Company's distribution
centers and the loss of business due to the bankruptcy of Megafoods Stores, Inc.
These losses were partially offset by the addition of business from Kmart,
Florida retail operations acquired in the fourth quarter of 1993 ("Hyde Park")
and Randall's Food Markets, Inc.
Fleming measures inflation using data derived from the average cost of a ton
of product sold by the Company; for the 40 weeks ended October 1, 1994, food
price inflation was negligible. Tonnage of food product sold in the 40 weeks
ended October 1, 1994, without giving effect to the Acquisition, declined by 6%
compared to the comparable period in 1993, reflecting the difficult retail
environment. Consistent tonnage statistics for the Scrivner Group are not
available.
GROSS MARGIN. Gross margin for the 40 weeks ended October 1, 1994 increased
by $174 million, or 29.6%, to $762 million from $588 million for the comparable
period in 1993 and increased as a percentage of net sales to 6.9% for the 1994
period from 5.9% for the comparable 1993 period. Without Scrivner Group
operations, gross margin would have been 6.3% of net sales. The increase in
gross margin was due to retail stores, principally the 179 stores acquired with
the Scrivner Group as well as the 21 Hyde Park stores and 24 Consumers stores,
which were not included in 1993 results. See "-- Results of Operations --
Other." Retail
27
<PAGE>
operations typically have both a higher gross margin and higher selling expenses
than wholesale operations. In addition, product handling expenses, which consist
of warehouse, truck and building expenses, decreased as a percentage of net
sales for the 1994 period from the comparable 1993 period due in part to the
positive impact of the Company's facilities consolidation program and to higher
fees charged to certain customers. These gross margin increases were partially
offset by charges to income resulting from the LIFO method of inventory
valuation in the 1994 period compared to credits to income in the 1993 period.
SELLING AND ADMINISTRATIVE EXPENSE. Selling and administrative expense for
the 40 weeks ended October 1, 1994 increased by $218 million, or 52.3%, to $635
million from $417 million for the comparable period in 1993 and increased as a
percentage of net sales to 5.7% for the 1994 period from 4.2% in the comparable
period in 1993. This increase was due primarily to the acquisition of the
Scrivner Group, particularly its retail operations, as well as the acquisition
of 21 Hyde Park stores and 24 Consumers stores which were not included in 1993
results. Retail operations typically have higher selling expenses than wholesale
operations. Selling and administrative expenses also increased by reason of the
provision for additional goodwill amortization, principally related to the
Acquisition.
Credit loss expense included in selling and administrative expense for the
40 weeks ended October 1, 1994 increased by $19 million to $49 million from $30
million in the comparable period in 1993. This increase, after the $6.5 million
credit loss discussed below, was due to the continued difficult retail
environment and low levels of food price inflation. Although the Company has
begun to de-emphasize credit extensions to and investments in customers and has
adopted more stringent credit practices, there can be no assurance that credit
losses from existing or future investments or commitments will not have a
material adverse effect on results of operations or financial condition.
In August 1994, a customer of the Company, Megafoods Stores, Inc. and
certain of its affiliates ("Megafoods"), filed Chapter 11 bankruptcy
proceedings. As of such date, Megafood's total indebtedness to Fleming for goods
sold on open account, equipment leases and loans aggregated approximately $20
million. The Company holds collateral with respect to a substantial portion of
these obligations. Megafoods is also liable to the Company under store sublease
agreements for approximately $37 million, and the Company is contingently liable
on certain lease guarantees given by the Company on behalf of Megafoods. The
Company is partially secured as to these obligations. Megafoods has alleged
claims against the Company arising from breach of contract, tortious
interference with contracts and business relationships and wrongful set-off of a
$12 million cash security deposit and has threatened to seek equitable
subordination of the Company's claims. The Company denies these allegations and
will vigorously protect its interests. Based on this event, the Company took a
charge to earnings of $6.5 million in the third quarter of 1994 to cover its
estimated net credit exposure. However, the exact amount of the ultimate loss
may vary depending upon future developments in the bankruptcy proceedings
including those related to collateral values, priority issues and the Company's
ultimate expense, if any, related to certain customer store leases. An estimate
of additional possible loss, or the range of additional losses, if any, cannot
be made at this early stage of the proceedings. The Company estimates that its
annualized sales to Megafoods prior to the bankruptcy were approximately $335
million and currently are approximately $170 million pursuant to a short-term
arrangement.
INTEREST EXPENSE. Interest expense for the 40 weeks ended October 1, 1994
increased $17 million to $76 million from $59 million for the comparable period
in 1993. The increase was due to the indebtedness incurred to finance the
Acquisition and higher interest rates imposed on the Company as a result
thereof. Without these factors, interest expense for the 1994 period is
estimated to have been approximately the same as the comparable 1993 period.
The Company enters into financial derivatives as a method of hedging its
interest rate exposure. During July 1994, management terminated all of its
outstanding derivative contracts at an immaterial net gain, which will be
amortized over the original term of each derivative instrument. The Credit
Agreement requires the Company to provide interest rate protection on a
substantial portion of the indebtedness outstanding thereunder. The Company has
entered into interest rate swaps and caps covering $1 billion aggregate
principal amount of floating rate indebtedness. This amount exceeds the
requirements set forth in the Credit Agreement.
28
<PAGE>
The average interest rate on the Company's floating rate indebtedness is
equal to the London interbank offered interest rate ("LIBOR") plus a margin. The
average fixed interest rate paid by the Company on the interest rate swaps is
6.794%, covering $750 million of floating rate indebtedness. The interest rate
swap agreements, which were implemented through eight counterparty banks, and
which have an average remaining life of 3.6 years, provide for the Company to
receive substantially the same LIBOR that the Company pays on its floating rate
indebtedness. For the remaining $250 million, the Company has purchased interest
rate cap agreements from an additional two counterparty banks covering $250
million of its floating rate indebtedness. The agreements cap LIBOR at 7.33%
over the next 4.2 years. The Company's payment obligations under the interest
rate swap and cap agreements meet the criteria for hedge accounting treatment.
Accordingly, the Company's payment obligations are accounted for as interest
expense.
With respect to the interest rate hedging agreements, the Company believes
its exposure to potential credit loss expense is minimized primarily due to the
relatively strong credit ratings of the counterparties for their unsecured
long-term debt (A+ or higher from Standard & Poor's Ratings Group and A1 or
higher from Moody's Investors Service, Inc.) and the size and diversity of the
counterparty banks. The hedge agreements are subject to market risk to the
extent that market interest rates for similar instruments decrease, and the
Company terminates the hedges prior to their maturity. However, the Company
believes this risk is minimized as it currently foresees no need to terminate
any hedge agreements prior to their maturity.
On an annualized basis, the $1 billion of interest rate hedge agreements
account for $53 million of fixed annual interest expense. For the quarter ended
October 1, 1994, the interest rate hedge agreements contributed $8 million to
interest expense. The estimated fair value of the hedge agreements at October 1,
1994 was $13 million.
INTEREST INCOME. Interest income for the 40 weeks ended October 1, 1994
declined by $1 million to $47 million from $48 million for the comparable period
in 1993. The decrease was due to a lower average level of notes receivable and
direct financing leases in 1994, combined with lower average interest rates. The
Company has sold certain notes receivable with limited recourse in prior years
and may do so again in the future.
EQUITY INVESTMENT RESULTS. The Company's portion of operating losses from
equity investments for the 40 weeks ended October 1, 1994 increased by $5
million to $11 million from $6 million for the comparable period in 1993. The
increase resulted primarily from losses related to the Company's investments in
small retail operators under the Company's Equity Store Program, offset in part
by improved results from investments in strategic multi-store customers under
the Company's Business Development Ventures Program. See "Business -- Capital
Invested in Customers."
TAXES ON INCOME. The Company's effective tax rate for the 40 weeks ended
October 1, 1994 increased to 47.5% from 42.5% for the comparable period in 1993
primarily as a result of the lower than expected earnings for 1994, the Scrivner
Group's operations in states with higher tax rates and increased goodwill
amortization with no related tax deduction. The Company's ultimate tax rate for
1994 will depend on annual earnings and may be higher than 47.5%.
OTHER. In August 1994 the Company increased its indirect ownership of
Consumers Markets, Inc. ("Consumers"), the operator of 24 supermarkets located
in Missouri, Arkansas and Kansas with annual sales of $225 million, from 40% to
79%. On October 29, 1994, the Company acquired all of the outstanding stock of
Consumers. Results of operations and financial position of Consumers are not
material.
On November 30, the Company announced that Smitty's Super Valu, a customer
based in Arizona, had challenged the enforceability of its supply contract with
Fleming and may seek alternate arrangements. Smitty's has provided Fleming with
the opportunity to match the terms offered by a competitor. Under the provisions
of its supply contract, Fleming has three months in which to respond. Fleming's
supply contract will expire in 31 months if the Company matches the competing
offer and in 15 months if it does not. Fleming intends to comply fully with the
supply contract and expects Smitty's to do likewise. Smitty's purchased
approximately $290 million of products from Fleming during the past 12 months.
29
<PAGE>
A subsidiary of the Company has been named in two related legal actions
filed in the U.S. District Court in Miami in December 1993. The litigation is in
its preliminary stages, and the ultimate outcome cannot be determined.
Furthermore, the Company is unable to predict a potential range of monetary
exposure to the Company. Based on the recovery sought, an unfavorable judgment
could have a material adverse effect on the Company. See "Business -- Certain
Legal Proceedings."
Management believes that several factors affecting earnings in the third
quarter are likely to continue and will depress results in the fourth quarter of
1994 and beyond. Such factors include: flat wholesale sales; lack of food price
inflation; operating losses in Company-owned retail stores; increased interest
expense, goodwill amortization and integration costs related to the Acquisition;
and a higher effective tax rate.
1993, 1992, 1991
NET SALES. Net sales in 1993 increased by $199 million, or 1.5%, to $13.09
billion from $12.89 billion for 1992, and net sales in 1992 remained essentially
unchanged from 1991. The 1993 net sales increase was primarily due to the
following items, none of which individually was material to net sales: the
inclusion of a full year of operation of Baker's Supermarkets Inc. in 1993,
compared to 12 weeks in 1992, and the addition of the Garland, Texas
distribution center purchased in August 1993. Also contributing to the 1993
increase were the addition of new customers, including Kmart. For 1993, the
Company experienced food price deflation of 0.1% compared to deflation of 1.0%
in 1992 and inflation of 0.8% in 1991. The Company's outlook for 1994 is for a
low level of food price inflation.
Tonnage of food product sold in 1993 was essentially the same as 1992. In
1992, tonnage of food product sold increased 1.6% over the 1991 level. The lower
tonnage growth rate in 1993 reflects sluggish retail food industry sales and the
lack of net expansion of the Company's customer base.
GROSS MARGIN. Gross margin in 1993 increased by $39 million, or 5.3%, to
$765 million from $727 million for 1992 and increased as a percentage of net
sales to 5.9% from 5.6% in 1992. Gross margin in 1992 decreased by $21 million,
or 2.9%, from $748 million in 1991 and decreased as a percentage of net sales
from 5.8% in 1991. The increase in gross margin in 1993 was due to increased net
sales by Company-owned stores (which included the ten Baker's Supermarkets Inc.
stores acquired in September 1992). Retail operations typically have a higher
gross margin than wholesale operations. Product handling expense for 1993
decreased as a percentage of net sales from 1992. The resulting increase in
gross margin was offset in part by lower wholesale margins.
The decrease in gross margin in 1992 compared to 1991 was due to several
factors, including the absence of the Company-owned Dixieland food stores sold
in December 1991, offset by the presence of the ten Baker's stores acquired at
the beginning of the fourth quarter of 1992. In addition, there were increased
transportation expenses in 1992, due principally to the Company's facilities
consolidation program which resulted in trucks driving farther to deliver
product. Gross margin in 1992 was also increased by $5 million from the
favorable resolution of certain litigation. The LIFO method of inventory
valuation increased gross margin by $9 million, an increase of $5 million from
1991.
SELLING AND ADMINISTRATIVE EXPENSE. Selling and administrative expense in
1993 increased $63 million, or 12.8%, to $558 million from $495 million in 1992
and increased as a percentage of net sales to 4.3% from 3.8%. Selling and
administrative expense in 1992 decreased $42 million, or 7.8%, from $537 million
in 1991 and decreased as a percentage of net sales from 4.2% in 1991. The
increase in 1993 was due primarily to the higher selling and administrative
expense associated with a higher number of Company-owned stores (which included
the ten Baker's stores acquired at the beginning of the fourth quarter of 1992).
Retail operations generally have higher selling expenses than wholesale
operations. In addition, selling and administrative expense included credit loss
expense of $52 million in 1993 compared with $28 million in 1992. The increase
was due to the combined effects on customers' financial conditions of sluggish
retail sales, intensified retail competition and lack of food price inflation.
These increases were offset in part by reductions in certain other selling and
administrative expense categories.
Furthermore, in 1993, selling and administrative expense was affected by
several non-recurring items. The Company recorded $11 million of pre-tax income
resulting from cash received from the favorable
30
<PAGE>
resolution of litigation and a $1 million accrual for expected settlements in
other legal proceedings. The Company estimated that its contingent liability for
lease obligations exceeded its previously established reserves by $2 million and
recorded this amount as an expense. A $5 million gain from a real estate
transaction was also recorded.
Of the decrease in selling and administrative expense in 1992, $25 million
was due to a reduction in the number of Company-owned stores resulting from the
sale of the Dixieland Food stores at the end of 1991, offset in part by
additional selling expenses related to the ten Baker's supermarkets acquired at
the beginning of the fourth quarter of 1992. The reduction in 1992 was also due
in part to $15 million of selling and administrative expense in 1991 due to
unusual charges related to litigation settlements and the write-down of a
non-operating asset. These benefits were offset in part by a higher credit loss
expense in 1992 of $28 million compared to credit loss expense of $17 million in
1991. The increase in credit loss expense was due to the combined effects on
customers' financial conditions of sluggish retail sales, intensified retail
competition and lack of food price inflation.
Also contributing to the reduction in the selling and administrative expense
in 1992 compared to 1991 were the effects of cost controls and the benefits of
certain completed facilities consolidations. Gains on the sales of customer
notes receivable reduced selling and administrative expense by $3 million in
each of 1993, 1992 and 1991.
INTEREST EXPENSE. Interest expense in 1993 declined $3 million, to $78
million from $81 million in 1992. Interest expense in 1992 decreased by $12
million, from $93 million in 1991. The decrease in 1993 was due primarily to
lower short-term interest rates and lower average borrowing levels. The 1992
decrease in interest expense was due primarily to lower interest rates. The
Company entered into interest rate hedge agreements to manage its exposure to
interest rates.
INTEREST INCOME. Interest income in 1993 increased by $3 million, to $63
million from $59 million in 1992. The increase was due to higher outstanding
notes receivable and direct financing leases, partially offset by a slight
decline in interest rates. Interest income in 1992 declined by $2 million, from
$61 million in 1991. The decrease was due to lower interest rates, partially
offset by higher average notes receivable balances. Interest income consists
primarily of interest earned on notes receivable and income generated from
direct financing leases of retail stores and related equipment.
EQUITY INVESTMENT RESULTS. The Company's share of operating losses from
equity investments in certain customers (including customers participating in
the Company's Equity Store Program or the Business Development Venture Program)
accounted for under the equity method in 1993 decreased by $3 million, to $12
million from $15 million in 1992. Operating losses from investments in such
customers in 1992 increased by $7 million, from $8 million in 1991. The
improvement in 1993 was due to improved operating performance by certain of the
Company's Business Development Ventures partially offset by the Company's share
of losses from customers participating in the Company's Equity Store Program.
Business Development Ventures were responsible for equity method losses of $6
million in 1993, compared to $11 million in 1992 and $4 million in 1991. The
increase in 1992 was attributable to poor performance by certain Business
Development Ventures. The continued effects on the Company's customers
(including those in which the Company has made equity investments) of a lack of
food price inflation and intense competition has resulted in continuing losses.
The Company's equity investments in its customers are usually coupled with long
term supply agreements. In the past, the Company sought additional incremental
sales resulting from such investments. See, however, "Business -- Capital
Invested in Customers -- EQUITY INVESTMENTS."
EARLY DEBT RETIREMENT. In the fourth quarters of 1993 and 1992, the Company
recorded extraordinary losses related to the early retirement of debt. In 1993,
the Company retired $63 million of the 9.5% debentures at a cost of $2 million,
net of tax benefits of $2 million. In 1992, the Company recorded a charge of $6
million, net of tax benefits of $4 million. The 1992 costs related to retiring
$173 million aggregate principal amount of convertible notes, $30 million
aggregate principal amount of 9.5% debentures and certain other debt.
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<PAGE>
TAXES ON INCOME. The effective income tax rate for 1993 increased to 48%
from 39% in 1992 and 38.3% in 1991. The 1993 increase was primarily due to
facilities consolidation and related restructuring charges. As a result, pre-tax
income was reduced, causing nondeductible items for tax purposes to have a
larger impact on the effective tax rate. In addition, both the federal and state
income tax rates increased by 1% due to a new tax law enacted in 1993. Moreover,
the 1992 effective rate had been reduced due to favorable settlements of tax
assessments recorded in prior years. The 1991 rate was lower than the 1992 rate
primarily due to one-time benefits related to the difference between the
financial and tax basis in an insurance subsidiary sold in 1991 and a lower
combined state income tax rate.
OTHER. In 1993, the Company reduced the discount rate assumption used to
determine its obligations for defined benefit pension plans and postretirement
benefits. The 1% decline will cause pension and postretirement benefit expense
recognized in 1994 to increase by approximately $3 million compared to 1993.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity are cash flows from operating
activities and bank borrowings. Operating activities generated $325 million of
cash flow for the first 40 weeks of 1994 as compared to $246 million for the
comparable period in 1993. The increase was principally due to larger reductions
of inventory and a larger increase in accounts payable before the effects of the
Acquisition during the 1994 period compared to the 1993 period. Cash flow from
operations was $209 million in 1993, up from $90 million in 1992. The increase
was attributable to reduced trade receivables and inventories.
Working capital was $454 million at October 1, 1994, an increase of $12
million from December 25, 1993. The current ratio decreased to 1.32 to 1.00 at
October 1, 1994 compared to 1.48 to 1.00 at December 25, 1993. The ratio of
total indebtedness, including capitalized lease obligations, to total capital
was 66% at October 1, 1994, compared to 50% at December 25, 1993. Such total
indebtedness at October 1, 1994 increased by $985 million to $2.06 billion from
$1.08 billion at December 25, 1993 principally as a result of the Acquisition.
Capital expenditures for the 40 weeks ending October 1, 1994 and the year
ended December 25, 1993, were approximately $82 million and $53 million,
respectively. The Company expects that 1994 capital expenditures will
approximate $150 million.
The Company incurred substantial indebtedness in connection with the
financing of the Acquisition and is subject to substantial repayment
obligations. At November 1, 1994, the Company had an aggregate of $1.55 billion
borrowed under the Credit Agreement consisting of $250 million borrowed pursuant
to Tranche A (the five-year revolving facility), $500 million borrowed pursuant
to Tranche B (the two-year term loan facility) and $800 million borrowed
pursuant to Tranche C (the six-year amortizing facility). Net proceeds from the
Offering will be used to repay borrowings outstanding under Tranche B. See
"Capitalization," "Use of Proceeds" and "The Credit Agreement." Assuming
consummation of the Offering and the use of proceeds therefrom, the Company's
debt repayment obligations will be approximately $34 million for the balance of
1994, $118 million for 1995, $77 million for 1996, $152 million for 1997, $208
million for 1998, and $497 million for 1999. There are no committed lines of
credit other than the Credit Agreement.
The Credit Agreement contains customary covenants associated with similar
facilities including, without limitation, the following financial covenants:
maintenance of a borrowed funds to net worth ratio of not more than 2.45 to 1;
maintenance of a minimum consolidated net worth of $851 million; and maintenance
of a fixed charge coverage ratio of at least 1.40 to 1. The Company is currently
in compliance with all financial covenants under the Credit Agreement. As of
November 1, 1994, the restricted payments test would have allowed the Company to
pay dividends or repurchase capital stock in the aggregate amount of $17
million. The borrowed funds to net worth test would have allowed the Company to
borrow an additional $547 million. The fixed charge coverage test would have
allowed the Company to incur an additional $33 million of annual interest
expense. See "Investment Considerations -- Leverage and Debt Service" and "--
Restrictive Covenants."
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<PAGE>
The Credit Agreement and the Senior Note Indentures also place significant
restrictions on the Company's ability to incur additional indebtedness, to
create liens or other encumbrances, to make certain payments, investments, loans
and guarantees and to sell or otherwise dispose of a substantial portion of
assets to, or merge or consolidate with, another entity which is not controlled
by the Company.
From time to time the Company sells, with limited recourse, notes evidencing
certain secured loans made to retailers. The Company also plans to sell a
portion of its investment in direct financing leases during 1995. See "Certain
Other Obligations -- Sales of Certain Secured Loans and Direct Financing
Leases."
At October 1, 1994 the Company had $130 million of contingent obligations
under undrawn letters of credit, primarily related to insurance reserves
associated with its normal risk management activities. To the extent that any of
these letters of credit were drawn, payments would be financed by borrowings
under Tranche A of the Credit Agreement.
The consummation of the Acquisition and the resulting downgrade in the
ratings of the Company's long-term unsecured indebtedness represented a
"repurchase event" under the indenture governing the Company's Medium-Term Notes
which required the Company to offer to purchase one series of such Medium-Term
Notes. On August 16, 1994, the Company made an offer to purchase the notes
issued in this series, which offer terminated October 21, 1994. An aggregate of
$33 million of such Medium-Term Notes were purchased on October 31, 1994, using
borrowings under Tranche A of the Credit Agreement.
The Company believes that cash flows from operating activities and its
ability to borrow under the Credit Agreement will be adequate to meet the
Company's working capital needs, planned capital expenditures and debt service
obligations for the foreseeable future.
CERTAIN ACCOUNTING MATTERS. Statement of Financial Accounting Standards No.
114 -- Accounting by Creditors for Impairment of a Loan (as amended by Statement
of Financial Accounting Standards No. 118 -- Accounting by Creditors for
Impairment of a Loan -- Income Recognition and Disclosures) will be effective in
the first quarter of the Company's 1995 fiscal year. This statement requires
that loans that are determined to be impaired must be measured by the present
value of expected future cash flows discounted at the loan's effective interest
rate. Management has not yet determined the impact, if any, on the Company's
consolidated statements of earnings or financial position.
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<PAGE>
ANALYSIS OF THE SCRIVNER GROUP'S HISTORICAL RESULTS OF OPERATIONS
Set forth below is Fleming's analysis of the Scrivner Group's results of
operations for the three years ended 1993 and for the first six months of 1994
and 1993.
GENERAL
The statement of operations data for the Scrivner Group may not be
comparable to that for Fleming because cost of sales and selling and
administrative expense are affected by classification differences. Certain costs
and expenses included in determining cost of sales for Fleming are classified as
selling, operating and administrative expenses for the Scrivner Group. In
addition, the Scrivner Group-owned stores accounted for approximately 33% of the
Scrivner Group's net sales in 1993 while Company-owned stores accounted for
approximately 7% of Fleming's net sales in 1993.
RESULTS OF OPERATIONS
Set forth in the following table is information regarding Scrivner Group's
net sales and certain components of earnings expressed as a percentage of net
sales:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, ------------------------
------------------------------------- JUNE 30, JUNE 30,
1991 1992 1993 1993 1994
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net sales............................................ 100.00% 100.00% 100.00% 100.00% 100.00%
Gross margin......................................... 13.75 13.94 14.12 14.01 14.32
Less:
Selling, operating and administrative expense...... 11.80 12.08 12.51 12.38 12.75
Interest expense................................... 1.28 1.09 0.94 0.96 0.86
Interest income.................................... (0.11) (0.11) (0.10) (0.10) (0.12)
----------- ----------- ----------- ----------- -----------
Total............................................ 12.97 13.06 13.35 13.24 13.49
----------- ----------- ----------- ----------- -----------
Income before income taxes........................... 0.78 0.88 0.77 0.77 0.83
Provision for income taxes........................... 0.41 0.43 0.36 0.38 0.41
----------- ----------- ----------- ----------- -----------
Net income........................................... 0.37% 0.45% 0.41% 0.39% 0.42%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
SIX MONTHS ENDED JUNE 30, 1994 AND 1993
NET SALES. Net sales for the six months ended June 30, 1994 decreased $14
million, or 0.4%, from $3.24 billion to $3.22 billion for the comparable 1993
period. The flat net sales were attributable to low food price inflation
(measured by reference to the Consumer Price Index-Food at Home) and lower
volume in the 1994 period versus the 1993 period, partially offset by an
increase in net sales by the Scrivner Group-owned stores.
GROSS MARGIN. Gross margin for the 1994 period increased $8 million, or
1.8%, to $462 million from $454 million for the comparable 1993 period and
increased as a percent of net sales to 14.3% from 14.0% for the 1993 period. The
increase in gross margin was primarily attributable to increased net sales at
the Scrivner Group-owned stores and a modest shift in the sales mix of such
stores to higher margin items during the 1994 period, offset in part by a small
decrease in gross margin for wholesale operations primarily as a result of lower
food price inflation during the 1994 period. Retail operations typically have a
higher gross margin than wholesale operations.
SELLING, OPERATING AND ADMINISTRATIVE EXPENSE. Selling, operating and
administrative expense increased $10 million, or 2.6%, to $411 million from $401
million for the comparable period in 1993, and increased as a percentage of net
sales to 12.8% from 12.4% in the 1993 period. The increase was primarily
attributable to higher payroll and related benefit expenses and occupancy costs
at the Scrivner Group-owned stores during the 1994 period. Retail operations
typically have higher selling expenses than wholesale operations.
INTEREST EXPENSE. Interest expense during the 1994 period decreased $4
million, to $28 million from $31 million in the 1993 period. The decrease in
interest expense occurred as a result of lower borrowings during the 1994
period, partially offset by higher interest rates.
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<PAGE>
INTEREST INCOME. Interest income for the 1994 period increased $1 million,
to $4 million from $3 million for the comparable period in 1993, as a result of
higher interest rates during the 1994 period.
PROVISION FOR INCOME TAXES. The Scrivner Group's effective tax rate for the
six months ended June 30, 1994 increased to 49.9% from 49.3% for the comparable
1993 period as a result of the higher federal tax rate resulting from a tax law
enacted in 1993.
1993, 1992 AND 1991
NET SALES. Net sales in 1993 increased $332 million, or 5.8%, to $6.02
billion from $5.69 billion in 1992. Net sales in 1992 increased $79 million, or
1.4%, from $5.61 billion in 1991. The 1993 increase was attributable to the
Scrivner Group's purchase of certain assets of the Peter J. Schmitt Company (the
"Schmitt Company") in January 1993 and a modest increase in food prices. The
assets purchased from the Schmitt Company consisted of the inventory at two
distribution centers, seven retail food stores and franchise and lease rights to
twenty-six retail food stores. The 1992 increase resulted from an increase in
net sales by Scrivner Group-owned stores and a slight increase in food prices,
partially offset by the absence of sales from foodservice operations sold in
April 1992.
GROSS MARGIN. Gross margin in 1993 increased by $57 million, or 7.2%, to
$849 million from $792 million in 1992, and increased as a percentage of net
sales to 14.1% from 13.9% in 1992. Gross margin in 1992 increased $21 million,
or 2.7%, from $771 million in 1991, and increased as a percentage of net sales
from 13.8% in 1991. The increase in 1993 was primarily due to increased net
sales at Scrivner Group-owned stores as a result of the inclusion of former
Schmitt Company retail food stores and improvements resulting from remodels and
expansions of Scrivner Group-owned stores. The 1992 increase resulted primarily
from increased net sales at Scrivner Group-owned stores, partially offset by the
absence of sales from foodservice operations sold in April 1992. Retail
operations typically have a higher gross margin than wholesale operations.
SELLING, OPERATING AND ADMINISTRATIVE EXPENSE. Selling, operating and
administrative expense in 1993 increased $65 million, or 9.5%, to $752 million
from $687 million in 1992, and increased as a percentage of net sales to 12.5%
from 12.1% in 1992. Selling, operating and administrative expense in 1992
increased $26 million, or 3.9%, from $661 million in 1991, and increased as a
percentage of net sales from 11.8% in 1991. The 1993 increase was primarily due
to increases in payroll and related expenses and advertising costs at Scrivner
Group-owned stores, one-time costs associated with the purchase of certain
assets of the Schmitt Company and start-up expenses for a new general
merchandise distribution center in Buffalo, New York. The 1992 increase was
primarily attributable to higher payroll and related expenses and product
handling costs in wholesale operations.
INTEREST EXPENSE. Interest expense in 1993 decreased $6 million, to $56
million from $62 million in 1992. Interest expense in 1992 decreased $9 million
from $72 million in 1991. The decrease in both 1993 and 1992 was primarily
attributable to lower interest rates and, with respect to 1993, lower borrowing
levels.
INTEREST INCOME. Interest income remained stable at approximately $6
million during fiscal years 1993, 1992 and 1991 as a result of increased levels
of notes receivable from customers offset by lower interest rates.
PROVISION FOR INCOME TAXES. The effective income tax rates were 46.1%,
49.6% and 51.5% in 1993, 1992 and 1991, respectively. The lower effective income
tax rate in 1993 resulted from a tax credit of $3 million from net operating
loss carryforwards, offset in part by an increase in the federal tax rate of 1%
due to the passage of a new tax law and increases in state taxes.
35
<PAGE>
BUSINESS
The Company is a recognized leader in the food marketing and distribution
industry with both wholesale and retail operations. The Company is the largest
food wholesaler in the United States as a result of the acquisition of the
Scrivner Group in July 1994 (the "Acquisition"), based on PRO FORMA 1993 net
sales of approximately $19 billion. The Company serves as the principal source
of supply for approximately 10,000 retail food stores, including approximately
3,700 supermarkets (defined as any retail food store with annual sales of at
least $2 million) which represented approximately 13% of all supermarkets in the
United States at year-end 1993 and totaled approximately 97 million square feet
in size. The Company serves food stores of various sizes operating in a wide
variety of formats, including conventional full-service stores, supercenters,
price impact stores (including warehouse stores), combination stores (which
typically carry a higher proportion of non-food items) and convenience stores.
With customers in 43 states, the Company services a geographically diverse area.
The Company's wholesale operations offer a wide variety of national brand and
private label products, including groceries, meat, dairy and delicatessen
products, frozen foods, produce, bakery goods and a variety of general
merchandise and related items. In addition, the Company offers a wide range of
support services to its customers to help them compete more effectively with
other food retailers in their respective markets. Such services include store
development and expansion services, merchandising and marketing assistance,
advertising, consumer education programs, retail electronic services and
employee training.
In addition to its food wholesale operations, the Company has a significant
presence in food retailing, owning and operating 345 retail food stores,
including 283 supermarkets with an aggregate of approximately 9.5 million square
feet. Company-owned stores operate under a number of names and vary in format
from super warehouse stores and conventional supermarkets to convenience stores.
PRO FORMA 1993 net sales from retail operations were approximately $3 billion.
The Company believes it is one of the 20 largest food retailers in the United
States based on PRO FORMA net sales.
Fleming's net sales grew from approximately $5 billion in 1983 to
approximately $13 billion in 1993, largely as a result of acquisitions of
wholesale food distributors and operations. After giving PRO FORMA effect to the
Acquisition, the Company's 1993 net sales were approximately $19 billion. The
Company believes that its position as a leader in the food marketing and
distribution industry is attributable to a number of competitive strengths,
including the following:
SIZE. As the largest food wholesaler in the United States, the Company has
substantial purchasing power and is able to realize significant economies of
scale.
DIVERSE CUSTOMER BASE. In 1993, chains and multiple-store independent
operators represented 40% and 33%, respectively, of Fleming's net sales,
with the balance comprised of sales to single-store independent operators
and Fleming-owned stores. Approximately one-third of the Scrivner Group's
1993 net sales were to Scrivner Group-owned stores, with the balance
comprised of sales to multi-store independent operators, single-store
operators and chains. In addition, with customers in 43 states, the
Company's sales are geographically dispersed.
EXPERTISE IN PRIVATE LABEL PRODUCTS AND PERISHABLES. The Company offers a
wide range of private label products and perishables and has developed
extensive expertise in handling, marketing and distributing these products.
The Company believes that these products are an important element in
attracting and retaining consumers. This expertise has permitted the Company
to derive 41% of 1993 PRO FORMA net sales from the sale of perishables. In
addition, private label products and certain perishables (such as produce,
frozen foods and bakery goods) generally produce higher margins than other
food categories.
EFFICIENT DISTRIBUTION NETWORK. Fleming has successfully integrated the
operations of previously acquired food wholesalers, thereby developing an
efficient distribution network, and has recorded 19 consecutive years of
warehouse productivity increases. The Company aggressively pursues
opportunities for the consolidation of distribution centers, seeking to
eliminate duplicative operations and facilities and achieve greater
efficiencies. In addition, the Company believes it is an industry leader in
the development and application of advanced distribution technology.
36
<PAGE>
LONG-TERM SUPPLY CONTRACTS. The Company pursues various means of obtaining
future business, including the formation of alliances with retailers. In
particular, the Company has focused on retailers with demonstrated operating
success, including operators of alternative formats such as warehouse stores
and supercenters. The Company has long-term supply contracts with many of
its major customers. For example, in December 1993 the Company signed a
six-year supply agreement with Kmart Corporation ("Kmart") to serve its new
Super Kmart Centers in areas where the Company has distribution facilities.
MANAGEMENT TEAM. The Company is led by an experienced management team
comprised of individuals who combine many years in the food marketing and
distribution industry. See "Management."
BUSINESS STRATEGY
The Company's strategy is to maintain and strengthen its position in food
marketing and distribution by: (i) consolidating distribution centers into
larger, more efficient centers and eliminating functions that do not add
economic value; (ii) maximizing the Company's substantial purchasing power;
(iii) building and maintaining long-term alliances with successful retailers,
including both traditional and alternative format operators; (iv) remaining at
the forefront of technology-driven distribution systems; (v) continuing to
capitalize on the Company's expertise in handling private label products and
perishables; and (vi) focusing on the profitability of Company-owned stores on a
stand-alone basis and increasing net sales of such stores through internal
growth and, in the long term, selective acquisitions.
CONSOLIDATE DISTRIBUTION CENTERS; ELIMINATE FUNCTIONS NOT ADDING ECONOMIC
VALUE. In January 1994, the Company's Board of Directors approved a plan
designed to improve the Company's performance by, among other things, developing
larger, more productive distribution centers and by eliminating functions and
operations that do not add economic value. Estimated pre-tax cost savings are
expected to grow to at least $65 million per year beginning in 1997 after the
plan is fully implemented. Such estimates do not include any incremental savings
which may be realized as a result of closing distribution centers made
duplicative by the Acquisition. The plan calls for reorganizing the management
of operations, consolidating facilities and reengineering the way the Company
conducts business. See "-- The Consolidation, Reorganization and Reengineering
Plan."
MAXIMIZE PURCHASING POWER. The Company's position as the largest single
customer of most of its suppliers provides it with substantial purchasing power.
The Company will seek to maximize this purchasing power, which will result in
lower unit costs, through increased use of centralized procurement and increased
volume.
MAINTAIN LONG-TERM ALLIANCES WITH RETAILERS. The Company maintains strong
relationships with successful retailers and has long-term supply contracts with
many of its major customers. Recently, mass merchandisers and warehouse stores
have begun to compete with more traditional forms of retail food stores, gaining
an increasing share of retail food dollars. The Company believes that it is well
positioned to serve these alternative format stores not only through its
extensive product offerings and efficient distribution system, but also through
the various retail services it offers. In December 1993 the Company entered into
a six-year supply agreement with Kmart to serve new Super Kmart Centers
(combination stores with an average of approximately 170,000 square feet of
which approximately 60,000 square feet is devoted to food and related products)
in selected areas. By expanding the Company's network of distribution centers,
the Acquisition has increased the number of potential Super Kmart Centers which
the Company could serve. The Company will pursue other similar contracts in the
future.
REMAIN AT THE FOREFRONT OF TECHNOLOGY-DRIVEN DISTRIBUTION SYSTEMS. The
Company believes its success is in part a result of its ability to identify new
technology for application to food marketing and distribution. The Company
intends to remain at the technological forefront of its industry. To this end,
the Company has been a leader in developing technology related to the Efficient
Consumer Response ("ECR") industry initiative. ECR is a consumer-driven
grocery-industry strategy whereby wholesalers, retailers, and vendors cooperate
to improve responsiveness to consumer needs through greater operating
efficiencies and lower distribution costs. ECR focuses on removing costs from
the entire food distribution system while creating better assortment, in-stock
service, convenience and prices through a leaner, faster and more responsive
37
<PAGE>
supply chain. ECR will make use of computer-to-computer trading relationships
among wholesalers, retailers and vendors to enable automatic replenishment of
inventories. The Company is developing applications to link its customers, the
Company and vendors. The electronic network will better facilitate the movement
of information and products while collecting consumer purchasing data to be used
in marketing and promotion, category management and new product development.
CAPITALIZE ON EXPERTISE IN PRIVATE LABEL PRODUCTS AND PERISHABLES. The
Company believes private label products and perishables are in increasing demand
by many consumers. Additionally, private label products and certain perishables
(such as produce, frozen foods and bakery goods) produce higher margins than
other retail food categories. The Company expects to capitalize on opportunities
for broader distribution of expanded product lines as a result of acquiring the
private label products handled by the Scrivner Group. The Company intends to
further develop its expertise in handling, marketing and distributing private
label products and perishables.
FOCUS ON PROFITABILITY OF RETAIL FOOD STORES. At July 9, 1994, Fleming
owned 139 retail food stores and, primarily as the result of the Acquisition,
the Company owns 345 retail stores as of November 1, 1994. The Company recently
recruited a senior officer to assume management responsibility for the Company's
retail operating results. Retail operations previously had been conducted as an
extension of the Company's wholesale operations, with each store being managed
by the distribution center personnel supplying it. The Company has initiated a
comprehensive evaluation of its retail operations in order to focus such
operations on stand-alone profitability. The Company intends to increase the net
sales of its retail operations through internal growth and, in the long term,
selective acquisitions.
THE CONSOLIDATION, REORGANIZATION AND REENGINEERING PLAN
Under the leadership of Robert E. Stauth, who was elected President and
Chief Operating Officer in March 1993, Chief Executive Officer in October 1993
and Chairman in April 1994, Fleming determined that its performance during the
past several years, along with the performance of a number of its retail
customers, has been unfavorably affected by a number of changes taking place
within the food marketing and distribution industry, which has become
increasingly competitive in an environment of relatively static over-all demand.
Alternative format food stores (such as warehouse stores and supercenters) have
gained retail food market share at the expense of traditional supermarket
operators, including independent grocers, many of whom are customers of the
Company. Vendors, seeking to ensure that more of their promotional dollars are
used by retailers to increase sales volume, increasingly direct promotional
dollars to large self-distributing chains. The Company believes that these
changes have led to reduced margins and lower profitability among many of its
customers and at the Company itself. See "Investment Considerations -- Response
to a Changing Industry." Having identified these market forces, Fleming
initiated specific actions to respond to, and help its retail customers respond
to, changes in the marketplace.
In January 1994, Fleming announced the details of a plan to improve
operating performance by consolidating facilities, eliminating regional
operations and reengineering the distribution and pricing of goods and services.
The Company believes consolidation, reorganization and reengineering will result
in significant cost savings through lower product handling expenses, lower
selling and administrative expenses and reduced staffing of retailer services
(or increased income from retailers to offset the cost of retailer services).
Estimated pre-tax cost savings are expected to grow to at least $65 million per
year beginning in 1997 after the plan has been fully implemented. The Company
believes these expense savings and income offsets will allow it to deliver goods
and services to its customers at a lower all-in cost, while increasing the
Company's profitability. However, unforeseen events or circumstances could cause
the Company to alter planned work force reductions or facilities consolidations,
thereby delaying or reducing expected cost savings.
CONSOLIDATION. In order to improve operating efficiencies, the Company
closed four distribution centers, with the closing of one more facility to be
announced. The business formerly conducted through these closed distribution
centers has been transferred to certain other Company facilities. In the 40
weeks ended October 1, 1994, approximately 700 associate positions were
eliminated through facilities consolidation.
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OPERATIONAL REORGANIZATION. Historically, Fleming's operations were
organized around geographical divisions each of which functioned as a separate
business unit. Each division contained sales, merchandising, human resources,
distribution, procurement, accounting, store development and management
information functions, and provided services to a number of retail stores of
various formats located within a certain geographical area.
As a first step in its organizational realignment, Fleming determined to
close its regional administrative offices, the last being closed in April 1994.
This resulted in the elimination of approximately 100 associate positions. Staff
functions previously performed at the regional offices were moved to corporate
headquarters, moved into the divisions or eliminated.
REENGINEERING. Fleming commissioned an internal management task force to
reengineer Fleming's business processes at both the divisional and corporate
level. The task force made specific reengineering recommendations, which were
approved by Fleming's Board of Directors, to enhance value-added services and to
eliminate non-value-added services.
The Company is reorganizing itself around five key value-added functions:
Customer Management, Retailer Services, Category Marketing, Product Supply, and
Support Services. Customer Management, Retailer Services, and Category Marketing
represent the marketing functions of the Company. Product Supply represents the
procurement and distribution functions of the Company.
Through Customer Management, the Company will manage its relationships with
customers primarily on the basis of customer type instead of on the basis of
geography. This will enable the Company to be more effective in serving its
diverse customer base. Through Retailer Services, the Company will offer
retailers the same support services it currently offers, except that these
services will be offered on a fee basis to those retailers choosing to purchase
such services. In the past, Fleming has offered many support services without a
direct charge but has indirectly charged all customers for such services.
Through Category Marketing, the Company will more efficiently manage its
relationships with vendors, manufacturers and other suppliers, working to obtain
the best possible promotional benefits offered by suppliers and will pass
through directly to retailers 100% of those benefits related to grocery, frozen
foods and dairy products. Through Product Supply, which will be comprised of all
food distribution centers and operations, the Company will work to provide
retailers with the lowest possible "landed" cost of goods (I.E., the total of
cost of product and all related charges plus the Company's distribution fee).
Through Support Services, various functions -- such as Finance, Associate
Support, and Corporate/Business Development -- will provide a variety of
administrative support services more efficiently to all of the Company's
operations.
A new flexible sales plan for grocery, frozen foods and dairy products will
be based on a new pricing policy whereby retailers will pay the Company's actual
cost of acquiring goods, receiving 100% of available promotional benefits from
the vendor arranged by the Company, including those derived from forward buying.
Customers will pay all costs incurred by the Company for transportation (which
currently are often subsidized by the Company). Instead of paying a basic
distribution fee, customers will pay handling and storage charges, which will be
higher than the prior distribution fee. Additionally, retail customers will pay
for all other retailer services purchased. The Company believes its flexible
sales plan will result in increased promotional benefits being offered through
the Company which will attract new business due to lower landed cost of goods to
the retailer.
Based on customer feedback, the Company believes its customers will support
the new pricing policy and the unbundling of retailer services and that these
changes will add value to customers primarily through cost savings to be derived
through the Company's more efficient organization. The Company estimates that
the reengineering process will be completed by the end of 1996. Certain aspects
of reengineering are currently being tested with implementation to take place at
the Company's operations in the western and midwestern parts of the United
States based on a scheduled roll-out over the course of 1995. Reengineering will
be implemented at the Company's operations in the eastern and southern parts of
the United States over the course of 1996.
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PRODUCTS
The Company supplies its customers with a full line of national brand
products as well as an extensive range of private label, including controlled
label, products, perishables and non-food items. Controlled labels are those
which the Company controls and private labels are those which may be offered
only in stores operating under specific banners, which may or may not be under
the Company's control. Among the controlled labels offered by the Company are
TV-R-, Hyde Park-R-, Marquee-R-, Bonnie Hubbard-R-, Montco-R-, Best Yet-R- and
Rainbow-R-. Among the private labels handled by the Company are IGA-R-, Piggly
Wiggly-R-, and Sentry-R-. Controlled label and private label products offer both
the wholesaler and the retailer opportunities for high margins as the costs of
national advertising campaigns can be eliminated. The controlled label program
is augmented with marketing and promotional support programs developed by the
Company.
Certain categories of perishables also offer both the wholesaler and the
retailer significant opportunities for improved margins as consumers are
generally willing to pay relatively higher prices for produce and bakery goods
and high quality frozen foods. Furthermore, retailers are increasingly competing
for business through an emphasis on perishables and private label products.
The Company's PRO FORMA product mix as a percentage of 1993 net sales was
53% groceries, 41% perishables and 6% general merchandise.
SERVICES TO CUSTOMERS
The Company offers value-added services to its retailer customers, thereby
differentiating itself from most of its competitors. These services include,
among others, merchandising and marketing assistance, in-house advertising,
consumer education programs, retail electronic services and employee training.
See also "-- Capital Invested in Customers."
In addition, the Company provides its retail customers with assistance in
the development and expansion of retail stores, including retail site selection
and market surveys; store design, layout, and decor assistance; and equipment
and fixture planning. The Company also has expertise in developing sales
promotions, including employee and customer incentive programs, such as
"continuity programs" designed to entice the customer to return regularly to the
store.
SALE TERMS
The Company currently charges customers for products based generally on an
agreed price which includes the Company's defined "cost" (which does not give
effect to promotional fees and allowances from vendors), to which is added a fee
determined by the volume of the customer's purchase. In some geographic areas,
product charges are based upon a percentage markup over cost. A delivery charge
is usually added based on order size and mileage from the distribution center to
the customer's store. Payment may be received upon delivery of the order, or
within credit terms that generally are weekly or semi-weekly.
As part of the reengineering process, the Company will begin to charge the
actual costs of acquiring its grocery, frozen food and dairy products while
passing through to its customers all promotional fees and allowances received
from vendors. In addition, the Company will charge customers for the costs of
transportation and will charge for handling and storage, which charges will be
higher than the previous basic distribution fee. The Company will also begin
charging retailers directly for services for which they formerly paid
indirectly. As a result, the Company believes it will lower the cost of products
to most of its customers while increasing the Company's profitability. See "--
The Consolidation, Reorganization and Reengineering Plan."
DISTRIBUTION
The Company currently operates 49 distribution centers, including 39
full-service food distribution centers which are responsible for the
distribution of national brand and private label groceries, meat, dairy and
delicatessen products, frozen foods, produce, bakery goods and a variety of
related food and non-food items. Seven general merchandise distribution centers
distribute health and beauty care items and other non-food items. Two
distribution centers serve convenience stores and one distribution center
handles only dairy, delicatessen and fresh meat products. Substantially all
facilities are equipped with modern material
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handling equipment for receiving, storing and shipping large quantities of
merchandise. The Company believes that the technology currently in place at its
distribution facilities offers a competitive advantage. As a result of the
Acquisition, the Company has closed three distribution centers, has announced
plans to close two distribution centers (Buffalo, New York and Blooming Prairie,
Minnesota), and expects to close an additional five distribution centers.
Pursuant to the consolidation, reorganization and reengineering plan, the
Company has closed four distribution centers and will close one additional
distribution center.
The Company's distribution facilities comprise more than 20 million square
feet of warehouse space. Additionally, the Company rents, on a short-term basis,
approximately seven million square feet of off-site temporary storage space.
Most distribution divisions operate a truck fleet to deliver products to
customers. The Company increases the utilization of its truck fleet by
backhauling products from many suppliers, thereby reducing the number of empty
miles traveled. To further increase its fleet utilization, the Company has made
its truck fleet available to other firms on a for-hire carriage basis.
RETAIL STORES SERVED
The Company serves approximately 10,000 retail stores ranging in size from
small convenience outlets to conventional supermarkets, combination units, price
impact stores and large supercenters. Among the stores served are approximately
3,700 supermarkets with an aggregate of approximately 97 million square feet.
Fleming's customers are geographically diverse, with operations in 43 states.
The Company's principal customers are supermarkets carrying a wide variety of
grocery, meat, produce, frozen food and dairy products. Most customers also
handle an assortment of non-food items, including health and beauty care
products and general merchandise such as housewares, soft goods and stationery.
Most supermarkets also operate one or more specialty departments such as
in-store bakeries, delicatessens, seafood departments and floral departments.
The Company believes that its focus on quality service, broad product
offerings, competitive prices and value-added services enables the Company to
maintain long-term customer relationships while attracting new customers. The
Company has successfully targeted self-distributing chains and operators of
alternative format stores as sources of incremental sales. These operations have
gained increasing market share in the retail food industry in recent years. The
Company currently serves over 1,000 chain stores, compared to 810 at year-end
1993. In December 1993, Fleming signed a six-year supply agreement with Kmart to
serve new Super Kmart Centers in areas where Fleming has distribution
facilities. The Company currently supplies 37 Super Kmart Centers and the total
number of Super Kmart Centers supplied is expected to increase to approximately
60 by year-end 1995.
The Company also licenses or grants franchises to retailers to use certain
trade names such as IGA-R-, Piggly Wiggly-R-, Food 4 Less-R-, Big Star-R-, Big
T-R-, Buy-for-Less-R-, Checkers-R-, Festival Foods-R-, Jubilee Foods-R-,
Jamboree Foods-R-, MEGA MARKET-R-, Minimax-R-, Sentry-TM-, Shop 'n Bag-R-, Shop
'n Kart-R-, Super 1 Foods-R-, Super Save-R-, Super Thrift-R-, Thriftway-R-,
United Supers-R-, and Value King-R-. There are approximately 1,700 food stores
operating under Company franchises or licenses.
The Company believes that its ten largest customers on a PRO FORMA basis
accounted for approximately 16% of net sales during 1993, with no single
customer representing more than 3.5% of net sales.
COMPANY-OWNED STORES
Principally as a result of the Acquisition, the number of Company-owned
stores increased from 139 at July 9, 1994 to 345 at November 1, 1994, including
283 supermarkets with an aggregate of approximately 9.5 million square feet. The
Company-owned stores are located in 14 states and are all served by the
Company's distribution centers. Formats vary from super warehouse stores and
conventional supermarkets to convenience stores. Generally in the industry, an
average super warehouse store is 58,000 square feet, a conventional supermarket
is 23,000 square feet and a convenience store is 2,500 square feet. All Company-
owned supermarkets are designed and equipped to offer a broad selection of both
national brands as well as private label products at attractive prices while
maintaining high levels of service. Most supermarket formats
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have one or more specialty departments such as bakeries, full service
delicatessens, extensive produce departments and complete seafood and meat
departments. Specialty departments generally produce higher gross margins per
selling square foot than general grocery sections.
The Company-owned stores provide added purchasing power as they enable the
Company to commit to certain promotional efforts at the retail level. The
Company, through its owned stores, is able to retain many of the promotional
savings offered by vendors in exchange for volume increases.
Until recently, the Company conducted its retail operations primarily as an
extension of its wholesale business. Each Company-owned retail store was managed
by personnel at the distribution center serving such store and did not benefit
from any coordinated retail strategy. The Company emphasized wholesale
operations, and many of its retail stores, while making a positive contribution
to overall Company profitability through increased wholesale volume, were not
profitable on a stand-alone basis.
In 1993, the Company determined that its retail operations were
underperforming and that, as a part of its overall business strategy, the
Company would aggressively pursue stand-alone profitability in its retail
operations. The Company recruited a senior officer to assume responsibility for
retail operating results for all Company-owned stores and to focus on the
development of successful retail strategies. See "Management."
The Company has developed a comprehensive plan to evaluate the retail stores
in each of its markets in order to improve profitability on a stand-alone basis.
The analysis includes evaluation of the management team, the local marketplace,
reporting systems and technology and results in a defined action plan which may
include changes in management, renovation, reduction in overhead and store
closures. The Company has begun to implement its plan in several markets,
including Florida, where management anticipates improved results from its 21
stores in 1995.
The Company intends to increase net sales derived from Company-owned stores
through the implementation of the retail plan described above, internal growth
and, in the long term, selective acquisitions of retail chains in niche markets.
See "-- Business Strategy."
TECHNOLOGY
Fleming has played a leading role in employing technology for internal
operations as well as for its independent retail customers. The Company may
enter into agreements with one or more technology partners to maintain this
position. See "-- Business Strategy."
Over the past three years, Fleming has introduced radio-frequency terminals
in its distribution centers to track inventory, further improve customer service
levels, reduce out-of-stock conditions and obtain other operational
improvements. Most Fleming distribution centers are managed by computerized
inventory control systems, along with warehouse productivity monitoring and
scheduling systems. Fleming intends to add these technological aids to the
Scrivner Group distribution system. Most of Fleming's truck fleet is equipped
with on-board computers to monitor the efficiency of deliveries to its
customers.
Fleming's Retail Technology Group provides value-added services to its
retailers including point-of-sale scanning systems (including hardware and
software, on both a sale and lease basis), in-store personal computers,
electronic shopping programs, electronic order entry and many specific
applications designed for independent supermarket operators. In addition, the
Company has been a leader in developing technology related to the ECR
initiative. The Company's role in the continued development of ECR will further
strengthen its relationship with retail customers and vendors.
SUPPLIERS
The Company purchases goods from numerous vendors and growers. As the
largest single customer of most of its suppliers, the Company is able to secure
favorable terms and volume discounts on most of its purchases, leading to lower
unit costs. The Company purchases products from a diverse group of suppliers and
believes it has adequate and alternative sources of supply for substantially all
of its products.
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CAPITAL INVESTED IN CUSTOMERS
As part of its services to retailers, the Company provides capital to
customers in several ways, although the Company has decided to reduce its
financial exposure to such customers by more selectively allocating capital in
the future. In making credit and investment decisions, the Company considers
many factors, including estimated return on capital, risk and the benefits to be
derived from sustained or increased product sales. Any equity investment or loan
of $250,000 or more must be approved by the Company's business development
committee and any investment or loan in excess of $5 million must be approved by
the Board of Directors. For equity investments, the Company has active
representation on the customer's board of directors. The Company also conducts
periodic credit reviews, receives and analyzes customers' financial statements
and visits customers' locations regularly. On an ongoing basis, senior
management reviews the Company's largest investments and credit exposures.
The Company provides capital to certain customers by becoming primarily or
secondarily liable for store leases, by extending credit for inventory
purchases, and by guaranteeing loans and making secured loans to and equity
investments in customers.
STORE LEASES. The Company leases stores for sublease to certain customers.
Sublease rentals are generally higher than the base rental to the Company. As of
November 1, 1994, the Company was the primary lessee of approximately 1,100
retail store locations subleased to and operated by customers. In certain
circumstances, the Company also guarantees the lease obligations of certain
customers.
EXTENSION OF CREDIT FOR INVENTORY PURCHASES. The Company has supply
agreements with customers in which it invests and, in connection with supplying
such customers, will, in certain circumstances, extend credit for inventory
purchases. Customary trade credits terms are up to seven days; the Company has
extended credit for additional periods under certain circumstances.
GUARANTEES AND SECURED LOANS. The Company guarantees the obligations of
certain of its customers. Loans are also made to customers primarily for store
expansions or improvements. These loans are typically secured by inventory and
store fixtures, bear interest at rates at or above the prime rate, and are for
terms of up to ten years. During fiscal year 1993, 1992 and 1991 Fleming sold,
with limited recourse, $68 million, $45 million and $82 million, respectively,
of notes evidencing such loans. During fiscal years 1993, 1992 and 1991, the
Scrivner Group sold, with limited recourse, $51 million, $40 million and $35
million, respectively, of notes evidencing similar loans. The Company believes
its loans to customers are illiquid and would not be investment grade if rated.
At October 1, 1994, the Company had outstanding $415 million of notes receivable
from customers, of which $31.2 million were greater than 90 days past due. At
that date, the Company had reserves covering 67% of such past due amount.
EQUITY INVESTMENTS. The Company has made equity investments in strategic
multi-store customers, which it refers to as Business Development Ventures, and
in smaller operators, referred to as Equity Stores. Equity Store participants
typically retain the right to purchase the Company's investment over a five to
ten year period. Many of the customers in which the Company has made equity
investments are highly leveraged, and the Company believes its equity
investments are highly illiquid.
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The following table sets forth the components of Fleming's portfolio of
loans to and investments in customers at year end 1993 and 1992.
<TABLE>
<CAPTION>
CUSTOMERS WITH EQUITY INVESTMENTS
-----------------------------------------
CUSTOMERS
BUSINESS WITH NO
DEVELOPMENT EQUITY OTHER SUB EQUITY
VENTURES STORES STORES(A) TOTAL INVESTMENTS TOTAL
----------- ------ --------- ------ ----------- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
1993
Loans(b)................................... $ 78 $55 $ 2 $135 $178 $ 313
Equity Investments......................... 28 15 12 55 -- 55
----- ------ --- ------ ----- -----
Total.................................... $106 $70 $14 $190 $178 $ 368
----- ------ --- ------ ----- -----
----- ------ --- ------ ----- -----
1992
Loans(b)................................... $114 $49 $-- $163 $193 $ 356
Equity Investments......................... 18 18 10 46 -- 46
----- ------ --- ------ ----- -----
Total.................................... $132 $67 $10 $209 $193 $ 402
----- ------ --- ------ ----- -----
----- ------ --- ------ ----- -----
<FN>
- ------------------------
(a) Other stores are Company-owned stores pending sale.
(b) Includes current portion of loans, which amounts are recorded as
receivables on the Company's balance sheet.
</TABLE>
The table does not include the Scrivner Group's loans to or equity
investments in customers or the Company's investments in customers through
direct financing leases, lease guarantees, operating leases, loan guarantees or
credit extensions for inventory purchases. As of December 25, 1993, the
Company's undiscounted obligations under direct financing leases and lease
guarantees were $424 million and $335 million, respectively. As of October 1,
1994, total loans to and equity investments in customers was $507 million.
The Company has shifted its strategy to emphasize ownership of, rather than
investment in, retail stores. In addition, the Company intends to de-emphasize
credit extensions to its customers and to reduce future credit loss expense by
raising the Company's financial standards for credit extensions and by
conducting post-financing reviews more frequently and in more depth. Fleming's
credit loss expense, including from receivables as well as from investments in
customers, was $49 million in the 40 weeks ended October 1, 1994 and $52
million, $28 million and $17 million in 1993, 1992 and 1991, respectively.
Prior to the Acquisition, the Scrivner Group provided capital to customers
in similar ways. At June 30, 1994, the Scrivner Group's portfolio of credit
extensions to customers (excluding prime lease obligations) consisted of loans
aggregating $72 million, obligations under direct financing leases of $2 million
and equity investments of $418,000. The Scrivner Group's credit loss expense was
approximately $8 million, $6 million and $8 million in 1993, 1992 and 1991,
respectively.
COMPETITION
Competition in the food marketing and distribution industry is intense. The
Company's primary competitors are national chains who perform their own
distribution (such as The Kroger Co. and Albertson's, Inc.), national food
distributors (such as SUPERVALU Inc.) and regional and local food distributors.
The principal competitive factors include product price, quality and assortment
of product lines, schedules and reliability of delivery, and the range and
quality of customer services. The sales volume of wholesale food distributors is
dependent on the level of sales achieved by the retail food stores they serve.
Retail stores served by the Company compete with other retail food outlets in
their geographic areas on the basis of product price, quality and assortment,
store location and format, sales promotions, advertising, availability of
parking, hours of operation and store appeal. The Company believes it compares
favorably with its competition by virtue of its purchasing power, which results
in more favorable pricing for retail customers, efficient, technologically
advanced distribution centers and value-added services to customers.
The primary competitors of the Company-owned stores are national, regional
and local chains, as well as independent supermarkets and convenience stores.
The principal competitive factors include product price, quality and assortment,
store location and format, sales promotions, advertising, availability of
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parking, hours of operation and store appeal. The Company believes its
competitive advantages are its competitive prices, varied store formats,
complete specialty food departments and broad variety of both private label and
national brand food and non-food items.
EMPLOYEES
Upon consummation of the Acquisition, the Company had approximately 43,000
full time and part-time associates. Almost half of the Company's associates are
covered by collective bargaining agreements with the International Brotherhood
of Teamsters, Chauffeurs, Warehousemen and Helpers of America, the United Food
and Commercial Workers, the International Longshoremen's and Warehousemen's
Union and the Retail Warehouse and Department Store Union. The Company has 95
such agreements which expire at various times throughout the next five years.
The Company believes it has satisfactory relationships with its unions. The
Company's work force is expected to decrease by 1,500 associates by the end of
1996. See "-- The Consolidation, Reorganization and Reengineering Plan." In
addition, the Company expects to further reduce associate positions due to
facilities consolidations resulting from the Acquisition and the effects of
applying its reengineering plan to the Scrivner Group's operations.
CERTAIN LEGAL PROCEEDINGS
A Company subsidiary has been named as a defendant in the following related
cases:
TROPIN V. THENEN, ET AL., CASE NO. 93-2502-CIV-MORENO, UNITED STATES
DISTRICT COURT, SOUTHERN DISTRICT OF FLORIDA; and WALCO INVESTMENTS, INC.,
ET AL. V. THENEN, ET AL., CASE NO. 93-2534-CIV-MORENO, UNITED STATES
DISTRICT COURT, SOUTHERN DISTRICT OF FLORIDA.
These cases were filed in the United States District Court for the Southern
District of Florida on December 21, 1993. Both cases name numerous defendants,
including, in one case, four former employees of subsidiaries of the Company
and, in the other, two former employees of a subsidiary of the Company. The
cases contain similar factual allegations and the plaintiffs allege, among other
things, that the former employees participated in fraudulent activities by
taking money for confirming "diverting" transactions (a practice involving
arbitraging in food and other goods to profit from price differentials given by
manufacturers to different retailers and wholesalers) which had not occurred and
that, in so doing, the former employees acted within the scope of their
employment. Plaintiffs also allege that the subsidiary allowed its name to be
used in furtherance of the alleged fraud.
The allegations include, among other causes of action, common law fraud,
breach of contract, negligence, conversion and civil theft, and violations of
the federal Racketeer Influenced and Corrupt Organizations Act and comparable
state law. Plaintiffs seek damages, treble damages, attorneys' fees, costs,
expenses and other appropriate relief. While the amount of damages sought under
most claims is not specified, plaintiffs allege that hundreds of millions of
dollars were lost as the result of the allegations contained in the complaint.
The Company denies the allegations of the complaints and will vigorously defend
the actions. The litigation is in its preliminary stages, and the ultimate
outcome cannot be determined. Furthermore, the Company is unable to predict a
potential range of monetary exposure to the Company. Based on the recovery
sought, an unfavorable judgment could have a material adverse effect on the
Company.
The Company has been designated by the U.S. Environmental Protection Agency
as a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA," also known as "Superfund"),
with others, with respect to EPA-designated Superfund sites. While liability
under CERCLA for remediation at such sites is joint and several, the Company
believes that, to the extent it is ultimately determined to be liable for clean
up at any such site, such liability will not result in a material adverse effect
on its consolidated financial position or results of operations.
The Company is a party to various other litigation, possible tax assessments
and other matters, some of which are for substantial amounts, arising in the
ordinary course of business. While the ultimate effect of such actions cannot be
predicted with certainty, the Company expects that the outcome of these matters
will not result in a material adverse effect on its consolidated financial
position or results of operations.
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MANAGEMENT
The following are the members of the Company's management committee. The
management committee is comprised of executive officers of the Company and has
oversight over the operations of the Company.
ROBERT E. STAUTH -- Mr. Stauth has served as President and Chief Operating
Officer of the Company since April 1993, and was named Chief Executive Officer
in October 1993 and Chairman in April 1994. Mr. Stauth has been with the Company
more than 20 years. Prior to being named President and Chief Operating Officer,
Mr. Stauth was named Senior Vice President -- Western Region in 1991, with
responsibility for the Company's eight West Coast operations. In 1992, he was
appointed Executive Vice President -- Division Operations, with responsibility
for Fleming's operations in the Western, Southern, Mid-America and Mid-South
regions. From 1987 to 1991, Mr. Stauth served as Vice President -- Arizona
operations.
GERALD G. AUSTIN -- Mr. Austin was elected Executive Vice President --
Operations in October 1993, after serving three years as Executive Vice
President -- Marketing. Mr. Austin is responsible for the Company's wholesale
food divisions, marketing and general merchandise activities, retail concepts
and store development and planning. Mr. Austin is supervising the implementation
of the Company's reengineering program, having served as a member of the
steering committee that created the plan. Mr. Austin has been an associate of
Fleming for 35 years.
E. STEPHEN DAVIS -- Mr. Davis serves as Executive Vice President -- Scrivner
Group. In addition, Mr. Davis is responsible for integrating the Scrivner Group
into Fleming. Mr. Davis is overseeing executives responsible for operations,
finance, human resources, marketing and management information systems at the
Scrivner Group. Mr. Davis has directed the Company's corporate distribution
function for the past 14 years, most of them as Executive Vice President --
Distribution. Mr. Davis has held numerous positions during his 34 years as a
Fleming associate.
HARRY L. WINN, JR. -- Mr. Winn joined the Company as Executive Vice
President -- Chief Financial Officer in May 1994. Mr. Winn has overall
responsibility for accounting, legal, management information systems, retailer
credit, capital management, tax, audit and planning. He came to the Company from
UtiliCorp United in Kansas City, where he had served as managing senior vice
president and chief financial officer from 1990 to 1993. UtiliCorp is a NYSE
energy company with revenues of $1.3 billion whose operations include gas and
electric utilities in eight states, Canada and New Zealand and unregulated
natural gas and oil operations in the U.S. and the U.K. Prior to joining
UtiliCorp, Mr. Winn was an independent consultant from 1988 to 1990. Prior to
that he held the roles of vice president -- controller of Squibb United States,
vice president -- treasurer of Squibb Corporation, vice president -- treasurer
of Baxter International, treasurer of American Hospital Supply and assistant
vice president of American National Bank.
DARRELD R. EASTER -- Mr. Easter serves the Company as Senior Vice President
- -- Marketing. Mr. Easter is also responsible for Fleming's entire marketing
function, which encompasses the merchandising and procurement of all food
product lines, including groceries, meat, dairy, produce, frozen foods, bakery
goods and private label products, as well as marketing services, sales promotion
and consumer services. Prior to election to his current post in October 1993,
Mr. Easter served three years as Senior Vice President -- Produce, Meat, Bakery
and Deli. Mr. Easter joined Fleming in 1985 as Director -- Produce Procurement
after spending 25 years with a leading retail food chain based in Kansas.
WILLIAM M. LAWSON, JR. -- Mr. Lawson was elected Senior Vice President --
Corporate Development/ International Operations effective August 1, 1994. He is
responsible for identifying business ventures that offer growth opportunities
for the Company such as acquisitions, divestitures, joint ventures (both
domestic and international) and start-up situations. Prior to joining Fleming,
Mr. Lawson had practiced law in Phoenix since 1976.
LARRY A. WAGNER -- Mr. Wagner is Senior Vice President -- Human Resources of
the Company, with responsibility for organizational planning, management
development and training, benefit programs, salary administration and employment
procedures. Mr. Wagner began working for Fleming 15 years ago as
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Manager of Human Resources for the Houston division. In 1979, he was promoted to
Regional Director of Human Resources. He was promoted to Vice President -- Human
Resources in January 1989, and to his present position in February 1991.
The following officers of the Company have oversight over the Company's
general merchandise and retail operations at the direction of the management
committee:
RONALD C. ANDERSON -- Mr. Anderson was elected Vice President -- General
Merchandise of the Company in June 1993, with responsibility for the Company's
general merchandise operations. Prior to joining Fleming in June 1993, Mr.
Anderson served as president of the service merchandising division of the
nation's largest wholesale distributor of pharmaceuticals, health and beauty
care products, specialty foods and general merchandise. He also has experience
at many levels of retail business, with 17 years service at a major supermarket
chain based in Salt Lake City.
THOMAS L. ZARICKI -- Mr. Zaricki was elected Senior Vice President -- Retail
Operations of the Company in October 1993. The Company formed the Fleming Retail
Group to oversee operations of all Company-owned stores and has named Mr.
