EXHIBIT 4-D
FRED MEYER, INC.
COMPOSITE CONFORMED COPY OF THE NOTE AGREEMENT
Re: $7,500,000 7.25% Senior Notes, Series A,
Due July 15, 1999,
$15,000,000 7.52% Senior Notes, Series B,
Due July 15, 2001,
$20,000,000 7.88% Senior Notes, Series C,
Due July 15, 2004
and
$15,000,000 7.98% Senior Notes, Series D,
Due July 15, 2007
_________________________________________
Series A PPN 593098 A@5
Series B PPN 593098 B*6
Series C PPN 593098 B@4
Series D PPN 593098 B#2
Closing Date: July 19, 1994
============================================================
Separate and several Note Agreements each dated as of
June 1, 1994, in the form attached hereto, were entered into
by Fred Meyer, Inc., a Delaware corporation, and each of the
institutions named below, respectively. Each of said Note
Agreements was executed on behalf of Fred Meyer, Inc. by
Michael H. Don, Vice President and Corporate Treasurer. The
separate Note Agreements were addressed to each of the
institutions as shown on Schedule I attached thereto and
were accepted by the officers of the respective institutions
as shown below.
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
By: /s/ Paul M. Chute
Managing Director
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ Julia S. Tucker
Investment Officer
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ Loren A. Haugland
Vice President
THE CANADA LIFE ASSURANCE COMPANY
By: /s/ Brian J. Lynch
Associate Treasurer
CANADA LIFE INSURANCE COMPANY OF AMERICA
By: /s/ Brian J. Lynch
Assistant Treasurer
CANADA LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Brian J. Lynch
Assistant Treasurer
THE FRANKLIN LIFE INSURANCE COMPANY
By: /s/ Daniel C. Leimbach
Vice President
By: /s/ Elizabeth E. Arthur
Assistant Secretary
KNIGHTS OF COLUMBUS
By: /s/ Robert J. Lane
Assistant Supreme Secretary
SAFECO LIFE INSURANCE COMPANY
By: /s/ Ronald Spaulding
Vice President
THE SECURITY MUTUAL LIFE INSURANCE COMPANY OF LINCOLN,
NEBRASKA
By: /s/ Kevin W. Hammond
Vice President, Investments
STANDARD INSURANCE COMPANY
By: /s/ Vicki R. Chase
Vice President - Securities
WOODMEN ACCIDENT AND LIFE COMPANY
By: /s/ M.F. Wilder
Senior Vice President and Treasurer
MUTUAL TRUST LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ Loren A. Haugland
Vice President
SECURITY LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ Loren A. Haugland
Vice President
NATIONAL TRAVELERS LIFE COMPANY
By: MIMLIC Asset Management Company
By: /s/ Loren A. Haugland
Vice President
COLORADO BANKERS LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ Loren A. Haugland
Vice President
GUARANTEE RESERVE LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ Loren A. Haugland
Vice President
===============================================================
FRED MEYER, INC.
NOTE AGREEMENT
Dated as of June 1, 1994
Re:
$7,500,000 7.25% Senior Notes, Series A,
Due July 15, 1999,
$15,000,000 7.52% Senior Notes, Series B,
Due July 15, 2001,
$20,000,000 7.88% Senior Notes, Series C,
Due July 15, 2004
and
$15,000,000 7.98% Senior Notes, Series D,
Due July 15, 2007
===============================================================
Table of Contents
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT . . . . . .1
Section 1.1. Description of Notes . . . . . . . . . . .1
Section 1.2. Commitment, Closing Date . . . . . . . . .2
Section 1.3. Other Agreements . . . . . . . . . . . . .3
SECTION 2. PREPAYMENT OF NOTES . . . . . . . . . . . . . .3
Section 2.1. Optional Prepayment with Premium . . . . .3
Section 2.2. Notice of Optional Prepayments . . . . . .3
Section 2.3. Application of Prepayments . . . . . . . .4
Section 2.4. Direct Payment . . . . . . . . . . . . . .4
SECTION 3. REPRESENTATIONS . . . . . . . . . . . . . . . .4
Section 3.1. Representations of the Company . . . . . .4
Section 3.2. Representations of the Purchaser . . . . .4
SECTION 4. CLOSING CONDITIONS. . . . . . . . . . . . . . .5
Section 4.1. Conditions . . . . . . . . . . . . . . . .5
Section 4.2. Waiver of Conditions . . . . . . . . . . .6
SECTION 5. COMPANY COVENANTS . . . . . . . . . . . . . . .7
Section 5.1. Corporate Existence, Etc . . . . . . . . .7
Section 5.2. Insurance. . . . . . . . . . . . . . . . .7
Section 5.3. Taxes, Claims for Labor and Materials;
Compliance with Laws . . . . . . . . . . .7
Section 5.4. Maintenance, Etc . . . . . . . . . . . . .8
Section 5.5. Nature of Business . . . . . . . . . . . .8
Section 5.6. Consolidated Adjusted Net Worth. . . . . .8
Section 5.7. Limitations on Indebtedness. . . . . . . .8
Section 5.8. Limitation on Liens. . . . . . . . . . . .9
Section 5.9. Mergers, Consolidations and Sales
of Assets. . . . . . . . . . . . . . . . 12
Section 5.10. Guaranties . . . . . . . . . . . . . . . 14
Section 5.11. Repurchase of Notes. . . . . . . . . . . 14
Section 5.12. Transactions with Affiliates . . . . . . 14
Section 5.13. Withdrawal from Multiemployer Plans
and Termination of Pension Plans . . . . 14
Section 5.14. Redesignation of Subsidiaries. . . . . . 15
Section 5.15. Reports and Rights of Inspection . . . . 15
Section 5.16. Dividends. . . . . . . . . . . . . . . . 18
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR . . . 18
Section 6.1. Events of Default. . . . . . . . . . . . 18
Section 6.2. Notice to Holders. . . . . . . . . . . . 20
Section 6.3. Acceleration of Maturities . . . . . . . 20
Section 6.4. Rescission of Acceleration . . . . . . . 21
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS. . . . . . . 22
Section 7.1. Consent Required . . . . . . . . . . . . 22
Section 7.2. Solicitation of Holders. . . . . . . . . 22
Section 7.3. Effect of Amendment or Waiver. . . . . . 22
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS. . . 22
Section 8.1. Definitions. . . . . . . . . . . . . . . 22
Section 8.2. Accounting Principles. . . . . . . . . . 30
Section 8.3. Directly or Indirectly . . . . . . . . . 30
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . 30
Section 9.1. Registered Notes . . . . . . . . . . . . 30
Section 9.2. Exchange of Notes. . . . . . . . . . . . 31
Section 9.3. Loss, Theft, Etc. of Notes . . . . . . . 31
Section 9.4. Expenses, Stamp Tax Indemnity. . . . . . 31
Section 9.5. Powers and Rights Not Waived;
Remedies Cumulative. . . . . . . . . . . 32
Section 9.6. Notices. . . . . . . . . . . . . . . . . 32
Section 9.7. Successors and Assigns . . . . . . . . . 33
Section 9.8. Survival of Covenants and
Representations. . . . . . . . . . . . . 33
Section 9.9. Severability . . . . . . . . . . . . . . 33
Section 9.10. Changes in GAAP. . . . . . . . . . . . . 33
Section 9.11. Governing Law. . . . . . . . . . . . . . 33
Section 9.12. Submission to Jurisdiction.. . . . . . . 33
Section 9.13. Captions . . . . . . . . . . . . . . . . 34
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . 35
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Names and Addresses of Purchasers and
Amounts of Commitments
Schedule II -- Description of Current Debt, Funded Debt
(including Capitalized Leases), Liens,
Subsidiaries and Pending Tax Matters
Exhibit A-1 -- Form of 7.25% Senior Note, Series A, due
July 15, 1999
Exhibit A-2 -- Form of 7.52% Senior Note, Series B, due
July 15, 2001
Exhibit A-3 -- Form of 7.88% Senior Note, Series C, due
July 15, 2004
Exhibit A-4 -- Form of 7.98% Senior Note, Series D, due
July 15, 2007
Exhibit B -- Representations and Warranties of the
Company
Exhibit C -- Description of Special Counsel's Closing
Opinion
Exhibit D -- Description of Closing Opinion of Counsel
to the Company
Exhibit E -- Subordination Provisions Applicable to
Subordinated Indebtedness
FRED MEYER, INC.
3800 S.E. 22nd Avenue
Portland, Oregon 97242
NOTE AGREEMENT
Re:
$7,500,000 7.25% Senior Notes, Series A,
Due July 15, 1999,
$15,000,000 7.52% Senior Notes, Series B,
Due July 15, 2001,
$20,000,000 7.88% Senior Notes, Series C,
Due July 15, 2004
and
$15,000,000 7.98% Senior Notes, Series D,
Due July 15, 2007
Dated as of
June 1, 1994
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Fred Meyer, Inc., a Delaware
corporation (the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. (a) The Company
will authorize the issue and sale of its 7.25% Senior Notes,
Series A, due July 15, 1999 (the "Series A Notes") in an
aggregate principal amount of $7,500,000, its 7.52% Senior
Notes, Series B, due July 15, 2001 (the "Series B Notes") in
an aggregate principal amount of $15,000,000, its 7.88%
Senior Notes, Series C, due July 15, 2004 (the "Series C
Notes") in an aggregate principal amount of $20,000,000, and
its 7.98% Senior Notes, Series D, due July 15, 2007 (the
"Series D Notes") in an aggregate principal amount of
$15,000,000. The Series A Notes, the Series B Notes, the
Series C Notes and the Series D Notes issued pursuant to
this Agreement and the other separate agreements referred to
in Section 1.3 are hereinafter collectively referred to as
the "Notes."
(b) The Series A Notes will be dated the date of
issue, will bear interest from such date at the rate of
7.25% per annum, payable semiannually in arrears on the
fifteenth day of January and July in each year (commencing
January 15, 1995) and at maturity and will bear
interest on overdue principal (including any overdue
optional prepayment of principal) and premium, if any, and
(to the extent legally enforceable) on any overdue
installment of interest at the Overdue Rate after the date
due, whether by acceleration or otherwise, until paid. The
Series A Notes shall mature on July 15, 1999 and shall be
substantially in the form attached hereto as Exhibit A-1.
The Series B Notes will be dated the date of issue,
will bear interest from such date at the rate of 7.52% per
annum, payable semiannually in arrears on the fifteenth day
of January and July in each year (commencing January 15,
1995) and at maturity and will bear interest on overdue
principal (including any overdue optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the
Overdue Rate after the date due, whether by acceleration or
otherwise, until paid. The Series B Notes shall mature on
July 15, 2001 and shall be substantially in the form
attached hereto as Exhibit A-2.
The Series C Notes will be dated the date of issue,
will bear interest from such date at the rate of 7.88% per
annum, payable semiannually in arrears on the fifteenth day
of January and July in each year (commencing January 15,
1995) and at maturity and will bear interest on overdue
principal (including any overdue optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the
Overdue Rate after the date due, whether by acceleration or
otherwise, until paid. The Series C Notes shall mature on
July 15, 2004 and shall be substantially in the form
attached hereto as Exhibit A-3.
The Series D Notes will be dated the date of issue,
will bear interest from such date at the rate of 7.98% per
annum, payable semiannually in arrears on the fifteenth day
of January and July in each year (commencing January 15,
1995) and at maturity and will bear interest on overdue
principal (including any overdue optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the
Overdue Rate after the date due, whether by acceleration or
otherwise, until paid. The Series D Notes shall mature on
July 15, 2007 and shall be substantially in the form
attached hereto as Exhibit A-4.
Interest on the Notes shall be computed on the basis of
a 360-day year of twelve 30-day months. The Notes are not
subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on
the terms and conditions and in the amounts and with the
premium, if any, set forth in Section 2 of this Agreement.
You and the other purchasers named in Schedule I are
hereinafter sometimes referred to as the "Purchasers". The
terms which are capitalized herein shall have the meanings
set forth in Section 8.1 unless the context shall otherwise
require.
