KROGER CO
S-3, 1996-06-25
GROCERY STORES
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<PAGE>
 
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 25, 1996.
 
                                                      REGISTRATION NO. 33-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                               ----------------
                                   FORM S-3
                            REGISTRATION STATEMENT
                                     UNDER
                          THE SECURITIES ACT OF 1933
                               ----------------
                                THE KROGER CO.
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
                               ----------------
                 OHIO                                31-0345740
    (STATE OR OTHER JURISDICTION OF               (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)
                               1014 VINE STREET
                            CINCINNATI, OHIO 45202
                                (513) 762-4000
         (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
            AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
                               ----------------
                             PAUL W. HELDMAN, ESQ.
                 VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
                                THE KROGER CO.
                               1014 VINE STREET
                            CINCINNATI, OHIO 45202
                                (513) 762-4000
           (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
                  INCLUDING AREA CODE, OF AGENT FOR SERVICE)
                               ----------------
  APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
  If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
  If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
  If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
  If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
  If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
                        CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                PROPOSED
                                                 MAXIMUM            AMOUNT OF
           TITLE OF SECURITIES                  AGGREGATE         REGISTRATION
             TO BE REGISTERED               OFFERING PRICE(1)          FEE
- -------------------------------------------------------------------------------
<S>                                        <C>                 <C>
Debt Securities...........................   $500,000,000(2)     $172,413.79(3)
- -------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
(1) Estimated solely for purposes of determining the amount of the
    registration fee.
(2) In U.S. dollars or equivalent thereof.
(3) Includes $100,000,000 of Securities registered pursuant to Registration
    No. 33-60946 carried forward pursuant to Rule 429. The registration fee
    attributable to those Securities is $34,482.76.
                               ----------------
  THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<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.                                                               +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
                   SUBJECT TO COMPLETION, DATED JUNE 25, 1996
 
                                 THE KROGER CO.
 
                                DEBT SECURITIES
 
                                  -----------
 
  The Kroger Co. (together with its consolidated subsidiaries, the "Company")
may offer for sale from time to time, in one or more series up to $500,000,000
aggregate principal amount of its debt securities (the "Debt Securities") on
terms determined at the time of sale. The specific designation, aggregate
principal amount, authorized denominations, purchase price, initial public
offering price, maturity, rate (which may be fixed or variable) and time of
payment of any interest, any redemption terms or other specific terms and any
listing on a securities exchange of any Debt Securities offered, in respect of
which this Prospectus is being delivered, will be set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement"), together with the terms
for the offering of the Debt Securities. At the option of the Company, Debt
Securities may be issued as Senior Debt Securities or as Subordinated Debt
Securities. This Prospectus may not be used to consummate the sale of Debt
Securities unless accompanied by a Prospectus Supplement.
 
  The Debt Securities may be sold in one or more transactions directly, through
agents designated from time to time, or through underwriters or dealers, which
may be a group of underwriters represented by underwriters' representatives. If
any agents of the Company or any underwriters are involved in the sale of the
Debt Securities, the names of such agents or underwriters, the principal
amount, if any, to be purchased by the underwriters and any applicable
commissions or discounts will be set forth in the Prospectus Supplement. The
net proceeds to the Company from each sale will also be set forth in the
Prospectus Supplement. As used herein, Debt Securities shall include securities
denominated in United States dollars or, at the option of the Company if so
specified in the Prospectus Supplement, in any other currency or in composite
currencies or in amounts determined by reference to an index.
 
  SEE "RISK FACTORS" AT PAGE 3 HEREIN FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE DEBT SECURITIES.
 
                                  -----------
 
THESE SECURITIES HAVE  NOT BEEN APPROVED  OR DISAPPROVED BY  THE SECURITIES AND
EXCHANGE COMMISSION  OR ANY STATE  SECURITIES COMMISSION NOR  HASTHE SECURITIES
 AND EXCHANGE COMMISSION  OR ANY  STATE SECURITIES COMMISSION  PASSED UPON  THE
 ACCURACY OR ADEQUACY  OF THIS PROSPECTUS. ANY  REPRESENTATION TO THE CONTRARY
 IS A CRIMINAL OFFENSE.
 
                                  -----------
 
                 THE DATE OF THIS PROSPECTUS IS          , 1996
<PAGE>
 
                             AVAILABLE INFORMATION
 
  The Kroger Co. (together with its consolidated subsidiaries, the "Company")
is subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and, in accordance therewith, files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed with the Commission can be inspected and copied at the
Commission's public reference facilities at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511 and 7 World Trade Center, New York, New York 10048. Copies
of such material can be obtained by mail from the Commission's Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. Such reports, proxy statements and other information also
can be inspected at the offices of the New York Stock Exchange, Inc. ("NYSE"),
20 Broad Street, New York, New York 10005.
 
  The Company has filed 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"), with
respect to the securities offered hereby. This Prospectus does not contain all
of 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 made to the Registration
Statement and the exhibits filed as a part thereof. Statements contained
herein concerning any document filed as an exhibit are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed as an exhibit to the Registration Statement. Each such statement is
qualified in its entirety by such references.
 
                               ----------------
 
                INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
 
  The following documents filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus:
 
  1. Annual Report on Form 10-K for the fiscal year ended December 30, 1995,
     as amended.
 
  2. Quarterly Report on Form 10-Q for the quarter ended March 23, 1996.
 
  3. Reports on Form 8-K dated January 25, 1996 and April 17, 1996.
 
  All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated herein by reference and to be a part hereof from the respective
dates of filing of such documents.
 
  Any statement contained in a document incorporated or deemed incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus and the Registration Statement of which it is a part 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
herein 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 this Prospectus or such Registration Statement.
 
  The Company will provide without charge to each person, including a
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to The Kroger Co.,
1014 Vine Street, Cincinnati, Ohio 45202, Attention: Paul W. Heldman, (513)
762-4000.
 
                                       2
<PAGE>
 
                                 RISK FACTORS
 
  The following factors, in addition to other information set forth in this
Prospectus, should be considered carefully in evaluating the Company and its
business before acquiring any Debt Securities offered by this Prospectus.
 
  The Indentures, as hereinafter defined, will not provide any protection to
the Holders of the Debt Securities in the event of a decline in credit quality
resulting from takeovers, recapitalizations or similar restructurings.
 
SUBSTANTIAL INDEBTEDNESS
 
  At March 23, 1996, the Company had $3.6 billion of indebtedness outstanding,
including $1,117.4 million outstanding under the Senior Competitive Advance
and Revolving Credit Facility Agreement (the "Credit Agreement"), dated as of
July 19, 1994, as amended, among the Company and Chemical Bank and Citibank,
N.A., as administrative agents, and the lenders named therein (collectively,
the "Senior Lenders") (with an additional $438.1 million available for
borrowing under the Working Capital Facility thereof). This degree of leverage
has important consequences to investors in the Debt Securities. The Company
has significant interest payment and principal repayment obligations and the
ability of the Company to satisfy such interest and principal obligations is
subject to prevailing economic, financial and business conditions and to other
factors beyond the Company's control. A significant portion of the Company's
indebtedness bears interest at floating rates causing the Company's results of
operations to be sensitive to prevailing interest rates.
 
RESTRICTIONS IMPOSED BY THE CREDIT AGREEMENT AND OTHER AGREEMENTS
 
  The Credit Agreement contains numerous restrictive covenants which, among
other things, restrict the ability of the Company to dispose of assets, incur
debt, pay dividends, make capital expenditures and make certain investments or
acquisitions and which otherwise restrict corporate activities. In addition,
the Company is required to maintain specified financial ratios and levels,
including fixed charge coverage, total debt and senior debt ratios. The
ability of the Company to comply with such provisions depends on its future
performance, which is subject to prevailing economic, financial and business
conditions and to other factors beyond the Company's control.
 
  The indentures relating to the Company's outstanding public debt securities
place limitations on, among other things, the Company's ability to incur
indebtedness, pay dividends, acquire assets and enter into leases and sale and
leaseback transactions. The indentures, however, do not contain any covenant
requiring the Company to meet or maintain on a day-to-day basis any specific
financial test or ratio.
 
LABOR AGREEMENTS
 
  The Company is party to more than 200 collective bargaining agreements with
local unions representing approximately 150,000 of the Company's employees.
Among the contracts that have expired or will expire in 1996 are those
covering food clerks in Dallas, Toledo and Denver. Typical agreements are 3 to
5 years in duration, and as such agreements expire, the Company expects to
negotiate with the unions and to enter into new collective bargaining
agreements. There can be no assurance, however, that such agreements will be
reached without work stoppage. A prolonged work stoppage affecting a
substantial number of stores could have a material adverse effect on the
Company's results of operations or financial position.
 
LEGAL PROCEEDINGS
 
  There are pending against the Company various claims and lawsuits arising in
the normal course of business, including suits charging violations of certain
antitrust and civil rights laws. Some of these suits purport or have been
determined to be class actions and/or seek substantial damages. Any damages
that may be awarded in antitrust cases will be automatically trebled. Although
it is not
 
                                       3
<PAGE>
 
possible at this time to evaluate the merits of these claims and lawsuits, nor
their likelihood of success, the Company is of the opinion that any resulting
liability will not have a material adverse effect on the Company's results of
operations or financial position.
 
  Fry's Food Stores of Arizona, Inc. ("Fry's"), a subsidiary of the Company,
is currently a defendant and cross-defendant in actions pending in the U.S.
District Court for the Southern District of Florida (the "Court") entitled
Harley S. Tropin v. Kenneth Thenen, et. al., No. 93-2502-CIV-MORENO and Walco
Investments, Inc., et. al. v. Kenneth Thenen, et. al., No. 93-2534-CIV-MORENO.
The plaintiff and cross-claimants in these actions seek unspecified damages
against numerous defendants and cross-defendants, including Fry's. Plaintiffs
and cross-claimants allege that a former employee of Fry's supplied false
information to third parties in connection with purported sales transactions
between Fry's and affiliates of Premium Sales Corporation or certain limited
partnerships. Claims have been alleged against Fry's for breach of implied
contract, aiding and abetting conspiracy, conversion and civil theft,
negligent supervision, fraud, and violations of 18 U.S.C. (S)(S) 1961 and
1962(d) and Chapter 895, Florida Statutes. Fry's has entered into an agreement
with Harley S. Tropin as trustee and receiver for the Premium Sales
Corporation and certain affiliates to settle all claims against Fry's. That
agreement is subject to the execution of a definitive settlement agreement and
the approval of the Court.
 
                                  THE COMPANY
 
  The Company was founded in 1883, incorporated in 1902, and maintains its
principal executive offices in Cincinnati, Ohio. The Company is the nation's
largest supermarket operator measured by total sales for 1995. At December 30,
1995, the Company operated 1,325 supermarkets in 24 states and 694 convenience
stores in 15 states. Additionally the Company had 125 franchised convenience
stores in 4 states. The Company also operates food processing facilities which
enable the Company's stores to offer quality, low-cost private label
perishable and non-perishable products, and an efficient warehouse and
distribution system which supplies products to its stores.
 
  The Company's principal executive offices are located at 1014 Vine Street,
Cincinnati, Ohio 45202, and its telephone number at that address is (513) 762-
4000.
 
                CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
 
  The following table presents the consolidated ratio of earnings to fixed
charges for the Company. For purposes of determining the ratio of earnings to
fixed charges, "earnings" includes earnings before tax expense, cumulative
effect of change in accounting for income taxes and extraordinary loss, plus
fixed charges (excluding capitalized interest) and "fixed charges" consists of
interest (including capitalized interest) on all indebtedness, amortization of
deferred financing costs and that portion of rental expense which the Company
believes to be representative of interest.
 
<TABLE>
<CAPTION>
      QUARTERS ENDED                            FISCAL YEARS ENDED
   ------------------------------------------------------------------------------------
   MARCH 23,    MARCH 25,  DECEMBER 30, DECEMBER 31, JANUARY 1, JANUARY 2, DECEMBER 28,
      1996         1995        1995         1994        1994       1993        1991
   (12 WEEKS)   (12 WEEKS)  (52 WEEKS)   (52 WEEKS)  (52 WEEKS) (53 WEEKS)  (52 WEEKS)
   ----------   ---------- ------------ ------------ ---------- ---------- ------------
   <S>          <C>        <C>          <C>          <C>        <C>        <C>
      2.1          1.9         2.0          1.8         1.5        1.3         1.2
</TABLE>
 
                                USE OF PROCEEDS
 
  The Company will apply the net proceeds from the sale of the Debt Securities
initially to repay amounts outstanding under the Facility (as hereafter
defined) and thereafter, from time to time will use Facility borrowings to
repurchase or redeem outstanding indebtedness of the Company, or for other
general corporate purposes.
 
                                       4
<PAGE>
 
                      DESCRIPTION OF THE CREDIT AGREEMENT
 
GENERAL
 
  The following constitutes only a summary of the principal terms and
conditions of the Credit Agreement, and is qualified in its entirety by the
actual terms of the Credit Agreement, which was filed as an exhibit to the
Company's Form 8-K, dated July 20, 1994 and thereafter was amended on July 20,
1995, on November 17, 1995, on April 16, 1996 and on June 14, 1996. Whenever
particular provisions or defined terms of the Credit Agreement are referred
to, such provisions or defined terms are incorporated herein by reference as
part of the statements made herein. For purposes of this description of the
Credit Agreement, the term "Company" refers only to The Kroger Co. and does
not include The Kroger Co.'s consolidated subsidiaries.
 
  The Credit Agreement provides for a $1.750 billion Senior Competitive
Advance and Revolving Credit Facility Agreement (the "Facility").
 
COMMITMENT REDUCTIONS
 
  The Credit Agreement expires on July 20, 2002 and is not otherwise subject
to amortization.
 
INTEREST RATES
 
  Borrowings under the Facility bear interest at the option of the Company at
a rate equal to either (i) the highest, from time to time, of (A) the average
of the publicly announced prime rate of Chemical Bank and Citibank, N.A., (B)
1/2% over a moving average of secondary market morning offering rates for 3
month certificates of deposit adjusted for reserve requirements, and (C) 1/2%
over the federal funds rate (the "Base Rate") plus the Applicable Percentage
or (ii) an adjusted Eurodollar rate based upon the London Interbank Offered
Rate ("Eurodollar Rate") plus the Applicable Percentage. The Applicable
Percentage is zero for the Base Rate. The Applicable Percentage for Eurodollar
Rate advances is 0.3125% as of March 23, 1996.
 
COLLATERAL
 
  The Company's obligations under the Facility originally were collateralized
by a pledge of a substantial portion of the Company's and certain of its
Subsidiaries' assets, including substantially all of the Company's and such
Subsidiaries' inventory and equipment and the stock of all Subsidiaries, which
collateral also secured the Company's obligations under its Secured
Debentures. On April 29, 1996, pursuant to the terms of the Credit Agreement,
the Company elected to release all Collateral.
 
PREPAYMENT
 
  The Company may prepay the Facility, in whole or in part, at any time,
without a prepayment penalty.
 
CERTAIN COVENANTS
 
  The Credit Agreement contains covenants which, among other things, (i)
restrict investments, capital expenditures, and other material outlays and
commitments relating thereto, (ii) restrict the incurrence of debt, including
the incurrence of debt by subsidiaries, (iii) restrict dividends and payments,
prepayments, and repurchases of capital stock, (iv) restrict mergers and
acquisitions and changes of business or conduct of business, (v) restrict
transactions with affiliates, (vi) restrict certain sales of assets, (vii)
restrict changes in accounting treatment and reporting practices except as
permitted under generally accepted accounting principles, (viii) require the
maintenance of certain financial ratios and levels, including fixed charge
coverage ratios, total debt ratios and senior debt ratios and (ix) require the
Company to maintain interest rate protection providing that at least 50% of
the Company's indebtedness for borrowed money is maintained at a fixed rate of
interest. See "Risk Factors -- Restrictions Imposed by the Credit Agreement
and Other Agreements."
 
  The following is a summary of certain of the covenants contained in the
Credit Agreement.
 
                                       5
<PAGE>
 
  Maintenance of Fixed Charge Coverage Ratio. The Company is required to
maintain a ratio, for the Rolling Period in respect of each Fiscal Quarter,
determined as of the last day of each Fiscal Quarter of (i) the sum of (a)
Consolidated EBITDA for such Rolling Period and (b) Consolidated Rental
Expense for such Rolling Period to (ii) the sum of (a) Consolidated Cash
Interest Expense for such Rolling Period and (b) Consolidated Rental Expense
for such Rolling Period of not less than 1.7:1.
 
  The Company's ratio of Consolidated EBITDA Available for Fixed Charges to
Consolidated Fixed Charges for the Rolling Period ended March 23, 1996 was
2.46:1.
 
  Maintenance of Net Total Debt/Consolidated EBITDA Ratio. Following the
release of the security interest in all the Collateral the Company is required
to maintain a ratio, determined as of the last day of each Fiscal Quarter for
the Rolling Period ending on such day, of (i) Net Total Debt on such day to
(ii) the sum of (a) Consolidated EBITDA for such Rolling Period and (b) from
and after the making of certain investments or acquisitions, the Acquired
EBITDA for any Acquired Entity so invested in or acquired with respect to any
Acquired Entity Fiscal Quarter ending during such Rolling Period of no greater
than 3.65 to 1.
 
  The Ratio at March 23, 1996 was 3.05:1.
 
  Maintenance of Net Senior Debt/Consolidated EBITDA Ratio. Following the
release of the security interest in all the Collateral the Company is required
to maintain a ratio, determined as of the last day of each Fiscal Quarter for
the Rolling Period ending on such day, of (i) Net Senior Debt to (ii) the sum
of (a) Consolidated EBITDA for such Rolling Period and (b) from and after the
making of certain investments or acquisitions, the Acquired EBITDA for any
Acquired Entity so invested in or acquired with respect to any Acquired Entity
Fixed Quarter ending during such Rolling Period of no greater than 3.0 to 1.
This covenant shall cease to be applicable upon achievement of the Investment
Grade Rating Condition.
 
  The Ratio at March 23, 1996 was 2.19:1.
 
  Interest Rate Protection. The Company is required to obtain interest rate
protection providing that at least 50% of the Company's indebtedness for
borrowed money is maintained at a fixed rate of interest.
 
  Debt. The Company may not create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist any Debt except, among other things,
(i) Debt under the Credit Agreement; (ii) certain designated Debt existing on
July 19, 1994; (iii) Debt secured by permitted liens; (iv) trade accounts
payable in the ordinary course of business and accounted for as current
accounts payable; (v) Commercial Paper issued by the Parent Borrower; (vi)
Debt of the Parent Borrower incurred to prepay, redeem, defease or repurchase
existing Debt of the Parent Borrower or any of the Subsidiaries so long as (a)
such Debt so incurred is subordinated in right of payment to, or pari passu in
right of payment with, the Debt being prepaid, redeemed, defeased or
repurchased and (b) the average life to maturity of such Debt so incurred is
no earlier than the date that is three months following the Termination Date;
provided, however, that up to $625,000,000 of such Debt so incurred may have
an average life to maturity shorter than the date that is three months
following the Termination Date so long as (A) such Debt does not mature before
June 15, 1999, and (B) such Debt is incurred to prepay, redeem, defease or
repurchase Debt that matures earlier than the date that is three months
following the Termination Date and of the $625,000,000 of such Debt, up to
$150,000,000 (or $300,000,000 at any time following the occurrence of an
Investment Grade Rating Condition) may be senior in right of payment to the
Debt being prepaid, redeemed, defeased or repurchased provided that such Debt
is unsecured; (vii) Capital Lease Obligations; (viii) Debt incurred in
connection with the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; (ix)
Debt incurred or assumed in connection with any investment or acquisition
permitted by the Credit Agreement; (x) certain debt owed to the Parent
Borrower by Subsidiaries; (xi) Debt secured by mortgages on (a) any
 
                                       6
<PAGE>
 
property purchased, acquired or developed between January 21, 1992, and the
Closing Date or (b) any property purchased, acquired or developed with Real
Estate Capital Expenditures, in each case so long as the aggregate amount of
the Debt secured by such mortgages does not exceed 100% of the Fair Market
Value (determined at the time of such transaction) of such property; (xii)
Debt incurred by the Parent Borrower or any of its Subsidiaries in connection
with any Receivables Securitization; (xiii) Debt incurred by the Parent
Borrower in connection with Interest Rate Agreements; (xiv) Debt of the Parent
Borrower not referred to in paragraphs (i) through (xiii) above or in
paragraph (xv) below so long as the average life to maturity of such Debt is
no earlier than the date that is three months following the Termination Date;
and (xv) Debt of the Parent Borrower or any Subsidiary not referred to in
paragraphs (i) through (xiv) above in an aggregate amount outstanding at any
time not in excess of $100,000,000.
 
  Capital Expenditures. Prior to the occurrence of the Investment Grade Rating
Condition the Company may not make, and will not permit any of its
Subsidiaries to make, any Capital Expenditures in excess of $650,000,000 (the
"Base Capital Expenditure Amount") for each Fiscal Year; provided, however,
that if in any Fiscal Year the amount specified exceeds the amount of Base
Capital Expenditures actually made by the Company and its Subsidiaries in such
Fiscal Year, the Company and its Subsidiaries shall be entitled to make
additional Capital Expenditures in the next succeeding Fiscal Year equal to
the amount of such excess not to exceed 45% of the Base Capital Expenditure
Amount; provided further, however, that the Company and its Subsidiaries shall
be permitted to make additional Capital Expenditures in any Fiscal Year
("Additional Capital Expenditures") in an aggregate amount with respect to the
Parent Borrower and its Subsidiaries equal to a percentage of Consolidated
Free Cash Flow for the immediately preceding Fiscal Year, such percentage with
respect to any Fiscal Year to be equal to (a) 100% in the event that the
Parent Borrower's Consolidated Ratio of Net Total Debt to Consolidated EBITDA
for the immediately preceding Fiscal Year is 3.0 to 1 or lower; (b) 75% in the
event that the Parent Borrower's Consolidated Ratio of Net Total Debt to
Consolidated EBITDA for the immediately preceding Fiscal Year is 3.5 to 1 or
lower; and (c) 50% in the event that the Parent Borrower's Consolidated Ratio
of Net Total Debt to Consolidated EBITDA for the immediately preceding Fiscal
Year is lower than the amount set forth below with respect to such preceding
Fiscal Year:
 
<TABLE>
<CAPTION>
       PRECEDING
        FISCAL                       RATIO OF NET TOTAL DEBT TO CONSOLIDATED
         YEAR                      EBITDA FOR IMMEDIATELY PRECEDING FISCAL YEAR
      ----------                   --------------------------------------------
       <S>                         <C>
        1995......................                 4.20 to 1.00
        1996......................                 4.10 to 1.00
        1997......................                 4.00 to 1.00
        1998......................                 3.90 to 1.00
        1999......................                 3.80 to 1.00
        2000......................                 3.80 to 1.00
</TABLE>
 
  The entire amount of Additional Capital Expenditures that are permitted to
be made in any Fiscal Year but are not made in such Fiscal Year may be carried
forward to, and made in the two succeeding Fiscal Years.
 
  Dividends. Under the Credit Agreement, the Company is restricted from making
or declaring cash dividends on the Common Stock.
 
CERTAIN DEFINITIONS
 
  "Applicable Percentage" means at any time, with respect to Adjusted
Eurodollar Rate Advances, the Facility Fees, Standby Letters of Credit and
Documentary Letters of Credit, the applicable
 
                                       7
<PAGE>
 
percentage set forth below based upon (a) the Senior Debt Ratings at such time
or (b) the Applicable Percentage Ratio at such time:
 
<TABLE>
<CAPTION>
                            LEVEL 1     LEVEL 2     LEVEL 3    LEVEL 4    LEVEL 5     LEVEL 6
                          ----------- ----------- ----------- ---------- ---------- -----------
<S>                       <C>         <C>         <C>         <C>        <C>        <C>
Moody's/S&P or..........  Baa1 or     Baa2 and    Baa2 or BBB Baa3 and   Baa3 or    Lower than
                          better or   BBB                     BBB-       BBB-       or equal to
                          BBB+ or                                                   Ba1 and
                          better                                                    lower than
                                                                                    or equal to
                                                                                    BB+
Applicable Percentage     5.25 to 1.0 4.75 to 1.0 4.0 to 1.0  3.5 to 1.0 3.0 to 1.0 Lower than
 Ratio..................  or greater  or greater  or greater  or greater or greater 3.0 to 1.0
                                   (spreads expressed in basis points per annum)
Adjusted Eurodollar Rate
 Advances...............     12.5        20.0        22.5       31.25       40.0       50.0
</TABLE>
 
  The Applicable Percentage for Base Rate Advances is zero.
 
  The Applicable Percentage as of March 23, 1996 is determined in accordance
with Level 4.
 
  "Applicable Percentage Ratio" means the ratio (determined as of the last day
of each Fiscal Quarter for the Rolling Period ending on such day) of (i)
Consolidated EBITDA for such Rolling Period to (ii) Consolidated Total
Interest Expense for such Rolling Period.
 
  "Capital Expenditures" of any Person means, for any period, all expenditures
of such Person during such period (whether paid in cash or accrued as
liabilities during such period) which, in conformity with generally accepted
accounting principles, are required to be included in or reflected by the
property, plant or equipment or similar fixed asset accounts on the balance
sheet of such Person and certain investments permitted under the Credit
Agreement, including equipment which is purchased simultaneously with the
trade-in of existing equipment owned by such Person to the extent of the gross
amount of the purchase price of such purchased equipment less the book value
of the equipment being traded in at such time, but excluding, among other
things, (i) expenditures made in connection with the replacement or
restoration of assets, to the extent such replacement or restoration is
financed out of (a) insurance proceeds paid on account of the loss of or
damage to the assets so replaced or restored or (b) awards of compensation
arising from the taking by condemnation or eminent domain of the assets so
replaced, (ii) any portion of Capital Lease Obligations which is capitalized
on such person's balance sheet and (iii) interest capitalized during
construction.
 
  "Consolidated Cash Interest Expense" means, for any period, interest expense
net of interest income, whether paid or accrued (including the interest
component of Capital Lease Obligations) on all debt of the Company and its
Subsidiaries on a Consolidated basis for such period, including, without
limitation (i) cash dividends paid in respect of preferred stock issued by the
Company, (ii) commissions and other fees and charges payable in connection
with Letters of Credit, (iii) net payments payable in connection with certain
interest rate protection contracts and (iv) interest capitalized during
construction, but excluding, however, (v) interest expense not payable in cash
(including amortization of discount and deferred debt expenses), all as
determined in conformity with GAAP.
 
  "Consolidated EBITDA" means, for any period, on a Consolidated basis for the
Company and its Subsidiaries, the sum for such period of (i) Consolidated Net
Income, plus (ii) depreciation and amortization expense, plus (iii) interest
expense net of interest income, plus (iv) federal and state income taxes as
determined in accordance with GAAP, plus (v) extraordinary losses (and any
unusual losses in excess of $1,000,000 arising in or outside of the ordinary
course of business not included in
 
                                       8
<PAGE>
 
extraordinary losses determined in accordance with GAAP which have been
included in the determination of Consolidated Net Income), plus (vi) LIFO
charges included in the calculation of Consolidated Net Income, minus (vii)
extraordinary gains (and any unusual gains in excess of $1,000,000 arising in
or outside of the ordinary course of business not included in extraordinary
losses determined in accordance with GAAP which have been included in the
determination of Consolidated Net Income), and minus (viii) LIFO credits that
have been included in the calculation of Consolidated Net Income.
 
  "Consolidated Net Income" means, for any period, the net income of the
Company and its Consolidated Subsidiaries for such period, before the payments
of dividends on all capital stock, determined in accordance with GAAP.
 
  "Consolidated Rental Expense" means, for any period, the aggregate rental
expense (including any contingent or percentage rental expense) of the Parent
Borrower and its Subsidiaries on a Consolidated basis for such period
(excluding real estate taxes and common area maintenance charges) in respect
of all rent obligations under all operating leases for real or personal
property minus any rental income of the Parent Borrower and its Subsidiaries
on a Consolidated basis for such period, all as determined in conformity with
GAAP.
 
  "Consolidated Total Interest Expense" means, for any period, interest
expense net of interest income, whether paid or accrued (including the
interest component of Capital Lease Obligations) on all Debt of the Parent
Borrower and its Subsidiaries on a Consolidated basis for such period,
including (i) commissions and other fees and charges payable in connection
with Letters of Credit, (ii) net payments payable in connection with all
Interest Rate Agreements, (iii) interest capitalized during construction and
(iv) cash dividends paid in respect of any preferred stock issued by the
Parent Borrower, but excluding, however, amortization of deferred debt
expense, all as determined in conformity with GAAP.
 
  "Debt" of any Person means, without duplication, (i) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property
or services (including all obligations, contingent or otherwise, of such
Person in connection with the Letters of Credit, Auction Bid LOCs, letter of
credit facilities, acceptance facilities or other similar facilities and in
connection with any agreement to purchase, redeem, exchange into debt
securities, convert into debt securities or otherwise acquire for value (a)
any capital stock of such Person or (b) any warrants, rights or options to
acquire such capital stock, now or hereafter outstanding), (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though 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), (iv) all Capital Lease Obligations of
such Person, (v) all Debt referred to in clause (i), (ii), (iii) or (iv) above
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any lien, security interest or
other charge or encumbrance upon or in property (including accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Debt, (vi) all Guaranteed Debt of
such Person and (vii) any preferred stock of such Person that is classified as
a liability on such Person's Consolidated balance sheet.
 