Zaricki President -- Fleming Retail Group. Mr. Zaricki joined Fleming in October
1993 with over 30 years experience in supermarket management, having served most
recently as president of a regional supermarket chain headquartered in Phoenix.
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THE CREDIT AGREEMENT
The following discussion of certain of the provisions of the Credit
Agreement is not intended to be exhaustive and is qualified in its entirety by
the provisions of the Credit Agreement contained as an Exhibit to the Company's
Current Report on Form 8-K, dated July 19, 1994, which is incorporated in this
Prospectus by reference.
On July 19, 1994, Fleming executed the Credit Agreement with Morgan
Guaranty, as Managing Agent, and twelve other domestic and foreign banks as
Agents. The Credit Agreement is divided into the following three facilities: (i)
a $900 million five-year revolving credit facility ("Tranche A"), (ii) a $500
million two-year term loan facility ("Tranche B"), and (iii) an $800 million
six-year amortizing term loan facility ("Tranche C"). At November 1, 1994, $250
million was borrowed under Tranche A, $500 million was borrowed under Tranche B
and $800 million was borrowed under Tranche C.
GUARANTEES. The Company's obligations under the Credit Agreement are
unconditionally guaranteed, on a joint and several basis, by substantially all
direct and indirect subsidiaries of the Company. The Company is obligated to
maintain guarantees by its subsidiaries such that the assets of the guaranteeing
subsidiaries, together with the assets of the Company, comprise at least 85% of
the assets of the Company on a consolidated basis.
COLLATERAL. Borrowings under the Credit Agreement (and obligations under
certain Letters of Credit and under certain derivative financial transactions
entered into to hedge the Company's interest rate exposure thereunder) must,
except as described below, be secured by a perfected pledge of substantially all
of the inventory and accounts receivable of Fleming and its subsidiaries.
Obligations under the Credit Agreement are also secured by a pledge of the
capital stock of substantially all of the Company's guaranteeing subsidiaries.
The collateral will be released upon the earlier to occur of (i) all debt
under the Credit Agreement being repaid and all commitments thereunder canceled,
(ii) Fleming's senior unsecured long-term debt being rated investment grade or
higher by Standard & Poor's Ratings Group, a division of McGraw Hill, Inc. and
by Moody's Investors Service, Inc. or (iii) upon the affirmative vote of Banks
holding 85% of the obligations under the Credit Agreement.
MANDATORY PREPAYMENTS. The net proceeds of the Offering, together with
borrowings under Tranche A, will be used to repay Tranche B (see "Use of
Proceeds"). Upon repayment of Tranche B, 50% of the net cash proceeds of any
asset sales, 75% of the net cash proceeds of equity issuances and 100% of the
net cash proceeds of any debt financing will be applied to reduce Tranche C
borrowings. Tranche C amortizes on a quarterly basis, beginning March 31, 1995.
INTEREST RATE. Under the Credit Agreement, the interest rate for any
Tranche may be based on LIBOR, CD rates or prime rates, as selected by the
Company from time to time, plus a borrowing margin. The borrowing margins vary
depending upon the rating of the Company's senior unsecured long-term debt.
INTEREST RATE PROTECTION. The Credit Agreement stipulates that the Company
must enter into interest rate protection agreements for at least 50% of the bank
debt outstanding under Tranche A and Tranche C (less $150 million) until it has
received investment grade credit ratings for its senior unsecured debt. As of
the date of this Prospectus, the Company had fully complied with this provision.
COVENANTS. The Credit Agreement contains customary covenants associated
with similar facilities, including, without limitation: maintenance of a
specified borrowed funds to net worth ratio; maintenance of a minimum
consolidated net worth; maintenance of a specified fixed charge coverage ratio;
a limitation on restricted payments (including dividends and Company stock
repurchases); prohibition of certain liens; prohibitions of certain mergers,
consolidations and sales of assets; restrictions on the incurrence of debt and
additional guarantees; limitations on restricted payments; limitations on
transactions with affiliates; limitations on acquisitions and investments;
limitations on capital expenditures; and limitations on payment restrictions
affecting subsidiaries. The Company is currently in compliance with all
financial covenants under the Credit Agreement. As of November 1, 1994, the
restricted payments test would have allowed the
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Company to pay dividends and/or repurchase capital stock in the aggregate amount
of $17 million for the balance of 1994. The borrowed funds to net worth test
would have allowed the Company to borrow an additional $547 million. The fixed
charge coverage test would have allowed the Company to incur an additional $33
million of annual interest expense.
EVENTS OF DEFAULT. The Credit Agreement contains Events of Default,
including, but not limited to, failure to pay principal or interest, failure to
meet covenants, representations or warranties false in any material respect,
cross default to other indebtedness of the Company, and a change of control.
CERTAIN OTHER OBLIGATIONS
THE PRIOR INDENTURES
On March 15, 1986, the Company entered into an Indenture (the "86
Indenture") with Morgan Guaranty, as Trustee, regarding $100 million of 9 1/2%
Debentures due 2016 (the "9 1/2% Debentures"). As of the date of this
Prospectus, approximately $7.0 million in aggregate principal amount of the
9 1/2% Debentures were outstanding. The terms of the Indenture include a
negative pledge obligating the Company to equally and ratably secure the holders
of the 9 1/2% Debentures in the event the Company secures any debt by placing a
lien or other encumbrance upon the shares of stock or indebtedness of certain of
its subsidiaries.
On December 1, 1989, the Company entered into an Indenture (the "89
Indenture") with Morgan Guaranty as Trustee. Pursuant to the 89 Indenture, the
Company issued, from time to time, an aggregate of $275 million of Medium-Term
Notes in three series. As of November 1, 1994, approximately $189 million in
aggregate principal amount of Medium-Term Notes were outstanding. The 89
Indenture contains a negative pledge substantially identical to that found in
the 86 Indenture.
The securing of obligations under the Credit Agreement by the pledge of the
stock of the Company's subsidiaries and the pledge of the accounts receivable of
the Company and its subsidiaries activated the negative pledge covenants under
both Prior Indentures. Contemporaneously with entering into the Credit Agreement
and securing its obligations thereunder, the Company equally and ratably secured
the holders of the 9 1/2% Debentures and the Medium-Term Notes by the pledge of
the capital stock and the inter-company indebtedness (including inter-company
accounts receivable) of substantially all of the Company's subsidiaries.
Additionally, the first series of Medium-Term Notes ("Series A Notes")
contain a provision requiring the Company to offer to purchase such notes (at
par plus accrued but unpaid interest) upon the occurrence of certain "repurchase
events." The consummation of the Acquisition and the resulting downgrade in the
ratings of the Company's long-term unsecured indebtedness represented such a
repurchase event. On August 16, 1994, the Company made an offer to purchase the
Series A Notes in accordance with the provisions of the 89 Indenture, which
offer terminated on October 21, 1994, with $33 million of such notes tendered.
The Company financed the purchase by drawing additional amounts under Tranche A
of the Credit Agreement. Neither the 9 1/2% Debentures nor any of the other
series of Medium-Term Notes contains a similar provision.
SALES OF CERTAIN SECURED LOANS AND DIRECT FINANCING LEASES
From time to time the Company sells notes evidencing certain secured loans
made to retailers. See "Business -- Capital Invested in Customers." Such notes
are typically sold, with limited recourse, directly to financial institutions or
to a grantor trust, with financial institutions purchasing trust certificates
representing an interest in a pool of notes.
The Company leases electronic equipment to certain retailers, including
point-of-sale scanning systems and other computer equipment, related software
and peripherals. Such leases, which had an aggregate book value at October 1,
1994 of approximately $20 million, generally have lease terms of three to five
years with optional renewal provisions. The Company expects to sell, with
limited recourse, an interest in a substantial portion of such leases directly
or indirectly to financial institutions during 1995.
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DESCRIPTION OF THE NOTES
The Fixed Rate Notes offered hereby will be issued under an indenture to be
dated as of , 1994 (the "Fixed Rate Note Indenture"), among the
Company, as issuer, each of the Subsidiary Guarantors, as guarantors, and Texas
Commerce Bank, National Association, as trustee (the "Trustee"). The Floating
Rate Notes offered hereby will be issued under an indenture to be dated as of
, 1994 (the "Floating Rate Note Indenture" and, together with the
Fixed Rate Note Indenture, the "Senior Note Indentures"), among the Company, as
issuer, each of the Subsidiary Guarantors, as guarantors, and the Trustee, as
trustee.
Copies of the forms of the Senior Note Indentures are filed as exhibits to
the Registration Statement of which this Prospectus is a part. The Senior Note
Indentures are subject to and governed by the Trust Indenture Act. The following
summaries of the material provisions of the Senior Note Indentures do not
purport to be complete and are subject to, and qualified in their entirety by,
reference to all of the provisions of the Senior Note Indentures, including the
definitions of certain terms contained therein and those terms made a part of
the Senior Note Indentures by the Trust Indenture Act. For definitions of
certain capitalized terms used in the following summary, see "-- Certain
Definitions."
The Fixed Rate Notes and the Floating Rate Notes (collectively, the "Notes")
are identical except as indicated below.
GENERAL
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes will be exchangeable and transferable, at the office or agency of
the Company in The City of New York maintained for such purposes (which
initially will be the office of the Trustee maintained at Texas Commerce Trust
Company of New York, 80 Broad Street, Suite 400, New York, New York 10004);
PROVIDED, HOWEVER, that payment of interest may be made, at the option of the
Company, by check mailed to the Person entitled thereto as shown on the security
register. (Sections 301, 305 and 307) The Notes will be issued only in fully
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. (Section 302) No service charge will be made for any
registration of transfer, exchange or redemption of Notes, except in certain
circumstances for any tax or other governmental charge that may be imposed in
connection therewith. (Section 305)
TERMS SPECIFIC TO THE FIXED RATE NOTES
MATURITY, INTEREST AND PRINCIPAL
The Fixed Rate Notes will mature on , 2001, and will be unsecured
senior obligations of the Company limited in aggregate principal amount to
$ . The Fixed Rate Notes will bear interest at the rate set forth opposite
their name on the cover page hereof from , 1994 or from the most
recent interest payment date to which interest has been paid, payable
semi-annually on and of each year commencing , 1995,
to the Person in whose name the Fixed Rate Note is registered at the close of
business on the or next preceding such interest payment date.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months. (Sections 301, 307 and 310 of the Fixed Rate Note Indenture)
OPTIONAL REDEMPTION
The Fixed Rate Notes may be redeemed at the option of the Company, in whole
or in part, at any time on or after , 1999, at the redemption prices
(expressed as percentages of principal amount) set forth below, together with
accrued and unpaid interest, if any, to the date of redemption, if redeemed
during the 12-month period beginning on of the years indicated below
(subject to the right of holders of record on relevant record dates to receive
interest due on an interest payment date):
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ----------------------------------------------------------------------- ---------------
<S> <C>
1999................................................................... %
2000................................................................... %
</TABLE>
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In addition, up to 20% of the initial aggregate principal amount of the
Fixed Rate Notes may be redeemed on or prior to , 1997, at the option
of the Company, within 180 days of a Public Equity Offering with the net
proceeds of such offering at a redemption price equal to % of the principal
amount thereof, together with accrued and unpaid interest, if any, to the date
of redemption (subject to the right of holders of record on relevant record
dates to receive interest due on relevant interest payment dates); PROVIDED,
that after giving effect to such redemption at least $200 million aggregate
principal amount of the Fixed Rate Notes remain outstanding.
SINKING FUND
The Fixed Rate Notes will not be entitled to the benefit of any sinking
fund.
TERMS SPECIFIC TO THE FLOATING RATE NOTES
MATURITY, INTEREST AND PRINCIPAL
The Floating Rate Notes will mature on , 2001, and will be
unsecured senior obligations of the Company limited in aggregate principal
amount to $ . The Floating Rate Notes will bear interest from ,
1994 or from the most recent interest payment date to which interest has been
paid at the rate described below.
Interest on the Floating Rate Notes will accrue at a rate equal to the
Applicable LIBOR Rate and will be payable quarterly in arrears on ,
, and of each year, or if any such day is not a Business
Day, on the next succeeding Business Day, commencing on , 1995 (each a
"Floating Rate Interest Payment Date") to holders of record on the immediately
preceding , , and . Interest on the Floating
Rate Notes will be calculated on a formula basis by multiplying the principal
amount of the Floating Rate Notes then outstanding by the Applicable LIBOR Rate,
and multiplying such product by the LIBOR Fraction.
"APPLICABLE LIBOR RATE" means for each Quarterly Period during which any
Floating Rate Note is outstanding subsequent to the Initial Quarterly Period,
basis points over the rate determined by the Company (notice of such rate to
be sent to the Trustee by the Company on the date of determination thereof)
equal to the average (rounded upwards, if necessary, to the nearest 1/16 of 1%)
of the offered rates for deposits in U.S. dollars for a period of three months,
as set forth on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on
the Interest Rate Determination Date for such Quarterly Period; PROVIDED,
HOWEVER, that if only one such offered rate appears on the Reuters Screen LIBO
Page, the Applicable LIBOR Rate for such Quarterly Period will mean such offered
rate. If such rate is not available at 11:00 a.m., London time, on the Interest
Rate Determination Date for such Quarterly Period, then the Applicable LIBOR
Rate for such Quarterly Period will mean the arithmetic mean (rounded upwards,
if necessary, to the nearest 1/16 of 1%) of the interest rates per annum at
which deposits in amounts equal to $1 million in U.S. dollars are offered by the
Reference Banks to leading banks in the London Interbank Market for a period of
three months as of 11:00 a.m, London time, on the Interest Rate Determination
Date for such Quarterly Period. If on any Interest Rate Determination Date, at
least two of the Reference Banks provide such offered quotations, then the
Applicable LIBOR Rate for such Quarterly Period will be determined in accordance
with the preceding sentence on the basis of the offered quotations of those
Reference Banks providing such quotations; PROVIDED, HOWEVER, that if fewer than
two of the Reference Banks are so quoting such interest rates as mentioned
above, the Applicable LIBOR Rate for such Quarterly Period shall be deemed to be
the Applicable LIBOR Rate for the next preceding Quarterly Period and in the
case of the Quarterly Period next succeeding the Initial Quarterly Period, the
Applicable LIBOR Rate shall be %. Notwithstanding the foregoing, the
Applicable LIBOR Rate for the Initial Quarterly Period shall be %.
"INTEREST RATE DETERMINATION DATE" means, with respect to each Quarterly
Period, the second Working Day prior to the first day of such Quarterly Period.
"LIBOR FRACTION" means the actual number of days in the Initial Quarterly
Period or Quarterly Period, as applicable, divided by 360; PROVIDED, HOWEVER,
that the number of days in the Initial Quarterly Period and each Quarterly
Period shall be calculated by including the first day of such Initial Quarterly
Period or Quarterly Period and excluding the last.
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"INITIAL QUARTERLY PERIOD" means the period from and including ,
1994 through and including , 1995.
"QUARTERLY PERIOD" means the period from and including a scheduled Floating
Rate Interest Payment Date through the day next preceding the following
scheduled Floating Rate Interest Payment Date.
"REFERENCE BANKS" means each of Barclays Bank PLC, London Branch, the Bank
of Tokyo, Ltd., London Branch, Bankers Trust Company, London Branch, and
National Westminster Bank PLC, London Branch, and any such replacement bank
thereof as listed on the Reuters Screen LIBO Page and their respective
successors, and if any of such banks are not at the applicable time providing
interest rates as contemplated within the definition of the "APPLICABLE LIBOR
RATE," Reference Banks shall mean the remaining bank or banks so providing such
rates. In the event that fewer than two of such banks are providing such rates,
the Company shall use reasonable efforts to appoint additional Reference Banks
so that there are at least two such banks providing such rates; PROVIDED,
HOWEVER, that such banks appointed by the Company shall be London offices of
leading banks engaged in the Eurodollar market (the market in which U.S.
currency, which is deposited by corporations and national governments in banks
outside the United States, is used for settling international transactions).
"REUTERS SCREEN LIBO PAGE" means the display designated as page "LIBO" on
the Reuter Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London Interbank Offered
Rates of leading banks).
"WORKING DAY" means any day which is not a Saturday, Sunday or a day on
which banking institutions in New York, New York or London, England are
authorized or obligated by law or executive order to close.
OPTIONAL REDEMPTION
The Floating Rate Notes will be redeemable at the option of the Company, in
whole or in part, on any Floating Rate Interest Payment Date on or after
, 1995 and on or prior to , 1999 at a redemption price equal to
100.5% of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of redemption, and after , 1999 at a
redemption price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the date of redemption (subject to the
right of holders of record on relevant record dates to receive interest due on
an interest payment date).
SINKING FUND
The Floating Rate Note Indenture will provide for the redemption on each of
, 1999 and , 2000, of $1 million principal amount of
Floating Rate Notes, at a redemption price equal to 100% of their principal
amount, plus accrued interest to the redemption date. (Section 1401)
TERMS COMMON TO THE FIXED RATE NOTES AND THE FLOATING RATE NOTES
REDEMPTION
CHANGE OF CONTROL. As described below, if a Change of Control Triggering
Event shall occur at any time, then each holder of Notes shall have the right to
require that the Company purchase such holder's Notes, in whole or in part, at a
purchase price equal to 101% of the principal amount of such Notes plus accrued
and unpaid interest, if any, to the date of purchase. See "-- Certain Covenants
- -- PURCHASE OF NOTES UPON A CHANGE OF CONTROL TRIGGERING EVENT." (Section 1101)
SELECTION AND NOTICE. In the event that less than all of the Fixed Rate
Notes or Floating Rate Notes, respectively, are to be redeemed at any time,
selection of such Fixed Rate Notes or Floating Rate Notes for redemption will be
made by the applicable Trustee on a PRO RATA basis, by lot or by such other
method as the applicable Trustee shall deem fair and appropriate; PROVIDED,
HOWEVER, that no Note of a principal amount of $1,000 or less shall be redeemed
in part. Notice of redemption shall be mailed by first class mail at least 30
but not more than 60 days before the redemption date to each holder of Fixed
Rate Notes or Floating Rate Notes to be redeemed at its registered address. If
any Note is to be redeemed in part only, the notice of redemption that relates
to such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in a principal amount equal to the unredeemed portion
thereof will be issued in the name of the
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holder thereof upon cancellation of the original Note. On or after the
redemption date, interest will cease to accrue on Notes or portions thereof
called for redemption and accepted for payment. (Sections 1104, 1105, 1107 and
1108)
GUARANTEES
Payment of the principal of, premium, if any, and interest on the Notes,
when and as the same become due and payable (whether at Stated Maturity or
purchase upon a Change of Control Triggering Event, and whether by declaration
of acceleration, a Change of Control Triggering Event, call for redemption or
otherwise), will be guaranteed, jointly and severally, on a senior basis by the
Subsidiary Guarantors. (Section 1201)
RANKING
The Notes will be unsecured senior obligations of the Company, and the
Indebtedness represented by the Notes and the payment of principal of, premium,
if any, and interest on the Notes will rank PARI PASSU in right of payment with
all other existing and future Senior Indebtedness and senior in right of payment
to all future Subordinated Indebtedness of the Company. The Company currently
has no Subordinated Indebtedness. The Notes, however, will be effectively
subordinated to secured Senior Indebtedness of the Company with respect to the
assets securing such Indebtedness, including Indebtedness under the Credit
Agreement which is secured by the capital stock of substantially all of the
Company's subsidiaries and substantially all of the inventory and accounts
receivable of the Company and its subsidiaries and Indebtedness under the Prior
Indentures which is secured by a portion of such collateral. As of October 1,
1994, on PRO FORMA basis after giving effect to the Offering and the use of
proceeds therefrom, Senior Indebtedness of the Company (including capitalized
leases) would have been approximately $2.07 billion, of which $1.57 billion
would have been secured Senior Indebtedness. As of October 1, 1994, on a PRO
FORMA basis after giving effect to the Offering and the use of proceeds
therefrom, the total amount of Indebtedness of the Company and its subsidiaries
(including capitalized leases) ranking PARI PASSU with the Notes would have been
approximately $2.07 billion. See "Investment Considerations -- Restrictive
Covenants; Asset Encumbrances" and "The Credit Agreement."
Each Note Guarantee will be an unsecured senior obligation of the Subsidiary
Guarantor issuing such Note Guarantee, ranking PARI PASSU in right of payment
with all existing and future Senior Indebtedness of such Subsidiary Guarantor
and senior in right of payment to any future Indebtedness of the Subsidiary
Guarantors that is expressly subordinated to Senior Indebtedness of the
Subsidiary Guarantors. (Section 1203) The Subsidiary Guarantors currently have
no Subordinated Indebtedness. Each Note Guarantee issued by a Subsidiary
Guarantor, however, will be effectively subordinated to secured Senior
Indebtedness of such Subsidiary Guarantor with respect to the assets of such
Subsidiary Guarantor securing such Indebtedness, including the guarantee by each
such Subsidiary Guarantor of the Company's Indebtedness under the Credit
Agreement and the Prior Senior Note Indentures. As of October 1, 1994, on a PRO
FORMA basis after giving effect to the Offering and the use of proceeds
therefrom, Senior Indebtedness of the Subsidiary Guarantors (including
guarantees with respect to the Notes and the Credit Agreement but excluding
capitalized leases) would have been approximately $1.51 billion, of which $1.00
billion would have been secured Senior Indebtedness. As of October 1, 1994, on a
PRO FORMA basis, after giving effect to the Offering and the use of proceeds
therefrom, the total amount of Indebtedness of the Subsidiary Guarantors
(excluding capitalized leases) ranking PARI PASSU with the Notes would have been
approximately $1.51 billion. See "The Credit Agreement."
CERTAIN COVENANTS
The Senior Note Indentures will contain the following covenants, among
others:
LIMITATION ON INDEBTEDNESS. The Company will not, and will not permit any
of its Subsidiaries to, create, assume, or directly or indirectly guarantee or
in any other manner become directly or indirectly liable for the payment of, or
otherwise incur (collectively, "incur"), any Indebtedness (including any
Acquired Indebtedness) other than Permitted Indebtedness, unless, at the time of
such event (and after giving effect on a PRO FORMA basis to (i) the incurrence
of such Indebtedness; (ii) the incurrence, repayment or retirement of any other
Indebtedness by the Company or its Subsidiaries since the first day of such
four-quarter period
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as if such Indebtedness was incurred, repaid or retired at the beginning of such
four-quarter period; and (iii) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any company,
entity or business acquired or disposed of by the Company or its Subsidiaries,
as the case may be, since the first day of such four-quarter period as if such
acquisition or disposition had occurred at the beginning of such four-quarter
period), the Consolidated Fixed Charge Coverage Ratio of the Company for the
four full fiscal quarters immediately preceding such event, taken as one period
and calculated on the assumption that such Indebtedness had been incurred on the
first day of such four-quarter period and, in the case of Acquired Indebtedness,
on the assumption that the related acquisition (whether by means of purchase,
merger or otherwise) also had occurred on such date with the appropriate
adjustments with respect to such acquisition being included in such PRO FORMA
calculation, would have been at least equal to 1.75 to 1. (Section 1010)
LIMITATION ON RESTRICTED PAYMENTS. (a) The Company will not, and will not
permit any Subsidiary of the Company to, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to, the
holders of, any Capital Stock of the Company (other than dividends or
distributions payable solely in shares of Qualified Capital Stock of the
Company or in options, warrants or other rights to purchase such Qualified
Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value, directly
or indirectly, any Capital Stock of the Company or any Subsidiary or any
options, warrants or other rights to acquire such Capital Stock;
(iii) make any principal payment on, or redeem, repurchase, defease or
otherwise acquire or retire for value, prior to any scheduled repayment,
sinking fund payment or maturity, any Indebtedness of the Company which is
subordinate in right of payment to the Notes or of any Subsidiary Guarantor
that is subordinate to such Subsidiary Guarantor's Note Guarantee;
(iv) declare or pay any dividend or distribution on any Capital Stock of
any Subsidiary of the Company to any Person (other than the Company or any
Wholly Owned Subsidiary of the Company) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Subsidiary of the
Company held by any Person (other than the Company or any Wholly Owned
Subsidiary of the Company);
(v) create, assume or suffer to exist any guarantee of Indebtedness of
any Affiliate of the Company (other than a Wholly Owned Subsidiary of the
Company in accordance with the terms of the Indenture); or
(vi) make any Investment (other than any Permitted Investment) in any
Person
(such payments described in clauses (i) through (vi) and not excepted therefrom
are collectively referred to herein as "Restricted Payments") unless at the time
of and immediately after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (1) no Default or Event of Default shall have
occurred and be continuing and (2) the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in accordance with the
provisions described under "-- Certain Covenants -- LIMITATION ON INDEBTEDNESS."
(b) Notwithstanding paragraph (a) above, the Company and its Subsidiaries
may take the following actions so long as (with respect to clauses (ii), (iii),
and (iv), below) no Default or Event of Default shall have occurred and be
continuing:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied
with the provisions of paragraph (a) above;
(ii) the purchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company, in exchange for, or out
of the net cash proceeds of, a substantially concurrent issuance and sale
(other than to a Subsidiary) of shares of Capital Stock of the Company
(other than Redeemable Capital Stock, unless the redemption provisions of
such Redeemable Capital Stock prohibit the redemption thereof prior to the
date on which the Capital Stock to be acquired or retired was, by its terms,
required to be redeemed);
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(iii) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness (other than Redeemable
Capital Stock) in exchange for or out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a Subsidiary) of
shares of Capital Stock of the Company (other than Redeemable Capital Stock,
unless the redemption provisions of such Redeemable Capital Stock prohibit
the redemption thereof prior to the Stated Maturity of the Subordinated
Indebtedness to be acquired or retired); and
(iv) the purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness (other than Redeemable
Capital Stock) in exchange for, or out of the net cash proceeds of a
substantially concurrent incurrence or sale (other than to a Subsidiary) of,
new Subordinated Indebtedness of the Company so long as (A) the principal
amount of such new Subordinated Indebtedness does not exceed the principal
amount (or, if such Subordinated Indebtedness being refinanced provides for
an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, such lesser amount as of the date of
determination) of the Subordinated Indebtedness being so purchased,
redeemed, defeased, acquired or retired, PLUS the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Subordinated Indebtedness refinanced or the amount of any
premium reasonably determined by the Company as necessary to accomplish such
refinancing, PLUS the amount of expenses of the Company incurred in
connection with such refinancing, (B) such new Subordinated Indebtedness is
subordinated to the Notes to the same extent as such Subordinated
Indebtedness so purchased, redeemed, defeased, acquired or retired and (C)
such new Subordinated Indebtedness has an Average Life longer than the
Average Life of the Notes and a final Stated Maturity of principal later
than the final Stated Maturity of principal of the Notes.
LIMITATION ON LIENS. The Company will not and will not permit any
Subsidiary of the Company to, directly or indirectly, create, incur, assume or
suffer to exist any Lien (other than Permitted Liens) of any kind upon any
Principal Property or upon any shares of stock or indebtedness of any Subsidiary
of the Company now owned or acquired after the date of the Senior Note
Indentures, or any income or profits therefrom, unless (a) the Notes are
directly secured equally and ratably with (or prior to in the case of Liens with
respect to Subordinated Indebtedness) the obligation or liability secured by
such Lien or (b) any such Lien is in favor of the Company or any Subsidiary
Guarantor. (Section 1012)
PURCHASE OF NOTES UPON A CHANGE OF CONTROL TRIGGERING EVENT. If a Change of
Control Triggering Event shall occur at any time, then each holder of Notes
shall have the right to require the Company to purchase such holder's Notes in
whole or in part in integral multiples of $1,000 at a purchase price (the
"Change of Control Purchase Price") in cash in an amount equal to 101% of the
principal amount of such Notes, plus accrued and unpaid interest, if any, to the
date of purchase (the "Change of Control Purchase Date"), pursuant to the offer
described below (the "Change of Control Purchase Offer") and the other
procedures set forth in the Senior Note Indentures. Reference is made to "--
Certain Definitions" for the definitions of "Change of Control," "Change of
Control Triggering Event," "Rating Agencies," "Rating Decline" and "Investment
Grade." The foregoing rights are triggered only upon the occurrence of both a
Change of Control and a Rating Decline. A Rating Decline is defined as the
occurrence on, or within 90 days after, the date of public notice of the
occurrence of a Change of Control or of the intention of the Company or Persons
controlling the Company to effect a Change of Control (which period shall be
extended so long as the rating of the Notes is under publicly announced
consideration for possible downgrade by any of the Rating Agencies) of the
following: (i) if the Notes are rated by either Rating Agency as Investment
Grade immediately prior to the beginning of such period, the rating of the Notes
by both Rating Agencies shall be below Investment Grade; or (ii) if the Notes
are rated below Investment Grade by both Rating Agencies immediately prior to
the beginning of such period, the rating of such Notes by either Rating Agency
shall be decreased by one or more gradation (including gradations within Rating
Categories as well as between Rating Categories).
Upon the occurrence of a Change of Control Triggering Event and prior to the
mailing of the notice to Holders provided for in the Senior Note Indentures, the
Company covenants to either (x) repay in full all Indebtedness under the Credit
Agreement or offer to repay in full all such Indebtedness and to repay the
Indebtedness of each of the Banks that has accepted such offer or (y) obtain any
requisite consent under the Credit Agreement to permit the purchase of the Notes
pursuant to a Change of Control Purchase Offer as
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provided for in the Senior Note Indentures or take any other action as may be
required under the Credit Agreement to permit such purchase. The Company shall
first comply with such covenants before it shall be required to purchase the
Notes pursuant to the Senior Note Indentures. (Section 1009)
Within 30 days following the occurrence of any Change of Control Triggering
Event, the Company shall notify the Trustee and give written notice of such
Change of Control Triggering Event to each holder of Notes, by first-class mail,
postage prepaid, at the address appearing in the security register, stating,
among other things, the Change of Control Purchase Price and that the Change of
Control Purchase Date shall be a Business Day no earlier than 30 days nor later
than 60 days from the date such notice is mailed, or such later date as is
necessary to comply with requirements under the Exchange Act; that any Note not
tendered will continue to accrue interest; that, unless the Company defaults in
the payment of the Change of Control Purchase Price, any Notes accepted for
payment of the Change of Control Purchase Price pursuant to the Change of
Control Purchase Offer shall cease to accrue interest after the Change of
Control Purchase Date; and certain other procedures that a holder of Notes must
follow to accept a Change of Control Purchase Offer or to withdraw such
acceptance.
The Credit Agreement prohibits the Company from incurring any Indebtedness
which grants to holders thereof the option of requiring the Company to
repurchase such debt prior to the retirement of all amounts outstanding
thereunder. Upon the occurrence of a Change of Control Triggering Event, the
Company is obligated to retire all amounts then outstanding under the Credit
Agreement or to obtain a waiver of such prohibition for the benefit of the
holders of the Notes. Upon such retirement or waiver following a Change of
Control Triggering Event, each holder of the Notes will have the right to
require the Company to purchase all of such holder's Notes at a redemption price
equal to 101% of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of purchase. Failure by the Company to retire all
obligations then outstanding under the Credit Agreement or to obtain a waiver
upon the occurrence of a Change of Control Triggering Event would constitute a
default by the Company under the Senior Note Indentures and would entitle the
requisite holders to accelerate the obligations due under the Notes (although
without a premium). If a Change of Control Triggering Event occurs, there can be
no assurance that the Company will have available funds sufficient to pay the
Change of Control Purchase Price for all of the Notes that might be delivered by
holders of the Notes seeking to accept the Change of Control Purchase Offer and,
accordingly, none of the holders of the Notes may receive the Change of Control
Purchase Price for their Notes in the event of a Change of Control Triggering
Event. Each of the Credit Agreement and the Prior Indentures requires the
Company to repay the Indebtedness under the Credit Agreement ($1.55 billion as
of November 1, 1994) and repurchase the outstanding Indebtedness under the Prior
Indentures ($196 million as of November 1, 1994), respectively, in the event of
a change of control. If a purchase of the Notes, repayment of the Indebtedness
under the Credit Agreement and purchase of the outstanding Indebtedness under
the Prior Indentures were all triggered at the same time, it is possible the
Company would be unable to satisfy these obligations. The failure of the Company
to make or consummate the Change of Control Purchase Offer or pay the Change of
Control Purchase Price when due will give the Trustee and the holders of the
Notes the rights described under "-- Events of Default."
One of the events which constitutes a Change of Control under the Senior
Note Indentures is the disposition of "all or substantially all" of the
Company's assets. This term has not been interpreted under New York law (which
is the governing law of the Senior Note Indentures) to represent a specific
quantitative test. As a consequence, in the event holders of the Notes elect to
require the Company to purchase the Notes and the Company elects to contest such
election, there can be no assurance as to how a court interpreting New York law
would interpret the phrase.
The existence of a holder's right to require the Company to purchase such
holder's Notes upon a Change of Control Triggering Event may deter a third party
from acquiring the Company in a transaction which constitutes a Change of
Control.
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In addition to the obligations of the Company under the Senior Note
Indentures with respect to the Notes in the event of a "Change of Control
Triggering Event," the Credit Agreement contains a provision designating as an
event of default a change in control as described therein which obligates the
Company to repay amounts outstanding under the Credit Agreement upon an
acceleration of the indebtedness issued thereunder.
The provisions of the Senior Note Indentures may not afford holders of Notes
the right to require the Company to repurchase such Notes in the event of a
highly leveraged transaction or certain transactions with the Company's
management or its affiliates, including a reorganization, restructuring, merger
or similar transaction involving the Company (including, in certain
circumstances, an acquisition of the Company by management or its affiliates)
that may adversely affect holders of the Notes, if such transaction is not a
transaction defined as a Change of Control. See "-- Certain Definitions" for the
definition of "Change of Control." A transaction involving the Company's
management or its affiliates, or a transaction involving a recapitalization of
the Company, will result in a Change of Control if it is the type of transaction
specified by such definition.
The Company will comply with the applicable tender offer rules, including
Rule 14e-1 under the Exchange Act, and any other applicable securities laws or
regulations in connection with a Change of Control Purchase Offer. (Section
1009)
ADDITIONAL GUARANTEES. If the Company or any of its Subsidiaries shall
acquire or form a Subsidiary, the Company will cause any such Subsidiary (other
than an Equity Store or Business Development Venture, PROVIDED that such Equity
Store or Business Development Venture does not guarantee the Senior Indebtedness
of any other Person) that is or becomes a Significant Subsidiary or that
guarantees any Senior Indebtedness of the Company or any Subsidiary Guarantor to
(i) execute and deliver to the applicable Trustee a supplemental indenture in
form and substance reasonably satisfactory to such Trustee pursuant to which
such Subsidiary shall guarantee all of the obligations of the Company with
respect to the Notes issued under such Indenture on a senior basis and (ii)
deliver to such Trustee an Opinion of Counsel reasonably satisfactory to such
Trustee to the effect that a supplemental indenture has been duly executed and
delivered by such Subsidiary and is in compliance with the terms of the
applicable Indenture.
PROVISION OF FINANCIAL STATEMENTS. Whether or not the Company is subject to
Section 13(a), 13(c) or 15(d) of the Exchange Act, the Company will file with
the Commission the annual reports, quarterly reports and other documents that
the Company is or would have been required to file with the Commission pursuant
to such Section 13(a), 13(c) or 15(d) if the Company were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which the Company would have been required so
to file such documents if the Company were so subject. The Company will also in
any event within 15 days of each Required Filing Date (within 30 days of such
Required Filing Date for any reports filed on Form 10-K) (i) transmit by mail to
each holder of the Notes, as its name and address appears in the security
register, without cost to such holder and (ii) file with each Trustee copies of
the annual reports, quarterly reports and other documents which the Company is
or would have been required to file with the Commission pursuant to Section
13(a), 13(c) or 15(d) of the Exchange Act if the Company were so subject.
(Section 1014)
CONSOLIDATION, MERGER, SALE OF ASSETS
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer or lease or otherwise dispose of all or substantially
all of its properties and assets to any Person or group of affiliated Persons,
or permit any of its Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions, in the aggregate, would result
in a sale, assignment, transfer, lease or disposal of all or substantially all
of the properties and assets of the Company and its Subsidiaries on a
Consolidated basis to any other Person or group of affiliated Persons, unless at
the time and after giving effect thereto (i) either (A) the Company shall be the
surviving or continuing corporation, or (B) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or the
Person which acquires by sale, assignment, conveyance, transfer, lease or
disposition the properties and assets of the Company substantially as an
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entirety (the "Surviving Entity") shall be a corporation duly organized and
validly existing under the laws of the United States, any state thereof or the
District of Columbia and shall, in any case, expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company, under the Notes and the Senior Note
Indentures, and the Senior Note Indentures shall remain in full force and
effect; (ii) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (and treating any Indebtedness not previously
an obligation of the Company or any of its Subsidiaries which becomes an
obligation of the Company or any of its Subsidiaries in connection with or as a
result of such transaction as having been incurred at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing; (iii) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (on the assumption that the transaction
occurred on the first day of the four-quarter period immediately prior to the
consummation of such transaction with the appropriate adjustments with respect
to the transaction being included in such PRO FORMA calculation), the Company
(or the Surviving Entity if the Company is not the continuing obligor under the
Indenture) could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the provisions of "-- Certain Covenants -- LIMITATION ON
INDEBTEDNESS" above; (iv) each Subsidiary Guarantor, unless it is the other
party to the transactions described above, shall have confirmed, by supplemental
indenture to each of the Senior Note Indentures, that its respective Note
Guarantees with respect to the Notes shall apply to such Person's obligations
under the Senior Note Indentures and the Notes; (v) if any of the property or
assets of the Company or any of its Subsidiaries would thereupon become subject
to any Lien, the provisions of "-- Certain Covenants -- LIMITATION ON LIENS" are
complied with; and (vi) the Company shall have delivered, or caused to be
delivered, to the Trustee with respect to the Senior Note Indentures, in form
and substance satisfactory to such Trustee, an officers' certificate and an
opinion of counsel, each to the effect that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other transaction and the
supplemental indenture in respect thereto comply with the provisions in clauses
(i) through (v) of this paragraph and that all conditions precedent herein
provided for relating to such transaction have been complied with.
In the event of any consolidation, merger, sale, assignment, conveyance,
transfer, lease or other transaction described in, and complying with, the
conditions listed in the immediately preceding paragraph in which the Company is
not the continuing corporation, the successor Person formed or remaining shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company, as the case may be, and the Company shall be discharged from all
obligations and covenants under the Senior Note Indentures and the Notes;
PROVIDED that, in the case of a transfer by lease, the predecessor shall not be
released from its obligations with respect to the payment of principal (premium,
if any) and interest on the Notes. (Sections 801 and 802)
EVENTS OF DEFAULT
An Event of Default will occur under the Senior Note Indenture pursuant to
which such Notes were issued if any of the following events occurs with respect
to such Senior Note Indenture:
(i) there shall be a default in the payment of any interest on such
series of Notes issued under such Senior Note Indenture when such interest
becomes due and payable, and continuance of such default for a period of 30
days;
(ii) there shall be a default in the payment of the principal of (or
premium, if any, on) any series of Notes issued under such Senior Note
Indenture at its Stated Maturity;
(iii) (A) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or any Subsidiary Guarantor under such
Senior Note Indenture (other than a default in the performance, or breach,
of a covenant or agreement which is specifically dealt with in the
immediately preceding clauses (i) or (ii) or in clauses (B) or (C) of this
clause (iii)) and such default or breach shall continue for a period of 60
days after written notice has been given, by certified mail, (x) to the
Company by the applicable Trustee or (y) to the Company and the applicable
Trustee by the holders of at least 25% in aggregate principal amount of the
outstanding Notes; (B) there shall be a default in the performance or breach
of the provisions described in "-- Consolidation, Merger, Sale of Assets";
or
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(C) the Company shall have failed to make or consummate a Change of Control
Purchase Offer in accordance with the provisions of "-- Certain Covenants --
PURCHASE OF NOTES UPON A CHANGE OF CONTROL TRIGGERING EVENT";
(iv) (A) any default in the payment of the principal of any Indebtedness
shall have occurred under any agreements, indentures (including, with
respect to any Notes issued under the Fixed Rate Note Indenture, any such
default under the Floating Rate Note Indenture, and, with respect to the
Floating Rate Notes, any such default under the Fixed Rate Note Indenture)
or instruments under which the Company or any Subsidiary of the Company then
has outstanding Indebtedness in excess of $50 million when the same shall
become due and payable in full and such default shall have continued after
any applicable grace period and shall not have been cured or waived or (B)
an event of default as defined in any of the agreements, indentures or
instruments described in clause (A) of this clause (iv) shall have occurred
and the Indebtedness thereunder, if not already matured at its final
maturity in accordance with its terms, shall have been accelerated;
(v) any Person entitled to take the actions described below in this
clause (v), after the occurrence of any event of default on Indebtedness in
excess of $50 million in the aggregate of the Company or any Subsidiary,
shall notify the applicable Trustee of the intended sale or disposition of
any assets of the Company or any Subsidiary that have been pledged to or for
the benefit of such Person to secure such Indebtedness or shall commence
proceedings, or take any action (including by way of set-off) to retain in
satisfaction of any Indebtedness, or to collect on, seize, dispose of or
apply, any such assets of the Company or any Subsidiary (including funds on
deposit or held pursuant to lock-box and other similar arrangements),
pursuant to the terms of such Indebtedness or in accordance with applicable
law;
(vi) any Note Guarantee of any Significant Subsidiary individually or
any other Subsidiaries if such Subsidiaries in the aggregate represent 15%
or more of the assets of the Company and its Subsidiaries on a consolidated
basis with respect to such Notes shall for any reason cease to be, or be
asserted in writing by the Company, any Subsidiary Guarantor or any other
Subsidiary of the Company, as applicable, not to be, in full force and
effect, enforceable in accordance with its terms, except pursuant to the
release of any such Note Guarantee in accordance with the applicable Senior
Note Indenture;
(vii) one or more judgments, orders or decrees for the payment of money
in excess of $50 million (net of amounts covered by insurance, bond or
similar instrument), either individually or in the aggregate, shall be
entered against the Company or any Subsidiary of the Company or any of their
respective properties and shall not be discharged and either (A) any
creditor shall have commenced an enforcement proceeding upon such judgment,
order or decree or (B) their shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of
an appeal or otherwise, shall not be in effect;
(viii) there shall have been the entry by a court of competent
jurisdiction of (A) a decree or order for relief in respect of the Company
or any Significant Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or (B) a decree or order adjudging the Company or
any Significant Subsidiary bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or
any Significant Subsidiary under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Subsidiary or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and any such decree or order for
relief shall continue to be in effect, or any such other decree or order
shall be unstayed and in effect, for a period of 60 consecutive days; or
(ix) (A) the Company or any Significant Subsidiary commences a voluntary
case or proceeding under any applicable Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent, (B) the Company or any
Significant Subsidiary consents to the entry of a decree or order for relief
in respect of the Company or such Significant Subsidiary in an involuntary
case or proceeding under any applicable Bankruptcy Law or to the
commencement of any bankruptcy or insolvency case or proceeding against it,
(C) the Company or any Significant Subsidiary files a petition or answer or
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consent seeking reorganization or relief under any applicable federal or
state law, (D) the Company or any Significant Subsidiary (x) consents to the
filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or such Significant Subsidiary or of any substantial
part of its property, (y) makes an assignment for the benefit of creditors
or (z) admits in writing its inability to pay its debts generally as they
become due or (E) the Company or any Significant Subsidiary takes any
corporate action in furtherance of any such actions in this clause (ix).
If an Event of Default (other than as specified in clauses (viii) or (ix) of
the immediately preceding paragraph) shall occur and be continuing with respect
to any series of the Notes, the applicable Trustee, by notice to the Company, or
the holders of at least 25% in aggregate principal amount then outstanding of
such Notes, by notice to the applicable Trustee and to the Company, may declare
such Notes due and payable immediately, upon which declaration, all amounts
payable in respect of such Notes shall be immediately due and payable. If an
Event of Default specified in clause (viii) or (ix) of the immediately preceding
paragraph occurs and is continuing, then all of the outstanding Notes under each
of the Senior Note Indentures shall IPSO FACTO become and be immediately due and
payable without any declaration or other act on the part of the Trustee
thereunder or any holder of such Notes.
After a declaration of acceleration, but before a judgment or decree for
payment of the money due has been obtained by the applicable Trustee, the
holders of a majority in aggregate principal amount outstanding of any series of
Notes, by written notice to the Company and such Trustee, may annul such
declaration if (a) the Company has paid or deposited with such Trustee a sum
sufficient to pay (i) all sums paid or advanced by such Trustee under the Fixed
Rate Note Indenture, with respect to such series of Notes, or the Floating Rate
Note Indenture, as the case may be, and the reasonable compensation, expenses,
disbursements, and advances of such Trustee, its agents and counsel, (ii) all
overdue interest on all of the Notes of such series, and (iii) to the extent
that payment of such interest is lawful, interest upon overdue interest at the
rate borne by the Notes of such series; and (b) all Events of Default, other
than the non-payment of principal of such Notes which have become due solely by
such declaration of acceleration, have been cured or waived. (Section 502)
The holders of a majority in aggregate principal amount of the Fixed Rate
Notes and the Floating Rate Notes outstanding, respectively, may, on behalf of
the holders of all of such Notes, waive any past defaults under the Fixed Rate
Note Indenture, or the Floating Rate Note Indenture, as the case may be, except
a default in the payment of the principal of, premium, if any, or interest on
any such Note, or in respect of a covenant or provision which under such
Indenture cannot be modified or amended without the consent of the holder of
each such outstanding Fixed Rate Note or Floating Rate Note. (Section 513)
The Company is also required to notify the Trustee within ten days of the
occurrence of any Default. (Section 515)
The Trust Indenture Act contains limitations on the rights of the Trustee,
acting as trustee with respect to the Notes, should it become a creditor of the
Company or any Subsidiary Guarantor, to obtain payment of claims in certain
cases or to realize on certain property received by it in respect of any such
claims, as security or otherwise. Such Trustee is permitted to engage in other
transactions, PROVIDED that if it acquires any conflicting interest, it must
eliminate such conflict upon the occurrence of an Event of Default or else
resign.
DEFEASANCE OR COVENANT DEFEASANCE OF SENIOR NOTE INDENTURES
The Company may, at its option and at any time, elect to have the
obligations of the Company and any Subsidiary Guarantor discharged with respect
to any Notes issued under either Senior Note Indenture ("defeasance"). (Section
1301) Such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such outstanding Notes, except
for (i) the rights of holders of such outstanding Notes to receive payments in
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due or on the redemption date with respect to such Notes, as
the case may be, (ii) the Company's obligations with respect to such Notes
concerning issuing temporary Notes, registration of Notes, mutilated, destroyed,
lost or stolen Notes, and the maintenance of an office or
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agency for payment and money for security payments held in trust, (iii) the
rights, powers, trusts, duties and immunities of the applicable Trustee, and
(iv) the defeasance provisions of the applicable Indenture. (Section 1302) In
addition, the Company may, at its option and at any time, elect to have the
obligations of the Company released with respect to certain covenants that are
described in the Senior Note Indentures ("covenant defeasance") and thereafter
any omission to comply with such obligations shall not constitute a Default or
an Event of Default with respect to such Notes. In the event covenant defeasance
occurs, certain events (not including non-payment, enforceability of any Note
Guarantee, bankruptcy and insolvency events) described under "-- Events of
Default" will no longer constitute an Event of Default with respect to such
Notes. (Sections 1303 and 1304)
In order to exercise either defeasance or covenant defeasance with respect
to the Notes under the Fixed Rate Note Indenture or the Floating Rate Note
Indenture, as the case may be, (i) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the holders of such Notes, cash in United
States dollars, U.S. Government Obligations (as defined in the Senior Note
Indentures), or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent
public accountants, to pay and discharge the principal of, premium, if any, and
interest on the Notes outstanding on the Stated Maturity thereof or on an
optional redemption date (such date being referred to as the "Defeasance
Redemption Date"), as the case may be, if in the case of a Defeasance Redemption
Date prior to electing to exercise either defeasance or covenant defeasance, the
Company has delivered to the Trustee an irrevocable notice to redeem all of the
outstanding Notes on such Defeasance Redemption Date; (ii) in the case of
defeasance, the Company shall have delivered to the Trustee an opinion of
independent counsel in the United States stating that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of the Senior Note Indentures, there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such opinion of counsel in the United States shall
confirm that, the holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such defeasance had not
occurred; (iii) in the case of covenant defeasance, the Company shall have
delivered to the Trustee an opinion of independent counsel in the United States
to the effect that the holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred; (iv) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or insofar as
clause (viii) and (ix) under the first paragraph under "-- Events of Default"
are concerned, at any time during the period ending on the 91st day after the
date of deposit; (v) such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default under, the Senior Note
Indentures or any other material agreement or instrument to which the Company or
any Subsidiary Guarantor is a party or by which it is bound; (vi) the Company
shall have delivered to the Trustee an officers' certificate stating that the
deposit was not made by the Company with the intent of preferring the holders of
the Notes or any Subsidiary Guarantor over the other creditors of the Company or
any Subsidiary Guarantor or with the intent of defecting, hindering, delaying or
defrauding creditors of the Company, any Subsidiary Guarantor or others; and
(vii) the Company shall have delivered to the Trustee an officers' certificate
stating that all conditions precedent provided for relating to either the
defeasance or the covenant defeasance, as the case may be, have been complied
with. (Section 1304)
SATISFACTION AND DISCHARGE
Each of the Senior Note Indentures shall cease to be of further effect
(except as surviving rights of registration of transfer or exchange of the Notes
issued thereunder, as expressly provided for in each such Indenture) as to all
outstanding Notes issued thereunder when (i) either (A) all Notes issued under
the Fixed Rate Note Indenture or the Floating Rate Note Indenture, as the case
may be, and theretofore authenticated and delivered (except lost, stolen or
destroyed Notes of such series which have been replaced or paid and Notes for
whose payment funds have been deposited in trust by the Company and thereafter
repaid to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (B) all
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Notes issued under the Fixed Rate Note Indenture or the Floating Rate Note
Indenture, as the case may be, and not theretofore delivered to the applicable
Trustee for cancellation (x) have become due and payable or (y) will become due
and payable at their Stated Maturity within one year, and either the Company or
any Subsidiary Guarantor has irrevocably deposited or caused to be deposited
with such Trustee funds in an amount sufficient to pay and discharge the entire
indebtedness in respect of such Notes, for principal of, premium, if any, and
interest to the date of deposit; (ii) the Company or any Subsidiary Guarantor
has paid all other sums payable by the Company and any Subsidiary Guarantor
under the applicable Senior Note Indenture; and (iii) the Company has delivered
to the Trustee an officers' certificate and an opinion of counsel each stating
that all conditions precedent to the satisfaction and discharge of such Senior
Note Indenture, as specified therein, have been complied with and that such
satisfaction and discharge will not result in a breach or violation of, or
constitute a default under, such Indenture or any other material agreement or
instrument to which the Company or any Subsidiary Guarantor is a party or by
which it is bound. (Section 401)
MODIFICATION AND AMENDMENTS
Modifications and amendments of the Senior Note Indentures may be made by
the Company, the Subsidiary Guarantors and the applicable Trustee with the
consent of the holders of a majority in aggregate outstanding principal amount
of each series of Notes issued thereunder; PROVIDED, HOWEVER, that no such
modification or amendment may, without the consent of the holder of each
outstanding Note of each series affected thereby; (i) change the Stated Maturity
of the principal of, or any installment of interest on, any Note issued
thereunder or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or change the coin
or currency in which any Note or any premium or the interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment
after the Stated Maturity thereof; (ii) amend, change or modify the obligation
of the Company to make and consummate a Change of Control Purchase Offer in the
event of a Change of Control Triggering Event or modify any of the provisions or
definitions with respect thereto; (iii) reduce the percentage in principal
amount of outstanding Notes thereunder, the consent of whose holders is required
for any modification or amendment to such Senior Note Indenture, or the consent
of whose holders is required for any waiver thereof; (iv) modify any of the
provisions relating to supplemental indentures requiring the consent of holders
or relating to the waiver of past defaults or relating to the waiver of certain
covenants, except to increase the percentage of outstanding Notes issued
thereunder required for such actions or to provide that certain other provisions
of such Senior Note Indenture cannot be modified or waived without the consent
of the holder of each Note affected thereby; (v) except as otherwise permitted
under "-- Consolidation, Merger, Sale of Assets," consent to the assignment or
transfer by the Company or any Subsidiary Guarantor of any of its rights and
obligations under such Senior Note Indenture; or (vi) amend or modify any of the
provisions of such Senior Note Indenture in any manner which subordinates the
Notes issued thereunder in right of payment to other Indebtedness of the Company
or which subordinates any Note Guarantee in right of payment to other
Indebtedness of the Subsidiary Guarantor issuing such Guarantee. (Sections 901
and 902)
The holders of a majority in aggregate principal amount of the Notes issued
under a Senior Note Indenture and outstanding may waive compliance with certain
restrictive covenants and provisions of such Senior Note Indenture. (Section
1015)
CERTAIN DEFINITIONS
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Capital Stock or any
executive officer or director of any such specified Person. For the purposes of
this definition, "control", when used with
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respect to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through ownership of
Voting Stock, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (A) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (B) the amount of each such principal payment by (ii)
the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Banks" means the banks and other financial institutions from time to time
that are lenders under the Credit Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
"Capital Lease Obligation" of any Person means any obligation of such Person
and its Subsidiaries on a Consolidated basis under any capital lease of real or
personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interest,
partnership interests, participations or other equivalents (however designated)
of such Person's capital stock whether now outstanding or issued after the date
of the Senior Note Indentures, including, without limitation, all common stock
and preferred stock.
"Change of Control" means the occurrence of any of the following events: (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to
have beneficial ownership of all shares that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total outstanding
Voting Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the stockholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such Board of Directors then in office; (iii) the
Company consolidates with or merges with or into any Person or conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with or merges into or with the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is changed into or exchanged for cash, securities or
other property, other than any such transaction where the outstanding Voting
Stock of the Company is not changed or exchanged at all (except to the extent
necessary to reflect a change in the jurisdiction of incorporation of the
Company) or where (A) the outstanding Voting Stock of the Company is changed
into or exchanged for (x) Voting Stock of the surviving corporation which is not
Redeemable Capital Stock or (y) cash, securities or other property (other than
Capital Stock of the surviving corporation) in an amount which could be paid by
the Company as a Restricted Payment as described under "-- Certain Covenants --
LIMITATION ON RESTRICTED PAYMENTS" (and such amount shall be treated as a
Restricted Payment subject to the provisions in the Senior Note Indentures
described under "-- Certain Covenants -- LIMITATION ON RESTRICTED PAYMENTS") and
(B) immediately after such transaction, no "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a Person shall be deemed to have beneficial ownership of all shares that such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or
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indirectly, of more than 50% of the total outstanding Voting Stock of the
surviving corporation; or (iv) the Company is liquidated or dissolved or adopts
a plan of liquidation or dissolution other than in a transaction which complies
with the provisions described under "-- Consolidation, Merger, Sale of Assets."
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of the Senior Note Indentures such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Consolidated" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP consistently
applied.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for any
period, the ratio of (a) the sum of Consolidated Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-Cash
Charges deducted in computing Consolidated Net Income, in each case, for such
period, of the Company and its Subsidiaries on a Consolidated basis, all
determined in accordance with GAAP to (b) Consolidated Interest Expense for such
period; PROVIDED that (i) in making such computation, the Consolidated Interest
Expense attributable to interest on any Indebtedness computed on a PRO FORMA
basis and (A) bearing a floating interest rate shall be computed as if the rate
in effect on the date of computation had been the applicable rate for the entire
period and (B) which was not outstanding during the period for which the
computation is being made but which bears, at the option of the Company, a fixed
or floating rate of interest, shall be computed by applying, at the option of
the Company, either the fixed or floating rate and (ii) in making such
computation, Consolidated Interest Expense attributable to interest on any
Indebtedness under a revolving credit facility computed on a PRO FORMA basis
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period.
"Consolidated Income Tax Expense" means for any period the provision for
federal, state, local and foreign income taxes of the Company and its
Subsidiaries for such period as determined on a Consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, without duplication, for any period,
the sum of (A) the interest expense of the Company and its Subsidiaries for such
period, as determined on a Consolidated basis in accordance with GAAP including,
without limitation, (i) amortization of debt discount, (ii) the net cost under
Interest Rate Agreements (including amortization of discount), (iii) the
interest portion of any deferred payment obligation and (iv) accrued interest,
plus (B) the aggregate amount for such period of dividends on any Redeemable
Capital Stock or Preferred Stock of the Company and its Subsidiaries, (C) the
interest component of the Capital Lease Obligations paid, accrued and/or
scheduled to be paid, or accrued by such Person during such period and (D) all
capitalized interest of the Company and its Subsidiaries determined on a
Consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the Consolidated net income
(or loss) of the Company and its Subsidiaries for such period as determined on a
Consolidated basis in accordance with GAAP, adjusted, to the extent included in
calculating such net income (loss), by excluding, without duplication, (i) any
net after-tax extraordinary gains or losses (less all fees and expenses relating
thereto), (ii) the $101.3 million facilities consolidation and restructuring
charge originally reflected in the Company's Consolidated statement of earnings
for the year ended December 25, 1993; (iii) the portion of net income (or loss)
of the Company and its Subsidiaries determined on a Consolidated basis allocable
to minority interests in unconsolidated Persons to the extent that cash
dividends or distributions have not actually been received by the Company or any
Subsidiary; (iv) net income (or loss) of any Person combined with the Company or
any Subsidiary on a "pooling of interests" basis attributable to any period
prior to the date of combination and (v) net gains or losses (less all fees and
expenses relating thereto) in respect of dispositions of assets other than in
the ordinary course of business and (vi) the net income of any Subsidiary to the
extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is not at the time
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permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its shareholders.
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on the Consolidated balance sheet of the Company and its majority or
Wholly Owned Subsidiaries less the following: (1) current liabilities; (2)
reserves for depreciation and other asset valuation reserves; (3) intangible
assets including, without limitation, items such as goodwill, trademarks, trade
names, patents and unamortized debt discount and expense; and (4) appropriate
adjustments on account of minority interests of other Persons holding stock in
any majority-owned Subsidiary of the Company.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash charges of the Company and its
Subsidiaries for such period, as determined on a Consolidated basis in
accordance with GAAP (excluding any non-cash charges which require an accrual or
reserve for any future period).
"Credit Agreement" means the Credit Agreement, dated as of July 19, 1994,
among the Company, the Banks, the Agents listed therein and Morgan Guaranty
Trust Company of New York, as Managing Agent, as such agreement may be amended,
renewed, extended, substituted, refinanced, restructured, replaced, supplemented
or otherwise modified from time to time (including, without limitation, any
successive renewals, extensions, substitutions, refinancings, restructurings,
replacements, supplementations or other modifications of the foregoing).
"Currency Agreements" means any spot or forward foreign exchange agreements
and currency swap, currency option or other similar financial agreements or
arrangements entered into by the Company or any of its Subsidiaries in the
ordinary course of business and designed to protect against or manage exposure
to fluctuations in foreign currency exchange rates.
"Default" means any event which is, or after notice or passage of any time
or both would be, an Event of Default.
"Equity Store" means a Person in which the Company or any of its
Subsidiaries has invested capital or to which it has made loans in accordance
with the business practice of the Company and its Subsidiaries of making equity
investments in Persons, and making or guaranteeing loans to such Persons, for
the purpose of assisting such Person in acquiring, remodeling, refurbishing,
expanding or operating one or more retail grocery stores and pursuant to which
such Person is permitted or required to reduce the Company's or the Subsidiary's
equity interest to a minority position over time (usually five to ten years).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as applied from time to
time by the Company in the preparation of its consolidated financial statements.
"Guaranteed Debt" means, with respect to any Person, without duplication,
all Indebtedness of any other Person referred to in the definition of
Indebtedness contained herein guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (ii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss, PROVIDED that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
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"Indebtedness" means, with respect to any Person, without duplication, (i)
all liabilities of such Person for borrowed money (including overdrafts) or for
the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit and
acceptances issued under letter of credit facilities, acceptance facilities or
other similar facilities, (ii) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (iii) all indebtedness of
such Person created or arising under any conditioned sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
Capital Lease Obligations of such Person, (v) all obligations under Interest
Rate Agreements or Currency Agreements of such Person, (vi) Indebtedness
referred to in clauses (i) through (v) above of other Persons and all dividends
of other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Redeemable Capital Stock valued at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends, and (ix) any amendment, supplement, modification,
deferral, renewal, extension, refunding or refinancing of any liability of the
types referred to in clauses (i) through (viii) above. For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with terms of
such Redeemable Capital Stock as if such Redeemable Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
the Indenture, and if such price is based upon, or measured by, the fair market
value of such Redeemable Capital Stock, such fair market value is to be
determined in good faith by the Board of Directors of the issuer of such
Redeemable Capital Stock.
"Interest Rate Agreements" means any interest rate protection agreements and
other types of interest rate hedging agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements) designed to
protect against or manage exposure to fluctuations in interest rates in respect
of Indebtedness.
"Investment" means, with respect to any Person, directly or indirectly, any
advance (other than advances to customers in the ordinary course of business,
which are recorded as accounts receivable on the balance sheet of the Company
and its Subsidiaries), loan or other extension of credit or capital contribution
to (by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase,
acquisitions or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or assets issued or owned by any other Person.
"Investment Grade" means BBB- or higher by S&P or Baa3 or higher by Moody's
or the equivalent of such ratings by S&P or Moody's or in the event S&P or
Moody's shall cease rating the Notes and the Company shall select any other
Rating Agency, the equivalent of such ratings by such other Rating Agency.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired.
"Maturity" when used with respect to the Notes means the date on which the
principal of the Notes becomes due and payable as therein provided or as
provided in the Senior Note Indenture pursuant to which such Notes were issued,
whether at Stated Maturity, purchase upon a Change of Control Triggering Event
or redemption date, and whether by declaration of acceleration, Change of
Control, call for redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
"Note Guarantee" means any guarantee by a Subsidiary Guarantor of the
Company's obligations under the Fixed Rate Note Indenture or the Floating Rate
Note Indenture.
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"Permitted Indebtedness" means any of the following Indebtedness of the
Company or any Subsidiary, as the case may be:
(i) Indebtedness of the Company and guarantees of the Subsidiary
Guarantors under the Credit Agreement (including Indebtedness of the Company
under Tranche A of the Credit Agreement to the extent that the aggregate
commitment thereunder does not exceed $900 million, the maximum aggregate
commitment for such facility on the date of the Senior Note Indentures, and
any guarantees with respect thereto outstanding on the date of the Senior
Note Indentures and any additional guarantees executed in connection
therewith) in an aggregate principal amount at any one time outstanding not
to exceed $1.7 billion (after giving PRO FORMA effect to the use of proceeds
of the Offering) less mandatory repayments actually made in respect of any
term Indebtedness thereunder;
(ii) Indebtedness of the Company under uncommitted bank lines of credit;
PROVIDED, HOWEVER, that the aggregate principal amount of Indebtedness
incurred pursuant to clauses (i), (ii) and (xi) of this definition of
"Permitted Indebtedness" does not exceed $1.7 billion (after giving PRO
FORMA effect to the use of proceeds of the Offering) less mandatory
repayments actually made in respect of any term Indebtedness thereunder;
(iii) Indebtedness of the Company evidenced by the Fixed Rate Notes and
the Note Guarantees with respect thereto under the Fixed Rate Note
Indenture;
(iv) Indebtedness of the Company evidenced by the Floating Rate Notes
and the Note Guarantees with respect thereto under the Floating Rate Note
Indenture;
(v) Indebtedness of the Company or any Subsidiary outstanding on the
date of the Senior Note Indentures and listed on a schedule thereto;
(vi) obligations of the Company or any Subsidiary entered into in the
ordinary course of business (a) pursuant to Interest Rate Agreements
designed to protect against or manage exposure to fluctuations in interest
rates in respect of Indebtedness or retailer notes receivables, which, if
related to Indebtedness or such retailer notes receivables, do not exceed
the aggregate notional principal amount of such Indebtedness to which such
Interest Rate Agreements relate, or (b) under any Currency Agreements in the
ordinary course of business and designed to protect against or manage
exposure to fluctuations in foreign currency exchange rates which, if
related to Indebtedness, do not increase the amount of such Indebtedness
other than as a result of foreign exchange fluctuations;
(vii) Indebtedness of the Company owing to a Wholly Owned Subsidiary or
of any Subsidiary owing to the Company or any Wholly Owned Subsidiary;
PROVIDED that any disposition, pledge or transfer of any such Indebtedness
to a Person (other than the Company or another Wholly Owned Subsidiary)
shall be deemed to be an incurrence of such Indebtedness by the Company or
Subsidiary, as the case may be, not permitted by this clause (vii);
(viii) Indebtedness in respect of letters of credit, surety bonds and
performance bonds provided in the ordinary course of business;
(ix) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds in the ordinary course of business; PROVIDED that
such Indebtedness is extinguished within five business days of its
incurrence;
(x) Indebtedness of the Company or any Subsidiary consisting of
guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets;
(xi) Indebtedness of the Company evidenced by commercial paper issued by
the Company; PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness incurred pursuant to clauses (i), (ii) and (xi) of this
definition of "Permitted Indebtedness" does not exceed $1.7 billion (after
giving PRO FORMA effect to the use of proceeds of the Offering) less
mandatory repayments actually made in respect of any term Indebtedness
thereunder;
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(xii) Indebtedness of the Company pursuant to guarantees by the Company
or any Subsidiary Guarantor in connection with any Permitted Receivables
Financing; PROVIDED, HOWEVER, that such Indebtedness shall not exceed 15% of
the book value of the Transferred Receivables or in the case of receivables
arising from direct financing leases for retail electronics systems, 30% of
the book value thereof;
(xiii) Indebtedness of the Company and its Subsidiaries in addition to
that described in clauses (i) through (xii) of this definition of "Permitted
Indebtedness," together with any other outstanding Indebtedness incurred
pursuant to this clause (xiii), not to exceed $100 million at any time
outstanding in the aggregate; and
(xiv) any renewals, extensions, substitutions, refundings, refinancings
or replacements (each, a "refinancing") of any Indebtedness described in
clauses (ii), (iii) and (iv) of this definition of "Permitted Indebtedness,"
including any successive refinancings, so long as (A) the aggregate
principal amount of Indebtedness represented thereby is not increased by
such refinancing to an amount greater than such principal amount plus the
lesser of (x) the stated amount of any premium or other payment required to
be paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (y) the amount of premium or other payment
actually paid at such time to refinance the Indebtedness, plus, in either
case, the amount of expenses of the Company or Subsidiary, as the case may
be, incurred in connection with such refinancing and (B) such refinancing
does not reduce the Average Life to Stated Maturity or the Stated Maturity
of such Indebtedness.
"Permitted Investment" means (i) Investment in any Wholly Owned Subsidiary
or any Investment in any Person by the Company or any Wholly Owned Subsidiary as
a result of which such Person becomes a Wholly Owned Subsidiary or any
Investment in the Company by a Wholly Owned Subsidiary; (ii) intercompany
Indebtedness to the extent permitted under clause (vi) of the definition of
"Permitted Indebtedness"; (iii) Temporary Cash Investments; (iv) sales of goods
on trade credit terms consistent with the Company's past practices or otherwise
consistent with trade credit terms in common use in the industry; (v)
Investments in direct financing leases for equipment owned by the Company and
leased to its customers in the ordinary course of business consistent with past
practice; (vi) Investments in existence on the date of the Senior Note
Indentures; and (vii) any substitutions or replacements of any Investment so
long as the aggregate amount of such Investment is not increased by such
substitution or replacement.
