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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 11, 1998
THE KROGER CO.
(Exact name of registrant as specified in its charter)
An Ohio Corporation No. 1-303 31-0345740
State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Number)
1014 Vine Street
Cincinnati, OH 45201
(Address of principal
executive offices)
Registrant's telephone number: (513) 762-4000
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Item 5. Other Events
On April 16, 1998, The Kroger Co. filed Registration Statement No.
333-50269 on Form S-3 with the Securities and Exchange Commission
pursuant to Rule 415, (hereinafter referred to as the "Registration
Statement". The Registration Statement provides for the issuance of
Securities in an aggregate amount of $800,000,000, and was declared
effective on April 29, 1998. Pursuant to a Prospectus Supplement dated
December 9, 1998, The Kroger Co. is issuing $300,000,000 of Debt
Securities designated 6.80% Senior Notes due 2018.
Filed as Exhibit 1.1 to the Registration Statement was a form of
Underwriting Agreement for the issuance of the Debt Securities. In
connection with the issuance of the 6.80% Senior Notes due 2018, the
Registrant has executed an Underwriting Agreement dated December 8,
1998, which is incorporated herein by reference as Exhibit 1.4 hereof.
Filed as Exhibit 1.1 to the Registration Statement was a form of
Underwriting Agreement for the issuance of the Debt Securities. In
connection with the issuance of the 6.80% Senior Notes due 2018, the
Registrant has executed a Pricing Agreement dated December 8, 1998,
among Registrant, Goldman, Sachs & Co., Chase Securities Inc, and
Salomon Smith Barney Inc., the form of which is incorporated herein by
reference as Exhibit 1.5 hereof.
The form of indenture for the 6.80% Senior Notes due 2018 was filed as
Exhibit 4.3 of the Registration Statement. The Third Supplemental
Indenture dated as of December 11, 1998, between the Registrant and
Star Bank, National Association, as Trustee, supplements the Indenture
dated as of May 1, 1998, between the Registrant and Star Bank, National
Association, as Trustee, which originally was qualified as filed with
the Registration Statement. The Third Supplemental Indenture is
attached hereto as Exhibit 4.3(c).
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits:
1.4 Underwriting Agreement dated December 8, 1998.
1.5 Pricing Agreement dated December 8, 1998, among
Registrant, Goldman, Sachs & Co., Chase Securities Inc, and
Salomon Smith Barney Inc., relating to the Registrant's 6.80%
Senior Notes due 2018.
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4.3(c) Third Supplemental Indenture dated as of December 11,
1998, between the Registrant and Star Bank, National
Association, as Trustee, relating to the Registrant's 6.80%
Senior Notes due 2018.
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EXHIBIT INDEX
Exhibit No. Exhibit
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1.4 Underwriting Agreement dated December 8, 1998.
1.5 Pricing Agreement dated December 8, 1998, among Registrant,
Goldman, Sachs & Co., Chase Securities Inc, and Salomon Smith
Barney Inc., relating to the Registrant's 6.80% Senior Notes
due 2018.
4.3(c) Third Supplemental Indenture dated as of December 11, 1998,
between the Registrant and Star Bank, National Association, as
Trustee, relating to the Registrant's 6.80% Senior Notes due
2018.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
THE KROGER CO.
December 11, 1998 By: (Paul Heldman)
Paul Heldman
Senior Vice President, Secretary
and General Counsel
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EXHIBIT 1.4
The Kroger Co.
Debt Securities
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Underwriting Agreement
December 8, 1998
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
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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 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
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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 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
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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 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
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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) PricewaterhouseCoopers L.L.P. and Deloitte & Touche LLP,
respectively, who have audited certain financial statements of the Company
and its subsidiaries and Fred Meyer, Inc. and its subsidiaries
(collectively, the "Companies"), respectively, 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
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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 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
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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 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
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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;
(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
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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, Senior 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
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<PAGE> 10
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);
(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;
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<PAGE> 11
(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 transactions 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 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, authorizations, 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;
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<PAGE> 12
(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 supplemented (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 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
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<PAGE> 13
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) [Intentionally Omitted]
(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 Companies 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 Companies,
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 Companies' 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
Companies' debt securities;
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<PAGE> 14
(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 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;
(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; and
(j) 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 Fred Meyer, Inc. who have certified the
financial statements of Fred Meyer, Inc. 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 III hereto, in
form and substance satisfactory to the Representatives.
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.
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<PAGE> 15
(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 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
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<PAGE> 16
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 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 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
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<PAGE> 17
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
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<PAGE> 18
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 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.
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<PAGE> 19
Very truly yours,
The Kroger Co.
By:
-------------------------
Name:
Title:
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<PAGE> 20
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 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.
-20-
<PAGE> 21
Very truly yours,
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
-21-
<PAGE> 22
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
- --------------------------------------------------------------------------------
[Name(s) of Co-Representative(s) . . . . . . . . . $
[Names of other Underwriters] . . . . . . . . . .
-------
Total . . . . . . . . . . . . . . .$
-22-
<PAGE> 23
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.] [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].