  "Funded Debt" means the Debt resulting from the Advances under the Credit
Agreement and all other Debt of the Parent Borrower or its Subsidiaries that
(on the date of its incurrence or issuance) matures more than one year from
the date of determination or matures within one year from such date but is
renewable or extendible, at the option of the debtor, to a date more than one
year from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of more
than one year from such date (in each case including amounts of Funded Debt
required to be paid or prepaid within one year from the date of calculation).
 
                                       9
<PAGE>
 
  "Guaranteed Debt" of any Person means all Debt referred to in clause (i),
(ii), (iii), (iv) or (v) of the definition of the term "Debt" in this Section
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 Debt or to advance or supply funds for the payment or
purchase of such Debt, (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 Debt or to assure the holder of
such Debt 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
irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, but excluding
leases at a rental at least as favorable to the Parent Borrower as could be
obtained in an arm's-length transaction with a party that is not an Affiliate.
 
  "Investment Grade Rating Condition" means that the Senior Debt Ratings of
the Company's Debt are BBB- or better in the case of Standard & Poor's
Corporation or Baa3 or better in the case of Moody's Investors Service, Inc.
 
  "Net Senior Debt" means, on a Consolidated basis for the Company and its
Subsidiaries as of any date, Net Total Debt as of such date minus the sum as
of such date of (i) the aggregate outstanding amount of any Subordinated Debt
of the Company or any of the Subsidiary Guarantors, (ii) the capitalized
amount of any Capitalized Lease Obligations of the Company or any of its
Subsidiaries and (iii) the aggregate outstanding face amount of any preferred
stock of the Company that is classified as a liability on the Company's
Consolidated balance sheet.
 
  "Net Total Debt" means, on a Consolidated basis for the Company and its
Subsidiaries as of any date, (i) the sum as of such date of (a) the aggregate
outstanding amount of Funded Debt including current maturities thereof, (b)
the aggregate outstanding amount of Commercial Paper and (c) the aggregate
outstanding amount of Subsidiary Commercial Paper minus (ii) the sum as of
such date of (a) the aggregate outstanding face amount of letters of credit
included in Funded Debt, (b) the aggregate outstanding amount of Debt
represented by certain investments made by the Parent Borrower and (c) the
aggregate amount of Permitted Investments in excess of $100 million.
 
  "Rolling Period" means, in respect of any Fiscal Quarter, such Fiscal
Quarter and the three preceding Fiscal Quarters.
 
  "Subordinated Debt" means any Indebtedness which is subordinate to the
Obligations under the Credit Agreement.
 
EVENTS OF DEFAULT
 
  The Credit Agreement provides that various events shall be "Events of
Default," upon the occurrence of which the Senior Lenders may suspend or cease
making loans or terminate the Facility and declare all amounts outstanding
under the Credit Agreement immediately due and payable, as described below.
Events of Default include, among other things, (i) failure to pay, when due,
any principal payable under the Credit Agreement or the failure to pay any
interest or other amount under
the Credit Agreement after the same becomes due and such default continues
unremedied for three business days after written notice from either
Administrative Agent, (ii) material breach of any representation or warranty
in the Credit Agreement or related documents, (iii) failure to comply with any
of the covenants of the Credit Agreement or related documents after specified
grace periods, (iv) failure to pay, or default in performance permitting
acceleration under, certain of the Company's other indebtedness, (v)
bankruptcy or insolvency of the Company or a Subsidiary or failure to
discharge certain judgments of the Company or any Subsidiary, (vi) the Credit
Agreement or security interests thereunder in Collateral with a value in
excess, individually or in the aggregate, of $30,000,000 ceasing to be in full
force and effect, (vii) certain events occurring with respect to the Company's
pension plans potentially giving rise to liability under ERISA, and (viii) the
occurrence of a "Change of Control" of the Company. A "Change of Control" is
defined in the Credit Agreement as (A) the acquisition by any Person or group
(other than the trusts for the Company's employee benefit plans) of securities
representing 20% or more of the voting Power of the Company or (B) during any
24-month period,
 
                                      10
<PAGE>
 
individuals who were directors of the Company at the beginning of such period
(together with new directors approved by such directors) ceasing to constitute
at least 75% of the Board of Directors of the Company.
 
  The Credit Agreement provides that upon the occurrence of an Event of
Default, the Administrative Agents (i) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Company declare the
obligations of each Lender to make Advances to be terminated, whereupon the
same shall forthwith terminate, (ii) shall at the request, or may with the
consent, of any Issuing Bank or of the Majority Lenders by notice to the
Company declare the obligation of any Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (iii)
shall at the request, or may with the consent, of the Majority Lenders declare
the Advances, all interest thereon and all other amounts payable under the
Credit Agreement to be forthwith due and payable, whereupon the Advances, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest, prior notice of intention to
accelerate or any other notice, all of which are expressly waived by the
Company.
 
                        DESCRIPTION OF DEBT SECURITIES
 
  Offered Debt Securities (as defined below) will constitute either senior or
subordinated debt of the Company and will be issued, in the case of Offered
Debt Securities that will be senior debt ("Senior Debt Securities"), under an
Indenture (the "Senior Indenture"), between the Company and a trustee to be
selected by the Company (the "Senior Trustee"), and, in the case of Offered
Debt Securities that will be subordinated debt ("Subordinated Debt
Securities"), under an Indenture (the "Subordinated Indenture"), between the
Company and a trustee to be selected by the Company (the "Subordinated
Trustee"). The Senior Indenture and the Subordinated Indenture are sometimes
hereinafter referred to individually as an "Indenture" and collectively as the
"Indentures", and the Senior Trustee and the Subordinated Trustee are
hereinafter referred to as the "Trustee". The statements under this caption
relating to the Debt Securities and the Indentures are summaries and do not
purport to be complete. Such summaries make use of terms defined in the
Indentures and are qualified in their entirety by express reference to the
Indentures and the cited provisions thereof, the forms of which are filed as
exhibits to the Registration Statement. For purposes of this description of
the Debt Securities the term "Company" refers only to The Kroger Co. and does
not include The Kroger Co.'s consolidated subsidiaries.
 
  The particular terms of each issue of Debt Securities (the "Offered Debt
Securities"), as well as any modifications or additions to the following
general terms which may be applicable in the case of such Offered Debt
Securities, will be described in the Prospectus Supplement relating to such
Offered Debt Securities. Accordingly, for a description of the terms of a
particular issue of Offered Debt Securities, reference must be made both to
the Prospectus Supplement relating thereto and the following description.
 
GENERAL
 
  The Debt Securities will represent general unsecured senior or subordinated
obligations of the Company. The Debt Securities may be issued in one or more
series with the same or various maturities. Capitalized terms used herein
shall have the meanings established in the Indenture unless otherwise defined
herein.
 
  The Debt Securities relating to this Prospectus will be issued from time to
time up to an aggregate principal amount of $500,000,000 or the equivalent
thereof. Reference is made to the Prospectus Supplement for the following
terms of the Offered Debt Securities: (i) the title, aggregate principal
amount and authorized denominations of the Offered Debt Securities; (ii) the
percentage of their
 
                                      11
<PAGE>
 
principal amount at which such Offered Debt Securities will be issued; (iii)
the date or dates on which the Offered Debt Securities will mature; (iv) the
rate or rates (which may be fixed or variable) per annum, if any, at which the
Offered Debt Securities will bear interest and the date from which such
interest may accrue; (v) the times and places at which principal and any such
interest will be payable; (vi) any redemption or sinking fund provisions;
(vii) the currency of payment of principal of, premium, if any, and interest
on the Offered Debt Securities; (viii) any index or other basis used to
determine the amount of payments of principal of and interest on the Offered
Debt Securities; (ix) whether the Offered Debt Securities of any series will
be represented by a single global note registered in the name of a
depositary's nominee and, if so, the depositary for and the method of
transferring beneficial interests in the global note; (x) whether the Offered
Debt Securities will be issuable in registered form or bearer form or both
and, if Offered Debt Securities in bearer form are issuable, restrictions
applicable to the exchange of one form for another and to the offer, sale and
delivery of Offered Debt Securities in bearer form; (xi) ranking as
Subordinated Debt Securities, if applicable, and the terms of any such
subordination; and (xii) any other terms relating to the Offered Debt
Securities not inconsistent with the Indentures, including any terms which may
be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Offered Debt Securities.
 
  Offered Debt Securities may be presented for transfer in the manner, at the
places and subject to the restrictions set forth in the Offered Debt
Securities and the Prospectus Supplement. Such services will be provided
without charge, other than any tax or other governmental charge payable in
connection therewith, but subject to the limitations provided in the
Indentures. Offered Debt Securities in bearer form and the coupons, if any,
appertaining thereto will be transferable by delivery.
 
  The Indentures under which certain of the Company's outstanding indebtedness
was issued restrict the Company's ability to redeem, defease or otherwise
acquire the Debt Securities.
 
  Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other considerations
applicable thereto will be described in the Prospectus Supplement relating
thereto.
 
EVENTS OF DEFAULT AND NOTICE THEREOF
 
  The Indentures will define "Events of Default" with respect to any series of
Debt Securities as being any one of the following events and such other events
as may be established for a particular series of Debt Securities: (a) failure
to pay interest on Debt Securities of such series for 30 days after it becomes
due; (b) failure to pay principal (or premium or sinking fund payment, if any)
on Debt Securities of such series when due at maturity, upon redemption, by
declaration or otherwise; (c) failure to perform any other covenants for 60
days after notice (other than a covenant included in the Indentures solely for
the benefit of Debt Securities of any series other than such Debt Securities);
(d) a default under any indebtedness for borrowed money in excess of
$30,000,000 constituting a failure to pay when due or resulting in such
indebtedness becoming due prior to maturity; (e) certain events of bankruptcy,
insolvency or reorganization; and (f) any other Event of Default provided with
respect to Debt Securities of such series. (Section 501.) No Event of Default
(except an Event of Default described in (c), (d) or (e) above) with respect
to a particular series of Debt Securities issued under the Indenture
necessarily constitutes an Event of Default with respect to any other series
of Debt Securities issued thereunder.
 
  Each Indenture will provide that the Trustee shall, within 90 days after the
occurrence of a default with respect to any series of Debt Securities or all
Debt Securities, give to the holders of such series of Debt Securities or all
Debt Securities, as the case may be, notice of all uncured defaults known to
it (the term "default" to include the events specified above without grace
periods); provided, that except in the case of default in the payment of
principal (or premium or sinking fund payment, if any) or
 
                                      12
<PAGE>
 
interest on any series of the Debt Securities, the Trustee shall be protected
in withholding such notice if it in good faith determines that the withholding
of such notice is in the interest of the holders of the Debt Securities of
such series. (Section 602.)
 
  The Company will be required to furnish to the Trustee annually after the
first issue of the Debt Securities under the Indenture a statement of certain
officers of the Company to the effect that to the best of their knowledge the
Company is not in default in the performance and observance of the terms of
the Indenture or, if they have knowledge that the Company is in default,
specifying such default. (Section 1004.)
 
  If an Event of Default described in clause (a) or (b) above with respect to
Debt Securities of any series at the time Outstanding or an Event of Default
specified pursuant to clause (f) with respect to Debt Securities of a
particular series occurs and is continuing, then in every such case, unless
the principal of all such Debt Securities shall have become due and payable,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may in writing to the Company and the
Administrative Agents declare the principal amount (or, if the Debt Securities
of that series are Original Issue Discount Securities (as defined in the
Indenture), such portion of the principal amount as may be specified in the
terms of that series) of all of the Debt Securities of that series, to be due
and payable five business days after the receipt by the Company and the
Administrative Agents of such written notice. If an Event of Default described
in clause (c), (d) or (e) above occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in principal amount of
all the Debt Securities then Outstanding may in writing to the Company and the
Administrative Agents declare the principal amount (or, if any such Debt
Securities are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all of
the Debt Securities to be due and payable five business days after the receipt
by the Company and the Administrative Agents of such written notice; provided,
that each of the two preceding provisions shall not restrict the availability
of other rights or remedies that the Trustee or the holders may have. However,
at any time after such a declaration of acceleration with respect to Debt
Securities of such series (or of all Outstanding Securities, as the case may
be) has been made, but before the maturity thereof, the Holders of a majority
in principal amount of Outstanding Securities of such series (or of all
Outstanding Securities, as the case may be) may, subject to certain
conditions, rescind and annul such acceleration if all Events of Default,
other than the non-payment of accelerated principal (or specified portion
thereof) with respect to Debt Securities of such series (or of all Outstanding
Securities, as the case may be) have been cured or waived as provided in the
Indenture. (Section 502.)
 
  Each Indenture also provides that the Holders of not less than a majority in
principal amount of the Debt Securities of a series (or of all Outstanding
Securities, as the case may be) may, subject to certain limitations, waive
certain defaults. Subject to certain limitations, the Holders of not less than
a majority of the principal amount of the Debt Securities of any series may
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. (Sections 512 and 513.) Each Indenture will provide that in case an
Event of Default shall occur (which shall not have been cured or waived), the
Trustee will be required to exercise such of its rights and powers under the
Indenture and to use the degree of care and skill in their exercise that a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs. (Section 601.) Subject to such provisions, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Indenture at the request of any of the Holders of the Debt Securities unless
they shall have offered to the Trustee reasonable security or indemnity.
(Section 603.)
 
  Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of a portion of the principal
amount of such Original Issue Discount Securities upon the occurrence of an
Event of Default and the continuation thereof.
 
                                      13
<PAGE>
 
MODIFICATION OF THE INDENTURE
 
  Each Indenture will provide that with certain exceptions, the Indenture, the
rights and obligations of the Company and the rights of the holders of the
Debt Securities may be modified by the Company and the Trustee with the
consent of the holders of not less than 50% in aggregate principal amount of
all series of Debt Securities directly affected by such modification; but no
such modification may be made, without the consent of each holder of such Debt
Securities affected thereby, which would (i) change the stated maturity of any
Debt Security, or any installment of interest, if any, on any such Debt
Security, or reduce the principal amount thereof, or reduce any premium
payable upon the redemption thereof, or reduce the rate of interest thereon,
or reduce the principal amount payable on acceleration with respect to an
Original Issue Discount Security, or change the place or currency of payment
of principal or any premium or interest on any such Debt Security; (ii) reduce
the above-stated percentage of Debt Securities, the consent of the holders of
which is required to modify or alter the Indenture; (iii) impair the right to
institute suit for the enforcement of any payment of the principal of, and
premium, if any, and interest on any such Debt Security; (iv) modify the
foregoing requirements except to increase the percentage of outstanding Debt
Securities or to provide that certain other provisions cannot be modified or
waived without the consent of the holders of all outstanding Debt Securities;
or (v) modify the provisions of the Subordinated Indenture with respect to the
subordination of the Subordinated Debt Securities in a manner adverse to the
holders of such Debt Securities. (Section 902.) The Company may set a record
date for any Act of the holders with respect to consenting to any amendment.
(Section 104.)
 
THE TRUSTEES
 
  Each Indenture contains limitations on the right of the Trustee, as a
creditor of the Company, to obtain payment of claims in certain cases, or to
realize on certain property received in respect of any such claim as security
or otherwise. In addition, the Trustee may be deemed to have a conflicting
interest and may be required to resign as Trustee if at the time of a default
under the Indenture it is a creditor of the Company.
 
  As of the date hereof, the Company has not selected a Trustee for either the
Senior Indenture or the Subordinated Indenture.
 
CONSOLIDATION, MERGER AND SALE OF ASSETS
 
  The Prospectus Supplement will contain provisions regarding the ability of
the Company to consolidate or merge with or into, or convey, transfer or lease
its properties or assets to any Person.
 
CERTAIN DEFINITIONS
 
  "Indebtedness" means (without duplication), with respect to any Person, (i)
every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every obligation of such Person issued or assumed as the
deferred purchase price of property, every conditional sale obligation and
every obligation under any title retention agreement, in each case if on terms
permitting any portion of the purchase price to be paid beyond one year from
the date of purchase (but excluding trade accounts payable arising in the
ordinary course of business which are not overdue by more than 90 days or
which are being contested in good faith), (iv) every obligation of such Person
issued or contracted for as payment in consideration of the purchase by such
Person or an Affiliate of such Person of the stock or substantially all of the
assets of another Person or a merger or consolidation to which such Person or
an Affiliate of such Person was a party, (v) every obligation of the type
referred to in clauses (i) through (iv) of other Persons and all dividends of
other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, and (vi) every obligation of the type referred to in clauses (i)
through (v) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person), the
 
                                      14
<PAGE>
 
amount of such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured. "Indebtedness,"
however, does not include any obligation of any Person under any interest rate
swap, cap, collar or similar arrangement.
 
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
 
  If Subordinated Debt Securities are issued, a Prospectus Supplement relating
thereto will describe the terms whereby such Subordinated Debt Securities will
be made subordinate and subject in right of payment to the prior payment in
full of senior indebtedness of the Company, and such description will include
a definition of what constitutes "senior indebtedness" of the Company.
 
                             PLAN OF DISTRIBUTION
 
  The Company may offer the Debt Securities directly to purchasers or to or
through underwriters, dealers or agents. Any such underwriter(s), dealer(s) or
agent(s) involved in the offer and sale of the Debt Securities in respect of
which this Prospectus is delivered will be named in the Prospectus Supplement.
The Prospectus Supplement with respect to such Debt Securities will also set
forth the terms of the offering of such Debt Securities, including the
purchase price of such Debt Securities and the proceeds to the Company from
such sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such Debt Securities may be listed.
 
  The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Prospectus Supplement
will describe the method of distribution of the Debt Securities.
 
  If underwriters are used in an offering of Debt Securities, the name of each
managing underwriter, if any, and any other underwriters and the terms of the
transaction, including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set forth in the
Prospectus Supplement relating to such offering and the Debt Securities will
be acquired by the underwriters for their own accounts and may be resold from
time to time in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time
of sale. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time. It
is anticipated that any underwriting agreement pertaining to any Debt
Securities will (1) entitle the underwriters to indemnification by the Company
against certain civil liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters may be required to make in
respect thereof, (2) provide that the obligations of the underwriters will be
subject to certain conditions precedent and (3) provide that the underwriters
will be obligated to purchase all Debt Securities offered in a particular
offering if any such Debt Securities are purchased.
 
  If a dealer is used in an offering of Debt Securities, the Company will sell
such Debt Securities to the dealer, as principal. The dealer may then resell
such Debt Securities to the public at varying prices to be determined by such
dealer at the time of resale. The name of the dealer and the terms of the
transaction will be set forth in the Prospectus Supplement relating thereto.
 
  If any agent is used in an offering of Debt Securities, the agent will be
named, and the terms of the agency will be set forth, in the Prospectus
Supplement relating thereto. Unless otherwise indicated in such Prospectus
Supplement, an agent will act on a best efforts basis for the period of its
appointment.
 
 
                                      15
<PAGE>
 
  Dealers and agents named in a Prospectus Supplement may be deemed to be
underwriters (within the meaning of the Securities Act) of the Debt Securities
described therein and, under agreements which may be entered into with the
Company, may be entitled to indemnification by the Company against certain
civil liabilities under the Securities Act. Underwriters, dealers and agents
may be customers of, engage in transactions with, or perform services for, the
Company in the ordinary course of business.
 
  Offers to purchase Debt Securities may be solicited, and sales thereof may
be made, by the Company directly to institutional investors or others, who may
be deemed to be underwriters within the meaning of the Securities Act with
respect to any resales thereof. The terms of any such offer will be set forth
in the Prospectus Supplement relating thereto.
 
  If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other agents of the Company to solicit offers by certain
institutional investors to purchase Debt Securities from the Company pursuant
to contracts providing for payment and delivery at a future date.
Institutional investors with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases such purchasers must be approved by the Company. The obligations of any
person under any such contract will not be subject to any conditions except
that (1) the purchase of the Debt Securities shall not at the time of delivery
be prohibited under the laws of any jurisdiction to which such purchaser is
subject and (2) if the Debt Securities are also being sold to underwriters,
the Company shall have sold to such underwriters the Debt Securities not
subject to delayed delivery. Underwriters and other agents will not have any
responsibility in respect of the validity or performance of such contracts.
 
  The anticipated date of delivery of Debt Securities will be set forth in the
Prospectus Supplement relating to each offering.
 
                          VALIDITY OF DEBT SECURITIES
 
  The validity of the Debt Securities will be passed upon for the Company by
Paul W. Heldman, Esq., Vice President, Secretary and General Counsel of the
Company. In rendering his opinions on the validity of the Debt Securities, Mr.
Heldman will express no opinion as to the applicability of any federal or
state law relating to fraudulent transfers. As of March 31, 1996, Mr. Heldman
owned approximately 10,550 shares of the Company's Common Stock and had
options to acquire an additional 113,352 shares.
 
                                    EXPERTS
 
  The consolidated financial statements and financial statement schedules of
The Kroger Co. as of December 30, 1995 and December 31, 1994 and for each of
the three fiscal years in the period ended December 30, 1995, which appear in
the Company's Annual Report on Form 10-K for the fiscal year ended December
30, 1995, incorporated by reference in this Prospectus, have been incorporated
herein in reliance on the report of Coopers & Lybrand L.L.P. independent
certified public accountants, given on the authority of that firm as experts
in accounting and auditing.
 
  Documents incorporated herein by reference in the future will include
financial statements, related schedules (if required) and auditors' reports
which financial statements and schedules will have been audited to the extent
and for the periods set forth in such reports by the firm or firms rendering
such reports and, to the extent so audited and consent to incorporation by
reference is given, will be incorporated herein by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting
and auditing.
 
                                      16
<PAGE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
 
                               -----------------
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Available Information......................................................   2
Incorporation of Certain Documents by Reference............................   2
Risk Factors...............................................................   3
The Company................................................................   4
Consolidated Ratio of Earnings to Fixed Charges............................   4
Use of Proceeds............................................................   4
Description of the Credit Agreement........................................   5
Description of Debt Securities.............................................  11
Plan of Distribution.......................................................  15
Validity of Debt Securities................................................  16
Experts....................................................................  16
</TABLE>
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
 
 
                                 $500,000,000
 
                                THE KROGER CO.
 
                                DEBT SECURITIES
 
                               -----------------
 
                                     LOGO
 
                               -----------------
 
 
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
 
                                    PART II
 
                    INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
  The expenses in connection with the sale of the Debt Securities being
registered hereby, other than underwriting discounts and commissions, are
estimated as follows:
 
<TABLE>
      <S>                                                               <C>
      Registration Fee*................................................ $172,414
      Printing and engraving...........................................  100,000
      Legal fees and expenses..........................................   50,000
      Accounting fees and expenses.....................................   75,000
      Blue Sky qualifications and related legal fees and expenses......   15,000
      Rating Agency Fees...............................................   40,000
      Trustee fees.....................................................   15,000
      Miscellaneous....................................................   30,000
                                                                        --------
          Total........................................................ $497,414
                                                                        ========
</TABLE>
- --------
  *Actual fee
 
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
  Under the Company's Regulations (by-laws) each present or former director,
officer or employee of the Company and each person who is serving or shall
have served at the request of the Company as a director, officer or employee
of another corporation (and his heirs, executors and administrators) shall be
indemnified by the Company against expenses actually and necessarily incurred
by him, and also against expenses, judgments, decrees, fines, penalties or
amounts paid in settlement, in connection with the defense of any pending or
threatened action, suit, or proceeding, criminal or civil, to which he is or
may be made a party by reason of being or having been such director, officer
or employee, provided (1) he is adjudicated or determined not to have been
negligent or guilty of misconduct in the performance of his duty to the
Company or such other corporation, (2) he is determined to have acted in good
faith in what he reasonably believed to be the best interest of the Company or
of such other corporation, and (3) in any matter the subject of a criminal
action, suit, or proceeding, he is determined to have had no reasonable cause
to believe that his conduct was unlawful. See also Ohio Revised Code, Section
1701.13.
 
  The Company also maintains directors' and officers' reimbursement and
liability insurance pursuant to policies with aggregate limits of
$125,000,000.
 
ITEM 16. EXHIBITS:
<TABLE>
<CAPTION>
 
     <C>       <S>                                                          <C>
       1.1     Form of Underwriting Agreement.
       4.1     Amended Articles of Incorporation and Regulations of the
               Company are hereby incorporated by reference to Exhibits
               4.1 and 4.2 of the Company's Registration Statement on
               Form S-3 as filed with the Securities and Exchange Commis-
               sion on January 28, 1993, and bearing Registration No. 33-
               57552.
       4.2     Form of Senior Indenture (including form of securities)
               relating to the Senior Debt Securities.
       4.3     Form of Subordinated Indenture (including form of securi-
               ties) relating to the Subordinated Debt Securities.
       5.1     Opinion of Paul W. Heldman, Esq., including his consent.
      12.1     Computation of Ratio of Earnings to Fixed Charges incorpo-
               rated by reference to the Company's Quarterly Report on
               Form 10-Q for the quarter ended March 23, 1996.
      24.1     Consent of Coopers & Lybrand L.L.P.
      24.2     Consent of Paul W. Heldman, Esq., included in Exhibit 5.1
               filed herewith.
      25.1     Powers of Attorney.
     *26.1     Statement of Eligibility on Form T-1.
</TABLE>
- --------
  *To be filed.
 
                                     II-1
<PAGE>
 
ITEM 17. UNDERTAKINGS
 
  The undersigned registrant hereby undertakes:
 
  (1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
 
    (i) To include any prospectus required by Section 10(a)(3) of the
  Securities Act of 1933;
 
    (ii) To reflect in the prospectus any facts or events arising after the
  effective date of the registration statement (or the most recent post-
  effective amendment thereof) which, individually or in the aggregate,
  represent a fundamental change in the information set forth in this
  registration statement;
 
    (iii) To include any material information with respect to the plan of
  distribution not previously disclosed in this registration statement or any
  material change to such information in this registration statement.
  Notwithstanding the foregoing, any increase or decrease in volume of
  securities offered (if the total dollar value of securities offered would
  not exceed that which was registered) and any deviation from the low or
  high and of the estimated maximum offering range may be reflected in the
  form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
  the aggregate, the changes in volume and price represent no more than 20
  percent change in the maximum aggregate offering price set forth in the
  "Calculation of Registration Fee" table in the effective registration
  statement.
 
  Provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic reports filed
by the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement.
 
  (2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
 
  (3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
 
  (4) That, for purposes of determining 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 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.
 
  (5) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
 
  (6) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
 
  (7) To file an application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act ("Act") in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Act.
 
  Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions referred to in Item 15 or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in said
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 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 OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF CINCINNATI, STATE OF OHIO, ON JUNE 25, 1996.
 
                                         The Kroger Co.
 
                                                     /s/ Bruce M. Gack
                                         By____________________________________
                                            BRUCE M. GACK ASSISTANT SECRETARY
 
  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.
 
             SIGNATURES                       TITLE
 
     */s/ Reuben V. Anderson           Director
- -------------------------------------
         REUBEN V. ANDERSON
 
    */s/ Raymond B. Carey, Jr.         Director
- -------------------------------------
        RAYMOND B. CAREY, JR.
 
      */s/ John L. Clendenin           Director
- -------------------------------------
          JOHN L. CLENDENIN
 
       */s/ David B. Dillon            Director, President
- -------------------------------------   and
           DAVID B. DILLON              Chief Operating
                                        Officer
 
      */s/ Richard W. Dillon           Director
- -------------------------------------
          RICHARD W. DILLON
 
      */s/ John T. LaMacchia           Director
- -------------------------------------
          JOHN T. LAMACCHIA
 
       */s/ Edward M. Liddy            Director
- -------------------------------------
           EDWARD M. LIDDY
 
    */s/ Patricia Shontz Longe         Director
- -------------------------------------
        PATRICIA SHONTZ LONGE
 
                                      II-3
<PAGE>
 
             SIGNATURES                         TITLE
 
 
     */s/ W. Rodney McMullen            Group Vice President
- -------------------------------------    and Chief Financial
         W. RODNEY MCMULLEN              Officer
 
   */s/ T. Ballard Morton, Jr.          Director
- -------------------------------------
       T. BALLARD MORTON, JR.
 
      */s/ Thomas H. O'Leary            Director
- -------------------------------------
          THOMAS H. O'LEARY
 
         */s/ John D. Ong               Director
- -------------------------------------
             JOHN D. ONG
 
     */s/ Katherine D. Ortega           Director
- -------------------------------------
         KATHERINE D. ORTEGA
 
      */s/ Joseph A. Pichler            Chairman of the
- -------------------------------------    Board of Directors,
          JOSEPH A. PICHLER              Chief Executive
                                         Officer, and
                                         Director
 
    */s/ J. Michael Schlotman           Vice President and
- -------------------------------------    Corporate
        J. MICHAEL SCHLOTMAN             Controller--
                                         Principal
                                         Accounting Officer
 
                                        Director
- -------------------------------------
        MARTHA ROMAYNE SEGER
 
                                        Director
- -------------------------------------
           JAMES D. WOODS
 
         /s/ Bruce M. Gack                                      June 25, 1996
*By _________________________________
   BRUCE M. GACK AS ATTORNEY-IN-FACT
 
                                      II-4
<PAGE>
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER
 -------
 <C>     <S>                                                                <C>
   1.1   Form of Underwriting Agreement.
   4.1   Amended Articles of Incorporation and Regulations of the Company
         are hereby incorporated by reference to Exhibits 4.1 and 4.2 of
         the Company's Registration Statement on Form S-3 as filed with
         the Securities and Exchange Commission on January 28, 1993, and
         bearing Registration No. 33-57552.
   4.2   Form of Senior Indenture (including form of securities) relating
         to the Senior Debt Securities.
   4.3   Form of Subordinated Indenture (including form of securities)
         relating to the Subordinated Debt Securities.
   5.1   Opinion of Paul W. Heldman, Esq., including his consent.
  12.1   Computation of Ratio of Earnings to Fixed Charges incorporated
         by reference to the Company's Quarterly Report on Form 10-Q for
         the quarter ended March 23, 1996.
  24.1   Consent of Coopers & Lybrand L.L.P.
  24.2   Consent of Paul W. Heldman, Esq., included in Exhibit 5.1 filed
         herewith.
  25.1   Powers of Attorney.
 *26.1   Statement of Eligibility on Form T-1.
</TABLE>
- --------
  *To be filed.