"Permitted Liens" means, with respect to any Person:
(a) any Lien existing as of the date of the Senior Note Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired; (2) taxes, assessments, governmental charges or levies not yet
delinquent or which are being contested in good faith; (3) security for
payment of workers' compensation or other insurance; (4) security for the
performance of tenders, leases (including, without limitation, statutory and
common law landlord's liens) and contracts (other than contracts for the
payment of money); (5) zoning restrictions, easements, licenses,
reservations, title defects, rights of others for rights of way, utilities,
sewers, electric lines, telephone or telegraph lines, and other similar
purposes, provisions, covenants, conditions, waivers and restrictions on the
use of property or minor irregularities of title (and, with respect to
leasehold interests, mortgages, obligations, liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by, through or
under a landlord or owner of the leased property, with or without consent of
the lessee), none of which materially impairs the use of any parcel of
property material to the operation of the business of the Company or any
Subsidiary or the value of such property for the purpose of such business;
(6) deposits to secure public or statutory obligations; (7) operation of law
in favor of growers, dealers and suppliers of fresh fruits and vegetables,
carriers, mechanics, materialmen, laborers, employees or suppliers, incurred
in the ordinary course of business for sums which are not yet delinquent or
are being contested in good faith by negotiations or by appropriate
proceedings which suspend the collection
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thereof; (8) the grant by the Company to licensees, pursuant to security
agreements, of security interest in trademarks and goodwill, patents and
trade secrets of the Company to secure the damages, if any, of such
licensees, resulting from the rejection of the license of such licensees in
a bankruptcy, reorganization or similar proceeding with respect to the
Company; or (9) security for surety or appeal bonds;
(c) any extension, renewal, refinancing or replacement of any Lien on
property of the Company or any Subsidiary existing as of the date of the
Senior Note Indenture and securing the Indebtedness under the Credit
Agreement in an aggregate principal amount not to exceed the principal
amount of the Indebtedness outstanding as permitted by clause (i) of the
definition of "Permitted Indebtedness" so long as no additional collateral
is granted as security thereby; PROVIDED that this clause (c) shall not
apply to any Lien on such property that has not been subject to a Lien for
30 days;
(d) any Lien on any property or assets of a Subsidiary in favor of the
Company or any Wholly Owned Subsidiary;
(e) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Subsidiary; PROVIDED that such Lien does
not extend to any assets of the Company or any Subsidiary other than the
assets acquired in the transaction resulting in such Acquired Indebtedness
being incurred by the Company or Subsidiary, as the case may be;
(f) any Lien to secure the performance of bids, trade contracts, letters
of credit and other obligations of a like nature and incurred in the
ordinary course of business of the Company or any Subsidiary;
(g) any Lien securing any Interest Rate Agreements or Currency
Agreements permitted to be incurred pursuant to clause (v) of the definition
of "Permitted Indebtedness" or any collateral for the Indebtedness to which
such Interest Rate Agreements or Currency Agreements relate;
(h) any Lien securing the Notes;
(i) any Lien on an asset securing Indebtedness (including Capital Lease
Obligations) incurred or assumed for the purpose of financing all or any
part of the cost of acquiring or constructing such asset; PROVIDED that such
Lien attaches to such asset concurrently or within 180 days after the
acquisition or completion of construction thereof;
(j) any Lien on real or personal property securing Capital Lease
Obligations of the Company or any Subsidiary as lessee with respect to such
real or personal property (1) to the extent that the Company or such
Subsidiary has entered into (and not terminated), or has a binding
commitment for, subleases on terms which, to the Company, are at least as
favorable, on a current basis, as the terms of the corresponding capital
lease or (2) under which the aggregate principal component of the annual
rent payable does not exceed $5 million;
(k) any Lien on a Financing Receivable or other receivable that is
transferred in a Permitted Receivables Financing;
(l) any Lien consisting of any pledge to any Person of Indebtedness owed
by any Subsidiary to the Company or to any Wholly Owned Subsidiary;
PROVIDED, that (i) such Subsidiary is a Subsidiary Guarantor and (ii) the
principal amount pledged does not exceed the Indebtedness secured by such
pledge;
(m) any extension, renewal, refinancing or replacement, in whole or in
part, of any Lien described in the foregoing clause (a) so long as no
additional collateral is granted as security thereby.
"Permitted Receivables Financing" means any transaction involving the
transfer (by way of sale, pledge or otherwise) by the Company or any of its
Subsidiaries of receivables to any other Person, PROVIDED that after giving
effect to such transaction the sum of (i) the aggregate uncollected balances of
the receivables so
69
<PAGE>
transferred ("Transferred Receivables") PLUS (ii) the aggregate amount of all
collections on Transferred Receivables theretofore received by the seller but
not yet remitted to the purchaser, in each case at the date of determination,
would not exceed $750 million.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred stock whether now outstanding, or issued after the date of
the Indenture, and including, without limitation, all classes and series of
preferred or preference stock of such Person.
"Principal Property" means any manufacturing or processing plant, office
facility, retail store (other than an Equity Store), warehouse or distribution
center, including, in each case, the fixtures appurtenant thereto, located
within the continental United States and owned and operated now or hereafter by
the Company or any Subsidiary and having a book value on the date as of which
the determination is being made of more than 2% of Consolidated Net Tangible
Assets.
"Public Equity Offering" means a primary public offering of equity
securities of the Company, pursuant to an effective registration statement under
the Securities Act with net cash proceeds of at least $50 million.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Rating Agency" means any of (i) S&P, (ii) Moody's or (iii) if S&P or
Moody's or both shall not make a rating of the Notes publicly available, a
security rating agency or agencies, as the case may be, nationally recognized in
the United States, selected by the Company, which shall be substituted for S&P
or Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Aaa,
Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and
(iii) the equivalent of any such category of S&P or Moody's used by another
Rating Agency. In determining whether the rating of the Notes has decreased by
one or more gradation, gradations within Rating Categories (+ and - for S&P; 1,
2 and 3 for Moody's; or the equivalent gradations for another Rating Agency)
shall be taken into account (e.g., with respect to S&P, a decline in rating from
BB+ to BB, as well as from BB- to B+, will constitute a decrease of one
gradation).
"Rating Decline" means the occurrence on, or within 90 days after, the date
of public notice of the occurrence of a Change of Control or of the intention of
the Company or Persons controlling the Company to effect a Change of Control
(which period shall be extended so long as the rating of the Notes is under
publicly announced consideration for possible downgrade by any of the Rating
Agencies) of the following: (i) if the Notes are rated by either Rating Agency
as Investment Grade immediately prior to the beginning of such period, the
rating of the Notes by both Rating Agencies shall be below Investment Grade; or
(ii) if the Notes are rated below Investment Grade by both Rating Agencies
immediately prior to the beginning of such period, the rating of the Notes by
either Rating Agency shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"Redeemable Capital Stock" means any Capital Stock that, either by its terms
or by the terms of any security into which it is convertible or exchangeable or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Notes or is redeemable at the option of the holder thereof at any time prior to
any such Stated Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Stated Maturity at the option of the
holder thereof.
"Securities Act" means the Securities Act of 1933, as amended.
70
<PAGE>
"Senior Indebtedness" means Indebtedness of the Company other than
Subordinated Indebtedness.
"Significant Subsidiary" of the Company means any Subsidiary of the Company
that is a "significant subsidiary" as defined in Rule 1.02(v) of Regulation S-X
under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill Inc.,
a New York corporation, or any successor rating agency.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon means the dates specified in such Indebtedness
as the fixed date on which the principal of or premiums on such Indebtedness or
such installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company subordinated
in right of payment to the Notes.
"Subsidiary" means any Person a majority of the equity ownership or the
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Subsidiary Guarantor" means, in each case as applicable, any Person that is
required pursuant to the "Additional Guarantees" covenant, on or after the date
of the applicable Senior Note Indenture, to execute a Note Guarantee of the
Fixed Rate Notes pursuant to the Fixed Rate Note Indenture or a Note Guarantee
of the Floating Rate Notes pursuant to the Floating Rate Note Indenture, as the
case may be, until a successor replaces any such party pursuant to the
applicable provisions of the applicable Senior Note Indenture and, thereafter,
shall mean such successor, and, in the case of each such Senior Note Indenture,
the following Subsidiaries of the Company: 109 West Main Street, Inc., 121 East
Main Street, Inc., 27 Slayton Avenue, Inc., 29 Super Market, Inc., 35 Church
Street, Inc., ATI, Inc., Badger Markets, Inc., Baker's Supermarkets, Inc., Ball
Motor Service, Inc., Boogaart Stores of Nebraska, Inc., Central Park Super
Duper, Inc., Commercial Cold/Dry Storage Company, Consumers Markets, Inc., D.L.
Food Stores, Inc., Del-Arrow Super Duper, Inc., Festival Foods, Inc., Fleming
Direct Sales Corporation, Fleming Foods East, Inc., Fleming Foods of Texas,
Inc., Fleming Foods of Tennessee, Inc., Fleming Foods of Virginia, Inc., Fleming
Foods of Alabama, Inc., Fleming Foods of Ohio, Inc., Fleming Foods South, Inc.,
Fleming Foods West, Inc., Fleming Foreign Sales Corporation, Fleming
Franchising, Inc., Fleming Holdings, Inc., Fleming International Ltd., Fleming
Site Media, Inc., Fleming Supermarkets of Florida, Inc., Fleming Technology
Leasing Company, Inc., Fleming Transportation Service, Inc., Food Brands, Inc.,
Food Holdings, Inc., Food Saver of Iowa, Inc., Food-4-Less, Inc., Gateway
Development Co., Inc., Gateway Food Distributors, Inc., Gateway Foods, Inc.,
Gateway Foods of Altoona, Inc., Gateway Foods of Pennsylvania, Inc., Gateway
Foods of Twin Ports, Inc., Gateway Food Service Corporation, Grand Central
Leasing Corporation, Great Bend Supermarkets, Inc., Hub City Transportation,
Inc., Kensington and Harlem, Inc., Ladysmith East IGA, Inc., Ladysmith IGA,
Inc., Lake Markets, Inc., LAS, Inc., M&H Desoto, Inc., M&H Financial Corp., M&H
Realty Corp., Malone & Hyde of Lafayette, Inc., Malone & Hyde, Inc., Manitowoc
IGA, Inc., Moberly Foods, Inc., Mt. Morris Super Duper, Inc., Niagara Falls
Super Duper, Inc., Northern Supermarkets of Oregon, Inc., Northgate Plaza, Inc.,
Peshtigo IGA, Inc., Piggly Wiggly Corporation, Quality Incentive Company, Inc.,
Rainbow Transportation Services, Inc., Richland Center IGA, Inc., Route 16,
Inc., Route 219, Inc., Route 417, Inc., Scrivner, Inc., Scrivner of Alabama,
Inc., Scrivner of Illinois, Inc., Scrivner of Iowa, Inc., Scrivner of Kansas,
Inc., Scrivner of New York, Inc., Scrivner of North Carolina, Inc., Scrivner of
Pennsylvania, Inc., Scrivner of Tennessee, Inc., Scrivner of Texas, Inc.,
Scrivner Super Stores of Illinois, Inc., Scrivner Super Stores of Iowa, Inc.,
Scrivner Transportation, Inc., Scrivner-Food Holdings, Inc., Sehon Foods, Inc.,
Selected Products, Inc., Sentry Markets, Inc., SmarTrans, Inc., South Ogden
Super Duper, Inc., Southern Supermarkets, Inc. (TX), Southern Supermarkets, Inc.
(OK), Southern Supermarkets of Louisiana, Inc., Star Groceries, Inc., Store
Equipment, Inc., Sundries Service, Inc., Switzer Foods, Inc., Thompson Food
Basket, Inc., and WPC, Inc.
"Temporary Cash Investments" means (i) any evidence of Indebtedness issued
by the United States, or an instrumentality or agency thereof, and guaranteed
fully as to principal, premium, if any, and interest by the United States, (ii)
any certificate of deposit issued by, or time deposit of, a financial
institution that is a
71
<PAGE>
member of the Federal Reserve System having combined capital and surplus and
undivided profits of not less than $500 million, whose debt has a rating, at the
time of which any investment therein is made, of "A" (or higher) according to
Moody's or "A" (or higher) according to S&P, (iii) commercial paper issued by a
corporation (other than an Affiliate or Subsidiary of the Company) organized and
existing under the laws of the United States with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
or "A-1" (or higher) according to S&P, (iv) any money market deposit accounts
issued or offered by a financial institution that is a member of the Federal
Reserve System having capital and surplus in excess of $500 million, (v) short
term tax-exempt bonds with a rating, at the time as of which any investment is
made therein, of "Aa2" (or higher) according to Moody's or "AA" (or higher)
according to S&P, (vi) shares in a mutual fund, the investment objectives and
policies of which require it to invest substantially in the investments of the
type described in clause (v) and (vii) repurchase and reverse repurchase
obligations with the term of not more than seven days for underlying securities
of the types described in clauses (i) and (ii) entered into with any financial
institution meeting the qualifications specified in clause (ii); PROVIDED that
in the case of clauses (i), (ii), (iii), (v), (vi) and (vii), such investment
matures within one year from the date of acquisition thereof.
"Transferred Receivables" has the meaning specified in the definition of
"Permitted Receivables Financing" set forth herein.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
Person (irrespective of whether or not at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock (other
than directors' qualifying shares) of which is owned by the Company or another
Wholly Owned Subsidiary.
72
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") between the Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch") and J.P. Morgan Securities Inc.
("J.P. Morgan Securities" and together with Merrill Lynch, the "Underwriters"),
the Company has agreed to sell to the Underwriters, and the Underwriters have
severally agreed to purchase, the respective principal amounts of the Notes set
forth after their names below. The Underwriting Agreement provides that the
obligations of the Underwriters are subject to certain conditions precedent and
that the Underwriters will be obligated to purchase all of the Notes if any are
purchased.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
PRINCIPAL AMOUNT OF
OF FLOATING RATE
UNDERWRITER FIXED RATE NOTES NOTES
- ------------------------------------------------------------------------- ------------------ ------------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................... $ $
J.P. Morgan Securities Inc. .............................................
------------------ ------------------
Total.......................................................... $ 350,000,000 $ 150,000,000
------------------ ------------------
------------------ ------------------
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Notes to the public at the public offering prices set forth on the
cover page of this Prospectus, and to certain dealers at such prices less a
concession not in excess of % of the principal amount of the Fixed Rate
Notes and less a concession not in excess of % of the principal amount of the
Floating Rate Notes. The Underwriters may allow, and such dealers may reallow, a
discount not in excess of % of the principal amount of the Fixed Rate Notes
and a discount not in excess of % of the principal amount of the Floating
Rate Notes to certain other dealers. After the initial public offering, the
public offering prices, concessions and discounts may be changed.
There is no public trading market for the Notes, and the Company does not
intend to apply for listing of the Notes on any securities exchange or any
inter-dealer quotation system. The Company has been advised by the Underwriters
that, following the completion of the initial offering of the Notes, the
Underwriters presently intend to make a market in the Notes, although the
Underwriters are under no obligation to do so and may discontinue any market
making at any time without notice. No assurances can be given as to the
liquidity of the trading markets for the Notes or that an active trading market
for the Notes will develop. If active public trading markets for the Notes do
not develop, the market prices and liquidity of the Notes may be adversely
affected.
The Company and the Subsidiary Guarantors have agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act, or to contribute to payments which the Underwriters may be
required to make in respect thereof.
As further discussed in "Use of Proceeds," the Company intends to use the
proceeds of the Offering to repay all obligations outstanding under Tranche B of
the Credit Agreement. The offerings of the Fixed Rate Notes and the Floating
Rate Notes, respectively, are not conditioned upon each other. If either such
offering is not completed, a portion of Tranche B of the Credit Agreement will
remain outstanding.
The Underwriters have from time to time provided and may in the future
provide investment banking and financial advisory services to the Company, and
have received and may in the future receive customary fees for such services.
Morgan Guaranty, an affiliate of J.P. Morgan Securities, has from time to time
provided and may in the future provide commercial banking services and financial
advisory services for the Company and has received and may in the future receive
customary fees for such services. Currently, Morgan Guaranty is the managing
agent and a lender to the Company pursuant to the Credit Agreement.
Because more than 10% of the net proceeds of the Offering, not including
underwriting compensation, will be used to repay the Tranche B obligations under
the Credit Agreement for the benefit of Morgan Guaranty, an affiliate of J.P.
Morgan Securities, one of the Underwriters for the Offering, the Offering is
being made pursuant to the provisions of Article III, Section 44(c)(8) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
In accordance with these provisions, Merrill Lynch is acting
73
<PAGE>
as a "qualified independent underwriter," and the yield on the Fixed Rate Notes
and Floating Rate Notes, respectively, offered hereby will be no lower than that
recommended by Merrill Lynch. Merrill Lynch has also participated in the
preparation of the Registration Statement of which this Prospectus is a part and
has performed due diligence with respect thereto.
LEGAL OPINIONS
The validity of the Notes offered hereby and the Note Guarantees will be
passed upon for the Company by McAfee & Taft A Professional Corporation, Tenth
Floor, Two Leadership Square, Oklahoma City, Oklahoma 73102, and for the
Underwriters by Shearman & Sterling, 599 Lexington Avenue, New York, New York
10022.
EXPERTS
The consolidated financial statements as of December 25, 1993 and December
26, 1992 and for each of the three years in the period ended December 25, 1993
included in this Prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing herein, and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing. The consolidated financial statements of
Haniel Corporation included in or incorporated by reference in this Prospectus
or the related Registration Statement, to the extent and for the periods
indicated in their reports, have been audited by Arthur Andersen LLP,
independent public accountants, and are included in reliance upon the authority
of said firm as experts in accounting and auditing in giving said reports.
74
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
FLEMING COMPANIES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Earnings for the 40 weeks ended October 2, 1993
and October 1, 1994................................................................. F-2
Consolidated Condensed Balance Sheets as of December 25, 1993 and October 1, 1994.... F-3
Consolidated Condensed Statements of Cash Flows for the 40 weeks ended October 2,
1993 and October 1, 1994............................................................ F-4
Notes to Consolidated Condensed Financial Statements................................. F-5
Independent Auditors' Report......................................................... F-6
Consolidated Statements of Earnings for the three years in the period ended December
25, 1993............................................................................ F-7
Consolidated Balance Sheets as of December 26, 1992 and December 25, 1993............ F-8
Consolidated Statements of Shareholders' Equity for the three years in the period
ended December 25, 1993............................................................. F-9
Consolidated Statements of Cash Flows for the three years in the period ended
December 25, 1993................................................................... F-10
Notes to Consolidated Financial Statements........................................... F-11
Quarterly Financial Information for the years ended December 26, 1992 and December
25, 1993 (unaudited)................................................................ F-24
HANIEL CORPORATION
Report of Independent Public Accountants............................................. F-26
Consolidated Balance Sheets as of December 31, 1992 and 1993 and June 30, 1994....... F-27
Consolidated Statements of Income for the three years ended December 31, 1993 and the
six months ended June 30, 1993 and 1994............................................. F-28
Consolidated Statements of Stockholder's Equity for the three years ended December
31, 1993 and the six months ended June 30, 1994..................................... F-29
Consolidated Statements of Cash Flows for the three years ended December 31, 1993 and
the six months ended June 30, 1993 and 1994......................................... F-30
Notes to Consolidated Financial Statements........................................... F-31
</TABLE>
F-1
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
FOR THE 40 WEEKS ENDED OCTOBER 2, 1993, AND OCTOBER 1, 1994
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1993 1994
------------ -------------
<S> <C> <C>
Net sales............................................................................ $ 9,945,559 $ 11,057,167
Costs and expenses:
Cost of sales...................................................................... 9,357,706 10,295,126
Selling and administrative......................................................... 417,365 635,141
Interest expense................................................................... 59,081 75,692
Interest income.................................................................... (47,902) (46,885)
Equity investment results.......................................................... 5,824 11,027
Facilities consolidation........................................................... 6,500 --
------------ -------------
Total costs and expenses......................................................... 9,798,574 10,970,101
------------ -------------
Earnings before taxes................................................................ 146,985 87,066
Taxes on income...................................................................... 62,469 41,356
------------ -------------
Net earnings......................................................................... $ 84,516 $ 45,710
------------ -------------
------------ -------------
Net earnings per share............................................................... $ 2.30 $ 1.23
Dividends paid per share............................................................. $ .90 $ .90
Weighted average shares outstanding.................................................. 36,773 37,204
</TABLE>
Sales to customers accounted for under the equity method were approximately
$1.1 billion in 1994 and 1993.
See notes to consolidated condensed financial statements.
F-2
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 25, OCTOBER 1,
1993 1994
--------------- ------------
Current assets:
<S> <C> <C>
Cash and cash equivalents............................................................... $ 1,634 $ 5,625
Receivables............................................................................. 301,514 406,860
Inventories............................................................................. 923,280 1,312,369
Other current assets.................................................................... 134,229 134,363
--------------- ------------
Total current assets.................................................................. 1,360,657 1,859,217
Investments and notes receivable.......................................................... 309,237 418,281
Investment in direct financing leases..................................................... 235,263 234,590
Property and equipment.................................................................... 1,061,905 1,394,381
Less accumulated depreciation and amortization........................................ 426,846 458,290
--------------- ------------
Property and equipment, net............................................................... 635,059 936,091
Other assets.............................................................................. 90,633 186,118
Goodwill.................................................................................. 471,783 989,416
--------------- ------------
Total assets.............................................................................. $ 3,102,632 $ 4,623,713
--------------- ------------
--------------- ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................................................ $ 682,988 $ 1,046,144
Current maturities of long-term debt.................................................... 61,329 94,302
Current obligations under capital leases................................................ 13,172 15,163
Other current liabilities............................................................... 161,043 250,012
--------------- ------------
Total current liabilities............................................................. 918,532 1,405,621
Long-term debt............................................................................ 666,819 1,601,402
Long-term obligations under capital leases................................................ 337,009 352,894
Deferred income taxes..................................................................... 27,500 67,873
Other liabilities......................................................................... 92,366 117,253
Shareholders' equity:
Common stock, $2.50 par value per share................................................. 92,350 93,361
Capital in excess of par value.......................................................... 489,044 493,372
Reinvested earnings..................................................................... 492,250 504,647
Cumulative currency translation adjustment.............................................. (288) (663)
--------------- ------------
1,073,356 1,090,717
Less guarantee of ESOP debt........................................................... 12,950 12,047
--------------- ------------
Total shareholders' equity.......................................................... 1,060,406 1,078,670
--------------- ------------
Total liabilities and shareholders' equity................................................ $ 3,102,632 $ 4,623,713
--------------- ------------
--------------- ------------
</TABLE>
Receivables include $36.7 million and $48.3 million in 1994 and 1993,
respectively, from customers accounted for under the equity method.
See notes to consolidated condensed financial statements.
F-3
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE 40 WEEKS ENDED OCTOBER 2, 1993, AND OCTOBER 1, 1994
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 1994
----------- -------------
<S> <C> <C>
Net cash provided by operating activities............................................. $ 246,409 $ 325,027
Cash flows from investing activities:
Collections on notes receivable..................................................... 68,111 62,341
Notes receivable funded............................................................. (116,794) (93,316)
Purchase of property and equipment.................................................. (35,835) (85,448)
Proceeds from sale of property and equipment........................................ 1,493 5,467
Investments in customers............................................................ (23,398) (12,764)
Proceeds from sale of investment.................................................... 6,054 4,665
Business acquired................................................................... (50,812) (387,488)
Proceeds from sale of businesses.................................................... -- 6,682
Other investing activities.......................................................... (692) (1,584)
----------- -------------
Net cash used in investing activities............................................. (151,873) (501,445)
----------- -------------
Cash flows from financing activities:
Proceeds from long-term borrowings.................................................. 331,502 1,665,751
Principal payments on long-term debt................................................ (387,484) (1,425,563)
Principal payments on capital lease obligations..................................... (8,309) (9,916)
Sale of common stock under incentive stock and stock ownership plans................ 5,921 5,339
Dividends paid...................................................................... (33,087) (33,314)
Other financing activities.......................................................... (2,213) (21,888)
----------- -------------
Net cash provided by (used in) financing activities............................... (93,670) 180,409
----------- -------------
Net increase in cash and cash equivalents............................................. 866 3,991
Cash and cash equivalents, beginning of period........................................ 4,712 1,634
----------- -------------
Cash and cash equivalents, end of period.............................................. $ 5,578 $ 5,625
----------- -------------
----------- -------------
Supplemental information:
Cash paid for interest.............................................................. $ 56,908 $ 58,431
Cash paid for taxes................................................................. $ 67,906 $ 36,504
----------- -------------
----------- -------------
</TABLE>
See notes to consolidated condensed financial statements.
F-4
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The consolidated condensed balance sheet as of October 1, 1994, and the
consolidated condensed statements of earnings and cash flows for the 12-and
40-week periods ended October 1, 1994, and October 2, 1993, have been prepared
by the company, without audit. In the opinion of management, all adjustments
necessary to present fairly the company's financial position at October 1, 1994,
and the results of operations and cash flows for the periods presented have been
made. All such adjustments are of a normal, recurring nature. Primary earnings
per common share are calculated using the weighted average shares outstanding.
The impact of outstanding stock options on primary earnings per share is not
material.
2. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated condensed
financial statements should be read in conjunction with the consolidated
financial statements and related notes included in the company's 1993 annual
report on Form 10-K.
3. The LIFO method of inventory valuation is used for determining the cost
of substantially all grocery and certain perishable inventories. The excess of
current cost of LIFO inventories over their stated value was $14.8 million at
October 1, 1994 and $12.5 million at December 25, 1993.
4. On July 19, 1994, Fleming acquired Haniel Corporation, the parent of
Scrivner, Inc. Fleming paid $388 million in cash for the stock of Haniel and
refinanced substantially all of Haniel's and Scrivner's pre-existing debt
(approximately $680 million in aggregate principal amount and premium). The
acquisition has been accounted for under the purchase method of accounting. The
results of operations reflect the operations of Scrivner since the beginning of
the third quarter. The initial purchase price allocation as of October 1, 1994
has resulted in an excess of purchase price over net assets acquired of
approximately $535 million. Property and equipment appraisals are in process.
The following pro forma summary of consolidated results of operations is
prepared as though the acquisition had occurred at the beginning of the periods
presented.
<TABLE>
<CAPTION>
40 WEEKS ENDED
--------------------
1993 1994
--------- ---------
(IN MILLIONS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C>
Net sales..................................................... $ 14,553 $ 14,281
Net earnings.................................................. $ 64 $ 33
Net earnings per share........................................ $ 1.73 $ .89
--------- ---------
--------- ---------
</TABLE>
5. In December 1993, the company and numerous other defendants were named
in two suits in U.S. District Court in Miami. The plaintiffs allege liability on
the part of a subsidiary of the company as a consequence of an alleged
fraudulent scheme conducted by Premium Sales Corporation and others in which
large losses in the Premium-related entities occurred to the detriment of a
purported class of investors which has brought one of the suits. The other suit
is by the receiver/trustee of the estates of Premium and certain of its
affiliated entities. Plaintiffs seek damages, treble damages, attorney's fees,
costs, expenses and other appropriate relief. While the amount of damages sought
under most claims is not specified, plaintiffs allege that hundreds of millions
of dollars were lost as the result of the allegations contained in the
complaint.
The litigation is in its preliminary stages and the ultimate outcome cannot
presently be determined. Furthermore, management is unable to predict a
potential range of monetary exposure, if any, to the company. Based on the large
recovery sought, an unfavorable judgment could have a material adverse effect on
the company. Management believes, however, that a material adverse effect on the
company's consolidated financial position is not likely. The company intends to
vigorously defend the actions.
F-5
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Fleming Companies, Inc.
We have audited the accompanying consolidated balance sheets of Fleming
Companies, Inc. and subsidiaries as of December 26, 1992 and December 25, 1993,
and the related consolidated statements of earnings, shareholders' equity, and
cash flows for each of the three years in the period ended December 25, 1993.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Fleming Companies, Inc. and
subsidiaries as of December 26, 1992 and December 25, 1993, and the results of
their operations and their cash flows for each of the three years in the period
ended December 25, 1993 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Oklahoma City, Oklahoma
February 10, 1994 (October 1, 1994 as
to Subsidiary Guarantors note)
F-6
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 28, 1991, DECEMBER 26, 1992, AND DECEMBER 25, 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1991 1992 1993
------------- ------------- -------------
<S> <C> <C> <C>
Net sales........................................................... $ 12,851,129 $ 12,893,534 $ 13,092,145
Costs and expenses:
Cost of sales..................................................... 12,103,080 12,166,858 12,326,778
Selling and administrative........................................ 537,058 494,983 558,470
Interest expense.................................................. 93,353 81,102 78,029
Interest income................................................... (61,381) (59,477) (62,902)
Equity investment results......................................... 7,690 15,127 11,865
Facilities consolidation and restructuring........................ 67,000 -- 107,827
------------- ------------- -------------
Total costs and expenses........................................ 12,746,800 12,698,593 13,020,067
Earnings before taxes............................................... 104,329 194,941 72,078
Taxes on income..................................................... 39,964 76,037 34,598
------------- ------------- -------------
Earnings before extraordinary loss and cumulative effect of
accounting change.................................................. 64,365 118,904 37,480
Extraordinary loss from early retirement of debt.................... -- 5,864 2,308
Cumulative effect of change in accounting for postretirement health
care benefits...................................................... 9,270 -- --
------------- ------------- -------------
Net earnings........................................................ $ 55,095 $ 113,040 $ 35,172
------------- ------------- -------------
------------- ------------- -------------
Net earnings available to common shareholders....................... $ 51,955 $ 113,040 $ 35,172
------------- ------------- -------------
------------- ------------- -------------
Net earnings per common share:
Primary before extraordinary loss and accounting change........... $ 1.82 $ 3.33 $ 1.02
Extraordinary loss................................................ -- .16 .06
Accounting change................................................. .28 -- --
------------- ------------- -------------
Primary........................................................... $ 1.54 $ 3.16 $ .96
------------- ------------- -------------
------------- ------------- -------------
Fully diluted before extraordinary loss and accounting change..... $ 1.82 $ 3.21 $ 1.02
Extraordinary loss................................................ -- .15 .06
Accounting change................................................. .28 -- --
------------- ------------- -------------
Fully diluted..................................................... $ 1.54 $ 3.06 $ .96
------------- ------------- -------------
------------- ------------- -------------
Weighted average common shares outstanding.......................... 33,651 35,759 36,801
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
Sales to customers accounted for under the equity method were approximately
$1 billion, $1.3 billion and $1.6 billion in 1991, 1992 and 1993, respectively.
See notes to consolidated financial statements.
F-7
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED BALANCE SHEETS
AT DECEMBER 26, 1992, AND DECEMBER 25, 1993
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
1992 1993
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents..................................................... $ 4,712 $ 1,634
Receivables................................................................... 349,324 301,514
Inventories................................................................... 959,134 923,280
Other current assets.......................................................... 90,040 134,229
------------ ------------
Total current assets........................................................ 1,403,210 1,360,657
Investments and notes receivable................................................ 344,000 309,237
Investment in direct financing leases........................................... 213,956 235,263
Property and equipment:
Land.......................................................................... 46,293 49,580
Buildings..................................................................... 251,320 268,317
Fixtures and equipment........................................................ 438,068 466,904
Leasehold improvements........................................................ 123,734 133,897
Leased assets under capital leases............................................ 152,737 143,207
------------ ------------
1,012,152 1,061,905
Less accumulated depreciation and amortization................................ 401,446 426,846
------------ ------------
Net property and equipment.................................................. 610,706 635,059
Other assets.................................................................... 79,686 90,633
Goodwill........................................................................ 466,147 471,783
------------ ------------
Total assets................................................................ $ 3,117,705 $ 3,102,632
------------ ------------
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................................................. $ 717,484 $ 682,988
Current maturities of long-term debt.......................................... 36,474 61,329
Current obligations under capital leases...................................... 10,927 13,172
Other current liabilities..................................................... 110,051 161,043
------------ ------------
Total current liabilities................................................... 874,936 918,532
Long-term debt.................................................................. 735,565 666,819
Long-term obligations under capital leases...................................... 302,618 337,009
Deferred income taxes........................................................... 39,194 27,500
Other liabilities............................................................... 104,958 92,366
Shareholders' equity:
Common stock, $2.50 par value, authorized--100,000 shares, issued and
outstanding--36,698 and 36,940 shares........................................ 91,746 92,350
Capital in excess of par value................................................ 482,107 489,044
Reinvested earnings........................................................... 501,231 492,250
Cumulative currency translation adjustment.................................... -- (288)
------------ ------------
1,075,084 1,073,356
Less guarantee of ESOP debt................................................. 14,650 12,950
------------ ------------
Total shareholders' equity................................................ 1,060,434 1,060,406
------------ ------------
Total liabilities and shareholders' equity...................................... $ 3,117,705 $ 3,102,632
------------ ------------
------------ ------------
</TABLE>
Receivables include $48.9 million and $48.3 million in 1992 and 1993,
respectively, due from customers accounted for under the equity method.
See notes to consolidated financial statements.
F-8
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 28, 1991, DECEMBER 26, 1992, AND DECEMBER 25, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1991 1992 1993
--------------------- ----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
--------- ---------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Preferred stock:
Beginning of year......................... 50 $ 50,000
Redemption................................ (50) (50,000)
--------- ----------
End of year............................... -- --
--------- ----------
--------- ----------
Common stock:
Beginning of year......................... 30,548 76,369 35,433 $ 88,584 36,698 $ 91,746
Incentive stock and stock ownership
plans.................................... 285 715 191 478 242 604
Stock issued for acquisition.............. -- -- 1,074 2,684 -- --
Stock offering............................ 4,600 11,500 -- -- -- --
--------- ---------- --------- ------------ --------- ------------
End of year............................... 35,433 88,584 36,698 91,746 36,940 92,350
--------- ---------- --------- ------------ --------- ------------
--------- --------- ---------
Capital in excess of par value:
Beginning of year......................... 287,665 445,501 482,107
Stock offering, net....................... 148,436 -- --
Incentive stock and stock ownership
plans.................................... 9,400 5,165 6,937
Stock issued for acquisition.............. -- 31,441 --
---------- ------------ ------------
End of year............................... 445,501 482,107 489,044
---------- ------------ ------------
Reinvested earnings:
Beginning of year......................... 418,085 431,120 501,231
Net earnings.............................. 55,095 113,040 35,172
Cash dividends:
Common ($1.14 per share in 1991, $1.20
in 1992 and 1993)...................... (38,920) (42,929) (44,153)
Preferred............................... (3,140) -- --
---------- ------------ ------------
End of year............................... 431,120 501,231 492,250
---------- ------------ ------------
Cumulative currency translation adjustment:
Beginning of year......................... --
Currency translation adjustments.......... (288)
------------
End of year............................... (288)
------------
Guarantee of ESOP debt:
Beginning of year......................... (17,665) (16,218) (14,650)
Payments.................................. 1,447 1,568 1,700
---------- ------------ ------------
End of year (16,218) (14,650) (12,950)
---------- ------------ ------------
Total shareholders' equity, end of year..... $ 948,987 $ 1,060,434 $ 1,060,406
---------- ------------ ------------
---------- ------------ ------------
</TABLE>
See notes to consolidated financial statements.
F-9
<PAGE>
FLEMING COMPANIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 28, 1991, DECEMBER 26, 1992, AND DECEMBER 25, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1991 1992 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings............................................................. $ 55,095 $ 113,040 $ 35,172
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization.......................................... 91,252 93,827 101,103
Credit losses.......................................................... 17,281 28,258 52,018
Deferred income taxes.................................................. (34,158) 11,343 (24,471)
Equity investment results.............................................. 7,690 15,128 11,865
Facilities consolidation and reserve activities, net................... 53,l50 (31,226) 87,211
Postretirement health care benefits.................................... 15,000 -- --
Change in assets and liabilities:
Receivables.......................................................... (45,094) (75,924) (16,420)
Inventories.......................................................... (74,500) (440) 58,625
Other assets......................................................... (31,124) (10,218) (48,984)
Accounts payable..................................................... 37,166 (41,285) (38,472)
Other liabilities.................................................... 4,251 (16,566) (10,883)
Other adjustments, net................................................. (634) 3,918 1,779
----------- ----------- -----------
Net cash provided by operating activities............................ 95,375 89,855 208,543
----------- ----------- -----------
Cash flows from investing activities:
Collections on notes receivable.......................................... 95,045 88,851 82,497
Notes receivable funded.................................................. (193,643) (168,814) (130,846)
Notes receivable sold.................................................... 81,986 44,970 67,554
Purchase of property and equipment....................................... (67,295) (66,376) (55,554)
Proceeds from sale of property and equipment............................. 4,748 3,603 2,955
Investments in customers................................................. (21,108) (17,315) (37,196)
Businesses acquired...................................................... -- (8,233) (51,110)
Proceeds from sale of investments........................................ 7,156 9,763 7,077
Other investing activities............................................... (8,428) (353) 197
----------- ----------- -----------
Net cash used in investing activities.................................. (101,539) (113,904) (114,426)
----------- ----------- -----------
Cash flows from financing activities:
Proceeds from long-term borrowings....................................... 353,381 462,726 331,502
Principal payments on long-term debt..................................... (432,364) (383,188) (373,693)
Principal payments on capital lease obligations.......................... (11,565) (10,904) (11,316)
Sale of common stock under incentive stock and stock ownership plans..... 8,870 5,653 7,541
Dividends paid........................................................... (41,979) (42,929) (44,153)
Redemption of preferred stock............................................ (30,900) (19,100) --
Proceeds from common stock sale.......................................... 159,936 -- --
Other financing activities............................................... 588 (4,587) (7,076)
----------- ----------- -----------
Net cash provided by (used in) financing activities.................... 5,967 7,671 (97,195)
----------- ----------- -----------
Net decrease in cash and cash equivalents.................................. (197) (16,378) (3,078)
Cash and cash equivalents, beginning of year............................... 21,287 21,090 4,712
----------- ----------- -----------
Cash and cash equivalents, end of year..................................... $ 21,090 $ 4,712 $ 1,634
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See notes to consolidated financial statements.
F-10
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR: The company's fiscal year ends on the last Saturday in
December.
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
all material subsidiaries. Material intercompany items have been eliminated. The
equity method of accounting is used for investments in certain entities in which
the company has an investment in common stock of between 20% and 50%. Under the
equity method, original investments are recorded at cost and adjusted by the
company's share of earnings or losses of these entities and for declines in
estimated realizable values deemed to be other than temporary.
CASH AND CASH EQUIVALENTS: Cash equivalents consist of liquid investments
readily convertible to cash with a maturity of three months or less. The
carrying amount for cash equivalents is a reasonable estimate of fair value.
RECEIVABLES: Receivables include the current portion of customer notes
receivable of $67.8 million (1992) and $69.9 million (1993). Receivables are
shown net of allowance for credit losses of $25.3 million (1992) and $44.3
million (1993). The company extends credit to its retail customers located over
a broad geographic base. Regional concentrations of credit risk are limited.
INVENTORIES: Inventories are valued at the lower of cost or market. Most
grocery and certain perishable inventories are valued on a last-in, first-out
(LIFO) method. Other inventories are valued on a first-in, first-out (FIFO)
method.
PROPERTY AND EQUIPMENT: Property and equipment are recorded at cost or, for
leased assets under capital leases, at the present value of minimum lease
payments. Depreciation, as well as amortization of assets under capital leases,
are based on the estimated useful asset lives using the straight-line method.
FIXED ASSET IMPAIRMENT: Fixed asset impairments are recorded when events or
changes in circumstances indicate that the carrying amount of the fixed assets
may not be recoverable. Such impairment losses are measured by the excess of the
carrying amount of the fixed asset over the fair value of the related asset.
GOODWILL: The excess of purchase price over the value of net assets of
businesses acquired is amortized on the straight-line method over periods not
exceeding 40 years. Goodwill is shown net of accumulated amortization of $60
million (1992) and $74.2 million (1993). Goodwill is written down if it is
probable that estimated operating income, measured on an undiscounted basis,
generated by the related assets will be less than the carrying amount.
ACCOUNTS PAYABLE: Accounts payable include $11.2 million (1992) and $8.8
million (1993) of issued checks that have not yet cleared the company's bank
accounts, less deposits in transit.
FINANCIAL INSTRUMENTS: Interest rate hedge transactions and other financial
instruments are utilized to manage interest rate exposure. The difference
between amounts to be paid or received is accrued and recognized over the life
of the contracts.
TAXES ON INCOME: Deferred income taxes arise from temporary differences
between financial and tax bases of certain assets and liabilities.
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS: The methods and
assumptions used to estimate the fair value of significant financial instruments
are discussed in the Investments and Notes Receivable, and Long-Term Debt notes.
FOREIGN CURRENCY TRANSLATION: Net exchange gains or losses resulting from
the translation of assets and liabilities of an international investment are
included in shareholders' equity.
F-11
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
NET EARNINGS PER COMMON SHARE: Primary earnings per common share are
computed based on net earnings, less dividends on preferred stock in 1991,
divided by the weighted average common shares outstanding. The impact of common
stock options on primary earnings per common share is not materially dilutive.
Fully diluted earnings per common share assume conversion of the convertible
subordinated notes that were redeemed during 1992.
CONTINGENT LIABILITIES: The company has aggregate contingent liabilities
under debt guarantees and future minimum rental commitments of $370 million.
RECLASSIFICATIONS: Certain reclassifications have been made to prior year
amounts to conform to current year classifications.
INVENTORIES
Inventories are valued as follows:
<TABLE>
<CAPTION>
DEC. 26, DEC. 25,
1992 1993
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
LIFO method............................................................ $ 689,358 $ 638,383
FIFO method............................................................ 269,776 284,897
---------- ----------
Inventories.......................................................... $ 959,134 $ 923,280
---------- ----------
---------- ----------
</TABLE>
Current replacement cost of LIFO inventories were greater than the carrying
amounts by approximately $19.3 million at December 26, 1992, and $12.5 million
at December 25, 1993.
INVESTMENTS AND NOTES RECEIVABLE
Investments and notes receivable consist of the following:
<TABLE>
<CAPTION>
DEC. 26, DEC. 25,
1992 1993
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Investments in and advances to customers............................... $ 176,092 $ 164,292
Notes receivable from customers........................................ 157,655 133,935
Other investments and receivables...................................... 10,253 11,010
---------- ----------
Investments and notes receivable....................................... $ 344,000 $ 309,237
---------- ----------
---------- ----------
</TABLE>
The company extends long-term credit to certain retail customers it serves.
Loans are primarily collateralized by inventory and fixtures. Investments and
notes receivable are shown net of allowance for credit losses of $18.2 million
and $18.3 million in 1992 and 1993, respectively. Interest rates are above prime
with terms up to 10 years. The carrying amount of notes receivable approximates
fair value because of the variable interest rates charged on the notes.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards (SFAS) No. 114--Accounting by Creditors for Impairment of a
Loan. This new statement requires that loans determined to be impaired be
measured by the present value of expected future cash flows discounted at the
loan's effective interest rate. The new standard is effective for the first
quarter of the company's 1995 fiscal year. The company has not yet determined
the impact, if any, on the consolidated statements of earnings or financial
position.
The company has sold certain notes receivable at face value with limited
recourse. The outstanding balance at year end 1993 on all notes sold is $155.4
million, of which the company is contingently liable for $31.3 million should
all the notes become uncollectible. The company guarantees bank debt of $35
million for a customer.
F-12
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
DEC. 26, DEC. 25,
1992 1993
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Medium-term notes, due 1994 to 2003, average interest rates of 8.3%
and 7.5%............................................................. $ 194,450 $ 222,450
Commercial paper, average interest rate of 3.3% in 1993............... -- 165,866
Unsecured term bank loans, due 1994 to 1996, average interest rates of
4.2% and 3.7%........................................................ 95,000 160,000
Unsecured credit lines, average interest rates of 3.9% and 3.3%....... 340,000 145,000
9.5% Debentures, due 2010, annual sinking fund payments of $5,000
commencing in 1997................................................... 70,000 7,000
Guaranteed bank loan of employee stock ownership plan................. 14,650 12,950
Mortgaged real estate notes and other debt, varying interest rates
from 3.5% to 8%, due 1994 to 2019.................................... 57,939 14,882
---------- ----------
772,039 728,148
Less current maturities............................................... 36,474 61,329
---------- ----------
Long-term debt........................................................ $ 735,565 $ 666,819
---------- ----------
---------- ----------
</TABLE>
Aggregate maturities of long-term debt for the next five years are as
follows: 1994 -- $61.3 million; 1995 -- $140.3 million; 1996 -- $69 million;
1997 -- $13.8 million and 1998 -- $27.8 million.
In 1993 and 1992, the company recorded extraordinary losses for early
retirement of debt. In 1993, the company retired $63 million of the 9.5%
debentures. The extraordinary loss was $2.3 million, after income tax benefits
of $2.1 million, or $.06 per share. The funding source for the early redemption
was the sale of notes receivable. In 1992, the company retired the $172.5
million of convertible subordinated notes, $30 million of the 9.5% debentures
and certain other debt. The extraordinary loss was $5.9 million, after income
tax benefits of $3.7 million, or $.15 per share. Funding sources related to the
1992 early retirement were bank lines, medium-term notes, sale of notes
receivable and commercial paper.
The company has two commercial paper programs supported by committed $400
million and $200 million revolving credit agreements with a group of banks.
Currently, the company limits the amount of commercial paper issued at any time
plus the amount of borrowing under uncommitted credit lines to the unused credit
available through the committed credit agreements. The $400 million credit
agreement matures in October 1997. The $200 million credit agreement matures in
October 1994, but the company intends to renew the agreement prior to maturity.
At year end, the company had no borrowings under the agreements which carry
combined annual facility and commitment fees of .25% and .15% for the $400
million agreement and the $200 million agreement, respectively. The interest
rate is based on various money market rates selected by the company at the time
of borrowing.
The credit agreements contain various covenants, including restrictions on
additional indebtedness, payment of cash dividends and acquisition of the
company's common stock. None of these covenants negatively impact the company's
liquidity or capital resources at this time. Reinvested earnings of
approximately $92 million were available at year end for cash dividends and
acquisition of the company's stock. The agreements contain a provision that, in
the event of a defined change of control, the credit agreements may be
terminated.
F-13
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
The company has registered $565 million in medium-term notes. Of this, the
remaining $289.6 million may be issued from time to time, at fixed or floating
interest rates, as determined at the time of issuance.
The unsecured term bank loans have original maturities of three years and
bear interest at floating rates. Unsecured credit lines have original maturities
of generally less than one year and bear interest at floating rates. The loans
contain essentially the same covenants as the revolving credit agreements and
are prepayable without penalty.
The carrying value of assets collateralized under mortgaged real estate
notes and other debt was approximately $123 million and $9.4 million at year end
1992 and 1993, respectively.
Components of interest expense are as follows:
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Interest costs incurred:
Long-term debt............................................. $ 64,068 $ 50,524 $ 44,628
Capital lease obligations.................................. 26,915 29,103 31,355
Other...................................................... 2,539 1,475 2,046
--------- --------- ---------
Total incurred........................................... 93,522 81,102 78,029
Less interest capitalized.................................... 169 -- --
--------- --------- ---------
Interest expense............................................. $ 93,353 $ 81,102 $ 78,029
--------- --------- ---------
--------- --------- ---------
</TABLE>
The company's employee stock ownership plan (ESOP) allows substantially all
associates to participate. The ESOP purchased 640,000 shares of common stock
from the company at $31.25 per share, resulting in proceeds of $20 million. The
ESOP borrowed the money from a bank. The company guaranteed the bank loan. The
loan balance is presented in long-term debt with an offset as a reduction of
shareholders' equity. The ESOP will repay the loan with proceeds from company
contributions.
The company makes contributions based on fixed debt service requirements of
the ESOP loan. The ESOP used $.6 million of common stock dividends for debt
service in each of 1991, 1992 and 1993. During 1991, 1992 and 1993, the company
recognized $.8 million, $.9 million and $1.1 million, respectively, in
compensation expense. Interest expense of $1.3 million, $.7 million and $.5
million was recognized at average rates of 7.7%, 4.4% and 3.7% in 1991, 1992 and
1993, respectively.
The company enters into interest rate hedge agreements to manage interest
costs and exposure to changing interest rates. At year end 1992 and 1993,
agreements were in place that effectively fixed rates on $270 million and $70
million, respectively, of the company's floating rate debt. Additionally, for
both years, $60 million of agreements convert fixed rate debt to floating and a
$100 million transaction hedges the company's risk of fluctuation between prime
rate and LIBOR. The maturities for such agreements range from 1995 to 1998. The
counterparties to these agreements are major national and international
financial institutions.
The fair value of long-term debt as of year end 1992 and 1993 was determined
using valuation techniques that considered cash flows discounted at current
market rates and management's best estimate for instruments without quoted
market prices. At year end 1992 and 1993, the fair value of debt exceeded the
carrying amount by $16.5 million and $13.8 million, respectively. For interest
rate swap agreements, the fair value was estimated using termination cash
values. At year end 1993, swap agreements had no fair value. At year end 1992,
swap agreements had a fair value of $1.7 million. The company does not have any
financial basis in the hedge agreements other than accrued interest payable or
receivable.
F-14
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
SUBSIDIARY GUARANTORS
The company plans to issue $500 million principal amount of senior debt (the
"Senior Notes") which will be guaranteed by all direct and indirect subsidiaries
of the company (except for certain subsidiaries which are inconsequential), all
of which are wholly owned. The guarantees will be joint and several, full,
complete and unconditional. There are currently no restrictions on the ability
of the subsidiary guarantors to transfer funds to the company in the form of
cash dividends, loans or advances. Full financial statements for the subsidiary
guarantors are not presented herein because management does not believe such
information would be material. Set forth below is certain summarized financial
data regarding the subsidiary guarantors on a combined basis.
The following summarized financial information for the combined subsidiary
guarantors has been prepared from the books and records maintained by the
subsidiary guarantors and the company. Intercompany transactions are eliminated.
The summarized financial information may not necessarily be indicative of the
results of operations or financial position had the subsidiary guarantors been
operated as independent entities. The summarized financial information includes
allocations of material amounts of expenses such as corporate services and
administration, interest expense on indebtedness, and taxes on income. The
allocations are generally based on proportional amounts of sales or assets, and
taxes on income are allocated consistent with the asset and liability approach
used for consolidated financial statement purposes. Management believes these
allocation methods are reasonable.
<TABLE>
<CAPTION>
OCTOBER 1,
1992 1993 1994
--------- --------- -----------
(IN MILLIONS)
(UNAUDITED)
<S> <C> <C> <C>
Current assets......................................................... $ 1,204 $ 1,168 $ 1,642
Noncurrent assets...................................................... 1,508 1,579 2,543
Current liabilities.................................................... 708 764 1,103
Noncurrent liabilities................................................. 957 936 1,755
</TABLE>
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- --------- 40 WEEKS
ENDED
OCTOBER 1,
1994
-----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Net sales................................................. $ 11,423 $ 11,488 $ 11,759 $ 10,070
Costs and expenses........................................ 11,299 11,321 11,674 9,987
Earnings before extraordinary items and cumulative effect
of accounting change..................................... 77 102 44 44
Net earnings.............................................. 69 97 42 44
</TABLE>
LEASE AGREEMENTS
CAPITAL AND OPERATING LEASES: The company leases certain distribution
facilities with terms generally ranging from 20 to 30 years, while lease terms
for other operating facilities range from 1 to 15 years. The leases normally
provide for minimum annual rentals plus executory costs and usually include
provisions for one to five renewal options of five years.
The company leases company-operated retail store facilities with terms
generally ranging from 3 to 20 years. These agreements normally provide for
contingent rentals based on sales performance in excess of specified minimums.
The leases usually include provisions for one to three renewal options of two to
five years. Certain equipment is leased under agreements ranging from 2 to 8
years with no renewal options.
Accumulated amortization related to leased assets under capital leases was
$59.5 million and $41.7 million at year end 1992 and 1993, respectively.
F-15
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
Future minimum lease payment obligations for leased assets under capital
leases as of year end 1993 are set forth below:
<TABLE>
<CAPTION>
LEASE
YEARS OBLIGATIONS
- --------------------------------------------------------------------------- --------------
(IN THOUSANDS)
<S> <C>
1994....................................................................... $ 16,719
1995....................................................................... 16,672
1996....................................................................... 16,554
1997....................................................................... 16,244
1998....................................................................... 15,816
Later...................................................................... 143,209
Total minimum lease payments............................................... 225,214
Less estimated executory costs............................................. 332
--------------
Net minimum lease payments................................................. 224,882
Less interest.............................................................. 101,754
--------------
Present value of net minimum lease payments................................ 123,128
Less current obligations................................................... 5,618
--------------
Long-term obligations...................................................... $117,510
--------------
--------------
</TABLE>
Future minimum lease payments required at year end 1993 under operating
leases that have initial noncancelable lease terms exceeding one year are
presented in the following table:
<TABLE>
<CAPTION>
FACILITY FACILITIES EQUIPMENT NET
YEARS RENTALS SUBLEASED RENTALS RENTALS
- ------------------------------------------------------- ---------- ---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
1994................................................... $ 92,936 $ 46,105 $ 16,407 $ 63,238
1995................................................... 83,905 43,084 10,277 51,098
1996................................................... 77,680 39,733 5,057 43,004
1997................................................... 71,364 36,700 1,219 35,883
1998................................................... 64,559 32,702 347 32,204
Later.................................................. 368,039 165,396 -- 202,643
---------- ---------- ----------- ----------
Total minimum lease payments........................... $ 758,483 $ 363,720 $ 33,307 $ 428,070
---------- ---------- ----------- ----------
---------- ---------- ----------- ----------
</TABLE>
The following table shows the composition of total annual rental expense
under noncancelable operating leases and subleases with initial terms of one
year or greater:
<TABLE>
<CAPTION>
1991 1992 1993
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Minimum rentals.......................................... $ 119,819 $ 123,189 $ 126,040
Contingent rentals....................................... 415 247 182
Less sublease income..................................... 51,506 54,348 57,308
---------- ---------- ----------
Rental expense........................................... $ 68,728 $ 69,088 $ 68,914
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
At year end 1993, the company is contingently liable for future minimum
rental commitments of $335 million.
F-16
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
DIRECT FINANCING LEASES: The company leases retail store facilities for
sublease to customers with terms generally ranging from 5 to 25 years. Most
leases provide for a contingent rental based on sales performance in excess of
specified minimums. Sublease rentals are generally higher than the rental paid.
The leases and subleases usually contain provisions for one to four renewal
options of two to five years.
The following table shows the future minimum rentals to be received under
direct financing leases and future minimum lease payment obligations under
capital leases in effect at December 25, 1993:
<TABLE>
<CAPTION>
LEASE RENTALS LEASE
YEARS RECEIVABLE OBLIGATIONS
- ------------------------------------------------------------------ ------------- -----------
(IN THOUSANDS)
<S> <C> <C>
1994.............................................................. $ 41,633 $ 29,375
1995.............................................................. 40,560 29,553
1996.............................................................. 39,083 29,617
1997.............................................................. 36,751 29,646
1998.............................................................. 33,229 29,599
Later............................................................. 293,696 277,785
------------- -----------
Total minimum lease payments...................................... 484,952 425,575
Less estimated executory costs.................................... 2,062 2,055
------------- -----------
Net minimum lease payments........................................ 482,890 423,520
Less unearned income.............................................. 235,813 --
Less interest..................................................... -- 196,467
------------- -----------
Present value of net minimum lease payments....................... 247,077 227,053
Less current portion.............................................. 11,814 7,554
------------- -----------
Long-term portion................................................. $ 235,263 $ 219,499
------------- -----------
------------- -----------
</TABLE>
Contingent rental income and contingent rental expense were not material in
1993, 1992 or 1991.
FACILITIES CONSOLIDATION AND RESTRUCTURING
The results in 1993 include a charge of $107.8 million for additional
facilities consolidations, reengineering, impairment of retail-related assets
and elimination of regional operations. Facilities consolidations will result in
the closure of five distribution centers, the relocation of two operations, the
consolidation of a center's administrative function and completion of the 1991
facilities consolidation actions. The related charge provides for severance
costs, impaired property and equipment, product handling and damage, and
impaired other assets. The reengineering component of the charge provides for
severance costs of terminating associates displaced by the reengineering plan.
Impairment of retail-related assets provides for the present value of lease
payments and assets associated with certain retail supermarket locations leased
or owned by the company. These sites are no longer strategically viable due to
size, location or age. Elimination of regional operations in early 1994 will
result in cash severance payments to affected associates.
The 1991 restructuring plan was initiated to reduce costs and increase
operating efficiency by consolidating four distribution centers into larger,
higher volume and more efficient facilities. The $67 million charge included
associate severance, lease terminations and impairment of related assets. The
plan has resulted in the closing or consolidation of four facilities whose
operations were assimilated into other distribution centers. Additional
estimated costs, related primarily to asset dispositions in process, were made
in the 1993 charge.
F-17
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
TAXES ON INCOME
Components of taxes on income (tax benefit) are as follows:
<TABLE>
<CAPTION>
1991 1992 1993
---------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal.............................................................. $ 56,634 $ 55,473 $ 48,742
State................................................................ 8,849 11,814 10,327
---------- --------- ----------
Total current...................................................... 65,483 67,287 59,069
---------- --------- ----------
Deferred:
Federal.............................................................. (21,500) 7,280 (20,160)
State................................................................ (4,019) 1,470 (4,311)
---------- --------- ----------
Total deferred..................................................... (25,519) 8,750 (24,471)
---------- --------- ----------
Taxes on income........................................................ $ 39,964 $ 76,037 $ 34,598
---------- --------- ----------
---------- --------- ----------
</TABLE>
Deferred tax expense (benefit) relating to temporary differences includes
the following components:
<TABLE>
<CAPTION>
1991 1992 1993
---------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Depreciation.......................................................... $ (301) $ 2,161 $ 516
Facilities consolidation and reserve activities....................... (20,977) 10,989 (31,519)
Retirement benefits................................................... (350) 517 13,094
Equity investment results............................................. (1,717) (4,292) (6,767)
Credit losses......................................................... 421 (4,539) (5,417)
Prepaid expenses...................................................... -- -- 3,200
Asset dispositions.................................................... 186 3,818 2,670
Lease transactions.................................................... (509) (230) (2,307)
Noncompete agreement.................................................. 2,556 2,552 2,170
Associate benefits.................................................... (6,525) (3,494) (2,115)
Note sales............................................................ 1,038 623 1,880
Other................................................................. 659 645 124
---------- --------- ----------
Deferred tax expense (benefit)........................................ $ (25,519) $ 8,750 $ (24,471)
---------- --------- ----------
---------- --------- ----------
</TABLE>
F-18
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
Temporary differences that give rise to deferred tax assets and liabilities
as of December 25, 1993, are as follows:
<TABLE>
<CAPTION>
DEFERRED DEFERRED
TAX TAX
ASSETS LIABILITIES
---------- ----------
(IN THOUSANDS)
<S> <C> <C>
Depreciation........................................................... $ 4,333 $ 88,609
Facilities consolidation and reserve activities........................ 51,942 --
Associate benefits..................................................... 31,878 --
Credit losses.......................................................... 22,579 --
Equity investment results.............................................. 13,848 1,758
Lease transactions..................................................... 8,857 1,623
Inventory.............................................................. 7,743 18,401
Asset dispositions..................................................... 5,580 --
Acquired loss carryforwards............................................ 4,514 --
Retirement benefits.................................................... -- 16,568
Note sales............................................................. -- 3,555
Prepaid expenses....................................................... -- 3,200
Other.................................................................. 8,954 8,582
---------- ----------
Gross deferred taxes................................................... 160,228 142,296
Valuation allowance.................................................... (6,514) --
---------- ----------
Total deferred taxes................................................. $ 153,714 $ 142,296
---------- ----------
---------- ----------
Total deferred taxes, December 26, 1992.............................. $ 112,904 $ 125,957
---------- ----------
---------- ----------
</TABLE>
The effect of the increase in the federal statutory rate to 35% on deferred
tax assets and liabilities was immaterial. The valuation allowance contains $4.5
million of acquired loss carryforwards that, if utilized, will be reversed to
goodwill in future years.
The effective income tax rates are different from the statutory federal
income tax rates for the following reasons:
<TABLE>
<CAPTION>
1991 1992 1993
------ ------ ------
<S> <C> <C> <C>
Statutory rate.......................................... 34.0% 34.0% 35.0%
State income taxes, net of federal tax benefit.......... 3.1 4.4 5.4
Acquisition-related differences......................... 4.7 2.3 6.6
Possible assessments.................................... 2.1 (1.4) --
Sale of insurance subsidiary............................ (4.8) -- --
Other................................................... (.8) (.3) 1.0
------ ------ ------
Effective rate.......................................... 38.3% 39.0% 48.0%
------ ------ ------
------ ------ ------
</TABLE>
SHAREHOLDER'S EQUITY
The company offers a Dividend Reinvestment and Stock Purchase Plan which
offers shareholders the opportunity to automatically reinvest their dividends in
common stock at a 5% discount from market value. Shareholders also may purchase
shares at market value by making cash payments up to $5,000 per calendar
quarter. Shareholders reinvested dividends in 157,000 and 174,000 new shares in
1992 and 1993, respectively. Additional shares totaling 13,000 and 9,000 in 1992
and 1993, respectively, were purchased at market value by shareholders.
The company has a shareholder rights plan designed to protect shareholders
should the company become the target of coercive and unfair takeover tactics.
Shareholders have one right for each share of stock held. When exercisable, each
right entitles shareholders to buy one share of common stock at a specific price
in the event of certain defined actions that constitute a change of control. The
rights expire on July 6, 1996.
F-19
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
The company has severance agreements with certain management associates. The
agreements generally provide two years' salary to these associates if the
associate's employment terminates within two years after a change of control. In
the event of a change of control, a supplemental trust will be funded to provide
these salary obligations.
INCENTIVE STOCK PLANS
The company's stock option plans allow the granting of nonqualified stock
options and incentive stock options, with or without stock appreciation rights
(SARs), to key associates.
In 1992 and 1993, options with SARs were exercisable for 46,000 and 35,000
shares, respectively. Options without SARs were exercisable for 805,000 shares
in 1992 and 841,000 shares in 1993. At year end 1993, there were 1.5 million
shares available for grant under the stock option plans.
Stock option transactions are as follows:
<TABLE>
<CAPTION>
OPTIONS PRICE RANGE
----------- ----------------
(SHARES IN THOUSANDS)
<S> <C> <C>
Outstanding, December 29, 1990.................................... 1,225 $ 4.72 - 42.13
Exercised....................................................... (34) $ 12.88 - 37.06
Canceled and forfeited.......................................... (23) --
----- ----------------
Outstanding, December 28, 1991.................................... 1,168 $ 4.72 - 42.13
Granted......................................................... 4 $ 30.00
Exercised....................................................... (28) $ 12.88 - 29.81
Canceled and forfeited.......................................... (60) --
----- ----------------
Outstanding, December 26, 1992.................................... 1,084 $ 4.72 - 42.13
Exercised....................................................... (59) $ 20.33 - 31.75
Canceled and forfeited.......................................... (42) --
----- ----------------
Outstanding, December 25, 1993.................................... 983 $ 4.72 - 42.13
----- ----------------
----- ----------------
</TABLE>
The company has a stock incentive plan that allows awards to key associates
of up to 400,000 restricted shares of common stock and phantom stock units. The
company has issued 133,000 restricted common shares, net of 10,000 shares
forfeited in 1993. These shares were recorded at the market value when issued,
$4.4 million, and are amortized to expense as earned. The unamortized portion,
$2.1 million and $1.8 million in 1992 and 1993, respectively, is netted against
capital in excess of par value within shareholders' equity. In the event of a
change of control, the company may accelerate the vesting and payment of any
award or make a payment in lieu of an award.
ASSOCIATE RETIREMENT PLANS
The company sponsors retirement and profit sharing plans for substantially
all nonunion and some union associates. The company also has nonqualified,
unfunded supplemental retirement plans for selected associates. These plans
comprise the company's defined benefit pension plans.
Contributory profit sharing plans maintained by the company are for
associates who meet certain types of employment and length of service
requirements. Company contributions under these defined contribution plans are
made at the discretion of the board of directors. Expenses for these plans were
$.8 million, $1.1 million and $2 million in 1991, 1992 and 1993, respectively.
F-20
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
Benefit calculations for the company's defined benefit pension plans are
primarily a function of years of service and final average earnings at the time
of retirement. Final average earnings are the average of the highest five years
of compensation during the last 10 years of employment. The company funds these
plans by contributing the actuarially computed amounts that meet funding
requirements.
The following table sets forth the company's defined benefit pension plans'
funded status and the amounts recognized in the statements of earnings.
Substantially all the plans' assets are invested in listed stocks, short-term
investments and bonds. The significant actuarial assumptions used in the
calculation of funded status for 1992 and 1993 are: discount rate -- 8.5% and
7.5%, respectively; compensation increases -- 5% and 4%, respectively; and
return on assets -- 10% and 9.5%, respectively.
<TABLE>
<CAPTION>
DECEMBER 26, 1992 DECEMBER 25, 1993
-------------------------- --------------------------
ASSETS ACCUMULATED ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
BENEFITS ASSETS BENEFITS ASSETS
------------ ------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Actuarial present value of accumulated benefit
obligations:
Vested.................................................. $ 129,248 $ 11,701 $ 166,474 $ 9,587
Total................................................... $ 135,895 $ 12,444 $ 174,332 $ 16,577
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Projected benefit obligations............................. $ 149,108 $ 13,886 $ 187,833 $ 18,302
Plan assets at fair value................................. 139,989 -- 176,307 --
------------ ------------ ------------ ------------
Projected benefit obligation in excess of plan
assets................................................... 9,119 13,886 11,526 18,302
Unrecognized net loss..................................... (19,800) (5,416) (42,195) (7,672)
Unrecognized prior service cost........................... (2,910) -- (2,293) (777)
Unrecognized net asset (obligation)....................... 1,447 (749) 291 (216)
------------ ------------ ------------ ------------
Pension liability (asset)................................. $ (12,144) $ 7,721 $ (32,671) $ 9,637
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
Net pension expense includes the following components:
<TABLE>
<CAPTION>
1991 1992 1993
---------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost............................................... $ 4,651 $ 4,997 $ 5,323
Interest cost.............................................. 11,955 13,503 14,792
Actual return on plan assets............................... (24,159) (8,159) (19,103)
Net amortization and deferral.............................. 15,170 (5,030) 8,039
---------- --------- ----------
Net pension expense........................................ $ 7,617 $ 5,311 $ 9,051
---------- --------- ----------
---------- --------- ----------
</TABLE>
Certain associates have pension and health care benefits provided under
collectively bargained multiemployer agreements. Expenses for these benefits
were $37.1 million, $40 million and $44 million for 1991, 1992 and 1993,
respectively.
ASSOCIATE POSTRETIREMENT HEALTH CARE BENEFITS
In 1991, the company adopted SFAS No. 106 -- Employers' Accounting for
Postretirement Benefits Other Than Pensions. The company elected to recognize
immediately the accumulated postretirement benefit obligation, resulting in a
charge to net earnings of $9.3 million. The effect of the change on 1991 net
earnings, excluding the cumulative effect upon adoption, was not material.
F-21
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
The company offers a comprehensive major medical plan to eligible retired
associates who meet certain age and years of service requirements. This unfunded
defined benefit plan generally provides medical benefits until Medicare
insurance commences.
Components of postretirement benefits expense are as follows:
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost..................................................... $ 194 $ 108 $ 140
Interest cost.................................................... 1,210 1,430 1,628
Amortization of net loss......................................... -- -- 138
--------- --------- ---------
Postretirement expense........................................... $ 1,404 $ 1,538 $ 1,906
--------- --------- ---------
--------- --------- ---------
</TABLE>
The composition of the accumulated postretirement benefit obligation (APBO)
and the amounts recognized in the balance sheets are presented below.