-23-
<PAGE> 24
[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:
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
-24-
<PAGE> 25
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
-25-
<PAGE> 26
were derived the unaudited condensed financial statements
referred to in clause (A) and any unaudited income statement data
and balance sheet items included in the Prospectus and referred to
in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements
included or incorporated by reference in the Company's Annual Report
on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
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.
-26-
<PAGE> 27
ANNEX III
Pursuant to Section 7 (k) 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 Fred Meyer, Inc. 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 Fred Meyer, Inc. 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) 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 Fred Meyer, Inc. and its subsidiaries, inspection of the
minute books of Fred Meyer, Inc. and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of Fred Meyer, Inc.
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 Fred Meyer, Inc. '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 Fred Meyer, Inc. '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 Fred Meyer, Inc. '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 Fred
Meyer, Inc. 's Annual Report on Form 10-K for the most recent fiscal
year; and
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated
<PAGE> 28
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.
(iv) 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 paragraph (iii) 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 Fred Meyer, Inc.
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 Fred Meyer, Inc.
and its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the 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> 1
EXHIBIT 1.5
Pricing Agreement
Goldman, Sachs & Co.
Chase Securities Inc.
Salomon Smith Barney Inc.
As Representatives of the several
Underwriters named in Schedule I hereto,
December 8, 1998
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
December 8, 1998 (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 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.
<PAGE> 2
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 six 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,
The Kroger Co.
By:
---------------------------
Name: Lawrence M. Turner
Title: V.P. & Treasurer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Chase Securities Inc.
Salomon Smith Barney Inc.
By: -------------------------------------
Goldman, Sachs & Co.
On behalf of each of the Underwriters
-2-
<PAGE> 3
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES TO BE
PURCHASED
UNDERWRITER
<S> <C>
Goldman, Sachs & Co. $150,000,000
Chase Securities Inc. 75,000,000
Salomon Smith Barney Inc. 75,000,000
Total $300,000,000
</TABLE>
-3-
<PAGE> 4
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
6.80% Senior Notes due 2018
AGGREGATE PRINCIPAL AMOUNT:
$300,000,000
PRICE TO PUBLIC:
99.696% of the principal amount of the Designated Securities, plus
accrued interest from December 11, 1998
PURCHASE PRICE BY UNDERWRITERS:
98.821% of the principal amount of the Designated Securities, plus
accrued interest from December 11, 1998
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately available funds
INDENTURE:
Indenture dated as of May 1, 1998, between the Company and Star Bank,
National Association, as Trustee, as amended by the First Supplemental
Indenture, dated May 11, 1998, the Second Supplemental Indenture, dated June 26,
1998 and the Third Supplemental Indenture, dated December 11, 1998.
MATURITY:
December 15, 2018
INTEREST RATE:
6.80%
INTEREST PAYMENT DATES:
June 15 and December 15, commencing June 15, 1999
REDEMPTION PROVISIONS:
As described in the Prospectus Supplement dated December 9, 1998
-4-
<PAGE> 5
SINKING FUND PROVISIONS:
No sinking fund provisions
DEFEASANCE PROVISIONS:
As described in the Prospectus Supplement dated December 9, 1998
TIME OF DELIVERY:
December 11, 1998
CLOSING LOCATION:
The offices of Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza, New York, New York 10004
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representative Goldman, Sachs & Co.
Address for Notices, etc: 85 Broad Street
New York, New York
-5-
<PAGE> 1
EXHIBIT 4.3(c)
================================================================================
THE KROGER CO.
TO
STAR BANK, NATIONAL ASSOCIATION
Trustee
----------
THIRD SUPPLEMENTAL INDENTURE
Dated as of December 11, 1998
TO
INDENTURE
Dated as of May 1, 1998
----------
6.80% SENIOR NOTES DUE 2018
================================================================================
<PAGE> 2
THIRD SUPPLEMENTAL INDENTURE, dated as of December 11, 1998,
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 Star Bank, National
Association, a banking corporation duly organized and existing under the laws of
the State of Ohio, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore executed and delivered to the
Trustee an Indenture dated as of May 1, 1998 (the "Indenture"), providing for
the issuance from time to time of the Company's unsecured debentures, notes or
other evidences of indebtedness (herein and therein called the "Securities"), to
be issued in one or more series as in the Indenture provided.
Section 201 of the Indenture permits the form of the
Securities of any series to be established pursuant to an indenture supplemental
to the Indenture.
Section 301 of the Indenture permits the terms of the
Securities of any series to be established in an indenture supplemental to the
Indenture.
Section 901(7) of the Indenture provides that, 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 to the Indenture for the purpose of establishing the
form or terms of Securities of any series as permitted by Sections 201 and 301
of the Indenture.
The Company, pursuant to the foregoing authority, proposes in
and by this Third Supplemental Indenture to establish the terms and form of the
Securities of a new series and to amend and supplement the Indenture in certain
respects with respect to the Securities of such series.