Section 1.2. Commitment, Closing Date. Subject to
the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, the
Company agrees to issue and sell to you, and you agree to
purchase from the Company, Notes of the series and in the
aggregate principal amount set forth opposite your name on
Schedule I hereto at a price of 100% of such principal
amount on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of
Chapman and Cutler, 111 West Monroe Street, Chicago,
Illinois 60603, against payment therefor in Federal Reserve
or other funds current and immediately available at the
principal office of _______ in the amount of the purchase
price at 10:00 A.M., _______ time, on July 15, 1994 (the
"Closing Date"). The Notes delivered to you on the Closing
Date will be delivered to you in the form of a single
registered Note of each series of Notes to be purchased by
you, in the form attached hereto as Exhibit A-1, Exhibit
A-2, Exhibit A-3 or Exhibit A-4, as the case may be, for the
full amount of your purchase (unless different denominations
are specified by you), registered in your name or in the
name of such nominee, as may be specified in Schedule I
attached hereto.
Section 1.3. Other Agreements. Simultaneously with
the execution and delivery of this Agreement, the Company is
entering into similar agreements with the other Purchasers
under which such other Purchasers agree to purchase from the
Company the principal amount of Notes of the series set
opposite such Purchasers' names in Schedule I, and your
obligation and the obligations of the Company hereunder are
subject to the execution and delivery of the similar
agreements by the other Purchasers. This Agreement and said
similar agreements with the other Purchasers are herein
collectively referred to as the "Agreements". The
obligations of each Purchaser shall be several and not joint
and no Purchaser shall be liable or responsible for the acts
of any other Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
No prepayment of the Notes may be made except to the
extent and in the manner provided in this Section.
Section 2.1. Optional Prepayment with Premium. Upon
compliance with Section 2.2, the Company shall have the
privilege, at any time and from time to time, of prepaying
the outstanding Notes, either in whole or in part (but if in
part then in a minimum principal amount of $1,000,000), by
payment of the principal amount of the Notes, or portion
thereof to be prepaid, and accrued interest thereon to the
date of such prepayment, together with a premium equal to
the Make-Whole Amount, determined as of two Business Days
prior to the date of such prepayment pursuant to this
Section 2.1. The Company shall not prepay the Notes of any
series pursuant to this Section 2.1 unless concurrently with
such prepayment the Company shall prepay the same proportion
of the Notes of each other series then outstanding so that
the aggregate principal amount of the Notes of each series
then prepaid bears the same relationship to the aggregate
unpaid principal amount of the Notes of such series
outstanding immediately prior to such prepayment as the
proportion of the Notes of each other series then to be
prepaid bears to the aggregate unpaid principal amount of
the Notes of such series outstanding immediately prior to
such prepayment.
Section 2.2. Notice of Optional Prepayments. The
Company will give notice of any prepayment of the Notes
pursuant to Section 2.1 to each holder thereof not less than
30 days nor more than 60 days before the date fixed for such
optional prepayment specifying (a) such date, (b) the
principal amount of the holder's Notes to be prepaid on such
date, (c) that a premium may be payable, (d) the date when
such premium will be calculated, (e) the estimated premium,
and (f) the accrued interest applicable to the prepayment.
Such notice of prepayment shall also certify all facts,
if any, which are conditions precedent to any such prepayment.
Notice of prepayment having been so given, the aggregate
principal amount of the Notes specified in such notice,
together with accrued interest thereon and the premium,
if any, payable with respect thereto shall become due and
payable on the prepayment date specified in said notice.
Not later than two Business Days prior to the prepayment
date specified in such notice, the Company shall provide
each holder of a Note written notice of the premium, if
any, payable in connection with such prepayment and, whether
or not any premium is payable, a reasonably detailed
computation of the Make-Whole Amount.
Section 2.3. Application of Prepayments. All partial
prepayments in respect of the Notes of any series shall be
applied on all outstanding Notes of the same series ratably
in accordance with the unpaid principal amounts thereof.
Section 2.4. Direct Payment. Notwithstanding
anything to the contrary contained in this Agreement or the
Notes, in the case of any Note owned by you or your nominee
or owned by any subsequent Institutional Holder which has
given written notice to the Company requesting that the
provisions of this Section 2.4 shall apply, the Company will
punctually pay when due the principal thereof, interest
thereon and premium, if any, due with respect to said
principal, without any presentment thereof, directly to you,
to your nominee or to such subsequent Institutional Holder
at your address or your nominee's address set forth in
Schedule I hereto or such other address as you, your nominee
or such subsequent Institutional Holder may from time to
time designate in writing to the Company or, if a bank
account with a United States bank is designated for you or
your nominee on Schedule I hereto or in any written notice
to the Company from you, from your nominee or from any such
subsequent Institutional Holder, the Company will make such
payments in immediately available funds to such bank
account, no later than 11:00 a.m. Chicago, Illinois time on
the date due, marked for attention as indicated, or in such
other manner or to such other account in any United States
bank as you, your nominee or any such subsequent
Institutional Holder may from time to time direct in
writing. If for any reason whatsoever the Company does not
make any such payment by such 11:00 a.m. transmittal time,
such payment shall be deemed to have been made on the next
following Business Day and such payment shall bear interest
at the Overdue Rate.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The
Company represents and warrants that all representations and
warranties set forth in Exhibit B are true and correct as of
the date hereof and are incorporated herein by reference
with the same force and effect as though herein set forth in
full.
Section 3.2. Representations of the Purchaser.
(a) You represent, and in entering into this Agreement the
Company understands, that you are acquiring the Notes for
the purpose of investment and not with a view to the
distribution thereof, and that you have no present intention
of selling, negotiating or otherwise disposing of the Notes;
it being understood, however, that the disposition of your
property shall at all times be and remain within your control.
(b) You further represent that either: (1) you are
acquiring the Notes with assets from your general account
and not with the assets of any separate account in which any
employee benefit plan has any interest; (2) no part of the
funds to be used by you to purchase the Notes constitutes
assets allocated to any separate account maintained by you
such that the application of such funds constitutes a
prohibited transaction under Section 406 of ERISA; or (3)
all or a part of such funds constitute assets of one or more
separate accounts, trusts or a commingled pension trust
maintained by you, and you have disclosed to the Company the
names of such employee benefit plans whose assets in such
separate account or accounts or pension trusts exceed 10% of
the total assets or are expected to exceed 10% of the total
assets of such account or accounts or trusts as of the date
of such purchase and the Company has advised you in writing
(and in making the representations set forth in this clause
(3) you are relying on such advice) that the Company is not
a party-in-interest nor are the Notes employer securities
with respect to the particular employee benefit plan
disclosed to the Company by you as aforesaid (for the
purpose of this clause (3), all employee benefit plans
maintained by the same employer or employee organization are
deemed to be a single plan). As used in this Section
3.2(b), the terms "separate account", "party-in-interest",
"employer securities" and "employee benefit plan" shall have
the respective meanings assigned to them in ERISA.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase
the Notes on the Closing Date shall be subject to the
performance by the Company of its agreements hereunder which
by the terms hereof are to be performed at or prior to the
time of delivery of the Notes and to the following further
conditions precedent:
(a) Closing Certificate. You shall have received
a certificate dated the Closing Date, signed by the
President or a Vice President of the Company, the truth
and accuracy of which shall be a condition to your
obligation to purchase the Notes proposed to be sold to
you and to the effect that (1) the representations and
warranties of the Company set forth in Exhibit B hereto
are true and correct on and with respect to the Closing
Date, (2) the Company has performed all of its
obligations hereunder which are to be performed on or
prior to the Closing Date, and (3) no Default or Event
of Default has occurred and is continuing.
(b) Legal Opinions. You shall have received from
Chapman and Cutler, who are acting as your special
counsel in this transaction, and from Stoel Rives Boley
Jones & Grey, counsel for the Company, their respective
opinions dated the Closing Date, in form and substance
satisfactory to you, and covering the matters set forth
in Exhibits C and D, respectively, hereto.
(c) Company's Existence and Authority. On or
prior to the Closing Date, you shall have received, in
form and substance reasonably satisfactory to you and
your special counsel, such documents and evidence with
respect to the Company as you may reasonably request in
order to establish the existence and good standing of
the Company and the authorization of the transactions
contemplated by this Agreement.
(d) Related Transactions. The Company shall have
consummated the sale of the entire principal amount of
the Notes scheduled to be sold on the Closing Date
pursuant to this Agreement and the other agreements
referred to in Section 1.3.
(e) Private Placement Number. On or prior to the
Closing Date, special counsel to the Purchasers shall
have duly made the appropriate filings with Standard &
Poor's CUSIP Service Bureau, as agent for the National
Association of Insurance Commissioners, in order to
obtain private placement numbers for each series of
Notes.
(f) Funding Instructions. At least three
Business Days prior to the Closing Date, you shall have
received written instructions executed by a Responsible
Officer of the Company directing the manner of the
payment of funds and setting forth (1) the name of the
transferee bank, (2) such transferee bank's ABA number,
(3) the account name and number into which the purchase
price for the Notes is to be deposited, and (4) the
name and telephone number of the account representative
responsible for verifying receipt of such funds.
(g) Special Counsel Fees. Concurrently with the
delivery of the Notes to you on the Closing Date, the
reasonable charges and disbursements of Chapman and
Cutler, your special counsel, shall have been paid by
the Company.
(h) Legality of Investment. The Notes to be
purchased by you shall be a legal investment for you
under the laws of each jurisdiction to which you may be
subject (without resort to any so-called "basket
provisions" to such laws).
(i) Satisfactory Proceedings. All proceedings
taken in connection with the transactions contemplated
by this Agreement, and all documents necessary to the
consummation thereof, shall be satisfactory in form and
substance to you and your special counsel, and you
shall have received a copy (executed or certified as
may be appropriate) of all legal documents or
proceedings taken in connection with the consummation
of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing
Date the Company fails to tender to you the Notes to be
issued to you on such date or if the conditions specified in
Section 4.1 have not been fulfilled, you may thereupon elect
to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the
conditions specified in Section 4.1 have not been fulfilled,
you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion
determine. Nothing in this Section 4.2 shall operate to
relieve the Company of any of its obligations hereunder or
to waive any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long
as any amount remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company
will preserve and keep in full force and effect, and will
cause each Restricted Subsidiary to preserve and keep in
full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its
business, provided that the foregoing shall not prevent any
transaction permitted by Section 5.9.
Section 5.2. Insurance. The Company will maintain,
and will cause each Restricted Subsidiary to maintain,
insurance coverage by financially sound and reputable
insurers and in such forms and amounts (including
deductibles) and against such risks as are (a) maintained by
prudent corporations of established reputation engaged in
the same or a similar business and owning and operating
similar properties and, in the case of the Company, having
as of the date of any determination thereof a "consolidated
net worth" determined in accordance with GAAP approximately
equal to the Consolidated Net Worth of the Company or (b)
consistent with the Company's insurance practices existing
on the Closing Date, including self-insurance, all as more
fully set forth in Schedule II hereto.
Section 5.3. Taxes, Claims for Labor and Materials;
Compliance with Laws.
(a) The Company will promptly pay and discharge, and
will cause each Restricted Subsidiary promptly to pay and
discharge, all lawful taxes, assessments and governmental
charges or levies imposed upon the Company or such
Restricted Subsidiary, respectively, or upon or in respect
of all or any part of the property or business of the
Company or such Restricted Subsidiary, all trade accounts
payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, which if
unpaid might become a Lien upon any property of the Company
or such Restricted Subsidiary; provided the Company or such
Restricted Subsidiary shall not be required to pay any such
tax, assessment, charge, levy, account payable or claim if
(1) the validity, applicability or amount thereof is being
contested in good faith by appropriate actions or
proceedings which will prevent the forfeiture or sale of any
property of the Company or such Restricted Subsidiary or any
material interference with the use thereof by the Company or
such Restricted Subsidiary, and (2) the Company or such
Restricted Subsidiary shall set aside, on its books,
reserves deemed by it to be adequate with respect thereto.
(b) The Company will promptly comply and will cause
each Restricted Subsidiary to promptly comply with all laws,
ordinances or governmental rules and regulations to which it
is subject, including, without limitation, the Occupational
Safety and Health Act of 1970, as amended, ERISA and all
Environmental Laws, the violation of which could materially
and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Company
and its Restricted Subsidiaries or would result in any Lien
not permitted under Section 5.8.
