SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES UNDER
THE TRUST INDENTURE ACT OF 1939
Homeland Stores, Inc.
(Name of applicant)
2601 N.W. Expressway
Oklahoma City, Oklahoma 73112
(Address of principal executive offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE
QUALIFIED
TITLE OF CLASS AMOUNT
10% Senior Subordinated Notes Due 2003 $60,000,000
Approximate date of proposed public offering: June 30,
1996
Name and address of agent for service: Larry W. Kordisch
Homeland Stores, Inc.
2601 N.W. Expressway
Oklahoma City,
Oklahoma 73112
-with a copy to -
Kenni B. Merritt
Crowe & Dunlevy
20 North Broadway
Oklahoma City, Oklahoma 73102
The obligor hereby amends this application for
qualification
on such date or such dates as may be necessary to delay its
effectiveness
until (i) the 20th day after the filing of a further amendment
which
specifically states that it shall supersede such amendment or
(ii) such date
as the Commission, acting pursuant to Section 307(c) of the Act,
may
determine upon the written request of the obligor.
GENERAL
1. General Information. Furnish the following as to the
applicant:
(a) Form of organization.
The applicant, Homeland Stores, Inc. ("Company"), is a
corporation.
(b) State or other sovereign power under the laws of which
organized.
The Company is organized under the laws of the State of
Delaware.
2. Securities Act exemption available. State briefly the
facts relied
upon by the applicant as a basis for the claim that registration
of the
indenture securities under the Securities Act of 1933 is not
required.
The indenture securities are exempt from registration
under the
Securities Act of 1933, as amended ("Securities Act"), by virtue
of Section
1145(a)(1) of the United States Bankruptcy Code, as amended
("Bankruptcy Code").
The Company is a debtor in a case filed under Chapter
11 of the
Bankruptcy Code styled In re Homeland Stores. Inc.. Debtor, Case
No. 96-747
(PJW), pending in the United States Bankruptcy Court for the
District of
Delaware ("Bankruptcy Court"). The case is jointly administered
with a case
filed under Chapter 11 of the Bankruptcy Code styled In re
Homeland Holding
Corporation. Debtor, Case No. 96-748 (PJW), pending in the
Bankruptcy Court.
The indenture securities, the 10% Senior Subordinated
Notes Due 2003
("New Notes"), are securities being issued by the Company under
the First
Amended Joint Plan of Reorganization of Homeland Stores, Inc. and
Homeland
Holding Corporation ("Plan") filed by the applicant and its
parent corporation
Homeland Holding Corporation ("Holding") on June 13, 1996. The
Plan may be
modified from time to time as provided therein.
The New Notes are being issued in exchange for claims
against the
Company. These claims consist of the allowed secured claims of
the holders of
the Series A Senior Secured Floating Rate Notes due 1997, the
Series C Senior
Secured Fixed Rate Notes due 1999 and the Series D Senior Secured
Floating
Rate Notes due 1997, in each case issued by the Company ("Old
Notes").
AFFILIATIONS
3. Affiliates. Furnish a list or diagram of all
affiliates of the
applicant and indicate the respective percentages of voting
securities or
other bases of control.
Holding is the parent corporation of the Company.
Holding owns,
prior to the consummation of the Plan, all of the issued and
outstanding
shares of Common Stock, par value $0.01 per share ("Homeland
Common Stock"),
of the Company and, upon the consummation of the Plan, will
continue to own
all of the issued and outstanding shares of Homeland Common
Stock.
As of May 31, 1996, the Clayton & Dubilier Private
Equity Fund III,
Limited Partnership ("C&D Fund III") and The Clayton & Dubilier
Private Equity
Fund IV, Limited Partnership ("C&D Fund IV") may be deemed to be
"affiliates"
of the Company by virtue of their beneficial ownership of 35.9%
and 40.4%,
respectively, of the then outstanding shares of Common Stock, par
value $0.01
per share ("Old Common Stock"), of Holding. Joseph L. Rice,
III and Alberto Cribore, who serve as general partners of the
general
partner of C&D Fund III and as general partners of the general
partner of C&D
Fund III, may be deemed to share beneficial ownership of the
shares
beneficially owned by C&D Fund III and C&D Fund IV, though each
of them
disclaims such beneficial ownership. Likewise, B. Charles Ames,
William
A. Barbe, Donald J. Gogel, Leon J. Hendrix, Jr., Hubbard C. Howe
and Andrall
Pearson, who also serve as general partners of the general
partner of C & D
Fund IV, may deemed to share beneficial ownership of the shares
beneficially
owned by C&D Fund IV, though each of them disclaims such
beneficial ownership.