All things necessary to make this Third Supplemental Indenture
a valid agreement of the Company, and a valid amendment of and supplement to the
Indenture, have been done.
NOW, THEREFORE, THIS THIRD Supplemental 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 of the series to be
created hereby, as follows:
<PAGE> 3
ARTICLE ONE
DEFINITIONS
Section 101. Definitions.
(a) For all purposes of this Third Supplemental Indenture:
(1) Capitalized terms used herein without definition
shall have the meanings specified in the Indenture;
(2) All references herein to Articles and Sections,
unless otherwise specified, refer to the corresponding
Articles and Sections of this Third Supplemental Indenture
and, where so specified, to the Articles and Sections of the
Indenture as supplemented by this Third Supplemental
Indenture; and
(3) The terms "hereof", "herein", "hereby", "hereto",
"hereunder" and "herewith" refer to this Third Supplemental
Indenture.
(b) For all purposes of the Indenture and this Third
Supplemental Indenture, with respect to the Securities of the series created
hereby, except as otherwise expressly provided or unless the context otherwise
requires:
"Adjusted Treasury Rate" means, with respect to any
Redemption Date, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed
as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date.
"Attributable Debt" means, in connection with a Sale and
Lease-Back Transaction, as of any particular time, the
aggregate of present values (discounted at a rate per annum
equal to the interest rate borne by the Securities of the
series created by this Third Supplemental Indenture) of the
obligations of the Company or any Restricted Subsidiary for
net rental payments during the remaining primary term of the
applicable lease, calculated in accordance with generally
accepted accounting principles. The term "net rental payments"
under any lease for any period shall mean the sum of the
rental and other payments required to be paid in such period
by the lessee thereunder, not including, however, any amounts
required to be paid by such lessee (whether or not designated
as rental or additional rental) on account of maintenance and
repairs, reconstruction, insurance, taxes, assessments, water
rates, operating and labor costs or similar charges required
to be paid by such lessee thereunder or any amounts required
to be paid by such lessee thereunder
-2-
<PAGE> 4
contingent upon the amount of sales, maintenance and repairs,
reconstruction, insurance, taxes, assessments, water rates or
similar charges.
"Business Day" means any day other than a Saturday or
Sunday or a day on which banking institutions in New York City
or Cincinnati, Ohio are authorized or obligated by law or
executive order to close.
"Capital Lease" means any lease of property which, in
accordance with generally accepted accounting principles,
should be capitalized on the lessee's balance sheet or for
which the amount of the asset and liability thereunder as if
so capitalized should be disclosed in a note to such balance
sheet; and "Capitalized Lease Obligation" means the amount of
the liability which should be so capitalized or disclosed.
"Comparable Treasury Issue" means the United States
Treasury security selected by a Quotation Agent as having a
maturity comparable to the remaining term of the Securities to
be redeemed that would be utilized, at the time of selection
and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Securities.
"Comparable Treasury Price" means, with respect to
any Redemption Date, (i) the average of the Reference Treasury
Dealer Quotations, after excluding the highest and lowest such
Reference Treasury Dealer Quotations for such Redemption Date,
or (ii) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such
Quotations.
"Consolidated Net Tangible Assets" means, for the
Company and its Subsidiaries on a consolidated basis
determined in accordance with generally accepted accounting
principles, the aggregate amounts of assets (less depreciation
and valuation reserves and other reserves and items deductible
from gross book value of specific asset accounts under
generally accepted accounting principles) which under
generally accepted accounting principles would be included on
a balance sheet after deducting therefrom (a) all liability
items except deferred income taxes, commercial paper,
short-term bank Indebtedness, Funded Indebtedness, other
long-term liabilities and shareholders' equity and (b) all
goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, which in each
case would be so included on such balance sheet.
"Funded Indebtedness" means any Indebtedness maturing
by its terms more than one year from the date of the
determination thereof, including (i) any Indebtedness having a
maturity of 12
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months or less but by its terms renewable or extendible at the
option of the obligor to a date later than 12 months from the
date of the determination thereof and (ii) rental obligations
payable more than 12 months from the date of determination
thereof under Capital Leases (such rental obligations to be
included as Funded Indebtedness at the amount so capitalized
at the date of such computation and to be included for the
purposes of the definition of Consolidated Net Tangible Assets
both as an asset and as Funded Indebtedness at the amount so
capitalized).
"Non-Restricted Subsidiary" means any Subsidiary that
the Company's Board of Directors has in good faith declared
pursuant to a written resolution not to be of material
importance, either singly or together with all other
Non-Restricted Subsidiaries, to the business of the Company
and its consolidated Subsidiaries taken as a whole.
"Operating Assets" means all merchandise inventories,
furniture, fixtures and equipment (including all
transportation and warehousing equipment but excluding office
equipment and data processing equipment) owned or leased
pursuant to Capital Leases by the Company or a Restricted
Subsidiary.
"Operating Property" means all real property and
improvements thereon owned or leased pursuant to Capital
Leases by the Company or a Restricted Subsidiary and
constituting, without limitation, any store, warehouse,
service center or distribution center wherever located,
provided that such term shall not include any store,
warehouse, service center or distribution center which the
Company's Board of Directors declares by written resolution
not to be of material importance to the business of the
Company and its Restricted Subsidiaries.