<TABLE>
<CAPTION>
1992 1993
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Retirees................................................................ $ 13,824 $ 13,299
Fully eligible actives.................................................. 1,695 1,916
Others.................................................................. 1,485 1,680
--------- ---------
APBO.................................................................... 17,004 16,895
Unrecognized net loss................................................... -- 3,333
--------- ---------
Accrued postretirement benefit cost..................................... $ 17,004 $ 13,562
--------- ---------
--------- ---------
</TABLE>
During 1993, a postretirement benefit obligation was settled. No additional
benefit payments will be made for this terminated obligation.
The weighted average discount rate used in determining the APBO was 9.5% and
7.5% for 1992 and 1993, respectively. For measurement purposes in 1992 and 1993,
a 15% and 14%, respectively, annual rate of increase in the per capita cost of
covered medical care benefits was assumed. In 1993, the rate was assumed to
decrease to 8% by 2000, then to 7.5% in 2001 and thereafter. In 1992, the rate
was assumed to decrease to 8% by 1999 and remain at 8% thereafter. If the
assumed health care cost increased by 1% for each future year, the current cost
and the APBO would have increased by 3% to 5% for all periods presented.
The company also provides other benefits for certain inactive associates.
Expenses related to these benefits are immaterial.
SUPPLEMENTAL CASH FLOWS INFORMATION
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash paid during the year for:
Interest, net of amounts capitalized......................... $ 91,301 $ 82,051 $ 79,634
Income taxes............................................... $ 61,437 $ 65,884 $ 74,320
Direct financing leases and related obligations.............. $ 44,055 $ 27,507 $ 33,594
Property and equipment additions by capital leases........... $ 9,182 $ 22,513 $ 21,011
</TABLE>
In 1993, the company acquired the assets or common stock of three
businesses. In August, the company purchased distribution center assets located
in Garland, Texas. In September and November, the company purchased certain
assets and the common stock, respectively, of two supermarket operators in
southern
F-22
<PAGE>
FLEMING COMPANIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 25, 1993, DECEMBER 26, 1992 AND DECEMBER 28, 1991
Florida. The acquisitions were accounted for as purchases. The results of these
entities are not material to the company. Cash paid for the acquisitions, net of
cash acquired, was $51.1 million. The fair value of assets acquired was $111.1
million, with liabilities assumed or created of $9 million.
In 1992, the company acquired the common stock of Baker's Supermarkets, the
operator of 10 supermarkets located in Omaha, Neb. The acquisition was accounted
for as a purchase. The results of Baker's operations are not material to the
company. The company issued 1,073,512 shares of common stock at a price of
$31.79 per share, or $34.1 million. The fair value of assets acquired was $88.7
million, with liabilities assumed or created of $39.8 million. Cash paid for the
acquisition, net of cash acquired, was $8.2 million.
LITIGATION AND CONTINGENCIES
In December 1993, the company and numerous other defendants were named in
two suits filed in U.S. District Court in Miami. The plaintiffs allege liability
on the part of the company as a consequence of an alleged fraudulent scheme
conducted by Premium Sales Corporation and others in which losses in the
Premium-related entities occurred to the detriment of a purported class of
investors which has brought one of the suits. The other suit is by the
receiver/trustee of the estates of Premium and certain of its affiliated
entities. Plaintiffs seek damages, treble damages, attorneys fees, costs,
expenses and other appropriate relief. While the amount of damages sought under
most claims is not specified, plaintiffs allege that hundreds of millions of
dollars were lost as the result of the allegations contained in the complaint.
The litigation is in its preliminary stages and the ultimate outcome cannot
presently be determined. Furthermore, management is unable to predict a
potential range of monetary exposure, if any, to the company. Based on the large
recovery sought, an unfavorable judgment could have a material adverse effect on
the company. Management believes, however, that a material adverse effect on the
company's consolidated financial position is not likely. The company intends to
vigorously defend the actions.
The company's facilities are subject to various laws and regulations
regarding the discharge of materials into the environment. In conformity with
these provisions, the company has a comprehensive program for testing and
removal, replacement or repair of its underground fuel storage tanks and for
site remediation where necessary. The company has established reserves that it
believes will be sufficient to satisfy anticipated costs of all known
remediation requirements. In addition, the company is addressing several other
environmental cleanup matters involving its properties, all of which the company
believes are immaterial.
The company has been designated by the U.S. Environmental Protection Agency
("EPA") as a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA," also known as "Superfund"),
with others, with respect to EPA-designated Superfund sites. While liability
under CERCLA for remediation at such sites is joint and several with other
responsible parties, the company believes that, to the extent it is ultimately
determined to be liable for clean up at any such site, such liability will not
result in a material adverse effect on its consolidated financial position or
results of operations.
The company is committed to maintaining the environment and protecting
natural resources and to achieving full compliance with all applicable laws and
regulations.
The company is a party to various other litigation, possible tax assessments
and other matters, some of which are for substantial amounts, arising in the
ordinary course of business. While the ultimate effect of such actions cannot be
predicted with certainty, the company expects that the outcome of these matters
will not result in a material adverse effect on its consolidated financial
position or results of operations.
- --------------------------------------------------------------------------------
F-23
<PAGE>
QUARTERLY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH YEAR
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
1993
Net sales................................. $ 4,044,894 $ 2,964,655 $ 2,936,010 $ 3,146,586 $ 13,092,145
Costs and expenses:
Cost of sales........................... 3,803,545 2,787,087 2,767,074 2,969,072 12,326,778
Selling and administrative.............. 170,893 121,366 125,106 141,105 558,470
Interest expense........................ 23,481 17,804 17,796 18,948 78,029
Interest income......................... (18,548) (14,469) (14,885) (15,000) (62,902)
Equity investment results............... 2,067 805 2,952 6,041 11,865
Facilities consolidation and
restructuring.......................... -- 6,500 -- 101,327 107,827
------------ ------------ ------------ ------------ -------------
Total costs and expenses.............. 3,981,438 2,919,093 2,898,043 3,221,493 13,020,067
------------ ------------ ------------ ------------ -------------
Earnings (loss) before taxes.............. 63,456 45,562 37,967 (74,907) 72,078
Taxes on income (tax benefit)............. 26,081 18,726 17,662 (27,871) 34,598
------------ ------------ ------------ ------------ -------------
Earnings (loss) before extraordinary
loss..................................... 37,375 26,836 20,305 (47,036) 37,480
Extraordinary loss from early retirement
of debt.................................. -- -- -- 2,308 2,308
------------ ------------ ------------ ------------ -------------
Net earnings (loss)....................... $ 37,375 $ 26,836 $ 20,305 $ (49,344) $ 35,172
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
Net earnings (loss) per share:
Primary before extraordinary loss....... $ 1.02 $ .73 $ .55 $ (1.28) $ 1.02
Extraordinary loss...................... -- -- -- .06 .06
------------ ------------ ------------ ------------ -------------
Primary................................. $ 1.02 $ .73 $ .55 $ (1.34) $ .96
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
Fully diluted before extraordinary
loss................................... $ 1.02 $ .73 $ .55 $ (1.28) $ 1.02
Extraordinary loss...................... -- -- -- .06 .06
------------ ------------ ------------ ------------ -------------
Fully diluted........................... $ 1.02 $ .73 $ .55 $ (1.34) $ .96
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
Dividends paid per share.................. $ .30 $ .30 $ .30 $ .30 $ 1.20
Weighted average shares outstanding....... 36,722 36,780 36,833 36,896 36,801
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
</TABLE>
The first quarter of 1993 and 1992 consists of 16 weeks, all other quarters
are 12 weeks.
The second quarter of 1993 includes $11.2 million of pretax income resulting
from the favorable resolution of a litigation matter and a $1.2 million accrual
for charges in other legal proceedings. Also included is a $2 million charge for
an increase to previously established reserves related to the company's
contingent liability for lease obligations. The company also recorded a $4.6
million gain from a real estate transaction during the second quarter of 1993.
The effective tax rate was increased in the third quarter of 1993 due to the
new tax law enacted in August 1993.
See discussion of facilities consolidation and restructuring charges in the
notes to consolidated financial statements.
F-24
<PAGE>
QUARTERLY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH YEAR
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
1992
Net sales................................. $ 3,905,861 $ 2,955,934 $ 2,926,805 $ 3,104,934 $ 12,893,534
Cost and expenses:
Cost of sales........................... 3,678,598 2,796,876 2,773,220 2,918,164 12,166,858
Selling and administrative.............. 151,033 107,633 107,154 129,163 494,983
Interest expense........................ 26,332 18,577 18,626 17,567 81,102
Interest income......................... (17,032) (14,524) (13,585) (14,336) (59,477)
Equity investment results............... 3,486 3,931 4,013 3,697 15,127
------------ ------------ ------------ ------------ -------------
Total costs and expenses.............. 3,842,417 2,912,493 2,889,428 3,054,255 12,698,593
------------ ------------ ------------ ------------ -------------
Earnings before taxes..................... 63,444 43,441 37,377 50,679 194,941
Taxes on income........................... 24,749 16,943 14,573 19,772 76,037
------------ ------------ ------------ ------------ -------------
Earnings before extraordinary loss........ 38,695 26,498 22,804 30,907 118,904
Extraordinary loss from early retirement
of debt.................................. -- -- -- 5,864 5,864
------------ ------------ ------------ ------------ -------------
Net earnings.............................. $ 38,695 $ 26,498 $ 22,804 $ 25,043 $ 113,040
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
Net earnings per share:
Primary before extraordinary loss....... $ 1.09 $ .75 $ .64 $ .84 $ 3.33
Extraordinary loss...................... -- -- -- .16 .16
------------ ------------ ------------ ------------ -------------
Primary................................. $ 1.09 $ .75 $ .64 $ .68 $ 3.16
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
Fully diluted before extraordinary
loss................................... $ 1.04 $ .72 $ .62 $ .83 $ 3.21
Extraordinary loss...................... -- -- -- .16 .15
------------ ------------ ------------ ------------ -------------
Fully diluted........................... $ 1.04 $ .72 $ .62 $ .68 $ 3.06
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
Dividends paid per share.................. $ .30 $ .30 $ .30 $ .30 $ 1.20
Weighted average common shares
outstanding.............................. 35,449 35,493 35,541 36,657 35,759
------------ ------------ ------------ ------------ -------------
------------ ------------ ------------ ------------ -------------
</TABLE>
The fourth quarter of 1992 reflects $4.9 million of income related to
litigation settlement.
F-25
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Haniel Corporation:
We have audited the accompanying consolidated balance sheets of Haniel
Corporation (a Delaware corporation) and subsidiaries as of December 31, 1992
and 1993, and the related consolidated statements of income, stockholder's
equity and cash flows for each of the three years in the period ended December
31, 1993. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Haniel Corporation and
subsidiaries as of December 31, 1992 and 1993, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
As discussed in Note 6 to the financial statements, the Company changed its
method of accounting for income taxes in 1993 and restated prior year financial
statements to reflect the change. In addition, as discussed in Note 5 to the
financial statements, the Company changed its method of accounting for
postretirement benefits other than pensions, effective January 1, 1993.
ARTHUR ANDERSEN & CO.
Oklahoma City, Oklahoma,
March 11, 1994
F-26
<PAGE>
HANIEL CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ JUNE 30,
1992 1993 1994
-------------- -------------- --------------
(UNAUDITED)
<S> <C> <C> <C>
Current Assets:
Cash....................................... $ 2,703,700 $ 3,252,760 $ 2,461,225
Receivables-
Accounts receivable...................... 147,241,595 154,674,250 148,704,447
Notes receivable......................... 44,092,855 53,877,158 71,630,512
Less-Allowance for doubtful accounts..... (18,208,359) (18,160,262) (22,497,023)
-------------- -------------- --------------
173,126,091 190,391,146 197,837,936
Inventories................................ 441,534,444 415,560,007 372,250,362
Other current assets....................... 22,193,935 16,780,520 12,147,871
-------------- -------------- --------------
Total current assets................... 639,558,170 625,984,433 584,697,394
-------------- -------------- --------------
Direct financing leases, net of current
portion..................................... 2,604,875 2,280,345 2,110,575
Investments.................................. 1,897,725 1,805,165 1,503,210
Property and equipment, at cost
Land and buildings......................... 212,322,536 223,064,269 229,324,212
Furniture, fixtures and equipment.......... 200,407,415 225,683,911 237,002,425
Transportation equipment................... 83,047,275 85,122,869 83,906,755
Leasehold improvements..................... 56,589,307 64,903,194 64,589,031
-------------- -------------- --------------
552,366,533 598,774,243 614,822,423
Less-Accumulated depreciation and
amortization.............................. (218,254,460) (263,480,135) (282,075,739)
-------------- -------------- --------------
334,112,073 335,294,108 332,746,684
Intangible assets............................ 393,343,279 388,586,106 381,788,061
Other assets................................. 15,030,473 17,964,971 14,538,180
-------------- -------------- --------------
408,373,752 406,551,077 396,326,241
-------------- -------------- --------------
Total Assets........................... $1,386,546,595 $1,371,915,128 $1,317,384,104
-------------- -------------- --------------
-------------- -------------- --------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable........................... $ 253,759,183 $ 276,628,540 $ 235,885,834
Current portion of long-term debt and
capitalized lease obligations............. 32,862,051 20,048,742 15,821,059
Other current liabilities.................. 118,959,028 121,553,230 135,458,771
-------------- -------------- --------------
Total current liabilities.............. 405,580,262 418,230,512 387,165,664
-------------- -------------- --------------
Long-term debt, net of current portion....... 682,300,947 638,043,771 600,859,660
Capitalized lease obligations, net of current
portion..................................... 5,691,370 3,774,524 3,381,862
Deferred income taxes........................ 49,108,353 42,582,700 42,582,700
Other liabilities............................ 2,173,014 2,374,286 3,096,186
Commitments and Contingencies
Stockholder's Equity:
Common stock, par value $100 per share,
500,000 shares authorized, issued and
outstanding............................... 50,000,000 50,000,000 50,000,000
Additional paid-in capital................. 12,026,436 12,026,436 12,026,436
Retained earnings.......................... 179,666,213 204,882,899 218,271,596
-------------- -------------- --------------
241,692,649 266,909,335 280,298,032
-------------- -------------- --------------
Total Liabilities and Stockholder's
Equity................................ $1,386,546,595 $1,371,915,128 $1,317,384,104
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
F-27
<PAGE>
HANIEL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, FOR THE SIX MONTHS ENDED JUNE 30,
---------------------------------------------------- ----------------------------------
1991 1992 1993 1993 1994
---------------- ---------------- ---------------- ---------------- ----------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales.................... $ 5,606,198,504 $ 5,684,888,683 $ 6,016,975,280 $ 3,237,938,862 $ 3,224,344,635
Costs and expenses:
Cost of goods sold......... 4,835,078,213 4,892,604,182 5,167,570,482 2,784,290,579 2,762,698,270
Selling, operating and
administrative expenses... 661,332,632 686,954,018 752,430,781 400,719,857 411,094,534
Interest:
Interest income............ 6,191,346 6,100,801 6,079,193 3,229,956 3,746,665
Interest expense........... (71,520,472) (62,022,838) (56,297,924) (31,150,028) (27,569,099)
---------------- ---------------- ---------------- ---------------- ----------------
Income before income taxes... 44,458,533 49,408,446 46,755,286 25,008,354 26,729,397
Provision for income taxes... 22,890,300 24,490,563 21,538,600 12,337,514 13,340,700
---------------- ---------------- ---------------- ---------------- ----------------
Net income............... $ 21,568,233 $ 24,917,883 $ 25,216,686 $ 12,670,840 $ 13,388,697
---------------- ---------------- ---------------- ---------------- ----------------
---------------- ---------------- ---------------- ---------------- ----------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-28
<PAGE>
HANIEL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
------------------------ PAID-IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS TOTAL
--------- ------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1990............ 500,000 $ 50,000,000 $ 6,000,000 $ 131,669,709 $ 187,669,709
Cumulative effect of accounting
change (Note 6).................... -- -- -- 1,510,388 1,510,388
--------- ------------- -------------- -------------- --------------
Balance, December 31, 1990, as
restated............................. 500,000 50,000,000 6,000,000 133,180,097 189,180,097
Net income.......................... -- -- -- 21,568,233 21,568,233
--------- ------------- -------------- -------------- --------------
Balance, December 31, 1991............ 500,000 50,000,000 6,000,000 154,748,330 210,748,330
Net income.......................... -- -- -- 24,917,883 24,917,883
Capital contribution (Note 2)....... -- -- 6,026,436 -- 6,026,436
--------- ------------- -------------- -------------- --------------
Balance, December 31, 1992............ 500,000 50,000,000 12,026,436 179,666,213 241,692,649
Net Income.......................... -- -- -- 25,216,686 25,216,686
--------- ------------- -------------- -------------- --------------
Balance, December 31, 1993............ 500,000 50,000,000 12,026,436 204,882,899 266,909,335
Net income (unaudited).............. -- -- -- 13,388,697 13,388,697
--------- ------------- -------------- -------------- --------------
Balance, June 30, 1994
(unaudited)......................... 500,000 $ 50,000,000 $ 12,026,436 $ 218,271,596 $ 280,298,032
--------- ------------- -------------- -------------- --------------
--------- ------------- -------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-29
<PAGE>
HANIEL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
FOR THE YEARS ENDED DECEMBER 31, JUNE 30,
--------------------------------------------- ----------------------------
1991 1992 1993 1993 1994
-------------- ------------- -------------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................................... $ 21,568,233 $ 24,917,883 $ 25,216,686 $ 12,670,840 $ 13,388,697
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment....................................... 46,306,580 46,152,193 50,255,461 26,768,610 26,680,948
Amortization of excess purchase price............ 9,156,576 9,253,793 9,930,338 5,412,126 5,352,524
Amortization of other noncurrent assets.......... 3,613,324 3,482,314 5,003,846 2,428,285 3,066,140
Deferred items................................... (688,696) 2,027,741 (6,324,381) 2,459,212 721,900
Changes in assets and liabilities:
Increase in receivables........................ (575,334) (17,682,429) (17,296,491) (31,660,300) (7,446,790)
Decrease (increase) in inventories............. (33,536,329) (261,128) 25,974,437 18,791,065 43,309,645
Decrease (increase) in other current assets.... 16,932,007 (2,551,500) 5,413,415 (2,520,416) 4,632,649
Increase (decrease) in accounts payable........ 77,406,313 (35,568,099) 22,869,357 (19,043,230) (40,742,706)
Increase (decrease) in other current
liabilities................................... (6,807,629) (7,359,969) 2,594,202 3,450,087 13,905,541
-------------- ------------- -------------- ------------- -------------
Net cash provided by operating activities.... 133,375,045 22,410,799 123,636,870 18,756,279 62,868,548
-------------- ------------- -------------- ------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Changes in long-term investments................... (437,990) 285,414 92,560 48,007 301,955
Proceeds from sale of property and equipment,
net............................................... 24,919,819 3,162,820 3,572,706 396,825 608,104
Capital expenditures............................... (49,333,751) (41,717,059) (55,010,202) (31,483,633) (24,741,628)
Reductions of (additions to) intangible and other
assets............................................ (1,654,937) (11,977,364) (13,111,509) (7,911,559) 1,806,172
-------------- ------------- -------------- ------------- -------------
Net cash used in investing activities........ $ (26,506,859) $ (50,246,189) $ (64,456,445) $ (38,950,360) $ (22,025,397)
-------------- ------------- -------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in direct financing leases................ $ 437,397 $ 449,513 $ 355,966 $ 188,912 $ 169,770
Repayments of capital lease obligations............ (849,198) (748,314) (1,916,846) (1,620,481) (392,662)
Changes in long-term debt.......................... (107,526,535) 22,371,304 (57,070,485) 23,337,259 (41,411,794
Capital contribution............................... -- 6,026,436 -- -- --
-------------- ------------- -------------- ------------- -------------
Net cash effect of financing activities...... (107,938,336) 28,098,939 (58,631,365) 21,905,690 (41,634,686)
-------------- ------------- -------------- ------------- -------------
Net increase (decrease) in cash.............. (1,070,150) 263,549 549,060 1,711,609 (791,535)
Cash at beginning of period.......................... 3,510,301 2,440,151 2,703,700 2,703,700 3,252,760
-------------- ------------- -------------- ------------- -------------
Cash at end of period................................ $ 2,440,151 $ 2,703,700 $ 3,252,760 $ 4,415,309 $ 2,461,225
-------------- ------------- -------------- ------------- -------------
-------------- ------------- -------------- ------------- -------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for-
Interest (net of amounts capitalized)............ $ 70,347,000 $ 59,745,000 $ 58,916,000 $ 32,334,000 $ 26,213,000
Income taxes..................................... 20,243,000 26,523,000 22,537,000 10,887,000 7,865,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-30
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
1. ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
Haniel Corporation is a United States subsidiary of Franz Haniel & Cie. GmbH
("Franz Haniel"). Haniel Corporation's principal operations consist of holding
investments in the companies described below. The consolidated financial
statements include the accounts of Haniel Corporation and its wholly owned
subsidiaries, Scrivner, Inc., Hanamerica Energy Corporation and their
subsidiaries, collectively referred to as (the "Company"). All significant
intercompany transactions and balances have been eliminated.
NOTES RECEIVABLE
Notes receivable amounts due beyond one year which total $33,324,000 at
December 31, 1992, $44,747,000 at December 31, 1993, and $55,078,000 at June 30,
1994, are included in current assets, primarily in anticipation of their sale to
banks. The majority of the notes receivable bear interest at prime plus 2% (8%
at December 31, 1993 and 9.25% at June 30, 1994) and are scheduled to mature
over the next five years and thereafter as follows: $16,552,508 in 1994;
$4,748,287 in 1995; $7,401,489 in 1996; $8,795,049 in 1997; $7,468,237 in 1998
and $26,664,942 thereafter.
INVENTORIES
As further discussed in Note 3, wholesale and retail grocery inventories are
priced at the lower of cost or market, with cost being determined by the
last-in, first-out (LIFO) method and the first-in, first-out (FIFO) method.
PROPERTY AND EQUIPMENT
Depreciation of property and equipment is computed primarily on the
straight-line method, based on the estimated useful lives of the assets as
follows:
<TABLE>
<CAPTION>
USEFUL
LIFE IN
YEARS
----------
<S> <C>
Buildings............................................................... 4 - 45
Furniture, fixtures and equipment....................................... 2 - 15
Transportation equipment................................................ 2 - 7
</TABLE>
Leasehold improvements are amortized over the shorter of their useful lives
or terms of their leases.
INTANGIBLE ASSETS
At December 31, 1992 and 1993 and June 30, 1994, unamortized intangible
assets attributable to excess purchase price over net assets acquired were
approximately $352,127,544, $342,502,204 and $337,373,805, respectively, which
are being amortized on a straight-line basis over 10 to 40 years. The remaining
amounts of $41,215,735, $46,083,902 and $44,414,256 as of December 31, 1992 and
1993 and June 30, 1994, respectively, consist of other acquired intangible
assets which are being amortized over 3 to 40 years. Accumulated amortization of
intangible assets was $45,635,636, $57,996,557 and $65,749,961 at December 31,
1992 and 1993 and June 30, 1994, respectively.
INCOME TAXES
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes," in 1993 and elected to restate its prior
years' financial statements as discussed in Note 6. Deferred income taxes
reflect the estimated future tax effects of differences between financial
statement and tax bases of assets and liabilities at each year-end.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The methods and assumptions used to estimate the fair value of significant
financial instruments are discussed in the various footnotes.
F-31
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
1. ACCOUNTING POLICIES: (CONTINUED)
POSTEMPLOYMENT BENEFITS
In November 1992, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 112, "Employers' Accounting for Postemployment Benefits." The Company
will adopt SFAS No. 112 in 1994. The annual postemployment benefit expense
computed in accordance with the new standard will not have a material effect on
the Company's financial position or future results of operations.
INSURANCE
The Company self-insures the first $125,000 of medical coverage provided
certain of its employees, the physical damage coverage on its transportation
equipment and the first $350,000 of its workers compensation, general, and auto
liability coverage.
A provision for self-insured claims is recorded when sufficient information
is available to reasonably estimate the amount of the loss.
CAPITALIZATION OF INTEREST
Interest attributed to funds used to finance major capital expenditures is
capitalized as an additional cost of the related assets. Capitalization of
interest ceases when the related assets are substantially complete and ready for
their intended use.
2. POOLING OF INTERESTS:
Effective June 6, 1992, all of the outstanding stock of Food Holdings, Inc.
was acquired by Franz Haniel for $8,084,046 and contributed to the Company. The
purchase price over the net tangible assets was $6,026,436. Food Holdings'
primary asset is its 50% common stock interest in Gateway Foods, Inc. through a
holding company in which Scrivner holds the remaining 50% common stock interest.
The contribution of Food Holdings' common stock has been accounted for as a
pooling of interests and, accordingly, the financial statements have been
restated to include the accounts and operations of Food Holdings for all periods
beginning September 1989, the date Scrivner and Food Holdings acquired Gateway
Foods.
3. INVENTORIES:
All inventories are valued at the lower of cost or market. Costs are
determined through use of the LIFO and FIFO methods as follows (in thousands of
dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1992 1993 1994
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
LIFO................................................. $ 406,139 $ 399,657 $ 360,493
FIFO................................................. 35,395 15,903 11,757
--------- --------- -----------
$ 441,534 $ 415,560 $ 372,250
--------- --------- -----------
--------- --------- -----------
</TABLE>
Inventories on a FIFO basis would have been stated higher by approximately
$53,781,530 at December 31, 1992, $55,028,898 at December 31, 1993 and
$55,232,785 at June 30, 1994. Accordingly, reported net income would have
increased by approximately $356,000 and $121,000 for the six months ended June
30, 1993 and 1994, respectively, and by approximately $757,000 and $662,000 for
the years ended December 31, 1992 and 1993, respectively.
F-32
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
4. DEBT OBLIGATIONS:
NOTES PAYABLE
The Company has informal agreements with various banks from which it may
borrow up to $385,000,000 (subject to formal approval by the banks).
LONG-TERM DEBT
Long-term debt at December 31, 1992 and 1993 and June 30, 1994, consisted of
the following (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1992 1993 1994
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Unsecured notes, at rates approximating prime rate
minus 2%, to 12% due through various dates to
2003................................................ $ 5,298 $ 3,594 $ 2,951
Real estate mortgage notes, at fixed rates ranging
from 4% to 10.5% and variable rates at 60% of prime
rate, due serially through various dates to 2003.... 10,078 9,758 6,248
Amounts covered under revolving credit agreements.... 283,000 237,000 199,750
Amounts payable under Senior Term Notes.............. 166,000 157,000 157,000
Amounts payable under Senior Subordinated Notes...... 150,000 150,000 150,000
Amounts payable under Senior Notes................... 50,000 50,000 50,000
Amounts payable under Subordinated Notes............. 50,000 50,000 50,000
Other................................................ 39 39 39
--------- --------- -----------
714,415 657,391 615,988
Less-Current portion................................. 32,114 19,347 15,129
--------- --------- -----------
Long-term debt, net of current portion............. $ 682,301 $ 638,044 $ 600,859
--------- --------- -----------
--------- --------- -----------
</TABLE>
Scrivner's $180,000,000 revolving credit agreement and Gateway Foods'
$150,000,000 revolving credit agreement and $65,000,000 Senior Term loan were
refinanced with a five-year $430,000,000 revolving credit agreement dated
November 19, 1993.
Under terms of its revolving credit agreement, the Company may borrow up to
the lower of $430,000,000 or a Borrowing Base amount equal to a percentage of
the Company's eligible receivables and inventories, as defined in the agreement,
through November 19, 1998, at principally the prime interest rate, adjusted
certificate of deposit rate or a rate based on the Eurodollar London Interbank
interest rate ("LIBOR"). The Company is required to pay fees of 3/8 of 1% per
annum on the unborrowed portion. There are no requirements for maintaining
compensating balances. At December 31, 1992 and 1993 and June 30, 1994, the
Company had borrowings covered under its revolving credit agreements of
$283,000,000, $237,000,000 and $199,750,000, respectively.
The Company's $157,000,000 of Senior Term Notes at December 31, 1993 and
June 30, 1994 consist of $92,000,000 which bears interest at 10% and $65,000,000
which bears interest at 10.6%. The $92,000,000 Senior Term Note is payable in
annual installments of $8,000,000 in 1994 and $12,000,000 each year thereafter
through 2001. The $65,000,000 note is payable in annual installments of
$5,000,000 through 1996 and $10,000,000 each year thereafter through 2001.
The $150,000,000 Senior Subordinated Notes bear interest at 12.86%. The
notes are payable in annual installments of $30,000,000 beginning September 15,
1997 and each year thereafter through 2001.
F-33
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
4. DEBT OBLIGATIONS: (CONTINUED)
As of December 31, 1991, the Company had outstanding debt of $48,595,048 to
Franz Haniel and Haniel Finance B.V., a subsidiary of Franz Haniel. This debt
consisted of short-term borrowings bearing interest at various rates based on
LIBOR. In 1992, the weighted average interest rate on these borrowings was
approximately 4.85%. The Company incurred interest on its debt to Franz Haniel
and Haniel Finance B.V. of approximately $1,672,000 in 1992 and $3,463,000 in
1991.
In September 1992, Haniel borrowed $100,000,000 from two banks. The proceeds
of these loans were used to retire all notes payable to Haniel Finance B.V. and
Franz Haniel and Food Holdings' outstanding debt and accrued interest of
$43,020,841. The new debt consists of a $50,000,000 subordinated note payable
bearing interest at LIBOR plus 1 1/8% and $50,000,000 senior note payable
bearing interest at LIBOR plus 3/8 of 1%. The subordinated note matures in 1999
while the senior note matures in 1998. No principal payments are due until these
maturity dates.
The revolving credit agreement and the note agreements impose, among other
things, certain restrictions on the payment of cash dividends and provide that
neither the Company nor any subsidiary, without the consent of the holders of
the notes, shall (a) pledge any of its assets, except as provided in the loan
agreements, (b) enter into any merger or consolidation proceedings or dissolve,
sell, dispose of or lease all or substantially all of its assets or (c)
guarantee debt obligations of any other corporation or individual, except as
provided. Under the terms of these agreements, the Company has available
$5,000,000, plus 50% of net income recognized after December 31, 1993, for the
payment of cash dividends.
The real estate mortgage notes are collateralized by property and equipment
(primarily land, buildings and equipment) with a net book value of approximately
$9,238,000 and $8,617,000 at December 31, 1993 and June 30, 1994, respectively.
Payments on long-term debt as of December 31, 1993, for the next five years
are as follows (in thousands of dollars):
<TABLE>
<S> <C>
1994...................................................... $ 19,347
1995...................................................... 18,819
1996...................................................... 18,814
1997...................................................... 53,135
1998...................................................... 337,770
</TABLE>
At December 31, 1993 and June 30, 1994, the Company has interest rate cap
agreements on $170,000,000, which limit the interest rate the Company would pay
on its floating rate debt, from 7.5% to 11.5%.
The Company also enters into interest rate swap and forward rate agreements
in order to hedge the impact of future interest rate increases. At December 31,
1993 and June 30, 1994, the Company had an outstanding forward rate agreement of
$50,000,000, which matures in July 1994. There were no interest rate swap
agreements outstanding at December 31, 1993 or June 30, 1994. The differential
paid on the interest rate swap and forward rate agreements is recognized as
interest expense.
The fair value of long-term debt, interest rate cap and forward rate
agreements as of December 31, 1993, was determined using valuation techniques
that considered cash flows discounted at current market rates for similar types
of borrowing arrangements. At December 31, 1992 and 1993, the fair value of
debt, interest rate cap and forward rate agreements exceeded the carrying amount
by approximately $28,116,000 and $43,993,000, respectively.
F-34
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
5. BENEFIT PLANS:
The Company and its subsidiaries sponsor or contribute to various
contributory and noncontributory defined benefit pension plans and
noncontributory profit sharing plans. These plans provide for certain benefits
upon retirement or termination for all full-time employees not covered by
union-sponsored, collectively-bargained multiemployer pension plans. The Company
also has a nonqualified supplemental retirement plan for selected management
employees. Annual expense for the above-mentioned benefit plans is as follows
(in thousands of dollars):
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- ---------
<S> <C> <C> <C>
Pension and supplemental plans................................................... $ 676 $ 257 $ 215
Profit sharing plans............................................................. 6,333 7,097 7,053
Multiemployer plans.............................................................. 9,000 9,066 9,732
--------- --------- ---------
Total.......................................................................... $ 16,009 $ 16,420 $ 17,000
--------- --------- ---------
--------- --------- ---------
</TABLE>
The pension plan benefits are based on years of service and a percentage of
the participant's compensation during years of employment. The Company makes
annual contributions to the plans that comply with the minimum funding
provisions of the Employee Retirement Income Security Act. Such contributions
are intended to provide not only for benefits attributed to service to date, but
also for those expected to be earned in the future.
The following table sets forth the Company's defined benefit pension and
supplemental plans' funded status and amounts recognized in the Company's
financial statements (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31, 1992 DECEMBER 31, 1993
-------------------------- --------------------------
ASSETS ACCUMULATED ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
BENEFITS ASSETS BENEFITS ASSETS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Actuarial present value of accumulated benefit
obligations:
Vested........................................ $ 13,507 $ 130 $ 15,025 $ --
Total......................................... 13,755 3,239 15,247 2,685
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Projected benefit obligations................... 14,646 3,025 16,469 2,557
Plan assets at fair value....................... 17,543 455 17,346 737
------------ ------------ ------------ ------------
Plan assets in excess of or (less than)
projected benefit obligations.................. 2,897 (2,570) 877 (1,820)
Unrecognized net loss (gain).................... 235 127 2,031 (355)
Unrecognized prior service cost................. (52) 1,622 (47) 1,497
Unrecognized net asset.......................... (2,013) -- (1,738) --
------------ ------------ ------------ ------------
Pension asset (liability)....................... $ 1,067 $ (821) $ 1,123 $ (678)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- ---------
<S> <C> <C> <C>
Net pension expense included the following components:
Service cost-benefits earned during the year.......................... $ 1,160 $ 796 $ 605
Interest expense on projected benefit obligation...................... 1,738 1,378 1,499
Actual return on plan assets.......................................... (1,919) (353) (603)
Net amortization and deferral......................................... (303) (1,564) (1,286)
--------- --------- ---------
Net periodic pension expense............................................ $ 676 $ 257 $ 215
--------- --------- ---------
--------- --------- ---------
</TABLE>
F-35
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
5. BENEFIT PLANS: (CONTINUED)
The weighted-average discount rates and rates of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligations at December 31, 1993, were 8.25% to 9% and 5%,
respectively. The expected long-term rates of return on assets at December 31,
1993, were 8.75% to 9%. The Company computes pension expense using the projected
unit credit actuarial cost method.
The profit sharing plans maintained by the Company are for employees who
meet certain types of employment and length of service requirements.
Contributions and costs of these profit sharing plans are determined at the
discretion of the Board of Directors. However, the contributions to the profit
sharing plans shall not exceed the maximum amount deductible for Federal income
tax purposes.
For union-sponsored, multiemployer plans, contributions are made in
accordance with negotiated contracts.
The Company provides certain health care and life insurance benefits to
eligible retired employees covered under various group plans. Benefits,
eligibility requirements and cost-sharing provisions for employees vary by group
plan and/or bargaining unit. Generally, the plans pay a stated percentage of
most medical expenses reduced for any deductible and payments made by government
programs and other group coverage. Several of the group plans require retiree
contributions and the majority of the group plan's eligibility for retiree
benefits are frozen. The Company does not pre-fund these benefits and has the
right to modify or terminate certain of these plans in the future.
The Company adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" as of the beginning of 1993. This new standard
requires that the expected cost of these postretirement benefits must be charged
to expense during the years that the employees render service. The Company has
elected to amortize the unfunded obligations that were measured as of the
beginning of 1993, over a period of 20 years. The effect of this change in
accounting was to decrease 1993 pre-tax income by $378,000. Prior to 1993, the
Company recognized postretirement health care and life insurance costs in the
year that the benefits were paid. Postretirement health care and life insurance
costs charged to expense in 1991 and 1992 were $1,296,000 and $1,267,000,
respectively.
F-36
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
5. BENEFIT PLANS: (CONTINUED)
The following table reconciles the plans' funded status to the accrued
postretirement health care and life insurance cost liability as reflected on the
balance sheet as of December 31, 1993 (in thousands of dollars):
<TABLE>
<CAPTION>
1993
---------
<S> <C>
Accumulated postretirement benefit obligation:
Retirees.............................................................................................. $ (6,627)
Other fully eligible participants..................................................................... (350)
Other active participants............................................................................. (1,103)
---------
(8,080)
Unrecognized actuarial loss............................................................................. 553
Unrecognized transition obligation...................................................................... 7,149
---------
Accrued postretirement health care cost liability................................................... $ (378)
---------
---------
Net postretirement health care cost for 1993 included the following components:
Service cost -- benefits attributed to service during the period...................................... $ 80
Interest cost on accumulated postretirement benefit obligation........................................ 595
Amortization of transition obligation over 20 years................................................... 376
Net amortization and deferral......................................................................... --
---------
Net postretirement health cost...................................................................... $ 1,051
---------
---------
</TABLE>
The discount rate used in determining the accumulated postretirement benefit
obligation was 8.25%. A 12.5% annual rate of increase in the per capita cost of
covered health care benefits was assumed for 1993; the rate was assumed to
decrease gradually to 6% in year 2006 and remain at that level thereafter. A 1%
increase in the assumed health care cost trend rates would increase the
accumulated postretirement benefit obligation as of December 31, 1993 by
approximately $531,000, and the total of the service and interest cost
components of net postretirement health care cost for the year then ended by
approximately $72,000.
6. PROVISION FOR INCOME TAXES:
The Company adopted SFAS No. 109, "Accounting for Income Taxes," in 1993,
and has elected to apply the provisions retroactively beginning with its year
ended December 31, 1983. It was not practical to restate prior to 1983. SFAS No.
109 utilizes the liability method and deferred taxes are determined based on the
estimated future tax effects of differences between the financial statement and
tax bases of assets and liabilities given the provisions of the enacted tax
laws. Prior to the implementation of SFAS No. 109, the Company accounted for
income taxes using Accounting Principles Board Opinion No. 11.
As a result of this change, retained earnings at December 31, 1990,
increased by $1,510,000, the cumulative effect of the change in the method of
accounting for income taxes. The effect of adopting SFAS No. 109 was not
material to the Company's statements of income for the years ended 1991, 1992
and 1993, other than the valuation allowance adjustment discussed below.
The Company reduced its valuation allowance by $3,187,000 for the year ended
December 31, 1993, as a result of the recognition of certain net operating loss
carryforwards for financial reporting purposes. The Company's ability to obtain
future benefit of its net operating loss carryforwards is attributable to the
restructuring of subsidiaries implemented in 1993, as discussed in Note 2.
F-37
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
6. PROVISION FOR INCOME TAXES: (CONTINUED)
Provision for income taxes has been made as follows (in thousands of
dollars):
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- ---------
<S> <C> <C> <C>
Federal:
Current.............................................................. $ 16,957 $ 15,104 $ 16,086
Deferred............................................................. 1,650 4,703 3,190
--------- --------- ---------
18,607 19,807 19,276
State (current and deferred)........................................... 4,283 4,684 5,450
--------- --------- ---------
22,890 24,491 24,726
Benefit of operating loss carryforward................................. -- -- (3,187)
--------- --------- ---------
$ 22,890 $ 24,491 $ 21,539
--------- --------- ---------
--------- --------- ---------
</TABLE>
The provision for income taxes differs from an amount computed at the
statutory rate as follows (in thousands of dollars):
<TABLE>
<CAPTION>
1991 1992 1993
--------- --------- ---------
<S> <C> <C> <C>
Income taxes at statutory rate (35% in 1993, 34% in 1992 and 1991)..... $ 15,116 $ 16,799 $ 16,364
Amortization of excess purchase price.................................. 3,028 3,036 3,541
Benefit of operating loss carryforward................................. -- -- (3,187)
State income taxes, net of Federal benefit............................. 2,668 2,965 2,805
Other, net............................................................. 2,078 1,691 2,016
--------- --------- ---------
$ 22,890 $ 24,491 $ 21,539
--------- --------- ---------
--------- --------- ---------
</TABLE>
The 1% increase in the Federal statutory tax rate increased the Company's
1993 provision for income taxes $1,540,000. This consisted of a $468,000
increase in the current tax provision and a $1,072,000 increase in the deferred
tax provision as a result of adjusting the deferred tax asset and liability
accounts recorded in the Company's balance sheets.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The following table
includes $1,780,000 of net current deferred tax liabilities, which are included
in other current
F-38
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
6. PROVISION FOR INCOME TAXES: (CONTINUED)
liabilities at December 31, 1993 and $4,965,000 of net deferred tax assets,
included in other current assets at December 31, 1992, in the consolidated
balance sheets. The following is a summary of the significant components of the
Company's deferred tax assets and liabilities (in thousands of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1992 1993
--------- ---------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards, expiring 2003 to 2008................................... $ 15,566 $ 7,501
Provision for obligations and contingencies to be settled in future periods............... 22,524 20,394
Other..................................................................................... 3,114 6,765
--------- ---------
Total deferred tax assets............................................................... 41,204 34,660
--------- ---------
Deferred tax liabilities:
Depreciation and amortization............................................................. 56,441 56,947
Inventories............................................................................... 14,354 14,354
Other..................................................................................... 6,585 7,721
--------- ---------
Total deferred tax liabilities.......................................................... 77,380 79,022
--------- ---------
Deferred tax valuation allowance............................................................ 7,967 --
--------- ---------
Net deferred tax liability.............................................................. $ 44,143 $ 44,362
--------- ---------
--------- ---------
</TABLE>
7. LEASES:
The Company leases certain of its operating facilities under terms ranging
up to twenty-five years. In addition, the Company leases certain equipment used
in its operations under terms ranging up to ten years.
The Company also leases certain facilities which it in turn subleases to
some of its independent retail store operators. Some of these agreements contain
provisions calling for additional rentals based on sales. Amounts attributable
to capitalized subleases have been included in direct financing leases in the
accompanying balance sheets.
The following is a summary of property and equipment under leases that have
been capitalized and included in the accompanying balance sheets (in thousands
of dollars):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1992 1993
--------- ---------
<S> <C> <C>
Land and buildings................................................................. $ 5,224 $ 3,688
Less-Accumulated depreciation.................................................... (2,426) (2,170)
--------- ---------
Net property under capital leases.................................................. $ 2,798 $ 1,518
--------- ---------
--------- ---------
</TABLE>
F-39
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
7. LEASES: (CONTINUED)
The following represents the minimum lease payments remaining at December
31, 1993, under the capitalized leases and the minimum sublease rentals to be
received under the direct financing leases, covering certain facilities which
are sublet to retail customers (in thousands of dollars):
<TABLE>
<CAPTION>
TOTAL DIRECT
CAPITAL FINANCING
LEASES SUBLEASES NET
------------ ----------- ---------
<S> <C> <C> <C>
1994.......................................................................... $ 1,330 $ (593) $ 737
1995.......................................................................... 1,202 (535) 667
1996.......................................................................... 1,060 (482) 578
1997.......................................................................... 777 (360) 417
1998.......................................................................... 732 (350) 382
Later years................................................................... 3,294 (1,859) 1,435
------------ ----------- ---------
Total minimum lease payments.............................................. 8,395 (4,179) $ 4,216
---------
---------
Less-Executory costs........................................................ (360) --
Less-Imputed interest (6% to 13.37%)........................................ (3,558) 1,574
------------ -----------
Present value of minimum lease payments....................................... 4,477 (2,605)
Less-Current maturities..................................................... (702) 325
------------ -----------
Long-term obligations and receivables..................................... $ 3,775 $ (2,280)
------------ -----------
------------ -----------
</TABLE>
Total rental expense for all operating (noncapitalized) leases amounted to
(in thousands of dollars):
<TABLE>
<CAPTION>
LEASE RENTALS 1991 1992 1993
- -------------------------------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Minimum............................................................. $ 63,947 $ 76,404 $ 84,133
Contingent.......................................................... 4,650 5,012 3,188
Less-Sublease income.............................................. (36,728) (39,344) (38,737)
---------- ---------- ----------
$ 31,869 $ 42,072 $ 48,584
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The future minimum lease commitments as of December 31, 1993, for all
noncancelable operating leases are as follows (in thousands of dollars):
<TABLE>
<CAPTION>
SUBLEASE
EXPENSE INCOME NET
---------- ----------- ----------
<S> <C> <C> <C>
1994.............................................................. $ 85,198 $ (35,897) $ 49,301
1995.............................................................. 81,229 (33,648) 47,581
1996.............................................................. 76,078 (28,004) 48,074
1997.............................................................. 69,798 (23,807) 45,991
1998.............................................................. 63,089 (17,638) 45,451
Later years....................................................... 505,346 (53,435) 451,911
---------- ----------- ----------
$ 880,738 $ (192,429) $ 688,309
---------- ----------- ----------
---------- ----------- ----------
</TABLE>
Most of the real estate and retail store leases have renewal options of up
to twenty-five years.
8. COMMITMENTS AND CONTINGENCIES:
During the year ended December 31, 1992 and 1993 and the six months ended
June 30, 1994, the Company sold $40,591,000, $51,036,000 and $12,138,000,
respectively, of its notes receivable to banks at cost.
F-40
<PAGE>
HANIEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 1993 AND 1994 IS UNAUDITED)
8. COMMITMENTS AND CONTINGENCIES: (CONTINUED)
The Company is contingently liable, up to approximately $13,630,000 and
$12,620,764, for any future losses experienced by the banks in connection with
sold notes receivable at December 31, 1993 and June 30, 1994, respectively.
The Company has guaranteed the payment of notes and leases made by certain
retail store operators to various banks and lessors. These contingent
liabilities totaled approximately $3,301,000 and $4,160,000 at December 31, 1993
and June 30, 1994. The Company derives interest income as a guarantor of the
notes and leases.
The Internal Revenue Service (the "IRS") has examined the Company's Federal
income tax returns for the years 1983 through 1987, and has issued notices of
proposed tax deficiencies for those years. The Company has formally protested
the IRS proposed deficiencies, and the entire matter is now being reviewed by
the IRS Appeals Office. The significant issues have been tentatively agreed to
for settlement, subject to final approval by the IRS. The Company has accrued
reserves sufficient to provide for the proposed settlement amounts. The Company
believes that the ultimate resolution of these matters will not have a material
adverse effect on its financial position or future results of operations.
F-41
<PAGE>
[PICTURES TO COME]
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SUBSIDIARY GUARANTORS OR ANY OF THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE FIXED RATE NOTES OR THE FLOATING RATE NOTES IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY OR THE SUBSIDIARY GUARANTORS SINCE THE DATE HEREOF.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information.......................... 3
Incorporation of Certain Documents by
Reference..................................... 3
Prospectus Summary............................. 4
Investment Considerations...................... 13
The Company.................................... 18
Use of Proceeds................................ 18
Capitalization................................. 19
Pro Forma Financial Information................ 20
Selected Financial Information................. 23
Management's Discussion and Analysis........... 25
Business....................................... 36
Management..................................... 46
The Credit Agreement........................... 48
Certain Other Obligations...................... 49
Description of the Notes....................... 50
Underwriting................................... 73
Legal Opinions................................. 74
Experts........................................ 74
Index to Financial Statements.................. F-1
</TABLE>
$500,000,000
[LOGO]
$350,000,000 % SENIOR NOTES
DUE 2001
$150,000,000 FLOATING RATE
SENIOR NOTES DUE 2001
---------------------
PROSPECTUS
---------------------
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
, 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
APPENDIX B
DESCRIPTION OF PRINTED MATERIAL
Page 2 Map of United States showing location of company operated
distribution centers, retail chains and headquarters.
Letterhead "Fleming Companies, Inc." displayed above map.
Inside Back Color photographs of three distribution centers and three
Prospectus retail stores, each with a caption identifying the location
Cover appearing below the photograph.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC Registration Fee............................................ $ 172,414
NASD Fee........................................................ 30,500
Trustee's Fees and Expenses..................................... 25,000
Printing and Engraving Expenses................................. 325,000
Accountant's Fees and Expenses.................................. 60,000
Legal Fees and Expenses......................................... 450,000
Rating Agencies' Fees........................................... 90,000
Blue Sky Fees and Expenses...................................... 22,500
Miscellaneous................................................... 74,586
---------
Total....................................................... $1,250,000
---------
---------
</TABLE>
Except for the SEC registration fee and the NASD fee, all expenses are
estimated. All of the above expenses will be borne by the Company.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Section 31 of the Oklahoma General Corporation Act, the jurisdiction in
which the Company is incorporated, provides, under certain circumstances, for
indemnification of the directors or officers of an Oklahoma corporation for
expenses in connection with the defense of any action, suit or proceeding, in
relation to certain matters, brought against them as such directors and
officers.
In addition, the Company maintains insurance policies which insure its
officers and directors against certain liabilities.
The Purchase Agreement, filed as Exhibit 1 to this Registration Statement
and incorporated herein by reference, contains certain indemnifications made by
the Underwriters with respect to the accuracy and completeness of this
Registration Statement and with respect to certain civil liabilities, including
liabilities under the Securities Act of 1933.
(b) Section 8.3 of Article VIII of the By-Laws of Fleming provides
indemnification of directors, officers and agents under certain circumstances.
These provisions may be sufficiently broad to indemnify such persons for
liabilities under the Securities Act of 1933.
ITEM 16. EXHIBITS.
<TABLE>
<C> <C> <S>
*1 -- Purchase Agreement
*4.5 -- Fixed Rate Note Indenture
*4.6 -- Floating Rate Note Indenture
*5 -- Opinion of McAfee & Taft A Professional Corporation, as to the validity of
the Securities
12 -- Computation of Ratio of Earnings to Fixed Charges incorporated by reference
to Exhibit 12 to the Registrant's Quarterly Report on Form 10-Q for the
period ended October 1, 1994
*23.1 -- Consent of Deloitte & Touche LLP
*23.2 -- Consent of Arthur Andersen LLP
*23.3 -- Consent of McAfee & Taft A Professional Corporation, included as part of
Exhibit 5
24.1 -- Power of Attorney of the Registrant
24.2 -- Powers of Attorney of the Additional Registrants
25 -- Form T-1 Statement of Eligibility of Trustee under the Trust Indenture Act of
1939
<FN>
- ------------------------
* Filed with this amendment.
</TABLE>
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
Each of the undersigned registrants hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(2) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of the
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the registration
statement at the time it was declared effective.
(3) For the purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(4) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted against the registrant by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by its is against the public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING COMPANIES, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
-----------------------------------
John M. Thompson
VICE PRESIDENT AND TREASURER
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ ROBERT E. STAUTH*
- --------------------------------- Chairman, President and
Robert E. Stauth Chief Executive Officer
/s/ HARRY L. WINN, JR.* Executive Vice President
- --------------------------------- and Chief Financial
Harry L. Winn, Jr. Officer
/s/ DONALD N. EYLER* Senior Vice President --
- --------------------------------- Controller (Chief
Donald N. Eyler Accounting Officer)
/s/ ARCHIE R. DYKES*
- --------------------------------- Director
Archie R. Dykes
/s/ CAROL B. HALLETT*
- --------------------------------- Director
Carol B. Hallett
/s/ JAMES G. HARLOW, JR.*
- --------------------------------- Director
James G. Harlow, Jr.
December 5, 1994
/s/ LAWRENCE M. JONES*
- --------------------------------- Director
Lawrence M. Jones
/s/ EDWARD C. JOULLIAN III*
- --------------------------------- Director
Edward C. Joullian III
/s/ HOWARD H. LEACH*
- --------------------------------- Director
Howard H. Leach
/s/ JOHN A. McMILLAN*
- --------------------------------- Director
John A. McMillan
/s/ GUY A. OSBORN*
- --------------------------------- Director
Guy A. Osborn
/s/ E. DEAN WERRIES*
- --------------------------------- Director
E. Dean Werries
*By: /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
ATI, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
President (Chief
/s/ DONALD N. EYLER* Executive Officer and
- --------------------------------- Chief Accounting
Donald N. Eyler Officer) and Director
Vice President and
/s/ JOHN M. THOMPSON* Treasurer
- ---------------------------------
(Chief Financial
John M. Thompson Officer) December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
BADGER MARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ RONALD R. LUSIC*
- --------------------------------- President (Chief
Ronald R. Lusic Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ MARK K. BATENIC*
- --------------------------------- Director
Mark K. Batenic
/s/ MICHAEL J. GEORGE*
- --------------------------------- Director
Michael J. George
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
BAKER'S SUPERMARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JACK W. BAKER* Chairman, President and
- --------------------------------- Chief Executive Officer
Jack W. Baker and Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ THOMAS L. ZARICKI*
- --------------------------------- Director
Thomas L. Zaricki
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
BALL MOTOR SERVICE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ RONALD R. LUSIC*
- --------------------------------- President (Chief
Ronald R. Lusic Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ MARK K. BATENIC*
- --------------------------------- Director
Mark K. Batenic
/s/ MICHAEL J. GEORGE*
- --------------------------------- Director
Michael J. George
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
BOOGAART STORES OF NEBRASKA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
CENTRAL PARK SUPER DUPER, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
COMMERCIAL COLD/DRY
STORAGE COMPANY
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day of
December, 1994.
CONSUMERS MARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ DAVID S. MILLER* President, Chief
- --------------------------------- Executive Officer and
David S. Miller Director
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DAVID R. ALMOND*
- ---------------------------------
David R. Almond Director December 5, 1994
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ THOMAS L. ZARICKI*
- --------------------------------- Director
Thomas L. Zaricki
/s/ WILLIAM M. LAWSON, JR.*
- --------------------------------- Director
William M. Lawson, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
D. L. FOOD STORES, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ IVAN D. MULLEN* President (Chief
- --------------------------------- Executive Officer) and
Ivan D. Mullen Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
DEL-ARROW SUPER DUPER, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FESTIVAL FOODS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING DIRECT SALES CORPORATION
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ WILLIAM H. AHRENS*
- --------------------------------- President (Chief
William H. Ahrens Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS OF ALABAMA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ IVAN D. MULLEN* President (Chief
- --------------------------------- Executive Officer) and
Ivan D. Mullen Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS OF OHIO, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ BASIL G. VIOLAND* President (Chief
- --------------------------------- Executive Officer) and
Basil G. Violand Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ STEPHEN G. MANGOLD*
- --------------------------------- Director
Stephen G. Mangold
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS OF TENNESSEE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ M. THOMAS KRIEGER* President (Chief
- --------------------------------- Executive Officer) and
M. Thomas Krieger Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS OF TEXAS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JAMES E. STUARD* President (Chief
- --------------------------------- Executive Officer) and
James E. Stuard Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS OF VIRGINIA, INC.
(Registrant)
By: JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS EAST, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JAMES V. PINCIOTTI*
- --------------------------------- President (Chief
James V. Pinciotti Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ GERALD G. AUSTIN*
- --------------------------------- Director
Gerald G. Austin
/s/ MARK K. BATENIC*
- --------------------------------- Director
Mark K. Batenic
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS SOUTH, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JAMES E. STUARD* President (Chief
- --------------------------------- Executive Officer) and
James E. Stuard Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOODS WEST, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ DIXON E. SIMPSON* President (Chief
- --------------------------------- Executive Officer) and
Dixon E. Simpson Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FOREIGN SALES CORPORATION
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JAMES M. WALLACE* President (Chief
- --------------------------------- Executive Officer) and
James M. Wallace Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ WILLIAM M. LAWSON, JR.*
- --------------------------------- Director
William M. Lawson, Jr.
/s/ SHARON L. LEACH*
- --------------------------------- Director
Sharon L. Leach
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING FRANCHISING, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JOHN S. RUNYAN* President (Chief
- --------------------------------- Executive Officer) and
John S. Runyan Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING HOLDINGS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING INTERNATIONAL LTD.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ WAYNE EPPERSON*
- --------------------------------- President (Chief
Wayne Epperson Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ WILLIAM M. LAWSON, JR.*
- --------------------------------- Director
William M. Lawson, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING SITE MEDIA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JOHN S. RUNYAN* President (Chief
- --------------------------------- Executive Officer and
John S. Runyan Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING SUPERMARKETS
OF FLORIDA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ THOMAS A. FARELLO
- --------------------------------- President (Chief
Thomas A. Farello Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ LOUIS F. MOORE, JR.* Vice President --
- --------------------------------- Controller (Chief
Louis F. Moore, Jr. Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ THOMAS L. ZARICKI*
- --------------------------------- Director
Thomas L. Zaricki
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING TECHNOLOGY LEASING
COMPANY, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ THOMAS J. DOONER, JR.* President (Chief
- --------------------------------- Executive Officer) and
Thomas J. Dooner, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FLEMING TRANSPORTATION SERVICE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ E. STEPHEN DAVIS* President (Chief
- --------------------------------- Executive Officer) and
E. Stephen Davis Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-31
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FOOD BRANDS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-32
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FOOD-4-LESS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-33
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FOOD HOLDINGS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-34
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
FOOD SAVER OF IOWA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-35
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GATEWAY DEVELOPMENT CO., INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-36
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GATEWAY FOOD DISTRIBUTORS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-37
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GATEWAY FOODS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-38
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GATEWAY FOODS OF ALTOONA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-39
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GATEWAY FOODS OF PENNSYLVANIA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-40
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GATEWAY FOODS OF TWIN PORTS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-41
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GATEWAY FOODS SERVICE CORPORATION
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-42
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GRAND CENTRAL LEASING CORPORATION
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ DIXON E. SIMPSON* President (Chief
- --------------------------------- Executive Officer) and
Dixon E. Simpson Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ GERALD L. LISTER*
- --------------------------------- Director
Gerald L. Lister
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-43
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
GREAT BEND SUPERMARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-44
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
HUB CITY TRANSPORTATION, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ J. DOUGLAS SCHNEEBERGER*
- --------------------------------- President (Chief
J. Douglas Schneeberger Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ MICHAEL J. GEORGE*
- --------------------------------- Director
Michael J. George
/s/ RONALD R. LUSIC*
- --------------------------------- Director
Ronald R. Lusic
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-45
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
KENSINGTON AND HARLEM, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-46
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
LAS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JOHN S. RUNYAN* President (Chief
- --------------------------------- Executive Officer) and
John S. Runyan Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ RICHARD D. BEAZER*
- --------------------------------- Director
Richard D. Beazer
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-47
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
LADYSMITH EAST IGA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-48
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
LADYSMITH IGA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-49
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
LAKE MARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-50
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
M&H DESOTO, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.*
- --------------------------------- President (Chief
Harry L. Winn, Jr. Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-51
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
M&H FINANCIAL CORP.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.*
- --------------------------------- President (Chief
Harry L. Winn, Jr. Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-52
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
M&H REALTY CORP.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ ROBERT W. SMITH*
- --------------------------------- President (Chief
Robert W. Smith Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
Vice President --
/s/ DONALD N. EYLER* Controller
- --------------------------------- (Chief Accounting
Donald N. Eyler Officer) and Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-53
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
MALONE & HYDE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
Chairman of the Board and
/s/ ROBERT F. HARRIS* President (Chief
- --------------------------------- Executive Officer) and
Robert F. Harris Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-54
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
MALONE & HYDE OF LAFAYETTE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JOHN H. KEYSER, JR.*
- --------------------------------- President (Chief
John H. Keyser, Jr. Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ JAMES E. STUARD*
- --------------------------------- Director
James E. Stuard
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-55
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
MANITOWOC IGA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-56
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
MOBERLY FOODS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-57
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
MT. MORRIS SUPER DUPER, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-58
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
NIAGARA FALLS SUPER DUPER, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-59
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
NORTHERN SUPERMARKETS OF OREGON, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ WILLIAM H. AHRENS*
- --------------------------------- President (Chief
William H. Ahrens Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ THOMAS L. ZARICKI*
- --------------------------------- Director
Thomas L. Zaricki
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-60
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
NORTHGATE PLAZA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-61
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
109 WEST MAIN STREET, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-62
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
121 EAST MAIN STREET, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-63
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
PESHTIGO IGA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-64
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
PIGGLY WIGGLY CORPORATION
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ LAWRENCE L. CRANE, JR.* President (Chief
- --------------------------------- Executive Officer) and
Lawrence L. Crane, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ JOHN S. RUNYAN*
- --------------------------------- Director
John S. Runyan
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-65
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
QUALITY INCENTIVE COMPANY, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ RICHARD G. BROWN*
- --------------------------------- President (Chief
Richard G. Brown Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ GERALD G. AUSTIN*
- --------------------------------- Director
Gerald G. Austin
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-66
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
RAINBOW TRANSPORTATION SERVICES, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ MICHAEL J. GEORGE* President (Chief
- --------------------------------- Executive Officer) and
Michael J. George Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-67
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
ROUTE 16, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-68
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
ROUTE 219, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-69
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
ROUTE 417, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-70
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
RICHLAND CENTER IGA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-71
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ E. STEPHEN DAVIS*
- --------------------------------- President (Chief
E. Stephen Davis Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-72
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER-FOOD HOLDINGS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-73
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF ALABAMA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-74
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF ILLINOIS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-75
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF IOWA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-76
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF KANSAS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-77
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF NEW YORK, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-78
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF NORTH CAROLINA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-79
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF PENNSYLVANIA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-80
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF TENNESSEE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-81
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER OF TEXAS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-82
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER SUPER STORES OF ILLINOIS,
INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, Jr.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-83
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER SUPER STORES OF IOWA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-84
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SCRIVNER TRANSPORTATION, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-85
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SEHON FOODS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ BASIL G. VIOLAND* President (Chief
- --------------------------------- Executive Officer) and
Basil G. Violand Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
/s/ KEITH A. HIGGS*
- --------------------------------- Director
Keith A. Higgs
/s/ E. A. SCHULTZ*
- --------------------------------- Director
E. A. Schultz
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-86
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SELECTED PRODUCTS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ ROBERT E. STAUTH* President (Chief
- --------------------------------- Executive Officer) and
Robert E. Stauth Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-87
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SENTRY MARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ RONALD R. LUSIC*
- --------------------------------- President (Chief
Ronald R. Lusic Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ MARK K. BATENIC*
- --------------------------------- Director
Mark K. Batenic
/s/ MICHAEL J. GEORGE*
- --------------------------------- Director
Michael J. George
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-88
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SMARTRANS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-89
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SOUTH OGDEN SUPER DUPER, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-90
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SOUTHERN SUPERMARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ GERALD G. AUSTIN* President (Chief
- --------------------------------- Executive Officer) and
Gerald G. Austin Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ MATTHEW G. JONAS*
- --------------------------------- Director
Matthew G. Jonas
/s/ STEPHEN G. MANGOLD*
- --------------------------------- Director
Stephen G. Mangold
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-91
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SOUTHERN SUPERMARKETS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JAMES E. STUARD* President (Chief
- --------------------------------- Executive Officer) and
James E. Stuard Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ DONALD E. JEROME*
- --------------------------------- Director
Donald E. Jerome
/s/ STEPHEN G. MANGOLD*
- --------------------------------- Director
Stephen G. Mangold
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-92
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SOUTHERN SUPERMARKETS OF
LOUISIANA, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ JAMES E. STUARD*
- --------------------------------- President (Chief
James E. Stuard Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-93
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
STAR GROCERIES, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ DONALD L. DESPOT* President (Chief
- --------------------------------- Executive Officer) and
Donald L. Despot Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-94
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
STORE EQUIPMENT, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ RONALD R. LUSIC*
- --------------------------------- President (Chief
Ronald R. Lusic Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER*
- --------------------------------- Vice President (Chief
Donald N. Eyler Accounting Officer)
December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ MARK K. BATENIC*
- --------------------------------- Director
Mark K. Batenic
/s/ MICHAEL J. GEORGE*
- --------------------------------- Director
Michael J. George
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-95
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SUNDRIES SERVICE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-96
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
SWITZER FOODS, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-97
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
35 CHURCH STREET, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-98
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
THOMPSON FOOD BASKET, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-99
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
29 SUPER MARKET, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, JR.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-100
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
27 SLAYTON AVENUE, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ HARRY L. WINN, Jr.* President (Chief
- --------------------------------- Executive Officer) and
Harry L. Winn, Jr. Director
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
December 5, 1994
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-101
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this amended
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oklahoma City, State of Oklahoma, on the 5th day
of December, 1994.
WPC, INC.
(Registrant)
By: /s/ JOHN M. THOMPSON
--------------------------------------
John M. Thompson
VICE PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this amended
registration statement has been signed by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
- --------------------------------- ------------------------- ------------------
/s/ WILLIAM M. LAWSON, JR.*
- --------------------------------- President (Chief
William M. Lawson, Jr. Executive Officer)
/s/ JOHN M. THOMPSON* Vice President and
- --------------------------------- Treasurer (Chief
John M. Thompson Financial Officer)
/s/ DONALD N. EYLER* Vice President (Chief
- --------------------------------- Accounting Officer) and
Donald N. Eyler Director December 5, 1994
/s/ DAVID R. ALMOND*
- --------------------------------- Director
David R. Almond
/s/ HARRY L. WINN, JR.*
- --------------------------------- Director
Harry L. Winn, Jr.
*By /s/ JOHN M. THOMPSON
- ---------------------------------
John M. Thompson
ATTORNEY-IN-FACT
II-102
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 5, 1994
REGISTRATION NO. 33-55369
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
EXHIBITS
TO
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------
FLEMING COMPANIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
OKLAHOMA 48-0222760
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
P.O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
(405) 840-7200
(Address, including zip code, and telephone number, including area code of
registrant's and additional registrants' principal executive offices)
------------------------------
DAVID R. ALMOND, ESQ.
Senior Vice President, General Counsel and Secretary
Fleming Companies, Inc.
P.O. Box 26647
6301 Waterford Boulevard
Oklahoma City, Oklahoma 73126
(405) 840-7200
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
JOHN M. MEE, ESQ. ROHAN S. WEERASINGHE, ESQ.
BRICE E. TARZWELL, ESQ. Shearman & Sterling
McAfee & Taft 599 Lexington Avenue
A Professional Corporation New York, New York 10022
Tenth Floor, Two Leadership Square (212) 848-4000
Oklahoma City, Oklahoma 73102
(405) 235-9621
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER NUMBERED PAGE
- --------- -------------
<C> <C> <S> <C>
*1 -- Purchase Agreement
*4.5 -- Fixed Rate Note Indenture
*4.6 -- Floating Rate Note Indenture
*5 -- Opinion of McAfee & Taft A Professional Corporation, as to the validity of the
Securities
12 -- Computation of Ratio of Earnings to Fixed Charges incorporated by reference to Exhibit
12 to the Registrant's Quarterly Report on Form 10-Q for the period ended October 1,
1994
*23.1 -- Consent of Deloitte & Touche LLP
*23.2 -- Consent of Arthur Andersen LLP
*23.3 -- Consent of McAfee & Taft A Professional Corporation, included as part of Exhibit 5
24.1 -- Power of Attorney of the Registrant
24.2 -- Powers of Attorney of the Additional Registrants
25 -- Form T-1 Statement of Eligibility of Trustee under the Trust Indenture Act of 1939
<FN>
- ------------------------
* Filed with this amendment.
</TABLE>
<PAGE>
APPENDIX A
TABLE OF ADDITIONAL REGISTRANT
This filing contains an additional co-registrant as set forth below.
<TABLE>
<CAPTION>
EXACT NAME OF SUBSIDIARY GUARANTOR JURISDICTION I.R.S. EMPLOYER
REGISTRANTS AS SPECIFIED IN OF INCORPORATION IDENTIFICATION
THEIR RESPECTIVE CHARTERS OR ORGANIZATION NO. CIK FILE NO.
- ------------------------------------------------------------- ----------------- --------------- -------- --------
<S> <C> <C> <C> <C>
Consumers Markets, Inc....................................... Missouri 44-0559460 0000932744 033-55369-100
</TABLE>
<PAGE>
APPENDIX B
DESCRIPTION OF PRINTED MATERIAL
Page 2 Map of United States showing location of company operated
distribution centers, retail chains and headquarters.
Letterhead "Fleming Companies, Inc." displayed above map.
Inside Back Color photographs of three distribution centers and three
Prospectus retail stores, each with a caption identifying the location
Cover appearing below the photograph.
