<PAGE> 1
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: September 22, 1999
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
<PAGE> 2
Item 5. OTHER EVENTS
On August 20, 1999, The Kroger Co., and its subsidiary
guarantors, filed Registration Statement No. 333-85727 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
$2,000,000,000, and was declared effective on September 7,
1999. Pursuant to Prospectus Supplements dated September 15,
1999, The Kroger Co. is issuing $500,000,000 of Debt
Securities in two tranches, $250,000,000 7 5/8% Senior Notes
due 2006, and $250,000,000 8% Senior Notes due 2029
(collectively, the "Senior Notes"); and $275,000,000 of Debt
Securities in the form of Puttable Reset Securities (PURS) due
2010 (the "PURS"). The Debt Securities being issued are being
guaranteed by the subsidiary guarantors.
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 Senior
Notes, the Registrant has executed a Pricing Agreement dated
September 15, 1999, among The Kroger Co., its subsidiary
guarantors, Goldman, Sachs & Co., Salomon Smith Barney Inc.,
BNY Capital Markets, Inc., First Union Capital Markets Corp.,
Utendahl Capital Partners, L.P., Wachovia Securities, Inc.,
and The Williams Capital Group, L.P., the form of which is
incorporated herein by reference as Exhibit 1.1.1 hereof. In
connection with the issuance of the PURS, the Registrant has
executed a Pricing Agreement dated September 15, 1999, among
The Kroger Co., its subsidiary guarantors, Goldman, Sachs &
Co., and Salomon Smith Barney Inc., the form of which is
incorporated herein by reference as Exhibit 1.1.2 hereof.
The form of indenture for the Senior Notes and the PURS was
filed as Exhibit 4.3 of the Registration Statement. The Fourth
Supplemental Indenture, the Fifth Supplemental Indenture, and
the Sixth Supplemental Indenture, all dated as of September
22, 1999, among The Kroger Co., its subsidiary guarantors, and
Firstar Bank, National Association, as Trustee, supplement the
Indenture dated as of June 25, 1999, among The Kroger Co., its
subsidiary guarantors, and Firstar Bank, National Association,
as Trustee, which originally was qualified as filed with the
Registration Statement. The Fourth Supplemental Indenture, the
Fifth Supplemental Indenture, and the Sixth Supplemental
Indenture, are attached hereto as Exhibit 4.3.1, Exhibit
4.3.2, and Exhibit 4.3.3, respectively.
In connection with the issuance of the PURS, The Kroger Co.
has executed a Calculation Agency Agreement dated as of
September 22, 1999 with Goldman, Sachs & Co., which is
attached hereto as Exhibit 4.3.4
<PAGE> 3
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(c) Exhibits:
1.1.1 Pricing Agreement dated September 15, 1999, among
The Kroger Co., its subsidiary guarantors, Goldman, Sachs
& Co., Salomon Smith Barney Inc., BNY Capital Markets,
Inc., First Union Capital Markets Corp., Utendahl Capital
Partners, L.P., Wachovia Securities, Inc., and The
Williams Capital Group, L.P.
1.1.2 Pricing Agreement dated September 15, 1999, among
The Kroger Co., its subsidiary guarantors, Goldman, Sachs
& Co., and Salomon Smith Barney Inc.
4.3.1 Fourth Supplemental Indenture dated as of September
22, 1999, among The Kroger Co., its subsidiary guarantors,
and Firstar Bank, National Association, as trustee,
relating to the 7 5/8% Senior Notes due 2006.
4.3.2 Fifth Supplemental Indenture dated as of September
22, 1999, among The Kroger Co., its subsidiary guarantors,
and Firstar Bank, National Association, as trustee,
relating to the 8% Senior Notes due 2029.
4.3.3 Sixth Supplemental Indenture dated as of September
22, 1999, among The Kroger Co., its subsidiary guarantors,
and Firstar Bank, National Association, as trustee,
relating to the Puttable Reset Securities (PURS) due 2010
4.3.4 Calculation Agency Agreement dated as of September
22, 1999, between The Kroger Co. and Goldman, Sachs & Co.,
relating to the PURS.
<PAGE> 4
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.
September 22, 1999 By: (Paul Heldman)
Paul Heldman
Senior Vice President, Secretary
and General Counsel
<PAGE> 5
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
1.1.1 Pricing Agreement dated September 15, 1999, among The
Kroger Co., its subsidiary guarantors, Goldman, Sachs
& Co., Salomon Smith Barney Inc., BNY Capital
Markets, Inc., First Union Capital Markets Corp.,
Utendahl Capital Partners, L.P., Wachovia Securities,
Inc., and The Williams Capital Group, L.P.
1.1.2 Pricing Agreement dated September 15, 1999, among The
Kroger Co., its subsidiary guarantors, Goldman, Sachs
& Co., and Salomon Smith Barney Inc.
4.3.1 Fourth Supplemental Indenture dated as of September
22, 1999, among The Kroger Co., its subsidiary
guarantors, and Firstar Bank, National Association,
as trustee, relating to the 7 5/8% Senior Notes due
2006.
4.3.2 Fifth Supplemental Indenture dated as of September
22, 1999, among The Kroger Co., its subsidiary
guarantors, and Firstar Bank, National Association,
as trustee, relating to the 8% Senior Notes due 2029.
4.3.3 Sixth Supplemental Indenture dated as of September
22, 1999, among The Kroger Co., its subsidiary
guarantors, and Firstar Bank, National Association,
as trustee, relating to the Puttable Reset Securities
(PURS) due 2010
4.3.4 Calculation Agency Agreement dated as of September
22, 1999, between The Kroger Co. and Goldman, Sachs &
Co., relating to the PURS.
<PAGE> 1
Exhibit 1.1.1
Pricing Agreement
-----------------
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
FIRST UNION CAPITAL MARKETS CORP.
SALOMON SMITH BARNEY INC.
UTENDAHL CAPITAL PARTNERS L.P.
WACHOVIA SECURITIES, INC.
THE WILLIAMS CAPITAL GROUP, L.P.
As Representatives of the several
Underwriters named in Schedule II hereto,
September 15, 1999
Dear Sirs:
The Kroger Co., an Ohio corporation (the "Company"), and the
Guarantors on Schedule I and on the signature pages hereto propose, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
September 15, 1999 (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule II hereto (the "Underwriters") the Securities
(the "Designated Securities") and related Guarantees specified in Schedule III
hereto. 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 and related Guarantees. Each
reference to the Representative 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 and related Guarantees
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 III hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities and
related Guarantees, 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
<PAGE> 2
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, and under other terms and
conditions set forth in Schedule III hereto, the principal amount of Designated
Securities set forth opposite the name of such Underwriter in Schedule II
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, the Company and each of the Guarantors. 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,
Attest: THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Designated Securities
By:
- ----------------------------- -------------------------------------
Assistant Secretary/Secretary Name: Lawrence M. Turner
Title: Vice President and Treasurer
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Designated Securities
By:
- ----------------------------- -------------------------------------
Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
<PAGE> 3
RICHIE'S INC., as Guarantor of the Designated
Securities
By: ________________________________
Name: Keith C. Larson
Title: Vice President and Secretary
ROCKET NEWCO, INC.
as Guarantor of the Designated Securities
HENPIL, INC.,
as Guarantor of the Designated Securities
WYDIV, INC.,
as Guarantor of the Designated Securities
By: ________________________________
Name: Steven McMillan
Title: Vice President and Secretary
<PAGE> 4
GOLDMAN, SACHS & CO.
BNY CAPITAL MARKETS, INC.
FIRST UNION CAPITAL MARKETS CORP.
SALOMON SMITH BARNEY INC.
UTENDAHL CAPITAL PARTNERS L.P.
WACHOVIA SECURITIES, INC.
THE WILLIAMS CAPITAL GROUP, L.P.
By: ________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE> 5
SCHEDULE I
Guarantors
----------
Name of Guarantor State of Incorporation/Organization
- ----------------- -----------------------------------
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Fred Meyer, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
J.V. Distributing, Inc. Michigan
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
<PAGE> 6
Name of Guarantor State of Incorporation/Organization
- ----------------- -----------------------------------
Junior Food Stores of West Florida, Inc. Florida
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. Of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
<PAGE> 7
SCHEDULE II
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT OF 7.625% PRINCIPAL AMOUNT OF 8%
SENIOR NOTES DUE 2006 TO BE SENIOR NOTES DUE 2029 TO
PURCHASED BE PURCHASED
<S> <C> <C>
Goldman, Sachs & Co. $ 87,500,000 $ 87,500,000
Salomon Smith Barney Inc. 87,500,000 87,500,000
BNY Capital Markets, Inc. 15,000,000 15,000,000
First Union Capital Markets Corp. 15,000,000 15,000,000
Utendahl Capital Partners L.P. 15,000,000 15,000,000
Wachovia Securities, Inc. 15,000,000 15,000,000
The Williams Capital Group, LP. 15,000,000 15,000,000
----------- ----------
Total $250,000,000 $250,000,000
</TABLE>
<PAGE> 8
SCHEDULE III
TITLE OF DESIGNATED SECURITIES:
7.625% Senior Notes due 2006
8% Senior Notes due 2029
AGGREGATE PRINCIPAL AMOUNT:
$250,000,000 --7.625% Senior Notes due 2006
$250,000,000 --8% Senior Notes due 2029
------------
$500,000,000
PRICE TO PUBLIC:
99.944% of the principal amount of the 7.625% Senior Notes due 2006, plus
accrued interest from September 22, 1999.
98.949% of the principal amount of the 8% Senior Notes due 2029, plus
accrued interest from September 22, 1999.
PURCHASE PRICE BY UNDERWRITERS:
99.319% of the principal amount of the 7.625% Senior Notes due 2006, plus
accrued interest from September 22, 1999.
98.074% of the principal amount of the 8% Senior Notes due 2029, plus
accrued interest from September 22, 1999.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately available funds
INDENTURE:
Indenture dated June 25, 1999, between the Company, the Guarantors and
Firstar Bank, National Association, as Trustee, as supplemented by the
First Supplemental Indenture, dated June 25, 1999, the Second Supplemental
Indenture, dated June 25, 1999, the Third Supplemental Indenture, dated
June 25, 1999, the Fourth Supplemental Indenture, dated September 22,
1999, the Fifth Supplemental Indenture, dated September 22, 1999, and the
Sixth Supplemental Indenture, dated September 22, 1999.
MATURITY:
The 7.625% Senior Notes due 2006 will mature on September 15, 2006
The 8% Senior Notes due 2029 will mature on September 15, 2029
<PAGE> 9
INTEREST RATES:
The 7.625% Senior Notes due 2006 will bear interest from September 22,
1999 at 7.625%.
The 8% Senior Notes due 2029 will bear interest from September 22, 1999 at
8%.
INTEREST PAYMENT DATES:
Interest on the 7.625% Senior Notes due 2006 is payable semiannually on
September 15 and March 15 of each year commencing on March 15, 2000.
Interest on the 8% Senior Notes due 2029 is payable semiannually on
September 15 and March 15 of each year commencing on March 15, 2000.
REDEMPTION PROVISIONS:
As described in the Prospectus Supplement dated September 15, 1999.
SINKING FUND PROVISION:
No sinking fund provisions.
DEFEASANCE PROVISIONS:
As described in the Prospectus Supplement dated September 15, 1999.
GUARANTEES:
Guaranteed by the Guarantors set forth on the signature pages and Schedule
I to the Pricing Agreement.
TIME OF DELIVERY:
September 22, 1999
CLOSING LOCATION:
Offices of Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza,
New York, New York 10004
NAME AND ADDRESS OF REPRESENTATIVES:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
<PAGE> 1
Exhibit 1.1.2
Pricing Agreement
-----------------
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC.
As Representatives of the several
Underwriters named in Schedule II hereto,
September 15, 1999
Dear Sirs:
The Kroger Co., an Ohio corporation (the "Company"), and the
Guarantors on Schedule I and on the signature pages hereto propose, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
September 15, 1999 (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule II hereto (the "Underwriters") the Securities
(the "Designated Securities") and related Guarantees specified in Schedule III
hereto. 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 and related Guarantees. 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 and
related Guarantees 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 III hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities and
related Guarantees, 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, and under other terms and
conditions set forth in Schedule III hereto, the principal amount of Designated
Securities set forth opposite the name of such Underwriter in Schedule II
hereto.
<PAGE> 2
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, the Company and each of the Guarantors. 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,
Attest: THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Designated Securities
By:
- ----------------------------- ----------------------------------------
Assistant Secretary/Secretary Name: Lawrence M. Turner
Title: Vice President and Treasurer
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Designated Securities
By:
- ----------------------------- ----------------------------------------
Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the Designated
Securities
By: ________________________________
Name: Keith C. Larson
Title: Vice President and Secretary
<PAGE> 3
ROCKET NEWCO, INC.,
as Guarantor of the Designated Securities
HENPIL, INC.,
as Guarantor of the Designated Securities
WYDIV, INC.,
as Guarantor of the Designated Securities
By: ________________________________
Name: Steven McMillan
Title: Vice President and Secretary
<PAGE> 4
GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC.
By:
-------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE> 5
SCHEDULE I
SCHEDULE I
Guarantors
Name of Guarantor State of Organization
- ----------------- ---------------------
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
<PAGE> 6
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
<PAGE> 7
SCHEDULE II
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES TO BE
UNDERWRITER PURCHASED
Goldman, Sachs & Co. $137,500,000
Salomon Smith Barney Inc $137,500,000
------------
Total $275,000,000
<PAGE> 8
SCHEDULE III
TITLE OF DESIGNATED SECURITIES:
Puttable Reset Securities PURSSM due October 1, 2010
AGGREGATE PRINCIPAL AMOUNT:
$275,000,000
PRICE TO PUBLIC:
100% of the principal amount of the Designated Securities, plus accrued
interest from September 22, 1999
PURCHASE PRICE BY UNDERWRITERS:
99.750% of the principal amount of the Designated Securities, plus
accrued interest from September 22, 1999
In addition, in consideration of the Call Option they will have with
respect to the Designated Securities, Goldman, Sachs & Co. will pay the
Company an amount equal to 2.22% of the principal amount of the
Designated Securities.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately available funds
INDENTURE:
Indenture dated as of June 25, 1999, between the Company, the
Guarantors and Firstar Bank, National Association, as Trustee, as
amended by the First Supplemental Indenture, dated June 25, 1999, the
Second Supplemental Indenture, dated June 25, 1999, the Third
Supplemental Indenture, dated June 25, 1999, the Fourth Supplemental
Indenture, dated September 22, 1999, the Fifth Supplemental Indenture,
dated September 22, 1999, and the Sixth Supplemental Indenture, dated
September 22, 1999.
MATURITY:
October 1, 2010
<PAGE> 9
INTEREST RATE:
A floating rate as described under "Interest Rate" in the Prospectus
Supplement dated September 15, 1999 from and including September 22,
1999 to but excluding October 1, 2000 and upon such date (or the next
business day) reset so as to equal a fixed rate as described under
"Reset of Interest Rate," in the Prospectus Supplement dated September
15, 1999
INTEREST PAYMENT DATES:
Through October 1, 2000: December 22, 1999; March 22, 2000; June 22,
2000; October 1, 2000 commencing January 1, 2000.
After October 1, 2000: April 1 and October 1
REDEMPTION PROVISIONS:
As described in the Prospectus Supplement dated September 15, 1999.
SINKING FUND PROVISIONS:
No sinking fund provisions
CALL OPTION:
As described in the Prospectus Supplement under the caption
"Description of PURS--Call Option".
PUT OPTION:
As described in the Prospectus Supplement under the caption
"Description of PURS--Put Option".
DEFEASANCE PROVISIONS:
As described in the Prospectus Supplement dated September 15, 1999.
GUARANTEES:
Guaranteed by the Guarantors set forth on the signature pages and
Schedule I to the Pricing Agreement.
<PAGE> 10
TIME OF DELIVERY:
September 22 , 1999
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
<PAGE> 1
Exhibit 4.3.1
FOURTH SUPPLEMENTAL INDENTURE, dated as of September 22, 1999,
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, the Guarantors listed on the
signature pages and Schedule I hereto (each, a "Guarantor") and Firstar 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 June 25, 1999 (the "Indenture"), between the
Company, the Guarantors and Firstar Bank, National Association, as Trustee, as
supplemented by the First Supplemental Indenture dated June 25, 1999, the Second
Supplemental Indenture dated June 25, 1999 and the Third Supplemental Indenture
dated June 25, 1999, 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.
Each of the Guarantors has duly authorized the issuance of a
guarantee of the Securities, as set forth herein, and to provide therefor, each
of the Guarantors has duly authorized the execution and delivery of this Fourth
Supplemental Indenture.
The Company and the Guarantors, pursuant to the foregoing
authority, propose in and by this Fourth 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 Fourth Supplemental
Indenture a valid agreement of the Company and the Guarantors, and a valid
amendment of and supplement to the Indenture, have been done.
NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:
<PAGE> 2
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:
ARTICLE ONE
DEFINITIONS
Section 101. DEFINITIONS.
(a) For all purposes of this Fourth 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 Fourth Supplemental Indenture
and, where so specified, to the Articles and Sections of the
Indenture as supplemented by this Fourth Supplemental
Indenture; and
(3) The terms "hereof", "herein", "hereby", "hereto",
"hereunder" and "herewith" refer to this Fourth Supplemental
Indenture.
(b) For all purposes of the Indenture and this Fourth
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 Fourth 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
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<PAGE> 3
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
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
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<PAGE> 4
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.
"Credit Facility" means any credit agreement, loan
agreement or credit facility, whether syndicated or not,
involving the extension of credit by banks or other credit
institutions, entered into by the Company or Fred Meyer, Inc.
and outstanding on the date of this Fourth Supplemental
Indenture, and any refinancing or other restructuring of such
agreement or facility.
"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 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.
-4-
<PAGE> 5
"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.
"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.
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<PAGE> 6
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.
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depository. This Security is not exchangeable for Securities
registered in the name of a Person other than the Depositary or its nominee
except in the limited circumstances described in the Indenture, and no transfer
of this Security (other than a transfer of this Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
the limited circumstances described in the Indenture.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to The Kroger Co. or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE KROGER CO.
7.625% Senior Notes due 2006
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 September 15, 2006, and to pay interest thereon from September 22,
1999, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on September 15 and March 15 in each
year, commencing March 15, 2000 at the rate of interest of 7.625% 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
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<PAGE> 7
Regular Record Date for such interest, which shall be the September 1 or March 1
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
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:
............................................
This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.