"Quotation Agent" means the Reference Treasury Dealer
appointed by the Company.
"Reference Treasury Dealer" means (i) Goldman, Sachs
& Co. and its successors; provided, however, that if the
foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer, and (ii) any other Primary Treasury
Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Company, of the bid
and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted
in writing to the Trustee by such Reference Treasury Dealer at
5:00 p.m. on the third Business Day preceding such Redemption
Date.
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<PAGE> 6
"Restricted Subsidiaries" means all Subsidiaries other
than Non-Restricted Subsidiaries.
"Sale and Lease-Back Transaction" has the meaning
specified in Section 1010.
"Subsidiary" means (i) any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at
the time directly or indirectly owned by the Company and/or
one or more Subsidiaries or (ii) any partnership of which more
than 50% of the partnership interest is owned by the Company
or any Subsidiary.
ARTICLE TWO
SECURITY FORMS
Section 201. Form of Securities of this Series.
The Securities of this series shall be in the form set forth
in this Article.
Section 202. Form of Face of Security.
THE KROGER CO.
6.80% Senior Notes due 2018
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 December 15, 2018, and to pay interest thereon from December 11, 1998
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semi-annually on June 15 and December 15 in each year,
commencing June 15, 1999, at the rate of interest of 6.80% per annum until the
principal hereof is paid or made available for payment. 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 June 1 or
December 1 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder
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<PAGE> 7
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 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.
Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in Cincinnati, Ohio, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that 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.
In the case where any Interest Payment Date or the maturity
date of this Security does not fall on a Business Day, payment of interest or
principal otherwise payable on such day need not be made on such day, but may be
made on the next succeeding Business Day with the same form and effect as if
made on such Interest Payment Date or the maturity date of this Security.
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.
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<PAGE> 8
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 under an
Indenture dated as of May 1, 1998, as supplemented by the First Supplemental
Indenture dated as of May 11, 1998, the Second Supplemental Indenture, dated as
of June 26, 1998 and the Third Supplemental Indenture dated as of December 11,
1998 (as so supplemented, herein called the "Indenture"), each between the
Company and Star Bank, National Association, as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
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 $300,000,000.
The Securities of this series will be redeemable, in whole or
in part, at the option of the Company at any time at a redemption price equal to
the greater of (i) 100% of the principal amount of such Securities or (ii) as
determined by a Quotation Agent, the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including any portion
of such payments of interest accrued as of the date of redemption) discounted to
the date of redemption on a semi-annual basis (assuming a
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<PAGE> 9
360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate
plus 12.5 basis points, plus, in each case, accrued interest thereon to the date
of redemption.
Notice of any redemption will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each holder of the
Securities to be redeemed. Unless the Company defaults in payment of the
redemption price, on and after the Redemption Date, interest will cease to
accrue on the Securities or portions thereof called for redemption.
The Indenture contains provisions for defeasance at any time
of (i) the entire indebtedness of this Security or (ii) certain restrictive
covenants and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
If an Event of Default shall occur and be continuing, the
principal of all Securities of this series may be declared due and payable in
the manner and with the effect provided in the Indenture.
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 aggregate 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 the 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 therefor
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
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<PAGE> 10
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.
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
like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
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, 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.
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<PAGE> 11
ARTICLE THREE
THE SERIES OF SECURITIES
Section 301. Title and Terms.
There shall be a series of Securities designated as the "6.80%
Senior Notes due 2018" of the Company. Their Stated Maturity shall be December
15, 2018, and they shall bear interest at the rate of 6.80% per annum.
Interest on the Securities of this series will be payable
semi-annually on June 15 and December 15 of each year, commencing June 15, 1999,
until the principal thereof is made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the Person in whose name the Securities of this series (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 June 1 or December 1
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
In the case where any Interest Payment Date or the maturity
date of the Securities of this series does not fall on a Business Day, payment
of interest or principal otherwise payable on such date need not be made on such
day, but may be made on the next succeeding Business Day with the same force and
effect as if made on such Interest Payment Date or the maturity date of the
Securities of this series.
The aggregate principal amount of Securities of this series
which may be authenticated and delivered under this Third Supplemental Indenture
is limited to $300,000,000, except for Securities authenticated and delivered
upon registration or transfer of, or in exchange for, or in lieu of, other
Securities of this series pursuant to Section 304, 305 and 306 of the Indenture
and except for any Securities of this series which, pursuant to Section 303 of
the Indenture, are deemed never to have been authenticated and delivered under
the Indenture.
The Securities of this series will be represented by two or
more Global Securities representing the entire $300,000,000 aggregate principal
amount of the Securities of this series, and the Depositary with respect to such
Global Security or Global Securities will be The Depository Trust Company.