<PAGE>
EXHIBIT 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FLEMING COMPANIES, INC.
(an Oklahoma corporation)
% Senior Notes due 2001
Floating Rate Senior Notes due 2001
PURCHASE AGREEMENT
--------------------------
DATED: , 1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
FLEMING COMPANIES, INC.
(AN OKLAHOMA CORPORATION)
% SENIOR NOTES DUE 2001
FLOATING RATE SENIOR NOTES DUE 2001
PURCHASE AGREEMENT
------------------------
December __, 1994
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
c/oMERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
Fleming Companies, Inc., an Oklahoma corporation (the "Company"), proposes
to issue and sell to you (the "Underwriters") its % Senior Notes due 2001
(the "Fixed Rate Notes") and its Floating Rate Senior Notes due 2001 (the
"Floating Rate Notes"). The Fixed Rate Notes and the Floating Rate Notes
(collectively, the "Notes") are to be sold to each Underwriter, acting severally
and not jointly, in the respective principal amounts as are set forth in
Schedule A. The Fixed Rate Notes and the Floating Rate Notes will be issued
pursuant to indentures to be dated as of December __, 1994 (collectively, the
"Senior Note Indentures"), among the Company, as issuer, the subsidiary
guarantors listed on Exhibit B hereto, as guarantors (the "Subsidiary
Guarantors"), and Texas Commerce Bank National Association, as trustee (the
"Trustee"). The Notes will be guaranteed, jointly and severally, on an unsecured
senior basis (the "Note Guarantees") as to principal, premium, if any, and
interest by the Subsidiary Guarantors. The Notes and the Senior Note Indentures
are more fully described in the Prospectus referred to below.
The principal amount and certain terms of the Notes, and the purchase price
of the Notes to be paid by the Underwriters, shall be agreed upon by the Company
and the Underwriters, and such agreement shall be set forth in a separate
written instrument substantially in the form of Exhibit A hereto (the "Price
Determination Agreement"). The Price Determination Agreement may take the form
of an exchange of any standard form of written telecommunication between the
Company and the Underwriters and shall specify such applicable information as is
indicated in Exhibit A hereto. The offering of the Notes will be governed by
this Agreement, as supplemented by the Price Determination Agreement. From and
after the date of the execution and delivery of the Price Determination
Agreement, this Agreement shall be deemed to incorporate, and all references
herein to "this Agreement" shall be deemed to include, the Price Determination
Agreement.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Registration
No. 33-55369) covering the registration of the Notes and the Note Guarantees
under the Securities Act of 1933, as amended (the "1933 Act"), including the
related preliminary prospectus, or prospectuses, and either (A) has prepared and
proposes to file, prior to the effective date of such registration statement, an
amendment to such registration statement, including a final prospectus or (B) if
the Company has elected to rely upon Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations"),
will prepare and file a prospectus, in accordance with the provisions of Rule
430A and Rule 424(b) ("Rule 424(b)") of the 1933 Act Regulations, promptly after
execution and delivery of the Price Determination Agreement. The information, if
any, included in such prospectus that was omitted from the prospectus included
in such registration statement at the time it becomes effective but that is
deemed, pursuant to paragraph (b) of Rule 430A, to be part of such registration
statement at the time it becomes effective is referred to herein as the "Rule
430A Information". Each prospectus used before the time such registration
statement becomes effective, and any prospectus that omits the Rule 430A
Information that is used after such effectiveness and prior to the
<PAGE>
execution and delivery of the Price Determination Agreement, is herein called a
"preliminary prospectus". Such registration statement, including the exhibits
thereto and the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, as amended at the time it becomes effective and
including, if applicable, the Rule 430A Information, is herein called the
"Registration Statement", and the prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, included in the Registration Statement at the time it becomes effective is
herein called the "Prospectus", except that, if the final prospectus first
furnished to the Underwriters after the execution of the Price Determination
Agreement for use in connection with the offering of the Notes differs from the
prospectus included in the Registration Statement at the time it becomes
effective (whether or not such prospectus is required to be filed pursuant to
Rule 424(b)), the term "Prospectus" shall refer to the final prospectus first
furnished to the Underwriters for such use.
The Company understands that the Underwriters propose to make a public
offering of the Notes as soon as the Underwriters deem advisable after the
Registration Statement becomes effective, the Price Determination Agreement has
been executed and delivered and the Senior Note Indentures have been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
Section 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to and agrees with each of the
Underwriters that:
(i) The Company and the Subsidiary Guarantors meet the requirements for
use of Form S-3 under the 1933 Act and when the Registration Statement on
such form shall become effective and at all times subsequent thereto up to
the Closing Time referred to below, (A) the Registration Statement and any
amendments and supplements thereto will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations (except to the
extent set forth in the letter from McAfee & Taft A Professional
Corporation, counsel for the Company, to the staff of the Commission, dated
December 2, 1994) and the requirements of the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"); (B) neither the Registration Statement nor any amendment or
supplement thereto will 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; and (C) neither the Prospectus
nor any amendment or supplement thereto will include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; except that this representation and warranty does
not apply to statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of the
Underwriters expressly for use in the Registration Statement or the
Prospectus.
(ii) The documents incorporated by reference in the Prospectus pursuant
to Item 12 of Form S-3 under the 1933 Act, at the time they were filed with
the Commission, complied in all material respects with the requirements of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations of the Commission thereunder (the "1934 Act
Regulations"), and, when read together and with the other information in the
Prospectus, at the time the Registration Statement becomes effective and at
all times subsequent thereto up to the Closing Time, will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
(iii) Deloitte & Touche LLP and Arthur Andersen LLP, who are reporting
upon the financial statements and schedules included or incorporated by
reference in the Registration Statement, are independent public accountants
as required by the 1933 Act and the 1933 Act Regulations.
(iv) This Agreement has been duly authorized, executed and delivered by
the Company and the Subsidiary Guarantors.
(v) The consolidated financial statements included or incorporated by
reference in the Registration Statement present fairly the financial
position and the results of operations and cash flows of (1) the Company and
its subsidiaries on a consolidated basis and (2) Haniel Corporation and its
subsidiaries, in
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each case, as of the dates indicated, for the periods specified. Such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved. The financial statement schedules, if any, included in the
Registration Statement present fairly the information required to be stated
therein. The selected financial data included or incorporated by reference
in the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated
financial statements included or incorporated by reference in the
Registration Statement. The pro forma financial statements and other pro
forma financial information included in the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements, have been properly compiled on the pro forma bases described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(vi) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Oklahoma with corporate
power and authority under such laws to own, lease and operate its properties
and conduct its business as described in the Prospectus; and the Company is
duly qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction in which it owns or leases property of a
nature, or transacts business of a type, that would make such qualification
necessary, except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect on the Company and its
subsidiaries, considered as one enterprise.
(vii) Each subsidiary of the Company that (a) is neither inactive nor
inconsequential or (b) is a Subsidiary Guarantor is listed on Exhibit B
(each a "Subsidiary"; collectively, the "Subsidiaries"). Each Subsidiary is
a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation with corporate power and
authority under such laws to own, lease and operate its properties and
conduct its business; and each Subsidiary is duly qualified to transact
business as a foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property of a nature, or transacts
business of a type, that would make such qualification necessary, except to
the extent that the failure to so qualify or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise. All of the outstanding shares of capital stock
of each Subsidiary have been duly authorized and validly issued and are
fully paid and non-assessable and, except for any pledges of such stock
pursuant to (A) the Credit Agreement, dated July 19, 1994, with Morgan
Guaranty Trust Company, as Managing Agent and twelve other domestic and
foreign banks listed therein (as the same may have been amended to date),
(B) the Indenture, dated March 15, 1986, between the Company and Morgan
Guaranty Trust Company of New York, as Trustee, covering $100 million
aggregate principal amount of the Company's 9 1/2% Debentures due 2016 and
(C) the Indenture, dated December 1, 1989, between the Company and Morgan
Guaranty Trust Company of New York, as Trustee, covering $275 million
aggregate principal amount of the Company's Medium-Term Notes, such shares
of capital stock are owned by the Company, directly or through one or more
Subsidiaries, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind.
(viii) The Company had at the date indicated a duly authorized, issued and
outstanding capitalization as set forth in the Prospectus under the caption
"Capitalization".
(ix) The Senior Note Indentures have been duly authorized by the
Company, will be substantially in the form heretofore delivered to you and,
when duly executed and delivered by the Company, the Subsidiary Guarantors
and the Trustee, will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law); and the Senior Note
Indentures conform to the description thereof in the Prospectus.
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(x) The Notes have been duly authorized by the Company. When executed,
authenticated, issued and delivered in the manner provided for in the Senior
Note Indentures and sold and paid for as provided in this Agreement, the
Notes will constitute valid and binding obligations of the Company entitled
to the benefits of the respective Senior Note Indentures and enforceable
against the Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in a proceeding
in equity or at law); and the Notes conform to the description thereof in
the Prospectus.
(xi) The Note Guarantees have been duly authorized by each of the
respective Subsidiary Guarantors and, when the Notes are issued and
delivered in the manner provided in the Indenture and sold and paid for as
provided in this Agreement, the Note Guarantees will constitute valid and
legally binding obligations of the respective Subsidiary Guarantors
enforceable against the Subsidiary Guarantors in accordance with the terms
set forth in the Senior Note Indentures, except as enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws relating to or affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in a proceeding
in equity or at law); and the Note Guarantees will conform in all material
respects to the descriptions thereof in the Prospectus.
(xii) All of the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
non-assessable; no holder thereof is or will be subject to personal
liability by reason of being such a holder; and none of the outstanding
shares of capital stock of the Company was issued in violation of the
preemptive rights of any stockholder of the Company.
(xiii) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has not been (A) any material adverse
change in the condition (financial or otherwise), earnings, business affairs
or business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (B)
any transaction entered into by the Company or any subsidiary, other than in
the ordinary course of business, that is material to the Company and its
subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock, other than regular quarterly dividends declared or paid on
its Common Stock, par value $2.50 per share.
(xiv) Neither the Company nor any Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound or to which any of its properties may be subject,
except for such defaults that would not have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise. The execution and delivery of this Agreement and the Senior Note
Indentures by the Company, the issuance and delivery of the Notes, the
issuance of the Note Guarantees, the consummation by the Company and the
Subsidiary Guarantors of the transactions contemplated in this Agreement and
in the Registration Statement, compliance by the Company with the terms of
this Agreement and the Senior Note Indentures and compliance by the
Subsidiary Guarantors with the terms of the Note Guarantees, have been duly
authorized by all necessary corporate action on the part of the Company or
the applicable Subsidiary Guarantors, as the case may be, and do not and
will not result in any violation of the charter or by-laws of the Company or
any Subsidiary, and do not and will not conflict with, or result in a breach
of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any Subsidiary under (A) any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company or any Subsidiary is a party or
by which it may be bound or to which any of its
4
<PAGE>
properties may be subject (except for such conflicts, breaches or defaults
or liens, charges or encumbrances that would not have a material adverse
effect on the condition (financial or otherwise), earnings, business affairs
or business prospects of the Company and its subsidiaries, considered as one
enterprise) or (B) any existing applicable law, rule, regulation, judgment,
order or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any Subsidiary
or any of their respective properties.
(xv) No authorization, approval, consent or license of any government,
governmental instrumentality or court, domestic or foreign (other than under
the 1933 Act, the 1939 Act and the securities or blue sky laws of the
various states), is required for the valid authorization, issuance, sale and
delivery of the Notes, the valid issuance by the Subsidiary Guarantors of
the Note Guarantees, or the execution, delivery or performance of the Senior
Note Indentures by the Company and the Subsidiary Guarantors.
(xvi) Except as disclosed in the Prospectus, there is no action, suit or
proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary that is
required to be disclosed in the Prospectus or that could result in any
material adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, or that could materially and adversely affect
the properties or assets of the Company and its subsidiaries, considered as
one enterprise, or that is reasonably likely to adversely affect the
consummation of this Agreement or the transactions contemplated herein; the
aggregate of all pending legal or governmental proceedings that are not
described in the Prospectus to which the Company or any Subsidiary is a
party or which affect any of their respective properties, including ordinary
routine litigation incidental to the business of the Company or any
Subsidiary, would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one enterprise.
(xvii) There are no contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(xviii) The Company and the Subsidiaries each has good and marketable
title to all properties and assets described in the Prospectus as owned by
it, free and clear of all liens, charges, encumbrances or restrictions,
except such as (A) are described in the Prospectus or (B) are neither
material in amount nor materially significant in relation to the business of
the Company and its subsidiaries, considered as one enterprise; all of the
leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or
any Subsidiary holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any Subsidiary has any notice
of any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any Subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of such
corporation to the continued possession of the leased or subleased premises
under any such lease or sublease.
(xix) The Company and the Subsidiaries each owns, possesses or has
obtained all governmental licenses, permits, certificates, consents, orders,
approvals and other authorizations necessary to own or lease, as the case
may be, and to operate its properties and to carry on its business as
presently conducted except where the lack of possession of such licenses,
permits, certificates, consents, orders, approvals or authorizations would
not have a material adverse affect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company
and its subsidiaries, considered as one enterprise, and neither the Company
nor any Subsidiary has received any notice of proceedings relating to
revocation or modification of any such licenses, permits, certificates,
consents, orders, approvals or authorizations.
(xx) The Company and the Subsidiaries each owns or possesses, or can
acquire on reasonable terms, adequate patents, patent licenses, trademarks,
service marks and trade names necessary to carry on its business as
presently conducted, and neither the Company nor any Subsidiary has received
any
5
<PAGE>
notice of infringement of or conflict with asserted rights of others with
respect to any patents, patent licenses, trademarks, service marks or trade
names that in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could materially adversely affect the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one enterprise.
(xxi) To the best knowledge of the Company, no labor problem exists with
its employees or with employees of the Subsidiaries or is imminent that
could adversely affect the Company and its subsidiaries, considered as one
enterprise, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or the Subsidiaries' principal
suppliers, contractors or customers that could be expected to materially
adversely affect the condition (financial o r otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise.
(xxii) The Company has not taken and will not take, directly or
indirectly, any action designed to, or that might be reasonably expected to,
cause or result in stabilization or manipulation of the price of the Notes.
(xxiii) Except as disclosed in the Registration Statement and except as
would not individually or in the aggregate have a material adverse effect on
the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise, (A) the Company and the Subsidiaries are each in compliance with
all applicable Environmental Laws, (B) the Company and the Subsidiaries have
all permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened Environmental Claims against the Company
or any of the Subsidiaries, and (D) there are no circumstances with respect
to any property or operations of the Company or the Subsidiaries that could
reasonably be anticipated to form the basis of an Environmental Claim
against the Company or the Subsidiaries.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) federal, state, local or municipal statute, law,
rule, regulation, ordinance, code, policy or rule of common law and any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent decree or judgment, relating to the
environment, health, safety or any chemical, material or substance, exposure
to which is prohibited, limited or regulated by any governmental authority.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any
way to any Environmental Law.
(b) Any certificate signed by any officer of the Company or any Subsidiary
and delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company or such Subsidiary, as the case may
be, to each Underwriter as to the matters covered thereby.
Section 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at the purchase price to be agreed upon by the
Underwriters and the Company in accordance with Section 2(b) or 2(c), and set
forth in the Price Determination Agreement, the principal amount of Notes set
forth opposite the name of such Underwriter in Schedule A. If the Company elects
to rely on Rule 430A, Schedule A may be attached to the Price Determination
Agreement.
(b) If the Company has elected not to rely upon Rule 430A, the initial
public offering price of the Notes, the purchase price of the Notes to be paid
by the Underwriters and certain other principal terms of the Notes shall be
agreed upon and set forth in the Price Determination Agreement, dated the date
hereof, and an amendment to the Registration Statement containing such
information will be filed before the Registration Statement becomes effective.
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(c) If the Company has elected to rely upon Rule 430A, the initial public
offering price of the Notes, the purchase price of the Notes to be paid by the
Underwriters and certain other principal terms of the Notes shall be agreed upon
and set forth in the Price Determination Agreement. In the event that the Price
Determination Agreement has not been executed by the close of business on the
fourth business day following the date on which the Registration Statement
becomes effective, this Agreement shall terminate forthwith, without liability
of any party to any other party except that Sections 6, 7 and 8 shall remain in
effect.
(d) Payment of the purchase price for, and delivery of, the Notes (the
"Closing") shall be made at the offices of Shearman & Sterling, 599 Lexington
Avenue, New York, New York 10022, or at such other place as shall be agreed upon
by the Company and you, at 10:00 A.M. either (i) on the fifth full business day
after the effective date of the Registration Statement or (ii) if the Company
has elected to rely upon Rule 430A, the fifth full business day after execution
of the Price Determination Agreement (unless, in either case, postponed pursuant
to Section 10), or at such other time not more than ten full business days
thereafter as you and the Company shall determine (such date and time of the
Closing being herein called the "Closing Time"). Payment shall be made to the
Company by certified or official bank check or checks in New York Clearing House
or similar next day funds payable to the order of the Company, against delivery
of the Notes to you for the respective accounts of the several Underwriters.
(e) The Notes shall be in such denominations ($1,000 or an integral multiple
thereof) and registered in such names as you may request in writing at least two
full business days before the Closing Time. The Notes, which may be in temporary
form, will be made available in New York City for examination and packaging by
you not later than 10:00 A.M. on the business day prior to the Closing Time.
Section 3. CERTAIN COVENANTS OF THE COMPANY. The Company covenants with
each Underwriter as follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective and, if the Company elects to rely upon Rule 430A
and subject to Section 3(b) hereof, will comply with the requirements of Rule
430A and will notify you immediately, and confirm the notice in writing, (i)
when the Registration Statement, or any post-effective amendment to the
Registration Statement, shall have become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission to
amend the Registration Statement or amend or supplement the Prospectus or for
additional information and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Notes for offering or sale in any
jurisdiction, or of the institution or threatening of any proceedings for any of
such purposes. The Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order preventing or suspending such
use and, if any such order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) The Company will not at any time file or make any amendment to the
Registration Statement, or any amendment or supplement (i) if the Company has
not elected to rely upon Rule 430A, to the Prospectus (including amendments of
the documents incorporated by reference into the Prospectus) or (ii) if the
Company has elected to rely upon Rule 430A, to either the prospectus included in
the Registration Statement at the time it becomes effective or to the Prospectus
(including amendments of the documents incorporated by reference into the
prospectus or Prospectus), of which you shall not have previously been advised
and furnished a copy, or to which you or counsel for the Underwriters shall
object.
(c) The Company has furnished or will furnish to you as many conformed
copies of the Registration Statement (as originally filed) and of all amendments
thereto, whether filed before or after the Registration Statement becomes
effective, copies of all exhibits and documents filed therewith, including
documents incorporated by reference into the Prospectus pursuant to Item 12 of
Form S-3 under the 1933 Act, and signed copies of all consents and certificates
of experts, as you may reasonably request and has furnished or will furnish to
you, for each other Underwriter, one conformed copy of the Registration
Statement as originally filed and of each amendment thereto (including documents
incorporated by reference into the Prospectus but without exhibits).
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(d) The Company will deliver to each Underwriter, without charge, from time
to time until the effective date of the Registration Statement (or, if the
Company has elected to rely upon Rule 430A, until the date of the Price
Determination Agreement), as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will deliver
to each Underwriter, without charge, as soon as the Registration Statement shall
have become effective (or, if the Company has elected to rely upon Rule 430A, as
soon as practicable on or after the date of the Price Determination Agreement)
and thereafter from time to time as requested during the period when the
Prospectus is required to be delivered under the 1933 Act, such number of copies
of the Prospectus (as supplemented or amended) as such Underwriter may
reasonably request.
(e) The Company will comply with the 1933 Act and the 1933 Act Regulations,
the 1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939 Act
Regulations so as to permit the completion of the distribution of the Notes as
contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Notes any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of either such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, immediate notice shall
be given, and confirmed in writing, to the Underwriter to cease the solicitation
of offers to purchase the Notes, and the Company will promptly prepare and file
with the Commission, subject to Section 3(b) hereof, such amendment or
supplement as may be necessary to correct such untrue statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements.
(f) The Company and each Subsidiary Guarantor will use its best efforts in
cooperation with the Underwriters to qualify the Notes for offering and sale
under the applicable securities laws of such states and other jurisdictions as
you may designate and to maintain such qualifications in effect for a period of
not less than one year from the effective date of the Registration Statement;
PROVIDED, HOWEVER, that neither the Company nor any Subsidiary Guarantor shall
be obligated to file any general consent to service of process or to qualify as
a foreign corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be required by the laws of
each jurisdiction in which the Notes have been qualified as above provided. The
Company will also supply you with such information as is necessary for the
determination of the legality of the Notes for investment under the laws of such
jurisdictions as you may request. The Company will promptly advise the
Underwriters of the receipt by the Company or any Subsidiary Guarantor of any
notification with respect to suspension of the qualification of the Notes for
sale in any such state or jurisdiction or the initiation or threatening of any
proceeding for such purposes.
(g) The Company will make generally available to its Note holders as soon as
practicable, but not later than 90 days after the close of the period covered
thereby, an earnings statement of the Company and the Subsidiary Guarantors (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations,
except to the extent set forth in the letter from McAfee & Taft A Professional
Corporation, counsel for the Company, to the staff of the Commission, dated
December 2, 1994), covering a period of 12 months from the effective date of the
Registration Statement and covering a period of 12 months from the effective
date of any post-effective amendment to the Registration Statement but not later
than the first day of the Company's fiscal quarter next following such
respective effective dates.
(h) The Company will use the net proceeds received by it from the sale of
the Notes in the manner specified in the Prospectus under the caption "Use of
Proceeds".
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(i) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act, will file promptly all documents required to be
filed with the Commission pursuant to Section 13 or 14 of the 1934 Act
subsequent to the time the Registration Statement becomes effective.
(j) If the Company has elected to rely upon Rule 430A, it will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus.
(k) The Company and the Subsidiary Guarantors each has complied and will
comply with all the provisions of Florida H.B. 1771, codified as Section 517.075
of the Florida statutes, and all regulations promulgated thereunder relating to
issuers doing business in Cuba.
Section 4. PAYMENT OF EXPENSES. The Company will pay and bear all costs
and expenses incident to the performance of its obligations under this
Agreement, including (a) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, the preliminary prospectuses and the Prospectus
and any amendments or supplements thereto, and the cost of furnishing copies
thereto to the Underwriters, (b) the preparation, printing and distribution of
this Agreement (including the Price Determination Agreement), the Senior Note
Indentures, the Notes, the Blue Sky Survey and the Legal Investment Survey, (c)
the delivery of the Notes to the Underwriters, (d) the fees and disbursements of
the Company's counsel and accountants, (e) the qualification of the Notes under
the applicable securities laws in accordance with Section 3(f) and any filing
for review of the offering with the National Association of Securities Dealers,
Inc. ("NASD"), including filing fees and fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the Blue Sky
Survey and the Legal Investment Survey, (f) any fees charged by rating agencies
for rating the Notes, (g) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee, in connection with the Senior
Note Indentures and the Notes, (h) any advertising and other out-of-pocket
expenses of the Underwriters incurred with the approval of the Company, and (i)
the fees and expenses of Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), acting as a qualified independent underwriter pursuant to
Article III, Section 44(c)(8) of the Rules of Fair Practice of the NASD.
If this Agreement is terminated by you in accordance with the provisions of
Section 5 or 9(a)(i), the Company shall reimburse the Underwriters for all their
out-of-pocket expenses, including the fees and disbursements of counsel for the
Underwriters.
Section 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. In addition to the
execution and delivery of the Price Determination Agreement, the obligations of
the Underwriters to purchase and pay for the Notes that they have respectively
agreed to purchase hereunder are subject to the accuracy of the representations
and warranties of the Company contained herein (including those contained in the
Price Determination Agreement) or in certificates of any officer of the Company
or any Subsidiary delivered pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to the following
further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date of this Agreement or, with your consent, at a
later time and date not later, however, than 5:30 P.M. on the first business
day following the date hereof, or at such later time or on such later date
as you may agree to in writing with the approval of a majority in interest
of the several Underwriters; and at the Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings for that purpose shall have
been instituted or shall be pending or, to your knowledge or the knowledge
of the Company, shall be contemplated by the Commission, and any request on
the part of the Commission for additional information shall have been
complied with to the satisfaction of counsel for the Underwriters. If the
Company has elected to rely upon Rule 430A, a prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such information
shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
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(b) At the Closing Time, you shall have received a signed opinion of
McAfee & Taft A Professional Corporation, counsel for the Company, dated as
of the Closing Time, together with signed or reproduced copies of such
opinion for each of the other Underwriters, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Oklahoma with
corporate power and authority under such laws to own, lease and operate
its properties and conduct its business as described in the Prospectus;
(ii) The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which
it owns or leases property of a nature, or transacts business of a type,
that would make such qualification necessary, except to the extent that
the failure to so qualify or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, considered
as one enterprise;
(iii) Each Significant Subsidiary is a corporation duly incorporated,
and each Subsidiary is a corporation validly existing and in good
standing, under the laws of the jurisdiction of its incorporation with
corporate power and authority under such laws to own, lease and operate
its properties and conduct its business;
(iv) To the knowledge of such counsel, after reasonable
investigation, all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid
and non-assessable.
(v) Except with respect to Gateway Foods, Inc., to the knowledge of
such counsel, after reasonable investigation, all of the outstanding
shares of capital stock of each Significant Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable and,
except for any pledges of capital stock pursuant to (A) the Credit
Agreement, dated July 19, 1994, with Morgan Guaranty Trust Company, as
Managing Agent and twelve other domestic and foreign banks listed therein
(as the same may have been amended to date), (B) the Indenture, dated
March 15, 1986, between the Company and Morgan Guaranty Trust Company of
New York, as Trustee, covering $100 million aggregate principal amount of
the Company's 9 1/2% Debentures due 2016 and (C) the Indenture, dated
December 1, 1989, between the Company and Morgan Guaranty Trust Company
of New York, as Trustee, covering $275 million aggregate principal amount
of the Company's Medium-Term Notes, all of such shares of capital stock
are owned by the Company, directly or through one or more Subsidiaries,
free and clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind.
(vi) The Senior Note Indentures have been duly authorized, executed
and delivered by the Company and the Subsidiary Guarantors and, assuming
due authorization, execution and delivery by the Trustee, constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law);
(vii) The Notes have been duly authorized by the Company and, assuming
that the Notes have been duly authenticated by the Trustee in the manner
described in its certificate delivered to you today (which fact such
counsel need not determine by an inspection of the Notes), the Notes have
been duly executed, issued and delivered by the Company and, assuming
such Notes have been sold and paid for as provided in this Agreement,
constitute valid and binding obligations of the Company entitled to the
benefits of the Senior Note Indentures and enforceable against the
Company in accordance with their terms, except as enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers),
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reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law);
(viii) The Note Guarantees have been duly authorized by each of the
respective Subsidiary Guarantors and, when the Notes are issued and
delivered in the manner provided in the Senior Note Indentures and sold
and paid for as provided in this Agreement, the Note Guarantees will
constitute valid and legally binding obligations of the respective
Subsidiary Guarantors enforceable against the Subsidiary Guarantors in
accordance with the terms set forth in the Senior Note Indentures, except
as enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws relating to or
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Note Guarantees will conform in all material
respects to the description thereof in the Prospectus;
(ix) The Senior Note Indentures have been qualified under the 1939
Act;
(x) The Notes, the Note Guarantees and the Senior Note Indentures
conform in all material respects as to legal matters to the descriptions
thereof in the Prospectus;
(xi) This Agreement (including the Price Determination Agreement) has
been duly authorized, executed and delivered by the Company;
(xii) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the 1933 Act, the 1939 Act and the securities or blue
sky laws of the various states), is required for the valid authorization,
issuance, sale and delivery of the Notes;
(xiii) Such counsel does not know of any statutes or regulations, or
any pending or threatened legal or governmental proceedings, required to
be described in the Prospectus that are not described as required, nor of
any contracts or documents of a character required to be described or
referred to in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described,
referred to or filed as required;
(xiv) The descriptions in the Prospectus of the statutes, regulations,
legal or governmental proceedings, contracts and other documents therein
described are accurate in all material respects as to legal matters and
fairly summarize the information required to be shown;
(xv) To the knowledge of such counsel, no default exists in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, loan agreement, note,
lease or other agreement or instrument that is described or referred to
in the Registration Statement or the Prospectus or filed as an exhibit to
the Registration Statement;
(xvi) The execution and delivery of this Agreement and the Senior Note
Indentures by the Company, the issuance and delivery of the Notes, the
consummation by the Company of the transactions contemplated in this
Agreement and in the Registration Statement and compliance by the Company
and the Subsidiary Guarantors with the terms of this Agreement and the
Senior Note Indentures do not and will not result in any violation of the
charter or by-laws of the Company or any Subsidiary, and do not and will
not conflict with, or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any Subsidiary under (A) any contract,
indenture, mortgage, loan agreement, note, lease or any other agreement
or instrument known to such counsel, to which the Company or any
Subsidiary is a party or by which it may be bound or to which any of its
properties may be subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a material
adverse effect on the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company
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and its subsidiaries, considered as one enterprise), (B) any existing
applicable law, rule or regulation (other than the securities or blue sky
laws of the various states, as to which such counsel need express no
opinion), or (C) any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their
respective properties;
(xvii) The Registration Statement is effective under the 1933 Act and,
to the best of the knowledge of such counsel, the Registration Statement
is still effective, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated under the
1933 Act;
(xviii) The Registration Statement (including the Rule 430A
Information, if applicable) and the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement
thereto (except for the financial statements and other financial or
statistical data included therein or omitted therefrom, as to which such
counsel need express no opinion), as of their respective effective or
issue dates, appear on their face to have been appropriately responsive
in all material respects to the requirements of the 1933 Act and the 1933
Act Regulations (except to the extent set forth in the letter from McAfee
& Taft A Professional Corporation to the staff of the Commission, dated
December 2, 1994) and the Senior Note Indentures and the Statement of
Eligibility of the Trustee on Form T-1 filed with the Commission as part
of the Registration Statement appear on their face to have been
appropriately responsive in all material respects to the requirements of
the 1939 Act and the 1939 Act Regulations; and
(xix) The documents incorporated by reference in the Prospectus
(except for the financial statements and other financial or statistical
data included therein or omitted therefrom, as to which such counsel need
express no opinion, and except to the extent that any statement therein
is modified or superseded in the Prospectus), as of the dates they were
filed with the Commission, appear on their face to have been
appropriately responsive in all material respects to the requirements of
the 1934 Act and the 1934 Act Regulations.
Such opinion shall be to such further effect with respect to other legal
matters relating to this Agreement and the sale of the Notes pursuant to
this Agreement as counsel for the Underwriters may reasonably request. In
giving such opinion, such counsel may rely as to all matters governed by New
York law upon the opinion of Shearman & Sterling referred to in Section 5(c)
and as to all matters governed by the laws of jurisdictions other than the
States of Oklahoma and New York and the federal law of the United States and
the General Corporation Law of the State of Delaware, upon opinions of other
counsel, in which case the opinion shall state that they believe you and
they are entitled to so rely. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the
Subsidiaries and certificates of public officials; PROVIDED that such
certificates have been delivered to the Underwriters.
In giving their opinion required by this Section 5(b), McAfee and Taft A
Professional Corporation shall additionally state that such counsel have
participated in the preparation of the Registration Statement and Prospectus
and are familiar with or have participated in the preparation of the
documents incorporated by reference in the Prospectus and no facts have come
to the attention of such counsel to lead them to believe (A) that the
Registration Statement (including the Rule 430A Information, if applicable)
or any amendment thereto (except for the financial statements and other
financial or statistical data included therein or omitted therefrom and the
Statement of Eligibility of the Trustee on Form T-1, as to which such
counsel has not been requested to comment), at the time the Registration
Statement or any such amendment became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not misleading
and (B) that the Prospectus or any amendment or supplement thereto (except
for the financial statements and other financial or statistical data
included therein or omitted therefrom, as to which such counsel has not been
requested to comment), at the time the Prospectus was issued, at the time
any such amended or supplemented prospectus was issued or at the Closing
Time, included or
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includes an untrue statement of a material fact or omitted or omits to state
a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(c) At the Closing Time, you shall have received the favorable opinion
of Shearman & Sterling, counsel for the Underwriters, dated as of the
Closing Time, together with signed or reproduced copies of such opinion for
each of the other Underwriters, to the effect that the opinion delivered
pursuant to Section 5(b) appears on its face to be appropriately responsive
to the requirements of this Agreement except, specifying the same, to the
extent waived by you, and with respect to the incorporation and legal
existence of the Company, the Notes, the Note Guarantees, this Agreement,
the Senior Note Indentures, the Registration Statement, the Prospectus, the
documents incorporated by reference and such other related matters as you
may require. In giving such opinion such counsel may rely as to the
incorporation and legal existence of the Company and all other matters
governed by Oklahoma law upon the opinion of McAfee & Taft A Professional
Corporation referred to in Section 5(b) and as to all matters governed by
the laws of jurisdictions other than the States of Oklahoma and New York and
the federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to you. Such
counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates
of officers of the Company and the Subsidiaries and certificates of public
officials; PROVIDED that such certificates have been delivered to the
Underwriters.
(d) At the Closing Time, (i) the Registration Statement and the
Prospectus, as they may then be amended or supplemented, shall contain all
statements that are required to be stated therein under the 1933 Act and the
1933 Act Regulations and in all material respects shall conform to the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and the 1939 Act Regulations, the Company shall have complied in all
material respects with Rule 430A (if it shall have elected to rely thereon)
and neither the Registration Statement nor the Prospectus, as they may then
be amended or supplemented, shall 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, (ii) there shall
not have been, since the respective dates as of which information is given
in the Registration Statement, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, (iii) no action, suit or
proceeding shall be pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary that would be required to be set forth
in the Prospectus other than as set forth therein and no proceedings shall
be pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary before or by any government, governmental
instrumentality or court, domestic or foreign, that is reasonably likely to
result in any material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company
and its subsidiaries, considered as one enterprise, other than as set forth
in the Prospectus, (iv) the Company shall have complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Time and required by this Agreement and (v) the other
representations and warranties of the Company set forth in Section 1(a)
shall be accurate as though expressly made at and as of the Closing Time. At
the Closing Time, you shall have received a certificate of the President or
a senior or executive Vice President, and the Treasurer or Controller, of
the Company, dated as of the Closing Time, to such effect.
(e) At the time that this Agreement is executed by the Company, you
shall have received from Deloitte & Touche LLP, a letter, dated such date,
in form and substance satisfactory to you, confirming that they are
independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published 1933 Act Regulations,
and stating in effect that:
(i) in their opinion, the financial statements audited by them and
the related financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1934 Act and the respective published rules and
regulations thereunder;
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(ii) on the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of a reading of
the unaudited interim consolidated financial statements of the Company
and its subsidiaries for the 12 weeks ended October 1, 1994, July 9, 1994
and July 10, 1993, the 16 weeks ended April 16, 1994, and April 17, 1993,
and the 28 weeks ended July 9, 1994 and July 10, 1993, included or
incorporated by reference in the Registration Statement and the
Prospectus (collectively, the "10-Q Financials"), inspection of the
minute books of the Company and its subsidiaries since the end of the
most recent fiscal year with respect to which an audit report has been
issued, inquiries of certain officials of the Company and the
Subsidiaries responsible for financial and accounting matters, a limited
review in accordance with standards established by the American Institute
of Certified Public Accountants 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) the 10-Q Financials do not comply as to form in all material
respects with the accounting requirements of the 1934 Act and the
1934 Act Regulations applicable to unaudited financial statements
included in Form 10-Q or are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus;
(B) any material modifications should be made to the 10-Q
Financials for them to be in conformity with generally accepted
accounting principles;
(C) at a specified date not more than five days prior to the date
of this Agreement, there was any change in the consolidated capital
stock, any increase in the consolidated long-term debt of the Company
and its subsidiaries or any decrease in the consolidated net current
assets or stockholders' equity of the Company and its subsidiaries in
each case as compared with amounts shown in the latest unaudited
consolidated condensed balance sheet of the Company and its
subsidiaries incorporated by reference in the Registration Statement,
except in each case for changes, increases or decreases that the
Registration Statement discloses have occurred or may occur; or
(D) for the period from October 1, 1994 to a specified date not
more than five days prior to the date of this Agreement, there were
any decreases, as compared with the corresponding period in the
preceding year, in consolidated net sales or in the total or per
share amounts of income before extraordinary items or of net income,
except in each case for changes, increase or decreases that the
Registration Statement discloses have or may occur;
(iii) on the basis of a comparison of information included under the
heading "Selected Financial Information" in the Prospectus with the
requirements of Item 301 of Regulation S-K and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters whether this information conforms in all material
respects with the disclosure requirements of Item 301 of Regulation S-K,
nothing came to their attention that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Item 301 of Regulation S-K, except for the exclusion of
per share information for income (loss) from continuing operations and
each dividends declared;
(iv) they are unable to and do not express any opinion on the Pro
Forma Statements of Operations (unaudited) for the Fiscal Year Ended
1993, the Pro Forma Statements of Operations (unaudited) for the Interim
Period Ended 1994 or the Unaudited Pro Forma Consolidated Balance Sheet
as of the Second Quarter Ended 1994 (the "Pro Forma Statements") included
in the Registration Statement or on the pro forma adjustments applied to
the historical amounts included in the Pro Forma Statements; PROVIDED,
HOWEVER, for purposes of such letter they have:
(A) read the Pro Forma Statements;
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(B) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis
for their determination of the pro forma adjustments and whether the
Pro Forma Statements above comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of
Regulation S-X; and
(C) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma
Statements;
and, on the basis of such procedures, and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that the Pro Forma Statements
included in the Registration Statements do not comply as to form in all
material respects with the applicable requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of that statement;
and
(v) in addition to the procedures referred to in clause (ii) above,
they have performed other specified procedures, not constituting an
audit, with respect to certain amounts, percentages, numerical data and
financial information appearing in the Registration Statement, which have
previously been specified by you and which shall be specified in such
letter, and have compared certain of such items with, and have found such
items to be in agreement with, the accounting and financial records of
the Company.
(f) At the Closing Time, you shall have received from Deloitte & Touche
LLP a letter, in form and substance satisfactory to you and dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to Section 5(e), except that the specified date
referred to shall be a date not more than five days prior to the Closing
Time.
(g) At the time that this Agreement is executed by the Company, you
shall have received from Arthur Andersen LLP a letter, dated such date, in
form and substance satisfactory to you, confirming that they are independent
public accountants with respect to Haniel Corporation and its sole direct
subsidiary, Scrivner, Inc., and Scrivner, Inc.'s subsidiaries (collectively
referred to as "Haniel") within the meaning of the 1933 Act and the
applicable published 1933 Act regulations, and stating in effect that:
(i) in their opinion, the financial statements audited by them and
any related financial statement schedules included or incorporated by
reference in the Registration Statement and the Prospectus comply as to
form in all material respects with the applicable accounting requirements
of the 1933 Act and the 1934 Act and the respective published rules and
regulations thereunder; and
(ii) on the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of a reading of
the Consolidated Balance Sheet as of June 30, 1994 (unaudited), the
Consolidated Statements of Income for the Six Months Ended June 30, 1993
(unaudited) and the Six Months Ended June 30, 1994 (unaudited), and the
Consolidated Statements of Cash Flows for the Six Months Ended June 30,
1993 (unaudited) and the Six Months Ended June 30, 1994 (unaudited)
included in the Registration Statement and the Prospectus (collectively,
the "Unaudited Interim Financials"), inspection of the minute books of
the Company and its subsidiaries since the end of the most recent fiscal
year with respect to which an audit report has been issued, inquiries of
certain officials of the Company and its subsidiaries responsible for
financial and accounting matters, a limited review in accordance with
standards established by the American Institute of Certified Public
Accountants 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) the Unaudited Interim Financials are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included or incorporated by reference in the Registration
Statement and the Prospectus; or
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(B) any material modifications should be made to the Unaudited
Interim Financials for them to be in conformity with generally
accepted accounting principles.
(h) At the Closing Time, you shall have received from Arthur Andersen
LLP a letter, in form and substance satisfactory to you and dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to Section 5(g), except that the specified date
referred to shall be a date not more than five days prior to the Closing
Time.
(i) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Time, there shall not have been any downgrading, nor any
notice given of any intended or potential downgrading or of a possible
change that does not indicate the direction of the possible change, in the
rating accorded any of the Company's securities, including the Notes, by any
"nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the 1933 Act.
(j) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may
request for the purpose of enabling them to pass upon the issuance and sale
of the Notes as contemplated in this Agreement and the matters referred to
in Section 5(c) and in order to evidence the accuracy and completeness of
any of the representations, warranties or statements of the Company, the
performance of any of the covenants of the Company, or the fulfillment of
any of the conditions herein contained; and all proceedings taken by the
Company at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Notes as contemplated in this
Agreement shall be satisfactory in form and substance to you and to counsel
for the Underwriters.
If any of the conditions specified in this Section 5 shall not have been
fulfilled when and as required by this Agreement, this Agreement may be
terminated by you on notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party, except as provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 shall remain in effect.
Section 6. INDEMNIFICATION. (a) The Company and the Subsidiary Guarantors
each agrees to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information, if
applicable, and all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or
arising out of an untrue statement or alleged untrue statement of a material
fact included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; PROVIDED, HOWEVER, that the foregoing indemnity with respect to
any untrue statement contained in or any omission from a preliminary
prospectus shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such loss,
liability, claim, damage or expense purchased any of the Notes that are the
subject thereof if the Company shall sustain the burden of proving that such
person was not sent or given a copy of the Prospectus (or the Prospectus as
amended or supplemented) (in each case exclusive of the documents from which
information is incorporated by reference) at or prior to the written
confirmation of the sale of such Notes to such person and the untrue
statement contained in or the omission from such preliminary prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
16
<PAGE>
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including fees
and disbursements of counsel chosen by you), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission (A) made in
reliance upon and in conformity with written information furnished to the
Company or any Subsidiary Guarantor by any Underwriter through you expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information, if applicable, or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) or (B) made or omitted from the
Statement of Eligibility of the Trustee on Form T-1, other than any such untrue
statement or omission or alleged untrue statement or omission made therein or
omitted therefrom in reliance upon information furnished in writing to the
Trustee by the Company or any Subsidiary Guarantor for use therein.
The Company and the Subsidiary Guarantors each agrees to indemnify and hold
harmless Merrill Lynch and each person, if any, who controls Merrill Lynch
within the meaning of either Section 15 of the 1933 Act, or Section 20 of the
1934 Act, from and against any and all losses, claims, damages, liabilities and
judgments incurred as a result of Merrill Lynch's participation as a "qualified
independent underwriter" within the meaning of Schedule E to the By-Laws of the
NASD in connection with the offering of the Notes, except for any losses,
claims, damages, liabilities and judgments resulting from Merrill Lynch's or
such controlling person's, willful misconduct.
(b) Each Underwriter agrees severally and not jointly to indemnify and hold
harmless the Company and its directors, each of the Subsidiary Guarantors and
their respective directors, each of the officers who signed the Registration
Statement, and each person, if any, who controls the Company or any of the
Subsidiary Guarantors within the meaning of Section 15 of the 1933 Act, against
any and all loss, liability, claim, damage and expense described in the
indemnity agreement in Section 6(a), as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto), including the Rule
430A Information, if applicable, or any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information, if applicable, or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action. In no event shall the indemnifying party
or parties be liable for the fees and expenses of more than one counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances under which the indemnity provided for in Section
6 is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, the Company, the Subsidiary Guarantors
and the Underwriters shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by such indemnity
incurred by the Company, the Subsidiary Guarantors and one or more of the
Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the initial
public offering price appearing thereon and the Company is responsible for
17
<PAGE>
the balance; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as such Underwriter, and each director of
the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act shall have the same rights to contribution as the Company.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The representations, warranties, indemnities, agreements and other
statements of the Company or its officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, any Underwriter or any person
who controls the Company or any Underwriter within the meaning of Section 15 of
the 1933 Act and will survive delivery of and payment for the Notes.
Section 9. TERMINATION OF AGREEMENT. (a) You may terminate this Agreement,
by notice to the Company, at any time at or prior to the Closing Time (i) if
there has been, since the respective dates as of which information is given in
the Registration Statement, any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities or escalation thereof or other calamity or crisis the
effect of which is such as to make it, in your judgment, impracticable to market
the Notes or enforce contracts for the sale of the Notes, or (iii) if trading in
any securities of the Company has been suspended by the Commission or the NASD,
or if trading generally on either the American Stock Exchange or the New York
Stock Exchange or in the over-the-counter market has been suspended, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by such exchange or by order of the Commission,
the NASD or any other governmental authority, or (iv) if a banking moratorium
has been declared by either federal, New York or Oklahoma authorities, or (v) if
there shall have been any downgrading, or any notice given of any intended or
potential downgrading or of a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the Company's
securities, including the Notes, by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule 436(g)(2)
under the 1933 Act, or (vi) if there shall have come to your attention any facts
that would cause you to believe that the Prospectus, at the time it was required
to be delivered to a purchaser of the Notes, contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time of such
delivery, not misleading.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4 hereof. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 shall remain in effect.
(c) This Agreement may also terminate pursuant to the provisions of Section
2, with the effect stated in such Section.
Section 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one of the
Underwriters shall fail at the Closing Time to purchase the Notes that it is
obligated to purchase pursuant to this Agreement (the "Defaulted Notes"), the
non-defaulting Underwriter shall have the right, within 24 hours thereafter, to
make arrangements to purchase all, but not less than all, of the Defaulted Notes
upon the terms set forth in this Agreement; if, however, the non-defaulting
Underwriter has not completed such arrangements within such 24-hour period,
then:
(a) if the aggregate principal amount of Defaulted Notes does not exceed
10% of the aggregate principal amount of the Notes to be purchased pursuant
to this Agreement, the non-defaulting Underwriter shall be obligated to
purchase the full amount thereof, or
18
<PAGE>
(b) if the aggregate principal amount of Defaulted Notes exceeds 10% of
the aggregate principal amount of the Notes to be purchased pursuant to this
Agreement, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either the non-defaulting Underwriter or the Company shall have
the right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
Section 11. NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to you shall be directed to you, c/o Merrill Lynch, Pierce, Fenner &
Smith Incorporated, at Merrill Lynch World Headquarters, North Tower, World
Financial Center, New York, New York 10281, attention of Thomas W. Regan, Jr.;
and notices to the Company shall be directed to it at Fleming Companies, Inc.,
P.O. Box 26647, 6301 Waterford Boulevard, Oklahoma City, Oklahoma 73216,
attention of Harry L. Winn, Jr.
Section 12. PARTIES. This Agreement is made solely for the benefit of the
Underwriters, the Company, the Subsidiary Guarantors and, to the extent
expressed, any person who controls the Company or the Subsidiary Guarantors or
any of the Underwriters within the meaning of Section 15 of the 1933 Act, and
the directors of the Company, its officers who have signed the Registration
Statement, and their respective executors, administrators, successors and
assigns and, subject to the provisions of Section 10, no other person shall
acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser, as such purchaser,
from any of the Underwriters of the Notes. All of the obligations of the
Underwriters hereunder are several and not joint.
Section 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
the laws of the State of New York. Specified times of the day refer to New York
City time.
Section 14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
------------------------
19
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement among the Company, the Subsidiary Guarantors and
the Underwriters in accordance with its terms.
Very truly yours,
FLEMING COMPANIES, INC.
By _________________________________
Name:
Title:
Each of the Subsidiary Guarantors
Listed on Exhibit B
By _________________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By _________________________________
Name:
Title:
Investment Banking Group
20
<PAGE>
EXHIBIT A
FLEMING COMPANIES, INC.
(AN OKLAHOMA CORPORATION)
% SENIOR NOTES DUE 2001
FLOATING RATE SENIOR NOTES DUE 2001
PRICE DETERMINATION AGREEMENT
-------------------------------------
December __, 1994
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
c/o MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Ladies and Gentlemen:
Reference is made to the Purchase Agreement dated December __, 1994 (the
"Purchase Agreement") between Fleming Companies, Inc. (the "Company") and each
of the subsidiary guarantors as are listed on Exhibit B to the Purchase
Agreement, as guarantors (the "Subsidiary Guarantors"), and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities
Inc. (collectively, the "Underwriters"). The Purchase Agreement provides for the
purchase by the Underwriters from the Company, subject to the terms and
conditions set forth therein, of the Company's % Senior Notes due 2001 (the
"Fixed Rate Notes") and Floating Rate Senior Notes due 2001 (the "Floating Rate
Notes"). This Agreement is the Price Determination Agreement referred to in the
Purchase Agreement. Terms not otherwise defined herein shall have the meanings
assigned to them in the Purchase Agreement.
Pursuant to Section 2 of the Purchase Agreement, the Company agrees with the
Underwriters as follows:
A. THE FIXED RATE NOTES
1. The initial public offering price of the Fixed Rate Notes shall be %
of the principal amount thereof plus accrued interest, if any, from
, 1994 to the Closing Time.
2. The purchase price of the Fixed Rate Notes to be paid by the
Underwriters shall be % of the principal amount thereof plus accrued
interest, if any, from , 1994 to the Closing Time.
3. The interest rate to be borne by the Fixed Rate Notes shall be % per
annum, payable semi-annually on and of each year,
commencing , 1994.
4. The Fixed Rate Notes will mature on , 2001.
5. The Fixed Rate Notes may be redeemed at the option of the Company, in
whole or in part, at any time on or after , 1999, at a
redemption price equal to % of the principal amount thereof, if redeemed
during the 12-month period beginning on , 1999, and % of
the principal amount thereof, if redeemed during the 12-month period beginning
on , 2000, together with accrued and unpaid interest, if
any, to the date of redemption.
In addition, the Company may redeem up to 20% of the initial aggregate
principal amount of the Fixed Rate Notes at any time on or prior to
, 1997, within 180 days of a Public Equity
21
<PAGE>
Offering (as defined in the Senior Note Indentures) with the net proceeds of
such offering, at a redemption price equal to % of the principal amount
thereof, together with accrued and unpaid interest, if any, to the date of
redemption; provided that, after having given effect to such redemption, at
least $200 million aggregate principal amount of the Fixed Rate Notes remains
outstanding.
B. THE FLOATING RATE NOTES
1. The initial public offering price of the Floating Rate Notes shall be
% of the principal amount thereof plus accrued interest, if any, from
, 1994 to the Closing Time.
2. The purchase price of the Floating Rate Notes to be paid by the
Underwriters shall be % of the principal amount thereof plus accrued
interest, if any, from , 1994 to the Closing Time.
3. The Floating Rate Notes will bear interest at a rate of % per annum
from , 1994 through and including ,
1995 and at a rate per annum thereafter, determined quarterly, equal to the rate
determined on the basis of the Applicable LIBOR Rate (as defined in the Senior
Note Indentures). Interest on the Floating Rate Notes will be payable quarterly
on , , , and
of each year commencing , 1995.
4. The Floating Rate Notes will mature on , 2001.
5. The Floating Rate Notes may be redeemed at the option of the Company, in
whole or in part, on any Interest Payment Date (as defined in the Floating Rate
Senior Note Indenture) on or after , 1995 and on or prior
to , 1999 at a redemption price equal to 100.5% of the
principal amount thereof, together with accrued and unpaid interest, if any, to
the date of redemption, and after , 1999 at a redemption
price equal to 100% of the principal amount thereof, together with accrued and
unpaid interest, if any, to the date of redemption.
The Company represents and warrants to each of the Underwriters that the
representations and warranties of the Company set forth in Section 1 of the
Purchase Agreement are accurate as though expressly made at and as of the date
hereof.
22
<PAGE>
This Agreement shall be governed by the laws of the State of New York.
Very truly yours,
FLEMING COMPANIES, INC.
By ______________________________
Name:
Title:
Each of the Subsidiary Guarantors
Listed on Exhibit B
By ______________________________
Name:
Title:
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By _____________________________
Name:
Title:
Investment Banking
Group
23
<PAGE>
EXHIBIT B
Subsidiary Guarantors
ATI, Inc.
Badger Markets, Inc.
Baker's Supermarkets, Inc.
Ball Motor Service, Inc.
Boogaart Stores of Nebraska, Inc.
Central Park Super Duper, Inc.
Commercial Cold/Dry Storage Company
Consumers Markets, Inc.
D.L. Food Stores, Inc.
Del-Arrow Super Duper, Inc.
Festival Foods, Inc.
Fleming Direct Sales Corporation
Fleming Foods East, Inc.
Fleming Foods of Alabama, Inc.
Fleming Foods of Ohio, Inc.
Fleming Foods of Tennessee, Inc.
Fleming Foods of Texas, Inc.
Fleming Foods of Virginia, Inc.
Fleming Foods South, Inc.
Fleming Foods West, Inc.
Fleming Foreign Sales Corporation
Fleming Franchising, Inc.
Fleming Holdings, Inc.
Fleming International, Ltd.
Fleming Site Media, Inc.
Fleming Supermarkets of Florida, Inc.
Fleming Technology Leasing Company, Inc.
Fleming Transportation Service, Inc.
Food Brands, Inc.
Food-4-Less, Inc.
Food Holdings, Inc.
Food Saver of Iowa, Inc.
Gateway Development Co., Inc.
Gateway Food Distributors, Inc.
Gateway Foods, Inc.
Gateway Foods of Altoona, Inc.
Gateway Foods of Pennsylvania, Inc.
Gateway Foods of Twin Ports, Inc.
Gateway Foods Service Corporation
Grand Central Leasing Corporation
Great Bend Supermarkets, Inc.
Hub City Transportation, Inc.
Kensington and Harlem, Inc.
LAS, Inc.
Ladysmith East IGA, Inc.
Ladysmith IGA, Inc.
Lake Markets, Inc.
M&H Desoto, Inc.
M&H Financial Corp.
M&H Realty Corp.
Malone & Hyde, Inc.
Malone & Hyde of Lafayette, Inc.
Manitowoc IGA, Inc.
Moberly Foods, Inc.
Mt. Morris Super Duper, Inc.
Niagra Falls Super Duper, Inc.
Northern Supermarkets of Oregon, Inc.
Northgate Plaza, Inc.
109 West Main Street, Inc.
121 East Main Street, Inc.
Peshtigo IGA, Inc.
Piggly Wiggly Corporation
Quality Incentive Company, Inc.
Rainbow Transportation Services, Inc.
Route 16, Inc.
Route 219, Inc.
Route 417, Inc.
Richland Center IGA, Inc
Scrivner, Inc.
Scrivner-Food Holdings, Inc.
Scrivner of Alabama, Inc.
Scrivner of Illinois, Inc.
Scrivner of Iowa, Inc.
Scrivner of Kansas, Inc.
Scrivner of New York, Inc.
Scrivner of North Carolina, Inc.
Scrivner of Pennsylvania, Inc.
Scrivner of Tennessee, Inc.
Scrivner of Texas, Inc.
Scrivner Super Stores of Illinois, Inc.
Scrivner Super Stores of Iowa, Inc.
Scrivner Transportation, Inc.
Sehon Foods, Inc.
Selected Products, Inc.
Sentry Markets, Inc.
Smar Trans, Inc.
South Ogden Super Duper, Inc.
Southern Supermarkets, Inc. (TX)
Southern Supermarkets, Inc. (OK)
Southern Supermarkets of Louisiana, Inc.
Star Groceries, Inc.
Store Equipment, Inc.
Sundries Service, Inc.
Switzer Foods, Inc.
35 Church Street, Inc.
Thompson Food Basket, Inc.
29 Super Market, Inc.
27 Slayton Avenue, Inc.
WPC, Inc.
24
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL
PRINCIPAL AMOUNT OF
AMOUNT OF FIXED FLOATING RATE
RATE NOTES TO NOTES TO BE
UNDERWRITER BE PURCHASED PURCHASED
- -------------------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................................... $ $
J.P. Morgan Securities Inc......................................................
--------------- ---------------
Total................................................................. $ 350,000,000 $ 150,000,000
--------------- ---------------
--------------- ---------------
</TABLE>
25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FLEMING COMPANIES, INC.
ISSUER
TO
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
TRUSTEE
THE SUBSIDIARY GUARANTORS NAMED HEREIN
GUARANTORS
------------------------
Indenture
Dated as of , 1994
------------------------
$350,000,000
% Senior Notes due 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
FLEMING COMPANIES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF , 1994
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- ------------------------- ----------------------------
<S> <C> <C>
Section310(a)(1) .......................................................... 607[(a)]
(a)(2) .......................................................... 607[(a)]
(b) .......................................................... [607(b),] 608
Section312(c) .......................................................... 701
Section314(a) .......................................................... 703
(a)(4) .......................................................... 1008(a)
(c)(1) .......................................................... 102
(c)(2) .......................................................... 102
(e) .......................................................... 102
Section315(b) .......................................................... 601
Section316(a)(last
sentence) .......................................................... 101 ("Outstanding")
(a)(1)(A) .......................................................... 502, 512
(a)(1)(B) .......................................................... 513
(b) .......................................................... 508
(c) .......................................................... 104(d)
Section317(a)(1) .......................................................... 503
(a)(2) .......................................................... 504
(b) .......................................................... 1003
Section318(a) .......................................................... 111
</TABLE>
- ------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
PARTIES..............................................................................
RECITALS OF THE COMPANY..............................................................
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions..........................................................................
Acquired Indebtedness................................................................
Act..................................................................................
Affiliate............................................................................
Average Life to Stated Maturity......................................................
Bankruptcy Law.......................................................................
Banks................................................................................
Board of Directors...................................................................
Board Resolution.....................................................................
Business Day.........................................................................
Business Development Program.........................................................
Business Development Venture.........................................................
Capital Lease Obligation.............................................................
Capital Stock........................................................................
Change of Control....................................................................
Change of Control Purchase Date......................................................
Change of Control Purchase Offer.....................................................
Change of Control Purchase Price.....................................................
Change of Control Triggering Event...................................................
Commission...........................................................................
Common Stock.........................................................................
Company..............................................................................
Company Request or Company Order.....................................................
Consolidated.........................................................................
Consolidated Fixed Charge Coverage Ratio.............................................
Consolidated Income Tax Expense......................................................
Consolidated Interest Expense........................................................
Consolidated Net Income..............................................................
Consolidated Net Tangible Assets.....................................................
</TABLE>
- ------------------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
ii
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
Consolidated Non-Cash Charges........................................................
Corporate Trust Office...............................................................
Corporation..........................................................................
Credit Agreement.....................................................................
Currency Agreements..................................................................
Default..............................................................................
Defaulted Interest...................................................................
Equity Store.........................................................................
Event of Default.....................................................................
Exchange Act.........................................................................
Floating Rate Note Indenture.........................................................
Floating Rate Notes..................................................................
Generally Accepted Accounting Principles.............................................
Guaranteed Debt......................................................................
Guaranteed Obligations...............................................................
Holder...............................................................................
Indebtedness.........................................................................
Indenture............................................................................
Interest Payment Date................................................................
Interest Rate Agreements.............................................................
Investment...........................................................................
Investment Grade.....................................................................
Lien.................................................................................
Managing Agent.......................................................................
Maturity.............................................................................
Moody's..............................................................................
Note Guarantee.......................................................................
Notes................................................................................
Offering.............................................................................
Officers' Certificate................................................................
Opinion of Counsel...................................................................
Outstanding..........................................................................
Paying Agent.........................................................................
Permitted Indebtedness...............................................................
Permitted Investment.................................................................
Permitted Liens......................................................................
Permitted Receivables Financing......................................................
</TABLE>
<PAGE>
iii
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
Person...............................................................................
Predecessor Note.....................................................................
Preferred Stock......................................................................
Principal Property...................................................................
Prior Indentures.....................................................................
Public Equity Offering...............................................................
Qualified Capital Stock..............................................................
Rating Agency........................................................................
Rating Category......................................................................
Rating Decline.......................................................................
Redeemable Capital Stock.............................................................
Redemption Date......................................................................
Redemption Price.....................................................................
Regular Record Date..................................................................
Responsible Officer..................................................................
Securities Act.......................................................................
Security Register and Security Registrar.............................................
Senior Indebtedness..................................................................
Significant Subsidiary...............................................................
S&P..................................................................................
Special Record Date..................................................................
Stated Maturity......................................................................
Subordinated Indebtedness............................................................
Subsidiary...........................................................................
Subsidiary Guarantor.................................................................
Temporary Cash Investments...........................................................
Transferred Receivables..............................................................
Trust Indenture Act or TIA...........................................................
Trustee..............................................................................
U.S. Government Obligations..........................................................
Vice President.......................................................................
Voting Stock.........................................................................
Wholly Owned Subsidiary..............................................................
SECTION 102. Compliance Certificates and Opinions.................................................
103. Form of Documents Delivered to Trustee...............................................
104. Acts of Holders......................................................................
105. Notices, Etc., to Trustee, Company and Subsidiary Guarantors.........................
</TABLE>
<PAGE>
iv
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
106. Notice to Holders; Waiver............................................................
107. Effect of Headings and Table of Contents.............................................
108. Successors and Assigns...............................................................
109. Separability Clause..................................................................
110. Benefits of Indenture................................................................
111. Governing Law........................................................................
112. Legal Holidays.......................................................................
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally......................................................................
202. Form of Face of Note.................................................................
203. Form of Reverse of Note..............................................................
204. Form of Trustee's Certificate of Authentication......................................
ARTICLE THREE
THE NOTES
SECTION 301. Title and Terms......................................................................
302. Denominations........................................................................
303. Execution, Authentication, Delivery and Dating.......................................
304. Temporary Notes......................................................................
305. Registration, Registration of Transfer and Exchange..................................
306. Mutilated, Destroyed, Lost and Stolen Notes..........................................
307. Payment of Interest; Interest Rights Preserved.......................................
308. Persons Deemed Owners................................................................
309. Cancellation.........................................................................
310. Computation of Interest..............................................................
311. CUSIP Numbers........................................................................
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture..............................................
402. Application of Trust Money...........................................................
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default....................................................................
502. Acceleration of Maturity; Rescission and Annulment...................................
503. Collection of Indebtedness and Suits for Enforcement by Trustee......................
504. Trustee May File Proofs of Claim.....................................................
505. Trustee May Enforce Claims Without Possession of Notes...............................
506. Application of Money Collected.......................................................
507. Limitation on Suits..................................................................
508. Unconditional Right of Holders to Receive Principal, Premium and Interest............
509. Restoration of Rights and Remedies...................................................
510. Rights and Remedies Cumulative.......................................................
511. Delay or Omission Not Waiver.........................................................
512. Control by Holders...................................................................
513. Waiver of Past Defaults..............................................................
514. Waiver of Stay or Extension Laws.....................................................
515. Notice of Defaults...................................................................
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults...................................................................
602. Certain Rights of Trustee............................................................
603. Trustee Not Responsible for Recitals or Issuance of Notes............................
604. May Hold Notes.......................................................................
605. Money Held in Trust..................................................................
606. Compensation and Reimbursement.......................................................
607. Corporate Trustee Required; Eligibility..............................................
608. Resignation and Removal; Appointment of Successor....................................
609. Acceptance of Appointment by Successor...............................................
610. Merger, Conversion, Consolidation or Succession to Business..........................
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS
SECTION 701. Disclosure of Names and Addresses of Holders.........................................
702. Reports by Trustee...................................................................
703. Reports by Company and Subsidiary Guarantors.........................................
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.................................
802. Successor Substituted................................................................
803. Notes to Be Secured in Certain Events................................................
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders...................................
902. Supplemental Indentures With Consent of Holders......................................
903. Execution of Supplemental Indentures.................................................
904. Effect of Supplemental Indentures....................................................
905. Conformity with Trust Indenture Act..................................................
906. Reference in Notes to Supplemental Indentures........................................
907. Notice of Supplemental Indentures....................................................
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, If Any, and Interest..................................
1002. Maintenance of Office or Agency......................................................
1003. Money for Note Payments to Be Held in Trust..........................................
1004. Corporate Existence..................................................................
1005. Payment of Taxes and Other Claims....................................................
1006. Maintenance of Properties............................................................
1007. Insurance............................................................................
1008. Statement by Officers As to Default..................................................
1009. Purchase of Notes Upon a Change of Control Triggering Event..........................
1010. Limitation on Indebtedness...........................................................
1011. Limitation on Restricted Payments....................................................
1012. Limitation on Liens..................................................................
1013. Additional Guarantees................................................................
1014. Provision of Financial Statements....................................................
1015. Waiver of Certain Covenants..........................................................
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption..................................................................
1102. Applicability of Article.............................................................
1103. Election to Redeem; Notice to Trustee................................................
1104. Selection by Trustee of Notes to Be Redeemed.........................................
1105. Notice of Redemption.................................................................
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1106. Deposit of Redemption Price..........................................................
1107. Notes Payable on Redemption Date.....................................................
1108. Notes Redeemed in Part...............................................................
ARTICLE TWELVE
NOTE GUARANTEES
SECTION 1201. Note Guarantees......................................................................
1202. Obligations of the Subsidiary Guarantors Unconditional...............................
1203. Ranking of Note Guarantee............................................................
1204. Limitation of Note Guarantees........................................................
1205. Release of Subsidiary Guarantors.....................................................
1206. Subsidiary Guarantors May Consolidate, Etc. on Certain Terms.........................
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.........................
1302. Defeasance and Discharge.............................................................
1303. Covenant Defeasance..................................................................
1304. Conditions to Defeasance or Covenant Defeasance......................................
1305. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other
Miscellaneous Provisions............................................................
1306. Reinstatement........................................................................
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<PAGE>
INDENTURE, dated as of , 1994 among FLEMING COMPANIES, INC., a
corporation duly organized and existing under the laws of the State of Oklahoma
(herein called, the "Company"), having its principal office at 6301 Waterford
Boulevard, P.O. Box 26647, Oklahoma City, Oklahoma 73126, each of the Subsidiary
Guarantors (as hereinafter defined), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association duly organized and existing under
the laws of the United States, Trustee (herein called, the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of % Senior
Notes due 2001 (herein called, the "Notes"), of substantially the tenor and
amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended and shall, to the extent applicable, be governed by such
provisions.
The Company, directly or indirectly, owns beneficially and of record 100% of
the Capital Stock of the Subsidiary Guarantors; the Company and the Subsidiary
Guarantors are members of the same consolidated group of companies; the
Subsidiary Guarantors will derive direct and indirect economic benefit from the
issuance of the Notes; accordingly, the Subsidiary Guarantors have each duly
authorized the execution and delivery of this Indenture to provide for the
Guarantee by each of them with respect to the Notes as set forth in this
Indenture.
All things necessary have been done to make the Notes, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, to make the Note Guarantees of
each of the Subsidiary Guarantors, when executed by the respective Subsidiary
Guarantors and delivered hereunder, the valid obligations of the respective
Subsidiary Guarantors, and to make this Indenture a valid agreement of the
Company and each of the Subsidiary Guarantors, in accordance with their and its
terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
<PAGE>
2
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein, and the terms "cash transaction" and "self-liquidating paper",
as used in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; PROVIDED, HOWEVER, that
with respect to any computation required pursuant to Sections 1009, 1010,
1011 and 1012, such term shall mean such accounting principles as are
generally accepted as of the date of the Indenture; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (A) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (B) the amount of each such principal payment by (ii)
the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Banks" means the banks or other financial institutions from time to time
that are lenders under the Credit Agreement.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board, and, with respect to any Subsidiary
Guarantor, either the board of directors of such Subsidiary Guarantor or any
duly authorized committee of that board.
<PAGE>
3
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, and, with respect to a Subsidiary
Guarantor, a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Subsidiary Guarantor to have been duly adopted by its Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
"Business Development Program" means the business practice of the Company
and its Subsidiaries of making or guaranteeing loans to, or making equity
investments in, third parties engaged in the retail grocery business in exchange
for long-term supply agreements with the Company or any Subsidiary.