FIRSTAR BANK, National Association,
as Trustee
By ___________________________________
Authorized Officer
Section 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities
of the Company (including the related Guarantees, the "Securities") issued and
to be issued under an Indenture dated as of June 25, 1999, as supplemented by
the First Supplemental Indenture dated as of June 25, 1999, the Second
Supplemental Indenture dated as of June 25, 1999, the Third Supplemental
Indenture dated as of June 25, 1999, and the Fourth Supplemental Indenture dated
as of September 22, 1999 (as so supplemented, herein called the "Indenture"),
each between the Company and the Guarantors named therein, and Firstar 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 Guarantors named therein, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
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<PAGE> 9
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $250,000,000.
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 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 10 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
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<PAGE> 10
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities a direction inconsistent with such request
and shall have failed to institute such proceeding within 60 days; PROVIDED,
HOWEVER, that such limitations do not apply to a suit instituted by the Holder
hereof for the enforcement of payment of the principal of (and premium, if any)
or any interest on this Security on or after the respective due dates expressed
herein.
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
Section 204. FORM OF GUARANTEE.
The form of Guarantee shall be set forth on the Securities
substantially as follows:
GUARANTEE
For value received, each of the undersigned hereby absolutely, fully
and unconditionally and irrevocably guarantees, jointly and severally with each
other Guarantor, to the holder of this Security the payment of principal of,
premium, if any, and interest on this Security upon which this Guarantee is
endorsed in the amounts and at the time when due and payable whether by
declaration thereof, or otherwise, and interest on the overdue principal and
interest, if any, of this Security, if lawful, and the payment or performance of
all other obligations of the Company under the Indenture or the Securities, to
the holder of this Security and the Trustee, all in accordance with and subject
to the terms and limitations of this Security and Article Five of the Fourth
Supplemental Indenture to the Indenture. This Guarantee will not become
effective until the Trustee duly executes the certificate of authentication on
this Security. This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflict of law
principles thereof.
Dated:
Attest: Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Securities
By:
- ----------------------------- ----------------------------------------
Assistant Secretary/Secretary Name:
Title:
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Securities
By:
- ----------------------------- ----------------------------------------
Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the Securities
By: ---------------------------------------
Name: Keith C. Larson
Title: Vice President and Secretary
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<PAGE> 12
ROCKET NEWCO, INC.,
as Guarantor of the Securities
HENPIL, INC.,
as Guarantor of the Securities
WYDIV, INC.,
as Guarantor of the Securities
By: ---------------------------------------
Name: Steven McMillan
Title: Vice President and Secretary
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<PAGE> 13
SCHEDULE I
Guarantors
Name of Guarantor State of Organization
- ----------------- ---------------------
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
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<PAGE> 14
Name of Guarantor State of Organization
- ----------------- ---------------------
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
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<PAGE> 15
ARTICLE THREE
THE SERIES OF SECURITIES
Section 301. TITLE AND TERMS.
There shall be a series of Securities designated as the
"7.625% Senior Notes due 2006" of the Company. Their Stated Maturity shall be
September 15, 2006, and they shall bear interest at the rate of 7.625% per
annum.
Interest on the Securities of this series will be payable
semi-annually on September 15 and March 15 of each year, commencing March 15,
2000, 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 September 1 or March 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 Fourth Supplemental
Indenture is limited to $250,000,000, 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 $250,000,000 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 interest may be
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<PAGE> 16
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 Fourth 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 Fourth 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 Fourth Supplemental Indenture, including the due and punctual
payment of the principal of and interest on all the Securities of the series
created by the Fourth 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 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
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<PAGE> 17
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) he 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 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 Fourth Supplemental Indenture):
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"Section 1009. LIMITATIONS ON LIENS.
After the date hereof and so long as any Securities of
the series created by the Fourth 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 Fourth 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 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
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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
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
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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 Fourth 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:
(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 Fourth Supplemental Indenture pursuant
to Section 1009; or
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(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 Fourth 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 Fourth 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).
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 Fourth 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
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\
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 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
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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 (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.
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(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
ruling, or (y) since the date of this Fourth 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
trustee--collectively, 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.
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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.
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 10
basis points plus, in each case, accrued interest thereon to
the date of redemption."
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<PAGE> 26
ARTICLE FIVE
GUARANTEE
Section 501. GUARANTEE.
Each Guarantor hereby jointly and severally fully and
unconditionally guarantees (each a "Guarantee") to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of the Indenture or
the Securities or the obligations of the Company or any other Guarantor to the
Holders or the Trustee hereunder or thereunder, that (a) the principal of,
premium, if any, and interest on the Securities will be duly and punctually paid
in full when due, whether at maturity, upon redemption, by acceleration or
otherwise, and interest on the overdue principal and (to the extent permitted by
law) interest, if any, on the Securities and all other obligations of the
Company or the Guarantor to the Holders of or the Trustee under the Indenture or
the Securities hereunder (including fees, expenses or others) (collectively, the
"Obligations") will be promptly paid in full or performed, all in accordance
with the terms of the Indenture and the Securities; and (b) in case of any
extension of time of payment or renewal of any Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
If the Company shall fail to pay when due, or to perform, any Obligations, for
whatever reason, each Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under the
Indenture or the Securities shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Securities to accelerate the
Obligations of the Guarantor hereunder in the same manner and to the same extent
as the Obligations of the Company.
Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or the Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions of the Indenture or the Securities, any release of any
other Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Guarantee is affixed to any particular
Security, or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor.
Each Guarantor further agrees that, as between it, on the one
hand, and the Holders of Securities and the Trustee, on the other hand, (a) the
maturity of the Obligations may be accelerated as provided in Article Five of
the Indenture for the purposes of the Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations, and (b) in the event of any acceleration of such Obligations as
provided in Article Five of the Indenture, such Obligations (whether or not due
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and payable) shall forthwith become due and payable by the Guarantor for the
purposes of its Guarantee.
Section 502. WAIVER OF DEMAND.
To the fullest extent permitted by applicable law, each of the
Guarantors waives presentment to, demand of payment from and protest of any of
the Obligations, and also waives notice of acceptance of its Guarantee and
notice of protest for nonpayment.
Section 503. GUARANTEE OF PAYMENT.
Each of the Guarantors further agrees that its Guarantee
constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Trustee or any Holder of the
Securities to the security, if any, held for payment of the Obligations.
Section 504. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE.
Subject to Section 510 of this Fourth Supplemental Indenture,
the obligations of each of the Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or for any reason (other than the indefeasible
payment in full in cash of the Obligations), including any claim of waiver,
release, surrender, alteration or compromise of any of the Obligations, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each of the Guarantors hereunder
shall not be discharged or impaired or otherwise affected by the failure of the
Trustee or any Holder of the Securities to assert any claim or demand or to
enforce any remedy under the Indenture or the Securities, any other guarantee or
any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or that
would otherwise operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations).
Section 505. DEFENSES OF COMPANY WAIVED.
To the extent permitted by applicable law, each of the
Guarantors waives any defense based on or arising out of any defense of the
Company or any other Guarantor or the unenforceability of the Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
the Company, other than final and indefeasible payment in full in cash of the
Obligations. Each of the Guarantors waives any defense arising out of any such
election even though such election operates to impair or to extinguish any right
of reimbursement or subrogation or other right or remedy of each of the
Guarantors against the Company or any security.
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Section 506. CONTINUED EFFECTIVENESS.
Subject to Section 510 of this Fourth Supplemental Indenture,
each of the Guarantors further agrees that its Guarantee hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation is
rescinded or must otherwise be restored by the Trustee or any Holder of the
Securities upon the bankruptcy or reorganization of the Company.
Section 507. SUBROGATION.
In furtherance of the foregoing and not in limitation of any
other right of each of the Guarantors by virtue hereof, upon the failure of the
Company to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each of the
Guarantors hereby promises to and will, upon receipt of written demand by the
Trustee or any Holder of the Securities, forthwith pay, or cause to be paid, to
the Holders in cash the amount of such unpaid Obligations, and thereupon the
Holders shall, assign (except to the extent that such assignment would render a
Guarantor a "creditor" of the Company within the meaning of Section 547 of Title
11 of the United States Code as now in effect or hereafter amended or any
comparable provision of any successor statute) the amount of the Obligations
owed to it and paid by such Guarantor pursuant to this Guarantee to such
Guarantor, such assignment to be PRO RATA to the extent the Obligations in
question were discharged by such Guarantor, or make such other disposition
thereof as such Guarantor shall direct (all without recourse to the Holders, and
without any representation or warranty by the Holders). If (a) a Guarantor shall
make payment to the Holders of all or any part of the Obligations and (b) all
the Obligations and all other amounts payable under this Fourth Supplemental
Indenture shall be indefeasibly paid in full, the Trustee will, at such
Guarantor's request, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Obligations resulting from such payment by such Guarantor.
Section 508. INFORMATION.
Each of the Guarantors assumes all responsibility for being
and keeping itself informed of the Company's financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that each of the
Guarantors assumes and incurs hereunder, and agrees that the Trustee and the
Holders of the Securities will have no duty to advise the Guarantors of
information known to it or any of them regarding such circumstances or risks.
Section 509. SUBORDINATION.
Upon payment by any Guarantor of any sums to the Holders, as
provided above, all rights of such Guarantor against the Company, arising as a
result thereof by way of right of subrogation or otherwise, shall in all
respects be subordinated and junior in right of payment to
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<PAGE> 29
the prior indefeasible payment in full in cash of all the Obligations to the
Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Guarantor
may have pursuant to this Fourth Supplemental Indenture is subject to Section
507 hereof.
Section 510. TERMINATION.
A Guarantor shall, upon the occurrence of either of the
following events, be automatically and unconditionally released and discharged
from all obligations under this Fourth Supplemental Indenture and its Guarantee
without any action required on the part of the Trustee or any Holder if such
release and discharge will not result in any downgrade in the rating given to
the Securities by Moody's Investors Service and Standard and Poor's Rating
Services:
(a) upon any sale, exchange, transfer or other disposition (by
merger or otherwise) of all of the Capital Stock of a Guarantor or all, or
substantially all, of the assets of such Guarantor, which sale or other
disposition is otherwise in compliance with the terms of the Indenture;
provided, however, that such Guarantor shall not be released and discharged from
its obligations under this Fourth Supplemental Indenture and its Guarantee if,
upon consummation of such sale, exchange, transfer or other disposition (by
merger or otherwise), such Guarantor remains or becomes a Guarantor under any
Credit Facility; or
(b) at the request of the Company, at any time that none of
the Credit Facilities are guaranteed by any Subsidiary of the Company.
The Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request of the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section. Any Guarantor not so released
will remain liable for the full amount of the principal of, premium, if any, and
interest on the Notes provided in this Fourth Supplemental Indenture and its
Guarantee.
Section 511. GUARANTEES OF OTHER INDEBTEDNESS.
As long as the Securities are guaranteed by the Guarantors,
the Company will cause each of its Subsidiaries that becomes a Guarantor in
respect of (i) any Indebtedness of the Company which is outstanding on the date
hereof and (ii) any Indebtedness incurred by the Company after the date hereof
(other than in respect of asset-backed securities), to include in any guarantee
given by any such Guarantor, provisions similar to those set forth in Section
510 hereof.
Section 512. ADDITIONAL GUARANTORS.
The Company will cause each of its Subsidiaries that becomes a
Guarantor in respect of any Indebtedness of the Company following the date
hereof to execute and deliver a
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<PAGE> 30
supplemental indenture pursuant to which it will become a Guarantor under this
Fourth Supplemental Indenture, if it has not already done so or unless the
Guarantor is prohibited from doing so by applicable law or a provision of a
contract to which it is a party or by which it is bound.
Section 513. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor, and by its acceptance hereof each Holder,
hereby confirms that it is the intention of all such parties that the Guarantee
by such Guarantor not constitute a fraudulent transfer or conveyance for
purposes of Title 11 of the United States Code, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal of
state law. To effectuate the foregoing intention, the Holders and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under this
Fourth Supplemental Indenture and its Guarantee shall be limited to the maximum
amount which, after giving effect to all other contingent and fixed liabilities
of such Guarantor, and after giving effect to any collections from or payments
made by or on behalf of, any other Guarantor in respect of the obligations of
such Guarantor under its Guarantee or pursuant to its contribution obligations
under this Fourth Supplemental Indenture, will result in the obligations of such
Guarantor under its Guarantee not constituting such fraudulent transfer or
conveyance.
Section 514. CONTRIBUTION FROM OTHER GUARANTORS.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the net assets of each Guarantor, determined in accordance
with generally accepted accounting principles in effect in the United States of
America as of the date hereof.
Section 515. NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY.
Neither the Trustee, any Holder nor any other Person shall
have any obligation to enforce or exhaust any rights or remedies or take any
other steps under any security for the Obligations or against the Company or any
other Person or any property of the Company or any other Person before the
Trustee, such Holder or such other Person is entitled to demand payment and
performance by any or all Guarantors of their liabilities and obligations under
their Guarantee.
Section 516. DEALING WITH THE COMPANY AND OTHERS.
The Holders, without releasing, discharging, limiting or
otherwise affecting in whole or in part the obligations and liabilities of any
Guarantor hereunder and without the consent of or notice to any Guarantor, may:
(a) grant time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the Company
or any other Person;
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<PAGE> 31
(b) take or abstain from taking security or collateral from
the Company or from perfecting security or collateral from the Company;
(c) release, discharge, compromise, realize, enforce or
otherwise deal with or do any act or thing in respect of (with or without
consideration) any and all collateral, mortgages or other security given by the
Company or any third party with respect to the Obligations;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or
from any security to such part of the Obligations as the Holders may see fit or
change any such application in whole or in part from time to time as the Holders
may see fit; and
(f) otherwise deal with, or waive or modify their right to
deal with, the Company and all other Persons and any security as the Holders or
the Trustee may see fit.
Section 517. EXECUTION AND DELIVERY OF THE GUARANTEE.
(a) To further evidence the Guarantee set forth in this
Article Five, each Guarantor hereby agrees that a notation of such Guarantee
shall be endorsed on each Security authenticated and delivered by the Trustee
and executed by either manual or facsimile signature of an officer of each
Guarantor. The corporate seal of a Guarantor may be reproduced on the executed
Guarantee and the execution thereof may be attested to by any appropriate
officer of the Guarantor, but neither such reproduction nor such attestation is
or shall be required.
(b) Each of the Guarantors hereby agrees that its Guarantee
set forth in this Article Five shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Guarantee.
(c) If an officer of a Guarantor whose signature is on this
Fourth Supplemental Indenture or a Guarantee no longer holds that office at the
time the Trustee authenticates such Guarantee or at any time thereafter, such
Guarantor's Guarantee of such Security shall be valid nevertheless.
(d) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Fourth Supplemental Indenture on behalf of each Guarantor.
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<PAGE> 32
ARTICLE SIX
MISCELLANEOUS
Section 601. MISCELLANEOUS.
(a) The Trustee accepts the trusts created by the Indenture,
as supplemented by this Fourth Supplemental Indenture, and agrees to perform the
same upon the terms and conditions of the Indenture, as supplemented by this
Fourth Supplemental Indenture.
(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
Fourth 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 Fourth Supplemental Indenture all of its
respective representations, covenants and agreements set forth in the Indenture.
(e) All covenants and agreements in this Fourth Supplemental
Indenture by the Company or the Trustee and each Guarantor shall bind its
respective successors and assigns, whether so expressed or not.
(f) In case any provisions in this Fourth 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 Fourth 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 Fourth
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 Fourth
Supplemental Indenture as so modified or excluded, as the case may be.
(i) This Fourth Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.
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<PAGE> 33
(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 Fourth Supplemental Indenture shall
be deemed to be incorporated in, and made a part of, the Indenture; and the
Indenture, as supplemented by this Fourth Supplemental Indenture, shall be read,
taken and construed as one and the same instrument.
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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<PAGE> 34
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.
Attest: THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Securities
By:
- ----------------------------- ----------------------------------------
Assistant Secretary/Secretary Name: Lawrence M. Turner
Title: Vice President and Treasurer
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Securities
By:
- ----------------------------- ----------------------------------------
Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the Securities
By:
----------------------------------------
Name: Keith C. Larson
Title: Vice President and Secretary
ROCKET NEWCO, INC.,
as Guarantor of the Securities
HENPIL, INC.,
as Guarantor of the Securities
WYDIV, INC.,
as Guarantor of the Securities
By:
--------------------------------------
Name: Steven McMillan
Title: Vice President and Secretary
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<PAGE> 35
SCHEDULE I
Guarantors
Name of Guarantor State of Organization
- ----------------- ---------------------
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
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<PAGE> 36
Name of Guarantor State of Organization
- ----------------- ---------------------
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
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<PAGE> 37
STATE OF _________ )
) ss.:
COUNTY OF _______ )
On the day of September, 1999, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is __________________ of The Kroger Co., and ____________________ of
each of the Guarantors Listed on Schedule I hereto, corporations described in
and which executed the foregoing instrument; that he knows the seals of said
corporations; that the seals affixed to said instrument are such corporate
seals; that they were so affixed by authority of the Board of Directors of such
corporations, and that he signed his name thereto by like authority.
STATE OF _________ )
) ss.:
COUNTY OF _______ )
On the day of September, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ________________ of Rocket Newco, Inc., Henpil, Inc. and Wydiv,
Inc., corporations described in and which executed the foregoing instrument;
that he knows the seals of said corporations; that the seals affixed to said
instrument are such corporate seals; that they were so affixed by authority of
the Board of Directors of said corporations, and that he signed his name
thereto by like authority.
--------------------------
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<PAGE> 38
STATE OF _________ )
) ss.:
COUNTY OF _______ )
On the day of September, 1999, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is _________________ of Vine Court Assurance Incorporated, 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 Boards of
Directors of said corporation, and that he signed his name thereto by like
authority.
--------------------------
STATE OF _________ )
) ss.:
COUNTY OF _______ )
On the day of September, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ____________ of Richie's, Inc., 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 Boards of Directors of said
corporation, and that he signed his name thereto by like authority.
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<PAGE> 39
STATE OF __________ )
) ss.:
COUNTY OF ________ )
On the day of September, 1999, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of Firstar 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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<PAGE> 1
Exhibit 4.3.2
FIFTH SUPPLEMENTAL INDENTURE, dated as of September 22, 1999,
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, the Guarantors listed on the
signature pages and Schedule I hereto (each, a "Guarantor") and Firstar 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 June 25, 1999 (the "Indenture"), between the Company,
the Guarantors and Firstar Bank, National Association, as Trustee, as
supplemented by the First Supplemental Indenture dated June 25, 1999, the Second
Supplemental Indenture dated June 25, 1999, the Third Supplemental Indenture
dated June 25, 1999 and the Fourth Supplemental Indenture dated September 22,
1999 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.