The Plan contemplates the issuance on the consummation
of the Plan of
4,700,000 new shares of Common Stock, par value $0.01 per share
("New Common
Stock"), of Holding to the holders of general unsecured claims
against the
Company and the holders of Old Common Stock. The holders of
general unsecured
claims, including the holders of the Old Notes, will be issued an
aggregate
of 4,450,000 shares of New Common Stock and the holders of Old
Common
Stock will be issued an aggregate of 250,000 shares of New Common
Stock. As
a result of the equity recapitalization pursuant to the Plan, the
persons,
if any, who are affiliates on consummation by virtue of
beneficial ownership
of capital stock of Holding may be significantly different than
the persons
who are affiliates prior to consummation. The Company and Holding
are unable
to determine the identity of the persons, if any, who will be
affiliates
because, among reasons, a significant amount of the Old Notes are
currently
held in nominee name, the Old Notes and the other general
unsecured claims
may be transferred or acquired prior to the consummation of the
Plan and the
actual amount of general unsecured claims (other than unsecured
claims in
respect of the Old Notes) has not been finally determined.
As of May 31, 1996, the following persons may be deemed
to be
affiliates by virtue of their positions as directors and/or
executive
officers of the Company:
B. Charles Ames Andrall S. Pearson Terry M.
Marczewski
James A. Demme Hubbard C. Howe Alfred F.
Fideline, Sr.
John A. Shields Michael G. Babiarz Prentess E.
Alletag, Jr.
Bernard S. Black Larry W. Kordisch
Bernard Paroly Steven W. Mason
See Item 4.
On the consummation of the Plan, Messrs. Ames, Black,
Paroly,
Pearson, Howe and Babiarz will cease to serve as directors of the
Company
and should therefore cease to be affiliates of the Company. The
Plan provides
for the designation of five new directors (in addition to Messrs.
Demme and
Shields), four of whom will be designated by the ad hoc committee
which
represents approximately 75% of the holders of Old Notes
("Committee") and
one of whom will he designated by the United Food and Commercial
Workers
Union of America ("Union"), the union which represents
approximately 90% of
the employees of the Company. At the time of the filing hereof,
neither the
Committee nor the Union has made any such designation. All of the
other
persons (who serve as executive officers of the Company) will
continue to
hold the same positions after consummation of the Plan. See Item
4.
MANAGEMENT AND CONTROL
4. Directors and executive officers. List the name and
the complete
mailing addresses of all directors and executive officers of the
applicant
and all persons chosen to become directors and executive
officers. Indicate
all offices with the applicant held or to be held by the person
named.
Prior to the consummation of the Plan, the following
persons are
serving as directors of the Company:
B. Charles Ames (Chairman of the Board)
James A. Demme
John A. Shields
Bernard S. Black
Bernard Paroly
Andrall S. Pearson
Hubbard C. Howe
Michael G. Babiarz
The mailing address for each of these persons is as follows:
c/o Homeland Stores, Inc.
2601 Northwest Expressway
Oklahoma City, Oklahoma 73112
Upon the consummation of the Plan, the Board of
Directors will be
restructured to consist of seven members. The following two
persons will
continue to serve as directors of the Company:
James A. Demme
John A. Shields
In addition, the Committee is entitled to designate four
directors and the
Union is entitled to designate one director. At the time of the
filing
hereof, neither the Committee nor the Union has designated any
directors.
The mailing address for each of these persons will be as follows:
c/o Homeland Stores, Inc.
2601 Northwest Expressway
Oklahoma City, Oklahoma 73112
The following persons are serving as executive officers
of the
Company, holding the following officer, and will serve as
executive officers
of the Company, holding the same offices, upon the consummation
of the Plan:
Name Office(s)
James A. Demme President and Chief Executive
Officer
Larry W. Kordisch Executive Vice President -
Finance, Chief
Financial Officer, Treasurer and
Secretary
Steven M. Mason Vice President - Marketing
Terry M. Marczewski Chief Accounting Officer,
Assistant
Treasurer and Assistant Secretary
Alfred F. Fideline, Sr. Vice President - Retail
Operations
Prentess E. Alletag, Jr. Vice President - Human Resources
The mailing address for each of these persons is as follows:
c/o Homeland Stores, Inc.
2601 Northwest Expressway
Oklahoma City, Oklahoma 73112
5. Principal owners of voting securities. Furnish the
following
information as to each person owning 10 percent or more of the
voting
securities of the applicant.