The Place of Payment for the principal of (and premium, if
any) and interest on the Securities of this series shall be the office or agency
of the Company in the City of Cincinnati, State of Ohio, maintained for such
purpose, which shall be the Corporate Trust Office of the Trustee and at any
other office or agency maintained by the Company for such purpose; provided,
however, that at the option of the Company payment of
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<PAGE> 12
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
The Securities of this series are redeemable prior to maturity
at the option of the Company as provided in this Third Supplemental Indenture.
The Securities of this series are not subject to a sinking
fund and the provisions of Section 501(3) and Article Twelve of the Indenture
shall not be applicable to the Securities of this series.
The Securities of this series are subject to defeasance at the
option of the Company as provided in this Third Supplemental Indenture.
ARTICLE FOUR
MODIFICATIONS AND ADDITIONS TO THE INDENTURE
Section 401. Modifications to the Consolidation, Merger,
Conveyance, Transfer or Lease Provisions.
With respect to the Securities of this series, Section 801 of
the Indenture shall be deleted in its entirety and the following shall be
substituted therefor:
"Section 801. Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain Conditions.
The Company covenants that it will not merge with or into or
consolidate with any corporation, partnership, or other entity
or sell, lease or convey all or substantially all of its
assets to any other Person, unless (i) either the Company
shall be the continuing corporation, or the successor entity
or the Person which acquires by sale, lease or conveyance all
or substantially all the assets of the Company (if other than
the Company) shall be a corporation or partnership organized
under the laws of the United States of America or any State
thereof or the District of Columbia and shall expressly assume
all obligations of the Company under this Indenture and the
Securities of the series created by the Third Supplemental
Indenture, including the due and punctual payment of the
principal of and interest on all the Securities of the series
created by the Third Supplemental Indenture according to their
tenor, and the due and punctual performance and observance of
all of the covenants and conditions of the Indenture to be
performed or observed by the
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<PAGE> 13
Company, by supplemental indenture in form satisfactory to the
Trustee, executed and delivered to the Trustee by such entity,
and (ii) the Company, such person or such successor entity, as
the case may be, shall not, immediately after such merger or
consolidation, or such sale, lease or conveyance, be in
default in the performance of any such covenant or condition
and, immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have
happened and be continuing.
Section 802. Successor Substituted
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any sale, lease or
conveyance of all or substantially all of the assets of the
Company in accordance with Section 801, the successor Person
formed by such consolidation or into which the Company is
merged or to which such sale, lease or conveyance 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."
Section 402. Other Modifications.
With respect to the Securities of this series, the Indenture
shall be modified as follows:
(a) The eighth paragraph of Section 305 of the Indenture shall
be modified by inserting ", and a successor Depositary is not appointed by the
Company within 90 days" at the end of clause (i) in such paragraph; and
(b) Section 401 of the Indenture shall be modified by adding
to the end of such Section the following paragraph:
"For the purpose of this Section 401, trust funds may consist
of (A) money in an amount, or (B) U.S. Government Obligations
(as defined in Section 1304) which through the scheduled
payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or
(C) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, the principal of, premium, if
any, and each installment of interest on the Securities of
this
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<PAGE> 14
series on the Stated Maturity of such principal or installment
of interest on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of
such Securities of this series."
Section 403. Additional Covenants; Defeasance and Covenant Defeasance.
(a) With respect to the Securities of this series, the following provisions
shall be added as Sections 1009 and 1010 and as Article Thirteen (Section
references contained in these additional provisions are to the Indenture
as supplemented by this Third Supplemental Indenture):
"Section 1009. Limitations on Liens.
After the date hereof and so long as any Securities of the
series created by the Third Supplemental Indenture are
Outstanding, the Company will not issue, assume or guarantee,
and will not permit any Restricted Subsidiary to issue, assume
or guarantee, any Indebtedness which is secured by a mortgage,
pledge, security interest, lien or encumbrance of any kind
(including any conditional sale or other title retention
agreement, any lease in the nature thereof, and any agreement
to give any of the foregoing) (each being hereinafter referred
to as a "lien" or "liens") of or upon any Operating Property
or Operating Asset, whether now owned or hereafter acquired,
of the Company or any Restricted Subsidiary without
effectively providing that the Securities of the series
created by the Third Supplemental Indenture (together with, if
the Company shall so determine, any other Indebtedness of the
Company ranking equally with the Securities) shall be equally
and ratably secured by a lien on such assets ranking ratably
with and equal to (or at the Company's option prior to) such
secured Indebtedness; provided that the foregoing restriction
shall not apply to:
(a) liens on any property or assets of any corporation
existing at the time such corporation becomes a Restricted
Subsidiary provided that such lien does not extend to any
other property of the Company or any of its Restricted
Subsidiaries;
(b) liens on any property or assets (including stock) existing at the time of
acquisition of such property or assets by the Company or a Restricted
Subsidiary, or liens to secure the payment of all or any part of the
purchase price of such property or assets (including stock) upon the
acquisition of such property or assets by the Company or a Restricted