Section 5.4. Maintenance, Etc. The Company will
maintain, preserve and keep, and will cause each Restricted
Subsidiary to maintain, preserve and keep, its properties
which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good
repair and working order and from time to time will make all
necessary repairs, replacements, renewals and additions so
that at all times the efficiency thereof shall be
maintained.
Section 5.5. Nature of Business. Neither the Company
nor any Restricted Subsidiary will engage in or cease to
engage in any business if, as a result, the general nature
of the business, taken on a consolidated basis, which would
then be engaged in by the Company and its Restricted
Subsidiaries would be substantially changed from the
distribution, either at retail or wholesale, of apparel,
general merchandise and food and drug store products and in
connection therewith or in furtherance of and as a
supplement thereto operation of the businesses involved in
the manufacture, distribution or sale of food, consumer
products or services, and related businesses.
Section 5.6. Consolidated Adjusted Net Worth. The
Company will at all times keep and maintain Consolidated
Adjusted Net Worth at an amount not less than $400,000,000.
Section 5.7. Limitations on Indebtedness. (a) The
Company will not create, assume, guarantee or otherwise
incur or in any manner be or become liable in respect of any
Funded Debt, and will not permit any Restricted Subsidiary
to, create, assume, guarantee or otherwise incur or in any
manner be or become liable in respect of any Indebtedness,
except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company and Indebtedness
of Restricted Subsidiaries outstanding as of the
Closing Date and described on Schedule II hereto;
(3) Subordinated Funded Debt of the Company to a
Restricted Subsidiary;
(4) Indebtedness of a Restricted Subsidiary to
the Company or to a Predominantly-owned Restricted
Subsidiary; and
(5) additional Funded Debt of the Company and
Indebtedness of its Restricted Subsidiaries, provided
that at the time of creation, issuance, assumption,
guarantee or other incurrence thereof and after giving
effect thereto and to the application of the proceeds
thereof:
(i) in the case of the issuance of any Funded
Debt of the Company or a Restricted Subsidiary,
Consolidated Funded Debt shall not exceed 60% of
Consolidated Total Capitalization; provided that
notwithstanding the foregoing, the Company and its
Restricted Subsidiaries may incur Consolidated Funded
Debt exceeding 60% but in no event exceeding 65% of
Consolidated Total Capitalization ("Acquisition Funded
Debt") for a period of not more than four consecutive
fiscal quarters in any five consecutive fiscal year
period if, but only if, 100% of the net proceeds of
such Acquisition Funded Debt are applied to the
acquisition of assets or capital stock of any Person
engaged in one or more of the businesses engaged in
by the Company or a Restricted Subsidiary as described
in Section 5.5; and
(ii) in the case of the issuance of any Funded
Debt of the Company secured by Liens permitted by
Section 5.8(a)(11) or the issuance of Indebtedness of a
Restricted Subsidiary (other than Indebtedness of a
Restricted Subsidiary secured by Liens permitted by
Section 5.8(a)(8) or (10) and Indebtedness of a
corporation which becomes a Restricted Subsidiary after
the date hereof), the sum of (A) all Funded Debt of the
Company secured by Liens permitted by Section
5.8(a)(11), plus (B) the aggregate amount of all
Indebtedness of Restricted Subsidiaries incurred in
accordance with the provisions of this clause (ii)
shall not exceed 15% of Consolidated Total Assets.
(b) Indebtedness issued or incurred in accordance with
the limitations of Section 5.7(a) may be renewed, extended
or refunded (without increase in principal amount remaining
unpaid at the time of such renewal, extension or refunding),
provided that at the time of such renewal, extension or
refunding and after giving effect thereto, no Event of
Default would exist.
(c) Any corporation which becomes a Restricted
Subsidiary after the date hereof shall for all purposes of
Section 5.7(a)(5)(i) be deemed to have created, assumed or
incurred at the time it becomes a Restricted Subsidiary all
Indebtedness of such corporation existing immediately after
it becomes a Restricted Subsidiary.
Section 5.8. Limitation on Liens. (a) The Company
will not, and will not permit any Restricted Subsidiary to,
create or incur, or suffer to be incurred or to exist, any
Lien on its or their property or assets, whether now owned
or hereafter acquired, or upon any income or profits
therefrom, except:
(1) Liens for property taxes or assessments or
other governmental charges or levies and Liens securing
claims or demands of mechanics and materialmen,
provided that payment thereof is not at the time
required by Section 5.3;
(2) Liens of or resulting from any litigation or
legal proceeding which are currently being contested in
good faith by appropriate proceedings unless the
judgment they secure shall not have been stayed, bonded
or discharged within 60 days;
(3) Liens incidental to the conduct of business
or the ownership of properties and assets (including
Liens in connection with workers' compensation,
unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory
landlords' liens) and Liens to secure the performance
of bids, tenders or trade contracts, or to secure
statutory obligations, surety or appeal bonds or other
Liens of like general nature, in any such case incurred
in the ordinary course of business and not in
connection with the borrowing of money, which in any
such case would not materially and adversely affect the
properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole; provided in each case,
the obligation secured is not overdue or, if overdue,
is being contested in good faith by appropriate actions
or proceedings;
(4) minor survey exceptions or minor
encumbrances, easements or reservations, or rights of
others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct
of the activities of the Company and its Restricted
Subsidiaries or which customarily exist on properties
of corporations engaged in similar activities and
similarly situated and which do not in any event
materially impair their use in the operation of the
business of the Company and its Restricted
Subsidiaries;
(5) Liens securing Indebtedness of a Restricted
Subsidiary to the Company or to another Restricted
Subsidiary;
(6) Liens existing as of the Closing Date and
either described in Note 6 to the consolidated
financial statements of the Company and its
Subsidiaries for the fiscal year ended January 29, 1994
or described on Schedule II hereto;
(7) Liens created or incurred under leases of
real property owned by the Company in which the Company
is the landlord, provided that (1) the rentals payable
under any such lease are for fair rental value, (2) any
such lease is entered into in (i) an "arm's-length"
transaction and (ii) the ordinary course of the
Company's business and (3) after giving effect to the
execution, extension or renewal of any such lease, no
Default or Event of Default would exist;
(8) Liens created or incurred after the Closing
Date given to secure the payment of the purchase price
incurred in connection with the acquisition or purchase
of real or personal property or the cost of
construction or improvements to real or personal
property, in any such case, useful and intended to be
used in carrying on the business of the Company or a
Restricted Subsidiary, provided that (i) the Lien shall
attach solely to the real or personal property
acquired, purchased, constructed or improved, (ii) such
Lien shall have been created or incurred within 270
days after the date of acquisition or purchase or the
date of completion of construction or improvement of
such real or personal property, as the case may be,
(iii) at the time of the imposition of the Lien, the
aggregate amount remaining unpaid on all Indebtedness
secured by Liens on such real or personal property, as
the case may be (whether or not assumed by the Company
or a Restricted Subsidiary) shall not exceed an amount
equal to the lesser of the total acquisition or
purchase price or cost of construction or improvement,
as the case may be, or fair market value of such real
or personal property (as determined in good faith by
the Board of Directors of the Company), and (iv) all
such Indebtedness shall have been incurred within the
applicable limitations provided in Section 5.7(a)(5);
(9) Liens affixed on real or personal property
(including without limitation outstanding shares of
capital stock and Indebtedness) of any entity at the
time such entity becomes a Restricted Subsidiary given
to secure the payment of the purchase price incurred in
connection with the acquisition of such entity by the
Company or a Restricted Subsidiary; provided that (i)
the Lien shall attach solely to such real or personal
property, (ii) such Lien shall have been created or
incurred substantially concurrently with such
acquisition or purchase, (iii) at the time of
acquisition or purchase of such Restricted Subsidiary,
the aggregate amount of Indebtedness secured by Liens
on such real or personal property (whether or not
assumed by the Company or such Restricted Subsidiary)
shall not exceed an amount equal to the lesser of the
purchase price or fair market value of such real
property or such personal property (as determined in
good faith by the Board of Directors of the Company),
and (iv) all such Indebtedness shall have been incurred
within the applicable limitations provided in Section
5.7(a)(5);
(10) Liens on real or personal property existing
(i) at the time of acquisition thereof, whether or not
the Indebtedness secured thereby is assumed by the
Company or any such Restricted Subsidiary, or (ii) on
the property or outstanding shares of a corporation at
the time such corporation is merged into or
consolidated with the Company or any such Restricted
Subsidiary or at the time of a sale, lease or other
disposition of the properties or outstanding shares or
Indebtedness of a corporation or firm as an entirety to
the Company or any such Restricted Subsidiary; provided
that the amount of Indebtedness secured by such Liens
shall not exceed an amount equal to the lesser of the
acquisition or purchase price or fair market value of
such real or personal property; and provided further,
that all such Indebtedness shall have been incurred
within the limitations of Section 5.7(a)(5)(i);
(11) Liens created or incurred after the Closing
Date given to secure Indebtedness of the Company or any
Restricted Subsidiary in addition to the Liens
permitted by the preceding clauses (1) through (10)
hereof, provided that all Indebtedness secured by such
Liens shall have been incurred within the applicable
limitations provided in Section 5.7(a)(5); and
(12) Liens permitted by the preceding clause (5),
(6), (7), (8), (9), (10) or (11) of this Section 5.8
which have been extended or renewed in respect of the
same property theretofore subject to such Liens in
connection with the extension, renewal or refunding of
the Indebtedness secured thereby; provided that (i)
such extension, renewal or refunding of Indebtedness
shall be without increase in the principal amount
remaining unpaid as of the date of such extension,
renewal or refunding and (ii) such Liens shall attach
solely to the same such property.
(b) In the event that any property, asset or income or
profits therefrom is subjected to a Lien in violation of
this Section 5.8, the Company will make or cause to be made
provision whereby the Notes will be secured equally and
ratably with all other obligations secured thereby and
concurrently therewith the Company shall furnish to the
holders of the Notes an opinion to such effect in scope and
form reasonably satisfactory to the holders of at least
66-2/3% of the principal amount of the Notes at the time
outstanding of Stoel Rives Boley Jones & Grey or another
independent counsel satisfactory to such holders, and in any
case the Notes shall have the benefit, to the full extent
that, and with such priority as, the holders may be entitled
thereto under applicable law, of an equitable Lien on such
property, asset, income or profits securing the Notes.
Section 5.9. Mergers, Consolidations and Sales of
Assets. (a) The Company will not, and will not permit any
Restricted Subsidiary to, consolidate with or be a party to
a merger with any other corporation, or sell, lease or
otherwise dispose of all or substantially all of its assets;
provided that:
(1) any Restricted Subsidiary may merge or
consolidate with or into the Company or any
Predominantly-owned Restricted Subsidiary so long as in
any merger or consolidation involving the Company, the
Company shall be the surviving or continuing
corporation;
(2) the Company may consolidate or merge with or
into any other corporation if (i) the corporation which
results from such consolidation or merger (the
"surviving corporation") is organized under the laws of
any state of the United States or the District of
Columbia, (ii) the due and punctual payment of the
principal of and premium, if any, and interest on all
of the Notes, according to their tenor, and the due and
punctual performance and observation of all of the
covenants in the Notes and this Agreement to be
performed or observed by the Company are expressly
assumed by the surviving corporation, by written
agreement reasonably satisfactory in scope and form to
the holders of 66-2/3% in aggregate principal amount of
the outstanding Notes (provided that execution by the
holders of the Notes of such agreement shall not be
required), and (iii) at the time of such consolidation
or merger and immediately after giving effect thereto,
(A) no Default or Event of Default would exist and (B)
the surviving corporation would be permitted by the
provisions of Section 5.7(a)(5) to incur at least $1.00
of additional Consolidated Funded Debt; and
(3) the Company may sell or otherwise dispose of
all or substantially all of its assets to any Person if
(i) the acquiring Person is a corporation organized
under the laws of any state of the United States or the
District of Columbia, (ii) the due and punctual payment
of the principal of and premium, if any, and interest
on all the Notes, according to their tenor, and the due
and punctual performance and observance of all of the
covenants in the Notes and in this Agreement to be
performed or observed by the Company are expressly
assumed by the acquiring corporation, by written
agreement reasonably satisfactory in scope and form to
the holders of 66-2/3% in aggregate principal amount of
the outstanding Notes (provided that execution by the
holders of the Notes of such agreement shall not be
required), and (iii) at the time of such sale or
disposition and immediately after giving effect
thereto, (A) no Default or Event of Default would exist
and (B) the acquiring corporation would be permitted by
the provisions of Section 5.7(a)(5) to incur at least
$1.00 of additional Consolidated Funded Debt.