Each of the Guarantors has duly authorized the issuance of a
guarantee of the Securities, as set forth herein, and to provide therefor, each
of the Guarantors has duly authorized the execution and delivery of this Fifth
Supplemental Indenture.
The Company and the Guarantors, pursuant to the foregoing
authority, propose in and by this Fifth 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 Fifth Supplemental Indenture a
valid agreement of the Company and the Guarantors, and a valid amendment of and
supplement to the Indenture, have been done.
<PAGE> 2
NOW, THEREFORE, THIS FIFTH 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:
ARTICLE ONE
DEFINITIONS
Section 101. DEFINITIONS.
(a) For all purposes of this Fifth 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 Fifth Supplemental Indenture
and, where so specified, to the Articles and Sections of the
Indenture as supplemented by this Fifth Supplemental
Indenture; and
(3) The terms "hereof", "herein", "hereby", "hereto",
"hereunder" and "herewith" refer to this Fifth Supplemental
Indenture.
(b) For all purposes of the Indenture and this Fifth
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 Fifth Supplemental Indenture) of the
obligations of the Company or any Restricted Subsidiary for
net rental payments during the remaining
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<PAGE> 3
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
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
-3-
<PAGE> 4
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.
"Credit Facility" means any credit agreement, loan
agreement or credit facility, whether syndicated or not,
involving the extension of credit by banks or other credit
institutions, entered into by the Company or Fred Meyer, Inc.
and outstanding on the date of this Fifth Supplemental
Indenture, and any refinancing or other restructuring of such
agreement or facility.
"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 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
-4-
<PAGE> 5
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.
"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.
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<PAGE> 6
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.
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depository. This Security is not exchangeable for Securities
registered in the name of a Person other than the Depositary or its nominee
except in the limited circumstances described in the Indenture, and no transfer
of this Security (other than a transfer of this Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
the limited circumstances described in the Indenture.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to The Kroger Co. or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE KROGER CO.
8% Senior Notes due 2029
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 September 15, 2029 and to pay
interest thereon from September 22, 1999, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on September 15 and March 15 in each year, commencing March 15, 2000 at the rate
of interest of 8% 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
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<PAGE> 7
Date for such interest, which shall be the September 1 or March 1 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
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:
- ----------------------------
This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.
FIRSTAR BANK, National Association,
as Trustee
By
---------------------------------
Authorized Officer
Section 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities of
the Company (including the related Guarantees, the "Securities") issued and to
be issued under an Indenture dated as of June 25, 1999, as supplemented by the
First Supplemental Indenture dated as of June 25, 1999, the Second Supplemental
Indenture dated as of June 25, 1999, the Third Supplemental Indenture dated as
of June 25, 1999, the Fourth Supplemental Indenture dated as of September 22,
1999, and the Fifth Supplemental Indenture dated as of September 22, 1999 (as so
supplemented, herein called the "Indenture"), each between the Company and the
Guarantors named therein, and Firstar 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
-8-
<PAGE> 9
Guarantors named therein, 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 $250,000,000.
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 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 15 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
-9-
<PAGE> 10
of the Outstanding Securities shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
principal amount of the Outstanding Securities a direction inconsistent with
such request and shall have failed to institute such proceeding within 60 days;
PROVIDED, HOWEVER, that such limitations do not apply to a suit instituted by
the Holder hereof for the enforcement of payment of the principal of (and
premium, if any) or any interest on this Security on or after the respective due
dates expressed herein.
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
Section 204. FORM OF GUARANTEE.
The form of Guarantee shall be set forth on the Securities
substantially as follows:
GUARANTEE
For value received, each of the undersigned hereby absolutely,
fully and unconditionally and irrevocably guarantees, jointly and severally with
each other Guarantor, to the holder of this Security the payment of principal
of, premium, if any, and interest on this Security upon which this Guarantee is
endorsed in the amounts and at the time when due and payable whether by
declaration thereof, or otherwise, and interest on the overdue principal and
interest, if any, of this Security, if lawful, and the payment or performance of
all other obligations of the Company under the Indenture or the Securities, to
the holder of this Security and the Trustee, all in accordance with and subject
to the terms and limitations of this Security and Article Five of the Fifth
Supplemental Indenture to the Indenture. This Guarantee will not become
effective until the Trustee duly executes the certificate of authentication on
this Security. This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflict of law
principles thereof.
Dated:
Attest: Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Securities
- ----------------------------- By:
Assistant Secretary/Secretary -------------------------------------------
Name:
Title:
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Securities
- ----------------------------- By:
Assistant Treasurer -------------------------------------------
Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the Securities
By:
-------------------------------------------
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<PAGE> 12
Name: Keith C. Larson
Title: Vice President and Secretary
ROCKET NEWCO, INC.,
as Guarantor of the Securities
HENPIL, INC.,
as Guarantor of the Securities
WYDIV, INC.,
as Guarantor of the Securities
By:
------------------------------------------
Name: Steven McMillan
Title: Vice President and Secretary
-12-
<PAGE> 13
SCHEDULE I
Guarantors
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
</TABLE>
-13-
<PAGE> 14
<TABLE>
<CAPTION>
Game of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited
partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
</TABLE>
-14-
<PAGE> 15
ARTICLE THREE
THE SERIES OF SECURITIES
Section 301. TITLE AND TERMS.
There shall be a series of Securities designated as the "8%
Senior Notes due 2029" of the Company. Their Stated Maturity shall be September
15, 2029, and they shall bear interest at the rate of 8% per annum.
Interest on the Securities of this series will be payable
semi-annually on September 15 and March 15 of each year, commencing March 15,
2000, 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 September 1 or March 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 Fifth Supplemental Indenture is
limited to $250,000,000, 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 $250,000,000 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 interest may be
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<PAGE> 16
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 Fifth 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 Fifth 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 Fifth Supplemental Indenture, including the due and punctual
payment of the principal of and interest on all the Securities of the series
created by the Fifth 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 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
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<PAGE> 17
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 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 Fifth Supplemental Indenture):
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<PAGE> 18
"Section 1009. LIMITATIONS ON LIENS.
After the date hereof and so long as any Securities of the series
created by the Fifth 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 Fifth 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 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
-18-
<PAGE> 19
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
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
-19-
<PAGE> 20
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 Fifth 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:
(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 Fifth Supplemental Indenture pursuant to
Section 1009; or
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<PAGE> 21
(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 Fifth 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 Fifth 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).
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 Fifth 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
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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 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
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<PAGE> 23
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
(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.
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(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 ruling, or (y) since the date of this Fifth
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
trustee--collectively, 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.
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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.
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 15 basis points plus, in each
case, accrued interest thereon to the date of redemption."
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ARTICLE FIVE
GUARANTEE
Section 501. GUARANTEE.
Each Guarantor hereby jointly and severally fully and
unconditionally guarantees (each a "Guarantee") to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of the Indenture or
the Securities or the obligations of the Company or any other Guarantor to the
Holders or the Trustee hereunder or thereunder, that (a) the principal of,
premium, if any, and interest on the Securities will be duly and punctually paid
in full when due, whether at maturity, upon redemption, by acceleration or
otherwise, and interest on the overdue principal and (to the extent permitted by
law) interest, if any, on the Securities and all other obligations of the
Company or the Guarantor to the Holders of or the Trustee under the Indenture or
the Securities hereunder (including fees, expenses or others) (collectively, the
"Obligations") will be promptly paid in full or performed, all in accordance
with the terms of the Indenture and the Securities; and (b) in case of any
extension of time of payment or renewal of any Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
If the Company shall fail to pay when due, or to perform, any Obligations, for
whatever reason, each Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under the
Indenture or the Securities shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Securities to accelerate the
Obligations of the Guarantor hereunder in the same manner and to the same extent
as the Obligations of the Company.
Each Guarantor hereby agrees that its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Securities or the Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Securities with respect to any
provisions of the Indenture or the Securities, any release of any other
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same, whether or not a Guarantee is affixed to any particular
Security, or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor.
Each Guarantor further agrees that, as between it, on the one
hand, and the Holders of Securities and the Trustee, on the other hand, (a) the
maturity of the Obligations may be accelerated as provided in Article Five of
the Indenture for the purposes of the Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations, and (b) in the event of any acceleration of such Obligations as
provided in Article Five of the Indenture, such Obligations (whether or not due
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and payable) shall forthwith become due and payable by the Guarantor for the
purposes of its Guarantee.
Section 502. WAIVER OF DEMAND.
To the fullest extent permitted by applicable law, each of the
Guarantors waives presentment to, demand of payment from and protest of any of
the Obligations, and also waives notice of acceptance of its Guarantee and
notice of protest for nonpayment.
Section 503. GUARANTEE OF PAYMENT.
Each of the Guarantors further agrees that its Guarantee
constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Trustee or any Holder of the
Securities to the security, if any, held for payment of the Obligations.
Section 504. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE.
Subject to Section 510 of this Fifth Supplemental Indenture, the
obligations of each of the Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or for any reason (other than the indefeasible
payment in full in cash of the Obligations), including any claim of waiver,
release, surrender, alteration or compromise of any of the Obligations, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each of the Guarantors hereunder
shall not be discharged or impaired or otherwise affected by the failure of the
Trustee or any Holder of the Securities to assert any claim or demand or to
enforce any remedy under the Indenture or the Securities, any other guarantee or
any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or that
would otherwise operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations).
Section 505. DEFENSES OF COMPANY WAIVED.
To the extent permitted by applicable law, each of the Guarantors
waives any defense based on or arising out of any defense of the Company or any
other Guarantor or the unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Company,
other than final and indefeasible payment in full in cash of the Obligations.
Each of the Guarantors waives any defense arising out of any such election even
though such election operates to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of each of the Guarantors
against the Company or any security.
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Section 506. CONTINUED EFFECTIVENESS.
Subject to Section 510 of this Fifth Supplemental Indenture, each
of the Guarantors further agrees that its Guarantee hereunder shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Obligation is rescinded or
must otherwise be restored by the Trustee or any Holder of the Securities upon
the bankruptcy or reorganization of the Company.
Section 507. SUBROGATION.
In furtherance of the foregoing and not in limitation of any
other right of each of the Guarantors by virtue hereof, upon the failure of the
Company to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each of the
Guarantors hereby promises to and will, upon receipt of written demand by the
Trustee or any Holder of the Securities, forthwith pay, or cause to be paid, to
the Holders in cash the amount of such unpaid Obligations, and thereupon the
Holders shall, assign (except to the extent that such assignment would render a
Guarantor a "creditor" of the Company within the meaning of Section 547 of Title
11 of the United States Code as now in effect or hereafter amended or any
comparable provision of any successor statute) the amount of the Obligations
owed to it and paid by such Guarantor pursuant to this Guarantee to such
Guarantor, such assignment to be PRO RATA to the extent the Obligations in
question were discharged by such Guarantor, or make such other disposition
thereof as such Guarantor shall direct (all without recourse to the Holders, and
without any representation or warranty by the Holders). If (a) a Guarantor shall
make payment to the Holders of all or any part of the Obligations and (b) all
the Obligations and all other amounts payable under this Fifth Supplemental
Indenture shall be indefeasibly paid in full, the Trustee will, at such
Guarantor's request, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Obligations resulting from such payment by such Guarantor.
Section 508. INFORMATION.
Each of the Guarantors assumes all responsibility for being and
keeping itself informed of the Company's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
and the nature, scope and extent of the risks that each of the Guarantors
assumes and incurs hereunder, and agrees that the Trustee and the Holders of the
Securities will have no duty to advise the Guarantors of information known to it
or any of them regarding such circumstances or risks.
Section 509. SUBORDINATION.
Upon payment by any Guarantor of any sums to the Holders, as
provided above, all rights of such Guarantor against the Company, arising as a
result thereof by way of right of subrogation or otherwise, shall in all
respects be subordinated and junior in right of payment to
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the prior indefeasible payment in full in cash of all the Obligations to the
Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Guarantor
may have pursuant to this Fifth Supplemental Indenture is subject to Section 507
hereof.
Section 510. TERMINATION.
A Guarantor shall, upon the occurrence of either of the following
events, be automatically and unconditionally released and discharged from all
obligations under this Fifth Supplemental Indenture and its Guarantee without
any action required on the part of the Trustee or any Holder if such release and
discharge will not result in any downgrade in the rating given to the Securities
by Moody's Investors Service and Standard and Poor's Rating Services:
(a) upon any sale, exchange, transfer or other disposition (by
merger or otherwise) of all of the Capital Stock of a Guarantor or all, or
substantially all, of the assets of such Guarantor, which sale or other
disposition is otherwise in compliance with the terms of the Indenture;
provided, however, that such Guarantor shall not be released and discharged from
its obligations under this Fifth Supplemental Indenture and its Guarantee if,
upon consummation of such sale, exchange, transfer or other disposition (by
merger or otherwise), such Guarantor remains or becomes a Guarantor under any
Credit Facility; or
(b) at the request of the Company, at any time that none of the
Credit Facilities are guaranteed by any Subsidiary of the Company.
The Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request of the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section. Any Guarantor not so released
will remain liable for the full amount of the principal of, premium, if any, and
interest on the Notes provided in this Fifth Supplemental Indenture and its
Guarantee.
Section 511. GUARANTEES OF OTHER INDEBTEDNESS.
As long as the Securities are guaranteed by the Guarantors, the
Company will cause each of its Subsidiaries that becomes a Guarantor in respect
of (i) any Indebtedness of the Company which is outstanding on the date hereof
and (ii) any Indebtedness incurred by the Company after the date hereof (other
than in respect of asset-backed securities), to include in any guarantee given
by any such Guarantor, provisions similar to those set forth in Section 510
hereof.
Section 512. ADDITIONAL GUARANTORS.
The Company will cause each of its Subsidiaries that becomes a
Guarantor in respect of any Indebtedness of the Company following the date
hereof to execute and deliver a
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supplemental indenture pursuant to which it will become a Guarantor under this
Fifth Supplemental Indenture, if it has not already done so or unless the
Guarantor is prohibited from doing so by applicable law or a provision of a
contract to which it is a party or by which it is bound.
Section 513. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee by such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal of state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under this Fifth
Supplemental Indenture and its Guarantee shall be limited to the maximum amount
which, after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of, any other Guarantor in respect of the obligations of such
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Fifth Supplemental Indenture, will result in the obligations of such
Guarantor under its Guarantee not constituting such fraudulent transfer or
conveyance.
Section 514. CONTRIBUTION FROM OTHER GUARANTORS.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the net assets of each Guarantor, determined in accordance
with generally accepted accounting principles in effect in the United States of
America as of the date hereof.
Section 515. NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY.
Neither the Trustee, any Holder nor any other Person shall have
any obligation to enforce or exhaust any rights or remedies or take any other
steps under any security for the Obligations or against the Company or any other
Person or any property of the Company or any other Person before the Trustee,
such Holder or such other Person is entitled to demand payment and performance
by any or all Guarantors of their liabilities and obligations under their
Guarantee.
Section 516. DEALING WITH THE COMPANY AND OTHERS.
The Holders, without releasing, discharging, limiting or
otherwise affecting in whole or in part the obligations and liabilities of any
Guarantor hereunder and without the consent of or notice to any Guarantor, may:
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any other
Person;
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(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral from the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without consideration)
any and all collateral, mortgages or other security given by the Company or any
third party with respect to the Obligations;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or
from any security to such part of the Obligations as the Holders may see fit or
change any such application in whole or in part from time to time as the Holders
may see fit; and
(f) otherwise deal with, or waive or modify their right to deal
with, the Company and all other Persons and any security as the Holders or the
Trustee may see fit.
Section 517. EXECUTION AND DELIVERY OF THE GUARANTEE.
(a) To further evidence the Guarantee set forth in this Article
Five, each Guarantor hereby agrees that a notation of such Guarantee shall be
endorsed on each Security authenticated and delivered by the Trustee and
executed by either manual or facsimile signature of an officer of each
Guarantor. The corporate seal of a Guarantor may be reproduced on the executed
Guarantee and the execution thereof may be attested to by any appropriate
officer of the Guarantor, but neither such reproduction nor such attestation is
or shall be required.
(b) Each of the Guarantors hereby agrees that its Guarantee set
forth in this Article Five shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of such Guarantee.
(c) If an officer of a Guarantor whose signature is on this Fifth
Supplemental Indenture or a Guarantee no longer holds that office at the time
the Trustee authenticates such Guarantee or at any time thereafter, such
Guarantor's Guarantee of such Security shall be valid nevertheless.
(d) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Fifth Supplemental Indenture on behalf of each Guarantor.
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ARTICLE SIX
MISCELLANEOUS
Section 601. MISCELLANEOUS.
(a) The Trustee accepts the trusts created by the Indenture, as
supplemented by this Fifth Supplemental Indenture, and agrees to perform the
same upon the terms and conditions of the Indenture, as supplemented by this
Fifth Supplemental Indenture.
(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
Fifth 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 Fifth Supplemental Indenture all of its respective
representations, covenants and agreements set forth in the Indenture.
(e) All covenants and agreements in this Fifth Supplemental
Indenture by the Company or the Trustee and each Guarantor shall bind its
respective successors and assigns, whether so expressed or not.
(f) In case any provisions in this Fifth 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 Fifth 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 Fifth
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 Fifth
Supplemental Indenture as so modified or excluded, as the case may be.
(i) This Fifth Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
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<PAGE> 33
(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 Fifth Supplemental Indenture shall be
deemed to be incorporated in, and made a part of, the Indenture; and the
Indenture, as supplemented by this Fifth Supplemental Indenture, shall be read,
taken and construed as one and the same instrument.
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.
Attest: THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Securities
By:
- ----------------------------- ------------------------------------------
Assistant Secretary/Secretary Name: Lawrence M. Turner
Title: Vice President and Treasurer
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Securities
By:
- ----------------------------- ------------------------------------------
Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the Securities
By:
-----------------------------------------
Name: Keith C. Larson
Title: Vice President and Secretary
ROCKET NEWCO, INC.,
as Guarantor of the Securities
HENPIL, INC.,
as Guarantor of the Securities
WYDIV, INC.,
as Guarantor of the Securities
By:
------------------------------------------
Name: Steven McMillan
Title: Vice President and Secretary
Attest: FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
By:
- ----------------------------- ------------------------------------------
Name:
Title :
-34-
<PAGE> 35
SCHEDULE I
Guarantors
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
</TABLE>
-35-
<PAGE> 36
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited
partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
</TABLE>
-36-
<PAGE> 37
PAGE
STATE OF
-------------------- )
) ss.:
COUNTY OF )
-------------------
On the day of September, 1999, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is __________________ of The Kroger Co., and ____________________ of
each of the Guarantors Listed on Schedule I hereto, corporations described in
and which executed the foregoing instrument; that he knows the seals of said
corporations; that the seals affixed to said instrument are such corporate
seals; that they were so affixed by authority of the Board of Directors of such
corporations, and that he signed his name thereto by like authority.