"Business Development Venture" means any Person participating in the
Business Development Program and BFL of Tulsa, Inc., Butch's Finer Foods, Inc.,
South Ogden Super Duper, Inc., Stores located at 301 South Main, Smith Center,
KS 66967, 109 West Main Street, Inc., Route 417, Inc., Route 16, Inc. and Route
219, Inc.
"Capital Lease Obligation" means, with respect to any Person, any
obligations of such Person and its Subsidiaries on a Consolidated basis under
any capital lease of real or personal property which, in accordance with GAAP,
has been recorded as a capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
partnership interests, participations or other equivalents (however designated)
of such Person's capital stock whether now outstanding or issued after the date
hereof, including, without limitation, all Common Stock and Preferred Stock of
such Person.
"Change of Control" means the occurrence of any of the following events: (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to
have beneficial ownership of all shares that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total outstanding
Voting Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the shareholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such Board of Directors then in office; (iii) the
Company consolidates with or merges with or into any Person or conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with or merges into or with the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is changed into or exchanged for cash, securities or
other property, other than any such transaction where the outstanding Voting
<PAGE>
4
Stock of the Company is not changed or exchanged at all (except to the extent
necessary to reflect a change in the jurisdiction of incorporation of the
Company) or where (A) the outstanding Voting Stock of the Company is changed
into or exchanged for (x) Voting Stock of the surviving corporation which is not
Redeemable Capital Stock or (y) cash, securities or other property (other than
Capital Stock of the surviving corporation) in an amount which could be paid by
the Company as a Restricted Payment under Section 1011 (and such amount shall be
treated as a Restricted Payment subject to Section 1011) and (B) immediately
after such transaction no "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
total outstanding Voting Stock of the surviving corporation; or (iv) the Company
is liquidated or dissolved or adopts a plan of liquidation or dissolution other
than in a transaction which complies with Section 801.
"Change of Control Purchase Date" has the meaning specified in Section 1009.
"Change of Control Purchase Offer" has the meaning specified in Section
1009.
"Change of Control Purchase Price" has the meaning specified in Section
1009.
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act then the body performing
such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman, any Vice Chairman, its President,
any Vice President, its Treasurer or an Assistant Treasurer, and delivered to
the Trustee.
"Consolidated" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP consistently
applied.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for any
period, the ratio of (a) the sum of Consolidated Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-Cash
Charges deducted in computing
<PAGE>
5
Consolidated Net Income, in each case, for such period, of the Company and its
Subsidiaries on a Consolidated basis, all determined in accordance with GAAP to
(b) Consolidated Interest Expense for such period; PROVIDED that (i) in making
such computation, the Consolidated Interest Expense attributable to interest on
any Indebtedness computed on a PRO FORMA basis and (A) bearing a floating
interest rate shall be computed as if the rate in effect on the date of
computation had been the applicable rate for the entire period and (B) which was
not outstanding during the period for which the computation is being made but
which bears, at the option of the Company, a fixed or floating rate of interest,
shall be computed by applying, at the option of the Company, either the fixed or
floating rate; (ii) in making such computation, Consolidated Interest Expense
attributable to interest on any Indebtedness under a revolving credit facility
computed on a PRO FORMA basis shall be computed based upon the average daily
balance of such Indebtedness during the applicable period; and (iii) in making
such computation, Consolidated Interest Expense attributable to interest on
Indebtedness constituting obligations in connection with any letters of credit
and acceptances issued under letter of credit facilities, acceptance facilities
or other similar facilities computed on a PRO FORMA basis shall be computed
excluding any contingent obligations and without assuming that any undrawn
letter of credit has been drawn.
"Consolidated Income Tax Expense" means for any period the provision for
federal, state, local and foreign income taxes of the Company and its
Subsidiaries for such period as determined on a Consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, without duplication, for any period,
the sum of (a) the interest expense of the Company and its Subsidiaries for such
period, as determined on a Consolidated basis in accordance with GAAP including,
without limitation, (i) amortization of debt discount, (ii) the net cost under
Interest Rate Agreements (including amortization of discount), (iii) the
interest portion of any deferred payment obligation and (iv) accrued interest,
plus (b) the aggregate amount for such period of dividends on any Redeemable
Capital Stock or Preferred Stock of the Company and its Subsidiaries, (c) the
interest component of the Capital Lease Obligations paid, accrued and/or
scheduled to be paid, or accrued by such Person during such period and (d) all
capitalized interest of the Company and its Subsidiaries determined on a
Consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the Consolidated net income
(or loss) of the Company and its Subsidiaries for such period as determined on a
Consolidated basis in accordance with GAAP, adjusted, to the extent included in
calculating such net income (loss), by excluding, without duplication, (i) any
net after-tax extraordinary gains or losses (less all fees and expenses relating
thereto), (ii) the $101.3 million facilities consolidation and restructuring
charge originally reflected in the Company's audited Consolidated statement of
earnings for the year ended December 25, 1993, (iii) the portion of net income
(or loss) of the Company and its Subsidiaries determined on a Consolidated basis
allocable to minority interests in unconsolidated Persons to the extent that
cash dividends or distributions have not actually been received by the Company
or any Subsidiary, (iv) net income (or loss) of any Person combined with the
Company or any Subsidiary on a "pooling of interests" basis attributable to any
period prior to the date of combination, (v) net gains or losses (less all fees
and expenses relating thereto) in respect of dispositions of assets other than
in the ordinary course of business and (vi) the net income of any Subsidiary to
the extent that the declaration
<PAGE>
6
of dividends or similar distributions by that Subsidiary of that income is not
at the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its shareholders.
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on the Consolidated balance sheet of the Company and its Consolidated
Subsidiaries, less the following: (1) current liabilities; (2) reserves for
depreciation and other asset valuation reserves; (3) intangible assets
including, without limitation, items such as goodwill, trademarks, trade names,
patents and unamortized debt discount and expense; and (4) appropriate
adjustments on account of minority interests of other Persons holding stock in
any majority-owned Subsidiary of the Company.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash charges of the Company and its
Consolidated Subsidiaries for such period, as determined on a Consolidated basis
in accordance with GAAP (excluding any non-cash charges which require an accrual
or reserve for any future period).
"Corporate Trust Office" means a corporate trust office of the Trustee, at
which at any particular time its corporate trust business shall be administered,
which office at the date of execution of this Indenture is located at 2200 Ross
Avenue, 5th Floor, Dallas, Texas 75201.
"Corporation" includes corporations, associations, companies and business
trusts.
"Credit Agreement" means the Credit Agreement, dated as of July 19, 1994,
among the Company, the Banks, the Agents listed therein and the Managing Agent,
as such agreement may be amended, renewed, extended, substituted, refinanced,
restructured, replaced, supplemented or otherwise modified from time to time
(including, without limitation, any successive renewals, extensions,
substitutions, refinancings, restructurings, replacements, supplementations or
other modifications of the foregoing).
"Currency Agreements" means any spot or forward foreign exchange agreements
and currency swap, currency option or other similar financial agreements or
arrangements entered into by the Company or any of its Subsidiaries.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Equity Store" means a Person in which the Company or any of its
Subsidiaries has invested capital or to which it has made loans in accordance
with the business practice of the Company and its Subsidiaries of making equity
investments in Persons, and making or guaranteeing loans to such Persons, for
the purpose of assisting such Person in acquiring, remodeling, refurbishing,
expanding or operating one or more retail grocery stores and pursuant to which
such Person is permitted or required to reduce the Company's or the Subsidiary's
equity interest to a minority position over time (usually five to ten years).
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
<PAGE>
7
"Floating Rate Note Indenture" means the indenture dated as of ,
1994 among the Company, each of the Subsidiary Guarantors and Texas Commerce
Bank National Association, Trustee covering the Company's Floating Rate Notes.
"Floating Rate Notes" means the Floating Rate Senior Notes due 2001 and,
more particularly, means any notes authenticated and delivered under the
Floating Rate Note Indenture.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as applied from time to
time by the Company in the preparation of its Consolidated financial statements.
"Guaranteed Debt" means, with respect to any Person, without duplication,
all Indebtedness of any other Person referred to in the definition of
Indebtedness contained herein guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness other than to the Company, a Wholly Owned Subsidiary of the Company
or a Subsidiary Guarantor or to assure the holder of such Indebtedness other
than the Company, a Wholly Owned Subsidiary of the Company or a Subsidiary
Guarantor against loss, (iii) to supply funds to, or in any other manner invest
in, the debtor (including any agreement to pay for property or services without
requiring that such property be received or such services be rendered), (iv) to
maintain working capital or equity capital of the debtor, or otherwise to
maintain the net worth, solvency or other financial condition of the debtor or
(v) otherwise to assure a creditor against loss, PROVIDED that the term
"guarantee" shall not include endorsements for collection or deposit, in either
case in the ordinary course of business.
"Guaranteed Obligations" has the meaning specified in Section 1201.
"Holder" means a Person in whose name a Note is registered in the Security
Register.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all liabilities of such Person for borrowed money (including overdrafts) or for
the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit and
acceptances issued under letter of credit facilities, acceptance facilities or
other similar facilities, (ii) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (iii) all indebtedness of
such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
Capital Lease Obligations of such Person, (v) all obligations under Interest
Rate Agreements or Currency Agreements of such Person, (vi) all Indebtedness
referred to in clauses (i) through (v) above of other Persons and all dividends
of other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien,
<PAGE>
8
upon or with respect to property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness, (vii) all Guaranteed Debt
of such Person, (viii) all Redeemable Capital Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, and (ix) any amendment, supplement, modification, deferral, renewal,
extension, refunding or refinancing of any liability of the types referred to in
clauses (i) through (viii) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the fair market
value of such Redeemable Capital Stock, such fair market value is to be
determined in good faith by the Board of Directors of the issuer of such
Redeemable Capital Stock.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"Interest Rate Agreements" means any interest rate protection agreements and
other types of interest rate hedging agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements).
"Investment" means, with respect to any Person, directly or indirectly, any
advance (other than advances to customers in the ordinary course of business,
which are recorded as accounts receivable on the balance sheet of the Company
and its Subsidiaries), loan or other extension of credit or capital contribution
to (by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities issued by any other Person.
"Investment Grade" means BBB- or higher by S&P or Baa3 or higher by Moody's
or the equivalent of such ratings by S&P or Moody's or in the event Moody's or
S&P shall cease rating the Notes and the Company shall select any other Rating
Agency, the equivalent of such ratings by such other Rating Agency.
"Lien" means any mortgage or deed of trust, charge, pledge, lien (statutory
or otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property or assets of any kind, real or personal,
movable or immovable.
"Managing Agent" means Morgan Guaranty Trust Company of New York as managing
agent under the Credit Agreement and any future managing agent under the Credit
Agreement.
"Maturity", when used with respect to the Notes, means the date on which the
principal of the Notes becomes due and payable as therein provided or as
provided in this Indenture,
<PAGE>
9
whether at Stated Maturity, purchase upon a Change of Control Triggering Event
or redemption date, and whether by declaration of acceleration, Change of
Control, call for redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
"Note Guarantee" means any guarantee by a Subsidiary Guarantor of the
Company's obligations under this Indenture as set forth in Article Twelve of
this Indenture and any additional guarantee of the Notes pursuant to Section
1013 hereof.
"Notes" has the meaning stated in the first recital of this Indenture and,
more particularly, means any Notes authenticated and delivered under this
Indenture.
"Offering" means the sale of the Notes by the Company to Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc., as underwriters.
"Officers' Certificate" means a certificate signed by the Chairman, any Vice
Chairman, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, including an officer or employee of the Company, and who shall
be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to the Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Notes; PROVIDED that, if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Notes, except to the extent provided in Sections 1302 and 1303,
with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Thirteen; and
(iv) Notes which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Notes are held by a bona fide purchaser in whose hands the Notes are
valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company or any other obligor upon the Notes or any
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10
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in making such calculation or in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which
the Trustee actually knows to be so owned shall be so disregarded. Notes so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any,
on) or interest on any Notes on behalf of the Company.
"Permitted Indebtedness" means any of the following Indebtedness of the
Company or any Subsidiary, as the case may be:
(i) Indebtedness of the Company and guarantees of the Subsidiary
Guarantors under the Credit Agreement (including Indebtedness of the Company
under Tranche A of the Credit Agreement to the extent that the aggregate
commitment thereunder does not exceed $900 million, the maximum aggregate
commitment for such facility on the date of this Indenture, and any
guarantees with respect thereto outstanding on the date of this Indenture
and any additional guarantees executed in connection therewith) in an
aggregate principal amount, together with Indebtedness, if any, incurred
pursuant to clauses (ii) and (xi) of this definition of "Permitted
Indebtedness", at any one time outstanding not to exceed $1.7 billion (after
giving PRO FORMA effect to the use of proceeds of the Offering) less
mandatory repayments actually made in respect of any term Indebtedness
thereunder;
(ii) Indebtedness of the Company under uncommitted bank lines of credit;
PROVIDED, HOWEVER, that the aggregate principal amount of Indebtedness
incurred pursuant to clauses (i), (ii) and (xi) of this definition of
"Permitted Indebtedness" does not exceed $1.7 billion (after giving PRO
FORMA effect to the use of proceeds of the Offering) less mandatory
repayments actually made in respect of any term Indebtedness thereunder;
(iii) Indebtedness of the Company evidenced by the Notes and the Note
Guarantees with respect thereto under this Indenture;
(iv) Indebtedness of the Company evidenced by the Floating Rate Notes
and the Note Guarantees with respect thereto under the Floating Rate Note
Indenture;
(v) Indebtedness of the Company or any Subsidiary outstanding on the
date of this Indenture and listed on Schedule hereto;
(vi) obligations of the Company or any Subsidiary entered into in the
ordinary course of business (a) pursuant to Interest Rate Agreements
designed to protect against or manage exposure to fluctuations in interest
rates in respect of Indebtedness or retailer notes receivables, which, if
related to Indebtedness or retailer notes receivables, do not exceed the
aggregate notional principal amount of such Indebtedness or such retailer
notes receivables, as the case may be, to which such Interest Rate
Agreements relate, or (b) under any Currency Agreements in the ordinary
course of business and
<PAGE>
11
designed to protect against or manage exposure to fluctuations in foreign
currency exchange rates which, if related to Indebtedness, do not increase
the amount of such Indebtedness other than as a result of foreign exchange
fluctuations;
(vii) Indebtedness of the Company owing to a Wholly Owned Subsidiary or
of any Subsidiary owing to the Company or any Wholly Owned Subsidiary;
PROVIDED that any disposition, pledge (except any pledge under the Credit
Agreement or the Prior Indentures) or transfer of any such Indebtedness to a
Person (other than the Company or another Wholly Owned Subsidiary) shall be
deemed to be an incurrence of such Indebtedness by the Company or
Subsidiary, as the case may be, not permitted by this clause (vii);
(viii) Indebtedness in respect of letters of credit, surety bonds and
performance bonds provided in the ordinary course of business;
(ix) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds in the ordinary course of business; PROVIDED that
such Indebtedness is extinguished within five Business Days of its
incurrence;
(x) Indebtedness of the Company or any Subsidiary consisting of
guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets;
(xi) Indebtedness of the Company evidenced by commercial paper issued by
the Company; PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness incurred pursuant to clauses (i), (ii) and (xi) of this
definition of "Permitted Indebtedness" does not exceed $1.7 billion (after
giving PRO FORMA effect to the use of proceeds of the Offering) less
mandatory repayments actually made in respect of any term Indebtedness
thereunder;
(xii) Indebtedness of the Company pursuant to guarantees by the Company
or any Subsidiary Guarantor in connection with any Permitted Receivables
Financing; PROVIDED, HOWEVER, that such Indebtedness shall not exceed 15% of
the book value of the Transferred Receivables or, in the case of receivables
arising from direct financing leases for retail electronics systems, 30% of
the book value thereof;
(xiii) Indebtedness of the Company and its Subsidiaries in addition to
that described in clauses (i) through (xii) of this definition of "Permitted
Indebtedness," together with any other outstanding Indebtedness incurred
pursuant to this clause (xiii), not to exceed $100 million at any time
outstanding in the aggregate; and
(xiv) any renewals, extensions, substitutions, refundings, refinancings
or replacements (each, a "refinancing") of any Indebtedness described in
clauses (iii), (iv) and (v) of this definition of "Permitted Indebtedness",
including any successive refinancings, so long as (A) the aggregate
principal amount of Indebtedness represented thereby is not increased by
such refinancing to an amount greater than such principal amount plus the
lesser of (x) the stated amount of any premium or other payment required to
be paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (y) the amount of premium or other payment
actually paid at such
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12
time to refinance the Indebtedness, plus, in either case, the amount of
expenses of the Company or Subsidiary, as the case may be, incurred in
connection with such refinancing and (B) such refinancing does not reduce
the Average Life to Stated Maturity or the Stated Maturity of such
Indebtedness.
"Permitted Investment" means (i) Investment in any Wholly Owned Subsidiary
or any Investment in any Person by the Company or any Wholly Owned Subsidiary as
a result of which such Person becomes a Wholly Owned Subsidiary or any
Investment in the Company by a Wholly Owned Subsidiary; (ii) intercompany
Indebtedness to the extent permitted under clause (vii) of the definition of
"Permitted Indebtedness"; (iii) Temporary Cash Investments; (iv) sales of goods
on trade credit terms consistent with the Company's past practices or otherwise
consistent with trade credit terms in common use in the industry; (v)
Investments in direct financing leases for equipment owned by the Company and
leased to its customers in the ordinary course of business consistent with past
practice; (vi) Investments in existence on the date of this Indenture; and (vii)
any substitutions or replacements of any Investment so long as the aggregate
amount of such Investment is not increased by such substitution or replacement.
"Permitted Liens" means, with respect to any Person:
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired; (2) taxes, assessments, governmental charges or levies not yet
delinquent or which are being contested in good faith; (3) security for
payment of workers compensation or other insurance; (4) security for the
performance of tenders, leases (including, without limitation, statutory and
common law landlord's liens) and contracts (other than contracts for the
payment of money); (5) zoning restrictions, easements, licenses,
reservations, title defects, rights of others for rights-of-way for
utilities, sewers, electric lines, telephone or telegraph lines and other
similar purposes, provisions, covenants, conditions, waivers and
restrictions on the use of property or minor irregularities of title (and
with respect to leasehold interests, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted to exist and arising
by, through or under a landlord or owner of the leased property, with or
without consent of the lessee), none of which materially impairs the use of
any parcel of property material to the operation of the business of the
Company or any Subsidiary or the value of such property for the purpose of
such business; (6) deposits to secure public or statutory obligations; (7)
operation of law in favor of growers, dealers and suppliers of fresh fruits
and vegetables, carriers, mechanics, materialmen, laborers, employees or
suppliers, incurred in the ordinary course of business for sums which are
not yet delinquent or are being contested in good faith by negotiations or
by appropriate proceedings which suspend the collection thereof; (8) the
grant by the Company to licensees, pursuant to security agreements, of
security interests in trademarks and goodwill, patents and trade secrets of
the Company to secure the damages, if any, of such licensees,
<PAGE>
13
resulting from the rejection of the license of such licensees in a
bankruptcy, reorganization or similar proceeding with respect to the
Company; or (9) security for surety or appeal bonds;
(c) any extension, renewal, refinancing or replacement of any Lien on
property of the Company or any Subsidiary existing as of the date of this
Indenture and securing the Indebtedness under the Credit Agreement or the
Prior Indenture in an aggregate principal amount not to exceed the principal
amount of the Indebtedness outstanding as permitted by clause (i) of the
definition of "Permitted Indebtedness" so long as no additional collateral
is granted as security thereby; PROVIDED that this clause (c) shall not
apply to any Lien on such property that has not been subject to a Lien for
30 days;
(d) any Lien on any property or assets of a Subsidiary in favor of the
Company or any Wholly Owned Subsidiary;
(e) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Subsidiary; PROVIDED that such Lien does
not extend to any assets of the Company or any Subsidiary other than the
assets acquired in the transaction resulting in such Acquired Indebtedness
being incurred by the Company or Subsidiary, as the case may be;
(f) any Lien to secure the performance of bids, trade contracts,
letters of credit and other obligations of a like nature and incurred in the
ordinary course of business of the Company or any Subsidiary;
(g) any Lien securing any Interest Rate Agreements or Currency
Agreements permitted to be incurred pursuant to clause (v) of the definition
of "Permitted Indebtedness" or any collateral for the Indebtedness to which
such Interest Rate Agreements or Currency Agreements relate;
(h) any Lien securing the Notes;
(i) any Lien on an asset securing Indebtedness (including Capital Lease
Obligations) incurred or assumed for the purpose of financing all or any
part of the cost of acquiring or constructing such asset; PROVIDED that such
Lien attaches to such asset concurrently or within 180 days after the
acquisition or completion of construction thereof; and
(j) any Lien on real or personal property securing Capital Lease
Obligations of the Company or any Subsidiary as lessee with respect to such
real or personal property (1) to the extent that the Company or such
Subsidiary has entered into (and not terminated), or has a binding
commitment for, subleases on terms which, to the Company, are at least as
favorable, on a current basis, as the terms of the corresponding capital
lease or (2) under which the aggregate principal component of the annual
rent payable does not exceed $5 million;
(k) any Lien on a Financing Receivable or other receivable that is
transferred in a Permitted Receivables Financing;
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14
(l) any Lien consisting of any pledge to any Person of Indebtedness
owed by any Subsidiary to the Company or any Wholly Owned Subsidiary;
PROVIDED that (i) such Subsidiary is a Subsidiary Guarantor and (ii) the
principal amount pledged does not exceed the Indebtedness secured by such
pledge; and
(m) any extension, renewal, refinancing or replacement, in whole or in
part, of any Lien described in the foregoing clause (a) so long as no
additional collateral is granted as security thereby.
"Permitted Receivables Financing" means any transaction involving the
transfer (by way of sale, pledge or otherwise) by the Company or any of its
Subsidiaries of receivables to any other Person, PROVIDED that after giving
effect to such transaction the sum of (i) the aggregate uncollected balances of
the receivables so transferred ("Transferred Receivables") PLUS (ii) the
aggregate amount of all collections on Transferred Receivables theretofore
received by the seller but not yet remitted to the purchaser, in each case at
the date of determination, would not exceed $750 million.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred stock whether now outstanding or issued after the date of
this Indenture, including, without limitation, all classes and series of
preferred or preference stock of such Person.
"Principal Property" means any manufacturing or processing plant, office
facility, retail store, warehouse or distribution center, including, in each
case, the fixtures appurtenant thereto, located within the continental United
States and owned and operated now or hereafter by the Company or any Subsidiary
(other than an Equity Store or a Business Development Venture) and having a book
value on the date as of which the determination is being made of more than 2% of
Consolidated Net Tangible Assets.
"Prior Indentures" means the Indenture, dated March 15, 1986, between the
Company and Morgan Guaranty Trust Company of New York, as Trustee, covering $100
million aggregate principal amount of the Company's 9 1/2% Debentures due 2016
and the Indenture, dated December 1, 1989, between the Company and Morgan
Guaranty Trust Company of New York, as Trustee, covering $275 million aggregate
principal amount of the Company's Medium-Term Notes.
"Public Equity Offering" means a primary public offering of equity
securities of the Company pursuant to an effective registration statement under
the Securities Act with net cash proceeds of at least $50 million.
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15
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Rating Agency" means any of (i) S&P, (ii) Moody's or (iii) if S&P or
Moody's or both shall not make a rating of the Notes publicly available, a
security rating agency or agencies, as the case may be, nationally recognized in
the United States, selected by the Company, which shall be substituted for S&P
or Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Aaa,
Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and
(iii) the equivalent of any such category of S&P or Moody's used by another
Rating Agency. In determining whether the rating of the Notes has decreased by
one or more gradation, gradations within Rating Categories (+ and - for S&P; 1,
2 and 3 for Moody's; or the equivalent gradations for another Rating Agency)
shall be taken into account (E.G., with respect to S&P, a decline in rating from
BB+ to BB, as well as from BB- to B+, will constitute a decrease of one
gradation).
"Rating Decline" means the occurrence on, or within 90 days after, the date
of public notice of the occurrence of a Change of Control or of the intention of
the Company or Persons controlling the Company to effect a Change of Control
(which period shall be extended so long as the rating of the Notes is under
publicly announced consideration for possible downgrade by any of the Rating
Agencies) of the following: (i) if the Notes are rated by either Rating Agency
as Investment Grade immediately prior to the beginning of such period, the
rating of the Notes by both Rating Agencies shall be below Investment Grade; or
(ii) if the Notes are rated below Investment Grade by both Rating Agencies
immediately prior to the beginning of such period, the rating of the Notes by
either Rating Agency shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"Redeemable Capital Stock" means any Capital Stock that, either by its terms
or by the terms of any security into which it is convertible or exchangeable or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Notes or is redeemable at the option of the holder thereof at any time prior to
any such Stated Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Stated Maturity at the option of the
holder thereof.
"Redemption Date", when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed, means
the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the [date] or [date] (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the
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16
executive committee of the board of directors, the chairman of the trust
committee, the president, any vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
assistant controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers,
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" means Indebtedness of the Company other than
Subordinated Indebtedness.
"Significant Subsidiary" of the Company means any Subsidiary of the Company
that is a "significant subsidiary" as defined in Rule 1.02(v) of Regulation S-X
under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill Inc.,
a New York corporation, or any successor rating agency.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the date specified in such Indebtedness
as the fixed date on which the principal of or premium on such Indebtedness or
such installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company subordinated
in right of payment to the Notes.
"Subsidiary" means any Person a majority of the equity ownership or the
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Subsidiary Guarantor" means any Person that is required pursuant to Section
1013, on or after the date of this Indenture, to execute a Note Guarantee of the
Notes until a successor replaces any such party pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor, and the
following Subsidiaries of the Company: ATI, Inc., Badger Markets, Inc., Baker's
Supermarkets, Inc., Ball Motor Service, Inc., Boogaart Stores of Nebraska, Inc.,
Central Park Super Duper, Inc., Commercial Cold/Dry Storage Company, Consumers
Markets, Inc., D.L. Food Stores, Inc., Del-Arrow Super Duper, Inc., Festival
Foods, Inc., Fleming Direct Sales Corporation, Fleming Foods East, Inc., Fleming
Foods of Alabama, Inc., Fleming Foods of Ohio, Inc., Fleming Foods of Tennessee,
Inc., Fleming Foods of Texas, Inc., Fleming Foods of Virginia, Inc., Fleming
Foods South, Inc., Fleming Foods West, Inc., Fleming Foreign Sales Corporation,
Fleming Franchising, Inc., Fleming Holdings, Inc., Fleming International, Ltd.,
Fleming Site Media, Inc., Fleming
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17
Supermarkets of Florida, Inc., Fleming Technology Leasing Company, Inc., Fleming
Transportation Service, Inc., Food Brands, Inc., Food-4-Less, Inc., Food
Holdings, Inc., Food Saver of Iowa, Inc., Gateway Development Co., Inc., Gateway
Food Distributors, Inc., Gateway Foods, Inc., Gateway Foods of Altoona, Inc.,
Gateway Foods of Pennsylvania, Inc., Gateway Foods of Twin Ports, Inc., Gateway
Foods Service Corporation, Grand Central Leasing Corporation, Great Bend
Supermarkets, Inc., Hub City Transportation, Inc., Kensington and Harlem, Inc.,
LAS, Inc., Ladysmith East IGA, Inc., Ladysmith IGA, Inc., Lake Markets, Inc.,
M&H Desoto, Inc., M&H Financial Corp., M&H Realty Corp., Malone & Hyde, Inc.,
Malone & Hyde of Lafayette, Inc., Manitowoc IGA, Inc., Moberly Foods, Inc., Mt.
Morris Super Duper, Inc., Niagara Falls Super Duper, Inc., Northern Supermarkets
of Oregon, Inc., Northgate Plaza, Inc., 109 West Main Street, Inc., 121 East
Main Street, Inc., Peshtigo IGA, Inc., Piggly Wiggly Corporation, Quality
Incentive Company, Inc., Rainbow Transportation Services, Inc., Route 16, Inc.,
Route 219, Inc., Route 417, Inc., Richland Center IGA, Inc, Scrivner, Inc.,
Scrivner-Food Holdings, Inc., Scrivner of Alabama, Inc., Scrivner of Illinois,
Inc., Scrivner of Iowa, Inc., Scrivner of Kansas, Inc., Scrivner of New York,
Inc., Scrivner of North Carolina, Inc., Scrivner of Pennsylvania, Inc., Scrivner
of Tennessee, Inc., Scrivner of Texas, Inc., Scrivner Super Stores of Illinois,
Inc., Scrivner Super Stores of Iowa, Inc., Scrivner Transportation, Inc., Sehon
Foods, Inc., Selected Products, Inc., Sentry Markets, Inc., Smar Trans, Inc.,
South Ogden Super Duper, Inc., Southern Supermarkets, Inc. (TX), Southern
Supermarkets, Inc. (OK), Southern Supermarkets of Louisiana, Inc., Star
Groceries, Inc., Store Equipment, Inc., Sundries Service, Inc., Switzer Foods,
Inc., 35 Church Street, Inc., Thompson Food Basket, Inc., 29 Super Market, Inc.,
27 Slayton Avenue, Inc. and WPC, Inc.
"Temporary Cash Investments" means (i) any evidence of Indebtedness issued
by the United States, or an instrumentality or agency thereof, and guaranteed
fully as to principal, premium, if any, and interest by the United States, (ii)
any certificate of deposit issued by, or time deposit of, a bank or trust
company in the United States having combined capital and surplus and undivided
profits of not less than $500 million, whose debt has a rating, at the time as
of which any investment therein is made, of "A" (or higher) according to Moody's
or "A" (or higher) according to S&P, (iii) commercial paper issued by an entity
(other than an Affiliate or Subsidiary of the Company) with a rating, at the
time as of which any investment therein is made, of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P, (iv) any money market deposit
accounts issued or offered by a financial institution in the United States
having capital and surplus in excess of $500 million, (v) short term tax exempt
bonds with a rating, at the time as of which any investment is made therein, of
"Aa2" (or higher) according to Moody's or "AA" (or higher) according to S&P,
(vi) shares in a mutual fund, the investment objectives and policies of which
require it to invest substantially all of its assets in investments of the type
described in clause (v) and (vii) repurchase and reverse repurchase obligations
underlying securities of the types described in clauses (i) and (ii) entered
into with any financial institution meeting the qualifications specified in
clause (ii); PROVIDED that in the case of clauses (i), (ii), (iii), (v) and
(vii), such investment matures within one year from the date of acquisition
thereof.
"Transferred Receivables" has the meaning specified in the definition of
"Permitted Receivables Financing" in this Section.
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18
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed, except
as provided in Section 905.
"Trustee" means the Person named as the Trustee in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely payment of which its full faith
and credit is pledged or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States, the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S. Government Obligation
or a specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt; PROVIDED that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository receipt.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock (other
than directors' qualifying shares) of which is owned by the Company or another
Wholly Owned Subsidiary.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
<PAGE>
19
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Section 1008)
shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. In giving such opinion, such counsel may rely upon opinions of local
counsel reasonably satisfactory to the Trustee. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
<PAGE>
20
herein sometimes referred to as the "Act" of the Holders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of authority.
The fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any Person,
and the date of holding the same, shall be proved by the Security Register.
(d) If the Company shall solicit from the Holders of Notes any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding TIA Section 316(c),
such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for that purpose the Outstanding Notes shall be computed as of such record
date; PROVIDED that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than 330 days after the
record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
SECTION 105. NOTICES, ETC., TO TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
<PAGE>
21
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department, or
(2) the Company or any Subsidiary Guarantor by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this Indenture, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides notice of any event to Holders by the Company,
any Subsidiary Guarantor or the Trustee, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder when so
mailed, whether or not such Holder actually receives such notice. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 107. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 108. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and the
Subsidiary Guarantors shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 109. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes or the Note
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
<PAGE>
22
SECTION 110. BENEFITS OF INDENTURE.
Nothing in this Indenture, in the Notes or the Note Guarantees, express or
implied, shall give to any Person, other than the parties hereto, any Paying
Agent, any Securities Registrar and their successors hereunder and the Holders,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 111. GOVERNING LAW.
This Indenture, the Notes and the Note Guarantees shall be governed by and
construed in accordance with the law of the State of New York. This Indenture is
subject to the provisions of the Trust Indenture Act of 1939, as amended and
shall, to the extent applicable, be governed by such provisions.
SECTION 112. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date, or at the
Stated Maturity or Maturity; PROVIDED that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Stated
Maturity or Maturity, as the case may be.
ARTICLE TWO
NOTE FORMS
SECTION 201. FORMS GENERALLY.
The Notes and the Trustee's certificates of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
<PAGE>
23
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Notes may be listed, all as
determined by the officers of the Company executing such Notes, as evidenced by
their execution of such Notes.
SECTION 202. FORM OF FACE OF NOTE.
FLEMING COMPANIES, INC.
% SENIOR NOTE DUE 2001 CUSIP
NO. $
Fleming Companies, Inc., an Oklahoma corporation (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 Dollars on
, 2001, at the office or agency of the Company referred to below,
and to pay interest thereon from , 1994, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semiannually on [date] and [date] of each year, commencing , 1995,
at the rate of % per annum, until the principal hereof is paid or duly
provided for, and (to the extent lawful) to pay on demand interest on any
overdue interest at the rate borne by the Notes from the date on which such
overdue interest becomes payable to the date payment of such interest has been
made or duly provided for. 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 be the [date] or [date] (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date, and such Defaulted Interest, and (to
the extent lawful) interest on such Defaulted Interest at the rate borne by the
Notes, may 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 Holders of Notes not less than 10 days prior to
such Special Record Date, or may 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. Payment of the principal of (and
premium, if any, on) and interest on this Note will be made at the office or
agency of the Company maintained for that purpose in The City of New York, or at
such other office or agency of the Company as may be maintained for such
purpose, 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; PROVIDED,
HOWEVER, that payment of interest may be made at the option of the Company (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear on the Security Register or (ii) if requested in writing at least
10 days prior to a Regular Record Date or a Special Record Date, as the case may
be, by a Person who is entitled thereto with respect to at least $1 million in
principal amount of the Notes, by transfer to an account maintained by such
Person at a bank located in the United States.
<PAGE>
24
Reference is hereby made to the further provisions of this Note set forth on
the reverse hereof, 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 duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: FLEMING COMPANIES, INC.
By ___________________________________
Attest:
___________________________________
Secretary
SECTION 203. FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of securities of the Company
designated as its % Senior Notes due 2001 (herein called the "Notes"),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to $350,000,000, which may be issued under an
indenture (herein called the "Indenture") dated as of , 1994, among
the Company, the Subsidiary Guarantors named therein and Texas Commerce Bank
National Association, 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, obligations and immunities
thereunder of the Company, the Subsidiary Guarantors, the Trustee and the
Holders of the Notes and the Note Guarantees, and of the terms upon which the
Notes and the Note Guarantees are, and are to be, authenticated and delivered.
The Notes are subject to redemption at the option of the Company, upon not
less than 30 nor more than 60 days notice at any time after , 1999,
as a whole or in part, at the election of the Company, at a Redemption Price
equal to the percentage of the principal amount of the Notes set forth below if
redeemed during the 12-month period beginning on of the years
indicated below (subject to the right of Holders of record on relevant record
dates to receive accrued interest due on an Interest Payment Date):
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
- ---------------------------------------------------- ----------------
<S> <C>
1999................................................ %
2000................................................ %
</TABLE>
and thereafter at 100% of the principal amount together in the case of any such
redemption with accrued interest, if any, to the Redemption Date, all as
provided in the Indenture.
<PAGE>
25
In addition, up to 20% of the initial aggregate principal amount of the
Notes may be redeemed on or prior to , 1997, at the option of the
Company, within 180 days of a Public Equity Offering at a redemption price equal
to % of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of redemption (subject to the right of Holders of
record on relevant record dates to receive interest due on relevant Interest
Payment Dates); PROVIDED that after giving effect to such redemption at least
$200 million aggregate principal amount of the Notes remain outstanding.
Upon the occurrence of a Change of Control Triggering Event, the Holder of
this Note may require the Company, subject to certain limitations provided in
the Indenture, to repurchase this Note at a purchase price in cash in an amount
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase.
In the case of any redemption of Notes, interest installments whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of
such Notes, or one or more Predecessor Notes, of record at the close of business
on the relevant Record Date referred to on the face hereof. Notes (or portions
thereof) for whose redemption and payment provision is made in accordance with
the Indenture shall cease to bear interest from and after the Redemption Date.
In the event of redemption of this Note in part only, a new Note or Notes
for the unredeemed portion hereof shall be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal of all
the Notes 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 (a) the
entire indebtedness of the Company and any Subsidiary Guarantor on this Note and
(b) certain restrictive covenants and the related Defaults and Events of
Default, upon compliance by the Company and the Subsidiary Guarantors with
certain conditions set forth therein, which provisions apply to this Note.
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 Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
waive compliance by the Company and the Subsidiary Guarantors with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of 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.
<PAGE>
26
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, on) and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registerable on the Security Register of the
Company, upon surrender of this Note for registration of transfer at the office
or agency of the Company maintained for such purpose in The City of New York,
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 his attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or exchange
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent of
the Company, the Subsidiary Guarantors 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 Subsidiary Guarantors,
the Trustee nor any such agent shall be affected by notice to the contrary.
Interest on this Note shall be computed on the basis of a 360-day year of
twelve 30-day months.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED ___________________ hereby sell(s), assign(s) and
transfer(s) unto ______________ ______________ ______________ (please insert
social security or other identifying number of assignee) the within Note and
hereby irrevocably constitutes and appoints ______________ ______________ as
agent to transfer the said Note on the books of the Company with the full power
of substitution in the premises.
Dated:
______________________________________
Signature(s)
<PAGE>
27
Signature must be guaranteed by
a bank or trust company
or a member firm of a major stock
exchange
______________________________________
Signature Guarantee
NOTICE: The signature on the assignment
must correspond with the name as
written upon the face of the Note in every
particular without alteration or enlargement or any
change whatever.
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially the
following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
as Trustee
By ___________________________________
Authorized Signatory
ARTICLE THREE
THE NOTES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $350,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 303, 304, 305, 306, 801,
906, 1009 or 1108.
The Notes shall be known and designated as the " % Senior Notes due 2001"
of the Company. Their Stated Maturity shall be , 2001, and they
shall bear interest at the rate of % per annum from , 1994, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, payable semi-annually on [date] and [date] of each year,
commencing , 1995 and at said Stated Maturity, until the principal
thereof is paid or duly provided for.
The principal of (and premium, if any, on) and interest on the Notes shall
be payable at the office or agency of the Company maintained for such purpose in
The City of New York, or at such other office or agency of the Company as may be
maintained for such purpose; PROVIDED, HOWEVER, that, at the option of the
Company, interest may be paid by
<PAGE>
28
(i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address
of such Person as it appears in the Security Register or
(ii) if requested in writing at least 10 days prior to a Regular Record
Date or a Special Record Date, as the case may be, by a person who is
entitled thereto with respect to at least $1 million in principal amount of
the Notes by transfer to an account maintained by such Person at a bank
located in the United States.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. DENOMINATIONS.
The Notes shall be issuable only in registered form without coupons and only
in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Company by its Chairman, any
Vice Chairman, its President or a Vice President, under its corporate seal
reproduced thereon and attested by its Secretary or an Assistant Secretary. The
signature of any of these officers on the Notes may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who were at
any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication, together with a Company Order for the authentication and
delivery of such Notes, and the Trustee in accordance with such Company Order
shall authenticate and deliver such Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of a Responsible Officer, and such certificate
upon any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Notes authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Notes executed in the
<PAGE>
29
name of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the Notes surrendered
for such exchange and of like principal amount; and the Trustee, upon Company
Request of the successor Person, shall authenticate and deliver Notes as
specified in such request for the purpose of such exchange. If Notes shall at
any time be authenticated and delivered in any new name of a successor Person
pursuant to this Section in exchange or substitution for or upon registration of
transfer of any Notes, such successor Person, at the option of the Holders but
without expense to them, shall provide for the exchange of all Notes at the time
Outstanding for Notes authenticated and delivered in such new name.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may execute and
upon Company Order the Trustee shall authenticate and deliver, temporary Notes
which are printed, lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Notes in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender of
the temporary Notes at the office or agency of the Company designated for such
purpose pursuant to Section 1002, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes, the Company shall execute
and upon Company Order the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Security Register shall be in written
form or any other form capable of being converted into written form within a
reasonable time. At all reasonable times, the Security Register shall be open to
inspection by the Trustee. The Trustee is hereby initially appointed as security
registrar (the "Security Registrar") for the purpose of registering Notes and
transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the office or
agency of the Company designated pursuant to Section 1002, the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denomination or denominations of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Notes to be
<PAGE>
30
exchanged at such office or agency. Whenever any Notes are so surrendered for
exchange, the Company shall execute and the Trustee shall authenticate and
deliver, the Notes which the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company and, pursuant to the Note
Guarantees, the Subsidiary Guarantors, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
or redemption of Notes, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 303, 304, 801, 906, 1108 or 1009 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Note during a period beginning at the opening of business 15 days
before the selection of Notes to be redeemed under Section 1104 and ending at
the close of business on the day of such mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, and there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of actual notice to the Company or the Trustee that such
Note has been acquired by a bona fide purchaser, the Company shall execute and
the Trustee shall authenticate and deliver, in exchange for any such mutilated
Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Company and, pursuant to the Note Guarantees, the Subsidiary
Guarantors, whether or not the destroyed,
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31
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; PROVIDED,
HOWEVER, that each installment of interest may at the Company's option be paid
by (i) mailing a check for such interest, payable to or upon the written order
of the Person entitled thereto pursuant to Section 308, to the address of such
Person as it appears in the Security Register or (ii) if requested in writing at
least 10 days prior to a Regular Record Date or a Special Record Date, as the
case may be, by a person who is entitled thereto with respect to at least $1
million in principal amount of the Notes by transfer to an account maintained by
such Person at a bank located in the United States.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Notes (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") may be paid by
the Company, at its election in each case, as provided in clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date, and in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be given in the manner provided for in Section 106,
not less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so given, such Defaulted Interest shall be paid to the
Persons in
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32
whose names the Notes (or their respective Predecessor Notes) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest 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, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to the due presentment of a Note for registration of transfer, the
Company, the Subsidiary Guarantors, the Trustee and any agent of the Company,
the Subsidiary Guarantors or the Trustee may treat the Person in whose name such
Note is registered as the owner of such Note for the purpose of receiving
payment of principal of (and premium, if any, on) and (subject to Sections 305
and 307) interest on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Company, any Subsidiary Guarantor, the
Trustee or any agent of the Company, any Subsidiary Guarantor or the Trustee
shall be affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Notes surrendered for payment, redemption, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section, except as expressly permitted by this Indenture. All cancelled
Notes held by the Trustee shall be disposed of by the Trustee in accordance with
its customary procedures and certification of their disposal delivered to the
Company unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
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SECTION 311. CUSIP NUMBERS.
The Company may use "CUSIP" numbers in issuing the Notes (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; PROVIDED, HOWEVER, that any such notice
may state that no representation is made as to the correctness of such "CUSIP"
numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of Notes
issued under this Indenture) and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture when
(1) either
(A) all Notes theretofore authenticated and delivered (except (i)
lost, stolen or destroyed Notes which have been replaced or paid as
provided in Section 306 and (ii) Notes for whose payment funds have
theretofore been deposited in trust by the Company with the Trustee or
any Paying Agent or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, and
either the Company or any Subsidiary Guarantor has irrevocably deposited
or caused to be deposited with the Trustee funds in an amount sufficient
to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for principal,
premium, if any, and interest to the date of such deposit;
(2) the Company or any Subsidiary Guarantor has paid all other sums
payable hereunder by the Company and any Subsidiary Guarantors; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with and that such satisfaction and discharge will not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Company
or any Subsidiary Guarantor is a party or by which it is bound.
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34
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest on any Note issued under
this Indenture when such interest becomes due and payable, and continuance
of such default for a period of 60 days; or
(2) default in the payment of the principal of (or premium, if any, on)
any Note at its Stated Maturity; or
(3) (A) default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor under this Indenture
(other than a default in the performance, or breach, of a covenant or
agreement which is specifically dealt with in the immediately preceding
clauses (1) and (2) or clauses (B) and (C) of this clause (3), and such
default or breach shall continue for a period of 60 days after written
notice has been given, by certified mail, (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Notes specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; (B) default in the performance or breach of the
provisions in Section 801; or (C) the Company shall have failed to make or
consummate a Change of Control Purchase Offer in accordance with the
provisions of Section 1009; or
(4) (A) there shall have occurred any default in the payment of
principal of any Indebtedness under any agreements, indentures (including
any such default under the Floating Rate Note Indenture) or instruments
under which the Company or any Subsidiary of the Company then has
outstanding Indebtedness in excess of $50 million, when the same shall
become due and payable in full and such default shall have continued
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35
after any applicable grace period and shall not have been cured or waived or
(B) an event of default as defined in any of the agreements, indentures or
instruments described in clause (A) of this clause (4) shall have occurred
and the Indebtedness thereunder, if not already matured at its final
maturity in accordance with its terms, shall have been accelerated or
otherwise declared due and payable, or required to be prepaid or repurchased
(other than by regularly scheduled required prepayment), prior to the stated
maturity thereof; or
(5) any Person entitled to take the actions described in this clause
(5), after the occurrence of any event of default on Indebtedness in excess
of $50 million in the aggregate of the Company or any Subsidiary, shall
notify the Trustee of the intended sale or disposition of any assets of the
Company or any Subsidiary that have been pledged to or for the benefit of
such Person to secure such Indebtedness or shall commence proceedings, or
take any action (including by way of set-off) to retain in satisfaction of
any Indebtedness, or to collect on, seize, dispose of or apply, any such
assets of the Company or any Subsidiary (including funds on deposit or held
pursuant to lock-box and other similar arrangements), pursuant to the terms
of any agreement or instrument evidencing any such Indebtedness or in
accordance with applicable law; or
(6) any Note Guarantee of any Significant Subsidiary individually or
any other Subsidiaries if such Subsidiaries in the aggregate represent 15%
or more of the assets of the Company and its Subsidiaries on a Consolidated
basis with respect to such Notes shall for any reason cease to be, or be
asserted in writing by the Company, any Subsidiary Guarantor or any other
Subsidiary of the Company, as applicable, not to be, in full force and
effect, enforceable in accordance with its terms, except pursuant to the
release of any such Note Guarantee in accordance with this Indenture; or
(7) one or more judgments, orders or decrees for the payment of money
in excess of $50 million (net of amounts covered by insurance, bond or
similar instrument), either individually or in an aggregate amount, entered
against the Company or any Subsidiary or any of their respective properties
which is not discharged and either (i) any creditor shall have commenced an
enforcement proceeding upon such judgment, order or decree or (ii) there
shall have been a period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of pending appeal or
otherwise, shall not be in effect; or
(8) the entry by a court of competent jurisdiction of (A) a decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any applicable Bankruptcy Law or (B)
a decree or order adjudging the Company or any Significant Subsidiary
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant Subsidiary
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Significant Subsidiary or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and any such decree or order for relief shall continue to be in
effect, or any such other decree or order shall be unstayed and in effect,
for a period of 60 consecutive days; or
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36
(9) (A) the commencement by the Company or any Significant Subsidiary
of a voluntary case or proceeding under any applicable Bankruptcy Law or any
other case or proceeding to be adjudicated bankrupt or insolvent, (B) the
Company or any Significant Subsidiary consents to the entry of a decree or
order for relief in respect of the Company or such Significant Subsidiary in
an involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding against
it, (C) the Company or any Significant Subsidiary files a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state law, (D) the Company or any Significant Subsidiary (x) consents to the
filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or such Significant Subsidiary or of any substantial
part of its property, (y) makes an assignment for the benefit of creditors
or (z) admits in writing its inability to pay its debts generally as they
become due or (E) the Company or any Significant Subsidiary takes any
corporate action in furtherance of any such actions in this clause (9).
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
501(8) or 501(9)) shall occur and be continuing, then and in every such case the
Trustee, by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Notes Outstanding may declare all amounts payable in
respect of such Notes to be due and payable immediately, by a notice in writing
to the Company and to the Trustee, and upon any such declaration such amounts
shall become immediately due and payable. If an Event of Default specified in
Section 501(8) or 501(9) occurs then all amounts payable in respect of such
Notes shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Notes Outstanding, by written notice to the Company and
the Trustee, may rescind or annul such declaration if
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel,
(B) all overdue interest on all Outstanding Notes, and
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the Notes; and
(2) all Events of Default, other than the non-payment of principal of
such Notes which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
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SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Notes, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand on the Company for the payment
of overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
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38
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal (or premium, if any)
or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any, on,) and interest on the Notes in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable
on such Notes for principal (and premium, if any) and interest,
respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Notes shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
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39
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee, for 60 days after its receipt of such notice, request
and offer of reasonably satisfactory indemnity, has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority or
more in principal amount of the Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Thirteen) and in
such Note, of the principal of (and premium, if any, on) and (subject to Section
307) interest on, such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Subsidiary Guarantors, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and, subject
to the provisions of Section 507, every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
<PAGE>
40
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not consenting.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes may on behalf of the Holders of all the Notes waive any past
default hereunder and its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if any,
on) or interest on any Note, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
Each of the Company and the Subsidiary Guarantors covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and each of the
Company and the Subsidiary Guarantors (to
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the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 515. NOTICE OF DEFAULTS.
Within ten days after the occurrence of any Default hereunder, the Company
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice to the Trustee of such Default hereunder known to the Company or any
Subsidiary Guarantor, unless such Default shall have been cured or waived.
ARTICLE SIX
THE TRUSTEE
SECTION 601. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default hereunder, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such Default hereunder known to the Trustee, unless such Default shall
have been cured or waived; PROVIDED, HOWEVER, that, except in the case of a
Default in the payment of the principal of (or premium, if any, on) or interest
on any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders; and
PROVIDED FURTHER that in the case of any Default of the character specified in
Section 501(3) no such notice to Holders shall be given until at least 30 days
after the occurrence thereof.
SECTION 602. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
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(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonably satisfactory to
the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled at all reasonable times to examine the books, records and
premises of the Company and the Subsidiary Guarantors, personally or by
agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes, except for the Trustee's
certificates of authentication, shall be taken as the statements of the Company
or the Subsidiary Guarantors, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility of Form T-1 supplied to the
Company are true and accurate, subject to the qualifications set forth therein.
The Trustee shall not be accountable for the use or application by the Company
of Notes or the proceeds thereof.
SECTION 604. MAY HOLD NOTES.
The Trustee, any Paying Agent, any Security Registrar or any other agent of
the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company and any Subsidiary Guarantor with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
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SECTION 605. MONEY HELD IN TRUST.
Cash in United States dollars or U.S. Government Obligations held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest on
any such cash or U.S. Government Obligations received by it hereunder except as
otherwise agreed in writing with the Company or any Subsidiary Guarantor.
SECTION 606. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance, administration or
enforcement of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the Trustee,
to pay or reimburse the Trustee for expenses, disbursements and advances and to
indemnify and hold harmless the Trustee shall constitute indebtedness and shall
survive the satisfaction and discharge of this Indenture. As security for the
performance of such obligations of the Company, the Trustee shall have a claim
prior to the Notes upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the payment of principal of (and
premium, if any, on) or interest on particular Notes.
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50 million. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
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SECTION 608. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company addressed to the Company and the Subsidiary Guarantors. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of not
less than a majority in principal amount of the Outstanding Notes, delivered to
the Trustee and to the Company addressed to the Company and the Subsidiary
Guarantors.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA Section
310(b) after written request therefor by the Company, any Subsidiary
Guarantor or by any Holder who has been a bona fide Holder of a Note for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 607 and shall
fail to resign after written request therefor by the Company, any Subsidiary
Guarantor or by any Holder who has been a bona fide Holder of a Note for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Notes delivered to the Company,
the Subsidiary Guarantors and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Note for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
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(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to the Holders of Notes
in the manner provided for in Section 106. Each notice shall include the name of
the successor Trustee and the address of its Corporate Trust Office.
SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article.
SECTION 610. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
PROVIDED such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes; and in case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Notes, by receiving and holding the same, agrees with the
Company and the Trustee that none of the Company or the Trustee or any agent of
either of them shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with TIA
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under TIA Section 312(b).
SECTION 702. REPORTS BY TRUSTEE.
Within 60 days after [May 15] of each year commencing with the first [May
15] after the first issuance of Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such [May 15] if required by TIA Section 313(a).
SECTION 703. REPORTS BY COMPANY AND SUBSIDIARY GUARANTORS.
The Company and each of the Subsidiary Guarantors shall:
(1) file with the Trustee, within 15 days after the Company or such
Subsidiary Guarantor is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company or such Subsidiary Guarantor may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company or any of the Subsidiary Guarantors is not required to file
information, documents or reports pursuant to either of said Sections, then
they shall file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission; PROVIDED, HOWEVER, that any Subsidiary
Guarantor shall be relieved of its obligations under clauses (1) and (2) of
this Section to the extent that it is relieved of its obligations under
Section 13
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or Section 15(d) of the Exchange Act by the Commission pursuant to the terms
of any no-action letter addressed to the Company or such Subsidiary
Guarantor from the staff of the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any Person or group of affiliated Persons, or
permit any of its Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions, in the aggregate, would result
in a sale, assignment, transfer, lease or disposal of all or substantially all
of the properties and assets of the Company and its Subsidiaries on a
Consolidated basis to any other Person or group of affiliated Persons, unless at
the time and after giving effect thereto:
(1) either
(A) the Company shall be the surviving or continuing corporation or
(B) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or disposition,
the properties and assets of the Company substantially as an entirety
(the "Surviving Entity")
(i) shall be a corporation duly organized and validly existing
under the laws of the United States, any state thereof or the
District of Columbia and
(ii) shall, in any case, expressly assume, by a supplement
indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the Company
under the Notes and this Indenture, and this Indenture shall remain
in full force and effect;
(2) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (and treating any Indebtedness which
becomes an obligation of the Company or any of its Subsidiaries in
connection with or as a result of such transaction as having been incurred
at the time of such transaction), no Default or Event of Default shall have
occurred and be continuing;
(3) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (on the assumption that the transaction
occurred on the first day of the four-quarter period immediately prior to
the consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such PRO FORMA calculation),
the Company (or the Surviving Entity if the Company is not the continuing
obligor under this Indenture) could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the provisions of Section 1010;
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(4) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, shall have, by supplemental indenture to this
Indenture, confirmed that its respective Note Guarantees with respect to the
Notes shall apply to such Person's obligations under this Indenture and the
Notes;
(5) if any property or assets of the Company or any of its Subsidiaries
would thereupon become subject to any Lien, the provisions of Section 1012
are complied with; and
(6) the Company shall have delivered, or caused to be delivered, to the
Trustee an Officers' Certificate and an Opinion of Counsel, each to the
effect that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other transaction and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation, merger, sale, assignment, conveyance, transfer,
lease or other transaction described in, and complying with the provisions of,
Section 801 in which the Company is not the continuing corporation, the
successor Person formed or remaining shall succeed to, and be substituted for,
and may exercise every right and power of, the Company, as the case may be, and
the Company shall be discharged from all obligations and covenants under this
Indenture and the Notes, PROVIDED that, in the case of a transfer by lease, the
predecessor shall not be released from its obligations with respect to the
payment of principal (premium, if any) and interest on the Notes.
SECTION 803. NOTES TO BE SECURED IN CERTAIN EVENTS.
If, upon any such consolidation of the Company with or merger of the Company
into any other corporation, or upon any conveyance, lease or transfer of the
property of the Company substantially as an entirety to any other Person, any
property or assets of the Company would thereupon become subject to any Lien,
then unless such Lien could be created pursuant to Section 1012 without equally
and ratably securing the Notes, the Company, prior to or simultaneously with
such consolidation, merger, conveyance, lease or transfer, will as to such
property or assets, secure the Notes Outstanding (together with, if the Company
shall so determine any other Indebtedness of the Company now existing or
hereinafter created which is not subordinate in right of payment to the Notes)
equally and ratably with (or prior to) the Indebtedness which upon such
consolidation, merger, conveyance, lease or transfer is to become secured as to
such property or assets by such Lien, or will cause such Notes to be so secured.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, the Subsidiary Guarantors,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company contained
herein and in the Notes; or
(2) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee pursuant to the requirements of Section 609; or
(5) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture; PROVIDED that such action shall not adversely affect the
interests of the Holders in any material respect;
(6) to add new Subsidiary Guarantors pursuant to Section 1013;
(7) to secure the Notes pursuant to the requirements of Section 803 or
otherwise; or
(8) to comply with any requirements of the Commission in order to effect
and maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Notes, by Act of said Holders delivered to the
Company, the Subsidiary Guarantors and the Trustee, the Company, when authorized
by a Board Resolution, the Subsidiary Guarantors and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption or purchase
thereof, or change the coin or currency in which any Note or any premium or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date), or
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(2) reduce the percentage in principal amount of the Outstanding Notes,
the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section or Sections 513 and
1015, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
(b) Each Subsidiary Guarantor hereby appoints the Company as its
attorney-in-fact to execute, on its behalf, any indenture supplemental hereto to
be entered into solely for the purpose specified in Section 901(6).
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to the Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company and the Subsidiary Guarantors shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Company and the Subsidiary Guarantors, to any such supplemental
indenture may be prepared and executed by the Company and the Subsidiary
Guarantors and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
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SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Sections 901 and 902, the
Company shall give notice thereof to the Holders of each Outstanding Note
affected, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture; PROVIDED, HOWEVER, that the
Company shall not be required to give notice of any indenture supplemental
hereto entered into solely for the purpose specified in Section 901(5), (6) or
(8), notice with respect to which shall be given by the Company when it is next
required to give notice pursuant to this Section.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that it will
duly and punctually pay the principal of (and premium, if any, on) and interest
on the Notes in accordance with the terms of the Notes and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in The City of New York, an office or agency where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company or any Subsidiary Guarantor in respect of the
Notes and this Indenture may be served. The Corporate Trust Office of the
Trustee shall be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company and each of the Subsidiary Guarantors hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands. Unless otherwise specified with respect to the Notes as
contemplated by Section 301, the Company hereby designates as a Place of Payment
for the Notes the office or agency of the Trustee in the Borough of Manhattan,
The City of New York, and initially appoints Texas Commerce Trust Company of New
York, 80 Broad Street, Suite 400, New York, New York 10004, as Paying Agent to
receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such other office or agency.
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SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of (and premium, if any, on) or interest
on any of the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the Notes, it
will, on or before each due date of the principal of (and premium, if any, on),
or interest on, any Notes, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
The Company will cause each Paying Agent (other than the Trustee) to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any payment of principal (and
premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any,
on) or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper
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53
published in the English language, customarily published on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 1004. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect the corporate existence,
rights (charter and statutory) and franchises of the Company and each
Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Notwithstanding anything to the contrary in this Section 1004, the Company shall
be permitted to consolidate or merge any of its Subsidiaries with or into the
Company or any Wholly Owned Subsidiary of the Company.
SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (b) all lawful claims
for labor, materials and supplies, which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; PROVIDED, HOWEVER, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties owned by the Company or any Subsidiary
or used or held for use in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; PROVIDED, HOWEVER, that nothing in this Section shall prevent the
Company from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. INSURANCE.
The Company will at all times keep all of its and its Subsidiaries
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
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SECTION 1008. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this Section 1008, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1009. PURCHASE OF NOTES UPON A CHANGE OF CONTROL TRIGGERING EVENT.
(a) Upon the occurrence of a Change of Control Triggering Event, each Holder
shall have the right to require that the Company purchase such Holder's Notes in
whole or in part in integral multiples of $1,000 (the "Change of Control
Purchase Offer"), at a purchase price (the "Change of Control Purchase Price")
in cash in an amount equal to 101% of the principal amount thereof, together
with accrued and unpaid interest, if any, to the date of purchase (the "Change
of Control Purchase Date"), in accordance with the procedures set forth in
paragraphs (c) and (d) of this Section.
(b) Upon the occurrence of a Change of Control Triggering Event and prior to
the mailing of the notice to Holders provided for in paragraph (c) below, the
Company covenants to either (x) repay in full all Indebtedness under the Credit
Agreement or offer to repay in full all such Indebtedness and to repay the
Indebtedness of each of the Banks that has accepted such offer or (y) obtain any
requisite consent under the Credit Agreement to permit the purchase of the Notes
as provided for in paragraph (c) below or take any other action as may be
required under the Credit Agreement to permit such purchase.
(c) Within 30 days following any Change of Control Triggering Event, the
Company shall give to each Holder of the Notes in the manner provided in Section
106 a notice stating:
(1) that a Change of Control Triggering Event has occurred and that such
Holder has the right to require the Company to purchase in whole or in part
such Holder's Notes at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control Triggering Event (including but not limited to information with
respect to PRO FORMA historical income, cash flow and capitalization after
giving effect to the Change of Control);
(3) the Change of Control Purchase Date which shall be no earlier than
30 days nor later than 60 days from the date such notice is mailed or such
later date as is necessary to comply with the Exchange Act;
(4) that any Note, or portion thereof, not tendered will continue to
accrue interest;
(5) that, unless the Company defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment of the Change of
Control Purchase Price pursuant to the Change of Control Purchase Offer
shall cease to accrue interest after the Change of Control Purchase Date;
and
(6) the instructions a Holder must follow in order to have its Notes
purchased in accordance with paragraph (d) of this Section.
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(d) Holders electing to have Notes purchased will be required to surrender
such Notes to the Company at the address specified in the notice at least five
Business Days prior to the Change of Control Purchase Date. Holders will be
entitled to withdraw their election if the Company receives, not later than five
Business Days prior to the Change of Control Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase by the Holder as to which
his election is to be withdrawn and a statement that such Holder is withdrawing
his election to have such Notes purchased. Holders whose Notes are purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
(e) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and other applicable securities
laws and regulations in connection with a Change of Control Purchase Offer.
SECTION 1010. LIMITATION ON INDEBTEDNESS.
The Company will not, and will not permit any of its Subsidiaries to,
create, assume, or directly or indirectly guarantee or in any other manner
become directly or indirectly liable for the payment of, or otherwise incur
(collectively, "incur"), any Indebtedness (including any Acquired Indebtedness)
other than Permitted Indebtedness, unless, at the time of such event (and after
giving effect on a PRO FORMA basis to (i) the incurrence of such Indebtedness;
(ii) the incurrence, repayment or retirement of any other Indebtedness by the
Company or its Subsidiaries since the first day of such four-quarter period as
if such Indebtedness was incurred, repaid or retired at the beginning of such
four-quarter period; and (iii) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any company,
entity or business acquired or disposed of by the Company or its Subsidiaries,
as the case may be, since the first day of such four-quarter period, as if such
acquisition or disposition had occurred at the beginning of such four-quarter
period), the Consolidated Fixed Charge Coverage Ratio of the Company for the
four full fiscal quarters immediately preceding such event, taken as one period
and calculated on the assumption that such Indebtedness had been incurred on the
first day of such four-quarter period and, in the case of Acquired Indebtedness,
on the assumption that the related acquisition (whether by means of purchase,
merger or otherwise) also had occurred on such date with the appropriate
adjustments with respect to such acquisition being included in such PRO FORMA
calculation, would have been at least equal to 1.75 to 1.
SECTION 1011. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company will not, and will not permit any Subsidiary of the Company
to, directly or indirectly:
(1) declare or pay any dividend on, or make any distribution to, the
holders of, any Capital Stock of the Company (other than dividends or
distributions payable solely in shares of Qualified Capital Stock of the
Company or in options, warrants or other rights to purchase such Qualified
Capital Stock);
(2) purchase, redeem or otherwise acquire or retire for value, directly
or indirectly, any Capital Stock of the Company or any Subsidiary or any
options, warrants or other rights to acquire such Capital Stock;
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56
(3) make any principal payment on, or redeem, repurchase, defease or
otherwise acquire or retire for value, prior to any scheduled repayment,
sinking fund payment or maturity, any Indebtedness of the Company which is
subordinate in right of payment to the Notes or of any Subsidiary Guarantor
that is subordinate to such Subsidiary Guarantor's Note Guarantee;
(4) declare or pay any dividend or distribution on any Capital Stock of
any Subsidiary of the Company to any Person (other than the Company or any
Wholly Owned Subsidiary of the Company) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Subsidiary of the
Company held by any Person (other than the Company or any Wholly Owned
Subsidiary of the Company);
(5) create, assume or suffer to exist any guarantee of Indebtedness of
any Affiliate of the Company (other than a Wholly Owned Subsidiary of the
Company in accordance with the terms of the Indenture); or
(6) make any Investment (other than any Permitted Investment) in any
Person
(such payments described in clauses (1) through (6) and not excepted therefrom
are collectively referred to herein as "Restricted Payments") unless at the time
of and immediately after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in accordance with the
provisions described under Section 1010.
(b) Notwithstanding paragraph (a) above, the Company and its Subsidiaries
may take the following actions so long as (with respect to clauses (2), (3), and
(4), below) no Default or Event of Default shall have occurred and be
continuing:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied
with the provisions of paragraph (a) above;
(2) the purchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company, in exchange for, or out
of the net cash proceeds of, a substantially concurrent issuance and sale
(other than to a Subsidiary) of shares of Capital Stock of the Company
(other than Redeemable Capital Stock, unless the redemption provisions of
such Redeemable Capital Stock prohibit the redemption thereof prior to the
date on which the Capital Stock to be acquired or retired was by its terms
required to be redeemed);
(3) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness (other than Redeemable
Capital Stock) in exchange for or out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a Subsidiary) of
shares of Capital Stock of the Company (other than Redeemable Capital Stock,
unless the redemption provisions of such Redeemable Capital Stock prohibit
the redemption thereof prior to the Stated Maturity of the Subordinated
Indebtedness to be acquired or retired); and
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(4) the purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness (other than Redeemable
Capital Stock) in exchange for, or out of the net cash proceeds of a
substantially concurrent incurrence or sale (other than to a Subsidiary) of,
new Subordinated Indebtedness of the Company so long as
(A) the principal amount of such new Subordinated Indebtedness does
not exceed the principal amount (or, if such Subordinated Indebtedness
being refinanced provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration thereof,
such lesser amount as of the date of determination) of the Subordinated
Indebtedness being so purchased, redeemed, defeased, acquired or retired,
PLUS the amount of any premium required to be paid in connection with
such refinancing pursuant to the terms of the Subordinated Indebtedness
refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing, PLUS the amount of
expenses of the Company incurred in connection with such refinancing,
(B) such new Subordinated Indebtedness is subordinated to the Notes
to the same extent as such Subordinated Indebtedness so purchased,
redeemed, defeased, acquired or retired, and
(C) such new Subordinated Indebtedness has an Average Life longer
than the Average Life of the Notes and a final Stated Maturity of
principal later than the final Stated Maturity of principal of the Notes.
SECTION 1012. LIMITATION ON LIENS.
The Company will not, and will not permit any Subsidiary of the Company to,
directly or indirectly, create, incur, assume or suffer to exist any Lien (other
than Permitted Liens) of any kind upon any Principal Property or upon any shares
of stock or indebtedness of any Subsidiary of the Company now owned or acquired
after the date of this Indenture, or any income or profits therefrom, unless (a)
the Notes are directly secured equally and ratably with (or prior to in the case
of Liens with respect to Subordinated Indebtedness) the obligation or liability
secured by such Lien or (b) any such Lien is in favor of the Company or any
Subsidiary Guarantor.
SECTION 1013. ADDITIONAL GUARANTEES.
If the Company or any of its Subsidiaries shall acquire or form a
Subsidiary, the Company will cause any such Subsidiary (other than an Equity
Store or Business Development Venture, PROVIDED that such Equity Store or
Business Development Venture does not guarantee the Senior Indebtedness of any
other Person) that is or becomes a Significant Subsidiary or that guarantees any
Senior Indebtedness of the Company or of any Subsidiary Guarantor to become a
Subsidiary Guarantor with respect to the Notes. Any such Subsidiary shall become
a Subsidiary Guarantor by (i) executing and delivering to the Trustee a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee pursuant to which such Subsidiary shall guarantee all of the obligations
of the Company with respect to the Notes issued under this Indenture on a senior
basis and (ii) delivering to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee to the effect that a supplemental indenture has been
duly executed and delivered by such Subsidiary and is in compliance with the
terms of this Indenture.