As of May 31, 1996
Name and Complete Amount Percentage
of Voting
Mailing Address Title of Class Owned Owned Secure
Owned
Homeland Holding Common Stcok
Corporation (Par Value $0.01) 100 10%
2601 N.W. Expressway Shares
Oklahoma City, OK 73112
Holding will continue to own all of the issued and
outstanding
shares of Homeland Common Stock on the consummation of the Plan.
UNDERWRITERS
6. Underwriters. Give the name and complete address of
(a) each
person who, within three years prior to the date of filing the
application,
acted as an underwriter of any securities of the obligor which
were
outstanding on the date of filing the application and (b) each
proposed principal underwriter of the securities proposed to be
offered.
As to each person specified in (a), give the title of each class
of
securities underwritten.
There is no person who, within the three years prior to
the date of
filing the application, has served as an underwriter of any
securities of
the Company.
There is no person who will be the proposed principal
underwriter
of the securities proposed to be offered.
CAPITAL SECURITIES
7. Capitalization. (a) Furnish the following information
as to each
authorized class of securities of the applicant.
As of May 31, 1996
Title of Class Amount Authorized Amount
Outstanding
Common Stock
(Par Value $0.01) 100 Shares 100 Shares
(b) Give a brief outline of the voting rights of each
class of voting
securities referred to in paragraph (a) above.
The shares of Homeland Common Stock are the only voting
securities
of the applicant. Each holder of Homeland Common Stock will be
entitled to
one vote for each share held of record on each matter submitted
to the
shareholders. Cumulative voting for the election of directors
will not be
permitted.
INDENTURE SECURITIES
8 Analysis of indenture provisions. Insert at this point
the
analysis of indenture provisions required under Section
305(a)(2).
The following discussion is a description of certain
provisions of
the indenture ("New Indenture") to which this filing relates
required by
Section 305(a)(2) of the Trust Indenture Act of 1939, as amended.
This
discussion is qualified in its entirety by reference to the New
Indenture,
a copy of which is filed as Exhibit T3C. Capitalized terms used
in this Item
8 and not otherwise defined have the respective meanings assigned
to them in
the New Indenture.
A. Events of Default
The following events will be "Events of Default" under
the New
Indenture:
(a) The Company defaults in the payment of interest on
any New
Note when the same becomes due and payable and such default
continues for
a period of 30 days, whether or not such payment shall be
prohibited by the
subordination provisions of the New Indenture; or
(b) The Company defaults in the payment of the
principal of
(or premium, if any, on) any New Note at its Maturity, whether or
not such
payment shall be prohibited by the subordination provisions of
the New
Indenture; or
(c) The Company defaults in the performance of, or
breaches, any
covenant or warranty of the Company under the New Indenture
(other than a
default specified in clause (a) or (b) above or clause (g)
below), and such
default or breach continues for a period of 30 days after a
written notice
specifying such default or breach and stating that such notice is
a
"Notice of Default" under the New Indenture has been given, by
registered
or certified mail, to ( i) the Company by the New Trustee or (ii)
to the
Company and the New Trustee by the holders of at least 25% in
principal
amount of the Outstanding New Notes; or
(d) an event of default as defined in any mortgage,
bond,
indenture, loan agreement or other evidence of Indebtedness under
which the
Company or any Subsidiary then has outstanding Indebtedness in
excess of
$5 million in the aggregate shall occur and such default (i) is
caused by
a failure to pay principal of, or premium, if any, or interest
on, such
Indebtedness within the applicable grace period, if any, of such
Indebtedness
or (ii) results in such Indebtedness becoming or being declared
due and
payable prior to the date on which it would otherwise become due
and payable
(if not already matured at its final maturity in accordance with
its terms);
or
(e) final judgments or orders are rendered against the
Company,
the Guarantor or any Subsidiary which require the payment in
money, either
individually or in an aggregate amount, that is more than $5
million and such
judgment or order shall not have been discharged or fully bonded,
and there
shall have been a period of 60 days after the date on which any
period for
appeal has expired and during which a stay of enforcement of such
judgment,
order or decree shall not be in effect; or
(f) certain events of bankruptcy, insolvency or
reorganization
with respect to the Company or any Subsidiary shall have
occurred; or
(g) a default in the performance or breach of any of
the
provisions of the New Indenture relating to consolidation,
merger,
conveyance, transfer or lease.
There are no provisions in the New Indenture with
respect to the
withholding of notice to the holders of the New Notes of any
Event of Default.