------------------------------------
STATE OF
-------------------- )
) ss.:
COUNTY OF )
-------------------
On the day of September, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ________________ of Rocket Newco, Inc., Henpil, Inc. and Wydiv,
Inc., corporations described in and which executed the foregoing instrument;
that he knows the seals of said corporations; that the seals affixed to said
instrument are such corporate seals; that they were so affixed by authority of
the Board of Directors of said corporations, and that he signed his name
thereto by like authority.
------------------------------------
-1-
<PAGE> 38
PAGE
STATE OF
-------------------- )
) ss.:
COUNTY OF )
-------------------
On the day of September, 1999, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is _________________ of Vine Court Assurance Incorporated, 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 Boards of
Directors of said corporation, and that he signed his name thereto by like
authority.
------------------------------------
STATE OF
-------------------- )
) ss.:
COUNTY OF )
-------------------
On the day of September, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ____________ of Richie's, Inc., 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 Boards of Directors of said
corporation, and that he signed his name thereto by like authority.
------------------------------------
-2-
<PAGE> 39
PAGE
STATE OF
-------------------- )
) ss.:
COUNTY OF )
-------------------
On the day of September, 1999, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of Firstar 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.
------------------------------------
-3-
<PAGE> 1
Exhibit 4.3.3
SIXTH SUPPLEMENTAL INDENTURE, dated as of September 22, 1999,
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, the Guarantors listed on the
signature pages and Schedule I hereto (each, a "Guarantor") and Firstar 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 June 25, 1999 (the "Indenture"), between the Company,
the Guarantors and Firstar Bank, National Association, as Trustee, as
supplemented by the First Supplemental Indenture dated June 25, 1999, the Second
Supplemental Indenture dated June 25, 1999, the Third Supplemental Indenture
dated June 25, 1999, the Fourth Supplemental Indenture dated September 22, 1999,
and the Fifth Supplemental Indenture dated September 22, 1999, 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.
Each of the Guarantors has duly authorized the issuance of a
guarantee of the Securities, as set forth herein, and to provide therefor, each
of the Guarantors has duly authorized the execution and delivery of this Sixth
Supplemental Indenture.
The Company and the Guarantors, pursuant to the foregoing
authority, propose in and by this Sixth 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.
<PAGE> 2
All things necessary to make this Sixth Supplemental Indenture a
valid agreement of the Company and the Guarantors, and a valid amendment of and
supplement to the Indenture, have been done.
NOW, THEREFORE, THIS SIXTH 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:
ARTICLE ONE
DEFINITIONS
Section 101. DEFINITIONS.
(a) For all purposes of this Sixth 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 Sixth Supplemental Indenture and, where so
specified, to the Articles and Sections of the Indenture as
supplemented by this Sixth Supplemental Indenture; and
(3) The terms "hereof", "herein", "hereby", "hereto",
"hereunder" and "herewith" refer to this Sixth Supplemental
Indenture.
(b) For all purposes of the Indenture and this Sixth 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)
<PAGE> 3
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 Sixth 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
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, a
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
<PAGE> 4
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.
"Credit Facility" means any credit agreement, loan agreement
or credit facility, whether syndicated or not, involving the
extension of credit by banks or other credit institutions,
entered into by the Company or Fred Meyer, Inc. and outstanding
on the date of this Sixth Supplemental Indenture, and any
refinancing or other restructuring of such agreement or facility.
"Funded Indebtedness" means any Indebtedness maturing by its
terms more than one year from the date as of which the
determination is made, including (i) any Indebtedness having a
maturity of 12 months or less but by its terms renewable or
extendible at the option of the borrower beyond 12 months from
such date of determination and (ii) rental obligations payable
more than 12 months from such
<PAGE> 5
date 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.
<PAGE> 6
"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.
"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.
[FACE OF BOND]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
<PAGE> 7
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
<PAGE> 8
No. CUSIP: 501044BW0
-----
THE KROGER CO.
Puttable Reset Securities PURS(SM) due October 1, 2010
The Kroger Co., a corporation organized and existing under the
laws of the State of Ohio (hereinafter called the "Company", which term shall
include any successor entity), for value received, hereby promises to pay to
CEDE & CO. or registered assigns, the principal sum of _________Dollars on
October 1, 2010 (the "Final Maturity") at any office or agency maintained for
the purpose in the Borough of Manhattan, The City of New York, New York or
Cincinnati, Ohio, which shall initially be the corporate trust office of Firstar
Bank, National Association, the Trustee under the Indenture referred to on the
reverse hereof, located on the date hereof at 425 Walnut Street, P.O. Box 1118,
Cincinnati, Ohio 45201-1118, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts, and to pay to the registered holder hereof, as hereinafter
provided, interest on said principal sum at the rate described below, in like
coin or currency, from and including September 22, 1999, or from the most recent
Interest Payment Date (as defined below) to which interest has been paid or duly
provided for, on the dates set forth below, to but excluding the date on which
the principal amount is paid or made available for payment in full. The interest
so payable on any Interest Payment Date shall, subject to certain exceptions
provided in the Indenture, be paid to the person in whose name this Bond is
registered at the close of business on the applicable Interest Payment Record
Date (as defined below). Payments of interest shall be made at any office or
agency referred to above, provided that, at the option of the Company, payments
of interest may be made by check mailed to the registered address of the persons
entitled thereto.
From and including September 22, 1999 to but excluding October 1,
2000 (the "Floating Rate Period"), interest on the principal sum of this Bond
will accrue at LIBOR (as defined below) plus 0.90% and will be reset quarterly,
as described on the reverse side hereof. On October 1, 2000 (the "Reset Date"),
the interest rate on this Bond shall be reset so as to equal a fixed rate from
and including October 1, 2000 as determined as described on the reverse hereof,
unless the Company is obligated to repurchase this Bond on such date pursuant to
the Put Option referred to on the reverse hereof. Notwithstanding the foregoing,
the reset shall be subject to the occurrence of a Market Disruption Event or a
Failed Remarketing as described on the reverse hereof.
This Bond has initially been issued in the form of a Global
Security (as defined on the reverse hereof), and the Company has initially
designated The Depository
<PAGE> 9
Trust Company ("DTC", which term shall include any successor) as the Depositary
(the "Depositary") for this Bond. For as long as this Bond or any portion hereof
is issued in such form, and notwithstanding the foregoing, all payments of
interest, principal and other amounts in respect of this Bond or such portion
(including payments pursuant to the Call Option and Put Option referred to on
the reverse hereof) shall be made to the Depositary or its nominee in accordance
with its Applicable Procedures (as defined on the reverse hereof), in the coin
or currency specified above and as further provided on the reverse hereof.
Notwithstanding the foregoing, if any payment of interest,
principal or other amount to be made in respect of this Bond (including any
payment pursuant to an exercise of the Call Option or Put Option) would
otherwise be due on a day that is not a Business Day, such payment may be made
on the next succeeding day that is a Business Day, with the same effect as if
such payment were made on the due date.
This Bond is continued on the reverse hereof and the additional
provisions there set forth shall for all purposes have the same effect as if set
forth at this place. Such provisions include, inter alia, the Call Option and
Put Option, interest rate and the definitions of certain terms used on the face
hereof.
This Bond shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by the
Trustee under the Indenture.
IN WITNESS WHEREOF, THE KROGER CO. has caused this instrument to
be duly executed under its corporate seal.
Dated:
[CORPORATE SEAL] THE KROGER CO..
By:
---------------------------------
Name:
Title:
ATTEST:
By:
-------------------------
Name:
Title:
<PAGE> 10
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Attest: FIRSTAR BANK, NATIONAL ASSOCIATION
as Trustee
- ------------------------------- By:
Assistant Secretary ----------------------------------
Name:
Title:
<PAGE> 11
Section 203. FORM OF REVERSE OF SECURITY.
THE KROGER CO.
Puttable Reset Securities PURSSM due October 1, 2010
1. INDENTURE.
(a) This Bond is one of a duly authorized issue of debentures,
notes or other evidence of indebtedness of the Company (including the related
Guarantees, the "Securities") of the series hereinafter specified, all issued or
to be issued under and pursuant to an indenture dated as of June 25, 1999,
between the Company, the Guarantors and Firstar Bank, National Association, as
Trustee, as supplemented by the First Supplemental Indenture dated June 25,
1999, the Second Supplemental Indenture dated June 25, 1999, the Third
Supplemental Indenture dated June 25, 1999, the Fourth Supplemental Indenture
dated September 22, 1999, the Fifth Supplemental Indenture dated September 22,
1999, and the Sixth Supplemental Indenture dated September 22, 1999 (the
"Indenture"), duly executed and delivered by the Company to Firstar Bank,
National Association, as Trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture reference is hereby
made for a description of the rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Securities.
(b) The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may be
subject to different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any) and may otherwise vary as provided
in the Indenture. This Bond is one of a series of the Securities designated as
the Puttable Reset Securities PURSSM due October 1, 2010 of the Company, limited
in aggregate principal amount to $275,000,000 (the "Bonds"). The PURS constitute
a separate series of Securities under the Indenture.
(c) The provisions of this Bond (including those relating to the
Call Option and Put Option), together with the provisions of the Indenture,
shall govern the rights, obligations, duties and immunities of the holders
hereof, the Company and the Trustee with respect to this Bond, provided that, if
any provision of this Bond necessarily conflicts with any provision of the
Indenture, the provision of this Bond shall be controlling to the fullest extent
permitted under the Indenture.
(d) Terms used and not defined herein that are defined in the
Indenture shall have the respective meanings assigned thereto in the Indenture.
Unless the context requires otherwise, terms defined herein include the plural
as well as the singular and
<PAGE> 12
vice-versa, and the words "herein" and "hereof", and words of similar import,
refer to this Bond as a whole and not to any particular paragraph or other
subdivision.
2. CALL OPTION.
(a) Goldman, Sachs & Co., which term shall include any successor
(the "Call Option Holder"), shall have the right to purchase, on the Reset Date,
all of the Bonds outstanding on the Reset Date (in whole and not in part),
including this Bond, from the registered holders thereof on the Reset Date (such
right, the "Call Option"), at a price equal to 100% of the principal amount of
the Bonds purchased (the "Face Value") and subject to the Call Option Holder
giving notice of its intention to purchase the outstanding Bonds as described
below (a "Call Notice"). Whether or not the Call Option is exercised with
respect to the Reset Date, the Company shall remain obligated to pay all accrued
and unpaid interest on this Bond, and interest that becomes payable on this Bond
on the Reset Date shall be payable to the registered holder of this Bond on the
corresponding Interest Payment Record Date, as provided herein and in the
Indenture.
(b) To exercise the Call Option, the Call Option Holder must give
a Call Notice to the registered holder of this Bond no later than the tenth
Market Day prior to the Reset Date, in the manner described in paragraph 11
below. Subject to paragraph 5(a) below, in the event a Call Notice is duly
given, the registered holder of this Bond on the Reset Date shall be obligated
to sell this Bond to the Call Option Holder, and the Call Option Holder shall be
obligated to purchase this Bond from such holder, at the Face Value on the Reset
Date. Each such sale and purchase shall be effected through the facilities of
the Depositary, with the registered holder being deemed to have automatically
tendered this Bond for sale to the Call Option Holder on the Reset Date in
accordance with the Depositary's Applicable Procedures as provided in paragraph
5 below. The registered holder's automatic tender of this Bond on the Reset Date
shall be subject to receipt of payment of the Face Value of this Bond as
provided in paragraph 5(a) below. Notwithstanding any exercise of the Call
Option with respect to this Bond, this Bond will remain outstanding until it
otherwise ceases to be outstanding pursuant to the Indenture. As used herein,
"Market Day" means a Business Day other than a day on which dealings in the U.S.
Treasury bond market are generally not being conducted.
(c) If the Call Option is exercised, this Bond shall be subject
to purchase by the Call Option Holder on the Reset Date as provided herein and
subject to paragraph 5(a) below. This will be the case for every holder (and
every beneficial holder) of the Bonds outstanding on the Reset Date, including
any holder that acquires an interest in this Bond after the Call Notice is given
or who is otherwise unaware that the Call Notice has been given.
<PAGE> 13
3. PUT OPTION.
(a) If the Call Option Holder does not exercise the Call Option,
the registered holder of this Bond on the Reset Date shall have the right to
require the Company to repurchase this Bond (in whole and not in part) from such
holder on the Reset Date (such right, the holder's "Put Option") at a price
equal to 100% of the principal amount of this Bond repurchased (the "Put
Price"), in the circumstances described in the next paragraph. In the event the
Put Option is exercised, the Put Price shall be payable by the Company to the
registered holder of this Bond on the Reset Date, whereas the accrued and unpaid
interest on this Bond that becomes payable on the Reset Date shall be payable by
the Company to the registered holder of this Bond on the corresponding Interest
Payment Record Date, as provided herein and in the Indenture. If for any reason
payment of the Put Price is not made when due on this Bond, the accrued interest
from the Reset Date to the date such payment is made would be payable by the
Company as part of the Put Price for this Bond, to the person entitled to
receive the Put Price.
(b) On the Reset Date, the registered holder of this Bond on the
Reset Date shall be deemed to have exercised its Put Option automatically,
without any action on its part, for the full principal amount of this Bond held
of record by such holder on the Reset Date unless either (x) the Call Option
Holder has duly given a Call Notice or (y) if the Call Option Holder does not
exercise the Call Option, (i) no later than 10:00 A.M. (New York City time) on
the seventh Market Day prior to the Reset Date, the registered holder of this
Bond at the time gives notice to the Trustee that such holder elects not to sell
this Bond to the Company on the Reset Date (a "Hold Notice") and (ii) such
notice is effective (an "Effective Hold Notice") under the 10% Requirement (as
defined below). A Hold Notice must be given in the manner described in paragraph
11 below. Consequently, with respect to this Bond on the Reset Date, if a Call
Notice is not duly given by the Call Option Holder and an Effective Hold Notice
is not duly given by the applicable holder as provided above, the Company shall
be obligated to repurchase this Bond from the registered holder on the Reset
Date, and the registered holder of this Bond on the Reset Date shall be
obligated to sell this Bond to the Company, at the Put Price on the Reset Date.
Any such sale and purchase shall be effected through the facilities of the
Depositary, with the registered holder of this Bond on the Reset Date being
deemed (in the absence of an Effective Hold Notice) to have automatically
tendered this Bond in whole for sale to the Company on the Reset Date, all in
accordance with the Depositary's Applicable Procedures as provided in paragraph
5 below. Notwithstanding any exercise of the Put Option with respect to this
Bond, this Bond shall remain outstanding until it otherwise ceases to be
outstanding pursuant to the Indenture.
(c) Notwithstanding the foregoing, no Hold Notice for this Bond
shall be effective unless Hold Notices are duly given with respect to at least
10% of the
<PAGE> 14
principal amount of the Bonds outstanding. The provision described in this
paragraph is called the "10% Requirement". If a Hold Notice is duly given for
this Bond but the 10% Requirement is not satisfied, the Trustee shall give
written notice of that fact (a "10% Requirement Notice") to the registered
holder of this Bond and the Company not later than the close of business on the
seventh Market Day before the Reset Date, in the manner described in paragraph
11 below.
(d) Notwithstanding the foregoing, the Put Option shall be deemed
to be automatically exercised if the Call Option Holder exercises the Call
Option but either (i) a Market Disruption Event or Failed Remarketing occurs, as
provided in paragraph 4 below, or (ii) the Call Option Holder fails to pay the
Face Value on the Reset Date, as provided in paragraph 5(a) below.
4. INTEREST RATE.
During the Floating Rate Period, the Company shall pay interest
quarterly in arrears on December 22, 1999, March 22, 2000, June 22, 2000 and
October 1, 2000 (each, an "Interest Payment Date"), to the person in whose name
this Bond is registered at the close of business on the fifteenth calendar day
prior to the Reset Date (prior to the Reset Date, each, an "Interest Payment
Record Date"), whether or not it is a Business Day, immediately preceding the
Interest Payment Date.
During the Floating Rate Period, the interest rate on this Bond
will be calculated by the Trustee, and will be equal to LIBOR, as determined
below, plus 0.90%. The Trustee will set the interest rate on September 22, 1999
and reset the interest rate on December 22, 1999, March 22, 2000 and June 22,
2000 (each of which, including September 22, 1999, a "Floating Rate Reset
Date"). Prior to the Reset Date, interest on this Bond will be calculated on the
basis of a 360-day year for the actual number of days elapsed.
The second London Business day preceding each Floating Reset Date
is referred to as the "Floating Rate Determination Date" for that Floating Reset
Date. "London Business Day" means any day on which dealings in U.S. dollars are
transacted in the London interbank market.
The interest rate in effect on each date during the Floating Rate
Period that is not a Floating Rate Reset Date will be the interest rate
determined as of the Floating Rate Determination Date pertaining to the
immediately preceding Floating Rate Reset Date. The interest rate in effect on
each date during the Floating Rate Period that is a Floating Rate Reset Date
will be the interest rate determined as of the Floating Rate Determination Date
pertaining to that Floating Rate Reset Date.
"LIBOR" will be determined by the Trustee in accordance with the
<PAGE> 15
following provisions:
(1) Except as set forth in the next sentence, with respect to any
Floating Rate Determination Date, LIBOR will be the rate for deposits in U.S.
dollars having a maturity of three months commencing on the first day of the
applicable interest period that appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on that Floating Rate Determination Date. With respect to the
Floating Rate Determination Date for June 22, 2000, LIBOR will be interpolated
on a straight-line basis from (i) LIBOR for U.S. dollars having a maturity of
three months commencing on the first day of the applicable interest period that
appears on Telerate Page 3750 as of 11:00 a.m, London time, on the Floating Rate
Determination Date for June 22, 2000 and (ii) LIBOR for U.S. dollars having a
maturity of four months commencing on the first day of the applicable interest
period that appears on Telerate Page 3750 as of 11:00 a.m, London time, on the
Floating Rate Determination Date for June 22, 2000. If no applicable rate
appears on Telerate Page 3750 on that Floating Rate Determination Date, LIBOR,
in respect of that Floating Rate Determination Date, will be determined in
accordance with the provisions described in (2) below.