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SECTION 1014. PROVISION OF FINANCIAL STATEMENTS.
Whether or not the Company is subject to Section 13(a), 13(c) or 15(d) of
the Exchange Act, the Company will file with the Commission the annual reports,
quarterly reports and other documents that the Company is or would have been
required to file with the Commission pursuant to such Section 13(a), 13(c) or
15(d) of the Exchange Act if the Company were so subject, such documents to be
filed with the Commission on or prior to the respective dates (the "Required
Filing Dates") by which the Company would have been required so to file such
documents if the Company were so subject. The Company will also in any event
within 15 days of each Required Filing Date (within 30 days of such Required
Filing Date for any reports filed on Form 10-K) (i) transmit by mail to each
Holder, as its name and address appears in the security register, without cost
to such holder and (ii) file with the Trustee copies of the annual reports,
quarterly reports and other documents which the Company is or would have been
required to file with the Commission pursuant to Section 13(a), 13(c) or 15(d)
of the Exchange Act if the Company were so subject.
SECTION 1015. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 803 or Sections 1007 through 1014,
inclusive, if before or after the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Notes, by Act of such
Holders, waive such compliance in such instance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. RIGHT OF REDEMPTION.
The Notes may be redeemed, at the option of the Company, as a whole or from
time to time in part, at any time on or after , 1999, subject to
the conditions and at the Redemption Prices specified in the form of Note,
together with accrued interest to the Redemption Date.
Up to 20% of the initial aggregate principal amount of the Notes may be
redeemed on or prior to , 1997, at the option of the Company,
within 180 days of a Public Equity Offering with the net proceeds of such
offering at a redemption price equal to % of the principal amount thereof,
together with accrued and unpaid interest, if any, to the date of redemption
(subject to the right of holders of record on relevant record dates to receive
interest due on relevant interest payment dates); PROVIDED that after giving
effect to such redemption at least $200 million aggregate principal amount of
the Notes remain outstanding.
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SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section 1101
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed, the particular Notes to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Notes not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions of the principal of Notes;
PROVIDED, HOWEVER, that no such partial redemption shall reduce the portion of
the principal amount of a Note not redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Notes shall relate, in the case of any
Note redeemed or to be redeemed only in part, to the portion of the principal
amount of such Note which has been or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in Section
106 not less than 30 nor more than 60 days prior to the Redemption Date, to each
Holder of Notes to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Notes are to be redeemed, the
identification by CUSIP Numbers, if any, (and, in the case of a partial
redemption, the principal amounts) of the particular Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Note, or the
portion thereof, to be redeemed, and that interest thereon will cease to
accrue on and after said date, and
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(5) the place or places where such Notes are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and accrued interest on, any
Notes, or any portions thereof, to be redeemed on that date.
SECTION 1107. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Notes, or
portions thereof, shall cease to bear interest. Upon surrender of any such Note
for redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued interest, if any, to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Notes, or one or more Predecessor Notes, registered as such at the close
of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Notes.
SECTION 1108. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part (pursuant to the provisions of
this Article shall be surrendered at the office or agency of the Company
maintained for such purpose pursuant to Section 1002 (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holders attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes, of any authorized
denomination as requested by such Holder, in an aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Note so
surrendered.
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ARTICLE TWELVE
NOTE GUARANTEES
SECTION 1201. NOTE GUARANTEES.
Subject to the provisions of this Article Twelve, each Subsidiary Guarantor
hereby irrevocably and unconditionally guarantees, jointly and severally, on a
senior basis to each Holder and to the Trustee, on behalf of the Holders, (i)
the due and punctual payment of the principal of and interest on each Note, when
and as the same shall become due and payable, whether at Stated Maturity or
purchase upon a Change of Control Triggering Event, and whether by declaration
of acceleration, Change of Control Triggering Event, call for redemption or
otherwise, the due and punctual payment of interest on the overdue principal of
and interest, if any, on the Notes, to the extent lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of such Note and this Indenture and
(ii) in the case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that the same will be promptly paid in full when
due or performed in accordance with the terms of the extension or renewal, at
Stated Maturity or purchase upon a Change of Control Triggering Event, and
whether by declaration of acceleration, Change of Control Triggering Event, call
for redemption or otherwise (the obligations in clauses (i) and (ii) hereof
being the "Guaranteed Obligations").
Without limiting the generality of the foregoing, each Subsidiary
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Company to the Holders or the
Trustee under the Notes and the Indenture but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company. The Subsidiary
Guarantors hereby agree that their obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Note or this Indenture, any failure
to enforce the provisions of any such Note or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto, by any
Holder or any other circumstances which may otherwise constitute a legal or
equitable discharge or defense of the Company or a surety or guarantor.
The Subsidiary Guarantors hereby waive diligence, presentment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a proceeding first against the Company, the benefit of
discussion, protest or notice with respect to any such Note or the Indebtedness
evidenced thereby and all demands whatsoever (except as specified above), and
covenant that the Guaranteed Obligations will not be discharged as to any such
Note except by payment in full of such Guaranteed Obligations and as provided in
Sections 401, 1102 and 1205.
Each Subsidiary Guarantor further agrees that, as between such Subsidiary
Guarantor and the Holders, (i) the maturity of the Guaranteed Obligations may be
accelerated as provided in Article Five, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Company or any
other Subsidiary Guarantor in respect of the Guaranteed Obligations, and (ii) in
the event of any declaration of acceleration of such Guaranteed Obligations as
provided in Article Five, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary
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Guarantor. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article Five, the Trustee shall promptly
make a demand for payment on any Notes in respect of which the Guaranteed
Obligations provided for in this Article Twelve are not discharged.
Each Subsidiary Guarantor hereby irrevocably waives any claim or other
rights that it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Subsidiary
Guarantor's obligations under this Indenture, or any other document or
instrument including, without limitation, any right of reimbursement,
exoneration, contribution, indemnification, any right to participate in any
claim or remedy of the Holders against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company,
directly or indirectly, in cash or other property or in any other manner,
payment or security on account of such claim or other rights. Each Subsidiary
Guarantor shall be subrogated to all rights of the Holders of the Notes pursuant
to any Note Guarantee against the Company in respect of any amounts paid by such
Subsidiary Guarantor on account of such Note pursuant to the provisions of this
Indenture; PROVIDED, HOWEVER, that no Subsidiary Guarantor shall be entitled to
enforce or to receive any payments arising out of, or based upon such right of
subrogation until the principal of (and premium, if any) and interest on all
Notes issued hereunder shall have been paid in full to the Holders entitled
thereto. If any amount shall be paid to any Subsidiary Guarantor in violation of
this paragraph and the Guaranteed Obligations shall not have been paid in full,
such amount shall be deemed to have been paid to such Subsidiary Guarantor for
the benefit of, and held in trust for the benefit of, the Holders, and shall
forthwith be paid to the Trustee. Each Subsidiary Guarantor acknowledges that it
will receive direct and indirect benefits from the issuance of the Notes and
that the waiver set forth in this Section 1201 is knowingly made in
contemplation of such benefits.
Without limiting the generality of the foregoing, the Subsidiary Guarantors
hereby expressly and specifically waive the benefits of Section 26-7 through
26-9 of the General Statutes of North Carolina, as amended from time to time,
and any similar statute or law of any other jurisdiction, as the same may be
amended from time to time.
SECTION 1202. OBLIGATIONS OF THE SUBSIDIARY GUARANTORS UNCONDITIONAL.
Nothing contained in this Article Twelve, elsewhere in this Indenture or in
any Note is intended to or shall impair, as between the Subsidiary Guarantors
and the Holders, the obligation of the Subsidiary Guarantors, which obligations
are independent of the obligations of the Company under the Notes and this
Indenture and are absolute and unconditional, to pay to the Holders the
Guaranteed Obligations as and when the same shall become due and payable in
accordance with the provisions of this Indenture, or is intended to or shall
affect the relative rights of the Holders and creditors of the Subsidiary
Guarantors, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture. Each payment to be made by any Subsidiary
Guarantor hereunder in respect of the Guaranteed Obligations shall be payable in
the currency or currencies in which such Guaranteed Obligations are denominated.
<PAGE>
63
SECTION 1203. RANKING OF NOTE GUARANTEES.
Each Subsidiary Guarantor covenants and agrees, and each Holder of a Note by
his acceptance thereof likewise covenants and agrees, that each Note Guarantee
will be an unsecured senior obligation of the Subsidiary Guarantor issuing such
Note Guarantee, ranking PARI PASSU in right of payment with all other existing
and future Senior Indebtedness of such Subsidiary Guarantor and senior in right
of payment to any future Indebtedness of such Subsidiary Guarantor that is
expressly subordinated to Senior Indebtedness of such Subsidiary Guarantor.
SECTION 1204. LIMITATION OF NOTE GUARANTEES.
The Company and each Subsidiary Guarantor, and each Holder of a Note by his
acceptance thereof, hereby confirm that it is the intention of all such parties
that each Subsidiary Guarantor shall be liable under this Indenture only for
amounts aggregating up to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable state law.
To effectuate the foregoing intention, the Holders hereby irrevocably agree that
in the event that any such Note Guarantee would constitute or result in a
violation of any applicable fraudulent conveyance or similar law of any relevant
jurisdiction, the liability of the Subsidiary Guarantor under such Note
Guarantee shall be reduced to the maximum amount, after giving effect to all
other contingent and fixed liabilities of such Subsidiary Guarantor, permissible
under the applicable fraudulent conveyance or similar law.
SECTION 1205. RELEASE OF SUBSIDIARY GUARANTORS.
(a) Any Subsidiary Guarantor shall be released from and relieved of its
obligations under this Article Twelve (1) upon defeasance in accordance with
Section 1302, (2) upon the payment in full of all the Guaranteed Obligations or
(3) upon the sale by the Company or any Subsidiary of such Subsidiary Guarantor
to any Person other than a Subsidiary of the Company provided that such sale
does not result in a sale, assignment, transfer, lease or disposal of all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a Consolidated basis. Upon the delivery by the Company to the
Trustee of an Officers' Certificate and, if requested by the Trustee, an Opinion
of Counsel to the effect that the transaction giving rise to the release of such
obligations was made by the Company in accordance with the provisions of this
Indenture and the Notes, the Trustee shall execute any documents reasonably
required in order to evidence the release of the Subsidiary Guarantors from
their obligations. If any of the Guaranteed Obligations are revived and
reinstated after the termination of such Note Guarantee, then all of the
obligations of the Subsidiary Guarantors under such Note Guarantee shall be
revived and reinstated as if such Note Guarantee had not been terminated until
such time as the Guaranteed Obligations are paid in full, and the Subsidiary
Guarantors shall execute any documents reasonably satisfactory to the Trustee
evidencing such revival and reinstatement.
(b) Upon (i) the sale or disposition of all of the Common Stock of a
Subsidiary Guarantor (by merger or otherwise) to a Person other than the Company
and which sale or disposition is otherwise in compliance with the terms of this
Indenture, or (ii) the unconditional and full release in writing as provided
herein of such Subsidiary Guarantor from all Indebtedness
<PAGE>
64
arising hereunder, such Subsidiary Guarantor shall be deemed released from all
obligations under this Article Twelve; PROVIDED, HOWEVER, that any such
termination upon such sale or disposition shall occur if and only to the extent
that all obligations of such Subsidiary Guarantor under all of its guarantees
of, and under all of its pledges of assets or other security interests which
secure, Indebtedness of the Company or any Subsidiary, shall also terminate upon
such sale or disposition. Upon the delivery by the Company to the Trustee of an
Officers' Certificate and, if requested by the Trustee, an Opinion of Counsel to
the effect that the transaction giving rise to the release of such obligations
was made in accordance with the provisions of this Indenture and the Notes, the
Trustee shall execute any documents reasonably required in order to evidence the
release of such Subsidiary Guarantor from its obligations. Any Subsidiary
Guarantor not so released remains liable for the full amount of principal of
(and premium, if any) and interest on the Notes as provided in this Article
Twelve.
SECTION 1206. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
Except as set forth in Section 1205 and in Articles Eight and Ten hereof,
nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the Company or a
Subsidiary Guarantor or shall prevent any sale or conveyance of the property of
a Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or a Subsidiary Guarantor.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option and at any time, with respect to the Notes,
elect to have either Section 1302 or Section 1303 be applied to all Outstanding
Notes upon compliance with the conditions set forth below in this Article
Thirteen.
SECTION 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 1301 of the option applicable to
this Section 1302, the Company shall be deemed to have been discharged from its
obligations with respect to all Outstanding Notes on the date the conditions set
forth in Section 1304 are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding Notes, which
shall thereafter be deemed to be "Outstanding" only for the purposes of Section
1305 and the other Sections of this Indenture referred to in (A) and (B) below,
and to have satisfied all its other obligations under such Notes and this
Indenture insofar as such Notes are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Outstanding Notes to receive payments in
respect of the principal of (and premium, if any, on) and interest on such Notes
when such payments are due or on the Redemption Date with respect to such Notes,
as the case may be, (B) the Company's obligations with respect to such Notes
under Sections 304, 305, 306, 1002 and 1003, (C) the rights,
<PAGE>
65
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article Thirteen. Subject to compliance with this Article Thirteen, the Company
may exercise its option under this Section 1302 notwithstanding the prior
exercise of its option under Section 1303 with respect to the Notes.
SECTION 1303. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 1301 of the option applicable to
this Section 1303, the Company shall be released from its obligations under any
covenant contained in Section 801(3) and Section 803 and in Sections 1007
through 1015 with respect to the Outstanding Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Notes shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 501(3), but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section 1302
or Section 1303 to the Outstanding Notes:
(1) the Company shall irrevocably have deposited with the Trustee (or
another trustee satisfying the requirements of Section 607 who shall agree
to comply with the provisions of this Article Thirteen applicable to it) in
trust, for the benefit of the Holders, cash in United States dollars, U.S.
Government Obligations or a combination thereof in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge the principal of, and premium, if any, and
interest on the Outstanding Notes on the Stated Maturity or on an optional
redemption date (such date being referred to as the "Defeasance Redemption
Date"), as the case may be, if in the case of a Defeasance Redemption Date
prior to electing to exercise either defeasance or covenant defeasance, the
Company has delivered to the Trustee an irrevocable notice to redeem all of
the outstanding Notes on such Defeasance Redemption Date;
(2) in the case of an election under Section 1302, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States stating that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (y) since the
date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel in the United States shall confirm that, the Holders of
the
<PAGE>
66
Outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred;
(3) in the case of an election under Section 1303, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States to the effect that the Holders of the Outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred;
(4) no Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit or, insofar as
paragraphs (8) and (9) of Section 501 hereof are concerned, at any time
during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period);
(5) such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Company or any Subsidiary
Guarantor is a party or by which it is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders or any Subsidiary Guarantor over the other
creditors of the Company or any Subsidiary Guarantor or with the intent of
defecting, hindering, delaying or defrauding creditors of the Company, any
Subsidiary Guarantor or others; and
(7) the Company shall have delivered to the Trustee an Officers'
Certificate stating that all conditions precedent provided for relating to
either the defeasance under Section 1302 or the covenant defeasance under
Section 1303 (as the case may be) have been complied with.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to
<PAGE>
67
Section 1304 or the principal and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of the Outstanding Notes.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article.
SECTION 1306. REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1302 or 1303, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1305, and the Company shall execute all documents reasonably satisfactory to the
Trustee evidencing such revival and reinstatement; PROVIDED, HOWEVER, that if
the Company makes any payment of principal of (or premium, if any, on) or
interest on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
This Indenture may be signed in any number of counterparts each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture.
<PAGE>
68
IN WITNESS WHEREOF, the parties hereto have caused this 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.
FLEMING COMPANIES, INC.
SEAL By ___________________________________
Title:
Attest: __________________________
Title:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By ___________________________________
Title:
Attest: __________________________
Title:
[ATI, Inc.
Badger Markets, Inc.
Baker's Supermarkets, Inc.
Ball Motor Service, Inc.
Boogaart Stores of Nebraska, Inc.
Central Park Super Duper, Inc.
Commercial Cold/Dry Storage Company
Consumers Markets, Inc.
D.L. Food Stores, Inc.
Del-Arrow Super Duper, Inc.
Festival Foods, Inc.
Fleming Direct Sales Corporation
Fleming Foods East, Inc.
Fleming Foods of Alabama, Inc.
Fleming Foods of Ohio, Inc.
Fleming Foods of Tennessee, Inc.
Fleming Foods of Texas, Inc.
Fleming Foods of Virginia, Inc.
Fleming Foods South, Inc.
Fleming Foods West, Inc.
Fleming Foreign Sales Corporation
Fleming Franchising, Inc.
Fleming Holdings, Inc.
Fleming International, Ltd.
<PAGE>
69
Fleming Site Media, Inc.
Fleming Supermarkets of Florida, Inc.
Fleming Technology Leasing Company,
Inc.
Fleming Transportation Service, Inc.
Food Brands, Inc.
Food-4-Less, Inc.
Food Holdings, Inc.
Food Saver of Iowa, Inc.
Gateway Development Co., Inc.
Gateway Food Distributors, Inc.
Gateway Foods, Inc.
Gateway Foods of Altoona, Inc.
Gateway Foods of Pennsylvania, Inc.
Gateway Foods of Twin Ports, Inc.
Gateway Foods Service Corporation
Grand Central Leasing Corporation
Great Bend Supermarkets, Inc.
Hub City Transportation, Inc.
Kensington and Harlem, Inc.
LAS, Inc.
Ladysmith East IGA, Inc.
Ladysmith IGA, Inc.
Lake Markets, Inc.
M&H Desoto, Inc.
M&H Financial Corp.
M&H Realty Corp.
Malone & Hyde, Inc.
Malone & Hyde of Lafayette, Inc.
Manitowoc IGA, Inc.
Moberly Foods, Inc.
Mt. Morris Super Duper, Inc.
Niagara Falls Super Duper, Inc.
Northern Supermarkets of Oregon, Inc.
Northgate Plaza, Inc.
109 West Main Street, Inc.
121 East Main Street, Inc.
Peshtigo IGA, Inc.
Piggly Wiggly Corporation
Quality Incentive Company, Inc.
Rainbow Transportation Services, Inc.
Route 16, Inc.
Route 219, Inc.
Route 417, Inc.
Richland Center IGA, Inc.
Scrivner, Inc.
Scrivner-Food Holdings, Inc.
<PAGE>
70
Scrivner of Alabama, Inc.
Scrivner of Illinois, Inc.
Scrivner of Iowa, Inc.
Scrivner of Kansas, Inc.
Scrivner of New York, Inc.
Scrivner of North Carolina, Inc.
Scrivner of Pennsylvania, Inc.
Scrivner of Tennessee, Inc.
Scrivner of Texas, Inc.
Scrivner Super Stores of Illinois,
Inc.
Scrivner Super Stores of Iowa, Inc.
Scrivner Transportation, Inc.
Sehon Foods, Inc.
Selected Products, Inc.
Sentry Markets, Inc.
Smar Trans, Inc.
South Ogden Super Duper, Inc.
Southern Supermarkets, Inc. (TX)
Southern Supermarkets, Inc. (OK)
Southern Supermarkets of Louisiana,
Inc.
Star Groceries, Inc.
Store Equipment, Inc.
Sundries Service, Inc.
Switzer Foods, Inc.
35 Church Street, Inc.
Thompson Food Basket, Inc.
29 Super Market, Inc.
27 Slayton Avenue, Inc.
WPC, Inc.
Each, a Subsidiary Guarantor
By ___________________________________
Name: John M. Thompson
Title: Vice President and Treasurer
(Chief Financial Officer)]
Attest:
__________________________________
[Secretary]
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FLEMING COMPANIES, INC.
ISSUER
TO
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
TRUSTEE
THE SUBSIDIARY GUARANTORS NAMED HEREIN
GUARANTORS
------------------------
Indenture
Dated as of , 1994
------------------------
$150,000,000
Floating Rate Senior Notes due 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
FLEMING COMPANIES, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT
OF 1939 AND INDENTURE, DATED AS OF , 1994
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- ----------------------- ----------------------
<S> <C> <C>
Section310 (a)(1) .................................................................................... 607[(a)]
(a)(2) .................................................................................... 607[(a)]
(b) .................................................................................... [607(b),] 608
Section312 (c) .................................................................................... 701
Section314 (a) .................................................................................... 703
(a)(4) .................................................................................... 1008(a)
(c)(1) .................................................................................... 102
(c)(2) .................................................................................... 102
(e) .................................................................................... 102
Section315 (b) .................................................................................... 601
Section316 (a)(last
sentence) .................................................................................... 101 ("Outstanding")
(a)(1)(A) .................................................................................... 502, 512
(a)(1)(B) .................................................................................... 513
(b) .................................................................................... 508
(c) .................................................................................... 104(d)
Section317 (a)(1) .................................................................................... 503
(a)(2) .................................................................................... 504
(b) .................................................................................... 1003
Section318 (a) .................................................................................... 111
</TABLE>
- ------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
PARTIES..............................................................................
RECITALS OF THE COMPANY..............................................................
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions..........................................................................
Acquired Indebtedness................................................................
Act..................................................................................
Affiliate............................................................................
Applicable LIBOR Rate................................................................
Average Life to Stated Maturity......................................................
Bankruptcy Law.......................................................................
Banks................................................................................
Board of Directors...................................................................
Board Resolution.....................................................................
Business Day.........................................................................
Business Development Program.........................................................
Business Development Venture.........................................................
Capital Lease Obligation.............................................................
Capital Stock........................................................................
Change of Control....................................................................
Change of Control Purchase Date......................................................
Change of Control Purchase Offer.....................................................
Change of Control Purchase Price.....................................................
Change of Control Triggering Event...................................................
Commission...........................................................................
Common Stock.........................................................................
Company..............................................................................
Company Request or Company Order.....................................................
Consolidated.........................................................................
Consolidated Fixed Charge Coverage Ratio.............................................
Consolidated Income Tax Expense......................................................
Consolidated Interest Expense........................................................
Consolidated Net Income..............................................................
</TABLE>
- ------------------------
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
ii
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
Consolidated Net Tangible Assets.....................................................
Consolidated Non-Cash Charges........................................................
Corporate Trust Office...............................................................
Corporation..........................................................................
Credit Agreement.....................................................................
Currency Agreements..................................................................
Default..............................................................................
Defaulted Interest...................................................................
Equity Store.........................................................................
Event of Default.....................................................................
Exchange Act.........................................................................
Floating Rate Note Indenture.........................................................
Floating Rate Interest Payment Date..................................................
Fixed Rate Notes.....................................................................
Fixed Rate Interest Payment Date.....................................................
Generally Accepted Accounting Principles.............................................
Guaranteed Debt......................................................................
Guaranteed Obligations...............................................................
Holder...............................................................................
Indebtedness.........................................................................
Indenture............................................................................
Initial Quarterly Period.............................................................
Interest Payment Date................................................................
Interest Rate Agreements.............................................................
Interest Rate Determination Date.....................................................
Investment...........................................................................
Investment Grade.....................................................................
LIBOR Fraction.......................................................................
Lien.................................................................................
Managing Agent.......................................................................
Maturity.............................................................................
Moody's..............................................................................
Note Guarantee.......................................................................
Notes................................................................................
Offering.............................................................................
Officers' Certificate................................................................
Opinion of Counsel...................................................................
</TABLE>
<PAGE>
iii
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
Outstanding..........................................................................
Paying Agent.........................................................................
Permitted Indebtedness...............................................................
Permitted Investment.................................................................
Permitted Liens......................................................................
Permitted Receivables Financing......................................................
Person...............................................................................
Predecessor Note.....................................................................
Preferred Stock......................................................................
Principal Property...................................................................
Prior Indentures.....................................................................
Public Equity Offering...............................................................
Qualified Capital Stock..............................................................
Quarterly Period.....................................................................
Rating Agency........................................................................
Rating Category......................................................................
Rating Decline.......................................................................
Redeemable Capital Stock.............................................................
Redemption Date......................................................................
Redemption Price.....................................................................
Reference Banks......................................................................
Regular Record Date..................................................................
Responsible Officer..................................................................
Reuters Screen LIBO Page.............................................................
Securities Act.......................................................................
Security Register and Security Registrar.............................................
Senior Indebtedness..................................................................
Significant Subsidiary...............................................................
S&P..................................................................................
Special Record Date..................................................................
Stated Maturity......................................................................
Subordinated Indebtedness............................................................
Subsidiary...........................................................................
Subsidiary Guarantor.................................................................
Temporary Cash Investments...........................................................
Transferred Receivables..............................................................
Trust Indenture Act or TIA...........................................................
</TABLE>
<PAGE>
iv
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
Trustee..............................................................................
U.S. Government Obligations..........................................................
Vice President.......................................................................
Voting Stock.........................................................................
Wholly Owned Subsidiary..............................................................
Working Day..........................................................................
SECTION 102. Compliance Certificates and Opinions.................................................
103. Form of Documents Delivered to Trustee...............................................
104. Acts of Holders......................................................................
105. Notices, Etc., to Trustee, Company and Subsidiary Guarantors.........................
106. Notice to Holders; Waiver............................................................
107. Effect of Headings and Table of Contents.............................................
108. Successors and Assigns...............................................................
109. Separability Clause..................................................................
110. Benefits of Indenture................................................................
111. Governing Law........................................................................
112. Legal Holidays.......................................................................
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally......................................................................
202. Form of Face of Note.................................................................
203. Form of Reverse of Note..............................................................
204. Form of Trustee's Certificate of Authentication......................................
ARTICLE THREE
THE NOTES
SECTION 301. Title and Terms......................................................................
302. Denominations........................................................................
303. Execution, Authentication, Delivery and Dating.......................................
304. Temporary Notes......................................................................
305. Registration, Registration of Transfer and Exchange..................................
306. Mutilated, Destroyed, Lost and Stolen Notes..........................................
307. Payment of Interest; Interest Rights Preserved.......................................
308. Persons Deemed Owners................................................................
309. Cancellation.........................................................................
310. CUSIP Numbers........................................................................
</TABLE>
<PAGE>
v
<TABLE>
<CAPTION>
SECTION PAGE
- --------------------- -----
<C> <S> <C>
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture..............................................
402. Application of Trust Money...........................................................
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default....................................................................
502. Acceleration of Maturity; Rescission and Annulment...................................
503. Collection of Indebtedness and Suits for Enforcement by Trustee......................
504. Trustee May File Proofs of Claim.....................................................
505. Trustee May Enforce Claims Without Possession of Notes...............................
506. Application of Money Collected.......................................................
507. Limitation on Suits..................................................................
508. Unconditional Right of Holders to Receive Principal, Premium and Interest............
509. Restoration of Rights and Remedies...................................................
510. Rights and Remedies Cumulative.......................................................
511. Delay or Omission Not Waiver.........................................................
512. Control by Holders...................................................................
513. Waiver of Past Defaults..............................................................
514. Waiver of Stay or Extension Laws.....................................................
515. Notice of Defaults...................................................................
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults...................................................................
602. Certain Rights of Trustee............................................................
603. Trustee Not Responsible for Recitals or Issuance of Notes............................
604. May Hold Notes.......................................................................
605. Money Held in Trust..................................................................
606. Compensation and Reimbursement.......................................................
607. Corporate Trustee Required; Eligibility..............................................
608. Resignation and Removal; Appointment of Successor....................................
609. Acceptance of Appointment by Successor...............................................
610. Merger, Conversion, Consolidation or Succession to Business..........................
</TABLE>
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS
SECTION 701. Disclosure of Names and Addresses of Holders.........................................
702. Reports by Trustee...................................................................
703. Reports by Company and Subsidiary Guarantors.........................................
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.................................
802. Successor Substituted................................................................
803. Notes to Be Secured in Certain Events................................................
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders...................................
902. Supplemental Indentures With Consent of Holders......................................
903. Execution of Supplemental Indentures.................................................
904. Effect of Supplemental Indentures....................................................
905. Conformity with Trust Indenture Act..................................................
906. Reference in Notes to Supplemental Indentures........................................
907. Notice of Supplemental Indentures....................................................
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, If Any, and Interest..................................
1002. Maintenance of Office or Agency......................................................
1003. Money for Note Payments to Be Held in Trust..........................................
1004. Corporate Existence..................................................................
1005. Payment of Taxes and Other Claims....................................................
1006. Maintenance of Properties............................................................
1007. Insurance............................................................................
1008. Statement by Officers as to Default..................................................
1009. Purchase of Notes Upon a Change of Control Triggering Event..........................
1010. Limitation on Indebtedness...........................................................
1011. Limitation on Restricted Payments....................................................
1012. Limitation on Liens..................................................................
1013. Additional Guarantees................................................................
1014. Provision of Financial Statements....................................................
1015. Waiver of Certain Covenants..........................................................
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ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Right of Redemption..................................................................
1102. Applicability of Article.............................................................
1103. Election to Redeem; Notice to Trustee................................................
1104. Selection by Trustee of Notes to Be Redeemed.........................................
1105. Notice of Redemption.................................................................
1106. Deposit of Redemption Price..........................................................
1107. Notes Payable on Redemption Date.....................................................
1108. Notes Redeemed in Part...............................................................
ARTICLE TWELVE
NOTE GUARANTEES
SECTION 1201. Note Guarantees......................................................................
1202. Obligations of the Subsidiary Guarantors Unconditional...............................
1203. Ranking of Note Guarantee............................................................
1204. Limitation of Note Guarantees........................................................
1205. Release of Subsidiary Guarantors.....................................................
1206. Subsidiary Guarantors May Consolidate, Etc. on Certain Terms.........................
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.........................
1302. Defeasance and Discharge.............................................................
1303. Covenant Defeasance..................................................................
1304. Conditions to Defeasance or Covenant Defeasance......................................
1305. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other
Miscellaneous Provisions............................................................
1306. Reinstatement........................................................................
ARTICLE FOURTEEN
SINKING FUND
SECTION 1401. Mandatory Sinking Fund Payments......................................................
1402. Satisfaction of Sinking Fund Payments with Notes.....................................
1403. Redemption of Notes for Sinking Fund.................................................
</TABLE>
<PAGE>
INDENTURE, dated as of , 1994 among FLEMING COMPANIES, INC., a
corporation duly organized and existing under the laws of the State of Oklahoma
(herein called the "Company"), having its principal office at 6301 Waterford
Boulevard, P.O. Box 26647, Oklahoma City, Oklahoma 73126, each of the Subsidiary
Guarantors (as hereinafter defined), and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, a national banking association duly organized and existing under
the laws of the United States, Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of Floating Rate
Senior Notes due 2001 (herein called the "Notes"), of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended and shall, to the extent applicable, be governed by such
provisions.
The Company, directly or indirectly, owns beneficially and of record 100% of
the Capital Stock of the Subsidiary Guarantors; the Company and the Subsidiary
Guarantors are members of the same consolidated group of companies; the
Subsidiary Guarantors will derive direct and indirect economic benefit from the
issuance of the Notes; accordingly, the Subsidiary Guarantors have each duly
authorized the execution and delivery of this Indenture to provide for the
Guarantee by each of them with respect to the Notes as set forth in this
Indenture.
All things necessary have been done to make the Notes, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, to make the Note Guarantees of
each of the Subsidiary Guarantors, when executed by the respective Subsidiary
Guarantors and delivered hereunder, the valid obligations of the respective
Subsidiary Guarantors, and to make this Indenture a valid agreement of the
Company and each of the Subsidiary Guarantors, in accordance with their and its
terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
<PAGE>
2
(b) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein, and the terms "cash transaction" and "self-liquidating paper",
as used in TIA Section 311, shall have the meanings assigned to them in the
rules of the Commission adopted under the Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; PROVIDED, HOWEVER, that
with respect to any computation required pursuant to Sections 1009, 1010,
1011 and 1012, such term shall mean such accounting principles as are
generally accepted as of the date of the Indenture; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable LIBOR Rate" means for each Quarterly Period during which any
Floating Rate Note is outstanding subsequent to the Initial Quarterly Period,
[ ] basis points over the rate determined by the Company (notice of such rate
to be sent to the Trustee by the Company on the date of determination thereof)
equal to the average (rounded upwards, if necessary, to the nearest 1/16 of 1%)
of the offered rates for deposits in U.S. dollars for a period of three months,
as set forth on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on
the Interest Rate Determination Date for such Quarterly Period; PROVIDED,
HOWEVER, that if only one such offered rate appears on the Reuters Screen LIBO
Page, the Applicable LIBOR Rate for such Quarterly Period will mean such offered
rate. If such rate is not available at 11:00 a.m., London time, on the Interest
Rate Determination Date for such Quarterly Period, then the Applicable LIBOR
Rate for such Quarterly Period will mean the arithmetic mean (rounded upwards,
if necessary, to the nearest 1/16 of 1%) of the interest rates per annum at
which deposits in amounts equal to $1 million in U.S. dollars are offered by the
Reference Banks to leading banks in the London Interbank Market for a period of
three months as of 11:00 a.m., London time, on the Interest Rate Determination
Date for such Quarterly Period. If on any Interest Rate Determination Date, at
least two of the
<PAGE>
3
Reference Banks provide such offered quotations, then the Applicable LIBOR Rate
for such Quarterly Period will be determined in accordance with the preceding
sentence on the basis of the offered quotations of those Reference Banks
providing such quotations; PROVIDED, HOWEVER, that if fewer than two of the
Reference Banks are so quoting such interest rates as mentioned above, the
Applicable LIBOR Rate for such Quarterly Period shall be deemed to be the
applicable LIBOR Rate for the next preceding Quarterly Period and in the case of
the Quarterly Period next succeeding the Initial Quarterly Period, the
Applicable LIBOR Rate shall be [ ]%. Notwithstanding the foregoing, the
Applicable LIBOR Rate for the Initial Quarterly Period shall be [ ]%.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (A) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (B) the amount of each such principal payment by (ii)
the sum of all such principal payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Banks" means the banks or other financial institutions from time to time
that are lenders under the Credit Agreement.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board, and, with respect to any Subsidiary
Guarantor, either the board of directors of such Subsidiary Guarantor or any
duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, and, with respect to a Subsidiary
Guarantor, a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Subsidiary Guarantor to have been duly adopted by its Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
"Business Development Program" means the business practice of the Company
and its Subsidiaries of making or guaranteeing loans to, or making equity
investments in, third parties engaged in the retail grocery business in exchange
for long-term supply agreements with the Company or any Subsidiary.
"Business Development Venture" means any Person participating in the
Business Development Program and BFL of Tulsa, Inc., Butch's Finer Foods, Inc.,
South Ogden Super Duper, Inc., Stores located at 301 South Main, Smith Center,
KS 66967, 109 West Main Street, Inc., Route 417, Inc., Route 16, Inc. and Route
219, Inc.
<PAGE>
4
"Capital Lease Obligation" means, with respect to any Person, any
obligations of such Person and its Subsidiaries on a Consolidated basis under
any capital lease of real or personal property which, in accordance with GAAP,
has been recorded as a capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
partnership interests, participations or other equivalents (however designated)
of such Person's capital stock whether now outstanding or issued after the date
hereof, including, without limitation, all Common Stock and Preferred Stock of
such Person.
"Change of Control" means the occurrence of any of the following events: (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person shall be deemed to
have beneficial ownership of all shares that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total outstanding
Voting Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the shareholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such Board of Directors then in office; (iii) the
Company consolidates with or merges with or into any Person or conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with or merges into or with the
Company, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company is changed into or exchanged for cash, securities or
other property, other than any such transaction where the outstanding Voting
Stock of the Company is not changed or exchanged at all (except to the extent
necessary to reflect a change in the jurisdiction of incorporation of the
Company) or where (A) the outstanding Voting Stock of the Company is changed
into or exchanged for (x) Voting Stock of the surviving corporation which is not
Redeemable Capital Stock or (y) cash, securities or other property (other than
Capital Stock of the surviving corporation) in an amount which could be paid by
the Company as a Restricted Payment under Section 1011 (and such amount shall be
treated as a Restricted Payment subject to Section 1011) and (B) immediately
after such transaction no "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have beneficial ownership of all shares that such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 50% of the
total outstanding Voting Stock of the surviving corporation; or (iv) the Company
is liquidated or dissolved or adopts a plan of liquidation or dissolution other
than in a transaction which complies with Section 801.
"Change of Control Purchase Date" has the meaning specified in Section 1009.
"Change of Control Purchase Offer" has the meaning specified in Section
1009.
"Change of Control Purchase Price" has the meaning specified in Section
1009.
<PAGE>
5
"Change of Control Triggering Event" means the occurrence of both a Change
of Control and a Rating Decline.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act then the body performing
such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations and other equivalents (however designated, whether
voting or non-voting) of such Person's common stock, whether now outstanding or
issued after the date of this Indenture, including, without limitation, all
series and classes of such common stock.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order signed
in the name of the Company by its Chairman, any Vice Chairman, its President,
any Vice President, its Treasurer or an Assistant Treasurer, and delivered to
the Trustee.
"Consolidated" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries if and to the extent the
accounts of such Person and each of its subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP consistently
applied.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for any
period, the ratio of (a) the sum of Consolidated Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-Cash
Charges deducted in computing Consolidated Net Income, in each case, for such
period, of the Company and its Subsidiaries on a Consolidated basis, all
determined in accordance with GAAP to (b) Consolidated Interest Expense for such
period; PROVIDED that (i) in making such computation, the Consolidated Interest
Expense attributable to interest on any Indebtedness computed on a PRO FORMA
basis and (A) bearing a floating interest rate shall be computed as if the rate
in effect on the date of computation had been the applicable rate for the entire
period and (B) which was not outstanding during the period for which the
computation is being made but which bears, at the option of the Company, a fixed
or floating rate of interest, shall be computed by applying, at the option of
the Company, either the fixed or floating rate; (ii) in making such computation,
Consolidated Interest Expense attributable to interest on any Indebtedness under
a revolving credit facility computed on a PRO FORMA basis shall be computed
based upon the average daily balance of such Indebtedness during the applicable
period; and (iii) in making such computation, Consolidated Interest Expense
attributable to interest on Indebtedness constituting obligations in connection
with any letters of credit and acceptances issued under letter of credit
facilities, acceptance facilities or other similar facilities computed on a PRO
FORMA basis shall be computed excluding any contingent obligations and without
assuming that any undrawn letter of credit has been drawn.
"Consolidated Income Tax Expense" means for any period the provision for
federal, state, local and foreign income taxes of the Company and its
Subsidiaries for such period as determined on a Consolidated basis in accordance
with GAAP.
<PAGE>
6
"Consolidated Interest Expense" means, without duplication, for any period,
the sum of (a) the interest expense of the Company and its Subsidiaries for such
period, as determined on a Consolidated basis in accordance with GAAP including,
without limitation, (i) amortization of debt discount, (ii) the net cost under
Interest Rate Agreements (including amortization of discount), (iii) the
interest portion of any deferred payment obligation and (iv) accrued interest,
plus (b) the aggregate amount for such period of dividends on any Redeemable
Capital Stock or Preferred Stock of the Company and its Subsidiaries, (c) the
interest component of the Capital Lease Obligations paid, accrued and/or
scheduled to be paid, or accrued by such Person during such period and (d) all
capitalized interest of the Company and its Subsidiaries determined on a
Consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the Consolidated net income
(or loss) of the Company and its Subsidiaries for such period as determined on a
Consolidated basis in accordance with GAAP, adjusted, to the extent included in
calculating such net income (loss), by excluding, without duplication, (i) any
net after-tax extraordinary gains or losses (less all fees and expenses relating
thereto), (ii) the $101.3 million facilities consolidation and restructuring
charge originally reflected in the Company's audited Consolidated statement of
earnings for the year ended December 25, 1993, (iii) the portion of net income
(or loss) of the Company and its Subsidiaries determined on a Consolidated basis
allocable to minority interests in unconsolidated Persons to the extent that
cash dividends or distributions have not actually been received by the Company
or any Subsidiary, (iv) net income (or loss) of any Person combined with the
Company or any Subsidiary on a "pooling of interests" basis attributable to any
period prior to the date of combination, (v) net gains or losses (less all fees
and expenses relating thereto) in respect of dispositions of assets other than
in the ordinary course of business and (vi) the net income of any Subsidiary to
the extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary or its shareholders.
"Consolidated Net Tangible Assets" means the total of all the assets
appearing on the Consolidated balance sheet of the Company and its Consolidated
Subsidiaries, less the following: (1) current liabilities; (2) reserves for
depreciation and other asset valuation reserves; (3) intangible assets
including, without limitation, items such as goodwill, trademarks, trade names,
patents and unamortized debt discount and expense; and (4) appropriate
adjustments on account of minority interests of other Persons holding stock in
any majority-owned Subsidiary of the Company.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash charges of the Company and its
Subsidiaries for such period, as determined on a Consolidated basis in
accordance with GAAP (excluding any non-cash charges which require an accrual or
reserve for any future period).
"Corporate Trust Office" means a corporate trust office of the Trustee, at
which at any particular time its corporate trust business shall be administered,
which office at the date of execution of this Indenture is located at 2200 Ross
Avenue, 5th Floor, Dallas, Texas 75201.
"Corporation" includes corporations, associations, companies and business
trusts.
<PAGE>
7
"Credit Agreement" means the Credit Agreement, dated as of July 19, 1994,
among the Company, the Banks, the Agents listed therein and the Managing Agent,
as such agreement may be amended, renewed, extended, substituted, refinanced,
restructured, replaced, supplemented or otherwise modified from time to time
(including, without limitation, any successive renewals, extensions,
substitutions, refinancings, restructurings, replacements, supplementations or
other modifications of the foregoing).
"Currency Agreements" means any spot or forward foreign exchange agreements
and currency swap, currency option or other similar financial agreements or
arrangements entered into by the Company or any of its Subsidiaries.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Equity Store" means a Person in which the Company or any of its
Subsidiaries has invested capital or to which it has made loans in accordance
with the business practice of the Company and its Subsidiaries of making equity
investments in Persons, and making or guaranteeing loans to such Persons, for
the purpose of assisting such Person in acquiring, remodeling, refurbishing,
expanding or operating one or more retail grocery stores and pursuant to which
such Person is permitted or required to reduce the Company's or the Subsidiary's
equity interest to a minority position over time (usually five to ten years).
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fixed Rate Note Indenture" means the indenture dated as of , 1994
among the Company, each of the Subsidiary Guarantors and Texas Commerce Bank
National Association, Trustee covering the Company's Fixed Rate Notes.
"Fixed Rate Notes" means the ___% Rate Senior Notes due 2001 and, more
particularly, means any notes authenticated and delivered under the Fixed Rate
Note Indenture.
"Floating Rate Interest Payment Date" has the meaning specified in Section
301.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, as applied from time to
time by the Company in the preparation of its Consolidated financial statements.
"Guaranteed Debt" means, with respect to any Person, without duplication,
all Indebtedness of any other Person referred to in the definition of
Indebtedness contained herein guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness other than to the Company, a Wholly Owned Subsidiary of the Company
or a Subsidiary Guarantor or to assure the holder of such Indebtedness other
than the Company, a Wholly Owned Subsidiary of the Company or a Subsidiary
Guarantor against loss, (iii) to supply funds to, or in any other manner invest
in, the debtor (including any agreement to pay for property or
<PAGE>
8
services without requiring that such property be received or such services be
rendered), (iv) to maintain working capital or equity capital of the debtor, or
otherwise to maintain the net worth, solvency or other financial condition of
the debtor or (v) otherwise to assure a creditor against loss, PROVIDED that the
term "guarantee" shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Guaranteed Obligations" has the meaning specified in Section 1201.
"Holder" means a Person in whose name a Note is registered in the Security
Register.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all liabilities of such Person for borrowed money (including overdrafts) or for
the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities arising in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit and
acceptances issued under letter of credit facilities, acceptance facilities or
other similar facilities, (ii) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (iii) all indebtedness of
such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
Capital Lease Obligations of such Person, (v) all obligations under Interest
Rate Agreements or Currency Agreements of such Person, (vi) all Indebtedness
referred to in clauses (i) through (v) above of other Persons and all dividends
of other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Redeemable Capital Stock valued at
the greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued and unpaid dividends, and (ix) any amendment, supplement, modification,
deferral, renewal, extension, refunding or refinancing of any liability of the
types referred to in clauses (i) through (viii) above. For purposes hereof, the
"maximum fixed repurchase price" of any Redeemable Capital Stock which does not
have a fixed repurchase price shall be calculated in accordance with the terms
of such Redeemable Capital Stock as if such Redeemable Capital Stock were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by, the
fair market value of such Redeemable Capital Stock, such fair market value is to
be determined in good faith by the Board of Directors of the issuer of such
Redeemable Capital Stock.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Initial Quarterly Period" means the period from and including ,
1994 through and including , 1995.
<PAGE>
9
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.
"Interest Rate Agreements" means any interest rate protection agreements and
other types of interest rate hedging agreements (including, without limitation,
interest rate swaps, caps, floors, collars and similar agreements).
"Interest Rate Determination Date" means, with respect to each Quarterly
Period, the second Working Day prior to the first day of such Quarterly Period.
"Investment" means, with respect to any Person, directly or indirectly, any
advance (other than advances to customers in the ordinary course of business,
which are recorded as accounts receivable on the balance sheet of the Company
and its Subsidiaries), loan or other extension of credit or capital contribution
to (by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities issued by any other Person.
"Investment Grade" means BBB- or higher by S&P or Baa3 or higher by Moody's
or the equivalent of such ratings by S&P or Moody's or in the event Moody's or
S&P shall cease rating the Notes and the Company shall select any other Rating
Agency, the equivalent of such ratings by such other Rating Agency.
"LIBOR Fraction" means the actual number of days in the Initial Quarterly
Period or Quarterly Period, as applicable, divided by 360; PROVIDED, HOWEVER,
that the number of days in the Initial Quarterly Period and each Quarterly
Period shall be calculated by including the first day of such Initial Quarterly
Period or Quarterly Period and excluding the last.
"Lien" means any mortgage or deed of trust, charge, pledge, lien (statutory
or otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property or assets of any kind, real or personal,
movable or immovable.
"Managing Agent" means Morgan Guaranty Trust Company of New York as managing
agent under the Credit Agreement and any future managing agent under the Credit
Agreement.
"Maturity", when used with respect to the Notes, means the date on which the
principal of the Notes becomes due and payable as therein provided or as
provided in this Indenture, whether at Stated Maturity, purchase upon a Change
of Control Triggering Event or redemption date, and whether by declaration of
acceleration, Change of Control, call for redemption or purchase or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
"Note Guarantee" means any guarantee by a Subsidiary Guarantor of the
Company's obligations under this Indenture as set forth in Article Twelve of
this Indenture and any additional guarantee of the Notes pursuant to Section
1013 hereof.
"Notes" has the meaning stated in the first recital of this Indenture and,
more particularly, means any Notes authenticated and delivered under this
Indenture.
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10
"Offering" means the sale of the Notes by the Company to Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc., as underwriters.
"Officers' Certificate" means a certificate signed by the Chairman, any Vice
Chairman, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, including an officer or employee of the Company, and who shall
be acceptable to the Trustee.
"Outstanding", when used with respect to the Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Notes; PROVIDED that, if such Notes
are to be redeemed, notice of such redemption has been duly given pursuant
to this Indenture or provision therefor satisfactory to the Trustee has been
made;
(iii) Notes, except to the extent provided in Sections 1302 and 1303,
with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Thirteen; and
(iv) Notes which have been paid pursuant to Section 306 or in exchange
for or in lieu of which other Notes have been authenticated and delivered
pursuant to this Indenture, other than any such Notes in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Notes are held by a bona fide purchaser in whose hands the Notes are
valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Notes owned by
the Company or any other obligor upon the Notes or any Affiliate of the Company
or such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in making
such calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee actually
knows to be so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliate of the Company or such other obligor.
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11
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any,
on) or interest on any Notes on behalf of the Company.
"Permitted Indebtedness" means any of the following Indebtedness of the
Company or any Subsidiary, as the case may be:
(i) Indebtedness of the Company and guarantees of the Subsidiary
Guarantors under the Credit Agreement (including Indebtedness of the Company
under Tranche A of the Credit Agreement to the extent that the aggregate
commitment thereunder does not exceed $900 million, the maximum aggregate
commitment for such facility on the date of this Indenture, and any
guarantees with respect thereto outstanding on the date of this Indenture
and any additional guarantees executed in connection therewith) in an
aggregate principal amount, together with Indebtedness, if any, incurred
pursuant to clauses (ii) and (xi) of this definition of "Permitted
Indebtedness", at any one time outstanding not to exceed $1.7 billion (after
giving PRO FORMA effect to the use of proceeds of the Offering) less
mandatory repayments actually made in respect of any term Indebtedness
thereunder;
(ii) Indebtedness of the Company under uncommitted bank lines of credit;
PROVIDED, HOWEVER, that the aggregate principal amount of Indebtedness
incurred pursuant to clauses (i), (ii) and (xi) of this definition of
"Permitted Indebtedness" does not exceed $1.7 billion (after giving PRO
FORMA effect to the use of proceeds of the Offering) less mandatory
repayments actually made in respect of any term Indebtedness thereunder;
(iii) Indebtedness of the Company evidenced by the Notes and the Note
Guarantees with respect thereto under this Indenture;
(iv) Indebtedness of the Company evidenced by the Fixed Rate Notes and
the Note Guarantees (as defined in the Fixed Rate Note Indenture) with
respect thereto under the Fixed Rate Note Indenture;
(v) Indebtedness of the Company or any Subsidiary outstanding on the
date of this Indenture and listed on Schedule hereto;
(vi) obligations of the Company or any Subsidiary entered into in the
ordinary course of business (a) pursuant to Interest Rate Agreements
designed to protect against or manage exposure to fluctuations in interest
rates in respect of Indebtedness or retailer notes receivables, which, if
related to Indebtedness or retailer notes receivables, as the case may be,
do not exceed the aggregate notional principal amount of such Indebtedness
to which such Interest Rate Agreements relate, or (b) under any Currency
Agreements in the ordinary course of business and designed to protect
against or manage exposure to fluctuations in foreign currency exchange
rates which, if related to Indebtedness, do not increase the amount of such
Indebtedness other than as a result of foreign exchange fluctuations;
(vii) Indebtedness of the Company owing to a Wholly Owned Subsidiary or
of any Subsidiary owing to the Company or any Wholly Owned Subsidiary;
PROVIDED that any disposition, pledge (except any pledge under the Credit
Agreement or the Prior Indentures) or transfer of any such Indebtedness to a
Person (other than the Company or
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12
another Wholly Owned Subsidiary) shall be deemed to be an incurrence of such
Indebtedness by the Company or Subsidiary, as the case may be, not permitted
by this clause (vii);
(viii) Indebtedness in respect of letters of credit, surety bonds and
performance bonds provided in the ordinary course of business;
(ix) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds in the ordinary course of business; PROVIDED that
such Indebtedness is extinguished within five Business Days of its
incurrence;
(x) Indebtedness of the Company or any Subsidiary consisting of
guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets;
(xi) Indebtedness of the Company evidenced by commercial paper issued by
the Company; PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness incurred pursuant to clauses (i), (ii) and (xi) of this
definition of "Permitted Indebtedness" does not exceed $1.7 billion (after
giving PRO FORMA effect to the use of proceeds of the Offering) less
mandatory repayments actually made in respect of any term Indebtedness
thereunder;
(xii) Indebtedness of the Company pursuant to guarantees by the Company
or any Subsidiary Guarantor in connection with any Permitted Receivables
Financing; PROVIDED, HOWEVER, that such Indebtedness shall not exceed 15% of
the book value of the Transferred Receivables or, in the case of receivables
arising from direct financing leases for retail electronics systems, 30% of
the book value thereof;
(xiii) Indebtedness of the Company and its Subsidiaries in addition to
that described in clauses (i) through (xii) of this definition of "Permitted
Indebtedness," together with any other outstanding Indebtedness incurred
pursuant to this clause (xiii), not to exceed $100 million at any time
outstanding in the aggregate; and
(xiv) any renewals, extensions, substitutions, refundings, refinancings
or replacements (each, a "refinancing") of any Indebtedness described in
clauses (iii), (iv) and (v) of this definition of "Permitted Indebtedness",
including any successive refinancings, so long as (A) the aggregate
principal amount of Indebtedness represented thereby is not increased by
such refinancing to an amount greater than such principal amount plus the
lesser of (x) the stated amount of any premium or other payment required to
be paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (y) the amount of premium or other payment
actually paid at such time to refinance the Indebtedness, plus, in either
case, the amount of expenses of the Company or Subsidiary, as the case may
be, incurred in connection with such refinancing and (B) such refinancing
does not reduce the Average Life to Stated Maturity or the Stated Maturity
of such Indebtedness.
"Permitted Investment" means (i) Investment in any Wholly Owned Subsidiary
or any Investment in any Person by the Company or any Wholly Owned Subsidiary as
a result of which such Person becomes a Wholly Owned Subsidiary or any
Investment in the Company
<PAGE>
13
by a Wholly Owned Subsidiary; (ii) intercompany Indebtedness to the extent
permitted under clause (vii) of the definition of "Permitted Indebtedness";
(iii) Temporary Cash Investments; (iv) sales of goods on trade credit terms
consistent with the Company's past practices or otherwise consistent with trade
credit terms in common use in the industry; (v) Investments in direct financing
leases for equipment owned by the Company and leased to its customers in the
ordinary course of business consistent with past practice; (vi) Investments in
existence on the date of this Indenture; and (vii) any substitutions or
replacements of any Investment so long as the aggregate amount of such
Investment is not increased by such substitution or replacement.
"Permitted Liens" means, with respect to any Person:
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (1) any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired; (2) taxes, assessments, governmental charges or levies not yet
delinquent or which are being contested in good faith; (3) security for
payment of workers compensation or other insurance; (4) security for the
performance of tenders, leases (including, without limitation, statutory and
common law landlord's liens) and contracts (other than contracts for the
payment of money); (5) zoning restrictions, easements, licenses,
reservations, title defects, rights of others for rights-of-way for
utilities, sewers, electric lines, telephone or telegraph lines and other
similar purposes, provisions, covenants, conditions, waivers and
restrictions on the use of property or minor irregularities of title (and
with respect to leasehold interests, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted to exist and arising
by, through or under a landlord or owner of the leased property, with or
without consent of the lessee), none of which materially impairs the use of
any parcel of property material to the operation of the business of the
Company or any Subsidiary or the value of such property for the purpose of
such business; (6) deposits to secure public or statutory obligations; (7)
operation of law in favor of growers, dealers and suppliers of fresh fruits
and vegetables, carriers, mechanics, materialmen, laborers, employees or
suppliers, incurred in the ordinary course of business for sums which are
not yet delinquent or are being contested in good faith by negotiations or
by appropriate proceedings which suspend the collection thereof; (8) the
grant by the Company to licensees, pursuant to security agreements, of
security interests in trademarks and goodwill, patents and trade secrets of
the Company to secure the damages, if any, of such licensees, resulting from
the rejection of the license of such licensees in a bankruptcy,
reorganization or similar proceeding with respect to the Company; or (9)
security for surety or appeal bonds;
(c) any extension, renewal, refinancing or replacement of any Lien on
property of the Company or any Subsidiary existing as of the date of this
Indenture and securing the Indebtedness under the Credit Agreement or the
Prior Indenture in an aggregate principal amount not to exceed the principal
amount of the Indebtedness outstanding as
<PAGE>
14
permitted by clause (i) of the definition of "Permitted Indebtedness" so
long as no additional collateral is granted as security thereby; PROVIDED
that this clause (c) shall not apply to any Lien on such property that has
not been subject to a Lien for 30 days;
(d) any Lien on any property or assets of a Subsidiary in favor of the
Company or any Wholly Owned Subsidiary;
(e) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Subsidiary; PROVIDED that such Lien does
not extend to any assets of the Company or any Subsidiary other than the
assets acquired in the transaction resulting in such Acquired Indebtedness
being incurred by the Company or Subsidiary, as the case may be;
(f) any Lien to secure the performance of bids, trade contracts,
letters of credit and other obligations of a like nature and incurred in the
ordinary course of business of the Company or any Subsidiary;
(g) any Lien securing any Interest Rate Agreements or Currency
Agreements permitted to be incurred pursuant to clause (v) of the definition
of "Permitted Indebtedness" or any collateral for the Indebtedness to which
such Interest Rate Agreements or Currency Agreements relate;
(h) any Lien securing the Notes;
(i) any Lien on an asset securing Indebtedness (including Capital Lease
Obligations) incurred or assumed for the purpose of financing all or any
part of the cost of acquiring or constructing such asset; PROVIDED that such
Lien attaches to such asset concurrently or within 180 days after the
acquisition or completion of construction thereof; and
(j) any Lien on real or personal property securing Capital Lease
Obligations of the Company or any Subsidiary as lessee with respect to such
real or personal property (1) to the extent that the Company or such
Subsidiary has entered into (and not terminated), or has a binding
commitment for, subleases on terms which, to the Company, are at least as
favorable, on a current basis, as the terms of the corresponding capital
lease or (2) under which the aggregate principal component of the annual
rent payable does not exceed $5 million;
(k) any Lien on a Financing Receivable or other receivable that is
transferred in a Permitted Receivables Financing;
(l) any Lien consisting of any pledge to any Person of Indebtedness
owed by any Subsidiary to the Company or any Wholly Owned Subsidiary;
PROVIDED that (i) such Subsidiary is a Subsidiary Guarantor and (ii) the
principal amount pledged does not exceed the Indebtedness secured by such
pledge; and
(m) any extension, renewal, refinancing or replacement, in whole or in
part, of any Lien described in the foregoing clause (a) so long as no
additional collateral is granted as security thereby.
<PAGE>
15
"Permitted Receivables Financing" means any transaction involving the
transfer (by way of sale, pledge or otherwise) by the Company or any of its
Subsidiaries of receivables to any other Person, PROVIDED that after giving
effect to such transaction the sum of (i) the aggregate uncollected balances of
the receivables so transferred ("Transferred Receivables") PLUS (ii) the
aggregate amount of all collections on Transferred Receivables theretofore
received by the seller but not yet remitted to the purchaser, in each case at
the date of determination, would not exceed $750 million.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred stock whether now outstanding or issued after the date of
this Indenture, including, without limitation, all classes and series of
preferred or preference stock of such Person.
"Principal Property" means any manufacturing or processing plant, office
facility, retail store, warehouse or distribution center, including, in each
case, the fixtures appurtenant thereto, located within the continental United
States and owned and operated now or hereafter by the Company or any Subsidiary
(other than an Equity Store or a Business Development Venture) and having a book
value on the date as of which the determination is being made of more than 2% of
Consolidated Net Tangible Assets.
"Prior Indentures" means the Indenture, dated March 15, 1986, between the
Company and Morgan Guaranty Trust Company of New York, as Trustee, covering $100
million aggregate principal amount of the Company's 9 1/2% Debentures due 2016
and the Indenture, dated December 1, 1989, between the Company and Morgan
Guaranty Trust Company of New York, as Trustee, covering $275 million aggregate
principal amount of the Company's Medium-Term Notes.
"Public Equity Offering" means a primary public offering of equity
securities of the Company pursuant to an effective registration statement under
the Securities Act with net cash proceeds of at least $50 million.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Quarterly Period" means the period from and including a scheduled Floating
Rate Interest Payment Date through the day next preceding the following
scheduled Floating Rate Interest Payment Date.
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16
"Rating Agency" means any of (i) S&P, (ii) Moody's or (iii) if S&P or
Moody's or both shall not make a rating of the Notes publicly available, a
security rating agency or agencies, as the case may be, nationally recognized in
the United States, selected by the Company, which shall be substituted for S&P
or Moody's or both, as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories); (ii) with respect to Moody's, any of the following categories: Aaa,
Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories); and
(iii) the equivalent of any such category of S&P or Moody's used by another
Rating Agency. In determining whether the rating of the Notes has decreased by
one or more gradation, gradations within Rating Categories (+ and - for S&P; 1,
2 and 3 for Moody's; or the equivalent gradations for another Rating Agency)
shall be taken into account (E.G., with respect to S&P, a decline in rating from
BB+ to BB, as well as from BB- to B+, will constitute a decrease of one
gradation).
"Rating Decline" means the occurrence on, or within 90 days after, the date
of public notice of the occurrence of a Change of Control or of the intention of
the Company or Persons controlling the Company to effect a Change of Control
(which period shall be extended so long as the rating of the Notes is under
publicly announced consideration for possible downgrade by any of the Rating
Agencies) of the following: (i) if the Notes are rated by either Rating Agency
as Investment Grade immediately prior to the beginning of such period, the
rating of the Notes by both Rating Agencies shall be below Investment Grade; or
(ii) if the Notes are rated below Investment Grade by both Rating Agencies
immediately prior to the beginning of such period, the rating of the Notes by
either Rating Agency shall be decreased by one or more gradations (including
gradations within Rating Categories as well as between Rating Categories).
"Redeemable Capital Stock" means any Capital Stock that, either by its terms
or by the terms of any security into which it is convertible or exchangeable or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Notes or is redeemable at the option of the holder thereof at any time prior to
any such Stated Maturity, or is convertible into or exchangeable for debt
securities at any time prior to any such Stated Maturity at the option of the
holder thereof.
"Redemption Date", when used with respect to any Note to be redeemed, in
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Note to be redeemed, means
the price at which it is to be redeemed pursuant to this Indenture.
"Reference Banks" means each of Barclays Bank PLC, London Branch, the Bank
of Tokyo, Ltd., London Branch, Bankers Trust Company, London Branch, and
National Westminster Bank PLC, London Branch, and any such replacement bank
thereof as listed on the Reuters Screen LIBO Page and their respective
successors, and if any of such banks are not at the applicable time providing
interest rates as contemplated within the definition of the "Applicable LIBOR
Rate," Reference Banks shall mean the remaining bank or banks so providing such
rates. In the event that fewer than two of such banks are providing such rates,
the Company shall use reasonable efforts to appoint additional Reference Banks
so
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17
that there are at least two such banks providing such rates; PROVIDED, HOWEVER,
that such banks appointed by the Company shall be London offices of leading
banks engaged in the Eurodollar market (the market in which U.S. currency, which
is deposited by corporations and national governments in banks outside the
United States, is used for settling international transactions).
"Regular Record Date" for the interest payable on any Interest Payment Date
means the [date], [date], [date] or [date] (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above-designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Reuters Screen LIBO Page" means the display designated as page "LIBO" on
the Reuter Monitor Money Rates Service (or such other page as may replace the
LIBO page on that service for the purpose of displaying London Interbank Offered
Rates of leading banks).
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" means Indebtedness of the Company other than
Subordinated Indebtedness.
"Significant Subsidiary" of the Company means any Subsidiary of the Company
that is a "significant subsidiary" as defined in Rule 1.02(v) of Regulation S-X
under the Securities Act.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill Inc.,
a New York corporation, or any successor rating agency.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the date specified in such Indebtedness
as the fixed date on which the principal of or premium on such Indebtedness or
such installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company subordinated
in right of payment to the Notes.
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18
"Subsidiary" means any Person a majority of the equity ownership or the
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Subsidiary Guarantor" means any Person that is required pursuant to Section
1013, on or after the date of this Indenture, to execute a Note Guarantee of the
Notes until a successor replaces any such party pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor, and the
following Subsidiaries of the Company: ATI, Inc., Badger Markets, Inc., Baker's
Supermarkets, Inc., Ball Motor Service, Inc., Boogaart Stores of Nebraska, Inc.,
Central Park Super Duper, Inc., Commercial Cold/Dry Storage Company, Consumers
Markets, Inc., D.L. Food Stores, Inc., Del-Arrow Super Duper, Inc., Festival
Foods, Inc., Fleming Direct Sales Corporation, Fleming Foods East, Inc., Fleming
Foods of Alabama, Inc., Fleming Foods of Ohio, Inc., Fleming Foods of Tennessee,
Inc., Fleming Foods of Texas, Inc., Fleming Foods of Virginia, Inc., Fleming
Foods South, Inc., Fleming Foods West, Inc., Fleming Foreign Sales Corporation,
Fleming Franchising, Inc., Fleming Holdings, Inc., Fleming International, Ltd.,
Fleming Site Media, Inc., Fleming Supermarkets of Florida, Inc., Fleming
Technology Leasing Company, Inc., Fleming Transportation Service, Inc., Food
Brands, Inc., Food-4-Less, Inc., Food Holdings, Inc., Food Saver of Iowa, Inc.,
Gateway Development Co., Inc., Gateway Food Distributors, Inc., Gateway Foods,
Inc., Gateway Foods of Altoona, Inc., Gateway Foods of Pennsylvania, Inc.,
Gateway Foods of Twin Ports, Inc., Gateway Foods Service Corporation, Grand
Central Leasing Corporation, Great Bend Supermarkets, Inc., Hub City
Transportation, Inc., Kensington and Harlem, Inc., LAS, Inc., Ladysmith East
IGA, Inc., Ladysmith IGA, Inc., Lake Markets, Inc., M&H Desoto, Inc., M&H
Financial Corp., M&H Realty Corp., Malone & Hyde, Inc., Malone & Hyde of
Lafayette, Inc., Manitowoc IGA, Inc., Moberly Foods, Inc., Mt. Morris Super
Duper, Inc., Niagara Falls Super Duper, Inc., Northern Supermarkets of Oregon,
Inc., Northgate Plaza, Inc., 109 West Main Street, Inc., 121 East Main Street,
Inc., Peshtigo IGA, Inc., Piggly Wiggly Corporation, Quality Incentive Company,
Inc., Rainbow Transportation Services, Inc., Route 16, Inc., Route 219, Inc.,
Route 417, Inc., Richland Center IGA, Inc, Scrivner, Inc., Scrivner-Food
Holdings, Inc., Scrivner of Alabama, Inc., Scrivner of Illinois, Inc., Scrivner
of Iowa, Inc., Scrivner of Kansas, Inc., Scrivner of New York, Inc., Scrivner of
North Carolina, Inc., Scrivner of Pennsylvania, Inc., Scrivner of Tennessee,
Inc., Scrivner of Texas, Inc., Scrivner Super Stores of Illinois, Inc., Scrivner
Super Stores of Iowa, Inc., Scrivner Transportation, Inc., Sehon Foods, Inc.,
Selected Products, Inc., Sentry Markets, Inc., Smar Trans, Inc., South Ogden
Super Duper, Inc., Southern Supermarkets, Inc. (TX), Southern Supermarkets, Inc.
(OK), Southern Supermarkets of Louisiana, Inc., Star Groceries, Inc., Store
Equipment, Inc., Sundries Service, Inc., Switzer Foods, Inc., 35 Church Street,
Inc., Thompson Food Basket, Inc., 29 Super Market, Inc., 27 Slayton Avenue, Inc.
and WPC, Inc.
"Temporary Cash Investments" means (i) any evidence of Indebtedness issued
by the United States, or an instrumentality or agency thereof, and guaranteed
fully as to principal, premium, if any, and interest by the United States, (ii)
any certificate of deposit issued by, or time deposit of, a bank or trust
company in the United States having combined capital and surplus and undivided
profits of not less than $500 million, whose debt has a rating, at the time as
of which any investment therein is made, of "A" (or higher) according to Moody's
or "A" (or higher) according to S&P, (iii) commercial paper issued by an entity
(other than an
<PAGE>
19
Affiliate or Subsidiary of the Company) with a rating, at the time as of which
any investment therein is made, of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P, (iv) any money market deposit accounts
issued or offered by a financial institution in the United States having capital
and surplus in excess of $500 million, (v) short term tax exempt bonds with a
rating, at the time as of which any investment is made therein, of "Aa2" (or
higher) according to Moody's or "AA" (or higher) according to S&P, (vi) shares
in a mutual fund, the investment objectives and policies of which require it to
invest substantially all of its assets in investments of the type described in
clause (v) and (vii) repurchase and reverse repurchase obligations underlying
securities of the types described in clauses (i) and (ii) entered into with any
financial institution meeting the qualifications specified in clause (ii);
PROVIDED that in the case of clauses (i), (ii), (iii), (v) and (vii), such
investment matures within one year from the date of acquisition thereof.