(b) The Company will not, and will not permit any
Restricted Subsidiary to, sell, lease, transfer, abandon or
otherwise dispose of (any such sale, lease, transfer,
abandonment or other disposition being herein referred to as
a "Transfer") any assets (including stock of any
Subsidiary); provided that the foregoing restrictions do not
apply to:
(1) Transfers in the ordinary course of business
for fair value and except as provided in Section
5.9(a); or
(2) the Transfer of assets of a Restricted
Subsidiary to the Company or a Predominantly-owned
Restricted Subsidiary; or
(3) the Transfer of any real or personal property
of the Company or a Restricted Subsidiary the book
value of which at the time of such Transfer shall be
less than $5,000,000; provided that in the opinion of a
Responsible Officer of the Company (i) the Transfer is
for fair value and is in the best interests of the
Company and (ii) such Transfer is not part of a plan by
the Company to divest itself of a substantial portion
of its assets inconsistent with the purposes of this
Section 5.9 (in which event such Transfer shall be made
within the limitations of Section 5.9(a)(3) or (b)(5));
or
(4) any Transfer of assets of the Company or a
Restricted Subsidiary whenever it is determined in the
good faith judgment of a Responsible Officer of the
Company that such assets are obsolete, worn-out or
without economic value to the Company or any of its
Restricted Subsidiaries; or
(5) any Transfer of such assets for cash or other
property to a Person or Persons if all of the following
conditions are met:
(i) the assets (valued at net book value) do not,
together with all other assets of the Company and its
Restricted Subsidiaries previously Transferred during
the same fiscal year in reliance upon this Section
5.9(b)(5), exceed 10% of Consolidated Total Assets
determined as of the end of the immediately preceding
fiscal quarter;
(ii) in the good faith judgment of the Company's
Board of Directors, the Transfer is for fair value and
is in the best interests of the Company or such
Restricted Subsidiary;
(iii) immediately after the consummation of
the transaction and after giving effect thereto, (A) no
Default or Event of Default would exist, and (B) the
Company would be permitted by the provisions of Section
5.7(a)(5) to incur at least $1.00 of additional
Consolidated Funded Debt; and
(iv) in the case of any Transfer of all or
substantially all of the assets or stock of a
Subsidiary or of any Indebtedness of a Subsidiary,
immediately after the Transfer such Subsidiary shall
have no Indebtedness of or continuing Investment in the
capital stock of the Company or of any Subsidiary and
any such Indebtedness or Investment shall have been
discharged or acquired, as the case may be, by the
Company or a Subsidiary;
provided, however, that for purposes of the foregoing
calculation, there shall not be included any assets (or
portions of such assets) to the extent the proceeds are
applied within 12 months of the date of Transfer of
such assets to either (A) the acquisition of fixed
assets useful and intended to be used in the operation
of the Company and its Subsidiaries as described in
Section 5.5 and having a fair market value (as
determined in good faith by the Board of Directors of
the Company) at least equal to that of the assets so
Transferred and/or (B) the prepayment at any applicable
prepayment premium of Funded Debt (other than
Subordinated Funded Debt) of the Company. It is
understood and agreed by the Company that any such
proceeds paid and applied to the prepayment of the
Notes as hereinabove provided shall be prepaid as and
to the extent provided in Section 2.1.
Section 5.10. Guaranties. The Company will not, and
will not permit any Restricted Subsidiary to, become or be
liable in respect of any Guaranty of Indebtedness except
Guaranties of Indebtedness by the Company which are limited
in amount to a maximum principal amount, any interest
accrued thereon and any expenses incurred in connection
therewith or which constitute Guaranties of Indebtedness
incurred by any Restricted Subsidiary in compliance with the
provisions of this Agreement.
Section 5.11. Repurchase of Notes. Neither the
Company nor any Subsidiary or Affiliate which is controlled
by the Company, directly or indirectly, may repurchase or
make any offer to repurchase any Notes unless an offer has
been made to repurchase Notes, pro rata, from all holders of
the Notes at the same time and upon the same terms. In case
the Company or any Subsidiary or Affiliate which is
controlled by the Company repurchases or otherwise acquires
any Notes, such Notes shall immediately thereafter be
cancelled and no Notes shall be issued in substitution
therefor. Without limiting the foregoing, upon the purchase
or other acquisition of any Notes by the Company, any
Subsidiary or any such Affiliate, such Notes shall no longer
be outstanding for purposes of any section of this Agreement
relating to the taking by the holders of the Notes of any
actions with respect hereto, including, without limitation,
Section 6.3, Section 6.4 and Section 7.1.
Section 5.12. Transactions with Affiliates. The
Company will not, and will not permit any Restricted
Subsidiary to, enter into or be a party to any transaction
or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of
property with, or the rendering of any service by or for,
any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or
such Restricted Subsidiary's business and upon fair and
reasonable terms which, when taken as a whole, are no less
favorable to the Company or such Restricted Subsidiary than
would obtain in a comparable arm's-length transaction with a
Person other than an Affiliate.
Section 5.13. Withdrawal from Multiemployer Plans and
Termination of Pension Plans. The Company will not and will
not permit any Subsidiary to withdraw from any Multiemployer
Plan if such withdrawal could result in withdrawal liability
(as described in Part I of Subtitle E of Title IV of ERISA)
or to terminate any Plan which in either case could materially
and adversely affect the financial condition of the Company
and its Restricted Subsidiaries or the ability of the Company
to perform its obligations under this Agreement or the Notes.
Section 5.14. Redesignation of Subsidiaries. The
Company may designate or redesignate any Unrestricted
Subsidiary as a Restricted Subsidiary by giving prompt
written notice to the holders of the Notes that the Board of
Directors of the Company has made such determination,
provided, however, that no Unrestricted Subsidiary may be
designated as a Restricted Subsidiary and no Restricted
Subsidiary which at any time from and after the Closing Date
had previously been designated as an Unrestricted Subsidiary
may be designated as an Unrestricted Subsidiary if, at the
time of such action and after giving effect thereto: (a)
the Company would not be permitted by the provisions of
Section 5.7(a)(5) to incur at least $1.00 of additional
Consolidated Funded Debt, or (b) a Default or Event of
Default would exist, and provided further, that any
Restricted Subsidiary which at any time from and after the
Closing Date had previously been designated as an
Unrestricted Subsidiary and which is to be designated an
Unrestricted Subsidiary may not thereafter be designated as
a Restricted Subsidiary for a period of at least 366 days
following the date of designation of such Restricted
Subsidiary as an Unrestricted Subsidiary.
Section 5.15. Reports and Rights of Inspection.
(A) The Company will keep, and will cause each Restricted
Subsidiary to keep, proper books of record and account, on a
consolidated basis, in which full and correct entries will
be made of all dealings or transactions of, or in relation
to, the business and affairs of the Company and its
Subsidiaries, in accordance with GAAP consistently applied
(except for changes disclosed in the financial statements
furnished to you pursuant to this Section 5.15 and concurred
in by the independent public accountants referred to in
Section 5.15(b)), and will furnish to you so long as you are
the holder of any Note and to each other Institutional
Holder of the then outstanding Notes (in duplicate if so
specified below or otherwise requested):
(a) Quarterly Statements. As soon as available
and in any event within 90 days after the end of each
quarterly fiscal period (except the last) of each
fiscal year, copies of:
(1) a consolidated balance sheet of the Company
and its consolidated Subsidiaries as of the close of
such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the
fiscal year then most recently ended,
(2) consolidated statements of operations of the
Company and its consolidated Subsidiaries for such
quarterly fiscal period and for the portion of the
fiscal year ending with such quarterly fiscal period,
in each case setting forth in comparative form the
consolidated figures for the corresponding periods of
the preceding fiscal year, and
(3) a consolidated statement of cash flows of the
Company and its consolidated Subsidiaries for the
portion of the fiscal year ending with such quarterly
fiscal period, setting forth in comparative form the
consolidated figures for the corresponding period of
the preceding fiscal year,
all in reasonable detail and certified (subject to
normal year-end adjustments) as to fairness of
presentation and consistency by a Responsible Officer
of the Company;
(b) Annual Statements. As soon as available and
in any event within 120 days after the close of each
fiscal year of the Company, copies of:
(1) a consolidated balance sheet of the Company
and its consolidated Subsidiaries as of the close of
such fiscal year, and
(2) consolidated statements of operations,
changes in stockholders' equity and cash flows of the
Company and its consolidated Subsidiaries for such
fiscal year,
in each case setting forth in comparative form the
consolidated figures for the preceding fiscal year, all
in reasonable detail and accompanied by a report
thereon of a firm of independent public accountants of
recognized national standing selected by the Company to
the effect that the consolidated financial statements
present fairly, in all material respects, the
consolidated financial position of the Company and its
consolidated Subsidiaries as of the end of the fiscal
year being reported on and the consolidated results of
the operations and cash flows for said year in
conformity with GAAP and that the examination of such
accountants in connection with such financial
statements has been conducted in accordance with
generally accepted auditing standards and included such
tests of the accounting records and such other auditing
procedures as said accountants deemed necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt
thereof, one copy of each interim or special audit made
by independent accountants of the books of the Company
or any Restricted Subsidiary and any management letter
received from such accountants;
(d) SEC and Other Reports. Promptly upon their
becoming available, one copy of each financial
statement, report, notice or proxy statement sent by
the Company to its creditors and stockholders generally
and of each regular or periodic report, and any
registration statement or prospectus filed by the
Company or any Subsidiary with any securities exchange
or the Securities and Exchange Commission or any
successor agency, and copies of any orders in any
proceedings to which the Company or any of its
Subsidiaries is a party, issued by any governmental
agency, Federal or state, having jurisdiction over the
Company or any of its Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence
thereof, written notice of (1) a Reportable Event with
respect to any Plan for which the requirement of notice
to the PBGC within 30 days has not been waived
(provided that the loss of qualification of a Plan and
the failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA shall
be a Reportable Event for which notice must be given
regardless of the issuance of any waiver of the
reporting requirement by the PBGC); (2) the institution
of any steps by the Company, any ERISA Affiliate, the
PBGC or any other Person to terminate any Plan under
Sections 4041(c) or 4042 of ERISA; (3) the institution
of any steps by the Company or any ERISA Affiliate to
withdraw from any Plan which could result in a liability
to the Company; (4) a non-exempt "prohibited transaction"
within the meaning of Section 406 of ERISA in connection
with any Plan; (5) any material increase in the contingent
liability of the Company or any Restricted Subsidiary
with respect to any post-retirement welfare liability; or
(6) the taking of any action by, or the threatening of the
taking of any action by, the Internal Revenue Service,
the Department of Labor or the PBGC with respect to any
of the foregoing;
(f) Officer's Certificates. Within the periods
provided in paragraphs (a) and (b) above, a certificate
of a Responsible Officer of the Company stating that
such officer has reviewed the provisions of this
Agreement and setting forth: (1) the information and
computations (in sufficient detail) required in order
to establish whether the Company was in compliance with
the requirements of Sections 5.6, 5.7, 5.8(a)(10) and
5.9(b)(5) at the end of the period covered by the
financial statements then being furnished, and (2)
whether there existed as of the date of such financial
statements and whether, to the best of such officer's
knowledge, there exists on the date of the certificate
or existed at any time during the period covered by
such financial statements any Default or Event of
Default and, if any such condition or event exists on
the date of the certificate, specifying the nature and
period of existence thereof and the action the Company
is taking and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period
provided in paragraph (b) above, a certificate of the
accountants who render an opinion with respect to such
financial statements, stating that they have reviewed
this Agreement and stating further whether, in making
their audit, such accountants have become aware of any
Default or Event of Default under any of the terms or
provisions of this Agreement insofar as any such terms
or provisions pertain to or involve accounting matters
or determinations, and if any such condition or event
then exists, specifying the nature and period of
existence thereof; and
(h) Requested Information. With reasonable
promptness, such other data and information as you or
any such Institutional Holder may reasonably request.