(2) With respect to a Floating Rate Determination Date on which
no rate appears on Telerate Page 3750, as specified in (1) above, the Trustee
will request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the Trustee, to provide it with
its offered quotation for deposits in U.S. dollars for the period of three
months, or the period of three and four months, as applicable, commencing on the
first day of the applicable interest period, to prime banks in the London
interbank market at approximately 11:00 a.m., London time, on that Floating Rate
Determination Date and in a principal amount that is representative for a single
transaction in U.S. dollars in that market at that time. If at least two
quotations are provided, then LIBOR on that Floating Rate Determination Date
will be the arithmetic mean of those quotations. If fewer than two quotations
are provided, then LIBOR on the Floating Rate Determination Date will be the
arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of
a percentage point, with five one-millionths of a percentage point rounded
upwards) of the rates quoted at approximately 11:00 a.m., New York City time, on
the Floating Rate Determination Date by three major banks in New York City
selected by the Trustee for loans in U.S. dollars to leading European banks,
having a three month, or three month and four month, as applicable, maturity and
in a principal amount that is representative for a single transaction in U.S.
dollars in that market at that time. If the banks selected by the Trustee are
not providing quotations in the manner described in this sentence, LIBOR for the
interest period commencing on the Floating Rate Reset Date following the
Floating Rate Determination Date will be LIBOR in effect on that Floating Rate
Determination Date.
"Telerate Page 3750" means the display designated as "Page 3750"
on Dow
<PAGE> 16
Jones Market Service or any successor service, for the purpose of displaying the
London interbank offered rates for U.S. dollar deposits.
The interest rate on this Bond shall be reset on the Reset Date
(or, if the Reset Date is not a Market Day, on the next Market Day following the
Reset Date), unless the Company is obligated to purchase this Bond on such date
pursuant to the Put Option. After the interest rate has been reset, interest on
this Bond will accrue from the Reset Date (even if it is not a Market Day) at
the new interest rate. Notwithstanding the foregoing, reset of the interest rate
shall be subject to the occurrence of a Market Disruption Event or a Failed
Remarketing as described below.
Following the Reset Date, the Company shall pay interest
semi-annually in arrears on April 1 and October 1, to the person in whose name
this Bond is registered at the close of business on March 15 and September 15,
respectively (from and after the Reset Date, each, an "Interest Payment Record
Date"), whether or not it is a Business Day, immediately preceding the Interest
Payment Date. Following the Reset Date interest will be computed on the basis of
a 360-day year of twelve 30-day months.
Subject to its right to terminate the appointment of any such
agent, the Company shall take such action as is necessary to ensure that there
shall at all relevant times be a qualified financial institution appointed and
acting as its agent for the purpose of performing the actions contemplated
hereby to be performed by the Calculation Agent (such agent, including any
successor agent, the "Calculation Agent"). The Company has initially appointed
the Call Option Holder as Calculation Agent. If the interest rate is to be reset
on the Reset Date, the Calculation Agent shall effect the reset as set forth
below.
Between the tenth Market Day prior to the Reset Date and 11:00
A.M., New York City time, on the Calculation Date (as defined below), the
Calculation Agent shall select three leading financial institutions (one of
which will be Goldman, Sachs & Co. if Goldman, Sachs & Co. so requests) that
deal actively in the publicly-traded debt securities of the Company in New York
City and have agreed to participate as reference dealers in connection with the
rest of this Bond (the "Reference Dealers"). If the Call Option Holder has
exercised the Call Option and so requests, each Reference Dealer must include in
its participation agreement a written commitment (satisfactory to the Call
Option Holder) that, if it is selected as the Final Dealer (as defined below),
it shall purchase from the Call Option Holder on the Calculation Date for
settlement on the Reset Date and at the Final Offer Price (as defined below),
its Pro Rata (as defined below) portion of the Bonds that the Call Option Holder
purchases pursuant to the Call Option and tenders for resale to the Final Dealer
on the Reset Date. For each Reference Dealer, the Calculation Agent shall
request the name of and telephone and facsimile numbers for one individual to
represent such Reference Dealer.
<PAGE> 17
On the sixth Market Day prior to the Reset Date (the "Calculation
Date"), the Calculation Agent shall undertake the following actions to calculate
a fixed rate at which interest will accrue on the Bonds from and including the
Reset Date to but excluding the Final Maturity (the "Reset Period"). In
paragraphs (a) and (b) below, all references to specific hours are references to
prevailing New York City time, and each notice shall be given telephonically and
shall be confirmed as soon as possible by facsimile to each of the Calculation
Agent and the Company. The times set forth below are guidelines for action, and
the Calculation Agent shall use reasonable efforts to adhere to these times.
(a) At 12:00 P.M., the Calculation Agent shall:
(i) determine (or obtain from the Call Option Holder, if the
Call Option Holder has exercised the Call Option) the approximate
ten-year U.S. Treasury bond yield at or about such time, which
shall be expressed as a percentage (the "Designated Treasury
Yield") and shall be based on the then-current, ten-year U.S.
Treasury bond (the "Designated Treasury Bond");
(ii) calculate and provide to the Reference Dealers, on a
preliminary basis, a hypothetical price at which the Bonds might
be offered for sale to a Reference Dealer on the Reset Date (the
"Offer Price"). The Offer Price shall be expressed as a
percentage of the principal amount of the Bonds and will equal
100% plus the Margin (as defined below), if the Treasury Rate
Difference (as defined below) is positive, or 100% minus the
Margin, if the Treasury Rate Difference is negative. The "Margin"
means the present value, expressed as a percentage of the
principal amount of the Bonds, of the absolute value of the
Treasury Rate Difference applied to twenty semi-annual periods
(i.e., ten years), discounted at the Designated Treasury Yield
divided by two. The "Treasury Rate Difference" means the
percentage (which may be positive or negative) equal to (x) 5.93%
(the "Initial Treasury Yield") minus (y) the Designated Treasury
Yield; and
(iii) request each Reference Dealer to provide to the
Calculation Agent, when notified of the Final Offer Price as
described in paragraph (b) below, a firm bid, expressed as a
percentage representing an interest rate spread over the
<PAGE> 18
Designated Treasury Yield (the "Spread"), at which such Reference
Dealer would be willing to purchase on the Calculation Date for
settlement on the Reset Date, at the Final Offer Price, all of
the Bonds. Each such firm bid must be given on an "all-in" basis
and must remain open for at least 30 minutes after it is given.
(b) At 12:30 P.M., the Calculation Agent shall determine (or
obtain from the Call Option Holder, if the Call Option Holder has exercised the
Call Option) the Designated Treasury Yield on a final basis, and calculate and
provide to the Reference Dealers the Offer Price on a final basis (the "Final
Offer Price") and request each Reference Dealer to submit its bid immediately as
described in clause (a)(iii) above. If the Calculation Agent receives at least
two bids, the following shall occur:
(i) the Reference Dealer providing the bid presenting the
lowest all-in Spread (the "Final Spread") shall be the "Final
Dealer"; provided that if more than one Reference Dealer has
provided a bid representing the lowest all-in Spread (a
"Qualifying Reference Dealer"), the Calculation Agent will so
notify each Qualifying Reference Dealer and each Qualifying
Reference Dealer will have the opportunity immediately thereafter
to submit a second firm bid in the manner and on the terms
specified in clause (a)(iii) above, and the Qualifying Reference
Dealer providing the bid representing the lowest all-in Spread
will be the Final Dealer and if more than one Qualifying
Reference Dealer has provided a bid representing the lowest
all-in Spread, each of such Qualifying Reference Dealers will be
a Final Dealer (also, each referred to herein as the Final
Dealer);
(ii) if the Call Option Holder has exercised the Call
Option, the Final Dealer shall purchase from the Call Option
Holder at the Final Offer Price, for settlement on the Reset
Date, its Pro Rata portion of the Bonds that the Call Option
Holder purchases pursuant to the Call Option and tenders for
resale to the Final Dealer on the Reset Date (assuming that the
interest rate on the Bonds will be reset so as to equal the
Adjusted Rate (as defined below) during the Reset Period) (as
used herein "Pro Rata" shall mean the amount equal to the
aggregate outstanding principal amount of the Bonds that the Call
Option Holder purchases pursuant to the Call Option divided by
the number of Final Dealers); the Final Dealer
<PAGE> 19
shall not be obligated to purchase any Bonds if the Call Option
Holder has not exercised the Call Option;
(iii) the Calculation Agent shall calculate and provide to
the Company the "Adjusted Rate", which shall be the semi-annual,
bond- equivalent, fixed interest rate on the Bonds required to
produce, during the Reset Period, a semi-annual, bond-equivalent
yield on the Bonds that equals the sum of the Final Spread plus
the final Designated Treasury Yield, assuming that the Bonds are
purchased on the Reset Date at the Final Offer Price; and
(iv) the interest rate on the Bonds shall be adjusted so as
to equal the Adjusted Rate, effective from and including the
Reset Date to but excluding the Final Maturity. If the Call
Option Holder has not exercised the Call Option and an Effective
Hold Notice is given for this Bond, the Company shall promptly
give written notice of the Adjusted Rate to the registered
holder.
All determinations regarding the Designated Treasury Yield and the Designated
Treasury Bond as described in clause (a)(i) and the first sentence of paragraph
(b) above shall be made by the Call Option Holder if another party is acting as
the Calculation Agent, unless the Call Option Holder has elected not to exercise
the Call Option, in which case such determinations will be made as necessary by
the Calculation Agent.
If the Calculation Agent determines that, on the Calculation
Date, (x) a Market Disruption Event (as defined below) has occurred or is
continuing or (y) fewer than two Reference Dealers have provided firm bids in a
timely manner pursuant to participation agreements satisfactory to the Call
Option Holder substantially as described above (a "Failed Remarketing"), the
steps contemplated above shall be taken on the next Market Day on which the
Calculation Agent determines that no Market Disruption Event has occurred or is
continuing and at least two Reference Dealers have provided bids pursuant to
participation agreements satisfactory to the Call Option Holder substantially as
described above. If the Calculation Agent determines that a Market Disruption
Event and/or a Failed Remarketing has occurred or is continuing for at least
four consecutive Market Days starting on the Calculation Date, then the Call
Option Holder shall be deemed not to have exercised the Call Option and the
Company shall repurchase this Bond on the Reset Date at the Put Price from the
registered holder hereof on the Reset Date, all as if the Put Option on this
Bond had been exercised, and the Company shall pay to the Call Option Holder, an
amount equal to the Margin, if the Treasury Rate Difference is positive. For
purposes of calculating the amount that the Company will pay to the Call
<PAGE> 20
Option Holder, the Calculation Agent will redetermine the Designated Treasury
Yield, the Treasury Rate Difference and the Margin at 3:00 p.m., New York City
time on such fourth Market Day. In these circumstances, the registered holder
may not continue to hold this Bond by giving an Effective Hold Notice. The
Calculation Agent shall notify the Company of such determination promptly after
the close of business on such fourth Market Day. The Company shall give notice
to the registered holder that this Bond will be repurchased by the Company at
the Put Price, from the registered holder on the Reset Date, such notice to be
given no later than the second Market Day prior to the Reset Date in the manner
described below.
Notwithstanding the foregoing, if at any time the Call Option
Holder is not acting as Calculation Agent, then the determinations and notice to
the Company described in the preceding paragraph shall be made and given by the
Call Option Holder, unless the Call Option Holder does not exercise the Call
Option, in which case such determinations and notice will be made and given by
the Calculation Agent.
"Market Disruption Event" means any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or the establishment of minimum prices on such exchange;
(ii) a general moratorium on commercial banking activities declared by either
federal or New York State authorities; (iii) any material adverse change in the
existing financial, political or economic conditions in the United States of
America; (iv) an outbreak or escalation of hostilities involving the United
States of America or the declaration of a national emergency or war by the
United States of America; or (v) any material disruption of the U.S. government
securities market, U.S. corporate bond market and/or U.S. federal wire system.
All determinations regarding Market Disruption Events and Failed
Remarketings, including whether or not any such event has occurred or is
continuing, shall be made by the Calculation Agent (or the Call Option Holder,
if applicable as provided above) in its sole discretion.
All percentages resulting from any calculation with respect to
the Bonds will be rounded to the nearest one hundred-thousandth of a percentage
point, and all U.S. dollar amounts will be rounded to the nearest cent (with
one-half cent being rounded upwards).
All determinations made by the Calculation Agent (or the Call
Option Holder) regarding the matters described herein shall be final, conclusive
and binding on all concerned absent manifest error. To the extent permitted by
law, no determination made by the Calculation Agent (or the Call Option Holder)
regarding the matters described herein shall give rise to any liability on the
part of the Calculation Agent, the Call Option Holder, the Trustee or the
Company.
<PAGE> 21
5. SETTLEMENT ON EXERCISES OF CALL OPTION OR PUT OPTION.
For as long (but only for as long) as this Bond or any portion
hereof is issued in the form of a Global Security, the provisions of paragraphs
5(a) through 5(d) below, inclusive, shall apply with respect to this Bond or
such portion, as the case may be.
(a) If the Call Option is exercised, then, on the Reset Date,
all beneficial interests in this Bond held by or through Agent Members (as
defined below) shall be transferred to a Depositary account designated by the
Call Option Holder. The transfers shall be made automatically, without any
action on the part of any holder or beneficial owner, by book entry through the
facilities of the Depositary. The Call Option Holder shall be obligated to make
payment of the Face Value of this Bond to the Depositary or its nominee, for
credit to the accounts of the Agent Members by or through which beneficial
interests in this Bond are held, by the close of business on the Reset Date.
Each such transfer shall be made against the corresponding payment, and each
such payment shall be made against the corresponding transfer, in accordance
with the Depositary's Applicable Procedures. In all cases, the Company shall
remain obligated to make payment of accrued and unpaid interest on this Bond,
with interest payable on the Reset Date being payable to the registered holder
on the corresponding Interest Payment Record Date.
If the Call Option Holder fails to pay the Face Value of this
Bond on the Reset Date, the Call Option shall be deemed not to have been
exercised and the Put Option shall be deemed to have been exercised on this
Bond. In these circumstances, the registered holder on the Reset Date may not
continue to hold this Bond by giving an Effective Hold Notice, and the Company
will be obligated to pay, not later than two Business Days following the Reset
Date, the Put Price for this Bond (including accrued interest from the Reset
Date to but excluding the date payment is made), with settlement otherwise
occurring as described in paragraph 5(b).
As used herein, (i) "Agent Member" means, at any time, any person
who is a member of, or participant in, the Depositary at such time and (ii)
"Applicable Procedures" means, with respect to any payment, transfer or other
transaction to be effected with respect to a Global Security, through the
facilities of the Depositary at any time, the policies and procedures of the
Depositary applicable to such transaction, as in effect at such time.
(b) If the Put Option is exercised as to this Bond, then, on
the Reset Date, all beneficial interests in this Bond held by or through Agent
Members shall be transferred to a Depositary account designated by the Company.
The transfers shall be made automatically, without any action on the part of any
holder or beneficial owner, by
<PAGE> 22
book entry through the facilities of the Depositary. The Company shall be
obligated to make payment of the Put Price of this Bond to the Depositary or its
nominee, for credit to the accounts of the Agent Members by or through which
beneficial interests in this Bond are held, by the close of business on the
Reset Date. Each such transfer shall be made against the corresponding payment,
and each such payment shall be made against the corresponding transfer, in
accordance with the Depositary's Applicable Procedures. If the Company fails to
pay the Put Price for this Bond on the Reset Date, accrued interest at the then
applicable rate from the Reset Date to the date the payment is made shall be
payable as part of such Put Price, in the same manner and for credit to the same
accounts as such Put Price. Whether or not purchased pursuant to the Put Option,
the Company shall remain obligated to make payment of accrued and unpaid
interest on this Bond, with interest payable on the Reset Date being payable to
the registered holder on the corresponding Interest Payment Record Date as
provided herein and in the Indenture.
(c) The transactions described in paragraphs 5(a) and 5(b)
above shall be executed on the Reset Date through the facilities of the
Depositary in accordance with its Applicable Procedures, and the accounts of the
respective Agent Members shall be debited and credited and beneficial interests
in this Bond shall be delivered by book entry as necessary to effect the
purchases and sales provided for above. Unless the Depositary's Applicable
Procedures require otherwise, such transactions shall settle, and all other
payments in respect of the Bonds shall be made, in immediately available funds
through DTC's Same-Day Funds Settlement System. Notwithstanding any provision
hereof or of the Indenture, neither the Company, the Trustee, the Call Option
Holder, nor any agent of any such person, shall have any responsibility with
respect to the Applicable Procedures or for any payments, transfers or other
transactions, or any notices or other communications, among the Depositary, its
Agent Members, any other direct or indirect participants therein and any
beneficial owners of a Global Security. For all purposes of this Bond and the
Indenture, any payment or notice to be made or given with respect to this Bond
by the Company or the Call Option Holder shall be deemed made or given when made
or given to the Depositary or its nominee, in accordance with its Applicable
Procedures.
(d) The settlement procedures described in paragraphs 5(a), 5(b)
and 5(c) above may be modified, notwithstanding any contrary terms of the Bonds
or the Indenture, to the extent required by the Depositary. In addition,
notwithstanding any contrary terms of the Bonds or the Indenture, the Company
may modify the settlement procedures described in paragraphs 5(a), 5(b) and 5(c)
above in order to facilitate the settlement process.
(e) If any Bonds are issued in non-book-entry form, the Company
shall modify the provisions of paragraphs 5(a) through 5(d) above, inclusive, so
as to ensure that the Reset Date settlements of transactions in such Bonds are
effected in as
<PAGE> 23
comparable a manner as practical, provided that such modified procedures shall
not adversely affect the interests of the holders of the outstanding Bonds in
any material respect.
6. OPTIONAL REDEMPTION.
The Bonds will be redeemable, in whole or in part, at the option
of the Company at any time after the Reset Date at a redemption price equal to
the greater of (i) 100% of the principal amount of the Bonds 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.
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 Bonds or
portions thereof called for redemption.
7. COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance at any time of
certain restrictive covenants and Events of Default with respect to this Bond
upon compliance with certain conditions set forth therein.