B. Authentication and Delivery of Indenture Securities;
Application of
Proceeds
The New Notes will be issued in registered form,
without coupons, and
in denominations of $1,000 and integral multiples thereof. The
New Notes are
required to be substantially in the form set forth in Section 2.2
and Section
2.3 of the New Indenture.
The New Notes shall be executed on behalf of the
Company by any two of
the following: its Chairman of the Board, its President or one of
its Vice
Presidents, under its corporate seal reproduced thereon and
attested by its
Secretary or one of its Assistant Secretaries. The signature of
any of these
officers on the New Notes may be manual or facsimile.
New Notes bearing the manual or facsimile signatures of
individuals
who were at the time of the placement of their signatures on the
New Notes
the proper officers of the Company shall bind the Company,
notwithstanding
that such individuals or any of them have ceased to hold such
officers prior
to the authentication and delivery of such New Notes or did not
hold such
officers at the date of such New Notes.
The New Trustee shall (upon Company Order) authenticate
and
deliver Securities for original issue in an aggregate principal
amount
of up to $60,000,000.
At any time and from time to time after the execution
and delivery
of the New Indenture, the Company may deliver New Notes executed
by the
Company to the New Trustee for authentication, together with a
Company Order
for the authentication and delivery of such New Notes, and the
New Trustee
in accordance with such Company Order shall authenticate and
deliver such
New Notes.
Each New Note shall be dated the date of its
authentication.
No New Note shall be entitled to any benefit under the
New
Indenture or be valid or obligatory for any purpose unless there
appears on
such New Note a certificate of authentication substantially in
the form
provided for in the New Indenture duly executed by the New
Trustee by
manual signature of one of its duly authorized signatories, and
such
certificate upon any New Note shall be conclusive evidence, and
the only
evidence, that such New Note has been duly authenticated and
delivered
hereunder and is entitled to the benefits of the New Indenture.
The New Notes are being issued in exchange for the Old
Notes as
provided in the Plan and there are no cash proceeds from the
issuance of the
New Notes available for application by the Company.
C. Release and/or Substitution of Property
The New Indenture does not provide for any lien on any
property on
any property of the Company or Holding. Accordingly, there are no
provisions
with respect to the release of such property or the release and
substitution
of such property.
D. Satisfaction and Discharge
The New Indenture will be discharged and will cease to
be of
further effect (except as to surviving rights of registration of
transfer
or exchange of the New Notes, as expressly provided for in the
New Indenture)
as to all outstanding New Notes when (a) either (i) all the New
Notes
theretofore authenticated and delivered (except (A) lost, stolen
or destroyed
New Notes which have been replaced or paid and (B) New Notes for
which
payment money has theretofore been deposited in trust or
segregated and held
in trust by the Company and thereafter repaid to the Company or
discharged
from such trust) have been delivered to the New Trustee for
cancellation or
(ii) all New Notes not theretofore delivered (except lost, stolen
or destroyed
New Notes which have been replaced or repaid) to the New Trustee
for
cancellation (A) have become due and payable or (B) will become
due and
payable at their Stated Maturity within one year or (C) are to be
called for
redemption within one year under arrangements satisfactory to
the New Trustee for the giving of notice of redemption by the New
Trustee in
the name, and at the expense of the Company, and the Company has,
in the case
of (A), (B) or (C), irrevocably deposited or caused to be
deposited with the
New Trustee as trust funds in trust for the purpose an amount
sufficient to
pay and discharge the entire Indebtedness on such New Notes
(except lost,
stolen or destroyed New Notes which have been replaced or repaid)
not
theretofore delivered to the New Trustee for cancellation, for
principal of,
premium, if any, and interest on the New Notes to the date of
deposit
together with irrevocable instructions from the Company directing
the New
Trustee to apply such funds to the payment thereof at maturity or
redemption,
as the case may be, (b) the Company has paid all other sums
payable under
the New Indenture by the Company, and (c) the Company has
delivered to the
New Trustee an officers' certificate and an opinion of counsel
stating that
all conditions precedent under the New Indenture relating to the
satisfaction
and discharge of the New Indenture have been complied with.