Subsidiary or to secure any indebtedness incurred, assumed or guaranteed
by the Company or a Restricted Subsidiary for the purpose of financing all
or any part of the purchase price of such property or, in the case of real
property, construction or improvements thereon or attaching to property
substituted by the Company to obtain the release of a lien on other
property of the Company on which a lien then exists, which indebtedness is
incurred, assumed or guaranteed prior to, at the time of, or within 18
months after such acquisition (or in the case of real property, the
completion of construction (including any improvements on an existing
asset) or commencement of full operation at such property, whichever is
later (which in the case of a retail
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<PAGE> 15
store is the opening of the store for business to the public)); provided
that in the case of any such acquisition, construction or improvement, the
lien shall not apply to any other property or assets theretofore owned by
the Company or a Restricted Subsidiary;
(c) liens on any property or assets to secure Indebtedness of a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;
(d) liens on any property or assets of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a
Restricted Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an entirety or
substantially as an entirety by the Company or a Restricted Subsidiary
provided that such lien does not extend to any other property of the
Company or any of its Restricted Subsidiaries;
(e) liens on any property or assets of the Company or a Restricted Subsidiary
in favor of the United States of America or any State thereof, or any
department, agency or instrumentality or political subdivision of the
United States of America or any State thereof, or in favor of any other
country, or any political subdivision thereof, to secure partial,
progress, advance or other payments pursuant to any contract or statute or
to secure any Indebtedness incurred or guaranteed for the purpose of
financing all or any part of the purchase price (or, in the case of real
property, the cost of construction) of the property or assets subject to
such liens (including, but not limited to, liens incurred in connection
with pollution control, industrial revenue or similar financings);
(f) liens existing on properties or assets of the Company or any Restricted
Subsidiary existing on the date hereof; provided that such liens secure
only those obligations which they secure on the date hereof or any
extension, renewal or replacement thereof;
(g) any extension, renewal or replacement (or successive extensions, renewals
or replacements) in whole or in part, of any lien referred to in the
foregoing clauses (a) through (f), inclusive; provided that such
extension, renewal or replacement shall be limited to all or a part of the
property or assets which secured the lien so extended, renewed or replaced
(plus improvements and construction on real property);
(h) liens imposed by law, such as mechanics', workmen's, repairmen's,
materialmen's, carriers', warehouseman's, vendors', or other similar liens
arising in the ordinary course of business of the Company or a Restricted
Subsidiary, or governmental (federal, state or municipal) liens arising
out of contracts for the sale of products or services by the Company or
any Restricted Subsidiary, or deposits or pledges to obtain the release of
any of the foregoing liens;
(i) pledges, liens or deposits under worker's compensation laws or similar
legislation and liens or judgments thereunder which are not currently
dischargeable, or in connection with bids, tenders, contracts (other than
for the payment of money) or leases to which the Company or any Restricted
Subsidiary is a party, or to secure the public or statutory obligations of
the Company or any Restricted Subsidiary, or in connection with obtaining
or
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<PAGE> 16
maintaining self-insurance or to obtain the benefits of any law,
regulation or arrangement pertaining to unemployment insurance, old age
pensions, social security or similar matters, or to secure surety, appeal
or customs bonds to which the Company or any Restricted Subsidiary is a
party, or in litigation or other proceedings such as, but not limited to,
interpleader proceedings, and other similar pledges, liens or deposits
made or incurred in the ordinary course of business;
(j) liens created by or resulting from any litigation or other proceeding
which is being contested in good faith by appropriate proceedings,
including liens arising out of judgments or awards against the Company or
any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary is in good faith prosecuting an appeal or
proceedings for review or for which the time to make an appeal has not yet
expired; or final unappealable judgment liens which are satisfied within
30 days of the date of judgment; or liens incurred by the Company or any
Restricted Subsidiary for the purpose of obtaining a stay or discharge in
the course of any litigation or other proceeding to which the Company or
such Restricted Subsidiary is a party;
(k) liens for taxes or assessments or governmental charges or levies not yet
due or delinquent, or which can thereafter be paid without penalty, or
which are being contested in good faith by appropriate proceedings;
landlord's liens on property held under lease; and any other liens or
charges incidental to the conduct of the business of the Company or any
Restricted Subsidiary or the ownership of the property or assets of any of
them which were not incurred in connection with the borrowing of money or
the obtaining of advances or credit and which do not, in the opinion of
the Company, materially impair the use of such property or assets in the
operation of the business of the Company or such Restricted Subsidiary or
the value of such property or assets for the purposes of such business; or
(l) liens not permitted by clauses (a) through (k) above if at the time of,
and after giving effect to, the creation or assumption of any such lien,
the aggregate amount of all Indebtedness of the Company and its Restricted
Subsidiaries secured by all such liens not so permitted by clauses (a)
through (k) above together with the Attributable Debt in respect of Sale
and Lease-Back Transactions permitted by paragraph (a) of Section 1010
does not exceed 10% of Consolidated Net Tangible Assets.
Section 1010. Limitations on Sale and Lease-Back Transactions.