8. DEFAULT, WAIVER, AMENDMENT AND ENFORCEMENT.
(a) In case an Event of Default, as defined in the Indenture,
with respect to the Bonds shall have occurred and be continuing, the principal
of all outstanding Bonds may be declared, and upon such declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture. The Indenture provides that in the event
of such a declaration, its consequences may be rescinded and annulled (and the
related default and its consequences may be waived) with respect to all the
Bonds by the holders of not less than a majority in aggregate principal amount
of all the Bonds then outstanding, voting as a separate class, in accordance
with the provisions of, and in the circumstances provided by and the conditions
set forth in the Indenture. It is also provided in the Indenture that the
holders of a majority in aggregate principal amount of the Bonds at the time
outstanding may, on behalf of the holders of all of the Bonds, waive any past
default under the Indenture with respect to the Bonds and its consequences,
except a default in (i) the payment of interest on or principal of any Bond
<PAGE> 24
or (ii) in respect of certain covenants or provisions which cannot be modified
or amended without the consent of the holders of not less than a majority in
principal amount of the outstanding Bonds.
For all purposes of this Bond and the Indenture, any amount
payable by the Company in respect of the Put Price of this or any other Bond
(including any such amount payable by the Company because the Call Option Holder
fails to pay the Face Value of any Bond after its exercise of the Call Option as
to this Bond) shall be deemed to be an amount payable by the Company in respect
of the principal of such Bond at its maturity, and any default by the Company in
paying such amount shall be deemed to be a default in the payment of such
principal at maturity. No failure by the Call Option Holder to purchase any Bond
pursuant to the Call Option shall be deemed to be a default under this Bond or
the Indenture for any purpose.
(b) The Indenture contains provisions permitting the Company and
the Trustee, with the consent of the holders of not less than 50% in aggregate
principal amount of the Securities of all series to be affected at the time
outstanding, evidenced as provided in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, the Indenture with respect to
each such series of Securities or modifying in any manner the rights of the
holders of each such series of Securities; provided, however, that no such
supplemental indenture, without the consent of the holder of each outstanding
security affected thereby, shall (i) change the stated maturity of the principal
of, or any installment of principal of or interest on, any Security or reduce
the principal amount thereof, or (subject to stated exceptions) reduce the rate
of interest thereon or any premium payable upon redemption, or reduce the amount
of the principal of an Original Issue Discount Security (as defined) due and
payable upon an acceleration thereof, or change the place of payment of amounts
due, or change the currency in which any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), (ii) reduce the percentage in
principal amount of securities of any series or of all series, the consent of
the holders of which is required for any such supplemental indenture affecting
this Bond or the consent of which holders is required for waivers of certain
conditions of or a default under the Indenture; or (iii) modify any of the
provisions of the section discussed in this subsection (b) or certain other
sections, except to increase the percentages discussed therein or to provide
that other provisions of the Indenture cannot be modified or waived without the
consent of the holders of each security affected thereby, subject to certain
exceptions enumerated in the Indenture.
(c) As provided in and subject to the provisions of the
Indenture, no holder of this Bond shall have the right to institute any suit,
action or proceeding with
<PAGE> 25
respect to the Indenture, or for appointment of any receiver or trustee or for
any other remedy thereunder, unless an Event of Default with respect to the
Bonds shall have occurred and be continuing and such holder previously shall
have given the Trustee written notice of default and the continuance thereof,
the holders of not less than 25% in aggregate principal amount of the Bonds then
outstanding shall have made written request to the Trustee to institute such
suit, action or proceeding and shall have offered to the Trustee reasonable
indemnity and the Trustee, for 60 days after the receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute the same
and shall not have received any direction inconsistent therewith from the
holders of a majority in aggregate principal amount of all affected Securities
then outstanding.
(d) No reference herein to the Indenture and no provision of
this Bond or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal or Put Price
of and interest on this Bond at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
(e) Any consent, waiver or other action by the registered holder
of this Bond provided pursuant to this Bond or the Indenture (unless effectively
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders of this Bond and of any Bond issued in
exchange or substitution herefor, irrespective of whether or not any notation of
such consent or waiver is made upon this Bond or such other Bond.
9. FORM AND DENOMINATION; GLOBAL SECURITIES.
(a) The Bonds are issuable as fully registered Bonds without
coupons in the denominations of $1,000 and any whole multiple of $1,000. At the
corporate trust office of the Trustee referred to on the face hereof, and in the
manner and subject to the limitations provided herein and in the Indenture,
Bonds may be exchanged for a like aggregate principal amount of Bonds of other
authorized denominations, without payment of any charge other than a sum
sufficient to reimburse the Company for any tax or other governmental charge
incident thereto.
(b) The transfer of this Bond is registrable by the registered
holder hereof in person or by his attorney, duly authorized in writing, on the
books of the Company at the office or agency of the Company referred to on the
face hereof, subject to the terms of this Bond and the Indenture but without
payment of any charge other than a sum sufficient to reimburse the Company for
any tax or other governmental charge incident thereto, and upon surrender and
cancellation of this Bond upon any such transfer, a new Bond or Bonds of
authorized denomination or denominations, for the same aggregate principal
amount, shall be issued to the transferee in exchange herefor.
<PAGE> 26
(c) The Bond evidenced by this certificate has been issued in
the form of a Global Security and, for as long as this Bond shall be issued in
such form, the provisions of paragraphs (c)(i) through (c)(iv), inclusive, below
shall apply to this Bond.
(i) Notwithstanding any other provision of this Bond or the
Indenture, this Global Security may not be exchanged in whole or
in part for Bonds registered, and no transfer of this Global
Security in whole or in part may be registered, in the name of
any person other than the Depositary or a nominee thereof unless
(A) the Depositary has notified the Company that (1) it is
unwilling or unable to continue as Depositary or (2) has ceased
to be a clearing agency registered under the Exchange Act or (B)
there shall have occurred and be continuing an Event of Default
with respect to the Bonds, or except as the Company may request
in order to facilitate the purchase of this Bond or any portion
hereof by the Call Option Holder pursuant to the Call Option or
by the Company pursuant to the Put Option (provided that, after
consummation of any such purchase pursuant to the Call Option,
the Bond or portion so purchased may be reissued in the form of a
Global Security in accordance with the Applicable Procedures).
(ii) Subject to paragraph (c)(i) above, any exchange of this
Global Security for other Bonds may be made in whole or in part,
and all Bonds issued in exchange for this Global Security or any
portion hereof shall be registered in such names and delivered to
such persons as the Depositary shall direct.
(iii) Every Bond authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of,
this Global Security or any portion hereof shall be issued and
authenticated in the form of, and shall be, a Global Security,
shall bear such legend as the Depositary may require and shall be
delivered to the Depositary or a nominee thereof or custodian
therefor, unless such Bond is registered in the name of a person
other than the Depositary or a nominee thereof.
(iv) As used herein, (A) "Global Security" means a Bond that
evidences all or any portion of the Bonds and is registered in
the name of the Depositary (or its nominee), (B)
<PAGE> 27
"Depositary" means a clearing agency registered under the
Exchange Act and designated by the Company to act as Depositary
for the Bonds issued in book-entry form, and (C) "Exchange Act"
means the Securities Exchange Act of 1934 (or any successor
provision) as amended from time to time.
10. HOLDER.
The Company, the Trustee and the Call Option Holder (and any
agent of any such person) may treat the person in whose name this Bond shall be
registered as of the date of determination upon the books of the Company kept
for such purpose pursuant to the Indenture as the sole and absolute owner and
holder of this Bond (whether or not this Bond shall be overdue and
notwithstanding any notation of ownership or other writing hereon) for all
purposes, including the making of any payment in respect hereof, any exercise of
the Call Option or the Put Option and consummation of any sale and purchase
hereof pursuant thereto, the giving of any Call Notice, Hold Notice or other
notice with respect hereto, and the giving of any consent or taking of any other
action with respect hereto, and neither the Company nor the Trustee or the Call
Option Holder or any such agent shall be affected by any notice to the contrary.
11. NOTICES.
For as long as this Bond (or any portion hereof) is issued in the
form of a Global Security, each Call Notice, 10% Requirement Notice and any
other notice to be given to the holder of this Bond (or any such portion) shall
be deemed to have been duly given to such holder when given to the Depositary,
or its nominee, in accordance with its Applicable Procedures.
If at any time this Bond (or any portion hereof) is not issued in
the form of a Global Security, each Call Notice, 10% Requirement Notice and any
other notice to be given to the holder of this Bond (or any such portion) shall
be deemed to have been duly given to such holder upon the mailing of such notice
to the registered holder at such holder's address as it appears on the books of
the Company maintained for such purpose pursuant to the Indenture as of the
close of business preceding the day such notice is given.
Neither the failure to give any notice nor any defect in any
notice given to the holder of this Bond or any other Bond shall affect the
sufficiency of any notice given to another holder of any Bonds.
With respect to this Bond, whether or not issued in the form of a
Global Security, Hold Notices may be given by the registered holder hereof to
the Trustee only by facsimile transmission or by mail and must actually be
received by the Trustee at the
<PAGE> 28
following address no later than 10:00 A.M., New York City time, on the seventh
Market Day prior to the Reset Date:
Star Bank, National Association
425 Walnut Street, P.O. Box 1118
Cincinnati, Ohio 45201-1118
Attention: Corporate Trust Administration
Facsimile no.: (513) 632-5511
Hold Notices may be given with respect to this Bond only by the registered
holder hereof.
12. NO RECOURSE.
No recourse shall be had for the payment of the principal of, or
the interest on, this Bond or of the Face Value upon any exercise of the Call
Option or of the Put Price upon any exercise of the Put Option, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation or entity, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.
13. PROVISIONS RELATING TO THE CALL OPTION HOLDER.
Insofar as the provisions of this Bond purport to provide rights
to the Call Option Holder against any holder of this Bond, such rights
(including such rights to purchase this Bond pursuant to the Call Option) shall
be rights of the Company and shall be enforceable by the Company against such
holder. Each holder of this Bond shall hold this Bond (and by holding the same
shall be deemed to have agreed to do so) subject to the foregoing. Without
limiting the foregoing, the Call Option Holder may take any action under this
Bond (including giving any notice, making any determination and effecting any
settlement pursuant to paragraphs 2, 4 and 5 hereof) that the provisions of this
Bond contemplate may be taken by the Call Option Holder.
Pursuant to section 6 of the Calculation Agency Agreement, dated
as of September 22, 1999, the Call Option Holder has agreed with the Company,
for the benefit of the applicable holder of this Bond from time to time, that,
if the Call Option Holder exercises the Call Option, the Call Option Holder will
purchase this Bond from the registered holder hereof on the Reset Date, upon the
terms and subject to the conditions set forth herein. Except as may be expressly
provided in section 6 of such agreement, no holder of this Bond shall have any
right, remedy or claim against the Call Option Holder under this Bond, the
Indenture or such agreement.
<PAGE> 29
No provision of this Bond shall be invalid or unenforceable by
reason of any reference herein to the Call Option Holder. In addition, no
provision of this paragraph shall be construed to impair or otherwise affect any
rights that the Call Option Holder may have at any time as a holder of any
Securities.
14. GOVERNING LAW.
As provided in the Indenture, this Bond shall for all purposes be
governed by and construed in accordance with the laws of the State of New York.
Section 204. FORM OF GUARANTEE.
The form of Guarantee shall be set forth on the Securities
substantially as follows:
GUARANTEE
For value received, each of the undersigned hereby absolutely,
fully and unconditionally and irrevocably guarantees, jointly and severally with
each other Guarantor, to the holder of this Security the payment of principal
of, premium, if any, and interest on this Security upon which this Guarantee is
endorsed in the amounts and at the time when due and payable whether by
declaration thereof, or otherwise, and interest on the overdue principal and
interest, if any, of this Security, if lawful, and the payment or performance of
all other obligations of the Company under the Indenture or the Securities, to
the holder of this Security and the Trustee, all in accordance with and subject
to the terms and limitations of this Security and Article Five of the Sixth
Supplemental Indenture to the Indenture. This Guarantee will not become
effective until the Trustee duly executes the certificate of authentication on
this Security. This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflict of law
principles thereof.
Dated:
Attest:
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Securities
- ----------------------------- By:
Assistant Secretary/Secretary -----------------------------------------
Name:
Title:
Attest: VINE COURT ASSURANCE INCORPORATED,
<PAGE> 30
as Guarantor of the Securities
By:
- ----------------------------- -----------------------------------------
Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the Securities
By:
-----------------------------------------
Name: Keith C. Larson
Title: Vice President and Secretary
ROCKET NEWCO, INC.,
as Guarantor of the Securities
HENPIL, INC.,
as Guarantor of the Securities
WYDIV, INC.,
as Guarantor of the Securities
By:
-----------------------------------------
Name: Steven McMillan
Title: Vice President and Secretary
<PAGE> 31
SCHEDULE I
Guarantors
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
</TABLE>
<PAGE> 32
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Kwik Shop, Inc. Kansas
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited
partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
</TABLE>
<PAGE> 33
ARTICLE THREE
THE SERIES OF SECURITIES
Section 301. TITLE AND TERMS.
There shall be a series of Securities designated as the "Puttable
Reset Securities PURSSM due October 1, 2010" of the Company. Their Stated
Maturity shall be October 1, 2010, and they shall bear interest as set forth on
the reverse side of the Security.
Certain terms of the Securities are set forth on the face and the
reverse of the Security.
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.
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, each of Sections
801 and 802 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
<PAGE> 34
assume all obligations of the Company under this Indenture and
the Securities of the series created by the Sixth Supplemental
Indenture, including the due and punctual payment of the
principal of and interest on all the Securities of the series
created by the Sixth 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 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
deleted in its entirety and the following shall be substituted therefor:
"As long as the Depositary, or its nominee, is the registered
holder of a Global Security, the Depositary or such nominee, as
the case may be, will be considered the sole owner and holder of
such Global Security and the
<PAGE> 35
Securities represented thereby for all purposes under the
Securities and the Indenture. Except in the limited circumstances
referred to above, owners of beneficial interests in a Global
Security will not be entitled to have such Global Security or any
Securities represented thereby registered in their names, will
not receive or be entitled to receive physical delivery of
certificated Securities in exchange therefor and will not be
considered to be the owners or holders of such Global Security or
any Securities represented thereby for any purpose under the
Securities or the Indenture. All payments of principal of and
interest on a Global Security will be made to the Depositary or
its nominee, as the case may be, as the holder thereof. The laws
of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in
definitive form. These laws may impair the ability to transfer
beneficial interests in a Global Security."
(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 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; 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 Sixth Supplemental Indenture):
"Section 1009. LIMITATIONS ON LIENS.
After the date hereof and so long as any Securities of the series
created by the Sixth Supplemental Indenture are Outstanding, the
Company will not
<PAGE> 36
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 Sixth 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 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;
<PAGE> 37
(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
<PAGE> 38
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 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
<PAGE> 39
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 Sixth 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:
(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 Sixth 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 Sixth 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 Sixth 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
<PAGE> 40
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).
ARTICLE THIRTEEN
COVENANT DEFEASANCE
Section 1301. COMPANY'S OPTION TO EFFECT COVENANT DEFEASANCE.
The Company may at its option by Board Resolution, at any time,
elect to have Section 1302 applied to the Outstanding Securities
of this series upon compliance with the conditions set forth
below in this Article Thirteen.
Section 1302. 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, 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 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 1303. CONDITIONS TO COVENANT DEFEASANCE.
The following shall be the conditions to application of Section
1302 to the Outstanding Securities of this series:
<PAGE> 41
(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 (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
<PAGE> 42
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 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 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 covenant Defeasance
under Section 1302 have been complied with.
Section 1304. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee (or other qualifying
trustee--collectively, for purposes of this Section 1304, the
"Trustee") pursuant to Section 1303 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.
<PAGE> 43
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 1303 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 1303
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 covenant Defeasance.
Section 1305. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money
in accordance with Section 1302 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; 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 subrogated
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 after the Reset Date at a
redemption price equal to the
<PAGE> 44
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
GUARANTEE
Section 501. GUARANTEE.
Each Guarantor hereby jointly and severally fully and
unconditionally guarantees (each a "Guarantee") to each Holder of a Security
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of the Indenture or
the Securities or the obligations of the Company or any other Guarantor to the
Holders or the Trustee hereunder or thereunder, that (a) the principal of,
premium, if any, and interest on the Securities will be duly and punctually paid
in full when due, whether at maturity, upon redemption, by acceleration or
otherwise, and interest on the overdue principal and (to the extent permitted by
law) interest, if any, on the Securities and all other obligations of the
Company or the Guarantor to the Holders of or the Trustee under the Indenture or
the Securities hereunder (including fees, expenses or others) (collectively, the
"Obligations") will be promptly paid in full or performed, all in accordance
with the terms of the Indenture and the Securities; and (b) in case of any
extension of time of payment or renewal of any Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
If the Company shall fail to pay when due, or to perform, any Obligations, for
whatever reason, each Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. An Event of Default under the
Indenture or the Securities shall constitute an event of default under this
Guarantee, and shall entitle the Holders of Securities to accelerate the
Obligations of the Guarantor hereunder in the same manner and to the same extent
as the Obligations of the Company.
Each Guarantor hereby agrees that its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Securities or the Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Securities with respect to any
provisions of the Indenture or the
<PAGE> 45
Securities, any release of any other Guarantor, the recovery of any judgment
against the Company, any action to enforce the same, whether or not a Guarantee
is affixed to any particular Security, or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor further agrees that, as between it, on the one
hand, and the Holders of Securities and the Trustee, on the other hand, (a) the
maturity of the Obligations may be accelerated as provided in Article Five of
the Indenture for the purposes of the Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations, and (b) in the event of any acceleration of such Obligations as
provided in Article Five of the Indenture, such Obligations (whether or not due
and payable) shall forthwith become due and payable by the Guarantor for the
purposes of its Guarantee.
Section 502. WAIVER OF DEMAND.
To the fullest extent permitted by applicable law, each of the
Guarantors waives presentment to, demand of payment from and protest of any of
the Obligations, and also waives notice of acceptance of its Guarantee and
notice of protest for nonpayment.
Section 503. GUARANTEE OF PAYMENT.
Each of the Guarantors further agrees that its Guarantee
constitutes a guarantee of payment when due and not of collection, and waives
any right to require that any resort be had by the Trustee or any Holder of the
Securities to the security, if any, held for payment of the Obligations.
Section 504. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE.
Subject to Section 510 of this Sixth Supplemental Indenture, the
obligations of each of the Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or for any reason (other than the indefeasible
payment in full in cash of the Obligations), including any claim of waiver,
release, surrender, alteration or compromise of any of the Obligations, and
shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each of the Guarantors hereunder
shall not be discharged or impaired or otherwise affected by the failure of the
Trustee or any Holder of the Securities to assert any claim or demand or to
enforce any remedy under the Indenture or the Securities, any other guarantee or
any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in
<PAGE> 46
any manner or to any extent vary the risk of any Guarantor or that would
otherwise operate as a discharge of any Guarantor as a matter of law or equity
(other than the indefeasible payment in full in cash of all the Obligations).