(B) Without limiting the foregoing, the Company will
permit you, so long as you are the holder of any Note, and
each Institutional Holder of the then outstanding Notes (or
such agents as either you or such Institutional Holder may
designate), to visit and inspect, under the Company's
guidance, any of the properties of the Company or any
Restricted Subsidiary, to examine all of their books of
account, records, reports and other papers, to make copies
and extracts therefrom and to discuss their respective
affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this
provision the Company authorizes said accountants to discuss
with you the finances and affairs of the Company and its Restricted
Subsidiaries), all at such reasonable times and as often as
may be reasonably requested. Any visitation shall be at the
sole expense of you or such Institutional Holder, unless a
Default or Event of Default shall have occurred and be
continuing or the holder of any Note or of any other
evidence of Indebtedness of the Company or any Restricted
Subsidiary gives any written notice or takes any other
action with respect to a claimed default, in which case, any
such visitation or inspection shall be at the sole expense
of the Company.
(C) If at any time Unrestricted Subsidiaries
constitute 5% or more of Consolidated Total Assets or
Unrestricted Subsidiaries contribute 5% or more of operating
income of the Company and its Subsidiaries, then and in such
event the Company shall for each quarterly and annual fiscal
period thereafter deliver the financial statements referred
to in clauses (a) and (b) of Section 5.15(A) on the basis of
the Company and its Restricted Subsidiaries.
Section 5.16. Dividends, Stock Purchases. The Company
will not except as hereinafter provided:
(a) declare or pay any dividends, either in cash
or property, on any shares of its capital stock of any
class (except dividends or other distributions payable
solely in shares of common stock of the Company);
(b) directly or indirectly, or through any
Subsidiary or through any Affiliate of the Company,
purchase, redeem or retire any shares of its capital
stock of any class or any warrants, rights or options
to purchase or acquire any shares of its capital stock
(other than in exchange for or out of the net cash
proceeds to the Company for the substantially
concurrent issue or sale of shares of common stock of
the Company or warrants, rights or options to purchase
or acquire any shares of its common stock); or
(c) make any other payment or distribution,
either directly or indirectly or through any
Subsidiary, in respect of its capital stock;
if after giving effect thereto, an Event of Default would
exist under Section 5.6, Section 5.7 or Section 5.9.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of
the following shall constitute an "Event of Default" as such
term is used herein:
(a) Default shall occur in the payment of
interest on any Note when the same shall have become
due and such default shall continue for more than five
Business Days; or
(b) Default shall occur in the making of any
payment of the principal of any Note or premium, if
any, thereon at the expressed or any accelerated
maturity date or at any date fixed for prepayment; or
(c) Default shall occur in the observance or
performance of any covenant or agreement contained in
Section 5.6 through Section 5.9 which is not remedied
within ten Business Days after the first day on which a
Responsible Officer of the Company first obtains
knowledge of such default; or
(d) Default shall occur in the observance or
performance of any other provision of this Agreement
which is not remedied within 30 days after the first
day on which a Responsible Officer of the Company first
obtains knowledge of such Default; provided that in the
case of any Default pursuant to this Section 6.1(d)
which cannot with due diligence be cured within such
30-day period, if the Company shall proceed promptly to
cure the same and thereafter prosecute the curing of
such Default with due diligence, the time within which
to cure such Default shall be extended for such period
as may be necessary to effect such cure but in no event
more than 60 additional days; or
(e) Default shall be made in the payment when due
(whether by lapse of time, by declaration, by call for
redemption or otherwise) of the principal of or
interest on any Indebtedness for borrowed money (other
than the Notes) under any indenture, agreement or other
instrument under which any Indebtedness for borrowed
money of the Company or any Restricted Subsidiary
aggregating in excess of $10,000,000 is outstanding and
such default or event shall occur at the maturity of,
or result in the acceleration of, such Indebtedness for
borrowed money of the Company or any Restricted
Subsidiary and such acceleration shall not have been
rescinded or annulled; or
(f) Default or the happening of any event shall
occur under any indenture, agreement or other
instrument under which any Indebtedness for borrowed
money (other than the Notes) of the Company or any
Restricted Subsidiary aggregating in excess of
$10,000,000 may be issued and such default or event
shall occur at the maturity of, or result in the
acceleration of, such Indebtedness for borrowed money
of the Company or any Restricted Subsidiary and such
acceleration shall not have been rescinded or annulled;
or
(g) Any representation or warranty made by the
Company herein, or made by the Company in any statement
or certificate furnished by the Company in connection
with the consummation of the issuance and delivery of
the Notes or furnished by the Company pursuant hereto,
is untrue in any material respect as of the date of the
issuance or making thereof; or
(h) Final judgment or judgments for the payment
of money aggregating in excess of $10,000,000 (net of
insurance proceeds to the extent the insurer has
acknowledged liability) is or are outstanding against
the Company or any Material Restricted Subsidiary or
against any property or assets of either and any one
of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a
period of 60 days from the date of its entry; or
(i) A custodian, liquidator, trustee or receiver
is appointed for the Company or any Material Restricted
Subsidiary or for the major part of the property of
either and is not discharged within 60 days after such
appointment; or
(j) The Company or any Material Restricted
Subsidiary becomes insolvent or bankrupt, is generally
not paying its debts as they become due or makes an
assignment for the benefit of creditors, or the Company
or any Material Restricted Subsidiary applies for or
consents to the appointment of a custodian, liquidator,
trustee or receiver for the Company or such Material
Restricted Subsidiary or for the major part of the
property of either; or
(k) Bankruptcy, reorganization, arrangement or
insolvency proceedings, or other proceedings for relief
under any bankruptcy or similar law or laws for the
relief of debtors, are instituted by or against the
Company or any Material Restricted Subsidiary and, if
instituted against the Company or any Material
Restricted Subsidiary, are consented to or are not
dismissed within 60 days after such institution.
Section 6.2. Notice to Holders. When any Event of
Default described in the foregoing Section 6.1 has occurred,
or if the holder of any Note or of any other evidence of
Indebtedness for borrowed money of the Company gives any
notice or takes any other action with respect to a claimed
default, the Company agrees to give notice promptly and in
any event within five Business Days after a Responsible
Officer of the Company first obtains knowledge of such event
to all holders of the Notes then outstanding.
Section 6.3. Acceleration of Maturities. When any
Event of Default described in paragraph (a) or (b) of
Section 6.1 has happened and is continuing, any holder of
any Note may, by notice in writing sent to the Company in
the manner provided in Section 9.6, declare the entire
principal and all interest accrued on such Note to be, and
such Note shall thereupon become due and payable as
hereinafter provided, without any presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived. When any Event of Default described in
paragraphs (a) through (h), inclusive, of said Section 6.1
has happened and is continuing, the holder or holders of
66-2/3% or more of the principal amount of the Notes at the
time outstanding may, by notice in writing to the Company in
the manner provided in Section 9.6, declare the entire
principal and all interest accrued on all Notes to be, and
all Notes shall thereupon become due and payable as
hereinafter provided, without any presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived. The Notes declared due and payable
pursuant to foregoing sentences of this Section 6.3 shall be
and become due and payable five Business Days following
notice in writing sent to the Company in the manner provided
in Section 9.6 as provided in foregoing sentences of this
Section 6.3 (the "Acceleration Date"). When any Event of
Default described in paragraph (i), (j) or (k) of Section
6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment,
demand or notice of any kind. Upon the Notes becoming due
and payable as a result of any Event of Default as aforesaid,
the Company will forthwith pay to the holders of the Notes
the entire principal and interest accrued on the Notes and,
to the extent not prohibited by applicable law, an amount as
liquidated damages for the loss of the bargain evidenced
hereby (and not as a penalty) equal to the Make-Whole
Amount, determined as of the date on which the Notes shall
so become due and payable; provided, however, that if prior
to the Acceleration Date in respect of the occurrence of any
Event of Default described in paragraphs (a) through (h) of
Section 6.1, the provisions of Section 6.4(a), (b) and (c)
shall have been satisfied but the declaration of
acceleration of any Notes shall not have been rescinded and
annulled pursuant to the provisions of Section 6.4, then and
in such event the Company shall on the Acceleration Date pay
to the holders of the Notes which have not rescinded such
declaration of acceleration the entire principal and
interest accrued on such Notes, without payment of any Make-
Whole Amount. No course of dealing on the part of the
holder or holders of any Notes nor any delay or failure on
the part of any holder of Notes to exercise any right shall
operate as a waiver of such right or otherwise prejudice
such holder's rights, powers and remedies. The Company
further agrees, to the extent permitted by law, to pay to
the holder or holders of the Notes all costs and expenses
incurred by them in the collection of any Notes upon any
default hereunder or thereon, including reasonable
compensation to such holder's or holders' attorneys for all
services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The
provisions of Section 6.3 are subject to the condition that
if the principal of and accrued interest on (1) any
outstanding Note has been declared due and payable by reason
of the occurrence of any Event of Default described in
paragraph (a) or (b) of Section 6.1, the holder of such Note
may, by written instrument filed with the Company, rescind
and annul such declaration and the consequences thereof, and
(2) all of the outstanding Notes have been declared
immediately due and payable by reason of the occurrence of
any Event of Default described in paragraphs (c) through
(h), inclusive, of Section 6.1, the holders of 66-2/3% in
aggregate principal amount of the Notes then outstanding
may, by written instrument filed with the Company, rescind
and annul such declaration and the consequences thereof,
provided in each case that at the time such declaration is
annulled and rescinded:
(a) no judgment or decree has been entered for
the payment of any monies due pursuant to the Notes or
this Agreement;
(b) all arrears of interest upon all the Notes
and all other sums payable under the Notes and under
this Agreement (except any principal, interest or
premium on the Notes which has become due and payable
solely by reason of such declaration under Section 6.3)
shall have been duly paid; and
(c) each and every other Default and Event of
Default shall have been made good, cured or waived
pursuant to Section 7.1;
and provided further, that no such rescission and annulment
shall extend to or affect any subsequent Default or Event of
Default or impair any right consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant,
agreement or condition of this Agreement may, with the
consent of the Company, be amended or compliance therewith
may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company
shall have obtained the consent in writing of the holders of
at least 66-2/3% in aggregate principal amount of
outstanding Notes; provided that without the written consent
of the holders of all of the Notes then outstanding, no such
amendment or waiver shall be effective (a) which will change
the time of payment of the principal of or the interest on
any Note or change the principal amount thereof or reduce
the rate of interest thereon, or (b) which will change any
of the provisions with respect to optional prepayments, or
(c) which will change the percentage of holders of the Notes
required to consent to any such amendment or waiver of any
of the provisions of this Section 7 or Section 6.
Section 7.2. Solicitation of Holders. So long as
there are any Notes outstanding, the Company will not
solicit, request or negotiate for or with respect to any
proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each holder of Notes
(irrespective of the amount of Notes then owned by it) shall
be informed thereof by the Company within 5 Business Days
following the initial inquiry with respect thereto by the
Company to any holder of the Notes and shall be afforded the
opportunity of considering the same and shall be supplied by
the Company with sufficient information to enable it to make
an informed decision with respect thereto. The Company will
not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any holder of Notes as
consideration for or as an inducement to entering into by
any holder of Notes of any waiver or amendment of any of the
terms and provisions of this Agreement or the Notes unless
such remuneration is concurrently offered, on the same
terms, ratably to the holders of all Notes then outstanding.
Promptly and in any event within 30 days of the date of
execution and delivery of any such waiver or amendment, the
Company shall provide a true, correct and complete copy
thereof to each of the holders of the Notes.
Section 7.3. Effect of Amendment or Waiver. Any such
amendment or waiver shall apply equally to all of the
holders of the Notes and shall be binding upon them, upon
each future holder of any Note and upon the Company, whether
or not such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall
extend to or affect any obligation not expressly amended or
waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context
otherwise requires, the terms hereinafter set forth when
used herein shall have the following meanings and the
following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein
defined:
"Affiliate" shall mean any Person (other than a
Restricted Subsidiary) (a) which directly or indirectly
through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company,
(b) which beneficially owns or holds 10% or more of any
class of the Voting Stock of the Company or (c) 10% or more
of the Voting Stock (or in the case of a Person which is not
a corporation, 10% or more of the equity interest) of which
is beneficially owned or held by the Company or a
Subsidiary. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person,
whether through the ownership of Voting Stock, by contract
or otherwise.