After the date hereof and so long as any Securities of the series created
by the Third Supplemental Indenture are Outstanding, the Company agrees
that it will not, and will not permit any Restricted Subsidiary to, enter
into any arrangement with any Person providing for the leasing by the
Company or a Restricted Subsidiary of any Operating Property or Operating
Asset (other than any such arrangement involving a lease for a term,
including renewal rights, for not more than 3 years and leases between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries),
whereby such Operating Property or Operating Asset has been or is to be
sold or transferred by the Company or any Restricted Subsidiary to such
Person (herein referred to as a "Sale and Lease-Back Transaction"),
unless:
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<PAGE> 17
(a) the Company or such Restricted Subsidiary would, at the time of entering
into a Sale and Lease-Back transaction, be entitled to incur Indebtedness
secured by a lien on the Operating Property or Operating Asset to be
leased in an amount at least equal to the Attributable Debt in respect of
such Sale and Lease-Back Transaction without equally and ratably securing
the Securities of the series created by the Third Supplemental Indenture
pursuant to Section 1009; or
(b) the proceeds of the sale of the Operating Property or Operating Asset to
be leased are at least equal to the fair market value of such Operating
Property or Operating Asset (as determined by the chief financial officer
or chief accounting officer of the Company) and an amount in cash equal to
the net proceeds from the sale of the Operating Property or Operating
Asset so leased is applied, within 180 days of the effective date of any
such Sale and Lease-Back Transaction, to the purchase or acquisition (or,
in the case of Operating Property, the construction) of Operating Property
or Operating Assets or to the retirement, repurchase, redemption or
repayment (other than at maturity or pursuant to a mandatory sinking fund
or redemption provision and other than Indebtedness owned by the Company
or any Restricted Subsidiary) of Securities of the series created by the
Third Supplemental Indenture or of Funded Indebtedness of the Company
ranking on a parity with or senior to the Securities of the series created
by the Third Supplemental Indenture, or in the case of a Sale and
Lease-Back Transaction by a Restricted Subsidiary, of Funded Indebtedness
of such Restricted Subsidiary; provided that in connection with any such
retirement, any related loan commitment or the like shall be reduced in an
amount equal to the principal amount so retired.
The foregoing restriction shall not apply to, in the case of any Operating
Property or Operating Asset acquired or constructed subsequent to the date
eighteen months prior to the date of this Indenture, any Sale and Lease-Back
Transaction with respect to such Operating Asset or Operating Property
(including presently owned real property upon which such Operating Property is
to be constructed) if a binding commitment is entered into with respect to such
Sale and Lease-Back Transaction within 18 months after the later of the
acquisition of the Operating Property or Operating Asset or the completion of
improvements or construction thereon or commencement of full operations at such
Operating Property (which in the case of a retail store is the opening of the
store for business to the public).
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ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. Company's Option to Effect Defeasance or
Covenant Defeasance.
The Company may at its option by Board Resolution, at any
time, elect to have either Section 1302 or Section 1303 applied to the
Outstanding Securities of this series upon compliance with the
conditions set forth below in this Article Thirteen.
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section
1301 applicable to this Section, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities of
the series created by the Third Supplemental Indenture on the date the
conditions set forth below are satisfied (hereinafter, "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding Securities of
this series and to have satisfied all its other obligations under such
Securities of this series and this Indenture insofar as such Securities of this
series are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (A) the
rights of Holders of Outstanding Securities of this series to receive, solely
from the trust fund described in Section 1304 and as more fully set forth in
such Section, payments in respect of the principal of (and premium, if any) and
interest on such securities when such payments are due, (B) the Company's
obligations with respect to such Securities of this series under Sections 304,
305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and (D) this Article Thirteen. Subject to compliance
with this Article Thirteen, the Company may exercise its option under this
Section 1302 notwithstanding the prior exercise of its option under Section
1303.
Section 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section
1301 applicable to this Section, the Company shall be released from its
obligations under Section 501(4) (in respect of the covenants in Sections 1008
through 1010), Section 801 and Sections 1008 through 1010, the Securities of
this series and the Holders of Securities of this series, on and after the date
the conditions set forth below are satisfied (hereinafter, "covenant
Defeasance"). For this purpose, such covenant Defeasance means that the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such
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Section, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities of this series shall be unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Securities of this series:
(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 609 who shall agree to
comply with the provisions of this Article Thirteen applicable
to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such
Securities of this series, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and
discharge, the principal of, premium, if any, and each
installment of interest on the Securities of this series on
the Stated Maturity of such principal or installment of
interest on the day on which such payments are due and payable
in accordance with the terms of this Indenture and of such
Securities of this series. For this purpose, "U.S. Government
Obligations" means securities that are (x) direct obligations
of the United States of America for the payment of which its
full faith and credit is pledged or (y) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the
Company thereof, and shall also include a depository receipt
issued by a bank
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<PAGE> 20
(as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository
receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of
or interest on the U.S. Government Obligation evidenced by
such depositary receipt.
(2) No Event of Default or event which with notice or
lapse of time or both would become an Event of Default shall
have occurred and be continuing on the date of such deposit
or, insofar as subsections 501(6) and (7) are concerned, at
any time during the period ending on the 121st day after the
date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such
period).