Section 505. DEFENSES OF COMPANY WAIVED.
To the extent permitted by applicable law, each of the Guarantors
waives any defense based on or arising out of any defense of the Company or any
other Guarantor or the unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Company,
other than final and indefeasible payment in full in cash of the Obligations.
Each of the Guarantors waives any defense arising out of any such election even
though such election operates to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of each of the Guarantors
against the Company or any security.
Section 506. CONTINUED EFFECTIVENESS.
Subject to Section 510 of this Sixth Supplemental Indenture, each
of the Guarantors further agrees that its Guarantee hereunder shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Obligation is rescinded or
must otherwise be restored by the Trustee or any Holder of the Securities upon
the bankruptcy or reorganization of the Company.
Section 507. SUBROGATION.
In furtherance of the foregoing and not in limitation of any
other right of each of the Guarantors by virtue hereof, upon the failure of the
Company to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each of the
Guarantors hereby promises to and will, upon receipt of written demand by the
Trustee or any Holder of the Securities, forthwith pay, or cause to be paid, to
the Holders in cash the amount of such unpaid Obligations, and thereupon the
Holders shall, assign (except to the extent that such assignment would render a
Guarantor a "creditor" of the Company within the meaning of Section 547 of Title
11 of the United States Code as now in effect or hereafter amended or any
comparable provision of any successor statute) the amount of the Obligations
owed to it and paid by such Guarantor pursuant to this Guarantee to such
Guarantor, such assignment to be PRO RATA to the extent the Obligations in
question were discharged by such Guarantor, or make such other disposition
thereof as such Guarantor shall direct (all without recourse to the Holders, and
without any representation or warranty by the Holders). If (a) a Guarantor shall
make payment to the Holders of all or any part of the Obligations and (b) all
the Obligations and all other amounts payable under this Sixth Supplemental
Indenture shall be indefeasibly paid in full, the Trustee will, at such
<PAGE> 47
Guarantor's request, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Obligations resulting from such payment by such Guarantor.
Section 508. INFORMATION.
Each of the Guarantors assumes all responsibility for being and
keeping itself informed of the Company's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Obligations
and the nature, scope and extent of the risks that each of the Guarantors
assumes and incurs hereunder, and agrees that the Trustee and the Holders of the
Securities will have no duty to advise the Guarantors of information known to it
or any of them regarding such circumstances or risks.
Section 509. SUBORDINATION.
Upon payment by any Guarantor of any sums to the Holders, as
provided above, all rights of such Guarantor against the Company, arising as a
result thereof by way of right of subrogation or otherwise, shall in all
respects be subordinated and junior in right of payment to the prior
indefeasible payment in full in cash of all the Obligations to the Trustee;
provided, however, that any right of subrogation that such Guarantor may have
pursuant to this Sixth Supplemental Indenture is subject to Section 507 hereof.
Section 510. TERMINATION.
A Guarantor shall, upon the occurrence of either of the following
events, be automatically and unconditionally released and discharged from all
obligations under this Sixth Supplemental Indenture and its Guarantee without
any action required on the part of the Trustee or any Holder if such release and
discharge will not result in any downgrade in the rating given to the Securities
by Moody's Investors Service and Standard and Poor's Rating Services:
(a) upon any sale, exchange, transfer or other disposition (by
merger or otherwise) of all of the Capital Stock of a Guarantor or all, or
substantially all, of the assets of such Guarantor, which sale or other
disposition is otherwise in compliance with the terms of the Indenture;
provided, however, that such Guarantor shall not be released and discharged from
its obligations under this Sixth Supplemental Indenture and its Guarantee if,
upon consummation of such sale, exchange, transfer or other disposition (by
merger or otherwise), such Guarantor remains or becomes a Guarantor under any
Credit Facility; or
<PAGE> 48
(b) at the request of the Company, at any time that none of the
Credit Facilities are guaranteed by any Subsidiary of the Company.
The Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request of the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section. Any Guarantor not so released
will remain liable for the full amount of the principal of, premium, if any, and
interest on the Notes provided in this Sixth Supplemental Indenture and its
Guarantee.
Section 511. GUARANTEES OF OTHER INDEBTEDNESS.
As long as the Securities are guaranteed by the Guarantors, the
Company will cause each of its Subsidiaries that becomes a Guarantor in respect
of (i) any Indebtedness of the Company which is outstanding on the date hereof
and (ii) any Indebtedness incurred by the Company after the date hereof (other
than in respect of asset-backed securities), to include in any guarantee given
by any such Guarantor, provisions similar to those set forth in Section 510
hereof.
Section 512. ADDITIONAL GUARANTORS.
The Company will cause each of its Subsidiaries that becomes a
Guarantor in respect of any Indebtedness of the Company following the date
hereof to execute and deliver a supplemental indenture pursuant to which it will
become a Guarantor under this Sixth Supplemental Indenture, if it has not
already done so or unless the Guarantor is prohibited from doing so by
applicable law or a provision of a contract to which it is a party or by which
it is bound.
Section 513. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor, and by its acceptance hereof each Holder, hereby
confirms that it is the intention of all such parties that the Guarantee by such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal of state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under this Sixth
Supplemental Indenture and its Guarantee shall be limited to the maximum amount
which, after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of, any other Guarantor in respect of the obligations of such
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Sixth Supplemental Indenture, will result in the obligations of such
Guarantor under its Guarantee not constituting such fraudulent transfer or
conveyance.
<PAGE> 49
Section 514. CONTRIBUTION FROM OTHER GUARANTORS.
Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor in a pro
rata amount based on the net assets of each Guarantor, determined in accordance
with generally accepted accounting principles in effect in the United States of
America as of the date hereof.
Section 515. NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY.
Neither the Trustee, any Holder nor any other Person shall have
any obligation to enforce or exhaust any rights or remedies or take any other
steps under any security for the Obligations or against the Company or any other
Person or any property of the Company or any other Person before the Trustee,
such Holder or such other Person is entitled to demand payment and performance
by any or all Guarantors of their liabilities and obligations under their
Guarantee.
Section 516. DEALING WITH THE COMPANY AND OTHERS.
The Holders, without releasing, discharging, limiting or
otherwise affecting in whole or in part the obligations and liabilities of any
Guarantor hereunder and without the consent of or notice to any Guarantor, may:
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any other
Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral from the Company;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without consideration)
any and all collateral, mortgages or other security given by the Company or any
third party with respect to the Obligations;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or
from any security to such part of the Obligations as the Holders may see fit or
change any such application in whole or in part from time to time as the Holders
may see fit; and
(f) otherwise deal with, or waive or modify their right to deal
with, the Company and all other Persons and any security as the Holders or the
Trustee may see fit.
<PAGE> 50
Section 517. EXECUTION AND DELIVERY OF THE GUARANTEE.
(a) To further evidence the Guarantee set forth in this Article
Five, each Guarantor hereby agrees that a notation of such Guarantee shall be
endorsed on each Security authenticated and delivered by the Trustee and
executed by either manual or facsimile signature of an officer of each
Guarantor. The corporate seal of a Guarantor may be reproduced on the executed
Guarantee and the execution thereof may be attested to by any appropriate
officer of the Guarantor, but neither such reproduction nor such attestation is
or shall be required.
(b) Each of the Guarantors hereby agrees that its Guarantee set
forth in this Article Five shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of such Guarantee.
(c) If an officer of a Guarantor whose signature is on this Sixth
Supplemental Indenture or a Guarantee no longer holds that office at the time
the Trustee authenticates such Guarantee or at any time thereafter, such
Guarantor's Guarantee of such Security shall be valid nevertheless.
(d) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any Guarantee
set forth in this Sixth Supplemental Indenture on behalf of each Guarantor.
ARTICLE SIX
MISCELLANEOUS
Section 601. MISCELLANEOUS.
(a) The Trustee accepts the trusts created by the Indenture, as
supplemented by this Sixth Supplemental Indenture, and agrees to perform the
same upon the terms and conditions of the Indenture, as supplemented by this
Sixth Supplemental Indenture.
(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
Sixth Supplemental Indenture.
(c) All capitalized terms used and not defined herein shall have
the respective meanings assigned to them in the Indenture.
<PAGE> 51
(d) Each of the Company and the Trustee makes and reaffirms as of
the date of execution of this Sixth Supplemental Indenture all of its respective
representations, covenants and agreements set forth in the Indenture.
(e) All covenants and agreements in this Sixth Supplemental
Indenture by the Company or the Trustee and each Guarantor shall bind its
respective successors and assigns, whether so expressed or not.
(f) In case any provisions in this Sixth 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 Sixth 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 Sixth
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 Sixth
Supplemental Indenture as so modified or excluded, as the case may be.
(i) This Sixth 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 Sixth Supplemental Indenture shall be
deemed to be incorporated in, and made a part of, the Indenture; and the
Indenture, as supplemented by this Sixth Supplemental Indenture, shall be read,
taken and construed as one and the same instrument.
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.
<PAGE> 52
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.
Attest: THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Securities
By:
- ------------------------------ ----------------------------------------
Assistant Secretary/Secretary Name: Lawrence M. Turner
Title: Vice President and Treasurer
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Securities
By:
- ------------------------------ ----------------------------------------
Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the
Securities
By:
---------------------------------------
Name: Keith C. Larson
Title: Vice President and Secretary
<PAGE> 53
ROCKET NEWCO, INC.,
as Guarantor of the Securities
HENPIL, INC.,
as Guarantor of the Securities
WYDIV, INC.,
as Guarantor of the Securities
By:
---------------------------------------
Name: Steven McMillan
Title: Vice President and Secretary
Attest: FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
Assistant Secretary By:
---------------------------------------
Name:
Title:
SCHEDULE I
Guarantors
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
</TABLE>
<PAGE> 54
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
</TABLE>
<PAGE> 55
<TABLE>
<CAPTION>
Name of Guarantor State of Organization
- ----------------- ---------------------
<S> <C>
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited
partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
</TABLE>
<PAGE> 56
STATE OF
------------------- )
) ss.:
COUNTY OF
------------------ )
On the ___ day of September, 1999, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is __________________ of The Kroger Co., and ____________________ of
each of the Guarantors Listed on Schedule I hereto, corporations described in
and which executed the foregoing instrument; that he knows the seals of said
corporations; that the seals affixed to said instrument are such corporate
seals; that they were so affixed by authority of the Board of Directors of such
corporations, and that he signed his name thereto by like authority.
-----------------------------------------
STATE OF
------------------- )
) ss.:
COUNTY OF
------------------ )
On the ___ day of September, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ________________ of Rocket Newco, Inc., Henpil, Inc. and Wydiv,
Inc., corporations described in and which executed the foregoing instrument;
that he knows the seals of said corporations; that the seals affixed to said
instrument are such corporate seals; that they were so affixed by authority of
the Board of Directors of said corporations, and that he signed his name
thereto by like authority.
-----------------------------------------
-1-
<PAGE> 57
Page
----
STATE OF
------------------- )
) ss.:
COUNTY OF
------------------ )
On the ___ day of September, 1999, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is _________________ of Vine Court Assurance Incorporated, 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 Boards of
Directors of said corporation, and that he signed his name thereto by like
authority.
-----------------------------------------
STATE OF
------------------- )
) ss.:
COUNTY OF
------------------ )
On the ___ day of September, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ____________ of Richie's, Inc., 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 Boards of Directors of said
corporation, and that he signed his name thereto by like authority.
----------------------------------------
-2-
<PAGE> 58
Page
----
STATE OF
------------------- )
) ss.:
COUNTY OF
------------------ )
On the ___ day of September, 1999, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of Firstar 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.
----------------------------------------
-3-
<PAGE> 1
Exhibit 4.3.4
CALCULATION AGENCY AGREEMENT
BETWEEN
THE KROGER CO.
AND
GOLDMAN, SACHS & CO.
September 22, 1999
The Kroger Co., an Ohio corporation (the "Company"), proposes
to issue and sell $275,000,000 aggregate principal amount of its Puttable Reset
Securities (PURS) due October 1, 2010 (the "Bonds") in accordance with the terms
of the Indenture, dated as of June 25, 1999, as amended by the First
Supplemental Indenture, dated as of June 25, 1999, the Second Supplemental
Indenture, dated as of June 25, 1999, the Third Supplemental Indenture, dated as
of June 25, 1999, the Fourth Supplemental Indenture, dated as of September 22,
1999, the Fifth Supplemental Indenture, dated as of September 22, 1999 and the
Sixth Supplemental Indenture, dated as of September 22, 1999 (collectively, the
"Indenture"), in each case among the Company, the Guarantors named therein and
Firstar Bank, N.A., as trustee (the "Trustee"). Terms used but not defined
herein shall have the meanings assigned to them in the Bonds.
For the purpose of appointing an agent to perform the
functions of Calculation Agent as described in the Bonds, and for other reasons
related thereto, the Company and Goldman, Sachs & Co. hereby agree as follows
(it being understood that the references to Goldman, Sachs & Co. in subsection 1
through 4 below mean such firm in its capacity as Calculation Agent, in sections
5 and 6 below mean such firm in its individual capacity and not as Calculation
Agent, and in sections 7 through 12 below mean such firm in either capacity, as
the context may require):
1. Upon the terms and subject to the conditions contained
herein, the Company hereby appoints Goldman, Sachs & Co. as agent (solely in
such capacity, the "Calculation Agent") for the purpose of performing the
functions of Calculation Agent as described in the Bonds.
2. (a) Subject to sections 3 and 4 below, the Calculation
Agent agrees to perform the functions of the Calculation Agent described in the
Bonds. The Calculation Agent shall require each financial institution that is to
act as a Reference Dealer to execute a Reference Dealer agreement substantially
in the form attached hereto as Annex A, with such changes as Goldman, Sachs &
Co., in its individual capacity, reasonably may request with the approval of the
Company.
(b) Upon the request of a registered holder of Bonds, the
Trustee or the Company, the Calculation Agent shall inform such holder, the
Trustee or the Company of the results of any calculation or determination.
3. The Calculation Agent accepts and agrees to perform its
obligations set forth herein, upon the terms and subject to the conditions
hereof, including the following, to all of which the Company and the Trustee
agree:
<PAGE> 2
(a) The Company promises to reimburse the Calculation Agent
for the reasonable out-of-pocket expenses (including counsel fees and expenses)
incurred by it in connection with the services rendered hereunder by it as
Calculation Agent upon receipt of such invoices as the Company shall reasonably
require. The Company also agrees to indemnify the Calculation Agent for, and to
hold it harmless against, any and all loss, liability, damage, claims or expense
(including the costs and expenses, including reasonable legal fees and expenses,
of defending against any claim of liability) incurred by the Calculation Agent
that arises out of or in connection with its acting as Calculation Agent
hereunder, except such as may result from the gross negligence or bad faith of
the Calculation Agent. The Calculation Agent shall incur no liability to and
shall be indemnified and held harmless by the Company for, or in respect of, any
actions taken, omitted to be taken or suffered to be taken in good faith by the
Calculation Agent in reasonable reliance upon (i) the written opinion of counsel
satisfactory to it or (ii) instructions from the Trustee or the Company. The
Calculation Agent shall not be liable for any error resulting from the use of or
reliance on a source of information used in good faith and with due care to make
any determination, calculation or declaration hereunder. In no event shall the
Calculation Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Calculation Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action. The provisions of this paragraph
shall survive the termination of this Agreement.
(b) In acting under this Agreement and in connection with the
Bonds, the Calculation Agent is acting solely as agent of the Company and does
not assume any obligations to, or relationship of agency or trust for or with,
any of the owners or holders of the Bonds.
(c) Notwithstanding any other provision to the contrary set
forth in this Agreement, the Calculation Agent shall be protected against and
shall incur no liability for or in respect of any action taken or omitted to be
taken or anything suffered by it in reliance upon the terms of the Bonds or any
notice, direction, certificate, affidavit, statement or other paper, document or
communication reasonably believed by it to be genuine and to have been approved
or signed by the proper party or parties.
(d) The Calculation Agent shall be obligated to perform such
duties and only such duties as are specifically set forth for the Calculation
Agent herein or in the Bonds, and no implied duties or obligations shall be read
into this Agreement against the Calculation Agent.
(e) The Calculation Agent may, upon obtaining the prior
written consent of the Company, perform any duties hereunder through agents or
attorneys, and the Calculation Agent shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(f) The Company will not, without first obtaining the prior
written consent of the Calculation Agent, make any change to the terms of the
Bonds if such change would materially and adversely affect the Calculation
Agent's rights, duties and obligations under this Agreement.
(g) The Calculation Agent shall be protected and shall incur
no liability for or in respect of any action taken or omitted to be taken in
good faith or anything suffered in good faith by it in reliance upon anything
contained in the Bonds, the Indenture, the Prospectus Supplement dated September
15, 1999 or the Prospectus dated September 7, 1999 relating to the Bonds
(together, the "Prospectus") or any information supplied to the Calculation
Agent by the Company pursuant to this Agreement excluding any information
supplied by the Calculation Agent in any capacity.
-2-
<PAGE> 3
(h) The Calculation Agent, whether acting for itself or in any
other capacity, its partners, officers, directors, employees and shareholders or
any affiliate of the Calculation Agent may become the owner, holder or pledgee
of Bonds (or the owner, holder, pledgee or obligor with respect to any option,
swap or other contract related thereto) with the same rights as it would have
had if it were not acting hereunder as Calculation Agent and may engage or be
interested in any financial or other transaction with the Company as fully as if
it were not the Calculation Agent.
(i) The Calculation Agent shall promptly provide to the
Trustee a written report of all determinations and calculations required to be
made by the Calculation Agent pursuant to the terms of this Agreement and the
Bonds. The Trustee may conclusively rely on all of the information provided to
it pursuant to the preceding sentence without further investigation on its
behalf.
Any determination or calculation made by the Calculation Agent
in accordance with the terms of this Agreement and the Bonds shall be final and
binding on the Company, the Trustee and the Holders and owners of the Bonds,
absent manifest error.