E. Evidence of Compliance
The Company will deliver to the New Trustee, within 120
days after
the end of each fiscal year ending after the date hereof, an
Officers
Certificate stating that a review of the activities of the
Company and its
Subsidiaries during the preceding fiscal year has been made under
the
supervision of the signing Officers with a view to determining
whether the
Company has kept, observed, performed and fulfilled its
obligations under
the New Indenture, and further stating as to each such Officer
signing such
Certificate, that to the best of his or her knowledge, the
Company has kept,
observed, performed and fulfilled each and every covenant
contained in
the New Indenture and is not in default in the performance or
observance of
any of the terms, provisions or conditions of the New Indenture
(or, if a
Default or Event of Default shall have occurred, describing all
such Defaults
or Events of Default of which he or she may have knowledge and
what action
the Company is taking or proposes to take with respect thereto)
and
that to the best of his or her knowledge, no event has occurred
and remains
in existence by reason of which payments on the account of the
principal of
(and premium, if any) or interest on the Securities is prohibited
or if such
an event has occurred, a description of the event and what action
the Company
is taking or proposes to take with respect thereto. Such
compliance
shall be determined without regard to any period of grace or
requirement of
notice under the New Indenture.
The Company shall deliver to the New Trustee, as soon
as possible
following any Officer becoming aware of any Default or Event of
Default,
an Officers Certificate specifying such Default or Event of
Default and
what action the Company is taking or proposes to take with
respect thereto.
Upon any application or request by the Company and/or
the Guarantor
to the New Trustee to take any action or omit to take any action
under the
New Indenture, the Company and/or the Guarantor, as applicable,
shall
furnish to the New Trustee an Officers' Certificate, in form and
substance
reasonably satisfactory to the New Trustee, stating that, in the
opinion
of the signers, all conditions precedent, if any, provided for in
the New
Indenture (including any covenant compliance with which
constitutes a
condition precedent, if any) relating to the proposed action or
inaction
have been complied with, and an Opinion of Counsel, in form and
substance reasonably satisfactory to the New Trustee, stating
that, in the
opinion of such counsel, all such conditions precedent and
covenants,
compliance with which constitutes a condition precedent, if any,
have been
complied with, except that, in the case of any such application
or request
as to which the furnishing of such documents is specifically
required by
any provision of the New Indenture relating to such particular
application
or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance
with a
condition or covenant provided for in the New Indenture shall
include:
(a) a statement that each individual signing such certificate
or opinion has
read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or
investigation upon which the statements or opinions contained in
such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
such individual
has made such examination or investigation as is necessary to
enable him or
her to express an informed opinion as to whether or not such
covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such
individual, such condition or covenant has been complied with;
provided,
however, that with respect to matters of fact, an Opinion of
Counsel may
rely on an Officers' Certificate or certificates of public
officials.
9. Other Obligors. Give the name and complete mailing address
of each person,
other than the applicant, who is an obligor upon the indenture
securities.
Holding has guaranteed certain obligations of the Company under
the New
Indenture. The name and address of Holding is as follows:
Homeland Holding Corporation
2601 N.W. Expressway
Oklahoma City, Oklahoma 73112
Contents of application for qualification. This application for
qualification comprises:
(a) Pages numbered 1 to 12, consecutively.
(b) The statement of eligibility and qualification of each
trustee under the
indenture to be qualified.
(c) The following exhibits in addition to those filed as part of
the statement
of eligibility and qualification of each trustee.
Exhibit T3A. Restated Certificate of Incorporation of Homeland
Stores, Inc.
dated August 2, 1990 (incorporated by reference to Exhibit 38 to
Form 10-Q
for quarterly period ended September 8, 1990)
Exhibit T3B. Bylaws of Homeland Stores, Inc. as amended and
restated on
November 14, 1989, and further amended on September 23, 1992
(incorporated by
reference to Exhibit 3b to Form 10-Q for quarterly period ended
June 19, 1993)
Exhibit T3C. Form of New Indenture (To be filed by amendment)
Exhibit T3D. Not Applicable
Exhibit T3E1. First Amended Disclosure Statement for Joint Plan
of
Reorganization of Homeland Stores, Inc. and Homeland Holding
Corporation
(To be filed by amendment)
Exhibit T3E2. Forms of Ballot (To be filed by amendment)
Exhibit T3E3. Notice of Order Approving Disclosure Statement (To
be filed by
amendment)
Exhibit T3F. Cross Reference Sheet (contained in Exhibit T3C)
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
the applicant,
Homeland Stores, Inc., a corporation organized and existing under
the laws
of Delaware, has duly caused this application to be signed on its
behalf by
the undersigned, thereunto duly authorized, and its seal to be
hereunto
affixed and attested, all in the City of Oklahoma City, and State
of
Oklahoma, on the 17th day of June, 1996.
(SEAL) HOMELAND STORES, INC.
By: /s/Larry W. Kordisch
Larry Kordisch, Executive Vice
President
By: /s/Francis T. Wong
Francis T. Wong, Assistant
Secretary