<PAGE>
 
                                The Kroger Co.
                                Debt Securities
                                _______________

                            Underwriting Agreement
                            ----------------------
                                                 . . . . . . . . . . . . . . . .

To the Representatives of the
  several Underwriters named in the
  respective Pricing Agreements
  hereinafter described.

Dear Sirs:

     From time to time The Kroger Co., an Ohio corporation (the "Company"),
proposes to enter into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms and conditions
stated herein and therein, to issue and sell to the firms named in Schedule I to
the applicable Pricing Agreement (such firms constituting the "Underwriters"
with respect to such Pricing Agreement and the securities specified therein)
certain of its debt securities (the "Securities") specified in Schedule II to
such Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Securities").

     The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.

     1.  Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities, the initial public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters and the principal amount of
such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery to such Designated Securities and
payment therefor. The Pricing Agreement shall also specify (to the extent not
set forth in the Indenture and the registration statement and prospectus with
respect thereto) the terms of such Designated Securities. A Pricing Agreement
shall be in the form of an executed writing (which may be in counterparts), and
may be evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The obligations of the Underwriters under this Agreement and each
Pricing Agreement shall be several and not joint.

     2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:

         (a)  A registration statement in respect of the Securities has been
     filed with the Securities and Exchange Commission (the "Commission"); such
     registration statement and any post-effective amendment thereto, each in
     the form heretofore delivered or to be delivered to the Representatives
     and, excluding exhibits to such registration statement, but including all
     documents incorporated by reference
<PAGE>
 
     in the prospectus contained therein, to the Representatives for each of the
     other Underwriters, have been declared effective by the Commission in such
     form; no other document with respect to such registration statement or
     document incorporated by reference therein has heretofore been filed or
     transmitted for filing with the Commission; and no stop order suspending
     the effectiveness of such registration statement has been issued and no
     proceeding for that purpose has been initiated or threatened by the
     Commission (any preliminary prospectus included in such registration
     statement or filed with the Commission pursuant to Rule 424(a) of the rules
     and regulations of the Commission under the Securities Act of 1933, as
     amended (the "Act"), being hereinafter called a "Preliminary Prospectus";
     the various parts of such registration statement, including all exhibits
     thereto and the documents incorporated by reference in the prospectus
     contained in the registration statement at the time such part of the
     registration statement became effective but excluding Form T-1, each as
     amended at the time such part of the registration statement became
     effective, being hereinafter called the "Registration Statement"; the
     prospectus relating to the Securities, in the form in which it has most
     recently been filed, or transmitted for filing, with the Commission on or
     prior to the date of this Agreement, being hereinafter called the
     "Prospectus"; any reference herein to any Preliminary Prospectus or the
     Prospectus shall be deemed to refer to and include the documents
     incorporated by reference therein pursuant to the applicable form under the
     Act, as of the date of such Preliminary Prospectus or Prospectus, as the
     case may be; any reference to any amendment or supplement to any
     Preliminary Prospectus or the Prospectus shall be deemed to refer to and
     include any documents filed after the date of such Preliminary Prospectus
     or Prospectus, as the case may be, under the Securities Exchange Act of
     1934, as amended (the "Exchange Act"), and incorporated by reference in
     such Preliminary Prospectus or Prospectus, as the case may be; any
     reference to any amendment to the Registration Statement shall be deemed to
     refer to and include any annual report of the Company filed pursuant to
     Section 13(a) or 15(d) of the Exchange Act after the effective date of the
     Registration Statement that is incorporated by reference in the
     Registration Statement; and any reference to the Prospectus as amended or
     supplemented shall be deemed to refer to the Prospectus as amended or
     supplemented in relation to the applicable Designated Securities in the
     form in which it is filed with the Commission pursuant to Rule 424(b) under
     the Act in accordance with Section 5(a) hereof, including any documents
     incorporated by reference therein as of the date of such filing);

         (b)  The documents incorporated by reference in the Prospectus, when
     they became effective or were filed with the Commission, as the case may
     be, conformed in all material respects to the requirements of the Act or
     the Exchange Act, as applicable, and the rules and regulations of the
     Commission thereunder, and none of such documents contained an untrue
     statement of a material fact or omitted to state a material fact required
     to be stated therein or necessary to make the statements therein not
     misleading; and any further documents so filed and incorporated by
     reference in the Prospectus or any further amendment or supplement thereto,
     when such documents become effective or are filed with the Commission, as
     the case may be, will conform in all material respects to the requirements
     of the Act or the Exchange Act, as applicable, and the rules and
     regulations of the Commission thereunder and will not contain an untrue
     statement of a material fact or omit to state a material fact required to
     be stated therein or necessary to make the statements therein not
     misleading; provided, however, that this representation and warranty shall
     not apply to any statements or omissions made in reliance upon and in
     conformity with information furnished in writing to the Company by an
     Underwriter of Designated Securities through the Representatives expressly
     for use in the Prospectus as amended or supplemented relating to such
     Securities;

         (c)  The Registration Statement and the Prospectus conform, and any
     further amendments or supplements to the Registration Statement or the
     Prospectus will conform, in all material respects to the requirements of
     the Act and the Trust Indenture Act of 1939, as amended (the "Trust
     Indenture Act") and the rules and regulations of the Commission thereunder
     and do not and will not, as of the applicable effective date as to the
     Registration Statement and any amendment thereto and as of the applicable
     filing date as to the Prospectus and any amendment or supplement thereto,
     contain an untrue statement of a material fact or omit to state a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading; provided, however, that this representation and
     warranty shall not

                                      -2-
<PAGE>
 
     apply to any statements or omissions made in reliance upon and in
     conformity with information furnished in writing to the Company by an
     Underwriter of Designated Securities through the Representatives expressly
     for use in the Prospectus as amended or supplemented relating to such
     Securities;

         (d)  The Company and its subsidiaries have not sustained since the date
     of the latest audited financial statements included or incorporated by
     reference in the Prospectus any material loss or interference with their
     businesses, taken as a whole, from fire, explosion, flood or other
     calamity, whether or not covered by insurance, or from any labor dispute or
     court or governmental action, order or decree, otherwise than as set forth
     or contemplated in the Prospectus; and, since the respective dates as of
     which information is given in the Registration Statement and the
     Prospectus, there has not been any material change in the capital stock or
     long-term debt of the Company and its subsidiaries on a consolidated basis
     or any material adverse change, or any development involving a prospective
     material adverse change, in or affecting the general affairs, management,
     financial position, stockholders' equity or results of operations of the
     Company and its subsidiaries, taken as a whole, otherwise than as set forth
     or contemplated in the Prospectus;

         (e)  The Company and its subsidiaries have good and marketable title in
     fee simple to all real property and good and marketable title to all
     personal property owned by them, in each case free and clear of all liens,
     encumbrances and defects except such as are described in the Prospectus or
     such as do not materially affect the value of such property and do not
     interfere with the use made and proposed to be made of such property by the
     Company and its subsidiaries; and any real property and buildings held
     under lease by the Company and its subsidiaries are held by them under
     valid, subsisting and enforceable leases with such exceptions as are not
     material and do not interfere with the use made and proposed to be made of
     such property and buildings by the Company and its subsidiaries;

         (f)  The Company has been duly incorporated and is validly existing as
     a corporation in good standing under the laws of the State of Ohio, with
     power and authority (corporate and other) to own its properties and conduct
     its business as described in the Prospectus, and has been duly qualified as
     a foreign corporation for the transaction of business and is in good
     standing under the laws of each other jurisdiction in which it owns or
     leases properties, or conducts any business, so as to require such
     qualification, or is subject to no material liability or disability by
     reason of the failure to be qualified in any such jurisdiction; and each
     subsidiary of the Company has been duly incorporated and is validly
     existing as a corporation in good standing under the laws of its
     jurisdiction of incorporation;

         (g)  The Company has an authorized capitalization as set forth in the
     Prospectus, and all of the issued shares of capital stock of the Company
     have been duly and validly authorized and issued and are fully paid and
     non-assessable; and all of the issued shares of capital stock of each
     subsidiary of the Company have been duly and validly authorized and issued,
     are fully paid and non-assessable and (except for directors' qualifying
     shares) are owned directly or indirectly by the Company, free and clear of
     all liens, encumbrances, equities or claims;

         (h)  The Securities have been duly authorized, and, when Designated
     Securities are issued and delivered pursuant to this Agreement and the
     Pricing Agreement with respect to such Designated Securities against
     payment of the consideration specified in the Pricing Agreement, such
     Designated Securities will have been duly executed, authenticated, issued
     and delivered and will constitute valid and legally binding obligations of
     the Company, enforceable in accordance with their terms, subject, as to
     enforcement, to bankruptcy, insolvency, reorganization and other laws of
     general applicability relating to or affecting creditors' rights and to
     general equity principles and will be entitled to the benefits provided by
     the Indenture under which they are to be issued which will be substantially
     in the form filed as an exhibit to the Registration Statement; the
     Indenture has been duly authorized and duly qualified under the Trust
     Indenture Act and, at the Time of Delivery for such Designated Securities
     (as defined in Section 4 hereof), the Indenture will constitute a valid and
     legally binding instrument, enforceable in accordance with its terms,
     subject, as to enforcement, to bankruptcy, insolvency, reorganization and
     other laws of general applicability relating to or affecting creditors'
     rights and to general equity principles; and the Indenture conforms, and
     the Designated Securities will conform, in all material respects, to the

                                      -3-
<PAGE>
 
     descriptions thereof contained in the Prospectus as amended or supplemented
     with respect to such Designated Securities;

         (i)  The issue and sale of the Securities and the compliance by the
     Company with all of the provisions of the Securities, the Indenture, this
     Agreement and any Pricing Agreement, and the consummation of the
     transactions herein and therein contemplated will not conflict with or
     result in a breach of any of the terms or provisions of, or constitute a
     default under, any indenture, mortgage, deed of trust, loan agreement or
     other agreement or instrument to which the Company or any of its
     subsidiaries is a party or by which the Company or any of its subsidiaries
     is bound or to which any of the property or assets of the Company or any of
     its subsidiaries is subject, nor will such action result in any violation
     of the provisions of the Articles of Incorporation, as amended, or the
     Regulations of the Company or any statute or any order, rule or regulation
     of any court or governmental agency or body having jurisdiction over the
     Company or any of its subsidiaries or any of their properties; and no
     consent, approval, authorization, order, registration or qualification of
     or with any such court or governmental agency or body is required for the
     issue and sale of the Securities or the consummation by the Company of the
     other transactions contemplated by this Agreement or any Pricing Agreement
     or the Indenture, except such as have been, or will have been prior to the
     Time of Delivery, obtained under the Act and the Trust Indenture Act and
     such consents, approvals, authorizations, registrations or qualifications
     as may be required under state securities or Blue Sky laws in connection
     with the purchase and distribution of the Securities by the Underwriters;

         (j)  Other than as set forth or contemplated in the Prospectus, there
     are no legal or governmental proceedings pending to which the Company or
     any of its subsidiaries is a party or of which any property of the Company
     or any of its subsidiaries is the subject with respect to which there is a
     reasonable likelihood of a determination which would individually or in the
     aggregate have a material adverse effect on the consolidated financial
     position, stockholders' equity or results of operations of the Company and
     its subsidiaries; and, to the best of the Company's knowledge, no such
     proceedings are threatened or contemplated by governmental authorities or
     threatened by others;

         (k)  None of the transactions contemplated by this Agreement, any
     Pricing Agreement or the Indenture (including, without limitation, the use
     of the proceeds from the sale of the Securities) will violate or result in
     a violation of Section 7 of the Exchange Act, or any regulation promulgated
     thereunder, including, without limitation, Regulations G, T, U and X of the
     Board of Governors of the Federal Reserve System;

         (l)  The Company is not subject to regulation under the Investment
     Company Act of 1940, as amended;

         (m)  The Company will apply the net proceeds from the sale of
     Securities for the purpose set forth in the Prospectus under the caption
     "Use of Proceeds"; and

         (n)  Coopers & Lybrand L.L.P., who have audited certain financial
     statements of the Company and its subsidiaries, are independent public
     accountants as required by the Act and the rules and regulations of the
     Commission thereunder.

     3.  Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.

     4.  Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior notice
to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all at the place and time and date
specified in such Pricing Agreement or at such other 

                                      -4-
<PAGE>
 
place and time and date as the Representatives and the Company may agree upon in
writing, such time and date being herein called the "Time of Delivery" for such
Securities.

     5.  The Company agrees with each of the Underwriters of any Designated
Securities:

         (a)  To prepare the Prospectus as amended and supplemented in relation
     to the applicable Designated Securities in a form approved by the
     Representatives and to file such Prospectus pursuant to Rule 424(b) under
     the Act not later than the Commission's close of business on the second
     business day following the execution and delivery of the Pricing Agreement
     relating to the applicable Designated Securities or, if applicable, such
     earlier time as may be required by Rule 424(b); to make no further
     amendment or any supplement to the Registration Statement or Prospectus as
     amended or supplemented after the date of the Pricing Agreement relating to
     such Securities and prior to the Time of Delivery for such Securities which
     shall be disapproved by the Representatives for such Securities promptly
     after reasonable notice thereof; to advise the Representatives promptly of
     any such amendment or supplement after such Time of Delivery and furnish
     the Representatives with copies thereof; to file promptly all reports and
     any definitive proxy or information statements required to be filed by the
     Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
     of the Exchange Act for so long as the delivery of a prospectus is required
     in connection with the offering or sale of such Securities, and during such
     same period to advise the Representatives, promptly after it receives
     notice thereof, of the time when any amendment to the Registration
     Statement has been filed or becomes effective or any supplement to the
     Prospectus or any amended Prospectus has been filed with the Commission, of
     the issuance by the Commission of any stop order or of any order preventing
     or suspending the use of any prospectus relating to the Securities, of the
     suspension of the qualification of such Securities for offering or sale in
     any jurisdiction, of the initiation of or threatening of any proceeding for
     any such purpose, or of any request by the Commission for the amending or
     supplementing of the Registration Statement or Prospectus or for additional
     information; and, in the event of the issuance of any such stop order or of
     any such order preventing or suspending the use of any prospectus relating
     to the Securities or suspending any such qualification, to use promptly its
     best efforts to obtain its withdrawal;

         (b)  Promptly from time to time to take such action as the
     Representatives may reasonably request to qualify such Securities for
     offering and sale under the securities laws of such jurisdictions in the
     United States as the Representatives may request and to comply with such
     laws so as to permit the continuance of sales and dealings therein in such
     jurisdictions for as long as may be necessary to complete the distribution
     of such Securities, provided that in connection therewith the Company shall
     not be required to qualify as a foreign corporation or to file a general
     consent to service of process in any jurisdiction;

         (c)  To furnish the Underwriters with copies of the Prospectus as
     amended or supplemented in such quantities as the Representatives may from
     time to time reasonably request, and, if the delivery of a prospectus is
     required at any time prior to the expiration of nine months after the time
     of issue of the Prospectus in connection with the offering or sale of any
     Designated Securities and if at such time any event shall have occurred as
     a result of which the Prospectus as then amended or supplemented would
     include an untrue statement of a material fact or omit to state any
     material fact necessary in order to make the statements therein, in the
     light of the circumstances under which they were made when such Prospectus
     is delivered, not misleading, or, if for any other reason it shall be
     necessary during such same period to amend or supplement the Prospectus or
     to file under the Exchange Act any document incorporated by reference in
     the Prospectus in order to comply with the Act, the Exchange Act or the
     Trust Indenture Act, to notify the Representatives and upon their request
     to file such document and to prepare and furnish without charge to each
     Underwriter and to any dealer in securities as many copies as the
     Representatives may from time to time reasonably request of an amended
     Prospectus or a supplement to the Prospectus which will correct such
     statement or omission or effect such compliance; and in case any
     Underwriter is required to deliver a prospectus in connection with sales of
     any Designated Securities at any time nine months or more after the time of
     issue of the Prospectus as amended or supplemented with respect to such
     Designated Securities, upon the request of the Representatives but at the
     expense of such Underwriter, to prepare and deliver to such Underwriter as

                                       -5-
<PAGE>
 
     many copies as it may request of a further amended or supplemented
     Prospectus for such Designated Securities complying with Section 10(a)(3)
     of the Act;

         (d)  To make generally available to its security holders as soon as
     practicable, but in any event not later than eighteen months after the
     effective date of the Registration Statement (as defined in Rule 158(c) ),
     an earning statement of the Company and its subsidiaries (which need not be
     audited) complying with Section 11 (a) of the Act and the rules and
     regulations of the Commission thereunder (including at the option of the
     Company Rule 158); and

         (e)  During the period beginning from the date of the Pricing Agreement
     for such Designated Securities and continuing to and including the earlier
     of (i) the termination of trading restrictions for such Designated
     Securities, as notified to the Company by the Representatives, and (ii) the
     Time of Delivery for such Designated Securities, not to offer, sell,
     contract to sell or otherwise dispose of any debt securities of the Company
     which mature more than one year after such Time of Delivery and which are
     substantially similar to such Designated Securities, without the prior
     written consent of the Representatives.

     6.  The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any
Blue Sky and Legal Investment Memoranda and any other documents in connection
with the offering, purchase, sale and delivery of the Securities; (iii) all
expenses in connection with the qualification of the Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Securities; (v) any filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the
fees and expenses of any Trustee and any agent of any Trustee and the fees and
disbursements of counsel for any Trustee in connection with any Indenture and
the Securities; (viii) the fees and disbursements of counsel for the
Underwriters to the extent they exceed such amount as may be specified in the
Pricing Agreements; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters will
pay all of their own costs and expenses, including, but not limited to, the fees
and disbursements of their counsel up to such amount as may be specified in the
Pricing Agreements, transfer taxes on resale of any of the Securities by them,
and any advertising expenses connected with any offers they may make.

     7.  The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:

         (a)  The Prospectus as amended or supplemented in relation to the
     applicable Designated Securities shall have been filed with the Commission
     pursuant to Rule 424(b) within the applicable time period prescribed for
     such filing by the rules and regulations under the Act and in accordance
     with Section 5 (a) hereof; no stop order suspending the effectiveness of
     the Registration Statement or any part thereof shall have been issued and
     no proceeding for that purpose shall have been initiated or threatened by
     the Commission; and all requests for additional information on the part of
     the Commission shall have been complied with to the Representatives'
     reasonable satisfaction;

                                      -6-
<PAGE>
 
         (b)  Counsel for the Underwriters shall have furnished to the
     Representatives such opinion or opinions, dated the Time of Delivery for
     such Designated Securities, with respect to the incorporation of the
     Company, the validity of the Indenture, the Designated Securities, the
     Registration Statement, the Prospectus as amended or supplemented and other
     related matters as the Representatives may reasonably request, and such
     counsel shall have received such papers and information as they may
     reasonably request to enable them to pass upon such matters;

         (c)  Paul Heldman, Vice President, Secretary and General Counsel of the
     Company, shall have furnished to the Representatives his written opinion,
     dated the Time of Delivery for such Designated Securities, in form and
     substance satisfactory to the Representatives, to the effect that:

               (i)  The Company has been duly incorporated and is validly
         existing as a corporation in good standing under the laws of Ohio, with
         corporate power and authority to own its properties and conduct its
         business as described in the Prospectus as amended or supplemented;

               (ii)  The Company has an authorized capitalization as set forth
         in the Prospectus as amended or supplemented, and all of the issued
         shares of capital stock of the Company have been duly and validly
         authorized and issued and are fully paid and non-assessable;

               (iii)  The Company has been duly qualified as a foreign
         corporation for the transaction of business and is in good standing
         under the laws of each other jurisdiction in which it owns or leases
         properties, or conducts any business, so as to require such
         qualification, or is subject to no material liability or disability by
         reason of the failure to be so qualified in any such jurisdiction (such
         counsel being entitled to rely in respect of the opinion in this clause
         upon opinions of local counsel and in respect of matters of fact upon
         certificates of officers of the Company, provided that such counsel
         shall state that he believes that both the Underwriters and he are
         justified in relying upon such opinions and certificates);

               (iv)  Each subsidiary of the Company, with respect to which the
         Company owns, directly or indirectly, a 50% or greater equity interest
         (each a "subsidiary"), has been duly incorporated and is validly
         existing as a corporation in good standing under the laws of its
         jurisdiction of incorporation; and all of the issued shares of capital
         stock of each such subsidiary have been duly and validly authorized and
         issued, are fully paid and non-assessable, and (except for directors'
         qualifying shares) are owned directly or indirectly by the Company,
         free and clear of all liens, encumbrances, equities or claims, other
         than as described in the Prospectus (such counsel being entitled to
         rely in respect of the opinion in this clause upon opinions of local
         counsel and in respect of matters of fact upon certificates of officers
         of the Company, provided that such counsel shall state that he believes
         that both the Underwriters and he are justified in relying upon such
         opinions and certificates);

               (v)  The Company and its subsidiaries have good and marketable
         title in fee simple to all real property owned by them, in each case
         free and clear of all liens, encumbrances and defects except such as
         are described in the Prospectus or such as do not materially affect the
         value of such property and do not interfere with the use made and
         proposed to be made of such property by the Company and its
         subsidiaries; and any real property and buildings held under lease by
         the Company and its subsidiaries are held by them under valid,
         subsisting and enforceable leases with such exceptions as are not
         material and do not interfere with the use made and proposed to be made
         of such property and buildings by the Company and its subsidiaries (in
         giving the opinion in this clause, such counsel may state that no
         examination of record titles for the purpose of such opinion has been
         made, and that he is relying upon a general review of the titles of the
         Company and its subsidiaries, upon opinions of local counsel and
         abstracts, reports and policies of title companies rendered or issued
         at or subsequent to the time of acquisition of such property by the
         Company or its subsidiaries, upon opinions of counsel to the lessors of
         such property and, in respect of matters of fact, upon certificates of
         officers of the Company or its subsidiaries, provided that such counsel
         shall state that he believes that both the Underwriters and he are
         justified in relying upon such opinions, abstracts, reports, policies
         and certificates);

                                      -7-
<PAGE>
 
               (vi)  To the best of such counsel's knowledge and other than as
         set forth in the Prospectus, there are no legal or governmental
         proceedings pending to which the Company or any of its subsidiaries is
         a party or of which any property of the Company or any of its
         subsidiaries is the subject with respect to which there is a reasonable
         likelihood of determinations which would individually or in the
         aggregate have a material adverse effect on the consolidated financial
         position, stockholders' equity or results of operations of the Company
         and its subsidiaries; and, to the best of such counsel's knowledge, no
         such proceedings are threatened or contemplated by governmental
         authorities or threatened by others;

               (vii)  This Agreement and the Pricing Agreement with respect to
         the Designated Securities have been duly authorized, executed and
         delivered by the Company;

               (viii)  The Designated Securities have been duly authorized,
         executed, authenticated, issued and delivered, and the Designated
         Securities (assuming that (i) the Trustee has all requisite power and
         authority to perform its obligations under the Indenture and has made
         all necessary filings and received all necessary consents, (ii) the
         Indenture has been duly authorized, executed and delivered by the
         Trustee and (iii) the Trustee's certificates of authentication have
         been manually executed by an authorized officer of the Trustee)
         constitute valid and binding obligations of the Company, enforceable
         against the Company in accordance with their terms and are entitled to
         the benefits of the Indenture, except that (a) such enforcement may be
         subject to bankruptcy, insolvency, reorganization, moratorium, or other
         laws now or hereafter in effect affecting creditors' rights generally,
         and (b) the enforceability thereof is subject to the general principles
         of equity (whether such enforceability is considered in a proceeding in
         equity or at law); provided, however, that such counsel need express no
         opinion as to the application or effect of any applicable fraudulent
         conveyance, fraudulent transfer, fraudulent obligation or preferential
         transfer laws or any laws governing the distribution of assets of the
         Company to its stockholders; and the terms of the Designated Securities
         and the Indenture conform in all material respects to the descriptions
         thereof in the Prospectus as amended or supplemented;

               (ix)  The Indenture (i) has been duly authorized, executed and
         delivered by the Company and (ii) (assuming that (a) the Trustee has
         all requisite power and authority to perform its obligations under the
         Indenture and has made all necessary filings and received all necessary
         consents, and (b) the Indenture has been duly authorized, executed and
         delivered by the Trustee) constitutes a valid and binding instrument of
         the Company, enforceable in accordance with its terms, except (a) that
         such enforcement may be subject to bankruptcy, insolvency,
         reorganization, moratorium, or other laws now or hereafter in effect
         affecting creditors' rights generally, and (b) that the enforceability
         thereof is subject to general principles of equity (whether such
         enforceability is considered in a proceeding in equity or at law);
         provided, however, that such counsel need express no opinion as to the
         application or effect of any applicable fraudulent conveyance,
         fraudulent transfer, fraudulent obligation or preferential transfer
         laws or any laws governing the distribution of assets of the Company to
         its stockholders; and the Indenture has been duly qualified under the
         Trust Indenture Act;

               (x)  The issuance and sale of the Designated Securities and the
         compliance by the Company with all of the provisions of the Designated
         Securities, the Indenture, this Agreement and the Pricing Agreement
         with respect to the Designated Securities and the consummation of the
         trans actions herein and therein contemplated, to the best of such
         counsel's knowledge, will not conflict with or result in a breach of
         any of the terms or provisions of, or constitute a default under, any
         indenture, mortgage, deed of trust, loan agreement or other agreement
         or instrument to which the Company or any of its subsidiaries is a
         party or by which the Company or any of its subsidiaries is bound or to
         which any of the property or assets of the Company or any of its
         subsidiaries is subject, nor will such actions result in any violation
         of the provisions of the Articles of Incorporation, as amended, or the
         Regulations of the Company or any statute of the United States of
         America or of Ohio or any other statute known to such counsel or any
         order, rule or regulation of any court or governmental agency or body
         having jurisdiction over the Company or any of its subsidiaries or any

                                      -8-
<PAGE>
 
         of their properties; provided, however, that such counsel need express
         no opinion as to the application or effect of any applicable fraudulent
         conveyance, fraudulent transfer, fraudulent obligation or preferential
         transfer laws or any laws governing the distribution of assets of the
         Company to its stockholders;

               (xi)  To the best of such counsel's knowledge, no consent,
         approval, authorization, order, registration or qualification of or
         with any such court or governmental agency or body is required for the
         issuance and sale of the Designated Securities or the consummation of
         the other transactions contemplated by this Agreement or such Pricing
         Agreement or the Indenture, except such as have been obtained under the
         Act and the Trust Indenture Act and such consents, approvals, authoriza
         tions, registrations or qualifications as may be required under state
         securities or Blue Sky laws in connection with the purchase and
         distribution of the Designated Securities by the Underwriters and as
         may be required due to the Underwriters' or the Trustees' legal or
         regulatory status;

               (xii)  The Company is not subject to regulation under the
         Investment Company Act of 1940, as amended;

               (xiii)  The documents incorporated by reference in the Prospectus
         as amended or supple mented (other than (a) the financial statements,
         notes and schedules thereto included or incorporated by reference
         therein and (b) other financial and statistical information included or
         incorporated by reference therein, as to all of which such counsel need
         express no opinion), when they became effective or were filed with the
         Commission, as the case may be, complied as to form in all material
         respects with the requirements of the Act or the Exchange Act, as
         applicable, and the rules and regulations of the Commission thereunder;
         and such counsel has no reason to believe that any of such documents,
         when they became effective or were so filed, as the case may be,
         contained, in the case of a registration statement which became
         effective under the Act, an untrue statement of a material fact or
         omitted to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading, or, in the
         case of other documents which were filed under the Act or the Exchange
         Act with the Commission, an untrue statement of a material fact or
         omitted to state a material fact necessary in order to make the
         statements therein, in the light of the circumstances under which they
         were made when such documents were so filed, not misleading; and

               (xiv)  The Registration Statement and the Prospectus as amended
         or supplemented and any further amendments and supplements thereto made
         by the Company prior to the Time of Delivery for the Designated
         Securities (other than (a) the financial statements, notes and
         schedules thereto included or incorporated by reference therein, (b)
         other financial and statistical information included or incorporated by
         reference therein or (c) the Forms T-1 filed as exhibits to the
         Registration Statement, as to all of which such counsel need express no
         opinion) comply as to form in all material respects with the
         requirements of the Act and the Trust Indenture Act and the rules and
         regulations thereunder; such counsel has no reason to believe that, as
         of its effective date, the Registration Statement or any further
         amendment thereto made by the Company prior to the Time of Delivery
         (other than (a) the financial statements, notes and schedules thereto
         included or incorporated by reference therein, (b) other financial and
         statistical information included or incorporated by reference therein
         or (c) the Forms T-1 filed as exhibits to the Registration Statement,
         as to all of which such counsel need express no opinion) contained an
         untrue statement of a material fact or omitted to state a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading or that, as of its date, the Prospectus as
         amended or supplemented or any further amendment or supplement thereto
         made by the Company prior to the Time of Delivery (other than (a) the
         financial statements, notes and schedules thereto included or
         incorporated by reference therein, (b) other financial and statistical
         information included or incorporated by reference therein or (c) the
         Forms T-1 filed as exhibits to the Registration Statement, as to all of
         which such counsel need express no opinion) contained an untrue
         statement of a material fact or omitted to state a material fact
         necessary to make the statements therein, in light of the circumstances
         in which they were made, not misleading or that, as of the Time of

                                      -9-
<PAGE>
 
         Delivery, either the Registration Statement or the Prospectus as
         amended or supplemented or any further amendment or supplement thereto
         made by the Company prior to the Time of Delivery (other than (a) the
         financial statements, notes and schedules thereto included or
         incorporated by reference therein, (b) other financial and statistical
         information included or incorporated by reference therein or (c) the
         Forms T-1 filed as exhibits to the Registration Statement, as to all of
         which such counsel need express no opinion) contains an untrue
         statement of a material fact or omits to state a material fact
         necessary to make the statements therein, in light of the circumstances
         in which they were made, not misleading; and such counsel does not know
         of any amendment to the Registration Statement required to be filed or
         any contracts or other documents of a character required to be filed as
         an exhibit to the Registration Statement or required to be incorporated
         by reference into the Prospectus as amended or supplemented or required
         to be described in the Registration Statement or the Prospectus as
         amended or supplemented which are not filed or incorporated by
         reference or described as required;

         (d) On the date of the Pricing Agreement for such Designated
     Securities and at the Time of Delivery for such Designated Securities, the
     independent accountants of the Company who have certified the financial
     statements of the Company and its subsidiaries included or incorporated by
     reference in the Registration Statement shall have furnished to the
     Representatives letters, dated the respective dates of delivery of such
     letters, to the effect set forth in Annex II hereto, in form and substance
     satisfactory to the Representatives;

         (e) The Company shall have received all necessary consents or
     approvals required by the Senior Competitive Advance and Revolving Credit
     Facility Agreement, dated as of July 19, 1994, as amended, among the
     Company, the Subsidiary Borrowers named therein, the Lenders named therein,
     and Chemical Bank, as Administrative Agent and Collateral Agent, and
     Citibank, N.A., as Administrative Agent and Paying Agent, to issue, offer
     and sell the Designated Securities as contemplated by this Agreement and
     the Pricing Agreement with respect to such Designated Securities.