4. (a) The Calculation Agent may at any time resign as
Calculation Agent by giving written notice to the Company (with a copy to the
Trustee) of such intention on its part, specifying the date on which its desired
resignation shall become effective; PROVIDED, HOWEVER, that such date shall not
be earlier than 30 days after the receipt of such notice by the Company, unless
the Company agrees in writing to accept less notice. The Company may remove the
Calculation Agent at any time, but only for cause, by filing with the
Calculation Agent (with a copy to the Trustee) any instrument in writing signed
on behalf of the Company and specifying such removal, the reasons for such
removal and the date when such removal is intended to become effective. Such
resignation or removal shall take effect upon the date of the appointment by the
Company, as hereinafter provided, of a successor Calculation Agent. If at least
30 days prior to the next succeeding Calculation Date after notice of
resignation or removal has been given, a successor Calculation Agent has not
been appointed, the Calculation Agent may petition a court of competent
jurisdiction to appoint a successor Calculation Agent. A successor Calculation
Agent shall be appointed by the Company by an instrument in writing signed on
behalf of the Company and the successor Calculation Agent. Upon the appointment
of a successor Calculation Agent and acceptance by it of such appointment, the
Calculation Agent so superseded shall cease to be such Calculation Agent
hereunder. Upon its resignation or removal, the Calculation Agent shall be
entitled to the reimbursement of all reasonable out-of-pocket expenses incurred
in connection with the services rendered hereunder by it as Calculation Agent.
(b) Any successor Calculation Agent appointed hereunder shall
execute and deliver to its predecessor, the Company and the Trustee an
instrument accepting such appointment hereunder and agreeing to perform the
functions of the Calculation Agent under the Bonds and the obligations of the
Calculation Agent under this Agreement and to be bound by this Agreement, and
thereupon such successor Calculation Agent, without any further act, deed or
conveyance, shall become vested with all the authority, rights, powers, trusts,
immunities, duties and obligations of such predecessor with like effect as if
originally named as such Calculation Agent hereunder, and such predecessor
Calculation Agent, upon payment of its charges and disbursements then unpaid,
shall thereupon become obliged to transfer and deliver, and such successor
Calculation Agent shall be entitled to receive and the predecessor Calculation
Agent shall provide, copies of any relevant records maintained by such
predecessor Calculation Agent.
-3-
<PAGE> 4
(c) Any corporation, partnership, limited liability company or
other entity into which the Calculation Agent may be merged or converted or with
which the Calculation Agent may be consolidated, or any corporation,
partnership, limited liability company or other entity resulting from any
merger, conversion or consolidation to which the Calculation Agent shall be a
party, shall, to the extent permitted by applicable law, be the successor
Calculation Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto PROVIDED that
such successor Calculation Agent shall assume, or be deemed to have assumed, all
of the obligations and liabilities of its predecessor under this Agreement.
Notice of any such merger, conversion, consolidation or sale shall forthwith be
given to the Company and the Trustee.
(d) The foregoing indemnity, reimbursement and other
provisions of this Agreement will survive any resignation or removal of the
Calculation Agent. The agreements of the parties set forth above will be binding
upon and inure to the benefit of their respective successors.
5. For good and valuable consideration, the sufficiency of
which is hereby acknowledged, the Company hereby agrees with Goldman, Sachs &
Co., in its individual capacity and not as Calculation Agent, as follows:
(a) If at any time Goldman, Sachs & Co., with the advice of
its counsel and after consultation with the Company and its counsel, determines
that registration of the Bonds under the Securities Act of 1933 (or any
successor law), as it may be amended from time to time, is required in order for
Goldman, Sachs & Co. to resell the Bonds on any Reset Date as contemplated in
the Prospectus, the Company will, at its own expense, cause the Bonds to be so
registered in time to permit such resale of the Bonds on the relevant Reset
Date.
(b) Notwithstanding any provision to the contrary set forth in
the Indenture, the Company will not purchase any Bonds in the open market, by
tender offer, in a private transaction or otherwise, except pursuant to any
purchase obligation it may have under the Bonds or with the prior written
consent of Goldman, Sachs & Co., as holder of the Call Option.
(c) Notwithstanding any provision to the contrary set forth in
the Indenture, the Company will not cause or permit the provisions of any Bond
(or the Indenture, as it relates to any Bond) to be modified in any way without
the prior written consent of Goldman, Sachs & Co. (including with respect to the
payment and settlement provisions of paragraph 5 of the Bonds).
(d) The Bonds and the Indenture, insofar as they relate to the
Call Option or may affect the interests of Goldman, Sachs & Co. as holder of
such option (including the provisions relating to the interest rate reset and
resale to a Final Dealer, but excluding the provisions referred to in the next
sentence), constitute obligations of the Company that are made for the benefit
of, and are enforceable by, Goldman, Sachs & Co., in its individual capacity and
not as Calculation Agent. In addition, insofar as the provisions of any Bond
purport to provide rights to Goldman, Sachs & Co. against any holder of such
Bond (including the right to purchase such Bond from any holder on any Reset
Date pursuant to the Call Option), the Company shall take all action reasonably
necessary or desirable to enforce such rights in its own name, but for the
benefit of Goldman, Sachs & Co. so as to ensure that Goldman, Sachs & Co.
receives the full benefit of such rights as if they were enforceable directly by
Goldman, Sachs & Co., in each case if, to the extent and in the manner, but only
if, to the extent and in the manner, requested by Goldman, Sachs & Co. Among
other things, if requested by Goldman, Sachs & Co., such action by the Company
shall include effecting transfers of Bonds or beneficial interests therein as
contemplated in paragraph 9 of the reverse of the Bonds, exchanging Bonds in
book-entry
-4-
<PAGE> 5
form for Bonds that are not in such form and vice-versa as contemplated in
paragraph 9 of the reverse of the Bonds and instituting suit to enforce specific
performance of such rights or to obtain money damages or other relief in respect
of such rights, whether against the holders or their respective successors,
assigns, estates, heirs or representatives. Without limiting the foregoing,
Goldman, Sachs & Co. may take any action under the Bonds (including giving any
notice, making any determination and effecting any settlement pursuant to
paragraphs 11, 2 and 5 thereof) that the provisions of the Bonds contemplate may
be taken by Goldman, Sachs & Co., and the Company will not take any action
unless Goldman, Sachs & Co. requests it to do so. Goldman, Sachs & Co. shall
reimburse the Company for any reasonable, out-of-pocket expenses the Company
incurs, including reasonable counsel fees and expenses, in connection with any
action it may take in this regard at the request of Goldman, Sachs & Co. The
Company's agreements set forth in this paragraph shall not be invalid or
unenforceable by reason of any provision of the Bonds being unenforceable by
Goldman, Sachs & Co. This paragraph is not intended to limit any rights that
Goldman, Sachs & Co. may have under the Indenture or the Bonds as a holder or
owner of Securities from time to time.
(e) Notwithstanding any provision to the contrary set forth in
the Bonds or the Indenture (but subject to section 5(d) above), the Company (i)
will use its best efforts to maintain the Bonds in book-entry form with The
Depository Trust Company ("DTC") or any successor thereto and to appoint a
successor depository to the extent necessary to maintain the Bonds in book-entry
form and (ii) will waive any discretionary right it otherwise has under the
Indenture to cause the Bonds to be issued in certificated form. The Company will
perform its obligations, and pursue its rights against DTC, under the DTC Letter
of Representations dated September 22, 1999 among the Company, the Trustee and
DTC.
(f) If Goldman, Sachs & Co. resigns or is removed as
Calculation Agent, the Company will take such steps as are necessary to ensure
that there is at all times thereafter a qualified financial institution
appointed and serving as Calculation Agent pursuant to an agreement with the
Company that is substantially similar to this Agreement (excluding this section
5) or that is not materially adverse to the interests of Goldman, Sachs & Co. as
holder of the Call Option. The Company will promptly provide Goldman, Sachs &
Co. with a copy of each such agreement.
The agreements made in this section 5 will remain in effect regardless of
whether or not Goldman, Sachs & Co. ceases to act as Calculation Agent or to
perform its duties as Calculation Agent hereunder, and regardless of any change
in the Trustee. The agreements of the Company in this section 5 are not
contingent in any way upon the agreements of the parties set forth in the other
sections of this Agreement, will be binding upon the Company and its successors
and will inure to the benefit of Goldman, Sachs & Co. and its successors.
6. (a) Goldman, Sachs & Co., in its individual capacity and
not as Calculation Agent, hereby agrees with the Company and the Trustee, for
the benefit of the Company and the applicable holders of the Bonds from time to
time, that, if Goldman, Sachs & Co. exercises the Call Option with respect to
any Reset Date when the Bonds are outstanding, it will purchase the outstanding
Bonds from the registered holders thereof on such Reset Date upon the terms and
subject to the conditions (including the absence of a Market Disruption Event or
Failed Remarketing) set forth in such Bonds, all as provided in such Bonds. If
Goldman, Sachs & Co. exercises the Call Option and becomes obligated under this
Agreement to purchase outstanding Bonds on any Reset Date but fails to do so,
and the Company becomes obligated to purchase such Bonds on the Reset Date as
provided in the Bonds, such purchase by the Company will not relieve Goldman,
Sachs & Co. from any liability it may have on its obligation under this
Agreement to purchase such Bonds. The holders of the Bonds shall have no right,
claim or remedy under this Agreement except as provided in this section 6.
-5-
<PAGE> 6
(b) If any of the following events (each a "Call Option
Termination Event") shall occur on or prior to the Reset Date, then (i) the
Company shall notify Goldman, Sachs & Co. promptly of the occurrence of such
event (including, in the case of clause (B) below, any modification of any kind
to the Indenture or the Bonds) and (ii) Goldman, Sachs & Co., as holder of the
Call Option, shall upon the occurrence of such event be entitled to demand that
the Company pay them the Call Option Termination Amount (as defined below), and
the Company shall pay such amount to Goldman, Sachs & Co. within three Business
Days (as defined in the Indenture) of the date of such demand: (A) an Event of
Default (as defined in the Indenture) with respect to the Bonds, or any event
which, with the giving of notice or passage of time or both, would constitute
such an Event of Default, shall have occurred and be continuing, or (B) the
Indenture or the Bonds shall have been amended in any manner, or otherwise
contain any provision not contained therein as of the date hereof, that in the
reasonable judgment of Goldman, Sachs & Co. materially changes the nature of the
Bonds or the coupon reset procedures, unless consented to in writing by Goldman,
Sachs & Co. The Call Option shall terminate upon payment of the Call Option
Termination Amount.
(c) The "Call Option Termination Amount" shall mean, on any
date, the amount determined by Goldman, Sachs & Co. equal to the "Fair Market
Value" of the embedded interest rate option implicit in the option to purchase
the Bonds on the Reset Date at 100% of the aggregate principal amount thereof.
"Fair Market Value" shall be determined by Goldman, Sachs & Co., as follows:
Goldman, Sachs & Co. shall request five primary U.S. Government securities
dealers (each a "Reference Treasury Dealer") in the City of New York to provide
its quotation of the amount required to enter into an agreement with Goldman,
Sachs & Co. that would have the effect of preserving for Goldman, Sachs & Co.
the economic equivalent of the Call Option, assuming the Call Option Termination
Event had not occurred. Goldman, Sachs & Co. shall request each Reference
Treasury Dealer to provide its quotation to the extent reasonably practicable as
of the same day and time (without regard to different time zones) on or as soon
as reasonably practicable after the notice provided for in paragraph (b) above.
The day and time as of which these quotations are to be obtained will be
selected in good faith by Goldman, Sachs & Co. If more than three quotations are
provided, the Fair Market Value shall be the arithmetic mean of the quotations,
without regard to the quotations having the highest and lowest values. (For this
purpose, if more than one quotation has the same highest value or lowest value,
then one of such quotations shall be disregarded.) If three or fewer such
quotations are provided, the Fair Market Value shall be the arithmetic mean of
the quotations. The determination of the Call Option Termination Amount by
Goldman, Sachs & Co. shall, absent manifest error, be binding on the Company.
Notwithstanding the foregoing, (i) if a Call Option Termination Event occurs
after Goldman, Sachs & Co.'s exercise of the Call Option (or if a Call Option
Termination Event occurs prior to such exercise, but notice thereof is not
received by Goldman, Sachs & Co. until after such exercise) and prior to the
time a Final Dealer (which may be Goldman, Sachs & Co.) becomes obligated to
purchase the Bonds on the Reset Date, the Call Option Termination Amount shall
equal (A) the aggregate principal amount of the Bonds outstanding multiplied by
(B) the Margin as calculated by Goldman, Sachs & Co. in accordance with the
procedures set forth in the Bonds as soon as reasonably practicable after the
occurrence of such Call Option Termination Event (or receipt of such notice),
and (ii) if a Call Option Termination Event occurs after the time a Final Dealer
(which may be Goldman, Sachs & Co.) becomes obligated to purchase the Bonds on
the Reset Date, the Call Option Termination Amount shall equal (A) the aggregate
principal amount of the Bonds outstanding multiplied by (B) the Margin as
calculated on the date such Final Dealer became so obligated.
7. Any notice required to be given hereunder shall be
delivered in person, sent by overnight courier, registered mail, return receipt
requested, or facsimile or communicated by telephone (subject, in the case of
communication by telephone, to confirmation dispatched within twenty-four hours
by letter or by facsimile),
-6-
<PAGE> 7
in the case of the Company, to:
The Kroger Co.
1014 Vine Street
Cincinnati, Ohio 45202
Attention: Treasurer
Facsimile: (513) 762-4454
in the case of the Calculation Agent, to:
Goldman, Sachs & Co.
85 Broad Street
New York, N.Y. 10004
Attention: Registration Department
Facsimile: (212) 902-3000;
in the case of Goldman, Sachs & Co. (in its individual capacity, and
not as Calculation Agent), to:
Goldman, Sachs & Co.
85 Broad Street
New York, N.Y. 10004
Attention: Registration Department
Facsimile: (212) 902-3000;
and in the case of the Trustee, to:
Firstar Bank, N.A.
425 Walnut Street, P.O. Box 1118
Cincinnati, Ohio 45201-1118
Attention: Corporate Trust Administration
Facsimile: (513) 632-5511
or to any other address of which any party shall have notified the others in
writing as herein provided. Any notice hereunder given by facsimile or letter,
first class mail, shall be deemed to be received upon actual receipt thereof.
8. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
9. The rights and obligations of the Company hereunder may not
be assigned or delegated to any other person without the prior written consent
of Goldman, Sachs & Co. The rights and obligations of Goldman, Sachs & Co.
hereunder may not be assigned or delegated to any other person without the prior
written consent of the Company. This Agreement shall inure to the benefit of and
be binding upon the Company and Goldman, Sachs & Co. and their respective
successors and assigns, and will not confer any
-7-
<PAGE> 8
benefit upon any other person (other than as provided in section 6 above). The
terms "successors" and "assigns" shall not include any purchaser of Bonds merely
because of such purchase.
10. If any provision of this Agreement shall be held invalid
or unenforceable as applied in any particular case in any or all jurisdictions,
such circumstances shall not have the effect of rendering the provision invalid
or unenforceable in any other case or jurisdiction, or of rendering any other
provision of this Agreement invalid or unenforceable.
11. This Agreement may be amended by any instrument in writing
signed by each of the parties hereto.
12. This Agreement may be executed by each of the parties
hereto in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written.
The Kroger Co.
By: ______________________________
Name:
Title:
Goldman, Sachs & Co.
By: ______________________________
Name:
Title:
-8-
<PAGE> 9
ANNEX A
FORM OF REFERENCE
DEALER AGREEMENT
__________, 200_
- ----------------------
- ----------------------
- ----------------------
- ----------------------
Dear Sirs:
The Kroger Co., an Ohio corporation (the "Company"), has
issued $275,000,000 in outstanding principal amount of its Puttable Reset
Securities (PURS) due October 1, 2010 (the "Bonds") pursuant to an Indenture,
dated as of June 25, 1999, as amended by the First Supplemental Indenture, dated
as of June 25, 1999, the Second Supplemental Indenture, dated as of June 25,
1999, the Third Supplemental Indenture, dated as of June 25, 1999, the Fourth
Supplemental Indenture, dated as of September 22, 1999, the Fifth Supplemental
Indenture, dated as of September 22, 1999 and the Sixth Supplemental Indenture,
dated as of September 22, 1999 (collectively, the "Indenture"), in each case
among the Company, the Guarantors named therein and Firstar Bank, N.A., as
trustee (the "Trustee"). The Bonds provide for the reset of the rate at which
interest will accrue thereon and for their resale on the Reset Date. Pursuant to
a Calculation Agency Agreement, dated September 22, 1999, between the Company
and Goldman, Sachs & Co. (the "Calculation Agency Agreement"), we have been
appointed as the calculation agent (the "Calculation Agent") for purposes of
determining the new interest rate for the Bonds on the Reset Date. As
Calculation Agent, we would like to extend to you an invitation to participate
in the interest reset and resale process as a Reference Dealer, as described
more fully in the Bonds.
Capitalized terms used in this Agreement and not defined
herein will have the meanings ascribed to them in the Bonds.
The Calculation Date to which this agreement relates is [ ]
2000, and the Reset Date is [ ] 2000
Please note that by executing this agreement, you agree that,
if you are selected as the Final Dealer, you will purchase from Goldman, Sachs &
Co. on the Calculation Date for settlement on the Reset Date and at the Final
Offer Price your Pro Rata portion of the Bonds that Goldman, Sachs & Co. may
purchase pursuant to the Call Option and tender for sale to you on the Reset
Date. We will inform you whether you have been selected as the Final Dealer on
or shortly after the Calculation Date. If you are selected as the Final
-9-
<PAGE> 10
Dealer, (i) the aggregate principal amount of Bonds which you may be required to
purchase will not exceed your Pro Rata portion of the Bonds that Goldman, Sachs
& Co. purchases pursuant to the Call Option (we will inform you of the actual
amount on the Reset Date), (ii) the price for such Bonds will be the Final Offer
Price, which we will provide to you when requesting your bid on the Calculation
Date, and (iii) the Adjusted Rate for the Bonds for the Reset Period beginning
on such Reset Date will be calculated by us based on the bid submitted (and
confirmed in writing) by you on the Calculation Date.
Notwithstanding anything to the contrary set forth in this
Agreement, you will have no obligation or right to purchase any Bonds on any
Reset Date if you are not selected as the Final Dealer or if Goldman, Sachs &
Co. does not purchase such Bonds on the Reset Date. Neither the Calculation
Agent nor the Company has any obligation hereunder to sell any Bonds to you.
If you are willing to participate as a Reference Dealer under
the terms described above, please fill in the information requested below and
have an appropriate person sign and return this agreement to us by
________________, ____. Upon acceptance hereof by you, this letter shall
constitute a binding agreement between you and us, and for the benefit of the
Company and Goldman, Sachs & Co. (in its individual capacity and not as
Calculation Agent).
-10-
<PAGE> 11
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
Goldman, Sachs & Co.,
as Calculation Agent
By: _______________________
Name:
Title:
Accepted as of the date hereof:
By: ___________________________
Name:
Title:
Contact: _______________________
Telephone No.: _________________
Facsimile No.: _________________
-11-
