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 ofthe 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 SecuredFloating
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 officersof 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 toForm 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)
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 affixed and attested, all in the City of Oklahoma City, and State of
Oklahoma, on the 17th day of June, 1996.
SIGNATURE
By: /s/Larry W. Kordisch
Larry W. Kordisch
Executive Vice-President
By: /s/Francis T. Wong
Francis T. Wong, Assistant Secretary
/TEXT>