         (f) (i) Neither the Company nor any of its subsidiaries shall have
     sustained since the date of the latest audited financial statements
     included or incorporated by reference in the Prospectus as amended or
     supplemented any loss or interference with its business from fire,
     explosion, flood or other calamity, whether or not covered by insurance, or
     from any labor dispute or court or governmental action, order or decree,
     otherwise than as set forth or contemplated in the Prospectus as amended or
     supplemented, and (ii) since the respective dates as of which information
     is given in the Prospectus as amended or supplemented there shall not have
     been any change in the capital stock or long-term debt of the Company or
     any of its subsidiaries or any change, or any development involving a
     prospective change, in or affecting the general affairs, management,
     financial position, stockholders' equity or results of operations of the
     Company and its subsidiaries, otherwise than as set forth or contemplated
     in the Prospectus as amended or supplemented, the effect of which, in any
     such case described in Clause (i) or (ii), is in the judgment of the
     Representatives so material and adverse as to make it impracticable or
     inadvisable to proceed with the public offering or the delivery of the
     Designated Securities on the terms and in the manner contemplated in the
     Prospectus as amended or supplemented;

         (g) On or after the date of the Pricing Agreement relating to the
     Designated Securities (i) no downgrading shall have occurred in the rating
     accorded the Company's debt securities by any "nationally recognized
     statistical rating organization," as that term is defined by the Commission
     for purposes of Rule 436(g) (2) under the Act and (ii) no such organization
     shall have publicly announced that it has under surveillance or review,
     with possible negative implications, its rating of any of the Company's
     debt securities;

         (h) On or after the date of the Pricing Agreement relating to the
     Designated Securities there shall not have occurred any of the following:
     (i) a suspension or material limitation in trading in securities generally
     on the New York Stock Exchange; (ii) a general moratorium on commercial
     banking activities in New York declared by either Federal or New York State
     authorities; or (iii) the outbreak or escalation of hostilities involving
     the United States or the declaration by the United States of a national
     emergency or war, if the effect of any such event specified in this Clause
     (iii) in the judgment of the Representatives

                                     -10-
<PAGE>
 
     makes it impracticable or inadvisable to proceed with the public offering
     or the delivery of the Designated Securities on the terms and in the manner
     contemplated by the Prospectus as amended and supplemented; and

         (i) The Company shall have furnished or caused to be furnished to the
     Representatives at the Time of Delivery for the Designated Securities a
     certificate or certificates of officers of the Company satisfactory to the
     Representatives as to the accuracy of the representations and warranties of
     the Company herein at and as of such Time of Delivery, as to the
     performance by the Company of all of its obligations hereunder to be
     performed at or prior to such Time of Delivery, as to the matters set forth
     in subsections (a) and (f) of this Section and as to such other matters as
     the Representatives may reasonably request.

     8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.

         (b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim.

         (c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the

                                     -11-
<PAGE>
 
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.

         (d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters, in each case as set forth in the
table on the cover page of the Prospectus as amended or supplemented to relate
to a particular offering of Designated Securities. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considera considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and not
joint.

         (e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.

     9.  (a) If any Underwriter shall default in its obligation to purchase the
Designated Securities which it has agreed to purchase under the Pricing
Agreement relating to such Designated Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Designated Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the Representatives do
not arrange for the purchase of such Designated Securities, then the Company
shall be

                                     -12-
<PAGE>
 
entitled to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to the Representatives to purchase such
Designated Securities on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Designated Securities, or the Company notifies
the Representatives that it has so arranged for the purchase of such Designated
Securities, the Representatives or the Company shall have the right to postpone
the Time of Delivery for such Designated Securities for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company agrees
to file promptly any amendments or supplements to the Registration Statement or
the Prospectus which in the opinion of the Representatives may thereby be made
necessary. The term "Underwriter" as used in this Agreement shall include any
person substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such Designated
Securities.

     (b) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to purchase under
such Pricing Agreement) of the Designated Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.

     (c) If, after giving effect to any arrangements for the purchase of the
Designated Securities of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subsection (b) above, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.

     10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.

     11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason Designated Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6 and Section 8 hereof.

     12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any

                                     -13-
<PAGE>
 
statement, request, notice or agreement on behalf of any Underwriter made or
given by such Representatives jointly or by such of the Representatives, if any,
as may be designated for such purpose in the Pricing Agreement.

     All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.

     13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.

     14. Time shall be of the essence of each Pricing Agreement. As used herein,
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.

     15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     16. This Agreement and each Pricing Agreement may be executed by any one or
more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.



                                               Very truly yours,

                                               The Kroger Co.

                                               By:
                                               ---------------------
                                                   Name:
                                                   Title:

                                     -14-
<PAGE>
 
                                                                         ANNEX I


                               Pricing Agreement
                               -----------------



[NAMES OF CO-REPRESENTATIVE(S),]
  As Representatives of the several
  Underwriters named in Schedule I hereto,



                                                             _____________, 19__

Dear Sirs:

     The Kroger Co., an Ohio corporation (the "Company"), proposes, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
 .................... (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.

     An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.

     Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.

     If the foregoing is in accordance with your understanding, please sign and
return to us __ counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.

                                                        Very truly yours,
<PAGE>
 
                                                     The Kroger Co.


                                                     By:
                                                       -------------------------
                                                          Name:
                                                          Title:


Accepted as of the date hereof:

[NAME(S) OF CO-REPRESENTATIVE(S)]



      On behalf of each of the Underwriters


                                      -2-
<PAGE>
 
                                  SCHEDULE I

                                                             PRINCIPAL
                                                             AMOUNT OF
                                                            DESIGNATED
                                                            SECURITIES
                                                               TO BE
                    UNDERWRITER                              PURCHASED
                    -----------                              ---------

     [Name(s) of Co-Representative(s)......... $
     [Names of other Underwriters] ...........



                                                             ---------
                          Total............... $


                                      -3-
<PAGE>
 
                                  SCHEDULE II

TITLE OF DESIGNATED SECURITIES:

      [  %] [Floating Rate] [Zero Coupon] [Notes]
      [Debentures] due

AGGREGATE PRINCIPAL AMOUNT:

      [$]

PRICE TO PUBLIC:

          % of the principal amount of the Designated Securities, plus accrued
          interest from     to    [and accrued amortization, if any, from     
          to      ]

PURCHASE PRICE BY UNDERWRITERS:

          % of the principal amount of the Designated Securities, plus accrued
          interest from      to     
          [and accrued amortization, if any, from      to      ]

SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:

     [New York] Clearing House funds

INDENTURE:

     Indenture dated         , 19  , between the Company and  , as Trustee

MATURITY:


INTEREST RATE:

     [   %] [Zero Coupon] [See Floating Rate Provisions]

INTEREST PAYMENT DATES:

     [months and dates]

REDEMPTION PROVISIONS:

     [No provisions for redemption]

     [The Designated Securities may be redeemed, otherwise than through the
     sinking fund, in whole or in part at the option of the Company, in the
     amount of [$]      or an integral multiple thereof,

     [on or after      ,      at the following redemption prices (expressed in
     percentages of principal amount). If [redeemed on or before    ,    %, and
     if] redeemed during the 12-month period beginning        ,

                                                                    REDEMPTION
                           YEAR                                        PRICE
                           ----                                     ----------



    and thereafter at 100% of their principal amount, together in each case with
    accrued interest to the redemption date.]


                                      -4-
<PAGE>
 
[on any interest payment date falling in or after    ,    at the election of the
Company, at a redemption price equal to the principal amount thereof, plus
accrued interest to the date of redemption.]

[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]

[Restriction on refunding]

SINKING FUND PROVISIONS:

[No sinking fund provisions]

[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$]                    principal amount of Designated Securities on
in each of the years          through           at 100% of their principal
amount plus accrued interest] [,together with [cumulative] [noncumulative]
redemptions at the option of the Company to retire an additional [$]
principal amount of Designated Securities in the years          through
at 100% of their principal amount plus accrued interest].

           [If Securities are extendable debt Securities, insert --

EXTENDABLE PROVISIONS:

         Securities are repayable on          ,      [insert date and years], at
the option of the holder, at their principal amount with accrued interest.
Initial annual interest rate will be     %, and thereafter annual interest rate
will be adjusted on          ,      and     to a rate not less than   % of the
effective annual interest rate on U.S. Treasury obligations with        -year
maturities as of the [insert date 15 days prior to maturity date] prior to
such [insert maturity date].]

          [If Securities are Floating Rate debt Securities, insert --

FLOATING RATE PROVISIONS:

         Initial annual interest rate will be    % through      [and thereafter
will be adjusted [monthly] [on each           ,           ,        and] [to an
annual rate of     % above the average rate for      -year [month] [securities]
[certificates of deposit] issued by                and
[insert names of banks].] [and the annual interest rate [thereafter] [from
through         ] will be the interest yield equivalent of the weekly average
per annum market discount rate for            -month Treasury bills plus     %
of Interest Differential (the excess, if any, of (i) then current weekly average
per annum secondary market yield for           -month certificates of deposit
over (ii) then current interest yield equivalent of the weekly average per annum
market discount rate for          -month Treasury bills); [from
and thereafter the rate will be the then current interest yield equivalent plus
   % of Interest Differential].]

DEFEASANCE PROVISIONS:



TIME OF DELIVERY:



                                      -5-
<PAGE>
 
CLOSING LOCATION:



NAMES AND ADDRESSES OF REPRESENTATIVES:
   Designated Representatives:
   Address for Notices, etc.:

[OTHER TERMS]:


                                      -6-
<PAGE>
 
                                                                      ANNEX II

     Pursuant to Section 7 (d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:

          (i) They are independent certified public accountants with respect to
     the Company and its subsidiaries within the meaning of the Act and the
     applicable published rules and regulations thereunder;

          (ii) In their opinion, the financial statements and any supplementary
     financial information and schedules audited (and, if applicable,
     prospective financial statements and/or pro forma financial information
     examined) by them and included or incorporated by reference in the
     Registration Statement or the Prospectus comply as to form in all material
     respects with the applicable accounting requirements of the Act or the
     Exchange Act, as applicable, and the related published rules and
     regulations thereunder; and, if applicable, they have made a review in
     accordance with standards established by the American Institute of
     Certified Public Accountants of the consolidated interim financial
     statements, selected financial data, pro forma financial information,
     prospective financial statements and/or condensed financial statements
     derived from audited financial statements of the Company for the periods
     specified in such letter, as indicated in their reports thereon, copies of
     which have been furnished to the representatives of the Underwriters (the
     "Representatives");

          (iii) The unaudited selected financial information with respect to the
     consolidated results of operations and financial position of the Company
     for the five most recent fiscal years included in the Prospectus and
     included or incorporated by reference in Item 6 of the Company's Annual
     Report on Form 10-K for the most recent fiscal year agrees with the
     corresponding amounts (after restatement where applicable) in the audited
     consolidated financial statements for five such fiscal years which were
     included or incorporated by reference in the Company's Annual Reports on
     Form 10-K for such fiscal years;

          (iv) On the basis of limited procedures, not constituting an audit in
     accordance with generally accepted auditing standards, consisting of a
     reading of the unaudited financial statements and other information
     referred to below, a reading of the latest available interim financial
     statements of the Company and its subsidiaries, inspection of the minute
     books of the Company and its subsidiaries since the date of the latest
     audited financial statements included or incorporated by reference in the
     Prospectus, inquiries of officials of the Company and its subsidiaries
     responsible for financial and accounting matters and such other inquiries
     and procedures as may be specified in such letter, nothing came to their
     attention that caused them to believe that:

              (A) the unaudited condensed consolidated statements of income,
         consolidated balance sheets and consolidated statements of cash flows
         included or incorporated by reference in the Company's Quarterly
         Reports on Form 10-Q incorporated by reference in the Prospectus do not
         comply as to form in all material respects with the applicable
         accounting requirements of the Exchange Act as it applies to Form 10-Q
         and the related published rules and regulations thereunder or are not
         in conformity with generally accepted accounting principles applied on
         a basis substantially consistent with the basis for the audited
         consolidated statements of income, consolidated balance sheets and
         consolidated statements of cash flows included or incorporated by
         reference in the Company's Annual Report on Form 10-K for the most
         recent fiscal year;

              (B) any other unaudited income statement data and balance sheet
         items included in the Prospectus do not agree with the corresponding
         items in the unaudited consolidated financial statements from which
         such data and items were derived, and any such unaudited data and items
         were not determined on a basis substantially consistent with the basis
         for the corresponding amounts in the audited consolidated financial
         statements included or incorporated by reference in the Company's
         Annual Report on Form 10-K for the most recent fiscal year;

              (C) the unaudited financial statements which were not included in
         the Prospectus but from which were derived the unaudited condensed
         financial statements referred to in clause (A) and any unaudited income
         statement data and balance sheet items included in the Prospectus and
         referred to in Clause (B) were not determined on a basis substantially
         consistent with the basis for the audited financial statements included
         or incorporated by reference in the Company's Annual Report on 
         Form 10-K for the most recent fiscal year;

              (D) any unaudited pro forma consolidated condensed financial
         statements included or incorporated by reference in the Prospectus do
         not comply as to form in all material respects with the applicable
         accounting requirements of the Act and the published rules and
         regulations thereunder or the pro forma adjustments have not been
         properly applied to the historical amounts in the compilation of those
         statements;
<PAGE>
 
              (E) as of a specified date not more than five days prior to the
         date of such letter, there have been any changes in the consolidated
         capital stock (other than issuances of capital stock upon exercise of
         options and stock appreciation rights, upon earn-outs of performance
         shares and upon conversions of convertible securities, in each case
         which were outstanding on the date of the latest balance sheet included
         or incorporated by reference in the Prospectus, and sales of capital
         stock to employee benefit plans of the Company) or any increase in the
         consolidated long-term debt of the Company and its subsidiaries, or any
         decreases in consolidated net current assets or net assets or other
         items specified by the Representatives, or any increases in any items
         specified by the Representatives, in each case as compared with amounts
         shown in the latest balance sheet included or incorporated by reference
         in the Prospectus, except in each case for changes, increases or
         decreases which the Prospectus discloses have occurred or may occur or
         which are described in such letter; and

              (F) for the period from the date of the latest financial
         statements included or incorporated by reference in the Prospectus to
         the specified date referred to in Clause (E) there were any decreases
         in consolidated net revenues or operating profit or the total or per
         share amounts of consolidated net income or other items specified by
         the Representatives, or any increases in any items specified by the
         Representatives, in each case as compared with the comparable period of
         the preceding year and with any other period of corresponding length
         specified by the Representatives, except in each case for increases or
         decreases which the Prospectus discloses have occurred or may occur or
         which are described in such letter; and

          (v) In addition to the audit referred to in their report(s) included
     or incorporated by reference in the Prospectus and the limited procedures,
     inspection of minute books, inquiries and other procedures referred to in
     paragraphs (iii) and (iv) above, they have carried out certain specified
     procedures, not constituting an audit in accordance with generally accepted
     auditing standards, with respect to certain amounts, percentages and
     financial information specified by the Representatives, which are derived
     from the general accounting records of the Company and its subsidiaries,
     which appear in the Prospectus (excluding documents incorporated by
     reference), or in Part II of, or in exhibits and schedules to, the
     Registration Statement specified by the Representatives or in documents
     incorporated by reference in the Prospectus specified by the
     Representatives, and have compared certain of such amounts, percentages and
     financial information with the accounting records of the Company and its
     subsidiaries and have found them to be in agreement.

     All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.

<PAGE>
 
================================================================================



                                THE KROGER CO.

                                      TO

                         .............................
                                            Trustee



                                  __________


                                   INDENTURE

                            Dated as of __________


                                  __________


                            SENIOR DEBT SECURITIES



================================================================================
<PAGE>
 
                                THE KROGER CO.
                Certain Sections of this Indenture relating to
                  Sections 310 through 318, inclusive, of the
                         Trust Indenture Act of 1939:

Trust Indenture
  Act Section                                       Indenture Section
<TABLE>
<CAPTION>
 
<S>                                                <C>
(S) 310(a)(1)   ...........................         609
       (a)(2)   ...........................         609
       (a)(3)   ...........................         Not Applicable
       (a)(4)   ...........................         Not Applicable
       (b)      ...........................         608
                                                    610
(S) 311(a)      ...........................         613
       (b)      ...........................         613
(S) 312(a)      ...........................         701
                                                    702(a)   
       (b)      ...........................         702(b)
       (c)      ...........................         702(c)
(S) 313(a)      ...........................         703(a)
       (b)      ...........................         703(a)
       (c)      ...........................         703(a)
       (d)      ...........................         703(b)
(S) 314(a)      ...........................         704
       (a)(4)   ...........................         101
                                                    1004
       (b)      ...........................         Not Applicable
       (c)(1)   ...........................         102
       (c)(2)   ...........................         102
       (c)(3)   ...........................         Not Applicable
       (d)      ...........................         Not Applicable
       (e)      ...........................         102
(S) 315(a)      ...........................         601
       (b)      ...........................         602
       (c)      ...........................         601
       (d)      ...........................         601
       (e)      ...........................         514
(S) 316(a)      ...........................         101
       (a)(1)(A) ..........................         502
                                                    512
       (a)(1)(B) ..........................         513
       (a)(2)   ...........................         Not Applicable
       (b)      ...........................         508
       (c)      ...........................         104(c)
 (S) 317(a)(1)  ...........................         503
</TABLE> 
<PAGE>
 
<TABLE> 
<CAPTION> 
<S>                                                     <C>   

       (a)(2)  .............................             504
       (b)     .............................             1003
(S) 318(a)     .............................             107
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
 
<TABLE>
<CAPTION>

                               TABLE OF CONTENTS
                                  __________



                                                                            Page
                                                                            ----
<S>                                                                        <C> 
PARTIES...........................................................          1
RECITALS OF THE COMPANY...........................................          1

                                  ARTICLE ONE
                                  -----------

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
 
Section 101.                       Definitions...........................   1
                                   Act...................................   2
                                   Administrative Agents.................   2
                                   Affiliate; control....................   2
                                   Authenticating Agent..................   3
                                   Bank Agreement........................   3
                                   Board of Directors....................   3
                                   Board Resolution......................   3
                                   Business Day..........................   3
                                   Capital Stock.........................   4
                                   Commission............................   4
                                   Company...............................   4
                                   Company Request; Company Order........   4
                                   Corporate Trust Office................   4
                                   corporation...........................   4
                                   Defaulted Interest....................   4
                                   Depositary............................   4
                                   Event of Default......................   5
                                   Exchange Act..........................   5
                                   Global Security.......................   5
                                   Holder................................   5
                                   Indebtedness..........................   5
                                   Indenture.............................   6
                                   interest..............................   6
                                   Interest Payment Date.................   6
                                   Lien..................................   6
                                   Maturity..............................   6
                                   Officers' Certificate.................   7
                                   Opinion of Counsel....................   7
                                   Original Issue Discount Security......   7

</TABLE> 
- -------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.
<PAGE>
 
                                     -ii-
<TABLE> 
<CAPTION> 
                                                       Page
                                                       ----
<S>                                                    <C> 
                Outstanding...........................   7
                Paying Agent..........................   9
                Person................................   9
                Place of Payment......................   9
                Predecessor Security..................   9
                Redemption Date.......................   9
                Redemption Price......................   9
                Regular Record Date...................   9
                Securities............................  10
                Security Register and Security       
                 Registrar............................  10
                Special Record Date...................  10
                Stated Maturity.......................  10
                Subsidiary............................  10
                Trustee...............................  10
                Trust Indenture Act...................  10
                Vice President........................  11
                Wholly-owned Subsidiary...............  11
Section 102.    Compliance Certificates and Opinions..  11
Section 103.    Form of Documents Delivered to Trustee  12
Section 104.    Acts of Holders; Record Dates.........  13
Section 105.    Notices, Etc., to Trustee and Company.  15
Section 106.    Notice to Holders; Waiver.............  15
Section 107.    Conflict with Trust Indenture Act.....  16
Section 108.    Effect of Headings and
                 Table of Contents....................  16
Section 109.    Successors and Assigns................  16
Section 110.    Separability Clause...................  17
Section 111.    Benefits of Indenture.................  17
Section 112.    Governing Law.........................  17
Section 113.    Legal Holidays........................  17
 
                                  ARTICLE TWO
                                  -----------

                                SECURITY FORMS


Section 201.    Forms Generally.......................  18
Section 202.    Form of Face of Security..............  18
Section 203.    Form of Reverse of Security...........  21
Section 204.    Form of Legend for Global Securities..  27
</TABLE> 
- -------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.
<PAGE>
 
                                     -iii-

<TABLE> 
<CAPTION> 
                                                                          Page
                                                                          ----
<S>            <C>                                                       <C> 
Section 205.    Form of Trustee's Certificate of
                 Authentication.........................................    27


                                 ARTICLE THREE
                                 -------------

                                THE SECURITIES

Section 301.    Amount Unlimited; Issuable in Series....................    28
Section 302.    Denominations...........................................    32
Section 303.    Execution, Authentication, Delivery
                 and Dating.............................................    32
Section 304.    Temporary Securities....................................    35
Section 305.    Registration, Registration of Transfer
                 and Exchange...........................................    35
Section 306.    Mutilated, Destroyed, Lost and Stolen
                 Securities.............................................    38
Section 307.    Payment of Interest; Interest Rights
                 Preserved..............................................    39
Section 308.    Persons Deemed Owners...................................    41
Section 309.    Cancellation............................................    41
Section 310.    Computation of Interest.................................    42


                                 ARTICLE FOUR
                                 ------------

                           SATISFACTION AND DISCHARGE

Section 401.   Satisfaction and Discharge of Indenture..................    42
Section 402.   Application of Trust Money...............................    44


                                 ARTICLE FIVE
                                 ------------

                                   REMEDIES

Section 501.    Events of Default.......................................    44
Section 502.    Acceleration of Maturity; Rescission
                 and Annulment..........................................    47
Section 503.    Collection of Indebtedness and Suits
                 for Enforcement by Trustee.............................    49
</TABLE> 

- -------------------

NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.
<PAGE>
 
                                     -iv-

<TABLE> 
<CAPTION> 
                                                                          Page
                                                                          ----
<S>            <C>                                                       <C> 
Section 504.    Trustee May File Proofs of Claim........................    50
Section 505.    Trustee May Enforce Claims Without
                 Possession of Securities...............................    51
Section 506.    Application of Money Collected..........................    51
Section 507.    Limitation on Suits.....................................    52
Section 508.    Unconditional Right of Holders to
                 Receive Principal, Premium and
                 Interest...............................................    53
Section 509.    Restoration of Rights and Remedies......................    53
Section 510.    Rights and Remedies Cumulative..........................    53
Section 511.    Delay or Omission Not Waiver............................    54
Section 512.    Control by Holders......................................    54
Section 513.    Waiver of Past Defaults.................................    54
Section 514.    Undertaking for Costs...................................    55
Section 515.    Waiver of Usury, Stay or Extension Laws.................    55


                                  ARTICLE SIX
                                  -----------

                                  THE TRUSTEE

Section 601.    Certain Duties and Responsibilities.....................    56
Section 602.    Notice of Defaults......................................    56
Section 603.    Certain Rights of Trustee...............................    57
Section 604.    Not Responsible for Recitals or
                 Issuance of Securities.................................    58
Section 605.    May Hold Securities.....................................    59
Section 606.    Money Held in Trust.....................................    59
Section 607.    Compensation and Reimbursement..........................    59
Section 608.    Disqualification; Conflicting
                 Interests..............................................    60
Section 609.    Corporate Trustee Required;
                 Eligibility............................................    60
Section 610.    Resignation and Removal; Appointment of
                 Successor..............................................    61
Section 611.    Acceptance of Appointment by Successor..................    63
Section 612.    Merger, Conversion, Consolidation or
                 Succession to Business.................................    65
Section 613.    Preferential Collection of Claims
                 Against Company........................................    65
Section 614.    Appointment of Authenticating Agent.....................    65
</TABLE>

- -------------------


NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.
<PAGE>
 
                                      -v-


<TABLE> 
<CAPTION> 
                                                                          Page
                                                                          ----
<S>            <C>                                                       <C>
                                 ARTICLE SEVEN
                                 -------------

               HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701.    Company to Furnish Trustee Names and
                 Addresses of Holders...................................    68
Section 702.    Preservation of Information;
                 Communications to Holders..............................    69
Section 703.    Reports by Trustee......................................    70
Section 704.    Reports by Company......................................    70


                                 ARTICLE EIGHT
                                 -------------

             CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.   Company and Subsidiaries May
               Consolidate, Etc., Only on
               Certain Terms............................................     70
Section 802.   Successor Substituted....................................     71



                                 ARTICLE NINE
                                 ------------

                            SUPPLEMENTAL INDENTURES

Section 901.    Supplemental Indentures Without Consent
                 of Holders.............................................     71
Section 902.    Supplemental Indentures with Consent of
                 Holders................................................     73
Section 903.    Execution of Supplemental Indentures....................     75
Section 904.    Effect of Supplemental Indentures.......................     75
Section 905.    Conformity with Trust Indenture Act.....................     76
Section 906.    Reference in Securities to Supplemental
                 Indentures.............................................     76
</TABLE>

- -------------------

NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.
<PAGE>
 
                                     -vi-



<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
<S>            <C>                                                       <C>
                                  ARTICLE TEN
                                  -----------

                                   COVENANTS 

Section 1001.    Payment of Principal, Premium and
                  Interest..............................................    76
Section 1002.    Maintenance of Office or Agency........................    76
Section 1003.    Money for Securities Payments to Be
                  Held in Trust.........................................    77
Section 1004.    Statement by Officers as to Default....................    79
Section 1005.    Existence..............................................    79
Section 1006.    Maintenance of Properties..............................    80
Section 1007.    Payment of Taxes and Other Claims......................    80
Section 1008.    Waiver of Certain Covenants............................    80


                                ARTICLE ELEVEN
                                --------------

                           REDEMPTION OF SECURITIES

Section 1101.    Applicability of Article...............................    81
Section 1102.    Election to Redeem; Notice to Trustee..................    81
Section 1103.    Selection by Trustee of Securities to
                  Be Redeemed...........................................    82
Section 1104.    Notice of Redemption...................................    82
Section 1105.    Deposit of Redemption Price............................    83
Section 1106.    Securities Payable on Redemption Date..................    84
Section 1107.    Securities Redeemed in Part............................    84


                                 ARTICLE TWELVE
                                 --------------

                                 SINKING FUNDS

Section 1201.    Applicability of Article...............................    85
Section 1202.    Satisfaction of Sinking Fund Payments
                  with Securities.......................................    85
Section 1203.    Redemption of Securities for Sinking
                 Fund...................................................    86

TESTIMONIUM.............................................................    87
</TABLE> 

- -------------------

NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.
<PAGE>
 
                                     -vii-


<TABLE> 
<CAPTION> 

                                                                          Page
                                                                          ----
<S>                                                                      <C>
SIGNATURES AND SEALS....................................................    87
ACKNOWLEDGMENTS.........................................................    88
</TABLE>

- -------------------

NOTE: This table of contents shall not, for any purpose, be deemed to be a part
      of the Indenture.
<PAGE>
 
          INDENTURE, dated as of ........, 19.., between The Kroger Co., a
corporation duly organized and existing under the laws of the State of Ohio
(herein called the "Company"), having its principal office at 1014 Vine Street,
Cincinnati, Ohio 45202, and .............................., a
 ........................... duly organized and existing under the laws of
 ........, as Trustee (herein called the "Trustee").