"Business Day" shall mean any day other than a
Saturday, Sunday or other day on which banks in Portland,
Oregon or New York, New York are required by law to close or
are customarily closed.
"Capitalized Lease" shall mean any lease the obligation
for Rentals with respect to which is required to be
capitalized on a consolidated balance sheet of the lessee
and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of
the date of any determination thereof the amount at which
the aggregate Rentals due and to become due under all
Capitalized Leases under which such Person is a lessee would
be reflected as a liability on a consolidated balance sheet
of such Person.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations from time to time promulgated
thereunder.
"Company" shall mean Fred Meyer, Inc., a Delaware
corporation, and any Person who succeeds to all, or
substantially all, of the assets and business of Fred Meyer,
Inc.
"Consolidated Adjusted Net Worth" shall mean as of the
date of any determination thereof the arithmetic sum of:
(a) the amount of the capital stock accounts (net
of treasury stock, at cost, but including preferred
stock), plus (or minus in the case of a deficit) the
surplus and retained earnings of the Company and its
Restricted Subsidiaries as set forth in the
consolidated financial statements of the Company as at
the end of the fiscal quarter immediately preceding the
date of such determination,
MINUS
(b) the net book value, after deducting any
reserves applicable thereto, of all items of the
following character which are included in the assets of
the Company and its Restricted Subsidiaries, to wit:
(1) the incremental increase in an asset
resulting from any reappraisal, revaluation or write-up
of assets, other than an increase to the extent
permitted by GAAP, in any such case in connection with the
acquisition of an asset or business by the Company or
any of its Restricted Subsidiaries; and
(2) (i) unamortized debt discount and expense and
(ii) goodwill, patents, patent applications, permits,
trademarks, trade names, copyrights, licenses,
franchises, experimental expense, organizational
expense, research and development expense and such
other assets as are properly classified as "intangible
assets" the fair market value of which is in excess of
[$5,000,000] acquired by the Company or any of its
Restricted Subsidiaries after the Closing Date;
provided, however, that notwithstanding the foregoing,
the Company may include in any determination of
"Consolidated Adjusted Net Worth" the aggregate net
value of capitalized software, prepaid royalties,
patents, patent applications, trademarks, trade names,
and copyrights and other intellectual property the fair
market value of which is [$5,000,000] or less acquired
after the Closing Date;
all determined in accordance with GAAP.
"Consolidated Funded Debt" shall mean, as of the date
of any determination thereof, all Funded Debt of the Company
and its Restricted Subsidiaries, determined on a
consolidated basis eliminating intercompany items.
"Consolidated Total Assets" shall mean, as of the date
of any determination thereof, total assets of the Company
and its Restricted Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean, as of
the date of any determination thereof, the sum of (a)
Consolidated Funded Debt plus (b) Consolidated Adjusted Net
Worth.
"Default" shall mean any event or condition the
occurrence of which would, with the lapse of time or the
giving of notice, or both, constitute an Event of Default.
"Environmental Law" shall mean any international,
federal, state or local statute, law, regulation, order,
consent decree, judgment, permit, license, code, covenant,
deed restriction, common law, treaty, convention, ordinance
or other requirement relating to public health, safety or
the environment, including, without limitation, those
relating to releases, discharges or emissions to air, water,
land or groundwater, to the withdrawal or use of
groundwater, to the use and handling of polychlorinated
biphenyls or asbestos, to the disposal, treatment, storage
or management of hazardous or solid waste, or Hazardous
Substances or crude oil, or any fraction thereof, or to
exposure to toxic or hazardous materials, to the handling,
transportation, discharge or release of gaseous or liquid
Hazardous Substances and any regulation, order, notice or
demand issued pursuant to such law, statute or ordinance, in
each case applicable to the property of the Company and its
Subsidiaries or the operation, construction or modification
of any thereof, including without limitation, the following:
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, the Solid Waste
Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984, the Hazardous Materials Transportation
Act, as amended, the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1976, the Safe Drinking
Water Control Act, the Clean Air Act of 1966, as amended,
the Toxic Substances Control Act of 1976, the Occupational
Safety and Health Act of 1977, as amended, the Emergency
Planning and Community Right-to-Know Act of 1986, the
National Environmental Policy Act of 1975, the Oil Pollution
Act of 1990 and any similar or implementing state law, and
any state statute and any further amendments to these laws
providing for financial responsibility for cleanup or other
actions with respect to the release or threatened release of
Hazardous Substances or crude oil, or any fraction thereof,
and all rules, regulations, guidance documents and
publications promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and any successor statute
of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to
sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" shall mean any corporation, trade or
business that is, along with the Company, a member of a
controlled group of corporations or a controlled group of
trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in
Section 6.1.
"Funded Debt" of any Person shall mean (a) all
Indebtedness of such Person for borrowed money or which has
been incurred in connection with the acquisition of assets
in each case having a final maturity of more than one year
from the date of origin thereof (or which is renewable or
extendible at the option of the obligor for a period or
periods more than one year from the date of origin),
including all payments in respect thereof that are required
to be made within one year from the date of any
determination of Funded Debt, whether or not the obligation
to make such payments shall constitute a current liability
of the obligor under GAAP, (b) all Capitalized Rentals of
such Person, and (c) all Guaranties by such Person of Funded
Debt of others.
"GAAP" shall mean generally accepted accounting
principles at the time.
"Guaranties" by any Person shall mean all obligations
(other than endorsements in the ordinary course of business
of negotiable instruments for deposit or collection) of such
Person guaranteeing, or in effect guaranteeing, any
Indebtedness, dividend or other obligation of any other
Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, all
obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such
Indebtedness or obligation or any property or assets
constituting security therefor, (b) to advance or supply
funds (1) for the purchase or payment of such Indebtedness
or obligation, or (2) to maintain working capital or any
balance sheet or income statement condition or otherwise to
advance or make available funds for the purchase or payment
of such Indebtedness or obligation, (c) to lease property
or to purchase Securities or other property or services
primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation,
or (d) otherwise to assure the owner of the Indebtedness
or obligation of the primary obligor against loss in respect
thereof; provided that (i) letters of credit issued for
the benefit of the Company or a Restricted Subsidiary and
used to finance the purchase of inventory or the construction
of improvements otherwise subject to a construction contract
and (ii) notes, bills and checks presented by the Company
or a Restricted Subsidiary to banks for collection or
deposit in the ordinary course of business upon customary
credit terms may be excluded from any determination of
"Guaranties". For the purposes of all computations made
under this Agreement, a Guaranty in respect of any
Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed,
and a Guaranty in respect of any other obligation or
liability or any dividend shall be deemed to be
Indebtedness equal to the maximum aggregate amount of
such obligation, liability or dividend.
"Hazardous Substance" shall mean any hazardous or toxic
material, substance or waste, pollutant or contaminant which
is regulated under any statute, law, ordinance, rule or
regulation of any local, state, regional or federal
authority having jurisdiction over the property of the
Company and its Subsidiaries or its use, including but not
limited to any material, substance or waste which is: (a)
defined as a hazardous substance under Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. Section
1317), as amended; (b) regulated as a hazardous waste under
Section 1004 or Section 3001 of the Federal Solid Waste
Disposal Act, as amended by the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), as amended;
(c) defined as a hazardous substance under Section 101 of
the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), as amended;
or (d) defined or regulated as a hazardous substance or
hazardous waste under any rules or regulations promulgated
under any of the foregoing statutes.
"Indebtedness" of any Person shall mean and include all
(a) obligations of such Person for borrowed money or which
have been incurred in connection with the acquisition of
property or assets, (b) obligations secured by any Lien upon
property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of
such obligations, provided that if such Person has not,
directly or indirectly, assumed or otherwise become liable
for the payment of such obligations, the amount of
Indebtedness included in any calculation shall not exceed
the net book value of the property or assets encumbered by
the related Lien, (c) obligations created or arising under
any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding
the fact that the rights and remedies of the seller, lender
or lessor under such agreement in the event of default are
limited to repossession or sale of property, (d) Capitalized
Rentals and (e) Guaranties of obligations of others of the
character referred to in this definition; provided that in
no event shall:
(1) trade payables incurred in the ordinary
course of business by the Company or a Restricted
Subsidiary upon customary credit terms; and
(2) lease obligations of the Company or any
Restricted Subsidiary which do not constitute
Capitalized Rentals in accordance with GAAP be included
in any determination of "Indebtedness."
"Investments" shall mean all investments, in cash or by
delivery of property, made directly or indirectly in any
Person, whether by acquisition of shares of capital stock,
Indebtedness or other obligations or Securities or by loan,
advance, capital contribution or otherwise; provided,
however, that "Investments" shall not mean or include
routine investments and property to be used or consumed in
the ordinary course of business.
"Institutional Holder" shall mean any of the following
Persons: (a) any bank, savings and loan association,
savings institution, trust company or national banking
association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance
company, (d) any fraternal benefit society, (e) any pension,
retirement or profit-sharing trust or fund within the
meaning of Title I of ERISA or for which any bank, trust
company, national banking association or investment adviser
registered under the Investment Advisers Act of 1940, as
amended, is acting as trustee or agent, (f) any investment
company or business development company, as defined in the
Investment Company Act of 1940, as amended, (g) any small
business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any broker
or dealer registered under the Securities Exchange Act of
1934, as amended, or any investment adviser registered under
the Investment Adviser Act of 1940, as amended, (i) any
government, any public employees' pension or retirement
system, or any other government agency supervising the
investment of public funds, (j) any other entity all of the
equity owners of which are Institutional Holders or (k) any
other Person which may be within the definition of
"qualified institutional buyer" as such term is used in Rule
144A, as from time to time in effect, promulgated under the
Securities Act of 1933, as amended.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the
owner of the property, whether such interest is based on the
common law, statute or contract, and including but not
limited to the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security
purposes. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting real property. The
term "Lien" shall also include, with respect to stock,
stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements. For the purposes
of this Agreement, the Company or a Restricted Subsidiary
shall be deemed to be the owner of any property which it has
acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which
title to the property has been retained by or vested in some
other Person for security purposes and such retention or
vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any
prepayment or acceleration of the Notes of any series the
excess, if any, of (a) the aggregate present value as of the
date of such prepayment or payment of each dollar of
principal of the Notes of such series being prepaid or paid
and the amount of interest (exclusive of interest accrued to
the date of prepayment or payment) that would have been
payable in respect of such dollar if such prepayment or
payment had not been made, determined by discounting such
amounts at the Reinvestment Rate (applied on a semiannual
basis) from the respective dates on which they would have
been payable, over (b) 100% of the principal amount of the
outstanding Notes of such series being prepaid or paid. If
the Reinvestment Rate (i) in the case of the Series A Notes
is equal to or higher than 7.25%, (ii) in the case of the
Series B Notes is equal to or higher than 7.52%, (iii) in
the case of the Series C Notes is equal to or higher than
7.88% or (iv) in the case of the Series D Notes is equal to
or higher than 7.98%, then the Make-Whole Amount with
respect to the Notes of such series shall be zero. For
purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean (1) the sum of .50%
plus the yield reported on page "USD" of the Bloomberg
Financial Markets Services Screen (or, if not
available, any other nationally recognized trading
screen reporting on-line intraday trading in United
States government Securities) at 11:00 a.m. (New York
City, New York time) for the United States government
Securities having a maturity (rounded to the nearest
month) corresponding with the maturity date of the
principal of the Notes of the series being prepaid or
paid or (2) in the event no nationally recognized
trading screen reporting on-line intraday trading in
the United States government Securities is available,
Reinvestment Rate shall mean the sum of .50% plus the
arithmetic mean of the yields for the two columns under
the heading "Week Ending" published in the Statistical
Release under the caption "Treasury Constant
Maturities" for the maturity (rounded to the nearest
month) corresponding to the maturity date of the
principal of the Notes of the series being prepaid or
paid. If no published maturity exactly corresponds to
the maturity date of the principal of the Notes of the
series being prepaid or paid, yields for the two
published maturities most closely corresponding to such
maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment
Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For the
purposes of calculating the "Reinvestment Rate", the
most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be
used.