"Transferred Receivables" has the meaning specified in the definition of
"Permitted Receivables Financing" in this Section.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this Indenture was executed, except
as provided in Section 905.
"Trustee" means the Person named as the Trustee in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the timely payment of which its full faith
and credit is pledged or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States, the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S. Government Obligation
or a specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt; PROVIDED that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository receipt.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
<PAGE>
20
"Wholly Owned Subsidiary" means a Subsidiary all the Capital Stock (other
than directors' qualifying shares) of which is owned by the Company or another
Wholly Owned Subsidiary.
"Working Day" means any day which is not a Saturday, Sunday or a day on
which banking institutions in New York, New York or London, England are
authorized or obligated by law or executive order to close.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Section 1008)
shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. In giving such opinion, such counsel may rely upon opinions of local
counsel reasonably satisfactory to the Trustee. Any such certificate or Opinion
of Counsel
<PAGE>
21
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of authority.
The fact and date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any Person,
and the date of holding the same, shall be proved by the Security Register.
(d) If the Company shall solicit from the Holders of Notes any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding TIA Section 316(c),
such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of
<PAGE>
22
Outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Notes shall be computed as of such record date;
PROVIDED that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than 330 days after the record
date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Note.
SECTION 105. NOTICES, ETC., TO TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Department, or
(2) the Company or any Subsidiary Guarantor by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this Indenture, or at any other
address previously furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides notice of any event to Holders by the Company,
any Subsidiary Guarantor or the Trustee, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice mailed to a Holder in the manner herein prescribed
shall be conclusively deemed to have been received by such Holder when so
mailed, whether or not such Holder actually receives such notice. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders
<PAGE>
23
when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice for every
purpose hereunder.
SECTION 107. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 108. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company and the
Subsidiary Guarantors shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 109. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Notes or the Note
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 110. BENEFITS OF INDENTURE.
Nothing in this Indenture, in the Notes or the Note Guarantees, express or
implied, shall give to any Person, other than the parties hereto, any Paying
Agent, any Securities Registrar and their successors hereunder and the Holders,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 111. GOVERNING LAW.
This Indenture, the Notes and the Note Guarantees shall be governed by and
construed in accordance with the law of the State of New York. This Indenture is
subject to the provisions of the Trust Indenture Act of 1939, as amended and
shall, to the extent applicable, be governed by such provisions.
SECTION 112. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest or principal (and premium, if any) need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the Interest Payment Date, Redemption Date, or at the
Stated Maturity or Maturity; PROVIDED that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Stated
Maturity or Maturity, as the case may be.
<PAGE>
24
ARTICLE TWO
NOTE FORMS
SECTION 201. FORMS GENERALLY.
The Notes and the Trustee's certificates of authentication shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Notes, as evidenced by their
execution of such Notes; PROVIDED, HOWEVER, that if the Notes are listed on any
securities exchange such manner is permitted by the rules of such securities
exchange.
SECTION 202. FORM OF FACE OF NOTE.
FLEMING COMPANIES, INC.
FLOATING RATE SENIOR NOTE DUE 2001 CUSIP
NO. $
Fleming Companies, Inc., an Oklahoma corporation (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 Dollars on
, 2001, at the office or agency of the Company referred to below,
and to pay interest thereon from , 1994, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
quarterly in arrears, on [date], [date], [date] and [date] of each year,
commencing , 1995, at a rate per annum determined on each Interest
Rate Determination Date by multiplying the principal amount of the Notes
outstanding as of the first day of the respective Quarterly Period or the
Initial Quarterly Period, as the case may be, by the Applicable LIBOR Rate and
multiplying such product by the LIBOR Fraction, until the principal hereof is
paid or duly provided for, and (to the extent lawful) to pay on demand interest
on any overdue interest at the rate borne by the Notes from the date on which
such overdue interest becomes payable to the date payment of such interest has
been made or duly provided for. 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 be the [date], [date], [date] or [date]
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for shall forthwith cease to be payable to the Holder on such Regular Record
Date, and such Defaulted Interest, and (to the extent lawful) interest on
<PAGE>
25
such Defaulted Interest at the rate borne by the Notes, may 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
Holders of Notes not less than 10 days prior to such Special Record Date, or may
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. Payment of the principal of (and premium, if any, on) and
interest on this Note will be made at the office or agency of the Company
maintained for that purpose in The City of New York, or at such other office or
agency of the Company as may be maintained for such purpose, 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; PROVIDED, HOWEVER, that payment
of interest may be made at the option of the Company (i) by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Security Register or (ii) if requested in writing at least 10 days prior to a
Regular Record Date or a Special Record Date, as the case may be, by a Person
who is entitled thereto with respect to at least $1 million in principal amount
of the Notes, by transfer to an account maintained by such Person at a bank
located in the United States.
Reference is hereby made to the further provisions of this Note set forth on
the reverse hereof, 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 duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: FLEMING COMPANIES, INC.
By ___________________________________
Attest:
___________________________________
Secretary
SECTION 203. FORM OF REVERSE OF NOTE.
This Note is one of a duly authorized issue of securities of the Company
designated as its Floating Rate Senior Notes due 2001 (herein called the
"Notes"), limited (except as otherwise provided in the Indenture referred to
below) in aggregate principal amount to $150,000,000, which may be issued under
an indenture (herein called the "Indenture") dated as of , 1994,
among the Company, the Subsidiary Guarantors named
<PAGE>
26
therein and Texas Commerce Bank National Association, 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,
obligations and immunities thereunder of the Company, the Subsidiary Guarantors,
the Trustee and the Holders of the Notes and the Note Guarantees, and of the
terms upon which the Notes and the Note Guarantees are, and are to be,
authenticated and delivered.
The Notes are subject to redemption at the option of the Company, on any
Floating Rate Interest Payment Date, upon not less than 30 nor more than 60
days' notice on or after , 1995 and on or prior to , 1999, as
a whole or in part, at the election of the Company, at a Redemption Price equal
to 100.5% of the principal amount of the Notes together with accrued and unpaid
interest, if any, to the Redemption Date, and after , 1999 at a
Redemption Price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the Redemption Date (subject to the
right of Holders of record on relevant record dates to receive accrued interest
due on an Interest Payment Date), all as provided in the Indenture.
Upon the occurrence of a Change of Control Triggering Event, the Holder of
this Note may require the Company, subject to certain limitations provided in
the Indenture, to repurchase this Note at a purchase price in cash in an amount
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase.
In the case of any redemption of Notes, interest installments whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of
such Notes, or one or more Predecessor Notes, of record at the close of business
on the relevant Record Date referred to on the face hereof. Notes (or portions
thereof) for whose redemption and payment provision is made in accordance with
the Indenture shall cease to bear interest from and after the Redemption Date.
In the event of redemption of this Note in part only, a new Note or Notes
for the unredeemed portion hereof shall be issued in the name of the Holder
hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal of all
the Notes 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 (a) the
entire indebtedness of the Company and any Subsidiary Guarantor on this Note and
(b) certain restrictive covenants and the related Defaults and Events of
Default, upon compliance by the Company and the Subsidiary Guarantors with
certain conditions set forth therein, which provisions apply to this Note.
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 Subsidiary Guarantors and the rights of the Holders under the
Indenture at any time by the Company, the Subsidiary Guarantors and the Trustee
with the consent of the Holders of a majority in aggregate principal amount of
the Notes at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to
<PAGE>
27
waive compliance by the Company and the Subsidiary Guarantors with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by or on behalf of 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.
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, on) and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registerable on the Security Register of the
Company, upon surrender of this Note for registration of transfer at the office
or agency of the Company maintained for such purpose in The City of New York,
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 his attorney duly authorized in writing, and thereupon one or
more new Notes, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or exchange
of Notes, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this Note for registration of
transfer, the Company, the Subsidiary Guarantors, the Trustee and any agent of
the Company, the Subsidiary Guarantors 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 Subsidiary Guarantors,
the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED ___________________ hereby sell(s), assign(s) and
transfer(s) unto ______________ ______________ ______________ (please insert
social security or other identifying number of assignee) the within Note and
hereby irrevocably constitutes and appoints ______________ ______________ as
agent to transfer the said Note on the books of the Company with the full power
of substitution in the premises.
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28
Dated:
______________________________________
Signature(s)
Signature must be guaranteed by
a bank or trust company
or a member firm of a major stock
exchange
______________________________________
Signature Guarantee
NOTICE: The signature on the assignment
must correspond with the name as
written upon the face of the Note in every
particular without alteration or enlargement or any
change whatever.
SECTION 204. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially the
following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Notes referred to in the within-mentioned Indenture.
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
as Trustee
By ___________________________________
Authorized Signatory
ARTICLE THREE
THE NOTES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $150,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 303, 304, 305, 306, 801,
906, 1009 or 1108.
The Notes shall be known and designated as the "Floating Rate Senior Notes
due 2001" of the Company. Their Stated Maturity shall be , 2001, and
they shall bear interest from , 1994, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, payable
quarterly on [date], [date], [date] and [date] of each year, commencing
, 1995 and at said Stated Maturity, until the principal thereof is paid
or duly provided for.
<PAGE>
29
Interest on the Notes will accrue at a rate equal to the Applicable LIBOR
Rate and will be payable quarterly in arrears on , , and
of each year (each a "Floating Rate Interest Payment Date"), or if any
such day is not a Business Day, on the next succeeding Business Day, commencing
on , 1995 to holders of record on the immediately preceding ,
, _________ and . Interest on the Notes will be calculated on
a formula basis by multiplying the principal amount of the Notes outstanding as
of the first day of a Quarterly Period or the Initial Quarterly Period, as the
case may be, by the Applicable LIBOR Rate and multiplying such product by the
LIBOR Fraction.
The principal of (and premium, if any, on) and interest on the Notes shall
be payable at the office or agency of the Company maintained for such purpose in
The City of New York, or at such other office or agency of the Company as may be
maintained for such purpose; PROVIDED, HOWEVER, that, at the option of the
Company, interest may be paid by (i) mailing a check for such interest, payable
to or upon the written order of the Person entitled thereto pursuant to Section
308, to the address of such Person as it appears in the Security Register or
(ii) if requested in writing at least 10 days prior to a Regular Record Date or
a Special Record Date, as the case may be, by a Person who is entitled thereto
with respect to at least $1 million in principal amount of the Notes, by
transfer to an account maintained by such Person at a bank located in the United
States.
The Notes shall be redeemable as provided in Article Eleven.
SECTION 302. DENOMINATIONS.
The Notes shall be issuable only in registered form without coupons and only
in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Company by its Chairman, any
Vice Chairman, its President or a Vice President, under its corporate seal
reproduced thereon and attested by its Secretary or an Assistant Secretary. The
signature of any of these officers on the Notes may be manual or facsimile
signatures of the present or any future such authorized officer and may be
imprinted or otherwise reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who were at
any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication, together with a Company Order for the authentication and
delivery of such Notes, and the Trustee in accordance with such Company Order
shall authenticate and deliver such Notes.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of a
<PAGE>
30
Responsible Officer, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Notes authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Notes executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Notes surrendered for such exchange
and of like principal amount; and the Trustee, upon Company Request of the
successor Person, shall authenticate and deliver Notes as specified in such
request for the purpose of such exchange. If Notes shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Notes, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Notes at the time
Outstanding for Notes authenticated and delivered in such new name.
SECTION 304. TEMPORARY NOTES.
Pending the preparation of definitive Notes, the Company may execute and
upon Company Order the Trustee shall authenticate and deliver, temporary Notes
which are printed, lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Notes in
lieu of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as conclusively evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive Notes,
the temporary Notes shall be exchangeable for definitive Notes upon surrender of
the temporary Notes at the office or agency of the Company designated for such
purpose pursuant to Section 1002, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes, the Company shall execute
and upon Company Order the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Notes and of transfers of Notes. The Security Register shall be in
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written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Security Register shall
be open to inspection by the Trustee. The Trustee is hereby initially appointed
as security registrar (the "Security Registrar") for the purpose of registering
Notes and transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the office or
agency of the Company designated pursuant to Section 1002, the Company shall
execute and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denomination or denominations of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Notes to be exchanged at such office or agency. Whenever any Notes are so
surrendered for exchange, the Company shall execute and the Trustee shall
authenticate and deliver, the Notes which the Holder making the exchange is
entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company and, pursuant to the Note
Guarantees, the Subsidiary Guarantors, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange
or redemption of Notes, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes, other than exchanges
pursuant to Section 303, 304, 801, 906, 1108 or 1009 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Note during a period beginning at the opening of business 15 days
before the selection of Notes to be redeemed under Section 1104 and ending at
the close of business on the day of such mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Note so selected
for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee, or (ii) the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, and there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of actual notice to the Company or the Trustee that such
Note has been acquired by a bona fide purchaser, the Company shall execute and
the Trustee shall authenticate and deliver, in exchange for any such mutilated
Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Company and, pursuant to the Note Guarantees, the Subsidiary
Guarantors, whether or not the destroyed, lost or stolen Note shall be at any
time enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 1002; PROVIDED,
HOWEVER, that each installment of interest may at the Company's option be paid
by (i) mailing a check for such interest, payable to or upon the written order
of the Person entitled thereto pursuant to Section 308, to the address of such
Person as it appears in the Security Register or (ii) if requested in writing at
least 10 days prior to a Regular Record Date or a Special Record Date, as the
case may be, by a Person who is entitled thereto with respect to at least $1
million in principal amount of the Notes, by transfer to an account maintained
by such Person at a bank located in the United States.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Notes (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") may be paid by
the Company, at its election in each case, as provided in clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when
<PAGE>
33
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date, and in the name and
at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be given in
the manner provided for in Section 106, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so given, such
Defaulted Interest shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest 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, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
SECTION 308. PERSONS DEEMED OWNERS.
Prior to the due presentment of a Note for registration of transfer, the
Company, the Subsidiary Guarantors, the Trustee and any agent of the Company,
the Subsidiary Guarantors or the Trustee may treat the Person in whose name such
Note is registered as the owner of such Note for the purpose of receiving
payment of principal of (and premium, if any, on) and (subject to Sections 305
and 307) interest on such Note and for all other purposes whatsoever, whether or
not such Note be overdue, and none of the Company, any Subsidiary Guarantor, the
Trustee or any agent of the Company, any Subsidiary Guarantor or the Trustee
shall be affected by notice to the contrary.
SECTION 309. CANCELLATION.
All Notes surrendered for payment, redemption, registration of transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold, and all Notes so delivered
shall be promptly cancelled by the Trustee. If the Company shall so acquire any
of the Notes, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for
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34
cancellation. No Notes shall be authenticated in lieu of or in exchange for any
Notes cancelled as provided in this Section, except as expressly permitted by
this Indenture. All cancelled Notes held by the Trustee shall be disposed of by
the Trustee in accordance with its customary procedures and certification of
their disposal delivered to the Company unless by Company Order the Company
shall direct that cancelled Notes be returned to it.
SECTION 310. CUSIP NUMBERS.
The Company may use "CUSIP" numbers in issuing the Notes (if then generally
in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders; PROVIDED, HOWEVER, that any such notice
may state that no representation is made as to the correctness of such "CUSIP"
numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of Notes
issued under this Indenture) and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture when
(1) either
(A) all Notes theretofore authenticated and delivered (except (i)
lost, stolen or destroyed Notes which have been replaced or paid as
provided in Section 306 and (ii) Notes for whose payment funds have
theretofore been deposited in trust by the Company with the Trustee or
any Paying Agent or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Notes not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, and
either the Company or any Subsidiary Guarantor has irrevocably deposited
or caused to be deposited with the Trustee funds in an amount sufficient
to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for principal,
premium, if any, and interest to the date of such deposit;
(2) the Company or any Subsidiary Guarantor has paid all other sums
payable hereunder by the Company and any Subsidiary Guarantors; and
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35
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with and that such satisfaction and discharge will not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Company
or any Subsidiary Guarantor is a party or by which it is bound.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest on any Note issued under
this Indenture when such interest becomes due and payable, and continuance
of such default for a period of 60 days; or
(2) default in the payment of the principal of (or premium, if any, on)
any Note at its Stated Maturity; or
(3) (A) default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor under this Indenture
(other than a default in the performance, or breach, of a covenant or
agreement which is specifically dealt with in the immediately preceding
clauses (1) and (2) or clauses (B) and (C) of this clause (3), and such
default or breach shall continue for a period of 60 days after written
notice has been given, by certified mail, (x) to the Company by the Trustee
or (y) to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Notes specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; (B) default in the performance or breach
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36
of the provisions in Section 801; or (C) the Company shall have failed to
make or consummate a Change of Control Purchase Offer in accordance with the
provisions of Section 1009; or
(4) (A) there shall have occurred any default in the payment of
principal of any Indebtedness under any agreements, indentures (including
any such default under the Fixed Rate Note Indenture) or instruments under
which the Company or any Subsidiary of the Company then has outstanding
Indebtedness in excess of $50 million, when the same shall become due and
payable in full and such default shall have continued after any applicable
grace period and shall not have been cured or waived or (B) an event of
default as defined in any of the agreements, indentures or instruments
described in clause (A) of this clause (4) shall have occurred and the
Indebtedness thereunder, if not already matured at its final maturity in
accordance with its terms, shall have been accelerated or otherwise declared
due and payable, or required to be prepaid or repurchased (other than by
regularly scheduled required prepayment), prior to the stated maturity
thereof; or
(5) any Person entitled to take the actions described in this clause
(5), after the occurrence of any event of default on Indebtedness in excess
of $50 million in the aggregate of the Company or any Subsidiary, shall
notify the Trustee of the intended sale or disposition of any assets of the
Company or any Subsidiary that have been pledged to or for the benefit of
such Person to secure such Indebtedness or shall commence proceedings, or
take any action (including by way of set-off) to retain in satisfaction of
any Indebtedness, or to collect on, seize, dispose of or apply, any such
assets of the Company or any Subsidiary (including funds on deposit or held
pursuant to lock-box and other similar arrangements), pursuant to the terms
of any agreement or instrument evidencing any such Indebtedness or in
accordance with applicable law; or
(6) any Note Guarantee of any Significant Subsidiary individually or
any other Subsidiaries if such Subsidiaries in the aggregate represent 15%
or more of the assets of the Company and its Subsidiaries on a Consolidated
basis with respect to such Notes shall for any reason cease to be, or be
asserted in writing by the Company, any Subsidiary Guarantor or any other
Subsidiary of the Company, as applicable, not to be, in full force and
effect, enforceable in accordance with its terms, except pursuant to the
release of any such Note Guarantee in accordance with this Indenture; or
(7) one or more judgments, orders or decrees for the payment of money
in excess of $50 million (net of amounts covered by insurance, bond or
similar instrument), either individually or in an aggregate amount, entered
against the Company or any Subsidiary or any of their respective properties
which is not discharged and either (i) any creditor shall have commenced an
enforcement proceeding upon such judgment, order or decree or (ii) there
shall have been a period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of pending appeal or
otherwise, shall not be in effect; or
(8) the entry by a court of competent jurisdiction of (A) a decree or
order for relief in respect of the Company or any Significant Subsidiary in
an involuntary case or proceeding under any applicable Bankruptcy Law or (B)
a decree or order adjudging the
<PAGE>
37
Company or any Significant Subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under any applicable federal or
state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and any such decree
or order for relief shall continue to be in effect, or any such other decree
or order shall be unstayed and in effect, for a period of 60 consecutive
days; or
(9) (A) the commencement by the Company or any Significant Subsidiary
of a voluntary case or proceeding under any applicable Bankruptcy Law or any
other case or proceeding to be adjudicated bankrupt or insolvent, (B) the
Company or any Significant Subsidiary consents to the entry of a decree or
order for relief in respect of the Company or such Significant Subsidiary in
an involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding against
it, (C) the Company or any Significant Subsidiary files a petition or answer
or consent seeking reorganization or relief under any applicable federal or
state law, (D) the Company or any Significant Subsidiary (x) consents to the
filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or such Significant Subsidiary or of any substantial
part of its property, (y) makes an assignment for the benefit of creditors
or (z) admits in writing its inability to pay its debts generally as they
become due or (E) the Company or any Significant Subsidiary takes any
corporate action in furtherance of any such actions in this clause (9).
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
501(8) or 501(9)) shall occur and be continuing, then and in every such case the
Trustee, by notice to the Company, or the Holders of at least 25% in aggregate
principal amount of the Notes Outstanding may declare all amounts payable in
respect of such Notes to be due and payable immediately, by a notice in writing
to the Company and to the Trustee, and upon any such declaration such amounts
shall become immediately due and payable. If an Event of Default specified in
Section 501(8) or 501(9) occurs, then all amounts payable in respect of such
Notes shall IPSO FACTO become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Notes Outstanding, by written notice to the Company and
the Trustee, may rescind or annul such declaration if
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel,
(B) all overdue interest on all Outstanding Notes, and
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38
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the Notes; and
(2) all Events of Default, other than the non-payment of principal of
such Notes which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
No such rescission or annulment shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium, if
any, on) any Note at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee for the benefit
of the Holders of such Notes, the whole amount then due and payable on such
Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the Notes
or the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
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39
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name and as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal (or premium, if any)
or interest, upon presentation of the Notes and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid for principal
of (and premium, if any, on) and interest on the Notes in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable
on such Notes for principal (and premium, if any) and interest,
respectively; and
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THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Notes shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee, for 60 days after its receipt of such notice, request
and offer of reasonably satisfactory indemnity, has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority or
more in principal amount of the Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Thirteen) and in
such Note, of the principal of (and premium, if any, on) and (subject to Section
307) interest on, such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Subsidiary Guarantors, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
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41
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes in the last paragraph of Section 306,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and, subject
to the provisions of Section 507, every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not consenting.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Notes may on behalf of the Holders of all the Notes waive any past
default hereunder and its consequences, except a default
(1) in respect of the payment of the principal of (or premium, if any,
on) or interest on any Note, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
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42
SECTION 514. WAIVER OF STAY OR EXTENSION LAWS.
Each of the Company and the Subsidiary Guarantors covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and each of the
Company and the Subsidiary Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 515. NOTICE OF DEFAULTS.
Within ten days after the occurrence of any Default hereunder, the Company
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice to the Trustee of such Default hereunder known to the Company or any
Subsidiary Guarantor, unless such Default shall have been cured or waived.
ARTICLE SIX
THE TRUSTEE
SECTION 601. NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default hereunder, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such Default hereunder known to the Trustee, unless such Default shall
have been cured or waived; PROVIDED, HOWEVER, that, except in the case of a
Default in the payment of the principal of (or premium, if any, on) or interest
on any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders; and
PROVIDED FURTHER that in the case of any Default of the character specified in
Section 501(3) no such notice to Holders shall be given until at least 30 days
after the occurrence thereof.
SECTION 602. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
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43
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonably satisfactory to
the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled at all reasonable times to examine the books, records and
premises of the Company and the Subsidiary Guarantors, personally or by
agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 603. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes, except for the Trustee's
certificates of authentication, shall be taken as the statements of the Company
or the Subsidiary Guarantors, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Notes, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Notes and perform its obligations hereunder and that the
statements made by it in a Statement of Eligibility of Form T-1 supplied to the
Company are true and accurate, subject to the qualifications set forth therein.
The Trustee shall not be accountable for the use or application by the Company
of Notes or the proceeds thereof.
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44
SECTION 604. MAY HOLD NOTES.
The Trustee, any Paying Agent, any Security Registrar or any other agent of
the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Notes and, subject to TIA Sections 310(b) and
311, may otherwise deal with the Company and any Subsidiary Guarantor with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 605. MONEY HELD IN TRUST.
Cash in United States dollars or U.S. Government Obligations held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for interest on
any such cash or U.S. Government Obligations received by it hereunder except as
otherwise agreed in writing with the Company or any Subsidiary Guarantor.
SECTION 606. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance, administration or
enforcement of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the Trustee,
to pay or reimburse the Trustee for expenses, disbursements and advances and to
indemnify and hold harmless the Trustee shall constitute indebtedness and shall
survive the satisfaction and discharge of this Indenture. As security for the
performance of such obligations of the Company, the Trustee shall have a claim
prior to the Notes upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the payment of principal of (and
premium, if any, on) or interest on particular Notes.
SECTION 607. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50 million. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus
<PAGE>
45
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 608. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company addressed to the Company and the Subsidiary Guarantors. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of not
less than a majority in principal amount of the Outstanding Notes, delivered to
the Trustee and to the Company addressed to the Company and the Subsidiary
Guarantors.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA Section
310(b) after written request therefor by the Company, any Subsidiary
Guarantor or by any Holder who has been a bona fide Holder of a Note for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 607 and shall
fail to resign after written request therefor by the Company, any Subsidiary
Guarantor or by any Holder who has been a bona fide Holder of a Note for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Notes delivered to the Company,
the Subsidiary Guarantors and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor
<PAGE>
46
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to the Holders of Notes
in the manner provided for in Section 106. Each notice shall include the name of
the successor Trustee and the address of its Corporate Trust Office.
SECTION 609. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article.
SECTION 610. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
PROVIDED such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes; and in case at
that time any of the Notes shall not have been authenticated, any successor
Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Notes in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
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47
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE, COMPANY AND SUBSIDIARY GUARANTORS
SECTION 701. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Every Holder of Notes, by receiving and holding the same, agrees with the
Company and the Trustee that none of the Company or the Trustee or any agent of
either of them shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with TIA
Section 312, regardless of the source from which such information was derived,
and that the Trustee shall not be held accountable by reason of mailing any
material pursuant to a request made under TIA Section 312(b).
SECTION 702. REPORTS BY TRUSTEE.
Within 60 days after [May 15] of each year commencing with the first [May
15] after the first issuance of Notes, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such [May 15] if required by TIA Section 313(a).
SECTION 703. REPORTS BY COMPANY AND SUBSIDIARY GUARANTORS.
The Company and each of the Subsidiary Guarantors shall:
(1) file with the Trustee, within 15 days after the Company or such
Subsidiary Guarantor is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company or such Subsidiary Guarantor may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company or any of the Subsidiary Guarantors is not required to file
information, documents or reports pursuant to either of said Sections, then
they shall file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission;
PROVIDED, HOWEVER, that any Subsidiary Guarantor shall be relieved of its
obligations under clauses (1) and (2) of this Section to the extent that it
is relieved of its obligations
<PAGE>
48
under Section 13 or Section 15(d) of the Exchange Act by the Commission
pursuant to the terms of any no-action letter addressed to the Company or
such Subsidiary Guarantor from the staff of the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any Person or group of affiliated Persons, or
permit any of its Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions, in the aggregate, would result
in a sale, assignment, transfer, lease or disposal of all or substantially all
of the properties and assets of the Company and its Subsidiaries on a
Consolidated basis to any other Person or group of affiliated Persons, unless at
the time and after giving effect thereto:
(1) either
(A) the Company shall be the surviving or continuing corporation or
(B) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or disposition,
the properties and assets of the Company substantially as an entirety
(the "Surviving Entity")
(i) shall be a corporation duly organized and validly existing
under the laws of the United States, any state thereof or the
District of Columbia and
(ii) shall, in any case, expressly assume, by a supplement
indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the Company
under the Notes and this Indenture, and this Indenture shall remain
in full force and effect;
(2) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (and treating any Indebtedness which
becomes an obligation of the Company or any of its Subsidiaries in
connection with or as a result of such transaction as having been incurred
at the time of such transaction), no Default or Event of Default shall have
occurred and be continuing;
(3) immediately before and immediately after giving effect to such
transaction on a PRO FORMA basis (on the assumption that the transaction
occurred on the first day of the four-quarter period immediately prior to
the consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such PRO FORMA calculation),
the Company (or the Surviving Entity if the Company is not the continuing
obligor under this Indenture) could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under the provisions of Section 1010;
<PAGE>
49
(4) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, shall have, by supplemental indenture to this
Indenture, confirmed that its respective Note Guarantees with respect to the
Notes shall apply to such Person's obligations under this Indenture and the
Notes;
(5) if any property or assets of the Company or any of its Subsidiaries
would thereupon become subject to any Lien, the provisions of Section 1012
are complied with; and
(6) the Company shall have delivered, or caused to be delivered, to the
Trustee an Officer's Certificate and an Opinion of Counsel, each to the
effect that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other transaction and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation, merger, sale, assignment, conveyance, transfer,
lease or other transaction described in, and complying with the provisions of,
Section 801 in which the Company is not the continuing corporation, the
successor Person formed or remaining shall succeed to, and be substituted for,
and may exercise every right and power of, the Company, as the case may be, and
the Company shall be discharged from all obligations and covenants under this
Indenture and the Notes, PROVIDED that, in the case of a transfer by lease, the
predecessor shall not be released from its obligations with respect to the
payment of principal (premium, if any) and interest on the Notes.
SECTION 803. NOTES TO BE SECURED IN CERTAIN EVENTS.
If, upon any such consolidation of the Company with or merger of the Company
into any other corporation, or upon any conveyance, lease or transfer of the
property of the Company substantially as an entirety to any other Person, any
property or assets of the Company would thereupon become subject to any Lien,
then unless such Lien could be created pursuant to Section 1012 without equally
and ratably securing the Notes, the Company, prior to or simultaneously with
such consolidation, merger, conveyance, lease or transfer, will as to such
property or assets, secure the Notes Outstanding (together with, if the Company
shall so determine any other Indebtedness of the Company now existing or
hereinafter created which is not subordinate in right of payment to the Notes)
equally and ratably with (or prior to) the Indebtedness which upon such
consolidation, merger, conveyance, lease or transfer is to become secured as to
such property or assets by such Lien, or will cause such Notes to be so secured.
<PAGE>
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, the Subsidiary Guarantors,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company contained
herein and in the Notes; or
(2) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee pursuant to the requirements of Section 609; or
(5) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture; PROVIDED that such action shall not adversely affect the
interests of the Holders in any material respect;
(6) to add new Subsidiary Guarantors pursuant to Section 1013;
(7) to secure the Notes pursuant to the requirements of Section 803 or
otherwise; or
(8) to comply with any requirements of the Commission in order to effect
and maintain the qualification of this Indenture under the Trust Indenture
Act.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Notes, by Act of said Holders delivered to the
Company, the Subsidiary Guarantors and the Trustee, the Company, when authorized
by a Board Resolution, the Subsidiary Guarantors and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders under
this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby:
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption or purchase
thereof, or change the coin or currency in which any Note or any premium or
the interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment after the Stated Maturity thereof (or,
in the case of redemption, on or after the Redemption Date), or
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(2) reduce the percentage in principal amount of the Outstanding Notes,
the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture, or
(3) modify any of the provisions of this Section or Sections 513 and
1015, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
(b) Each Subsidiary Guarantor [hereby appoints] the Company as its
attorney-in-fact to execute, on its behalf, any indenture supplemental hereto to
be entered into solely for the purpose specified in Section 901(6).
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to the Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company and the Subsidiary Guarantors shall
so determine, new Notes so modified as to conform, in the opinion of the Trustee
and the Company and the Subsidiary Guarantors, to any such supplemental
indenture may be prepared and executed by the Company and the Subsidiary
Guarantors and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
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SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Sections 901 and 902, the
Company shall give notice thereof to the Holders of each Outstanding Note
affected, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture; PROVIDED, HOWEVER, that the
Company shall not be required to give notice of any indenture supplemental
hereto entered into solely for the purpose specified in Section 901(5), (6) or
(8), notice with respect to which shall be given by the Company when it is next
required to give notice pursuant to this Section.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that it will
duly and punctually pay the principal of (and premium, if any, on) and interest
on the Notes in accordance with the terms of the Notes and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in The City of New York, an office or agency where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company or any Subsidiary Guarantor in respect of the
Notes and this Indenture may be served. The Corporate Trust Office of the
Trustee shall be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company and each of the Subsidiary Guarantors hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands. Unless otherwise specified with respect to the Notes as
contemplated by Section 301, the Company hereby designates as a Place of Payment
for the Notes the office or agency of the Trustee in the Borough of Manhattan,
The City of New York, and initially appoints Texas Commerce Trust Company of New
York, 80 Broad Street, Suite 400, New York, New York 10004, as Paying Agent to
receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind any such designation; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such other office or agency.
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53
SECTION 1003. MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of (and premium, if any, on) or interest
on any of the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the Notes, it
will, on or before each due date of the principal of (and premium, if any, on),
or interest on, any Notes, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
The Company will cause each Paying Agent (other than the Trustee) to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any payment of principal (and
premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any,
on) or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper
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54
published in the English language, customarily published on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 1004. CORPORATE EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect the corporate existence,
rights (charter and statutory) and franchises of the Company and each
Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders.
Notwithstanding anything to the contrary in this Section 1004, the Company shall
be permitted to consolidate or merge any of its Subsidiaries with or into the
Company or any Wholly Owned Subsidiary of the Company.
SECTION 1005. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary and (b) all lawful claims
for labor, materials and supplies, which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; PROVIDED, HOWEVER, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties owned by the Company or any Subsidiary
or used or held for use in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; PROVIDED, HOWEVER, that nothing in this Section shall prevent the
Company from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. INSURANCE.
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
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55
SECTION 1008. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture. For purposes of this Section 1008, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1009. PURCHASE OF NOTES UPON A CHANGE OF CONTROL TRIGGERING EVENT.
(a) Upon the occurrence of a Change of Control Triggering Event, each Holder
shall have the right to require that the Company purchase such Holder's Notes in
whole or in part in integral multiples of $1,000 (the "Change of Control
Purchase Offer"), at a purchase price (the "Change of Control Purchase Price")
in cash in an amount equal to 101% of the principal amount thereof, together
with accrued and unpaid interest, if any, to the date of purchase (the "Change
of Control Purchase Date"), in accordance with the procedures set forth in
paragraphs (c) and (d) of this Section.
(b) Upon the occurrence of a Change of Control Triggering Event and prior to
the mailing of the notice to Holders provided for in paragraph (c) below, the
Company covenants to either (x) repay in full all Indebtedness under the Credit
Agreement or offer to repay in full all such Indebtedness and to repay the
Indebtedness of each of the Banks that has accepted such offer or (y) obtain any
requisite consent under the Credit Agreement to permit the purchase of the Notes
as provided for in paragraph (c) below or take any other action as may be
required under the Credit Agreement to permit such purchase.
(c) Within 30 days following any Change of Control Triggering Event, the
Company shall give to each Holder of the Notes in the manner provided in Section
106 a notice stating:
(1) that a Change of Control Triggering Event has occurred and that such
Holder has the right to require the Company to purchase in whole or in part
such Holder's Notes at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control Triggering Event (including but not limited to information with
respect to PRO FORMA historical income, cash flow and capitalization after
giving effect to the Change of Control);
(3) the Change of Control Purchase Date which shall be no earlier than
30 days nor later than 60 days from the date such notice is mailed or such
later date as is necessary to comply with the Exchange Act;
(4) that any Note, or portion thereof, not tendered will continue to
accrue interest;
(5) that, unless the Company defaults in the payment of the Change of
Control Purchase Price, any Notes accepted for payment of the Change of
Control Purchase Price pursuant to the Change of Control Purchase Offer
shall cease to accrue interest after the Change of Control Purchase Date;
and
(6) the instructions a Holder must follow in order to have its Notes
purchased in accordance with paragraph (d) of this Section.
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(d) Holders electing to have Notes purchased will be required to surrender
such Notes to the Company at the address specified in the notice at least five
Business Days prior to the Change of Control Purchase Date. Holders will be
entitled to withdraw their election if the Company receives, not later than five
Business Days prior to the Change of Control Purchase Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes delivered for purchase by the Holder as to which
his election is to be withdrawn and a statement that such Holder is withdrawing
his election to have such Notes purchased. Holders whose Notes are purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.
(e) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and other applicable securities
laws and regulations in connection with a Change of Control Purchase Offer.
SECTION 1010. LIMITATION ON INDEBTEDNESS.
The Company will not, and will not permit any of its Subsidiaries to,
create, assume, or directly or indirectly guarantee or in any other manner
become directly or indirectly liable for the payment of, or otherwise incur
(collectively, "incur"), any Indebtedness (including any Acquired Indebtedness)
other than Permitted Indebtedness, unless, at the time of such event (and after
giving effect on a PRO FORMA basis to (i) the incurrence of such Indebtedness;
(ii) the incurrence, repayment or retirement of any other Indebtedness by the
Company or its Subsidiaries since the first day of such four-quarter period as
if such Indebtedness was incurred, repaid or retired at the beginning of such
four-quarter period; and (iii) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any company,
entity or business acquired or disposed of by the Company or its Subsidiaries,
as the case may be, since the first day of such four-quarter period, as if such
acquisition or disposition had occurred at the beginning of such four-quarter
period), the Consolidated Fixed Charge Coverage Ratio of the Company for the
four full fiscal quarters immediately preceding such event, taken as one period
and calculated on the assumption that such Indebtedness had been incurred on the
first day of such four-quarter period and, in the case of Acquired Indebtedness,
on the assumption that the related acquisition (whether by means of purchase,
merger or otherwise) also had occurred on such date with the appropriate
adjustments with respect to such acquisition being included in such PRO FORMA
calculation, would have been at least equal to 1.75 to 1.
SECTION 1011. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company will not, and will not permit any Subsidiary of the Company
to, directly or indirectly:
(1) declare or pay any dividend on, or make any distribution to, the
holders of, any Capital Stock of the Company (other than dividends or
distributions payable solely in shares of Qualified Capital Stock of the
Company or in options, warrants or other rights to purchase such Qualified
Capital Stock);
(2) purchase, redeem or otherwise acquire or retire for value, directly
or indirectly, any Capital Stock of the Company or any Subsidiary or any
options, warrants or other rights to acquire such Capital Stock;
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57
(3) make any principal payment on, or redeem, repurchase, defease or
otherwise acquire or retire for value, prior to any scheduled repayment,
sinking fund payment or maturity, any Indebtedness of the Company which is
subordinate in right of payment to the Notes or of any Subsidiary Guarantor
that is subordinate to such Subsidiary Guarantor's Note Guarantee;
(4) declare or pay any dividend or distribution on any Capital Stock of
any Subsidiary of the Company to any Person (other than the Company or any
Wholly Owned Subsidiary of the Company) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Subsidiary of the
Company held by any Person (other than the Company or any Wholly Owned
Subsidiary of the Company);
(5) create, assume or suffer to exist any guarantee of Indebtedness of
any Affiliate of the Company (other than a Wholly Owned Subsidiary of the
Company in accordance with the terms of the Indenture); or
(6) make any Investment (other than any Permitted Investment) in any
Person
(such payments described in clauses (1) through (6) and not excepted therefrom
are collectively referred to herein as "Restricted Payments") unless at the time
of and immediately after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (i) no Default or Event of Default shall have
occurred and be continuing and (ii) the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in accordance with the
provisions described under Section 1010.
(b) Notwithstanding paragraph (a) above, the Company and its Subsidiaries
may take the following actions so long as (with respect to clauses (2), (3), and
(4), below) no Default or Event of Default shall have occurred and be
continuing:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such declaration complied
with the provisions of paragraph (a) above;
(2) the purchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Company, in exchange for, or out
of the net cash proceeds of, a substantially concurrent issuance and sale
(other than to a Subsidiary) of shares of Capital Stock of the Company
(other than Redeemable Capital Stock, unless the redemption provisions of
such Redeemable Capital Stock prohibit the redemption thereof prior to the
date on which the Capital Stock to be acquired or retired was by its terms
required to be redeemed);
(3) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness (other than Redeemable
Capital Stock) in exchange for or out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a Subsidiary) of
shares of Capital Stock of the Company (other than Redeemable Capital Stock,
unless the redemption provisions of such Redeemable Capital Stock prohibit
the redemption thereof prior to the Stated Maturity of the Subordinated
Indebtedness to be acquired or retired); and
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(4) the purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Indebtedness (other than Redeemable
Capital Stock) in exchange for, or out of the net cash proceeds of a
substantially concurrent incurrence or sale (other than to a Subsidiary) of,
new Subordinated Indebtedness of the Company so long as
(A) the principal amount of such new Subordinated Indebtedness does
not exceed the principal amount (or, if such Subordinated Indebtedness
being refinanced provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration thereof,
such lesser amount as of the date of determination) of the Subordinated
Indebtedness being so purchased, redeemed, defeased, acquired or retired,
PLUS the amount of any premium required to be paid in connection with
such refinancing pursuant to the terms of the Subordinated Indebtedness
refinanced or the amount of any premium reasonably determined by the
Company as necessary to accomplish such refinancing, PLUS the amount of
expenses of the Company incurred in connection with such refinancing,
(B) such new Subordinated Indebtedness is subordinated to the Notes
to the same extent as such Subordinated Indebtedness so purchased,
redeemed, defeased, acquired or retired, and
(C) such new Subordinated Indebtedness has an Average Life longer
than the Average Life of the Notes and a final Stated Maturity of
principal later than the final Stated Maturity of principal of the Notes.
SECTION 1012. LIMITATION ON LIENS.
The Company will not, and will not permit any Subsidiary of the Company to,
directly or indirectly, create, incur, assume or suffer to exist any Lien (other
than Permitted Liens) of any kind upon any Principal Property or upon any shares
of stock or indebtedness of any Subsidiary of the Company now owned or acquired
after the date of this Indenture, or any income or profits therefrom, unless (a)
the Notes are directly secured equally and ratably with (or prior to in the case
of Liens with respect to Subordinated Indebtedness) the obligation or liability
secured by such Lien or (b) any such Lien is in favor of the Company or any
Subsidiary Guarantor.
SECTION 1013. ADDITIONAL GUARANTEES.
If the Company or any of its Subsidiaries shall acquire or form a
Subsidiary, the Company will cause any such Subsidiary (other than an Equity
Store or Business Development Venture, PROVIDED that such Equity Store or
Business Development Venture does not guarantee the Senior Indebtedness of any
other Person) that is or becomes a Significant Subsidiary or that guarantees any
Senior Indebtedness of the Company or of any Subsidiary Guarantor to become a
Subsidiary Guarantor with respect to the Notes. Any such Subsidiary shall become
a Subsidiary Guarantor by (i) executing and delivering to the Trustee a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee pursuant to which such Subsidiary shall guarantee all of the obligations
of the Company with respect to the Notes issued under this Indenture on a senior
basis and (ii) delivering to the Trustee an Opinion of Counsel reasonably
satisfactory to the Trustee to the effect that a supplemental indenture has been
duly executed and delivered by such Subsidiary and is in compliance with the
terms of this Indenture.
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SECTION 1014. PROVISION OF FINANCIAL STATEMENTS.
Whether or not the Company is subject to Section 13(a), 13(c) or 15(d) of
the Exchange Act, the Company will file with the Commission the annual reports,
quarterly reports and other documents that the Company is or would have been
required to file with the Commission pursuant to such Section 13(a), 13(c) or
15(d) of the Exchange Act if the Company were so subject, such documents to be
filed with the Commission on or prior to the respective dates (the "Required
Filing Dates") by which the Company would have been required so to file such
documents if the Company were so subject. The Company will also in any event
within 15 days of each Required Filing Date (within 30 days of such Required
Filing Date for any reports filed on Form 10-K) (i) transmit by mail to each
Holder, as its name and address appears in the security register, without cost
to such holder and (ii) file with the Trustee copies of the annual reports,
quarterly reports and other documents which the Company is or would have been
required to file with the Commission pursuant to Section 13(a), 13(c) or 15(d)
of the Exchange Act if the Company were so subject.
SECTION 1015. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 803 or Sections 1007 through 1014,
inclusive, if before or after the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Notes, by Act of such
Holders, waive such compliance in such instance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. RIGHT OF REDEMPTION.
The Notes may be redeemed, at the option of the Company, as a whole or from
time to time in part, at any time on or after , 1999, subject to
the conditions and at the Redemption Prices specified in the form of Note,
together with accrued interest to the Redemption Date.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section 1101
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such
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Redemption Date and of the principal amount of Notes to be redeemed and shall
deliver to the Trustee such documentation and records as shall enable the
Trustee to select the Notes to be redeemed pursuant to Section 1104.
SECTION 1104. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all the Notes are to be redeemed, the particular Notes to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Notes not previously called for redemption,
pro rata unless prohibited by applicable law, in which case by such method as
the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions of the principal of Notes; PROVIDED,
HOWEVER, that no such partial redemption shall reduce the portion of the
principal amount of a Note not redeemed to less than $1,000.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Notes shall relate, in the case of any
Note redeemed or to be redeemed only in part, to the portion of the principal
amount of such Note which has been or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in Section
106 not less than 30 nor more than 60 days prior to the Redemption Date, to each
Holder of Notes to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Notes are to be redeemed, the
identification by CUSIP Numbers, if any (and, in the case of a partial
redemption, the principal amounts), of the particular Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Note, or the
portion thereof, to be redeemed, and that interest thereon will cease to
accrue on and after said date, and
(5) the place or places where such Notes are to be surrendered for
payment of the Redemption Price.
Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in
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trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and accrued interest on, any Notes, or any portions
thereof, to be redeemed on that date.
SECTION 1107. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Notes, or
portions thereof, shall cease to bear interest. Upon surrender of any such Note
for redemption in accordance with said notice, such Note shall be paid by the
Company at the Redemption Price, together with accrued interest, if any, to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Notes, or one or more Predecessor Notes, registered as such at the close
of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate borne by the Notes.
SECTION 1108. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part (pursuant to the provisions of
this Article shall be surrendered at the office or agency of the Company
maintained for such purpose pursuant to Section 1002 (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Note without service charge, a new Note or Notes, of any authorized
denomination as requested by such Holder, in an aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the Note so
surrendered.
ARTICLE TWELVE
NOTE GUARANTEES
SECTION 1201. NOTE GUARANTEES.
Subject to the provisions of this Article Twelve, each Subsidiary Guarantor
hereby irrevocably and unconditionally guarantees, jointly and severally, on a
senior basis to each Holder and to the Trustee, on behalf of the Holders, (i)
the due and punctual payment of the principal of and interest on each Note, when
and as the same shall become due and payable, whether at Stated Maturity or
purchase upon a Change of Control Triggering Event, and whether by declaration
of acceleration, Change of Control Triggering Event, call for redemption or
otherwise, the due and punctual payment of interest on the overdue principal of
and interest, if any, on the Notes, to the extent lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of such Note and this Indenture and
(ii) in the case of any extension of time of payment
<PAGE>
62
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, at Stated Maturity or purchase upon a Change of Control
Triggering Event, and whether by declaration of acceleration, Change of Control
Triggering Event, call for redemption or otherwise (the obligations in clauses
(i) and (ii) hereof being the "Guaranteed Obligations").
Without limiting the generality of the foregoing, each Subsidiary
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Company to the Holders or the
Trustee under the Notes and the Indenture but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company. The Subsidiary
Guarantors hereby agree that their obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Note or this Indenture, any failure
to enforce the provisions of any such Note or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto, by any
Holder or any other circumstances which may otherwise constitute a legal or
equitable discharge or defense of the Company or a surety or guarantor.
The Subsidiary Guarantors hereby waive diligence, presentment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a proceeding first against the Company, the benefit of
discussion, protest or notice with respect to any such Note or the Indebtedness
evidenced thereby and all demands whatsoever (except as specified above), and
covenant that the Guaranteed Obligations will not be discharged as to any such
Note except by payment in full of such Guaranteed Obligations and as provided in
Sections 401, 1102 and 1205.
Each Subsidiary Guarantor further agrees that, as between such Subsidiary
Guarantor and the Holders, (i) the maturity of the Guaranteed Obligations may be
accelerated as provided in Article Five, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Company or any
other Subsidiary Guarantor in respect of the Guaranteed Obligations, and (ii) in
the event of any declaration of acceleration of such Guaranteed Obligations as
provided in Article Five, such Guaranteed Obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor. In
addition, without limiting the foregoing provisions, upon the effectiveness of
an acceleration under Article Five, the Trustee shall promptly make a demand for
payment on any Notes in respect of which the Guaranteed Obligations provided for
in this Article Twelve are not discharged.
Each Subsidiary Guarantor hereby irrevocably waives any claim or other
rights that it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Subsidiary
Guarantor's obligations under this Indenture, or any other document or
instrument including, without limitation, any right of reimbursement,
exoneration, contribution, indemnification, any right to participate in any
claim or remedy of the Holders against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or common law,
including, without limitation, the right to take or receive from the Company,
directly or indirectly, in cash or other property or in any other manner,
payment or security on account of such claim or other rights. Each Subsidiary
Guarantor shall be subrogated to all rights of the Holders of the
<PAGE>
63
Notes pursuant to any Note Guarantee against the Company in respect of any
amounts paid by such Subsidiary Guarantor on account of such Note pursuant to
the provisions of this Indenture; PROVIDED, HOWEVER, that no Subsidiary
Guarantor shall be entitled to enforce or to receive any payments arising out
of, or based upon such right of subrogation until the principal of (and premium,
if any) and interest on all Notes issued hereunder shall have been paid in full
to the Holders entitled thereto. If any amount shall be paid to any Subsidiary
Guarantor in violation of this paragraph and the Guaranteed Obligations shall
not have been paid in full, such amount shall be deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the benefit
of, the Holders, and shall forthwith be paid to the Trustee. Each Subsidiary
Guarantor acknowledges that it will receive direct and indirect benefits from
the issuance of the Notes and that the waiver set forth in this Section 1201 is
knowingly made in contemplation of such benefits.
Without limiting the generality of the foregoing, the Subsidiary Guarantors
hereby expressly and specifically waive the benefits of Section 26-7 through
26-9 of the General Statutes of North Carolina, as amended from time to time,
and any similar statute or law of any other jurisdiction, as the same may be
amended from time to time.
SECTION 1202. OBLIGATIONS OF THE SUBSIDIARY GUARANTORS UNCONDITIONAL.
Nothing contained in this Article Twelve, elsewhere in this Indenture or in
any Note is intended to or shall impair, as between the Subsidiary Guarantors
and the Holders, the obligation of the Subsidiary Guarantors, which obligations
are independent of the obligations of the Company under the Notes and this
Indenture and are absolute and unconditional, to pay to the Holders the
Guaranteed Obligations as and when the same shall become due and payable in
accordance with the provisions of this Indenture, or is intended to or shall
affect the relative rights of the Holders and creditors of the Subsidiary
Guarantors, nor shall anything herein or therein prevent the Trustee or any
Holder from exercising all remedies otherwise permitted by applicable law upon
Default under this Indenture. Each payment to be made by any Subsidiary
Guarantor hereunder in respect of the Guaranteed Obligations shall be payable in
the currency or currencies in which such Guaranteed Obligations are denominated.
SECTION 1203. RANKING OF NOTE GUARANTEES.
Each Subsidiary Guarantor covenants and agrees, and each Holder of a Note by
his acceptance thereof likewise covenants and agrees, that each Note Guarantee
will be an unsecured senior obligation of the Subsidiary Guarantor issuing such
Note Guarantee, ranking PARI PASSU in right of payment with all other existing
and future Senior Indebtedness of such Subsidiary Guarantor and senior in right
of payment to any future Indebtedness of such Subsidiary Guarantor that is
expressly subordinated to Senior Indebtedness of such Subsidiary Guarantor.
SECTION 1204. LIMITATION OF NOTE GUARANTEES.
The Company and each Subsidiary Guarantor, and each Holder of a Note by his
acceptance thereof, hereby confirm that it is the intention of all such parties
that each Subsidiary Guarantor shall be liable under this Indenture only for
amounts aggregating up to the largest amount that would not render its
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any
<PAGE>
64
applicable state law. To effectuate the foregoing intention, the Holders hereby
irrevocably agree that in the event that any such Note Guarantee would
constitute or result in a violation of any applicable fraudulent conveyance or
similar law of any relevant jurisdiction, the liability of the Subsidiary
Guarantor under such Note Guarantee shall be reduced to the maximum amount,
after giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor, permissible under the applicable fraudulent conveyance or
similar law.
SECTION 1205. RELEASE OF SUBSIDIARY GUARANTORS.
(a) Any Subsidiary Guarantor shall be released from and relieved of its
obligations under this Article Twelve (1) upon defeasance in accordance with
Section 1302, (2) upon the payment in full of all the Guaranteed Obligations or
(3) upon the sale by the Company or any Subsidiary of such Subsidiary Guarantor
to any Person other than a Subsidiary of the Company provided that such sale
does not result in a sale, assignment, transfer, lease or disposal of all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a Consolidated basis. Upon the delivery by the Company to the
Trustee of an Officers' Certificate and, if requested by the Trustee, an Opinion
of Counsel to the effect that the transaction giving rise to the release of such
obligations was made by the Company in accordance with the provisions of this
Indenture and the Notes, the Trustee shall execute any documents reasonably
required in order to evidence the release of the Subsidiary Guarantors from
their obligations. If any of the Guaranteed Obligations are revived and
reinstated after the termination of such Note Guarantee, then all of the
obligations of the Subsidiary Guarantors under such Note Guarantee shall be
revived and reinstated as if such Note Guarantee had not been terminated until
such time as the Guaranteed Obligations are paid in full, and the Subsidiary
Guarantors shall execute any documents reasonably satisfactory to the Trustee
evidencing such revival and reinstatement.
(b) Upon (i) the sale or disposition of all of the Common Stock of a
Subsidiary Guarantor (by merger or otherwise) to a Person other than the Company
and which sale or disposition is otherwise in compliance with the terms of this
Indenture, or (ii) the unconditional and full release in writing as provided
herein of such Subsidiary Guarantor from all Indebtedness arising hereunder,
such Subsidiary Guarantor shall be deemed released from all obligations under
this Article Twelve; PROVIDED, HOWEVER, that any such termination upon such sale
or disposition shall occur if and only to the extent that all obligations of
such Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, Indebtedness of the
Company or any Subsidiary, shall also terminate upon such sale or disposition.
Upon the delivery by the Company to the Trustee of an Officers' Certificate and,
if requested by the Trustee, an Opinion of Counsel to the effect that the
transaction giving rise to the release of such obligations was made in
accordance with the provisions of this Indenture and the Notes, the Trustee
shall execute any documents reasonably required in order to evidence the release
of such Subsidiary Guarantor from its obligations. Any Subsidiary Guarantor not
so released remains liable for the full amount of principal of (and premium, if
any) and interest on the Notes as provided in this Article Twelve.
<PAGE>
65
SECTION 1206. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
Except as set forth in Section 1205 and in Articles Eight and Ten hereof,
nothing contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into the Company or a
Subsidiary Guarantor or shall prevent any sale or conveyance of the property of
a Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or a Subsidiary Guarantor.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option and at any time, with respect to the Notes,
elect to have either Section 1302 or Section 1303 be applied to all Outstanding
Notes upon compliance with the conditions set forth below in this Article
Thirteen.
SECTION 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 1301 of the option applicable to
this Section 1302, the Company shall be deemed to have been discharged from its
obligations with respect to all Outstanding Notes on the date the conditions set
forth in Section 1304 are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding Notes, which
shall thereafter be deemed to be "Outstanding" only for the purposes of Section
1305 and the other Sections of this Indenture referred to in (A) and (B) below,
and to have satisfied all its other obligations under such Notes and this
Indenture insofar as such Notes are concerned (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Outstanding Notes to receive payments in
respect of the principal of (and premium, if any, on) and interest on such Notes
when such payments are due or on the Redemption Date with respect to such Notes,
as the case may be, (B) the Company's obligations with respect to such Notes
under Sections 304, 305, 306, 1002 and 1003, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (D) this Article Thirteen.
Subject to compliance with this Article Thirteen, the Company may exercise its
option under this Section 1302 notwithstanding the prior exercise of its option
under Section 1303 with respect to the Notes.
SECTION 1303. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 1301 of the option applicable to
this Section 1303, the Company shall be released from its obligations under any
covenant contained in Section 801(3) and Section 803 and in Sections 1007
through 1015 with respect to the Outstanding Notes on and after the date the
conditions set forth below are satisfied
<PAGE>
66
(hereinafter, "covenant defeasance"), and the Notes shall thereafter be deemed
not to be "Outstanding" for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "Outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the Outstanding Notes, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 501(3), but, except as specified above, the remainder
of this Indenture and such Notes shall be unaffected thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section 1302
or Section 1303 to the Outstanding Notes:
(1) the Company shall irrevocably have deposited with the Trustee (or
another trustee satisfying the requirements of Section 607 who shall agree
to comply with the provisions of this Article Thirteen applicable to it) in
trust, for the benefit of the Holders, cash in United States dollars, U.S.
Government Obligations or a combination thereof in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge the principal of, and premium, if any, and
interest on the Outstanding Notes on the Stated Maturity or on an optional
redemption date (such date being referred to as the "Defeasance Redemption
Date"), as the case may be, if in the case of a Defeasance Redemption Date
prior to electing to exercise either defeasance or covenant defeasance, the
Company has delivered to the Trustee an irrevocable notice to redeem all of
the outstanding Notes on such Defeasance Redemption Date;
(2) in the case of an election under Section 1302, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States stating that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (y) since the
date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel in the United States shall confirm that, the Holders of
the Outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(3) in the case of an election under Section 1303, the Company shall
have delivered to the Trustee an opinion of independent counsel in the
United States to the effect that the Holders of the Outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred;
<PAGE>
67
(4) no Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit or, insofar as
paragraphs (8) and (9) of Section 501 hereof are concerned, at any time
during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period);
(5) such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Company or any Subsidiary
Guarantor is a party or by which it is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders or any Subsidiary Guarantor over the other
creditors of the Company or any Subsidiary Guarantor or with the intent of
defecting, hindering, delaying or defrauding creditors of the Company, any
Subsidiary Guarantor or others; and
(7) the Company shall have delivered to the Trustee an Officers'
Certificate stating that all conditions precedent provided for relating to
either the defeasance under Section 1302 or the covenant defeasance under
Section 1303 (as the case may be) have been complied with.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Notes.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance, as applicable, in accordance with this Article.
<PAGE>
68
SECTION 1306. REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1302 or 1303, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1305, and the Company shall execute all documents reasonably satisfactory to the
Trustee evidencing such revival and reinstatement; PROVIDED, HOWEVER, that if
the Company makes any payment of principal of (or premium, if any, on) or
interest on any Note following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE FOURTEEN
SINKING FUND
SECTION 1401. MANDATORY SINKING FUND PAYMENTS.
As a mandatory sinking fund for the retirement of certain of the Notes, the
Company will, until all such Notes shall have been paid, or payment thereof duly
provided for, pay to the Trustee, on each of , 1999 and
, 2000 (each such date a "sinking fund payment date"), an amount
sufficient to redeem $1 million principal amount of Notes, at a Redemption Price
equal to 100% of their principal amount. The cash amount of any sinking fund
payment is subject to reduction as provided in Section 1402. Each sinking fund
payment shall be applied to the redemption of Notes on such sinking fund payment
date as herein provided.
SECTION 1402. SATISFACTION OF SINKING FUND PAYMENTS WITH NOTES.
Subject to Section 1403, in lieu of making all or any part of any sinking
fund payment in cash, the Company may at its option (1) deliver to the Trustee
Outstanding Notes (other than any previously called for redemption) theretofore
purchased or otherwise acquired by the Company and/or (2) receive credit for the
principal amount of Notes which have been redeemed at the election of the
Company pursuant to Section 1101, in each case in satisfaction of all or any
part of any sinking fund payment required to be made pursuant to Section 1401;
PROVIDED, HOWEVER, that such Notes have not been previously so credited. Such
Notes shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in the form of Note for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 1403. REDEMPTION OF NOTES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date, the Company
will deliver to the Trustee an Officer's Certificate specifying the amount of
the next ensuing sinking fund payment, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering or crediting Notes pursuant to Section 1402 (which Notes
will, if not previously delivered, accompany such certificate). Such
<PAGE>
69
certificate shall be irrevocable and, upon its delivery, the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such certificate, the sinking fund payment due
on the next succeeding sinking fund payment date shall be paid entirely in cash
and shall be sufficient to redeem the principal amount of such Notes subject to
such sinking fund payment without the option to deliver or credit Notes as
provided in Section 1402.
Not more than 60 days before each such sinking fund payment date, the
Trustee shall select the Notes to be redeemed upon such sinking fund payment
date in the manner specified in Section 1104 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1105. Such notice having been duly given, the
redemption of such Notes shall be made upon the terms and in the manner stated
in Sections 1107 and 1108.
Prior to any sinking fund payment date, the Company shall pay to the Trustee
or a Paying Agent a sum in cash equal to any interest that will accrue to the
date fixed for redemption of Notes or portions thereof to be redeemed on such
sinking fund payment date pursuant to this Section 1403.
Notwithstanding the foregoing, if at any time the amount of cash to be paid
into such sinking fund on the next succeeding sinking fund payment date,
together with any unused balance of any preceding sinking fund payment or
payments, does not exceed in the aggregate $100,000, the Trustee, unless
requested by the Company, shall not give the next succeeding notice of the
redemption of Notes through the operation of the sinking fund. Any such unused
balance of moneys deposited in such sinking fund shall be added to the sinking
fund payment to be made in cash on the next succeeding sinking fund payment date
or, at the request of the Company, shall be applied at any time or from time to
time to the purchase of Notes, by public or private purchase, in the open market
or otherwise, at a purchase price for such Notes (excluding accrued interest and
brokerage commissions, for which the Trustee or any Paying Agent will be
reimbursed by the Company) not in excess of the principal amount thereof. In the
absence of such written request, the Trustee shall be under no duty to make such
purchases or otherwise invest such unused balance.
<PAGE>
70
This Indenture may be signed in any number of counterparts each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this 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.
FLEMING COMPANIES, INC.
SEAL By ___________________________________
Title:
Attest: __________________________
Title:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By ___________________________________
Title:
Attest: __________________________
Title:
[ATI, Inc.
Badger Markets, Inc.
Baker's Supermarkets, Inc.
Ball Motor Service, Inc.
Boogaart Stores of Nebraska, Inc.
Central Park Super Duper, Inc.
Commercial Cold/Dry Storage Company
Consumers Markets, Inc.
D.L. Food Stores, Inc.
Del-Arrow Super Duper, Inc.
Festival Foods, Inc.
Fleming Direct Sales Corporation
Fleming Foods East, Inc.
Fleming Foods of Alabama, Inc.
Fleming Foods of Ohio, Inc.
Fleming Foods of Tennessee, Inc.
Fleming Foods of Texas, Inc.
Fleming Foods of Virginia, Inc.
Fleming Foods South, Inc.
Fleming Foods West, Inc.
<PAGE>
71
Fleming Foreign Sales Corporation
Fleming Franchising, Inc.
Fleming Holdings, Inc.
Fleming International, Ltd.
Fleming Site Media, Inc.
Fleming Supermarkets of Florida, Inc.
Fleming Technology Leasing Company,
Inc.
Fleming Transportation Service, Inc.
Food Brands, Inc.
Food-4-Less, Inc.
Food Holdings, Inc.
Food Saver of Iowa, Inc.
Gateway Development Co., Inc.
Gateway Food Distributors, Inc.
Gateway Foods, Inc.
Gateway Foods of Altoona, Inc.
Gateway Foods of Pennsylvania, Inc.
Gateway Foods of Twin Ports, Inc.
Gateway Foods Service Corporation
Grand Central Leasing Corporation
Great Bend Supermarkets, Inc.
Hub City Transportation, Inc.
Kensington and Harlem, Inc.
LAS, Inc.
Ladysmith East IGA, Inc.
Ladysmith IGA, Inc.
Lake Markets, Inc.
M&H Desoto, Inc.
M&H Financial Corp.
M&H Realty Corp.
Malone & Hyde, Inc.
Malone & Hyde of Lafayette, Inc.
Manitowoc IGA, Inc.
Moberly Foods, Inc.
Mt. Morris Super Duper, Inc.
Niagara Falls Super Duper, Inc.
Northern Supermarkets of Oregon, Inc.
Northgate Plaza, Inc.
109 West Main Street, Inc.
121 East Main Street, Inc.
Peshtigo IGA, Inc.
Piggly Wiggly Corporation
Quality Incentive Company, Inc.
Rainbow Transportation Services, Inc.
Route 16, Inc.
Route 219, Inc.
<PAGE>
72
Route 417, Inc.
Richland Center IGA, Inc.
Scrivner, Inc.
Scrivner-Food Holdings, Inc.
Scrivner of Alabama, Inc.
Scrivner of Illinois, Inc.
Scrivner of Iowa, Inc.
Scrivner of Kansas, Inc.
Scrivner of New York, Inc.
Scrivner of North Carolina, Inc.
Scrivner of Pennsylvania, Inc.
Scrivner of Tennessee, Inc.
Scrivner of Texas, Inc.
Scrivner Super Stores of Illinois,
Inc.
Scrivner Super Stores of Iowa, Inc.
Scrivner Transportation, Inc.
Sehon Foods, Inc.
Selected Products, Inc.
Sentry Markets, Inc.
Smar Trans, Inc.
South Ogden Super Duper, Inc.
Southern Supermarkets, Inc. (TX)
Southern Supermarkets, Inc. (OK)
Southern Supermarkets of Louisiana,
Inc.
Star Groceries, Inc.
Store Equipment, Inc.
Sundries Service, Inc.
Switzer Foods, Inc.
35 Church Street, Inc.
Thompson Food Basket, Inc.
29 Super Market, Inc.
27 Slayton Avenue, Inc.
WPC, Inc.
Each, a Subsidiary Guarantor
By ___________________________________
Name: John M. Thompson
Title: Vice President and Treasurer
(Chief Financial Officer)]
Attest:
__________________________________
[Secretary]
<PAGE>
[MCAFEE & TAFT LETTERHEAD]
December 5, 1994
Fleming Companies, Inc.
6301 Waterford Boulevard
P.O. Box 26647
Oklahoma City, Oklahoma 73126
Gentlemen:
Reference is made to your Amendment No. 3 to Registration Statement on
Form S-3 (Registration No. 33-55369) to be filed with the Securities and
Exchange Commission on December 5, 1994. Unless otherwise defined herein,
capitalized terms used herein are defined as set forth in the above-mentioned
Registration Statement.
We have examined Fleming's corporate records, have attended meetings of
Fleming's Board of Directors and have made such other investigations as we
have deemed appropriate in order to express the opinions set forth herein. In
addition, we have relied upon opinions of local counsel, where appropriate, and
the factual representations made by Fleming and the Subsidiary Guarantors in
the Senior Note Indentures.
Based on and subject to the foregoing, we are of the opinion that:
1. The Notes proposed to be sold by Fleming, when issued to the
Underwriters against payment therefor in accordance with the underwriting
agreement between Fleming and Merrill Lynch & Co. and J.P. Morgan Securities
Inc., will be validly issued and will be binding obligations of the Company;
and
2. Upon such issuance of the Notes, the Note Guarantees will be binding
obligations of the Subsidiary Guarantors enforceable against such Subsidiary
Guarantors in accordance with their terms, except as such enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered a proceeding in equity or at law).
We hereby consent to the inclusion of this opinion as an exhibit to the
above-mentioned Registration Statement and to the reference to our firm under
the caption "Legal Opinions" in the Prospectus comprising a part of such
Registration Statement.
Very truly yours,
/s/ MCAFEE & TAFT APC
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McAfee & Taft
A Professional Corporation
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 3 to Registration Statement No.
33-55369 of Fleming Companies, Inc. on Form S-3 of our report dated February 10,
1994, (October 1, 1994 as to Subsidiary Guarantors note) appearing in the
Prospectus, which is a part of such Registration Statement, and to the reference
to us under the heading "Experts" in such Prospectus.
DELOITTE & TOUCHE LLP
Oklahoma City, Oklahoma
December 5, 1994
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.
ARTHUR ANDERSEN LLP
Oklahoma City, Oklahoma
December 5, 1994