                            RECITALS OF THE COMPANY

          The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

          All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, 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:

          (1) the terms defined in this Article have the meanings assigned to
     them in this
<PAGE>
 
      Article and include the plural as well as the singular;

          (2) 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;

          (3) 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 and applied by the Company on January 1, 1993; and

          (4) 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 sub division.

          "Act", when used with respect to any Holder, has the meaning specified
in Section 104.

          "Administrative Agents" means Chemical Bank and Citibank, N.A., as
Administrative Agents under the Bank Agreement, and, upon notice to the Company
and the Trustee, any successors thereto under the Bank Agreement.

          "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or con trolled 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 the ownership of voting securities, by contract or otherwise;

                                      -2-
<PAGE>
 
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

          "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

          "Bank Agreement" means the Senior Competitive Advance and Revolving
Credit Facility Agreement, dated as of July 19, 1994, among the Company, the
Subsidiary Borrowers named therein, the Lenders named therein, and the
Administrative Agents, as such Agreement (including, without limitation, any
"Loan Documents" (as defined in the Bank Agreement)) has been or may be amended,
amended and restated, supplemented or otherwise modified from time to time, and
includes any agreement extending the maturity of, refinancing or otherwise
restructuring (including, but not limited to, the inclusion of additional
borrowers thereunder that are Subsidiaries of the Company) all or any portion of
the Obligations under such Agreement or any successor agreement.

          "Board of Directors" means either the board of directors of the
Company 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.

          "Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

          "Capital Stock" means any and all shares, interests, participations,
warrants, rights or other equivalents (however designated) of corporate stock.

                                      -3-
<PAGE>
 
          "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument 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.

          "Company" means the Person named as the "Company" in the first
paragraph of this instrument 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 of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

          "Corporate Trust Office" means the principal office of the Trustee in
 ................................. .............................. at which at any
particular time its corporate trust business shall be administered.

          "corporation" means a corporation, association, company, joint-stock
company or business trust.

          "Defaulted Interest" has the meaning specified in Section 307.

          "Depositary" means, with respect to the Securities of any series
issuable in whole or in part in the form of one or more Global Securities, the
clearing agency registered under the Exchange Act specified for that purpose as
contemplated by Section 301.

          "Event of Default" has the meaning specified in Section 501.

          "Exchange Act" means the Securities Exchange Act of 1934 as it may be
amended and any successor act thereto.

                                      -4-
<PAGE>
 
          "Global Security" means a Security bearing the legend specified in
Section 204 evidencing all or part of a series of Securities, authenticated and
delivered to the Depositary for such series or its nominee, and registered in
the name of such Depositary or nominee.

          "Holder" means a Person in whose name a Security is registered in the
Security Register.

          "Indebtedness" means (without duplication), with respect to any
Person, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every obligation of such Person issued or assumed as the
deferred purchase price of property, every conditional sale obligation and every
obligation under any title retention agreement, in each case if on terms
permitting any portion of the purchase price to be paid beyond one year from the
date of purchase (but excluding trade accounts payable arising in the ordinary
course of business which are not overdue by more than 90 days or which are being
contested in good faith), (iv) every obligation of such Person issued or
contracted for as payment in consideration of the purchase by such Person or an
Affiliate of such Person of the Capital Stock or substantially all of the assets
of another Person or a merger or consolidation to which such Person or an
Affiliate of such Person was a party, (v) every obligation of the type referred
to in clauses (i) through (iv) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise, and (vi)
every obligation of the type referred to in clauses (i) through (v) of other
Persons secured by any Lien on any property or asset of such Person (whether or
not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value of such property or assets or the
amount of the obligation so secured. "Indebtedness," however, does not include
any obligation of any Person under any interest rate swap, cap, collar or
similar arrangement.

                                      -5-
<PAGE>
 
          "Indenture" means this instrument as originally executed or 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,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture, respec
tively. The term "Indenture" shall also include the terms of particular series
of Securities established as contemplated by Section 301.

          "interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

          "Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an instalment of interest on such Security.

          "Lien" means, with respect to any property or asset, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or asset (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).

          "Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

          "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant

                                      -6-
<PAGE>
 
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.

          "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Company or counsel for the Company, and who shall be acceptable
to the Trustee.

          "Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.

          "Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

          (i)  Securities theretofore cancelled by the Trustee or delivered to
      the Trustee for cancellation;

          (ii)  Securities 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 Securities; provided that, if such Securities 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; and

          (iii)  Securities which have been paid pursuant to Section 306 or in
      exchange for or in lieu of which other Securities have been authenticated
      and delivered pursuant to this Indenture, other than any such Securities
      in respect of which there shall have been pre-

                                      -7-
<PAGE>
 
      sented to the Trustee proof satisfactory to it that such Securities are
      held by a bona fide purchaser in whose hands such Securities are valid
      obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as contemplated by Sec
tion 301 on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of the amount
determined as provided in (i) above) of such Security, and (iii) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities 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
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

          "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

          "Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization

                                      -8-
<PAGE>
 
or government or any agency or political subdivision thereof.

          "Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.

          "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

          "Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

          "Redemption Price", when used with respect to any Security 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 on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

          "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

          "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

          "Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.

                                      -9-
<PAGE>
 
          "Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.

          "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other Sub
sidiaries. For the purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.

          "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

          "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

          "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".

          "Wholly-owned Subsidiary" means a Subsidiary, all of the outstanding
Capital Stock of which (other than directors' qualifying shares) shall at the
time be owned by

                                     -10-
<PAGE>
 
the Company or by one or more Wholly-owned Subsidiaries or by the Company and
one or more Wholly-owned Subsidiaries.

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 such certificates and opinions as may be required under the Trust
Indenture Act.  Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

          Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture 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.

                                     -11-
<PAGE>
 
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. 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; Record Dates.

          (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 agent duly
appointed in writing; and, except as herein

                                     -12-
<PAGE>
 
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 (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

          Without limiting the generality of the foregoing, a Holder, including
a Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a Depositary that is a
Holder of a Global Security may provide its proxy or proxies to the beneficial
owners of interests in any such Global Security.

          (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 his 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 Company may, in the circumstances permitted by the Trust
Indenture Act, and to the extent required by this Indenture shall, fix any day
as the record date for the purpose of determining the Holders of Securities of
any series entitled to give or take any request, demand, 

                                     -13-
<PAGE>
 
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders of
Securities of such series; provided, however, that in no event may the Company
set a record date for the purpose of determining the Holders of the Securities
entitled to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action pursuant to Section 501, 502 (other than the
second paragraph thereof), 507 or 512. Except as otherwise provided herein, if
not set by the Company prior to the first solicitation of a Holder of Securities
of such series made by any Person in respect of any such action, or, in the case
of any such vote, prior to such vote, the record date for any such action or
vote shall be the 30th day (or, if later, the date of the most recent list of
Holders required to be provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to any record date for
action to be given or taken or voted upon by the Holders of one or more series
of Securities, only the Holders of Securities of such series on such date (or
their duly designated proxies) shall be entitled to give or take, or vote on,
the relevant action.
         
          (d) The ownership of Securities shall be proved by the Security
Register.

          (e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security 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 Security.

Section 105.  Notices, Etc., to Trustee and Company.

          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,

                                     -14-
<PAGE>
 
                (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:
     ................., or

                (2) the Company 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 instrument 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 for notice to Holders of any event, 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 (if any), and not earlier than the earliest date (if any),
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. 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 regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such 

                                     -15-
<PAGE>
 
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.

Section 107.  Conflict with Trust Indenture Act.

          If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded.

Section 108.  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 109.  Successors and Assigns.

          All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

Section 110.  Separability Clause.

          In case any provision in this Indenture or in the Securities 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 111.  Benefits of Indenture.

          Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

                                     -16-
<PAGE>
 
Section 112.  Governing Law.

          This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.

Section 113.  Legal Holidays.

          In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.



                                  ARTICLE TWO

                                Security Forms

Section 201.  Forms Generally.

          The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case 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 Securities, as evidenced by their execution of the

                                     -17-
<PAGE>
 
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.

          The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

Section 202.  Form of Face of Security.
              ------------------------
                  [Insert any legend required by the Internal
                   ------------------------------------------
                 Revenue Code and the regulations thereunder.]
                 --------------------------------------------                
                                 THE KROGER CO.

                  ............................................

No. .........                                                        $ ........



          The Kroger Co., a corporation duly organized and existing under the
laws of the State of Ohio (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
 ............................ ........................... [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
 ............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ............ and
 ............ in each year, commencing ........., at the rate of ....% per annum,
until the principal hereof is paid or made available for payment [if applicable,
insert -- , and at the rate of ....% per annum on any overdue principal and
premium and on any overdue instalment of interest]. The interest so

                                     -18-
<PAGE>
 
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
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the
 ....... or ....... (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].

          [If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ....% per annum, which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ......% per annum, which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]

          Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, in such coin
or currency of the United States of America as at the time of

                                     -19-
<PAGE>
 
payment is legal tender for payment of public and private debts [if applicable,
insert -- ; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register].

          Reference is hereby made to the further provisions of this Security
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 executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
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:


                                                            THE KROGER CO.



                                                            By
                                                              ------------------

Attest:

- -------------------------


Section 203.  Form of Reverse of Security.

          This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ............., 1992 (herein called the
"Indenture"), between the Company and ..............., as Trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Inden-

                                     -20-
<PAGE>
 
ture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof[, limited in aggregate principal amount to $...........].

          [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time
[on or after .........., 19..], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before ..............., __%, and if
redeemed] during the 12-month period beginning ............. of the years
indicated,
<TABLE>
<CAPTION>
                       Redemption                                     Redemption
Year                     Price                     Year                  Price
- ----                     -----                     ----                  -----  
<S>                      <C>                       <C>                   <C>
 
</TABLE>

and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable

                                     -21-
<PAGE>
 
to the Holders of such Securities, or one or more Predecessor Securities, of
record at the close of business on the relevant Record Dates referred to on the
face hereof, all as provided in the Indenture.]

          [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on or
after ............], as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ............ of
the years indicated,
<TABLE>
<CAPTION>
                     Redemption Price
                      For Redemption                       Redemption Price For
                    Through Operation                      Redemption Otherwise
                         of the                           Than Through Operation
Year                  Sinking Fund                          of the Sinking Fund
- ----                -----------------                     ----------------------
<S>                 <C>                                   <C>

 </TABLE>

and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates

                                     -22-
<PAGE>
 
referred to on the face hereof, all as provided in the Indenture.]

          [Notwithstanding the foregoing, the Company may not, prior to
 ............., redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than .....% per annum.]

          [The sinking fund for this series provides for the redemption on
 ............ in each year beginning with the year ....... and ending with the
year ...... of [not less than $.......... ("mandatory sinking fund") and not
more than] $......... aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made [in the inverse
order in which they become due].]

          [If the Security is subject to redemption, insert -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]

          [If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]

          [If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to --

                                     -23-
<PAGE>
 
insert formula for determining the amount. Upon payment (i) of the amount of
principal so declared due and payable and (ii) of interest on any overdue
principal and overdue interest, all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

          As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default, the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have made written request, and offered reasonable indemnity, to
the Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Outstanding Securities a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of

                                     -24-
<PAGE>
 
payment of the principal of (and premium, if any) or any interest on this
Security on or after the respective due dates expressed herein.

          No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security 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 Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

          The Securities of this series are issuable only in registered form
without coupons in denominations of $....... and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

          No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

          Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in

                                     -25-
<PAGE>
 
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

          All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

Section 204.  Form of Legend for Global Securities.

          Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:

          "This Security is a Global Security within the meaning of the
     Indenture hereinafter referred to and is registered in the name of a
     Depositary or a nominee of a Depositary. This Security is not exchangeable
     for Securities registered in the name of a Person other than the Depositary
     or its nominee except in the limited circumstances described in the
     Indenture, and no transfer of this Security (other than a transfer of this
     Security as a whole by the Depositary to a nominee of the Depositary or by
     a nominee of the Depositary to the Depositary or another nominee of the
     Depositary) may be registered except in the limited circumstances described
     in the Indenture."

                                     -26-
<PAGE>
 
Section 205. Form of Trustee's Certificate of Authentication.

          The Trustee's certificates of authentication shall be in substantially
the following form:

          This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.


                                       .............................,
                                                           As Trustee


                                       By...........................
                                                   Authorized Officer



                                 ARTICLE THREE

                                 The Securities

Section 301.  Amount Unlimited; Issuable in Series.

          The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

          The Securities may be issued in one or more series.  There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate,
or established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series,

               (1) the title of the Securities of the series (which shall
     distinguish the Securities of the series from Securities of any other
     series);

               (2) any limit upon the aggregate principal amount of the
     Securities of the series which may be authenticated and delivered

                                     -27-
<PAGE>
     under this Indenture (except for Securities authenticated and delivered
     upon registration of transfer of, or in exchange for, or in lieu of, other
     Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and
     except for any Securities which, pursuant to Section 303, are deemed never
     to have been authenticated and delivered hereunder);

               (3) the Person to whom any interest on a Security of the series
     shall be payable, if other than the Person in whose name that Security (or
     one or more Predecessor Securities) is registered at the close of business
     on the Regular Record Date for such interest;

               (4) the date or dates on which the principal of the Securities
     of the series is payable;

               (5) the rate or rates at which the Securities of the series
     shall bear interest, if any, the date or dates from which such interest
     shall accrue, the Interest Payment Dates on which any such interest shall
     be payable and the Regular Record Date for any interest payable on any
     Interest Payment Date;

               (6) the place or places where the principal of and any premium
     and interest on Securities of the series shall be payable;

               (7) the period or periods within which, the price or prices at
     which and the terms and conditions upon which Securities of the series may
     be redeemed, in whole or in part, at the option of the Company;

               (8) the obligation, if any, of the Company to redeem or purchase
     Securities of the series pursuant to any sinking fund or 

                                     -28-
<PAGE>
 
     analogous provisions or at the option of a Holder thereof and the period or
     periods within which, the price or prices at which and the terms and
     conditions upon which Securities of the series shall be redeemed or
     purchased, in whole or in part, pursuant to such obligation;

               (9) if other than denominations of $1,000 and any integral
     multiple thereof, the denominations in which Securities of the series shall
     be issuable;

               (10) the currency, currencies or currency units in which payment
     of the principal of and any premium and interest on any Securities of the
     series shall be payable if other than the currency of the United States of
     America and the manner of determining the equivalent thereof in the
     currency of the United States of America for purposes of the definition of
     "Outstanding" in Section 101;

               (11) if the amount of payments of principal of or any premium or
     interest on any Securities of the series may be determined with reference
     to an index, the manner in which such amounts shall be determined;

               (12) if the principal of or any premium or interest on any
     Securities of the series is to be payable, at the election of the Company
     or a Holder thereof, in one or more currencies or currency units other than
     that or those in which the Securities are stated to be payable, the
     currency, currencies or currency units in which payment of the principal
     of and any premium and interest on Securities of such series as to which
     such election is made shall be payable, and the periods within which and
     the terms and conditions upon which such election is to be made;

                                     -29-
<PAGE>
 
               (13) if other than the principal amount thereof, the portion of
     the principal amount of Securities of the series which shall be payable
     upon declaration of acceleration of the Maturity thereof pursuant to
     Section 502;

               (14) whether the Securities of the Series shall be issued in
     whole or in part in the form of one or more Global Securities and, in such
     case, the Depositary or Depositaries with respect to such Global Security
     or Securities and the circumstances under which any such Global Security
     may be registered for transfer or exchange, or authenticated and delivered,
     in the name of a Person other than such Depositary or its nominee, if other
     than as set forth in Section 305;

               (15) any other event or events of default applicable with respect
     to the Securities of the series in addition to those provided in Section
     501(1) through (7);

               (16) any other covenant or warranty included for the benefit of
     Securities of the series in addition to (and not inconsistent with) those
     included in this Indenture for the benefit of Securities of all series, or
     any other covenant or warranty included for the benefit of Securities of
     the series in lieu of any covenant or warranty included in this Indenture
     for the benefit of Securities of all series, or any provision that any
     covenant or warranty included in this Indenture for the benefit of
     Securities of all series shall not be for the benefit of Securities of such
     series, or any combination of such covenants, warranties or provisions;

               (17) the terms pursuant to which (i) the Company may consolidate
     with or merge into any other Person, (ii) any Subsidiary of the 

                                     -30-
<PAGE>
 
     Company may consolidate with or merge into another Person in a transaction
     in which such Subsidiary remains a Subsidiary, (iii) any other Person may
     consolidate with or merge into any Subsidiary in which such Subsidiary
     remains a Subsidiary, or (iv) any other Person may, directly or indirectly,
     sell, assign, convey, transfer or lease its properties substantially as an
     entirety to the Company; and

               (18) any other terms of the series (which terms shall not be
     inconsistent with the provisions of this Indenture, except as permitted by
     Section 901(5)).

          All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.

          If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

Section 302.  Denominations.

          The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

                                     -31-
<PAGE>
 
Section 303. Execution, Authentication, Delivery and Dating.

          The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries.  The signature of any of these
officers on the Securities may be manual or facsimile.

          Securities 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 Securities or did not
hold such offices at the date of such Securities.

          At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any Series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities.  If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,

               (a) if the form of such Securities has been established by or
     pursuant to Board Resolution as permitted by Section 201, that such form
     has been established in conformity with the provisions of this Indenture;

               (b) if the terms of such Securities have been established by or
     pursuant to Board

                                     -32-
<PAGE>
 
     Resolution as permitted by Section 301, that such terms have been
     established in conformity with the provisions of this Indenture; and

               (c) that such Securities, when authenticated and delivered by the
     Trustee and issued by the Company in the manner and subject to any
     conditions specified in such Opinion of Counsel, will constitute valid and
     legally binding obligations of the Company enforceable in accordance with
     their terms, subject to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights and to general equity
     principles.

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

          Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.

          Each Security shall be dated the date of its authentication.

          No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein

                                     -33-
<PAGE>
 
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.  Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

Section 304.  Temporary Securities.

          Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

          If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay.  After the preparation of definitive Securities of such series, the 
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and
of a like aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under

                                     -34-
<PAGE>
 
this Indenture as definitive Securities of such series and tenor.

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 of the Company in a Place of Payment being herein sometimes
collectively 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 Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

          Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.

          At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities
to be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.

          All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

                                     -35-
<PAGE>
 
          Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) 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 of Securities, 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 Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

          The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

          Notwithstanding the foregoing, no Global Security shall be registered
for transfer or exchange, or authenticated and delivered, whether pursuant to
this Section, Section 304, 306, 906 or 1107 or otherwise, in the name of a
Person other than the Depositary for such Global Security or its nominee until
(i) the Depositary with respect to a Global Security notifies the Company that
it is unwilling or unable to continue as Depositary for such Global Security or
the Depositary ceases to be a clearing agency registered under the Exchange Act,
(ii) the Company executes and delivers to the Trustee a Company Order that such
Global Security shall be so transferable and exchangeable or (iii) there shall
have occurred and be continuing an Event of Default, or any event which after
notice or lapse of time, or both, would constitute an Event of Default, with
respect to the Securities of such series. 

                                     -36-
<PAGE>
 
Upon the occurrence in respect of any Global Security of any series of any one
or more of the conditions specified in clauses (i), (ii) or (iii) of the
preceding sentence or such other conditions as may be specified as contemplated
by Section 301 for such series, such Global Security may be registered for
transfer or exchange for Securities registered in the names of, or authenticated
and delivered to, such Persons as the Depositary with respect to such series
shall direct.


          Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Security, whether pursuant to this Section,
Section 304, 306, 906 or 1107 or otherwise, shall also be a Global Security and
bear the legend specified in Section 204.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.

          If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

          If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

                                     -37-
<PAGE>
 
          Upon the issuance of any new Security 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 Security of any series issued pursuant to this Section in
lieu of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series 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 Securities.

Section 307. Payment of Interest; Interest Rights Preserved.

          Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security 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 that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

          Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

                                     -38-
<PAGE>
 
               (1) The Company may elect to make payment of any Defaulted
     Interest to the Persons in whose names the Securities of such series (or
     their respective Predecessor Securities) 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 Security of such series 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 mailed, first-class postage prepaid, to each
     Holder of Securities of such series at his address as it appears in the
     Security Register, 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 mailed, such Defaulted Interest shall
     be paid to the Persons in whose names the Securities of such

                                     -39-
<PAGE>
 
     series (or their respective Predecessor Securities) 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 on the
     Securities of any series in any other lawful manner not inconsistent with
     the requirements of any securities exchange on which such Securities 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 Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

Section 308.  Persons Deemed Owners.

          Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

Section 309.  Cancellation.

          All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to 

                                     -40-
<PAGE>
 
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 Securities 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 Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities held by the
Trustee shall be disposed of as directed by a Company Order.

Section 310.  Computation of Interest.

          Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.


                                 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 any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), 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 Securities theretofore authenticated and delivered
               (other than (i) Securities which have been destroyed, lost or

                                     -41-
<PAGE>
 
     stolen and which have been replaced or paid as provided in Section 306 and
     (ii) Securities for whose payment money has theretofore been deposited in
     trust 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 Securities 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, or

                     (iii) are to be called for redemption within one year
               under arrangements satisfactory to the Trustee for the giving of
               notice of redemption by the Trustee in the name, and at the
               expense, of the Company,

     and the Company, in the case of (i), (ii) or (iii) above, has deposited or
     caused to be deposited with the Trustee as trust funds in trust for the
     purpose an amount sufficient to pay and discharge the entire indebtedness
     on such Securities not theretofore delivered to the Trustee for
     cancellation, for principal and any premium and interest to the date of
     such deposit (in the case of Securities which have become due and payable)
     or to the Stated Maturity or Redemption Date, as the case may be;

               (2) the Company has paid or caused to be paid all other sums
     payable hereunder by the Company; and

                                     -42-
<PAGE>
 
               (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.

          Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 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 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 Securities 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 any premium and
interest for whose payment such money has been deposited with the Trustee.


                                  ARTICLE FIVE

                                    Remedies

Section 501.  Events of Default.

          "Event of Default", wherever used herein with respect to Securities of
any series, 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):

                                     -43-
<PAGE>
 
               (1) default in the payment of any interest upon any Security of
     that series when it becomes due and payable, and continuance of such
     default for a period of 30 days; or

               (2) default in the payment of the principal of (or premium, if
     any, on) any Security of that series at its Maturity; or

               (3) default in the deposit of any sinking fund payment, when and
     as due by the terms of a Security of that series; or

               (4) default in the performance, or breach, of any covenant or
     warranty of the Company in this Indenture (other than a covenant or
     warranty a default in whose performance or whose breach is elsewhere in
     this Section specifically dealt with or which has expressly been included
     in this Indenture solely for the benefit of series of Securities other
     than that series), and continuance of such default or breach for a period
     of 60 days after there has been given, by registered or certified mail, to
     the Company by the Trustee or to the Company and the Trustee by the Holders
     of at least 25% in principal amount of the Outstanding Securities of that
     series a written notice specifying such default or breach and requiring it
     to be remedied and stating that such notice is a "Notice of Default"
     hereunder; or

               (5) a default under any Indebtedness by the Company (including a
     default with respect to Securities of any series other than that series) or
     under any bond, debenture, note, mortgage, indenture or instrument under
     which there may be issued or by which there may be secured or evidenced any
     Indebtedness by the Company (including this Indenture) with a principal
     amount then outstanding in excess

                                     -44-
<PAGE>
 
     of $30,000,000, whether such Indebtedness now exists or shall hereafter be
     created, which default shall constitute a failure to pay the principal of
     such Indebtedness at final maturity or shall have resulted in such
     Indebtedness becoming or being declared due and payable prior to the date
     on which it would otherwise have become due and payable, without such
     Indebtedness having been discharged, or such acceleration having been
     rescinded or annulled, within a period of 10 days after there shall have
     been given, by registered or certified mail, to the Company by the Trustee
     or to the Company and the Trustee by the Holders of at least 25% in
     principal amount of the Outstanding Securities of that series a written
     notice specifying such default and requiring the Company to cause such
     Indebtedness to be discharged or cause such acceleration to be rescinded or
     annulled and stating that such notice is a "Notice of Default" hereunder;
     or
               (6) the entry by a court having jurisdiction in the premises of
     (A) a decree or order for relief in respect of the Company in an
     involuntary case or proceeding under any applicable Federal or State
     bankruptcy, insolvency, reorganization or other similar law or (B) a decree
     or order adjudging the Company a bankrupt or insolvent, or approving as
     properly filed a petition seeking reorganization, arrangement, adjustment
     or composition of or in respect of the Company under any applicable
     Federal or State law, or appointing a custodian, receiver, liquidator,
     assignee, trustee, sequestrator or other similar official of the Company or
     of any substantial part of its property, or ordering the winding up or
     liquidation of its affairs, and the continuance of any such decree or order
     for relief or any such other decree or

                                     -45-
<PAGE>
 
     order unstayed and in effect for a period of 90 consecutive days; or

               (7) the commencement by the Company of a voluntary case or
     proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or of any other case or proceeding to
     be adjudicated a bankrupt or insolvent, or the consent by it to the entry
     of a decree or order for relief in respect of the Company in an involuntary
     case or proceeding under any applicable Federal or State bankruptcy,
     insolvency, reorganization or other similar law or to the commencement of
     any bankruptcy or insolvency case or proceeding against it, or the filing
     by it of a petition or answer or consent seeking reorganization or relief
     under any applicable Federal or State law, or the consent by it to the
     filing of such petition or to the appointment of or taking possession by
     a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
     similar official of the Company or of any substantial part of its property,
     or the making by it of a general assignment for the benefit of creditors,
     or the admission by it in writing of its inability to pay its debts
     generally as they become due, or the taking of corporate action by the
     Company in furtherance of any such action; or

               (8) any other Event of Default provided with respect to
     Securities of that series.

Section 502. Acceleration of Maturity; Rescission and Annulment.

          If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount

                                     -46-
<PAGE>
 
(or, if any of the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified in the terms thereof) of all of the Securities of that series to be
due and payable immediately, by a notice in writing to the Company and the
Administrative Agents (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become due
and payable five Business Days after the receipt by the Company and the
Administrative Agents of such written notice, provided such Event of Default is
then continuing; provided, however, that the preceding proviso shall not
restrict the availability of other rights or remedies that the Trustee or the
Holders may have.

          At any time after such a declaration of acceleration with respect to
Securities of any series 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 principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

               (1) the Company has paid or deposited with the Trustee a sum
     sufficient to pay

                     (A)  all overdue interest on all Securities of that series,

                     (B) the principal of (and premium, if any, on) any
          Securities of that series which have become due otherwise than by such
          declaration of acceleration and any interest thereon at the rate or
          rates prescribed therefor in such Securities,

                     (C)  interest upon overdue interest at the rate or rates
          prescribed therefor in such Securities, and

                                     -47-
<PAGE>
 
                     (D) all sums paid or advanced by the Trustee hereunder and
          the reasonable compensation, expenses, disbursements and advances of
          the Trustee, its agents and counsel;

and

               (2) all Events of Default with respect to Securities of that
     series, other than the non-payment of the principal of Securities of that
     series which have become due solely by such declaration of acceleration,
     have been cured or waived as provided in Section 513.

No such rescission 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

               (1) default is made in the payment of any interest on any
     Security when such inter est becomes due and payable and such default
     continues for a period of 30 days, or

               (2) default is made in the payment of the principal of (or
     premium, if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and interest on any
overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, 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.

                                     -48-
<PAGE>
 
          If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series 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 any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 other 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 to 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 607.

          No provision of this Indenture 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
Securities 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; provided,
however, the Trustees may vote on behalf of the Holders for the election of a
trustee in bankruptcy or similar official and may be a member of a creditors or
other similar committee.
                                     -49-
<PAGE>
 
Section 505. Trustee May Enforce Claims Without Possession of Securities.

          All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name 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 Securities 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 any premium
or interest, upon presentation of the Securities 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 607; and

               SECOND: To the payment of the amounts then due and unpaid for
     principal of and any premium and interest on the Securities 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 Securities for principal and any premium and interest,
     respectively.

Section 507.  Limitation on Suits.

          No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment 

                                     -50-
<PAGE>
 
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 with respect to the Securities of
     that series;

               (2) the Holders of not less than 25% in principal amount of the
     Outstanding Securities of that series 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 reasonable
     indemnity 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 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
     in principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such 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 of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

                                     -51-
<PAGE>
 
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
             Interest.

          Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
any interest on such Security on the Stated Maturity or Maturities expressed in
such Security (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 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 Securities 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 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.

                                     -52-
<PAGE>
 
Section 511.  Delay or Omission Not Waiver.

          No delay or omission of the Trustee or of any Holder of any Securities
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 a majority in principal amount of the Outstanding
Securities of any series 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, with respect to the
Securities of such series, provided that

               (1) such direction shall not be in conflict with any rule of law
     or with this Indenture, and

               (2) the Trustee may take any other action deemed proper by the
     Trustee which is not inconsistent with such direction.

Section 513.  Waiver of Past Defaults.

          The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default

               (1) in the payment of the principal of or any premium or interest
     on any Security of such series, or

               (2) in respect of a covenant or provision hereof which under
     Article Nine cannot

                                     -53-
<PAGE>
 
     be modified or amended without the consent of the Holder of each
     Outstanding Security of such series 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 impair any right consequent thereon.

Section 514.  Undertaking for Costs.

          In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.

Section 515.  Waiver of Usury, Stay or Extension Laws.

          The Company 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 usury, 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 the Company (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.