"Statistical Release" shall mean the then most
recently published statistical release designated
"H.15(519)" or any successor publication which is
published weekly by the Federal Reserve System and
which establishes yields on actively traded U.S.
Government Securities adjusted to constant maturities
or, if such statistical release is not published at the
time of any determination hereunder, then such other
reasonably comparable index which shall be designated
by the holders of 66-2/3% in aggregate principal amount
of the outstanding Notes.
"Material Restricted Subsidiary" shall mean any
Restricted Subsidiary the net worth (computed in accordance
with the definition of "Consolidated Adjusted Net Worth") of
which constitutes at least 2.5% of Consolidated Adjusted Net
Worth.
"Multiemployer Plan" shall have the same meaning as in
ERISA.
"Overdue Rate" shall mean (i) 8.25% per annum in the
case of the Series A Notes, (ii) 8.52% per annum in the case
of the Series B Notes, (iii) 8.88% per annum in the case of
the Series C Notes and (iv) 8.98% per annum in the case of
the Series D Notes.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation and any entity succeeding to any or all of its
functions under ERISA.
"Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, and a
government or agency or political subdivision thereof.
"Plan" shall mean a "pension plan," as such term is
defined in ERISA, established or maintained by the Company
or any ERISA Affiliate or as to which the Company or any
ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Predominantly-owned" when used in connection with any
Subsidiary shall mean a Subsidiary of which at least 80% of
the issued and outstanding shares of stock (except shares
required as directors' qualifying shares) shall be owned by
the Company and/or one or more of its Predominantly-owned
Subsidiaries.
"Purchasers" shall have the meaning set forth in
Section 1.1.
"Rentals" shall mean and include as of the date of any
determination thereof all fixed payments (including as such
all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the
property) payable by the Company or a Restricted Subsidiary,
as lessee or sublessee under a lease of real or personal
property, but shall be exclusive of any amounts required to
be paid by the Company or a Restricted Subsidiary (whether
or not designated as rents or additional rents) on account
of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called "percentage
leases" shall be computed solely on the basis of the minimum
rents, if any, required to be paid by the lessee regardless
of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in
ERISA.
"Responsible Officer" shall mean the President, Chief
Financial Officer, Treasurer or Chief Accounting Officer of
the Company.
"Restricted Subsidiary" shall mean any Subsidiary (a)
which is organized under the laws of the United States or
any State thereof; (b) which conducts substantially all of
its business and has substantially all of its assets within
the United States; and (c) which is not designated as an
Unrestricted Subsidiary on Schedule II to this Agreement
or in accordance with Section 5.15.
"Security" shall have the same meaning as in Section
2(1) of the Securities Act of 1933, as amended.
"Subordinated Funded Debt" shall mean all Funded Debt
of the Company which is at all times evidenced by a written
instrument or instruments containing subordination
provisions substantially in the form set forth in Exhibit E
attached hereto, providing for the subordination thereof to
other Indebtedness of the Company, including, without
limitation, the Notes, or such other provisions as may be
approved in writing by the holders of not less than 66-2/3%
in aggregate principal amount of the outstanding Notes.
The term "subsidiary" shall mean as to any particular
parent corporation any corporation of which more than 50%
(by number of votes) of the Voting Stock shall be
beneficially owned, directly or indirectly, by such parent
corporation. The term "Subsidiary" shall mean a subsidiary
of the Company.
"Transfer" shall have the meaning assigned thereto in
Section 5.9(b).
"Unrestricted Subsidiary" shall mean any Subsidiary
which is designated as an Unrestricted Subsidiary in
Schedule II to this Agreement or in accordance with Section
5.15.
"Voting Stock" shall mean Securities of any class or
classes, the holders of which are ordinarily, in the absence
of contingencies, entitled to elect a majority of the
corporate directors (or Persons performing similar
functions).
Section 8.2. Accounting Principles. Where the
character or amount of any asset or liability or item of
income or expense is required to be determined or any
consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall
be done in accordance with GAAP, to the extent applicable,
except where such principles are inconsistent with the
requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any
provision in this Agreement refers to action to be taken by
any Person, or which such Person is prohibited from taking,
such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall
cause to be kept at its principal office a register for the
registration and transfer of the Notes, and the Company will
register or transfer or cause to be registered or
transferred, as hereinafter provided, any Note issued
pursuant to this Agreement.
At any time and from time to time the holder of any
Note which has been duly registered as hereinabove provided
may transfer such Note upon surrender thereof at the
principal office of the Company duly endorsed or accompanied
by a written instrument of transfer duly executed by the
holder of such Note or its attorney duly authorized in
writing.
Prior to the presentation to the Company of a duly
executed instrument of transfer and the Note (or, in the
event of loss, theft, mutilation or destruction of the Note,
presentation of a duly executed instrument of transfer in
compliance with Section 9.3 hereof), the Person in whose
name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of
this Agreement, notwithstanding any notice to the contrary.
Payment of or on account of the principal, premium, if any,
and interest on any Note shall be made to or upon the
written order of such holder.
Section 9.2. Exchange of Notes. At any time and from
time to time, upon not less than ten days' notice to that
effect given by the holder of any Note initially delivered
or of any Note substituted therefor pursuant to Section 9.1,
this Section 9.2 or Section 9.3, and, upon surrender of such
Note at its office, the Company will deliver in exchange
therefor, without expense to such holder, except as set
forth below, a Note for the same aggregate principal amount
as the then unpaid principal amount of the Note so
surrendered, or Notes in the denomination of $100,000 (or
such lesser amount as shall constitute 100% of the Notes of
such holder) or any amount in excess thereof as such holder
shall specify, dated as of the date to which interest has
been paid on the Note so surrendered or, if such surrender
is prior to the payment of any interest thereon, then dated
as of the date of issue, registered in the name of such
Person or Persons as may be designated by such holder, and
otherwise of the same form and tenor as the Notes so
surrendered for exchange. The Company may require the
payment of a sum sufficient to cover any stamp tax or
governmental charge imposed upon such exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon
receipt of evidence satisfactory to the Company of the loss,
theft, mutilation or destruction of any Note, and in the
case of any such loss, theft or destruction upon delivery of
a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of
such mutilation upon surrender and cancellation of the Note,
the Company will make and deliver without expense to the
holder thereof, a new Note, of like tenor, in lieu of such
lost, stolen, destroyed or mutilated Note. If the Purchaser
or any subsequent Institutional Holder is the owner of any
such lost, stolen or destroyed Note, then the affidavit of
an authorized officer of such owner, setting forth the fact
of loss, theft or destruction and of its ownership of such
Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution
and delivery of a new Note other than the written agreement
of such owner to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether
or not the transactions herein contemplated shall be
consummated, the Company agrees to pay directly all of your
out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the
transactions contemplated hereby, including but not limited
to the reasonable charges and disbursements of Chapman and
Cutler, your special counsel, in connection with the
preparation, execution and delivery of this Agreement and
the duplicating and printing costs and charges for shipping
the Notes, adequately insured to you at your home office
or at such other place as you may designate, and all such
expenses relating to any amendments, waivers or consents
initiated at the request of the Company at any time
or by action of the holders of the Notes during the
continuance of a Default or Event of Default (whether or
not the same are actually executed and delivered),
including, without limitation, any amendments, waivers, or
consents resulting from any work-out, renegotiation or
restructuring relating to the performance by the Company of
its obligations under this Agreement and the Notes; provided
however, that the Company shall be obligated to pay your
out-of-pocket expenses only if the Company fails to proceed
with the consummation of such transactions. The Company
also agrees to pay, within ten Business Days of receipt
thereof, supplemental statements of Chapman and Cutler for
disbursements unposted or not incurred as of the Closing
Date. The Company further agrees that it will pay and save
you harmless against any and all liability with respect to
stamp and other taxes, if any, which may be payable or which
may be determined to be payable in connection with the
execution and delivery of this Agreement or the Notes,
whether or not any Notes are then outstanding. The Company
agrees to protect and indemnify you against any liability
for any and all brokerage fees and commissions payable or
claimed to be payable to any Person (including BA
Securities, Inc.) in connection with the transactions
contemplated by this Agreement. You represent that you have
not retained any broker or finder to arrange for the offer,
sale or delivery of the Notes. Without limiting the
foregoing, the Company agrees to pay the cost of obtaining
the private placement numbers for each series of Notes and
authorizes the submission of such information as may be
required by Standard & Poor's CUSIP Service Bureau for the
purpose of obtaining such number.
Section 9.5. Powers and Rights Not Waived; Remedies
Cumulative. No delay or failure on the part of the holder
of any Note in the exercise of any power or right shall
operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and
the rights and remedies of the holder of any Note are
cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
Section 9.6. Notices. All communications provided
for hereunder shall be in writing and, if to you, delivered
or mailed prepaid by registered or certified mail or
overnight air courier, or by facsimile communication, in
each case addressed to you at your address appearing on
Schedule I to this Agreement or such other address as you or
the subsequent holder of any Note initially issued to you
may designate to the Company in writing, and if to the
Company, delivered or mailed by registered or certified mail
or overnight air courier, or by facsimile communication
confirmed by registered or certified mail or overnight air
courier, to the Company at 3800 S.E. 22nd Avenue, Portland,
Oregon 97242, Attention: Vice President, Corporate
Treasurer, or to such other address as the Company may in
writing designate to you or to a subsequent holder of the
Note initially issued to you; provided, however, that a
notice to you by overnight air courier shall only be
effective if delivered to you at a street address designated
for such purpose in Schedule I, and a notice to you by
facsimile communication shall only be effective if made by
confirmed transmission to you at a telephone number
designated for such purpose in Schedule I, or, in
either case, as you or a subsequent holder of any Note
initially issued to you may designate to the Company in
writing.
Section 9.7. Successors and Assigns. This Agreement
shall be binding upon the Company and its successors and
assigns and shall inure to your benefit and to the benefit
of your successors and assigns, including each successive
holder or holders of any Notes.
Section 9.8. Survival of Covenants and
Representations. All covenants, representations and
warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in
connection with the Closing Date, shall survive the closing
and the delivery of this Agreement and the Notes.
Section 9.9. Severability. Should any part of this
Agreement for any reason be declared invalid or
unenforceable, such decision shall not affect the validity
or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this
Agreement had been executed with the invalid or
unenforceable portion thereof eliminated and it is hereby
declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement
without including therein any such part, parts or portion
which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.10. Changes in GAAP. Each of the Purchasers
and each other holder of the Notes by its acceptance thereof
understands and agrees with the Company that in the event
that a change in GAAP occurs which is the sole cause of a
change in any of the calculations contemplated by this
Agreement, including without limitation, calculations with
regard to the covenants contained in Sections 5.6 through
5.9, then in such event the Purchasers and/or such holders,
as the case may be, and the Company shall undertake to amend
any affected provisions of this Agreement so as to preserve
the intent and purpose thereof and to accommodate such
change in GAAP and to enter into an amendment hereof to
reflect the same.
Section 9.11. Governing Law. This Agreement and the
Notes issued and sold hereunder shall be governed by and
construed in accordance with New York law, including all
matters of construction, validity and performance.
Section 9.12. Submission to Jurisdiction. Any legal
action or proceeding with respect to this Agreement or the
Notes or any document related thereto may be brought in the
courts of the State of New York or of the United States of
America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Company hereby
accepts for itself and in respect of its property generally
and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts. The Company hereby irrevocably and
unconditionally waives any objection, including, without
limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens which it may now or
hereafter have to the bringing of any action or proceeding
in such respective jurisdiction.
Section 9.13. Captions. The descriptive headings of
the various Sections or parts of this Agreement are for
convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth,
and this Agreement may be executed in any number of
counterparts, each executed counterpart constituting an
original but all together only one agreement.
FRED MEYER, INC.
By ________________________________
Its Vice President and
Corporate Treasurer
Accepted as of _____________, 1994.