(3) Such Defeasance or covenant Defeasance shall not
cause the Trustee to have a conflicting interest as defined in
Section 608 and for purposes of the Trust Indenture Act with
respect to any securities of the Company.
(4) Such Defeasance or covenant Defeasance shall not
result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound.
(5) The Company shall have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for relating to
either the Defeasance under Section 1302 or the covenant
Defeasance under Section 1303 (as the case may be) have been
complied with.
(6) In the case of an election under Section 1302,
the Company shall have delivered to the Trustee an Opinion of
Counsel stating that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a
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<PAGE> 21
ruling, or (y) since the date of this Third Supplemental
Indenture there has been a change in the applicable Federal
income tax law, in either case to the effect that and based
thereon such opinion shall confirm that, the Holders of the
Outstanding Securities of this series will not recognize
income, gain or loss for Federal income tax purposes as a
result of such Defeasance or covenant Defeasance and will be
subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if
such Defeasance or covenant Defeasance had not occurred."
Section 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying
trusteecollectively, for purposes of this Section 1305, the "Trustee")
pursuant to Section 1304 in respect of the Securities of this series
shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities of this series and this Indenture, to
the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine,
to the Holders of such Securities of this series, of all sums due and
to become due thereon in respect of principal (and premium, if any) and
interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 1304 or the
principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders
of the Outstanding Securities of this series.
Anything in this Article Thirteen to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or U.S. Government
Obligations held by it as provided in Section 1304 which, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Defeasance or covenant
Defeasance.
Section 1306. Reinstatement.
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<PAGE> 22
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 1302 or 1303 by reason of any order or
judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Securities of this series
shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Thirteen until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with
Section 1302 or 1303; provided, however, that if the Company makes any
payment of principal of (and premium, if any) or interest on any
Security of this series following the reinstatement of its obligations,
the Company shall be subjugated to the rights of the Holders of such
Securities of this series to receive such payment from the money held
by the Trustee or the Paying Agent.
Section 404. Redemption of Securities.
With respect to Securities of this series, Section 1101 of the
Indenture shall be deleted in its entirety and the following shall be
substituted therefor:
"Section 1101. Optional Redemption.
The Securities will be redeemable, in whole or in part, at the
option of the Company at any time at a redemption price equal
to the greater of (i) 100% of the principal amount of such
Securities or (ii) as determined by a Quotation Agent, the sum
of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of
such payments of interest accrued as of the date of
redemption) discounted to the date of redemption on a
semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate plus 12.5
basis points plus, in each case, accrued interest thereon to
the date of redemption."
ARTICLE FIVE
MISCELLANEOUS
Section 501. Miscellaneous.
(a) The Trustee accepts the trusts created by the Indenture,
as supplemented by this Third Supplemental Indenture, and agrees to perform the
same upon the terms and conditions of the Indenture, as supplemented by this
Third Supplemental Indenture.
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(b) The recitals contained herein shall be taken as statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Third Supplemental Indenture.
(c) All capitalized terms used and not defined herein shall
have the respective meanings assigned to them in the Indenture.
(d) Each of the Company and the Trustee makes and reaffirms as
of the date of execution of this Third Supplemental Indenture all of its
respective representations, covenants and agreements set forth in the Indenture.
(e) All covenants and agreements in this Third Supplemental
Indenture by the Company or the Trustee shall bind its respective successors and
assigns, whether so expressed or not.
(f) In case any provisions in this Third Supplemental
Indenture 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.
(g) Nothing in this Third Supplemental Indenture, express or
implied, shall give to any Person, other than the parties hereto and their
successors under the Indenture and the Holders of the series of Securities
created hereby, any benefit or any legal or equitable right, remedy or claim
under the Indenture.
(h) If any provision hereof limits, qualifies or conflicts
with a provision of the Trust Indenture Act of 1939, as may be amended from time
to time, that is required under such Act to be a part of and govern this Third
Supplemental Indenture, the latter provision shall control. If any provision
hereof modifies or excludes any provision of such Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Third
Supplemental Indenture as so modified or excluded, as the case may be.
(i) This Third Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
(j) All amendments to the Indenture made hereby shall have
effect only with respect to the series of Securities created hereby.
(k) All provisions of this Third Supplemental Indenture shall
be deemed to be incorporated in, and made a part of, the Indenture; and the
Indenture, as supplemented by this Third Supplemental Indenture, shall be read,
taken and construed as one and the same instrument.
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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.
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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
--------------------------------
Name:
Title:
Attest:
- -------------------
Assistant Secretary
STAR BANK, NATIONAL ASSOCIATION,
as Trustee
By
--------------------------------
Name:
Title:
Attest:
- -------------------
Assistant Secretary
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<PAGE> 26
STATE OF _________ )
) ss.:
COUNTY OF _______ )
On the th day of December, 1998, 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 th day of December, 1998, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of Star Bank, National Association, 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.
----------------------------------------
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