                                     -54-
<PAGE>
 
                                  ARTICLE SIX

                                  The Trustee

Section 601.  Certain Duties and Responsibilities.

          The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act.  Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee 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.  Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

Section 602.  Notice of Defaults.

          If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof.  For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.

Section 603.  Certain Rights of Trustee.

          Subject to the provisions of Section 601:

               (a) the Trustee may rely and shall be protected in acting or
     refraining from acting upon any resolution, certificate,

                                     -55-
<PAGE>
 
     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;

               (b) 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;

               (c) 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;

               (d) 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;

               (e) 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 reasonable security or indemnity
     against the costs, expenses and liabilities which might be incurred by it
     in compliance with such request or direction;

                                     -56-
<PAGE>
 
               (f) 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 to examine the books, records and premises of the
     Company, personally or by agent or attorney; and

               (g) 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.

Section 604. Not Responsible for Recitals or Issuance of Securities.

          The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.

                                     -57-
<PAGE>
 
Section 605.  May Hold Securities.

          The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

Section 606.  Money Held in Trust.

          Money 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 money received by it hereunder except as
otherwise agreed with the Company.

Section 607.  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
                                     -58-
<PAGE>
 
               (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 or
     administration of the trust or trusts hereunder, 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.

Section 608. Disqualification; Conflicting Interests.

          If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

Section 609. Corporate Trustee Required; Eligibility.

          There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 [and its Corporate
Trust Office in ...............................]. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person 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.

                                     -59-
<PAGE>
 
Section 610. 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 611.

          (b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company.  If the
instrument of acceptance by a successor Trustee required by Section 611 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 with respect to the
Securities of such series.

          (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.

          (d)  If at any time:

          (1) the Trustee shall fail to comply with Section 608 after written
     request therefor by the Company or by any Holder who has been a bona fide
     Holder of a Security for at least six months, or

          (2) the Trustee shall cease to be eligible under Section 609 and shall
     fail to resign after written request therefor by the Company or by any such
     Holder, 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

                                     -60-
<PAGE>
 
     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 with respect to all securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security 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 with respect to all
Securities and the appointment of a successor Trustee or Trustees.

          (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, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any Series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any Series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of compe-

                                     -61-
<PAGE>
 
tent jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

          (f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.

          (a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed 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 the 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.

          (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those

                                     -62-
<PAGE>
 
series to which the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each 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 with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.

          (c) 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
referred to in paragraph (a) and (b) of this Section, as the case may be.

          (d) 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.

                                     -63-
<PAGE>
 
Section 612. 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 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 Securities 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 Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

Section 613. Preferential Collection of Claims Against Company.

          If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

Section 614.  Appointment of Authenticating Agent.

          The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference

                                     -64-
<PAGE>
 
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any
State thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent 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 an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.

          Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

          An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company.  The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company.  Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the

                                     -65-
<PAGE>
 
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

          The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.

          If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

          This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.




                                    ------------------------,
                                                   As Trustee


                                    By
                                      ----------------------,
                                      As Authenticating Agent


                                    By
                                      -----------------------
                                           Authorized Officer


                                     -66-

<PAGE>
 
                                 ARTICLE SEVEN

          Holders' Lists and Reports by Trustee and Company

Section 701.  Company to Furnish Trustee
              Names and Addresses of Holders.


          The Company will furnish or cause to be furnished to the Trustee

          (a) semi-annually, either (i) not later than _______________ and
     ___________________ in each year in the case of Original Issue Discount
     Securities of any series which by their terms bear interest only after
     Maturity, or (ii) not more than 15 days after each Regular Record Date in
     the case of Securities of any other series, a list of each series of
     Securities, in such form as the Trustee may reasonably require, of the
     names and addresses of the Holders of each such series as of the preceding
     ______________ or ______________ or Regular Record Date, as the case may
     be, and

          (b) at such other times as the Trustee may request in writing, within
     30 days after the receipt by the Company of any such request, a list of
     similar form and content as of a date not more than 15 days prior to the
     time such list is furnished;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

Section 702.  Preservation of Information;
              Communications to Holders.

          (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list

                                     -67-

<PAGE>
 
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.

          (b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.

          (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

Section 703.  Reports by Trustee.

          (a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

          (b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

Section 704.  Reports by Company.

          The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.

                                     -68-

<PAGE>
 
                                 ARTICLE EIGHT

             Consolidation, Merger, Conveyance, Transfer or Lease


Section 801.  Company and Subsidiaries May Consolidate,
              Etc., Only on Certain Terms.

          The Company (a) shall not consolidate with or merge into any other
Person or, directly or indirectly, transfer, convey, sell, lease or otherwise
dispose of all or substantially all of its properties and assets as an entirety
to any Person; (b) shall not permit any Subsidiary to consolidate with or merge
into another Person (other than a Wholly-owned Subsidiary) in a transaction in
which such Subsidiary remains a Subsidiary; (c) shall not permit (i) any other
Person to consolidate with or merge into the Company or (ii) any other Person
(other than a Wholly-owned Subsidiary) to consolidate with or merge into any
Subsidiary in a transaction in which such Subsidiary remains a Subsidiary; and
(d) shall not permit any other Person to, directly or indirectly, sell, assign,
convey, transfer or lease its properties substantially as an entirety to the
Company except as provided pursuant to Section 301(17).

Section 802.  Successor Substituted.

          Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

                                     -69-

<PAGE>
 
                                 ARTICLE NINE

                            Supplemental Indentures


Section 901.  Supplemental Indentures Without
              Consent of Holders.


          Without the consent of any Holders, the Company, 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
     herein and in the Securities; or

          (2) to add to the covenants of the Company for the benefit of the
     Holders of all or any series of Securities (and if such covenants are to be
     for the benefit of less than all series of Securities, stating that such
     covenants are expressly being included solely for the benefit of such
     series) or to surrender any right or power herein conferred upon the
     Company; or

          (3) to add any additional Events of Default; or

          (4) to add to or change any of the provisions of this Indenture to
     such extent as shall be necessary to permit or facilitate the issuance of
     Securities in bearer form, registrable or not registrable as to principal,
     and with or without interest coupons, or to permit or facilitate the
     issuance of Securities in uncertificated form; or

          (5) to add to, change or eliminate any of the provisions of this
     Indenture in

                                     -70-

<PAGE>
 
     respect of one or more series of Securities, provided that any such
     addition, change or elimination (i) shall neither (A) apply to any Security
     of any series created prior to the execution of such supplemental indenture
     and entitled to the benefit of such provision nor (B) modify the rights of
     the Holder of any such Security with respect to such provision or (ii)
     shall become effective only when there is no such Security Outstanding; or

          (6)  to secure the Securities; or

          (7) to establish the form or terms of Securities of any series as
     permitted by Sections 201 and 301; or

          (8) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series and to add to or change any of the provisions of this Indenture
     as shall be necessary to provide for or facilitate the administration of
     the trusts hereunder by more than one Trustee, pursuant to the requirements
     of Section 611(b); or

          (9) 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 pursuant to this clause (9)
     shall not adversely affect the interests of the Holders of Securities of
     any series in any material respect.

                                     -71-

<PAGE>
 
Section 902.  Supplemental Indentures with Consent
              of Holders.

          With the consent of the Holders of not less than 50% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, 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 of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,

          (1) change the Stated Maturity of the principal of, or any instalment
     of principal of or interest on, any Security, or reduce the principal
     amount thereof or (unless otherwise specified as contemplated by Section
     301) the rate of interest thereon or any premium payable upon the
     redemption thereof, or reduce the amount of the principal of an Original
     Issue Discount Security that would be due and payable upon a declaration of
     acceleration of the Maturity thereof pursuant to Section 502, or change any
     Place of Payment where, or the coin or currency in which, any Security or
     any premium or interest thereon is payable, or impair the right to
     institute suit for the enforcement of any such payment on or after the
     Stated Maturity thereof (or, in the case of redemption, on or after the
     Redemption Date), or

          (2) reduce the percentage in principal amount of the Outstanding
     Securities of any series, 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

                                     -72-

<PAGE>
 
     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, Section 513 or
     Section 1008, 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 Security affected
     thereby, provided, however, that this clause shall not be deemed to require
     the consent of any Holder with respect to changes in the references to "the
     Trustee" and concomitant changes in this Section and Section 1008, or the
     deletion of this proviso, in accordance with the requirements of Sections
     611(b) and 901(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

          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.

          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 (subject to Section 601) 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

                                     -73-

<PAGE>
 
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

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 Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

Section 905.  Conformity with Trust Indenture Act.

          Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

Section 906.  Reference in Securities to
              Supplemental Indentures.

          Securities of any series 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 shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                     -74-

<PAGE>
 
                                  ARTICLE TEN

                                   Covenants

Section 1001.  Payment of Principal, Premium and Interest.

          The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any
premium and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.

Section 1002. Maintenance of Office or Agency.

          The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of 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 hereby appoints the Trustee as its 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 where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; 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 each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.

                                     -75-

<PAGE>
 
Section 1003. Money for Securities Payments to
              Be Held in Trust.

          If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and 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 any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

          The Company will cause each Paying Agent for any series of Securities
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 (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.

          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

                                     -76-

<PAGE>
 

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 money.

          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 or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium 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 Security 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 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.  Statement by Officers as to Default.

          The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

                                     -77-
<PAGE>
 

Section 1005  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 its existence,
rights (charter and statutory) and franchises; 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.

                                     -78-
<PAGE>
 

Section 1006.  Maintenance of Properties.

          The Company will cause all properties used or useful in the conduct of
its business or the business of any material 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 operation or 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.

Section 1007.  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, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any material
Subsidiary or upon the income, profits or property of the Company or any
material Subsidiary, and (2) 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 material 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, if a reserve or other
appropriate provision shall have been made therefor in accordance with generally
accepted accounting principles.

Section 1008.  Waiver of Certain Covenants.

          The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1006 to 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of

                                     -79-
<PAGE>
 

the Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance 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 Securities

Section 1101.  Applicability of Article.

          Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.

Section 1102.  Election to Redeem; Notice to Trustee.

          The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 35 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, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.

                                     -80-
<PAGE>
 

Section 1103.  Selection by Trustee of Securities
               to Be Redeemed.

          If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series 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 (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.

          The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities 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 the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

Section 1104.  Notice of Redemption.

          Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of

                                     -81-
<PAGE>
 

Securities to be redeemed, at his address appearing in the Security Register.

           All notices of redemption shall state:

           (1)  the Redemption Date,

           (2)  the Redemption Price,

           (3)  if less than all the Outstanding Securities of any series are to
     be redeemed, the identification (and, in the case of partial redemption of
     any Securities, the principal amounts) of the particular Securities to be
     redeemed,

          (4)   that on the Redemption Date the Redemption Price will become due
     and payable upon each such Security to be redeemed and, if applicable, that
     interest thereon will cease to accrue on and after said date,

          (5)   the place or places where such Securities are to be surrendered
     for payment of the Redemption Price, and

          (6)   that the redemption is for a sinking fund, if such is the case.

          Notice of redemption of Securities 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 and shall be irrevocable.

Section 1105.  Deposit of Redemption Price.

          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 (except if the Redemption
Date shall be an Interest Payment Date)

                                     -82-
<PAGE>
 

accrued interest on, all the Securities which are to be redeemed on that date.

Section 1106.  Securities Payable on Redemption Date.

          Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, instalments of interest whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, 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 Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

Section 1107.  Securities Redeemed in Part.

          Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (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 his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and

                                     -83-
<PAGE>
 

in exchange for the unredeemed portion of the principal of the Security so
surrendered.

                                ARTICLE TWELVE

                                 Sinking Funds

Section 1201.  Applicability of Article.

          The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

          The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

Section 1202.  Satisfaction of Sinking Fund Payments
               with Securities.

          The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited.
Such Securities

                                     -84-
<PAGE>
 

shall be received and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

Section 1203.  Redemption of Securities for Sinking Fund.

          Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, 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 and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 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 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.

          This instrument may be executed 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 instrument.


                         -----------------------------


                                     -85-
<PAGE>
 

          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.


                                    THE KROGER CO.



                                    By.............................

Attest:

 ..........................


                                    ..................., as Trustee


                                    By.............................

Attest:

 ..........................




                                     -86-
<PAGE>

 
STATE OF NEW YORK  )
                   )  ss.:
COUNTY OF NEW YORK )


          On the .... day of ..........., ...., before me personally came
 ..........................., to me known, who, being by me duly sworn, did
depose and say that he is ............................ of The Kroger Co., one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.



                                    .......................................


STATE OF NEW YORK  )
                   )  ss.:
COUNTY OF NEW YORK )

          On the .... day of ..........., ...., before me personally came
 ..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of ............................,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.



                                    .......................................



                                     -87-

<PAGE>
 
==============================================================================


                                THE KROGER CO.

                                      TO

                              . . . . . . . . . .
                                    Trustee



                                  ----------


                                   INDENTURE

                          Dated as of . . . . . . . .


                                  ----------



                         SUBORDINATED DEBT SECURITIES



==============================================================================
<PAGE>
 
                                THE KROGER CO.
                Certain Sections of this Indenture relating to
                  Sections 310 through 318, inclusive, of the
                         Trust Indenture Act of 1939:

Trust Indenture
  Act Section                                                Indenture Section

<TABLE>
<CAPTION>

<S>                                                         <C>
(S) 310(a)(1)    .............................................  609
       (a)(2)    .............................................  609
       (a)(3)    .............................................  Not Applicable
       (a)(4)    .............................................  Not Applicable
       (b)       .............................................  608
                                                                610
(S) 311(a)       .............................................  613
       (b)       .............................................  613
(S) 312(a)       .............................................  701
                                                                702(a)
       (b)       .............................................  702(b)
       (c)       .............................................  702(c)
(S) 313(a)       .............................................  703(a)
       (b)       .............................................  703(a)
       (c)       .............................................  703(a)
       (d)       .............................................  703(b)
(S) 314(a)       .............................................  704
       (a)(4)    .............................................  101
                                                                1004
       (b)       .............................................  Not Applicable
       (c)(1)    .............................................  102
       (c)(2)    .............................................  102
       (c)(3)    .............................................  Not Applicable
       (d)       .............................................  Not Applicable
       (e)       .............................................  102
(S) 315(a)       .............................................  601
       (b)       .............................................  602
       (c)       .............................................  601
       (d)       .............................................  601
       (e)       .............................................  514
(S) 316(a)       .............................................  101
       (a)(1)(A) .............................................  502
                                                                512
       (a)(1)(B) .............................................  513
       (a)(2)    .............................................  Not Applicable
       (b)       .............................................  508
       (c)       .............................................  104(c)
(S) 317(a)(1)    .............................................  503
       (a)(2)    .............................................. 504
</TABLE>

<PAGE>
 
<TABLE>

<S>                                                            <C>
       (b)       .............................................  1003
(S) 318(a)       .............................................  107
</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>

                                                                          Page
                                                                          ----
<S>                                                                      <C>
PARTIES...................................................................  1
RECITALS OF THE COMPANY...................................................  1
</TABLE> 

                                  ARTICLE ONE
                                  -----------

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

                                                                          Page
                                                                          ----
<TABLE>
<CAPTION>
<S>          <C>                                                          <C>
Section 101.     Definitions:.............................................  1
                 Act......................................................  2
                 Administrative Agents....................................  2
                 Affiliate; control.......................................  2
                 Authenticating Agent.....................................  3
                 Bank Agreement...........................................  3
                 Board of Directors.......................................  3
                 Board Resolution.........................................  3
                 Business Day.............................................  3
                 Capital Stock............................................  4
                 Commission...............................................  4
                 Company..................................................  4
                 Company Request; Company Order...........................  4
                 Corporate Trust Office...................................  4
                 corporation..............................................  4
                 Defaulted Interest.......................................  4
                 Depositary...............................................  4
                 Event of Default.........................................  5
                 Exchange Act.............................................  5
                 Global Security..........................................  5
                 Holder...................................................  5
                 Indebtedness.............................................  5
                 Indenture................................................  6
                 interest.................................................  6
                 Interest Payment Date....................................  6
                 Lien.....................................................  6
                 Maturity.................................................  6
                 Officers' Certificate....................................  7
                 Opinion of Counsel.......................................  7
                 Original Issue Discount Security.........................  7
</TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>
 
                                     -ii-
<TABLE>
<CAPTION>

                                                                          Page
                                                                          ----
<S>            <C>                                                       <C>
                 Outstanding..............................................  7
                 Paying Agent.............................................  9
                 Person...................................................  9
                 Place of Payment.........................................  9
                 Predecessor Security.....................................  9
                 Redemption Date..........................................  9
                 Redemption Price.........................................  9
                 Regular Record Date......................................  9
                 Securities............................................... 10
                 Security Register; Security
                  Registrar............................................... 10
                 Senior Indebtedness...................................... 10
                 Special Record Date...................................... 10
                 Stated Maturity.......................................... 10
                 Subsidiary............................................... 10
                 Trustee.................................................. 10
                 Trust Indenture Act...................................... 10
                 Vice President........................................... 11
                 Wholly-owned Subsidiary.................................. 11
Section 102.     Compliance Certificates and Opinions..................... 11
Section 103.     Form of Documents Delivered to Trustee................... 12
Section 104.     Acts of Holders; Record Dates............................ 13
Section 105.     Notices, Etc., to Trustee and Company.................... 15
Section 106.     Notice to Holders; Waiver................................ 15
Section 107.     Conflict with Trust Indenture Act........................ 16
Section 108.     Effect of Headings and
                  Table of Contents....................................... 16
Section 109.     Successors and Assigns................................... 17
Section 110.     Separability Clause...................................... 17
Section 111.     Benefits of Indenture.................................... 17
Section 112.     Governing Law............................................ 17
Section 113.     Legal Holidays........................................... 17
</TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                     -iii-
<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
                                  ARTICLE TWO
                                  -----------

                                 SECURITY FORMS
<S>            <C>                                                       <C>
Section 201.    Forms Generally........................................... 18
Section 202.    Form of Face of Security.................................. 18
Section 203.    Form of Reverse of Security............................... 21
Section 204.    Form of Legend for Global Securities...................... 27
Section 205.    Form of Trustee's Certificate of
                 Authentication........................................... 28


                                 ARTICLE THREE
                                 -------------

                                THE SECURITIES

Section 301.     Amount Unlimited; Issuable in Series..................... 28
Section 302.     Denominations............................................ 33
Section 303.     Execution, Authentication, Delivery
                  and Dating.............................................. 33
Section 304.     Temporary Securities..................................... 35
Section 305.     Registration, Registration of Transfer
                  and Exchange............................................ 36
Section 306.     Mutilated, Destroyed, Lost and Stolen
                  Securities.............................................. 38
Section 307.     Payment of Interest; Interest Rights
                  Preserved............................................... 40
Section 308.     Persons Deemed Owners.................................... 42
Section 309.     Cancellation............................................. 42
Section 310.     Computation of Interest.................................. 43


                                 ARTICLE FOUR
                                 ------------
</TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                     -iv-

<TABLE>
<CAPTION>
 
                                                                          Page
                                                                          ----

                          SATISFACTION AND DISCHARGE

<S>             <C>                                                      <C>
Section 401.     Satisfaction and Discharge of Indenture.................. 43
Section 402.     Application of Trust Money............................... 45


                                 ARTICLE FIVE
                                 ------------

                                   REMEDIES

Section 501.     Events of Default........................................ 45
Section 502.     Acceleration of Maturity; Rescission
                  and Annulment........................................... 48
Section 503.     Collection of Indebtedness and Suits
                  for Enforcement by Trustee.............................. 50
Section 504.     Trustee May File Proofs of Claim......................... 51
Section 505.     Trustee May Enforce Claims Without
                  Possession of Securities................................ 51
Section 506.     Application of Money Collected........................... 52
Section 507.     Limitation on Suits...................................... 52
Section 508.     Unconditional Right of Holders to
                  Receive Principal, Premium and
                  Interest................................................ 54
Section 509.     Restoration of Rights and Remedies....................... 54
Section 510.     Rights and Remedies Cumulative........................... 54
Section 511.     Delay or Omission Not Waiver............................. 55
Section 512.     Control by Holders....................................... 55
Section 513.     Waiver of Past Defaults.................................. 55
Section 514.     Undertaking for Costs.................................... 56
Section 515.     Waiver of Usury, Stay or
                  Extension Laws.......................................... 56
</TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                      -v-
<TABLE>
<CAPTION>
                                                                          Page
                                                                          ----
                                  ARTICLE SIX
                                  -----------

                                  THE TRUSTEE
<S>            <C>                                                       <C>
Section 601.     Certain Duties and Responsibilities...................... 57
Section 602.     Notice of Defaults....................................... 57
Section 603.     Certain Rights of Trustee................................ 57
Section 604.     Not Responsible for Recitals or
                  Issuance of Securities.................................. 59
Section 605.     May Hold Securities...................................... 60
Section 606.     Money Held in Trust...................................... 60
Section 607.     Compensation and Reimbursement........................... 60
Section 608.     Disqualification; Conflicting
                  Interests............................................... 61
Section 609.     Corporate Trustee Required;
                  Eligibility............................................. 61
Section 610.     Resignation and Removal; Appointment of
                  Successor............................................... 62
Section 611.     Acceptance of Appointment by Successor................... 64
Section 612.     Merger, Conversion, Consolidation or
                  Succession to Business.................................. 66
Section 613.     Preferential Collection of Claims
                  Against Company......................................... 66
Section 614.     Appointment of Authenticating Agent...................... 66

                                 ARTICLE SEVEN
                                 -------------

               HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701.     Company to Furnish Trustee Names and
                  Addresses of Holders.................................... 69
Section 702.     Preservation of Information;
                  Communications to Holders............................... 70
 </TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>

                                     -vi-
 
<TABLE>
<CAPTION> 
                                                                          Page
                                                                          ----

<S>             <C>                                                      <C>
Section 703.     Reports by Trustee....................................... 70
Section 704.     Reports by Company....................................... 71


                                 ARTICLE EIGHT
                                 -------------

             CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.     Company and Subsidiaries May Consolidate,
                  Etc., Only on Certain Terms............................. 71
Section 802.     Successor Substituted.................................... 71


                                 ARTICLE NINE
                                 ------------

                            SUPPLEMENTAL INDENTURES

Section 901.     Supplemental Indentures Without Consent
                  of Holders.............................................. 72
Section 902.     Supplemental Indentures with Consent of
                  Holders................................................. 74
Section 903.     Execution of Supplemental Indentures..................... 76
Section 904.     Effect of Supplemental Indentures........................ 76
Section 905.     Conformity with Trust Indenture Act...................... 76
Section 906.     Reference in Securities to Supplemental
                  Indentures.............................................. 77


                                  ARTICLE TEN
                                  -----------

                                   COVENANTS

Section 1001.    Payment of Principal, Premium and
                  Interest................................................ 77
Section 1002.    Maintenance of Office or Agency.......................... 77
</TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.


<PAGE>

                                     -vii-
<TABLE>
<CAPTION> 
                                                                          Page
                                                                          ----
<S>             <C>                                                      <C>
Section 1003.    Money for Securities Payments to Be
                  Held in Trust........................................... 78
Section 1004.    Statement by Officers as to Default...................... 80
Section 1005.    Existence................................................ 80
Section 1006.    Maintenance of Properties................................ 80
Section 1007.    Payment of Taxes and Other Claims........................ 81
Section 1008.    Waiver of Certain Covenants.............................. 81


                                 ARTICLE ELEVEN
                                 --------------

                            REDEMPTION OF SECURITIES

Section 1101.    Applicability of Article................................. 82
Section 1102.    Election to Redeem; Notice to Trustee.................... 82
Section 1103.    Selection by Trustee of Securities to
                  Be Redeemed............................................. 82
Section 1104.    Notice of Redemption..................................... 83
Section 1105.    Deposit of Redemption Price.............................. 84
Section 1106.    Securities Payable on Redemption Date.................... 84
Section 1107.    Securities Redeemed in Part.............................. 85
</TABLE>

- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.

<PAGE>
 
                                    -viii-
<TABLE>
<CAPTION>
                                                                          PAGE
                                                                          ----
                                 ARTICLE TWELVE
                                 --------------

                                 SINKING FUNDS
 
<S>              <C>                                                     <C>
Section 1201.    Applicability of Article................................. 85
Section 1202.    Satisfaction of Sinking Fund Payments
                  with Securities......................................... 86
Section 1203.    Redemption of Securities for Sinking
                  Fund.................................................... 86

                                ARTICLE THIRTEEN
                                ----------------

                                 SUBORDINATION

Section 1301.    Securities Subordinate to Senior
                  Indebtedness............................................ 87
TESTIMONIUM............................................................... 89
SIGNATURES AND SEALS...................................................... 89
ACKNOWLEDGMENTS........................................................... 90
</TABLE>


- -------------
NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
       of the Indenture.


<PAGE>
 
          INDENTURE, dated as of . . . . . . . ., between The Kroger Co., a
corporation duly organized and existing under the laws of the State of Ohio
(herein called the "Company"), having its principal office at 1014 Vine Street,
Cincinnati, Ohio 45202, and . . . . . . . . . . . . . . . , a banking
corporation duly organized and existing under the laws of . . . . . . . . . . .
 . . ., as Trustee (herein called the "Trustee").


                            RECITALS OF THE COMPANY

          The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

          All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, 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:

<PAGE>
 
          (1)  the terms defined in this Article have the meanings assigned to
     them in this Article and include the plural as well as the singular;

          (2)  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;

          (3)  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 and applied by the Company on January 1, 1993; and

          (4)  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.

          "Act", when used with respect to any Holder, has the meaning specified
in Section 104.

          "Administrative Agents" means Chemical Bank and Citibank, N.A., as
Administrative Agents under the Bank Agreement, and, upon notice to the Company
and the Trustee, any successors thereto under the Bank Agreement.

          "Affiliate" of any specified Person means 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 the

                                      -2-
<PAGE>
 
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

          "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.

          "Bank Agreement" means the Senior Competitive Advance and Revolving
Credit Facility Agreement, dated as of July 19, 1994, among the Company, the
Subsidiary Borrowers named therein, the Lenders named therein, and the
Administrative Agents, as such Agreement (including, without limitation, any
"Loan Documents" (as defined in the Bank Agreement)) has been or may be amended,
amended and restated, supplemented or otherwise modified from time to time, and
includes any agreement extending the maturity of, refinancing or otherwise
restructuring (including, but not limited to, the inclusion of additional
borrowers thereunder that are Subsidiaries of the Company) all or any portion of
the Obligations under such Agreement or any successor agreement.

          "Board of Directors" means either the board of directors of the
Company 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.

          "Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

          "Capital Stock" means any and all shares, interests, participations,
warrants, rights or other equivalents (however designated) of corporate stock.

                                      -3-
<PAGE>
 
          "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument 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.

          "Company" means the Person named as the "Company" in the first
paragraph of this instrument 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 of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

          "Corporate Trust Office" means the principal office of the Trustee in
 . . . . . . . . . . . . . . . ., at which at any particular time its corporate
trust business shall be administered, which on the date of this Indenture
is . .. . . . . . . . . . . . . . . . . . . . . . . . . ,
Attention . . . . . . . . .. . . . . . .

          "corporation" means a corporation, association, company, joint-stock
company or business trust.

          "Defaulted Interest" has the meaning specified in Section 307.

          "Depositary" means, with respect to the Securities of any series
issuable in whole or in part in the form of one or more Global Securities, the
clearing agency registered under the Exchange Act specified for that purpose as
contemplated by Section 301.

          "Event of Default" has the meaning specified in Section 501.

                                      -4-
<PAGE>
 
          "Exchange Act" means the Securities Exchange Act of 1934 as it may be
amended and any successor act thereto.
        
          "Global Security" means a Security bearing the legend specified in
Section 204 evidencing all or part of a series of Securities, authenticated and
delivered to the Depositary for such series or its nominee, and registered in
the name of such Depositary or nominee.

          "Holder" means a Person in whose name a Security is registered in the
Security Register.

          "Indebtedness" means (without duplication), with respect to any
Person, (i) every obligation of such Person for money borrowed, (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) every obligation of such Person issued or assumed as the
deferred purchase price of property, every conditional sale obligation and every
obligation under any title retention agreement, in each case if on terms
permitting any portion of the purchase price to be paid beyond one year from the
date of purchase (but excluding trade accounts payable arising in the ordinary
course of business which are not overdue by more than 90 days or which are being
contested in good faith), (iv) every obligation of such Person issued or
contracted for as payment in consideration of the purchase by such Person or an
Affiliate of such Person of the Capital Stock or substantially all of the assets
of another Person or a merger or consolidation to which such Person or an
Affiliate of such Person was a party, (v) every obligation of the type referred
to in clauses (i) through (iv) of other Persons and all dividends of other
Persons for the payment of which, in either case, such Person is responsible or
liable, directly or indirectly, as obligor, guarantor or otherwise, and (vi)
every obligation of the type referred to in clauses (i) through (v) of other
Persons secured by any Lien on any property or asset of such Person (whether or
not such obligation is assumed by such Person), the amount of such obligation
being deemed to be the lesser of the value of such property or assets or the
amount of the obligation so secured. "Indebtedness," however, does not include
any

                                      -5-
<PAGE>
 
obligation of any Person under any interest rate swap, cap, collar or similar
arrangement.

          "Indenture" means this instrument as originally executed or 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,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.

          "interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

          "Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an instalment of interest on such Security.

          "Lien" means, with respect to any property or asset, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or asset (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).

          "Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

                                      -6-
<PAGE>
 
          "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, 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. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.

          "Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Company or counsel for the Company, and who shall be acceptable
to the Trustee.

          "Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.

          "Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

          (i)  Securities theretofore cancelled by the Trustee or delivered to
     the Trustee for cancellation;

          (ii)  Securities 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 Securities; provided that, if such Securities 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; and

          (iii)  Securities which have been paid pursuant to Section 306 or in
     exchange for or

                                      -7-
<PAGE>
 
     in lieu of which other Securities have been authenticated and delivered
     pursuant to this Indenture, other than any such Securities in respect of
     which there shall have been presented to the Trustee proof satisfactory to
     it that such Securities are held by a bona fide purchaser in whose hands
     such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as contemplated by
Section 301 on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of the amount
determined as provided in (i) above) of such Security, and (iii) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities 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
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

                                      -8-
<PAGE>
 
          "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

          "Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.

          "Place of Payment", when used with respect to the Securities of any
series, means the City of Chicago, State of Illinois and any other place or
places where the principal of and any premium and interest on the Securities of
that series are payable as specified as contemplated by Section 301.

          "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

          "Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

          "Redemption Price", when used with respect to any Security 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 on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.

          "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.

                                      -9-
<PAGE>
 

          "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

          "Senior Indebtedness" shall have the meaning determined pursuant to
Section 301(18).

          "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 Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.

          "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

          "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.

          "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

                                     -10-
<PAGE>
 

          "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".

          "Wholly-owned Subsidiary" means a Subsidiary, all of the outstanding
Capital Stock of which (other than directors' qualifying shares) shall at the
time be owned by the Company or by one or more Wholly-owned Subsidiaries or by
the Company and one or more Wholly-owned Subsidiaries.

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 such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

          Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture 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

                                     -11-
<PAGE>
 

     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. 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.

                                     -12-
<PAGE>
 

Section 104.  Acts of Holders; Record Dates.
              ----------------------------- 

          (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 agent 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 (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.

          Without limiting the generality of the foregoing, a Holder, including
a Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a Depositary that is a
Holder of a Global Security may provide its proxy or proxies to the beneficial
owners of interests in any such Global Security.

          (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 his 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

                                     -13-
<PAGE>
 

proved in any other manner which the Trustee deems sufficient.

          (c) The Company may, in the circumstances permitted by the Trust
Indenture Act, and to the extent required by this Indenture shall, fix any day
as the record date for the purpose of determining the Holders of Securities of
any series entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on any action,
authorized or permitted to be given or taken by Holders of Securities of such
series; provided, however, that in no event may the Company set a record date
for the purpose of determining the Holders of the Securities entitled to give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action pursuant to Section 501, 502 (other than the second paragraph
thereof), 507 or 512. Except as otherwise pro vided herein, if not set by the
Company prior to the first solicitation of a Holder of Securities of such series
made by any Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or vote shall be
the 30th day (or, if later, the date of the most recent list of Holders required
to be provided pursuant to Section 701) prior to such first solicitation or
vote, as the case may be. With regard to any record date for action to be given
or taken or voted upon by the Holders of one or more series of Securities, only
the Holders of Securities of such series on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.

          (d) The ownership of Securities shall be proved by the Security
Register.

          (e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security 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 Security.

                                     -14-
<PAGE>
 

Section 105.  Notices, Etc., to Trustee and Company.
              ------------------------------------- 

          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:
     ...................., or

          (2) the Company 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 instrument 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 for notice to Holders of any event, 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 (if any), and not earlier than the earliest date (if any),
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. 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

                                     -15-
<PAGE>
 

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 regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

Section 107.  Conflict with Trust Indenture Act.
              --------------------------------- 

          If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded.

Section 108.  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 109.  Successors and Assigns.
              ---------------------- 

          All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

Section 110.  Separability Clause.
              ------------------- 

          In case any provision in this Indenture or in the Securities 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.

                                     -16-
<PAGE>
 

Section 111.  Benefits of Indenture.
              --------------------- 

          Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.

Section 112.  Governing Law.
              ------------- 

          This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.

Section 113.  Legal Holidays.
              -------------- 

          In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.

                                  ARTICLE TWO

                                Security Forms

Section 201.  Forms Generally.
              --------------- 

          The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board

                                     -17-
<PAGE>
 

Resolution or in one or more indentures supplemental hereto, in each case 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
Securities, as evidenced by their execution of the Securities. If the form of
Securities of any series is established by action taken pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section
303 for the authentication and delivery of such Securities.

          The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.

Section 202.  Form of Face of Security.
              ------------------------ 

          [Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]

                                THE KROGER CO.

                     ....................................

No. .........                                                        $ ........

          The Kroger Co., a corporation duly organized and existing under the
laws of the State of Ohio (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
 ............................ ........................... [if the Security is to
bear

                                     -18-
<PAGE>
 

interest prior to Maturity, insert -- , and to pay interest thereon from
 ............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ............ and
 ............ in each year, commencing ........., at the rate of ....% per annum,
until the principal hereof is paid or made available for payment [if applicable,
insert -- , and at the rate of ....% per annum on any overdue principal and
premium and on any overdue instalment of interest].  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 Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the ....... or
 ....... (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.  Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].

          [If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ....% per annum, which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for.  Interest on any overdue principal shall be payable on
demand.  Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ......% per annum, which shall accrue
from the date 

                                     -19-
<PAGE>
 

of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]

          Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, 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 [if applicable, insert -- ;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].

          Reference is hereby made to the further provisions of this Security
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 executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
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:


                                         THE KROGER CO.
                                    
                                    
                                         By.....................

Attest:

 ...........................

                                     -20-
<PAGE>
 

Section 203.  Form of Reverse of Security.
              --------------------------- 

          This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of _______________ (herein called the
"Indenture"), between the Company and ..................., as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Indebtedness and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof[, limited in
aggregate principal amount to $...........].

          [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after .........., 19..], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before ..............., __%, and if
redeemed] during the 12-month period beginning ............. of the years
indicated,

                                     -21-
<PAGE>
 

              Redemption                  Redemption
Year            Price        Year           Price
- ----            -----        ----           -----





and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

          [If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on or
after ............], as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ............ of
the years indicated,

                                     -22-
<PAGE>
 

                     Redemption Price
                     For Redemption                 Redemption Price For
                     Through Operation              Redemption Otherwise
                         of the                    Than Through Operation
Year                  Sinking Fund                  of the Sinking Fund
- ----                -----------------             ----------------------



and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest instalments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

          [Notwithstanding the foregoing, the Company may not, prior to
 ............., redeem any Securities of this series as contemplated by [Clause
(2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than .....% per annum.]

          [The sinking fund for this series provides for the redemption on
 ............ in each year beginning with the year ....... and ending with the
year ...... of [not less than $.......... ("mandatory sinking fund") and not
more
    
                                     -23-
<PAGE>
 

than] $......... aggregate principal amount of Securities of this series.
Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made [in the inverse
order in which they become due].]

          [If the Security is subject to redemption, insert -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]

          The indebtedness evidenced by this Security is[, to the extent
provided in the Indenture,] subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.

          [If the Security is not an Original Issue Discount Security, insert --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]

          [If the Security is an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest, all of the
Company's obligations in respect of the

                                     -24-
<PAGE>
 
payment of the principal of and interest, if any, on the Securities of this
series shall terminate.]

          The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 50% in principal amount of the Securities at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

          As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default, the Holders of not less than 25% in principal amount of the Outstanding
Securities shall have made written request, and offered reasonable indemnity, to
the Trustee to institute such proceeding as trustee, and the Trustee shall not
have received from the Holders of a majority in principal amount of the
Outstanding Securities a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of (and premium, if any) or any interest
on this Security on or after the respective due dates expressed herein.

                                     -25-
<PAGE>
 

          No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security 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 Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

          The Securities of this series are issuable only in registered form
without coupons in denominations of $....... and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

          Except where otherwise specifically provided in the Indenture, no
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.

          Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue,

                                     -26-
<PAGE>
 

and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.

          All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.


Section 204.  Form of Legend for Global Securities.
              ------------------------------------ 

          Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:

          "This Security is a Global Security within the meaning of the
     Indenture hereinafter referred to and is registered in the name of a
     Depositary or a nominee of a Depositary. This Security is not exchangeable
     for Securities registered in the name of a Person other than the Depositary
     or its nominee except in the limited circumstances described in the
     Indenture, and no transfer of this Security (other than a transfer of this
     Security as a whole by the Depositary to a nominee of the Depositary or by
     a nominee of the Depositary to the Depositary or another nominee of the
     Depositary) may be registered except in the limited circumstances described
     in the Indenture."

                                     -27-
<PAGE>
 

Section 205.  Form of Trustee's Certificate of Authentication.
              ------------------------------------------------

          The Trustee's certificates of authentication shall be in substantially
the following form:

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.


                              .............................,
                                                 As Trustee


                              By...........................
                                         Authorized Officer


                                 ARTICLE THREE

                                The Securities

Section 301.  Amount Unlimited; Issuable in Series.
              ------------------------------------ 

          The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

          The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

          (1) the title of the Securities of the series (which shall distinguish
     the Securities of the series from Securities of any other series);

          (2) any limit upon the aggregate principal amount of the Securities of
     the series which may be authenticated and delivered

                                     -28-
<PAGE>
 

     under this Indenture (except for Securities authenticated and delivered
     upon registration of transfer of, or in exchange for, or in lieu of, other
     Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and
     except for any Securities which, pursuant to Section 303, are deemed never
     to have been authenticated and delivered hereunder);

          (3) the Person to whom any interest on a Security of the series shall
     be payable, if other than the Person in whose name that Security (or one or
     more Predecessor Securities) is registered at the close of business on the
     Regular Record Date for such interest;

          (4) the date or dates on which the principal of the Securities of the
     series is payable;

          (5) the rate or rates at which the Securities of the series shall bear
     interest, if any, the date or dates from which such interest shall accrue,
     the Interest Payment Dates on which any such interest shall be payable and
     the Regular Record Date for any interest payable on any Interest Payment
     Date;

          (6) the place or places where the principal of and any premium and
     interest on Securities of the series shall be payable;

          (7) the period or periods within which, the price or prices at which
     and the terms and conditions upon which Securities of the series may be
     redeemed, in whole or in part, at the option of the Company;

          (8) the obligation, if any, of the Company to redeem or purchase
     Securities of the series pursuant to any sinking fund or

                                     -29-
<PAGE>
 

     analogous provisions or at the option of a Holder thereof and the period or
     periods within which, the price or prices at which and the terms and
     conditions upon which Securities of the series shall be redeemed or
     purchased, in whole or in part, pursuant to such obligation;

          (9) if other than denominations of $1,000 and any integral multiple
     thereof, the denominations in which Securities of the series shall be
     issuable;

          (10) the currency, currencies or currency units in which payment of
     the principal of and any premium and interest on any Securities of the
     series shall be payable if other than the currency of the United States of
     America and the manner of determining the equivalent thereof in the
     currency of the United States of America for purposes of the definition of
     "Outstanding" in Section 101;

          (11) if the amount of payments of principal of or any premium or
     interest on any Securities of the series may be determined with reference
     to an index, the manner in which such amounts shall be determined;

          (12) if the principal of or any premium or interest on any Securities
     of the series is to be payable, at the election of the Company or a Holder
     thereof, in one or more currencies or currency units other than that or
     those in which the Securities are stated to be payable, the currency,
     currencies or currency units in which payment of the principal of and any
     premium and interest on Securities of such series as to which such election
     is made shall be payable, and the periods within which and the terms and
     conditions upon which such election is to be made;

                                     -30-
<PAGE>
 

          (13) if other than the principal amount thereof, the portion of the
     principal amount of Securities of the series which shall be payable upon
     declaration of acceleration of the Maturity thereof pursuant to Section
     502;

          (14) whether the Securities of the series shall be issued in whole or
     in part in the form of one or more Global Securities and, in such case, the
     Depositary or Depositaries with respect to such Global Security or
     Securities and the circumstances under which any such Global Security may
     be registered for transfer or exchange, or authenticated and delivered, in
     the name of a Person other than such Depositary or its nominee, if other
     than as set forth in Section 305;

          (15) any other event or events of default applicable with respect to
     the Securities of the series in addition to those provided in Section
     501(1) through (7);

          (16) any other covenant or warranty included for the benefit of
     Securities of the series in addition to (and not inconsistent with) those
     included in this Indenture for the benefit of Securities of all series, or
     any other covenant or warranty included for the benefit of Securities of
     the series in lieu of any covenant or warranty included in this Indenture
     for the benefit of Securities of all series, or any provision that any
     covenant or warranty included in this Indenture for the benefit of
     Securities of all series shall not be for the benefit of Securities of all
     series shall not be for the benefit of Securities of such series, or any
     combination of such covenants, warranties or provisions;

                                     -31-
<PAGE>
 

          (17) the terms pursuant to which (i) the Company may consolidate with
     or merge into any other Person, (ii) any Subsidiary of the Company may
     consolidate with or merge into another Person in a transaction in which
     such Subsidiary remains a Subsidiary, (iii) any other Person may
     consolidate with or merge into any Subsidiary in which such Subsidiary
     remains a Subsidiary, or (iv) any other Person may, directly or indirectly,
     sell, assign, convey, transfer or lease its properties substantially as an
     entirety to the Company;

          (18) the terms pursuant to which the Securities will be made
     subordinate and subject in right of payment to the prior payment in full of
     all Senior Indebtedness of the Company, and the definition of any such
     Senior Indebtedness; and

          (19) any other terms of the series (which terms shall not be
     inconsistent with the provisions of this Indenture, except as permitted by
     Section 901(5)).

          All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.

          If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.

                                     -32-
<PAGE>
 

Section 302.  Denominations.
              ------------- 

          The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.

Section 303.  Execution, Authentication, Delivery and Dating.
              ----------------------------------------------

          The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.

          Securities 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 Securities or did not
hold such offices at the date of such Securities.

          At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any Series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to

                                     -33-
<PAGE>
 

Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,

          (a) if the form of such Securities has been established by or pursuant
     to Board Resolution as permitted by Section 201, that such form has been
     established in conformity with the provisions of this Indenture;

          (b) if the terms of such Securities have been established by or
     pursuant to Board Resolution as permitted by Section 301, that such terms
     have been established in conformity with the provisions of this Indenture;
     and

          (c) that such Securities, when authenticated and delivered by the
     Trustee and issued by the Company in the manner and subject to any
     conditions specified in such Opinion of Counsel, will constitute valid and
     legally binding obligations of the Company enforceable in accordance with
     their terms, subject to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights and to general equity
     principles.

If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

          Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentica-

                                     -34-
<PAGE>
 

tion of each Security of such series if such documents are delivered at or prior
to the authentication upon original issuance of the first Security of such
series to be issued.

          Each Security shall be dated the date of its authentication.

          No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

Section 304.  Temporary Securities.
              -------------------- 

          Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

          If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the

                                     -35-
<PAGE>
 

temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor. Until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series and tenor.

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 of the Company in a Place of Payment being herein sometimes
collectively 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 Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

          Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.

          At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate

                                     -36-
<PAGE>
 

and deliver, the Securities which the Holder making the exchange is entitled to
receive.

          All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.

          Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) 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 of Securities, 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 Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

          The Company shall not be required (i) to issue, register the transfer
of or exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.

          Notwithstanding the foregoing, no Global Security shall be registered
for transfer or exchange, or authenticated and delivered, whether pursuant to
this Section, Section 304, 306, 906 or 1107 or otherwise, in the name of a
Person other than the Depositary for such Global Security or its nominee until
(i) the Depositary with

                                     -37-
<PAGE>
 

respect to a Global Security notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Security or the Depositary ceases to
be a clearing agency registered under the Exchange Act, (ii) the Company
executes and delivers to the Trustee a Company Order that such Global Security
shall be so transferable and exchangeable or (iii) there shall have occurred and
be continuing an Event of Default, or any event which after notice or lapse of
time, or both, would constitute an Event of Default, with respect to the
Securities of such series. Upon the occurrence in respect of any Global Security
of any series of any one or more of the conditions specified in clauses (i),
(ii) or (iii) of the preceding sentence or such other conditions as may be
specified as contemplated by Section 301 for such series, such Global Security
may be registered for transfer or exchange for Securities registered in the
names of, or authenticated and delivered to, such Persons as the Depositary with
respect to such series shall direct.

          Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any Global Security, whether pursuant to this Section,
Section 304, 306, 906 or 1107 or otherwise, shall also be a Global Security and
bear the legend specified in Section 204.

Section 306.  Mutilated, Destroyed, Lost and Stolen Securities.
              ------------------------------------------------

          If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

          If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the

                                     -38-
<PAGE>
 

Company shall execute and the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Security, a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

          Upon the issuance of any new Security 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 Security of any series issued pursuant to this Section in
lieu of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series 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 Securities.

Section 307.  Payment of Interest; Interest Rights Preserved.
              ----------------------------------------------

          Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security 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 that Security (or one or more Predecessor
Securities) is registered at the

                                     -39-
<PAGE>
 

close of business on the Regular Record Date for such interest.

          Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such 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 Securities of such series (or their
     respective Predecessor Securities) 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 Security of such series 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,

                                     -40-
<PAGE>
 

     shall cause notice of the proposed payment of such Defaulted Interest and
     the Special Record Date therefor to be mailed, first-class postage prepaid,
     to each Holder of Securities of such series at his address as it appears in
     the Security Register, 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 mailed, such Defaulted Interest
     shall be paid to the Persons in whose names the Securities of such series
     (or their respective Predecessor Securities) 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 on the
     Securities of any series in any other lawful manner not inconsistent with
     the requirements of any securities exchange on which such Securities 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 Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

Section 308.  Persons Deemed Owners.
              --------------------- 

          Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such Secu-

                                     -41-
<PAGE>
 

rity for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

Section 309.  Cancellation.
              ------------ 

          All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment 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 Securities 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 Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.

Section 310.  Computation of Interest.
              ----------------------- 

          Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                     -42-
<PAGE>
 

                                 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 any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), 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 Securities theretofore authenticated and delivered (other than
     (i) Securities which have been destroyed, lost or stolen and which have
     been replaced or paid as provided in Section 306 and (ii) Securities for
     whose payment money has theretofore been deposited in trust 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 Securities 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, or

              (iii) are to be called for redemption within one year under
          arrangements satisfactory to the Trustee for the giving of notice of
          redemption by the

                                     -43-
<PAGE>
 

          Trustee in the name, and at the expense, of the Company,

     and the Company, in the case of (i), (ii) or (iii) above, has deposited or
     caused to be deposited with the Trustee as trust funds in trust for the
     purpose an amount sufficient to pay and discharge the entire indebtedness
     on such Securities not theretofore delivered to the Trustee for
     cancellation, for principal and any premium and interest to the date of
     such deposit (in the case of Securities which have become due and payable)
     or to the Stated Maturity or Redemption Date, as the case may be;

          (2) the Company has paid or caused to be paid all other sums payable
     hereunder by the Company; 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.

          Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 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 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 Securities and this
Indenture, to the payment, either directly or through any

                                     -44-
<PAGE>
 

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 any
premium and interest for whose payment such money has been deposited with the
Trustee.

                                 ARTICLE FIVE

                                   Remedies

Section 501.  Events of Default.
              ----------------- 

          "Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
Thirteen or 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 upon any Security of that
     series when it becomes due and payable, and continuance of such default for
     a period of 30 days; or

          (2) default in the payment of the principal of (or premium, if any,
     on) any Security of that series at its Maturity; or

          (3) default in the deposit of any sinking fund payment, when and as
     due by the terms of a Security of that series; or

          (4) default in the performance, or breach, of any covenant of the
     Company in this Indenture (other than a covenant a default in whose
     performance or whose breach is elsewhere in this Section specifically dealt
     with or which has expressly been included in this Indenture solely for the

                                     -45-
<PAGE>
 

     benefit of series of Securities other than that series), and continuance of
     such default or breach for a period of 60 days after there has been given,
     by registered or certified mail, to the Company by the Trustee or to the
     Company and the Trustee by the Holders of at least 25% in principal amount
     of the Outstanding Securities of that series a written notice specifying
     such default or breach and requiring it to be remedied and stating that
     such notice is a "Notice of Default" hereunder; or

          (5) a default under any Indebtedness by the Company (including a
     default with respect to Securities of any series other than that series) or
     under any bond, debenture, note, mortgage, indenture or instrument under
     which there may be issued or by which there may be secured or evidenced any
     Indebtedness by the Company (including this Indenture) with a principal
     amount then outstanding in excess of $30,000,000, whether such Indebtedness
     now exists or shall hereafter be created, which default shall constitute a
     failure to pay the principal of such Indebtedness at final maturity or
     shall have resulted in such Indebtedness becoming or being declared due and
     payable prior to the date on which it would otherwise have become due and
     payable, without such Indebtedness having been discharged, or such
     acceleration having been rescinded or annulled, within a period of 10 days
     after there shall have been given, by registered or certified mail, to the
     Company by the Trustee or to the Company and the Trustee by the Holders of
     at least 25% in principal amount of the Outstanding Securities of that
     Series a written notice specifying such default and requiring the Company
     to cause such Indebtedness to be discharged or cause such acceleration to
     be

                                     -46-
<PAGE>
 

     rescinded or annulled and stating that such notice is a "Notice of Default"
     hereunder; or

          (6) the entry by a court having jurisdiction in the premises of (A) a
     decree or order for relief in respect of the Company in an involuntary case
     or proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or (B) a decree or order adjudging the
     Company a bankrupt or insolvent, or approving as properly filed a petition
     seeking reorganization, arrangement, adjustment or composition of or in
     respect of the Company under any applicable Federal or State law, or
     appointing a custodian, receiver, liquidator, assignee, trustee,
     sequestrator or other similar official of the Company or of any substantial
     part of its property, or ordering the winding up or liquidation of its
     affairs, and the continuance of any such decree or order for relief or any
     such other decree or order unstayed and in effect for a period of 90
     consecutive days; or

          (7) the commencement by the Company of a voluntary case or proceeding
     under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or of any other case or proceeding to
     be adjudicated a bankrupt or insolvent, or the consent by it to the entry
     of a decree or order for relief in respect of the Company in an involuntary
     case or proceeding under any applicable Federal or State bankruptcy,
     insolvency, reorganization or other similar law or to the commencement of
     any bankruptcy or insolvency case or proceeding against it, or the filing
     by it of a petition or answer or consent seeking reorganization or relief
     under any applicable Federal or State law, or the consent by it to the
     filing of such petition or to the appointment of or taking

                                     -47-
<PAGE>
 

     possession by a custodian, receiver, liquidator, assignee, trustee,
     sequestrator or other similar official of the Company or of any substantial
     part of its property, or the making by it of a general assignment for the
     benefit of creditors, or the admission by it in writing of its inability to
     pay its debts generally as they become due, or the taking of corporate
     action by the Company in furtherance of any such action; or

          (8) any other Event of Default provided with respect to Securities of
     that series.

Section 502.  Acceleration of Maturity; Rescission and Annulment.
              --------------------------------------------------

          If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company and the Co-Agents (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become due and payable five Business Days
after the receipt by the Company and the Co-Agents of such written notice,
provided such Event of Default is then continuing; provided, however, that the
preceding proviso shall not restrict the availability of other rights or
remedies that the Trustee or the Holders may have.

          At any time after such a declaration of acceleration with respect to
Securities of any series 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 principal amount of the
Outstanding Securities of that series, by

                                     -48-
<PAGE>
 

written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if

          (1) the Company has paid or deposited with the Trustee a sum
     sufficient to pay

              (A) all overdue interest on all Securities of that series,

              (B) the principal of (and premium, if any, on) any Securities of
          that series which have become due otherwise than by such declaration
          of acceleration and any interest thereon at the rate or rates
          prescribed therefor in such Securities,

              (C) interest upon overdue interest at the rate or rates prescribed
          therefor in such Securities, and

              (D) all sums paid or advanced by the Trustee hereunder and the
          reasonable compensation, expenses, disbursements and advances of the
          Trustee, its agents and counsel;

and

          (2) all Events of Default with respect to Securities of that series,
     other than the non-payment of the principal of Securities of that series
     which have become due solely by such declaration of acceleration, have been
     cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

                                     -49-
<PAGE>
 
Section 503.  Collection of Indebtedness and Suits
              for Enforcement by Trustee.
              ------------------------------------

     The Company covenants that if

     (1)  default is made in the payment of any interest on any Security when
  such interest becomes due and payable and such default continues for a period
  of 30 days, or

     (2)  default is made in the payment of the principal of (or premium, if
  any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and interest on any
overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, 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 an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series 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 any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust

                                     -50-
<PAGE>
 
Indenture Act in order to have claims of the Holders and the Trustee allowed in
any such proceeding. In particular, the Trustee shall be authorized 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 other 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 to 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 607.

     No provision of this Indenture 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 Securities
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; provided, however,
the Trustee may vote on behalf of the Holders for the election of a trustee in
bankruptcy or similar official and may be member of a creditors or other similar
committee.

Section 505.  Trustee May Enforce Claims Without
              Possession of Securities.
              ----------------------------------

     All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name 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 Securities in respect of which such judgment has been
recovered.

                                     -51-
<PAGE>
 
Section 506.  Application of Money Collected.
              ------------------------------ 

     Subject to Article Thirteen, 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 any premium or interest, upon presentation of the Securities 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 607;
   and

     SECOND:  To the payment of the amounts then due and unpaid for principal of
  and any premium and interest on the Securities 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
  Securities for principal and any premium and interest, respectively.

Section 507.  Limitation on Suits.
              ------------------- 

     No Holder of any Security of any series 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 with respect to the Securities of that series;

     (2)  the Holders of not less than 25% in principal amount of the
  Outstanding Securities of that series 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;

                                     -52-
<PAGE>
 
     (3)  such Holder or Holders have offered to the Trustee reasonable
  indemnity 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 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 in
  principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such 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 of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

Section 508.  Unconditional Right of Holders to
              Receive Principal, Premium and Interest.
              --------------------------------------- 

     Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307) any
interest on such Security on the Stated Maturity or Maturities expressed in such
Security (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.

                                     -53-
<PAGE>
 
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 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 Securities 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 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 Securities 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.

                                     -54-
<PAGE>
 
Section 512.  Control by Holders.
              ------------------ 

     The Holders of a majority in principal amount of the Outstanding Securities
of any series 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, with respect to the Securities of
such series, provided that

     (1)  such direction shall not be in conflict with any rule of law or with
  this Indenture, and

     (2)  the Trustee may take any other action deemed proper by the Trustee
  which is not inconsistent with such direction.

Section 513.  Waiver of Past Defaults.
              ----------------------- 

     The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default

     (1)  in the payment of the principal of or any premium or interest on any
  Security of such series, 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 Security of such series 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 impair any right consequent thereon.

                                     -55-
<PAGE>
 
Section 514.  Undertaking for Costs.
              --------------------- 

     In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.

Section 515.  Waiver of Usury, Stay or Extension Laws.
              --------------------------------------- 

     The Company 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 usury, 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 the Company (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.


                                  ARTICLE SIX

                                  The Trustee

Section 601.  Certain Duties and Responsibilities.
              ----------------------------------- 

     The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee 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

                                     -56-
<PAGE>
 
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

Section 602.  Notice of Defaults.
              ------------------ 

     If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

Section 603.  Certain Rights of Trustee.
              ------------------------- 

     Subject to the provisions of Section 601:

     (a)  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;

     (b)  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

                                     -57-
<PAGE>
 
  Board of Directors may be sufficiently evidenced by a Board Resolution;

     (c)  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;

     (d)  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;

     (e)  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 reasonable security or indemnity against the costs, expenses
  and liabilities which might be incurred by it in compliance with such request
  or direction;

     (f)  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

                                     -58-
<PAGE>
 
  such further inquiry or investigation, it shall be entitled to examine the
  books, records and premises of the Company, personally or by agent or
  attorney; and

     (g)  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.

Section 604.  Not Responsible for Recitals or
              Issuance of Securities.
              -------------------------------

     The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

Section 605.  May Hold Securities.
              ------------------- 

     The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

Section 606.  Money Held in Trust.
              ------------------- 

     Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent
                                
                                     -59-
<PAGE>
 
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.

Section 607.  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 or administration of
  the trust or trusts hereunder, 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.

Section 608.  Disqualification; Conflicting
              Interests.
              -----------------------------

     If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the

                                     -60-
<PAGE>
 
Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act
and this Indenture.

Section 609.  Corporate Trustee Required;
              Eligibility.
              ---------------------------

     There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and having its Corporate
Trust Office in the City of Chicago, State of Illinois, in the Borough of
Manhattan, The City of New York or in the City of Cincinnati, State of Ohio. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person 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 610.  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 611.

     (b)  The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 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 with respect to the
Securities of such series.

                                     -61-
<PAGE>
 
     (c)  The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.

     (d)  If at any time:

     (1)  the Trustee shall fail to comply with Section 608 after written
  request therefor by the Company or by any Holder who has been a bona fide
  Holder of a Security for at least six months, or

     (2)  the Trustee shall cease to be eligible under Section 609 and shall
  fail to resign after written request therefor by the Company or by any such
  Holder, 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 with respect to all securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security 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 with respect to all
Securities and the appointment of a successor Trustee or Trustees.

     (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, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those

                                     -62-
<PAGE>
 
series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any Series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any Series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series 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
with respect to the Securities of such series.

     (f)  The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

Section 611.  Acceptance of Appointment by
              Successor.
              ----------------------------

     (a)  In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the

                                     -63-
<PAGE>
 
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 the 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.

     (b)  In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any

                                     -64-
<PAGE>
 
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.

     (c)  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 referred to in
paragraph (a) and (b) of this Section, as the case may be.

     (d)  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 612.  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 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 Securities 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 Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

                                     -65-
<PAGE>
 
Section 613.  Preferential Collection of Claims
              Against Company.
              ---------------------------------

     If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

Section 614.  Appointment of Authenticating Agent.
              ----------------------------------- 

     The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall

                                     -66-
<PAGE>
 
resign immediately in the manner and with the effect specified in this Section.

     Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

     The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.

                                     -67-
<PAGE>
 
     If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.


                                    ------------------------,
                                                   As Trustee



                                    By
                                      ----------------------,
                                      As Authenticating Agent



                                    By
                                      ----------------------
                                          Authorized Officer


                                 ARTICLE SEVEN

               Holders' Lists and Reports by Trustee and Company

Section 701.  Company to Furnish Trustee
              Names and Addresses of Holders.
              ------------------------------ 

     The Company will furnish or cause to be furnished to the Trustee

     (a)  semi-annually, either (i) not later than _________________ and
  ____________________ in each year in the case of Original Issue Discount
  Securities of any series which by their terms bear interest only after
  Maturity, or (ii) not more than 15 days after each Regular Record Date in the
  case of Securities of any other series, a list of each series of Securities,
  in such form as the

                                     -68-
<PAGE>
 
  Trustee may reasonably require, of the names and addresses of the Holders of
  each such series as of the preceding _____________ or _______________ or
  Regular Record Date, as the case may be, and

     (b)  at such other times as the Trustee may request in writing, within 30
  days after the receipt by the Company of any such request, a list of similar
  form and content as of a date not more than 15 days prior to the time such
  list is furnished;

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

Section 702.  Preservation of Information;
              Communications to Holders.
              ----------------------------

     (a)  The Trustee shall preserve, in as current a form as is reasonably
  practicable, the names and addresses of Holders contained in the most recent
  list furnished to the Trustee as provided in Section 701 and the names and
  addresses of Holders received by the Trustee in its capacity as Security
  Registrar. The Trustee may destroy any list furnished to it as provided in
  Section 701 upon receipt of a new list so furnished.

     (b)  The rights of the Holders to communicate with other Holders with
  respect to their rights under this Indenture or under the Securities, and the
  corresponding rights and privileges of the Trustee, shall be as provided by
  the Trust Indenture Act.

     (c)  Every Holder of Securities, by receiving and holding the same, agrees
  with the Company and the Trustee that neither the Company nor the Trustee nor
  any agent of either of them shall be held accountable by reason of any
  disclosure of information as to names and addresses of Holders made pursuant
  to the Trust Indenture Act.

                                     -69-
<PAGE>
 

Section 703.  Reports by Trustee.
              ------------------ 

          (a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

          (b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

Section 704.  Reports by Company.
              ------------------ 

          The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.

                                     -70-
<PAGE>
 

                                 ARTICLE EIGHT

             Consolidation, Merger, Conveyance, Transfer or Lease

Section 801.  Company and Subsidiaries May Consolidate,
              Etc., Only on Certain Terms.
              -----------------------------------------

          The Company (a) shall not consolidate with or merge into any other
Person or, directly or indirectly, transfer, convey, sell, lease or otherwise
dispose of all or substantially all of its properties and assets as an entirety
to any Person; (b) shall not permit any Subsidiary to consolidate with or merge
into another Person (other than a Wholly-owned Subsidiary) in a transaction in
which such Subsidiary remains a Subsidiary; (c) shall not permit (i) any other
Person to consolidate with or merge into the Company or (ii) any other Person
(other than a Wholly-owned Subsidiary) to consolidate with or merge into any
Subsidiary in a transaction in which such Subsidiary remains a Subsidiary; and
(d) shall not permit any other Person to, directly or indirectly, sell, assign,
convey, transfer or lease its properties substantially as an entirety to the
Company except as provided pursuant to Section 301(17).

Section 802.  Successor Substituted.
              --------------------- 

          Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.

                                     -71-
<PAGE>
 

                                 ARTICLE NINE

                            Supplemental Indentures

Section 901.  Supplemental Indentures Without
              Consent of Holders.
              -------------------------------

          Without the consent of any Holders, the Company, 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 herein
     and in the Securities; or

          (2) to add to the covenants of the Company for the benefit of the
     Holders of all or any series of Securities (and if such covenants are to be
     for the benefit of less than all series of Securities, stating that such
     covenants are expressly being included solely for the benefit of such
     series) or to surrender any right or power herein conferred upon the
     Company; or

          (3) to add any additional Events of Default; or

          (4) to add to or change any of the provisions of this Indenture to
     such extent as shall be necessary to permit or facilitate the issuance of
     Securities in bearer form, registrable or not registrable as to principal,
     and with or without interest coupons, or to permit or facilitate the
     issuance of Securities in uncertificated form; or

          (5) to add to, change or eliminate any of the provisions of this
     Indenture in

                                     -72-
<PAGE>
 

     respect of one or more series of Securities, provided that any such
     addition, change or elimination (i) shall neither (A) apply to any Security
     of any series created prior to the execution of such supplemental indenture
     and entitled to the benefit of such provision nor (B) modify the rights of
     the Holder of any such Security with respect to such provision or (ii)
     shall become effective only when there is no such Security Outstanding; or

          (6) to secure the Securities; or

          (7) to establish the form or terms of Securities of any series as
     permitted by Sections 201 and 301; or

          (8) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series and to add to or change any of the provisions of this Indenture
     as shall be necessary to provide for or facilitate the administration of
     the trusts hereunder by more than one Trustee, pursuant to the requirements
     of Section 611(b); or

          (9) 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 pursuant to this clause (9)
     shall not adversely affect the interests of the Holders of Securities of
     any series in any material respect.

Section 902.  Supplemental Indentures with Consent of Holders.
              -----------------------------------------------

          With the consent of the Holders of not less than 50% in principal
amount of the Outstanding Securities of

                                     -73-
<PAGE>
 

each series affected by such supplemental indenture, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, 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 of Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
          (1) change the Stated Maturity of the principal of, or any instalment
     of principal of or interest on, any Security, or reduce the principal
     amount thereof or (unless otherwise specified as contemplated by Section
     301) the rate of interest thereon or any premium payable upon the
     redemption thereof, or reduce the amount of the principal of an Original
     Issue Discount Security that would be due and payable upon a declaration of
     acceleration of the Maturity thereof pursuant to Section 502, or change any
     Place of Payment where, or the coin or currency in which, any Security or
     any premium or interest thereon is payable, or impair the right to
     institute suit for the enforcement of any such payment on or after the
     Stated Maturity thereof (or, in the case of redemption, on or after the
     Redemption Date) or modify the provisions of this Indenture with respect to
     the subordination of the Securities of any series in a manner adverse to
     the Holders, or

          (2) reduce the percentage in principal amount of the Outstanding
     Securities of any series, 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

                                     -74-
<PAGE>
 

     defaults hereunder and their consequences) provided for in this Indenture,
     or

          (3) modify any of the provisions of this Section, Section 513 or
     Section 1008, 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 Security affected
     thereby, provided, however, that this clause shall not be deemed to require
     the consent of any Holder with respect to changes in the references to "the
     Trustee" and concomitant changes in this Section and Section 1008, or the
     deletion of this proviso, in accordance with the requirements of Sections
     611(b) and 901(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

          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.
              ------------------------------------ 

          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 (subject to Section 601) 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

                                     -75-
<PAGE>
 

be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

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 Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

Section 905.  Conformity with Trust Indenture Act.
              ----------------------------------- 

          Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

Section 906.  Reference in Securities to Supplemental Indentures.
              --------------------------------------------------

          Securities of any series 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 shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                     -76-
<PAGE>
 

                                  ARTICLE TEN

                                   Covenants

Section 1001.  Payment of Principal, Premium and Interest.
               ------------------------------------------ 

          The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.

Section 1002.  Maintenance of Office or Agency.
               ------------------------------- 

          The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of 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 hereby appoints the Trustee as its 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 where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; 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 each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.

                                     -77-
<PAGE>
 

Section 1003.  Money for Securities Payments to Be Held in Trust.
               -------------------------------------------------

          If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and 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 any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

          The Company will cause each Paying Agent for any series of Securities
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 (i) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.

          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

                                     -78-
<PAGE>
 

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 money.

          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 or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium 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 Security 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 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.  Statement by Officers as to Default.
               ----------------------------------- 

          The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.

                                      -79-
<PAGE>
 

Section 1005.  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 its existence,
rights (charter and statutory) and franchises; 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.

Section 1006.  Maintenance of Properties.
               ------------------------- 

          The Company will cause all properties used or useful in the conduct of
its business or the business of any material 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 operation or 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.

Section 1007.  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, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any material
Subsidiary or upon the income, profits or property of the Company or any
material Subsidiary, and (2) 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 material 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

                                     -80-
<PAGE>
 

faith by appropriate proceedings, if a reserve or other appropriate provision
shall have been made therefor in accordance with generally accepted accounting
principles.

Section 1008.  Waiver of Certain Covenants.
               --------------------------- 

          The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1006 to 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance 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 Securities

Section 1101.  Applicability of Article.
               ------------------------ 

          Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article.

Section 1102.  Election to Redeem; Notice to Trustee.
               ------------------------------------- 

          The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 35 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, of

                                     -81-
<PAGE>
 

the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.

Section 1103.  Selection by Trustee of Securities to Be Redeemed.
               -------------------------------------------------

          If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series 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 (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.

          The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities 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 the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the

                                     -82-
<PAGE>
 

portion of the principal amount of such Securities which has been or is to be
redeemed.

Section 1104.  Notice of Redemption.
               -------------------- 

          Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

          All notices of redemption shall state:

          (1)  the Redemption Date,

          (2)  the Redemption Price,

          (3)  if less than all the Outstanding Securities of any series are to
     be redeemed, the identification (and, in the case of partial redemption of
     any Securities, the principal amounts) of the particular Securities to be
     redeemed,

          (4)  that on the Redemption Date the Redemption Price will become due
     and payable upon each such Security to be redeemed and, if applicable, that
     interest thereon will cease to accrue on and after said date,

          (5)  the place or places where such Securities are to be surrendered
     for payment of the Redemption Price, and

          (6)  that the redemption is for a sinking fund, if such is the case.

          Notice of redemption of Securities 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 and shall be irrevocable.

                                     -83-
<PAGE>
 

Section 1105.  Deposit of Redemption Price.
               --------------------------- 

          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 (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

Section 1106.  Securities Payable on Redemption Date.
               ------------------------------------- 

          Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, instalments of interest whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, 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 Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

Section 1107.  Securities Redeemed in Part.
               --------------------------- 

          Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory

                                     -84-
<PAGE>
 

to the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of the same series and of like
tenor, of any authorized denomination as requested by such Holder, in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.

                                ARTICLE TWELVE

                                 Sinking Funds

Section 1201.  Applicability of Article.
               ------------------------ 

          The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

          The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.

Section 1202.  Satisfaction of Sinking Fund Payments with Securities.
               -----------------------------------------------------

          The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through

                                     -85-
<PAGE>
 

the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms of
such series; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

Section 1203.  Redemption of Securities for Sinking Fund.
               ----------------------------------------- 

          Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, 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 and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 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 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.

                               ARTICLE THIRTEEN

                          Subordination of Securities

Section 1301.  Securities Subordinate to Senior Indebtedness.
               --------------------------------------------- 

                                     -86-
<PAGE>
 

          The Company covenants and agrees, and each Holder of a Security of any
series, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner set forth pursuant to Section 301(18) hereof, the
indebtedness represented by the Securities of such series and the payment of the
principal of (and premium, if any) and interest on each of all of the Securities
of such series are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness.

          This instrument may be executed 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 instrument.


                         -----------------------------


                                     -87-
<PAGE>
 

          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.


                              THE KROGER CO.



                              By.............................

Attest:


 .........................


                              ..............................,
                                as Trustee



                              By.............................
 
Attest:


 .........................


                                     -88-
<PAGE>
 

STATE OF OHIO      )
                   )  ss.:
COUNTY OF HAMILTON )


          On the     day of . . . . . . . . , before me personally came
 .......................... , to me known, who, being by me duly sworn, did
depose and say that he is   ...........................  of The Kroger Co., one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.



                                             ...............................


STATE OF . . .     )
                   )  ss.:
COUNTY OF . . . .  )

          On the day of . . . . . . . . , before me personally came
 ........................... , to me known, who, being by me duly sworn, did
depose and say that he is a .............. of . . . . . . . . . .. . . . . , one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.



                                             ...............................

                                     -89-

<PAGE>
 
                                THE KROGER CO.
                               1014 VINE STREET
                             CINCINNATI, OH  45202


                                       June 24, 1996

Board of Directors
The Kroger Co.
1014 Vine Street
Cincinnati, OH  45202

Ladies and Gentlemen:

     I am familiar with the proceedings taken and proposed to be taken by The
Kroger Co., an Ohio corporation (the "Company"), in connection with the issuance
of up to $500 million aggregate principal amount of Debt Securities (the
"Securities"). I have acted as counsel to the Company in connection with its
preparation of (1) a Registration Statement relating to such issuance of the
Securities and the public sale thereof on Form S-3 filed by the Company with the
Securities and Exchange Commission (the "Registration Statement") for the
registration of the Securities under the Securities Act of 1933, as amended (the
"Act"); (2) the form of Underwriting Agreement filed as an exhibit to the
Registration Statement (the "Underwriting Agreement"); and (3) the forms of
Indentures filed as exhibits to the Registration Statement (the "Indentures"). I
have examined the aforementioned documents; the Amended Articles of
Incorporation and Regulations of the Company; the corporate minutes of the
proceedings of the directors and shareholders of the Company; and such other
records and documents as I have deemed necessary in order to express the
opinions hereinafter set forth.

     Based upon the foregoing, I am of the opinion that, when the Registration
Statement becomes effective under the Act, the respective Indentures have been
duly executed and delivered, and the Securities have been duly executed and
authenticated in accordance with the terms of the respective Indentures and
issued and sold in accordance with the Underwriting Agreement, the Securities
will constitute the valid and binding obligations of the Company.

     The foregoing opinion is subject to applicable bankruptcy, insolvency, or
other laws affecting creditors' rights generally, as from time to time in
effect, and to general
<PAGE>
 
equity principles.

     I consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me in the Registration Statement under the
caption "Validity of Debt Securities" therein. In giving such consent, I do not
admit that I am in the category of persons whose consent is required under
Section 7 of the Act.

                                            Very truly yours,



                                            (Paul W. Heldman)
                                            Paul W. Heldman
                                            Vice President, Secretary,
                                            and General Counsel

<PAGE>
 
                      CONSENT OF INDEPENDENT ACCOUNTANTS


     We consent to the incorporation by reference in this registration statement
of The Kroger Co. (the "Company") on Form S-3 of our report, which includes an
explanatory paragraph regarding the Company's change in its method of accounting
for post-retirement benefit costs other than pensions as of January 3, 1993,
dated January 24, 1996, on our audits of the consolidated financial statements
and financial statement schedules of the Company as of December 30, 1995, and
December 31, 1994, and for the years ended December 30, 1995, December 31, 1994,
and January 1, 1994, which report is included in the Company's Annual Report on
Form 10-K for the fiscal year ended December 30, 1995. We also consent to the
reference to our Firm under the caption "Experts".



(Coopers & Lybrand L.L.P.)
Coopers & Lybrand L.L.P.
Cincinnati, Ohio
June 21, 1996

<PAGE>
 
                               POWER OF ATTORNEY

     
     KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned directors of THE
KROGER CO. (the "Company") hereby make, constitute and appoint Paul W. Heldman
and Bruce M. Gack, or either one of them, his or her true and lawful attorneys-
in-fact to sign and execute for and on his or her behalf, a registration
statement and any and all amendments thereto with respect to the issuance and
sale by the Company of up to $500,000,000 of Securities to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended, in such form as they, or either of them, may approve and to do any and
all other acts which said attorneys-in-fact, or either one of them, may deem
necessary or desirable to enable The Kroger Co. to comply with said Act and the
rules and regulations thereunder in connection with such sale.

     IN WITNESS WHEREOF, the undersigned directors have hereunto set their hands
and seal, as of the 16th day of May, 1996.


(John L. Clendenin)                  (Joseph A. Pichler)
John L. Clendenin                    Joseph A. Pichler

(John D. Ong)                        (T. Ballard Morton, Jr.)
John D. Ong                          T. Ballard Morton, Jr.

(Reuben Anderson)                    (Katherine D. Ortega)
Reuben V. Anderson                   Katherine D. Ortega

(Raymond B. Carey, Jr.)              (E. M. Liddy)
Raymond B. Carey, Jr.                       Edward M. Liddy

(John T. LaMacchia)                  (Richard W. Dillon)
John T. LaMacchia                    Richard W. Dillon

(Patricia S. Longe)                  (David B. Dillon)
Patricia Shontz Longe                       David B. Dillon

(Thomas H. O'Leary)                  ________________________
Thomas H. O'Leary                    Martha Romayne Seger

_______________________
James D. Woods
<PAGE>
 
                               POWER OF ATTORNEY


     KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer of THE
KROGER CO. (the "Company") hereby makes, constitutes and appoints Paul W.
Heldman and Bruce M. Gack, or either one of them, his true and lawful attorneys-
in-fact to sign and execute for and on his behalf, a registration statement and
any and all amendments thereto with respect to the issuance and sale by the
Company of up to $500,000,000 of Securities to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, in such
form as they, or either of them, may approve and to do any and all other acts
which said attorneys-in-fact, or either one of them, may deem necessary or
desirable to enable The Kroger Co. to comply with said Act and the rules and
regulations thereunder in connection with such sale.

     IN WITNESS WHEREOF, I have hereunto set my hand.



(W. Rodney McMullen)                                May 16, 1996
W. Rodney McMullen
Group Vice President and
Chief Financial Officer
<PAGE>
 
                               POWER OF ATTORNEY


     KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer and
director of THE KROGER CO. (the "Company") hereby makes, constitutes and
appoints Paul W. Heldman and Bruce M. Gack, or either one of them, his true and
lawful attorneys-in-fact to sign and execute for and on his behalf, a
registration statement and any and all amendments thereto with respect to the
issuance and sale by the Company of up to $500,000,000 of Securities to be filed
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, in such form as they, or either of them, may approve and to do
any and all other acts which said attorneys-in-fact, or either one of them, may
deem necessary or desirable to enable The Kroger Co. to comply with said Act and
the rules and regulations thereunder in connection with such sale.

     IN WITNESS WHEREOF, I have hereunto set my hand.



(Joseph A. Pichler)                                 May 1, 1996
Joseph A. Pichler
Chairman of the Board,
Chief Executive Officer and
Director
<PAGE>
 
                               POWER OF ATTORNEY


     KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer of THE
KROGER CO. (the "Company") hereby makes, constitutes and appoints Paul W.
Heldman and Bruce M. Gack, or either one of them, his true and lawful attorneys-
in-fact to sign and execute for and on his behalf, a registration statement and
any and all amendments thereto with respect to the issuance and sale by the
Company of up to $500,000,000 of Securities to be filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, in such
form as they, or either of them, may approve and to do any and all other acts
which said attorneys-in-fact, or either one of them, may deem necessary or
desirable to enable The Kroger Co. to comply with said Act and the rules and
regulations thereunder in connection with such sale.

     IN WITNESS WHEREOF, I have hereunto set my hand.



(J. Michael Schlotman)                                     May 16, 1996
J. Michael Schlotman
Vice President and Corporate Controller
<PAGE>
 
                               POWER OF ATTORNEY


     KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer and
director of THE KROGER CO. (the "Company") hereby makes, constitutes and
appoints Paul W. Heldman and Bruce M. Gack, or either one of them, his true and
lawful attorneys-in-fact to sign and execute for and on his behalf, a
registration statement and any and all amendments thereto with respect to the
issuance and sale by the Company of up to $500,000,000 of Securities to be filed
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, in such form as they, or either of them, may approve and to do
any and all other acts which said attorneys-in-fact, or either one of them, may
deem necessary or desirable to enable The Kroger Co. to comply with said Act and
the rules and regulations thereunder in connection with such sale.

     IN WITNESS WHEREOF, I have hereunto set my hand.



(David B. Dillon)                           May 3, 1996
David B. Dillon
President, Chief Operating Officer, and
Director
<PAGE>
 
                                  RESOLUTION


     WHEREAS, The management of the Company has determined that it is
 advantageous to the Company to purchase on the open market or to redeem certain
 of its outstanding public indebtedness (the "Repurchased Debt");

     WHEREAS, The amount of funds which can be expended for such Redeemed Debt
 is, under certain circumstances, limited by the terms of the Indentures under
 its publicly and privately issued debt (together the "Indentures"); and

     WHEREAS, The Company is considering the issuance of debt (the "Securities")
 through private placement or through public offering, and the use of the
 proceeds from the sale of the Securities to purchase or redeem Repurchased Debt
 and for other general corporate purposes; now, therefore,

     RESOLVED, That, subject to the limitations set forth in these resolutions
 and the Indentures, the Company is authorized to issue, from time to time, up
 to $500,000,000 of Securities to the public, or to one or more institutional
 investors, on such terms and conditions as shall be determined by this Board;
 and further

     RESOLVED, That in connection with the proposed public offering or private
 placement of the Securities or the proposed debt repurchase program, the Board
 of Directors shall determine whether to issue the Securities, and, if issued,
 whether to offer the Securities through a public offering or through private
 transactions, and whether to purchase the Repurchased Debt; and further

     RESOLVED, That this Board may designate one or more persons (a
 "Committee"), who may or may not be a member of the Board, to act as and for
 the Board in such capacity as the Board may direct; and further

     RESOLVED, That the Board or a Committee may, at any time prior to December
 31, 1998, authorize one or more issuances and sales of the Securities by the
 Company and authorize one or more purchases of Repurchased Debt for so long as,
 or at such times as, economically advantageous to the Company, and, in
 connection with any such authorization, issue, determine, approve, or appoint,
 as the case may be:

 (a)  the type of Security or Securities and title or titles thereof;

 (b)  the aggregate principal amount, not to exceed $500,000,000, the
      denominations, and terms, of the Securities;

 (c)  the price at which such Securities are to be sold (which may be issued at
      an "original issue discount" within the meaning of the Internal Revenue
      Code of
<PAGE>
 
     1986, as amended), and the interest rate or rates, if any, to be
     established for the Securities, which rate or rates may vary from time to
     time;

 (d) the issuance of the Securities in any foreign currency or European currency
     units and if European currency units are issued, the currency or currencies
     in which interest is payable;

 (e) the maturity or maturities, which shall not be more than 30 years; and,
     furthermore, the determination that any issue of Securities may be of
     varying maturities and amounts;

 (f) the sinking fund, if any, and related redemption prices of the Securities;

 (g) the optional redemption rights, if any, of the Company and of the holders
     of the Securities, and related redemption prices and any limitations on
     such redemption;

 (h) the restrictive covenants, if any, to be imposed upon the Company relating
     to any of the Securities;

 (i) the form of Registration Statement on Form S-3, or such other form as the
     Board or a Committee shall determine (the "Registration Statement"), for
     the purpose of registering the Securities, if so required, under the
     Securities Act of 1933, as amended, and any amendments thereto;

 (j) the amount of Repurchased Debt to be purchased or redeemed by the Company;

 (k) the price at which such Repurchased Debt is to be purchased, if purchased;

 (l) any underwriting, standby, or similar agreement between the Company and an
     underwriter or underwriters;

 (m) the use, form, execution, and delivery of the Securities, indentures, note
     agreement, loan agreement, distribution agreement, reimbursement agreement,
     warrant agreement, notes, or such other contracts or agreements, including
     listing applications, as the Board or a Committee shall deem necessary or
     appropriate;

 (n) any transfer, authenticating, placement, exchange, distribution, or paying
     agent, or registrar, trustee or underwriter, or any other person or entity
     to act in connection with the Securities or the Repurchased Debt; including
     the selection of a financial institution or institutions, whether foreign
     or domestic, to advise the Company;
<PAGE>
 
 (o) whether the issuance of the Securities or the purchase or redemption of
     Repurchased Debt is permitted under the terms of the Indentures; and

 (p) such other terms, conditions, and provisions as the Board or a Committee
     shall deem necessary or appropriate; and further

     RESOLVED, That the elected officers of the Company be, and each of them
 hereby is, authorized, in the name and on behalf of the Company, to execute the
 Registration Statement with such changes therein as the officer executing the
 same may approve, such execution to be conclusive evidence of such approval,
 and to execute any and all amendments thereto as deemed necessary or desirable;
 and further

     RESOLVED, That upon the execution of the Registration Statement or any
 amendments thereto, including post-effective amendments, by directors and
 officers of the Company, as required by law, either in person or by a duly
 authorized attorney or attorneys, the elected officers of the Company be, and
 each of them hereby is, authorized to cause the Registration Statement and any
 amendments thereto to be filed with the Securities and Exchange Commission (the
 "Commission") and to execute and file all such instruments, make all such
 payments, and to do such other acts and things as, in their opinion or in the
 opinion of any of them, may be necessary or desirable in order to effect such
 filing, to cause the Registration Statement to become effective, and to
 maintain the Registration Statement in effect for as long as they deem it to be
 in the best interests of the Company; and further

     RESOLVED, That Paul W. Heldman and Bruce M. Gack, or either one of them,
 be, and each of them hereby is, made, constituted, and appointed the true and
 lawful attorneys-in-fact, with authority to sign and execute on behalf of this
 Company, and on behalf of the directors and officers thereof in their official
 capacities, the Registration Statement and any and all amendments thereto,
 which either of them, in their discretion, deem necessary or advisable to be
 filed with the Commission; and further

     RESOLVED, That Paul W. Heldman, Vice President, Secretary and General
 Counsel of the Company, whose address is 1014 Vine Street, Cincinnati, Ohio,
 be, and he hereby is, designated as the Agent for Service to be named in the
 Registration Statement, with authority to receive notices and communications
 with respect to such Registration Statement and with all powers consequent upon
 such designation under the rules and regulations of the Commission; and further

     RESOLVED, That, subject to the limitations set forth in these resolutions,
 the Securities Committee may approve the form of the Securities; that the
 elected officers of the Company be, and each of them hereby is, authorized to
 execute, in the name and on behalf of the Company, the Securities; that the
 signature of each of such officers on the Securities may be manual or by
 facsimile; that Securities
<PAGE>
 
bearing the manual or facsimile signatures of individuals who were at any time
the elected officers of the Company shall bind the Company notwithstanding that
such individuals or any of them cease to hold such offices; that the elected
officers of the Company be, and each of them hereby is, authorized to deliver or
cause to be delivered the Securities for authentication and delivery in the
principal amount thereof as shall have been determined by the Board or a
Committee; and further

     RESOLVED, That the elected officers of the Company be, and each of them
 hereby is, authorized and directed, if such officer or officers shall deem it
 necessary in connection with the offering of any of the Securities, to appoint
 a withholding agent and attorney for the Company for the purpose of withholding
 any and all taxes required to be withheld by the Company, under any Federal or
 other laws or regulations from time to time in effect, from the interest paid
 from time to time on the Securities, and to authorize and direct such agent to
 make any and all payments and reports and to file any and all returns and
 accompanying certificates with any governmental authority which such agent may
 be permitted or required to make or file as such agent under such laws or
 regulations; and further

     RESOLVED, That the elected officers of the Company be, and each of them
 hereby is, authorized in the name and on behalf of this Company to take any and
 all action which they deem necessary or advisable to effect the registration or
 qualification (or exemptions therefrom) of the Securities for issue, offer,
 sale, or trade under the Blue Sky or securities laws of any State of the United
 States of America, any Province of Canada, or of any other country and in
 connection therewith to sign, execute, acknowledge, verify, deliver, file, and
 publish all such applications, issuer's covenants, consents to service of
 process, resolutions, and other papers and documents as may be required under
 such laws, and to take any and all further action which they deem necessary or
 advisable in order to maintain such registration or qualification of the
 Securities for as long as they may deem necessary or as required by law; and
 further

     RESOLVED, That the elected officers of the Company be, and each of them
 hereby is, authorized in the name and on behalf of this Company to execute and
 file an application or applications for the listing of the Securities on the
 New York Stock Exchange, to appear before officials of the New York Stock
 Exchange and to take any and all action, and prepare, execute, and file any and
 all other applications and agreements, including an indemnity agreement
 relating to the use of facsimile signatures in the execution of the Securities,
 necessary, incidental, or convenient to effectuate such listing; and further

     RESOLVED, That the elected officers of the Company be, and each of them
 hereby is, authorized in the name and on behalf of this Company to execute and
 cause to be filed with the Commission and the New York Stock Exchange an
 application on Form 8-A, or such other form as may be required for the purpose
 of registering the Securities on a national securities exchange, pursuant to
 the Securities Exchange Act of 1934; and further
<PAGE>
 
     RESOLVED, That the elected officers of the Company be, and each of them
 hereby is, authorized and directed to advise the Company's senior lenders and
 the trustees under the Indentures of the issuance of Securities or the purchase
 or redemption of Repurchased Debt, as any such officer shall deem necessary or
 appropriate; and further

     RESOLVED, That the Securities Committee and each of the elected officers of
 the Company be, and each of them hereby is, authorized and directed to do and
 perform, or cause to be done and performed, all such acts, deeds, and things
 and to make, execute, and deliver, or cause to be made, executed, and
 delivered, all such agreements, undertakings, documents, instruments, or
 certificates, in the name and on behalf of the Company or otherwise, including,
 without limitation, indentures, loan agreements, underwriting, placement,
 exchange or agency agreements, and trust agreements, all as the Board or a
 Committee or any of the elected officers deem necessary or appropriate to
 effect the purposes and intent of the foregoing resolutions.


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