[VARIATION]
By ________________________________
Its
SCHEDULE I
----------
PRINCIPAL AMOUNT SERIES
NAMES AND ADDRESSES OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
PHOENIX HOME LIFE MUTUAL $15,000,000 Series D
INSURANCE COMPANY
One American Row
Hartford, Connecticut 06115
Attention: Private Placements Division
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.98%
Senior Notes, Series D, due 2007, PPN 593098 B# 2,
principal, premium or interest") to:
Chase Manhattan Bank (ABA #021 0000 21)
BNF-SSG Private Income Processing/AC-9009000200
for credit to: Phoenix Home Life Mutual Insurance
Company
Account Number G-05143
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0493340
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
THE VARIABLE ANNUITY LIFE $8,000,000 Series B
INSURANCE COMPANY
c/o American General $4,000,000 Series C
Corporation
P. O. Box 3247
Houston, Texas 77253-3247*
Attention: Investment
Research Department, A37-01
Facsimile Number: (713) 831-1366
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.52%
Senior Notes, Series B, due 2001, PPN 593098 B* 6, principal
or interest" or "Fred Meyer, Inc., 7.88% Senior Notes,
Series C, due 2004, PPN 593098 B@ 4, principal, premium or
interest", as the case may be) to:
State Street Bank and Trust Company (ABA #011000028)
Boston, Massachusetts 02101
Re: The Variable Annuity Life Insurance Company
AC-0125-821-9
OBI=Description of payment
Fund Number PA 54
Notices
All notices of payment on or in respect of the Notes and
written confirmation of each such payment to:
The Variable Annuity Life Insurance Company and PA 54
c/o State Street Bank and Trust Company
State Street South
Ann Hutchinson Offices, 2nd Fl.
108 Myrtle Street
Two Newport Office Park
North Quincy, Massachusetts 02171
Facsimile Number: (617) 985-4923
Duplicate payment notices and all other correspondences to
be addressed as first provided above.
*In the event that notices/communications are sent by
courier (e.g., Federal Express) rather than U.S. Postal
Service, the address should be changed to: 2929 Allen
Parkway, Houston, Texas 77019, Attention: Private
Placements, A37-01.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 74-1625348
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
THE MINNESOTA MUTUAL $8,000,000 Series C
LIFE INSURANCE COMPANY
400 North Robert Street
St. Paul, Minnesota 55101
Attention: Investment Department
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
The First Bank National Association (ABA #091000022)
Minneapolis, Minnesota
BNF The Minnesota Mutual Life Insurance Company
Account Number 1-801-10-00600-4
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0417830
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
THE CANADA LIFE $6,000,000 Series A
ASSURANCE COMPANY
Investment Department, U-6
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: U.S. Private Placements
Telefacsimile: (416) 597-9678
Confirmation: (416) 597-1456, ext. 5117
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.25%
Senior Notes, Series A, due 1999, PPN 593098 A@ 5,
principal, premium or interest") to:
Ince & Co.
c/o Morgan Guaranty Trust Company of New York (ABA
#021000238)
Account Number 999-99-024
Attention: Custody Collection
for: The Canada Life Assurance Company
Trust Account Number 41233
Notices
All notices and communications to be addressed as first
provided above, except notices with respect to payments and
written confirmation of each such payment to be addressed:
Morgan Guaranty Trust Company
60 Wall Street
New York, New York 10260
Attention: Patricia Ewing
with duplicate notice to:
The Canada Life Assurance Company
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: Supervisor, Securities Accounting
Name of Nominee in which Notes are to be issued: Ince & Co.
Taxpayer I.D. Number: 38-0397420
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
CANADA LIFE INSURANCE COMPANY $1,000,000 Series A
OF AMERICA
c/o The Canada Life Assurance Company
Investment Department, U-6
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: U.S. Private Placements
Telefacsimile: (416) 597-9678
Confirmation: (416) 597-1456, ext. 5117
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.25%
Senior Notes, Series A, due 1999, PPN 593098 A@ 5,
principal, premium or interest") to:
Chemical Bank (ABA #021-000128)
Account Number 544-755-102
For benefit of F/A/O AR80-77249
Attention: Mr. Tom Finn
for: The Canada Life Insurance Company of America
(CLICA)
Trust Account AR80-77249
Notices
All notices and communications to be addressed as first
provided above, except notices with respect to payments and
written confirmation of each such payment to be addressed:
Chemical Bank
Institutional Client Services
4 New York Plaza-4th Floor
New York, New York 10004
Attention: Mr. Michael Roman
with duplicate notice to:
The Canada Life Assurance Company
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: Supervisor, Securities Accounting
Name of Nominee in which Notes are to be issued: Cummings &
Co.
Taxpayer I.D. Number: 38-2816473
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
CANADA LIFE INSURANCE COMPANY $500,000 Series A
OF NEW YORK
c/o The Canada Life Assurance Company
Investment Department, U-6
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: U.S. Private Placements
Telefacsimile: (416) 597-9678
Confirmation: (416) 597-1456, ext. 5117
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.25%
Senior Notes, Series A, due 1999, PPN 593098 A@ 5,
principal, premium or interest") to:
Ince & Co.
c/o Morgan Guaranty Trust Company of New York (ABA #021
000 238)
Account Number 999-99-024
Attention: Custody Collection
for: Canada Life Insurance Company of New York
Custody Account Number 33370
Notices
All notices and communications to be addressed as first
provided above, except notices with respect to payments and
written confirmation of each such payment to be addressed:
Morgan Guaranty Trust Company
15 Broad Street
New York, New York 10015
Attention: Custody Collection Department
with duplicate notice to:
The Canada Life Assurance Company
330 University Avenue
Toronto, Ontario, Canada M5G 1R8
Attention: Supervisor, Securities Accounting
Name of Nominee in which Notes are to be issued: Ince & Co.
Taxpayer I.D. Number: 13-269-0792
PRINCIPAL AMOUNT SERIES
NAMES AND ADDRESSES OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
THE FRANKLIN LIFE $3,000,000 Series B
INSURANCE COMPANY
One Franklin Square
Springfield, Illinois 62713
Attention: Investment Division
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.52%
Senior Notes, Series B, due 2001, PPN 593098 B* 6,
principal, premium or interest") to:
Morgan Guaranty Trust Company of New York (ABA #0210-
0023-8)
23 Wall Street
New York, New York 10015
Attention: Money Transfer Department
for credit to: The Franklin Life Insurance Company
Account Number 022-05-988
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 37-0281650
PRINCIPAL AMOUNT SERIES
NAMES AND ADDRESSES OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
KNIGHTS OF COLUMBUS $3,000,000 Series B
One Columbus Plaza
New Haven, Connecticut 06507
Attention: Investment Department
Telecopier Number: (203) 772-0037
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.52%
Senior Notes, Series B, due 2001, PPN 593098 B* 6,
principal, premium or interest") to:
Morgan Guaranty Trust Company of New York (ABA
#021000238)
60 Wall Street
New York, New York 10260
for credit to: Knights of Columbus
MGT Receipts
Account Number 001-02-667
Notices
All notices and communications to be addressed as first
provided above, except notices with respect to payments and
written confirmation of each such payment to be addressed,
Attention: Accounting Department.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 060416470
PRINCIPAL AMOUNT SERIES
NAMES AND ADDRESSES OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
SAFECO LIFE $3,000,000 Series C
INSURANCE COMPANY
(for the account of Safeco Life Annuity)
Investment Department, T-14 Safeco Plaza
Seattle, Washington 98185
Attention: Keith Bunch (206) 545-3111 or Ron Spaulding
Telecopier Number: (206) 545-3446
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
US Trust/NYC/Trust (ABA #021001318)
for credit to: Safeco Life Annuity
Account Number 473633
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above with a copy
of all such notices and communications to be addressed:
Atwell & Co.
c/o U.S. Trust Company
P.O. Box 456, Wall Street Station
New York, New York 10005
Name of Nominee in which Notes are to be issued: Atwell &
Co.
Taxpayer I.D. Number: 3-6065575
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
THE SECURITY MUTUAL LIFE $1,000,000 Series B
INSURANCE COMPANY OF
LINCOLN, NEBRASKA
200 Centennial Mall North
Lincoln, Nebraska 68508
Attention: Investment Department
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.52%
Senior Notes, Series B, due 2001, PPN 593098 B* 6,
principal, premium or interest") to:
National Bank of Commerce (ABA #1040-00045)
13th and "O" Streets
Lincoln, Nebraska
for credit to: Security Mutual Life
Account Number 40-797-624
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0293990
PRINCIPAL AMOUNT SERIES
NAMES AND ADDRESSES OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
STANDARD INSURANCE COMPANY $1,000,000 Series C
P.O. Box 711
Portland, Oregon 97207
Attention: Securities Department
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
First Interstate Bank of Oregon/First Port Trust (ABA
#123000123)
1300 S.W. Fifth Avenue, 10th Floor
Portland, Oregon 97201
Attention: B. Harvey, Trust Operations
for credit to: Standard Insurance Company
Account Number 450010
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: STANCO
PRINCIPAL AMOUNT SERIES
NAMES AND ADDRESSES OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
WOODMEN ACCIDENT AND $1,000,000 Series C
LIFE COMPANY
P.O. Box 82288
Lincoln, Nebraska 68501
Attention: Securities Division
Telecopy Number: (402) 437-4392
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal funds (identifying each payment as
"Fred Meyer, Inc., 7.88% Senior Notes, Series C, due 2004,
PPN 593098 B@ 4, principal, premium or interest") to:
FirsTier Bank Lincoln, N.A. (ABA #1040-0003-2)
13 and M Streets
Lincoln, Nebraska 68508
for credit to: Woodmen Accident and Life Company
General Fund, Account Number 092-909
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above; provided,
however, all notices and communications delivered by
overnight courier shall be addressed as follows:
Woodmen Accident and Life Company
1526 K Street
Lincoln, Nebraska 68508
Attention: Securities Division
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-0339220
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
MUTUAL TRUST LIFE $1,000,000 Series C
INSURANCE COMPANY
c/o MIMLIC Asset Management Company
400 North Robert Street
St. Paul, Minnesota 55101
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
The Northern Trust Company (ABA #071000152)
Chicago, Illinois
for Credit Wire Account Number 5186041000
for further credit to: Mutual Trust Life Insurance
Company
Account Number 26-00621
Attention: MBS Department
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: ELL & Co.
Taxpayer I.D. Number: 36-1516780
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
SECURITY LIFE INSURANCE COMPANY $500,000 Series C
c/o MIMLIC Asset
Management Company
400 North Robert Street
St. Paul, Minnesota 55101
Attention: Investment Department
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
First Bank N.A. (ABA #091-0000-22)
Minneapolis, Minnesota
for further credit to: First Trust N.A.
Account Number 180121167365
for credit to: Security Life Insurance Company
Account Number 10170060, TSU: 020
Attention: Peggy Sime (612) 244-0647
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: Var & Co.
Taxpayer I.D. Number: 41-0808596
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
NATIONAL TRAVELERS LIFE COMPANY $500,000 Series C
c/o MIMLIC Asset
Management Company
400 North Robert Street
St. Paul, Minnesota 55101
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
First Bank N.A. (ABA #091-0000-22)
Minneapolis, Minnesota
for further credit to: First Trust N.A.
Account Number 180121167365
TSU: 020
for credit to: National Travelers Life Company
Account Number 12609110
Attention: Sheldon Sobro (612) 244-0648
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: Var & Co.
Taxpayer I.D. Number: 42-0432940
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
COLORADO BANKERS LIFE $500,000 Series C
INSURANCE COMPANY
c/o MIMLIC Asset
Management Company
400 North Robert Street
St. Paul, Minnesota 55101
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
Bankers Trust Company (ABA #021-001-003)
New York, New York
for credit to Account Number 01419540
for further credit to: Colorado Bankers
Life Insurance Company
Account Number 098125
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: Salkeld &
Co.
Taxpayer I.D. Number: 84-0674027
PRINCIPAL AMOUNT SERIES
NAME AND ADDRESS OF NOTES TO BE OF
OF PURCHASERS PURCHASED NOTES
GUARANTEE RESERVE LIFE $500,000 Series C
INSURANCE COMPANY
c/o MIMLIC Asset
Management Company
400 Robert Street North
St. Paul, Minnesota 55101
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank
wire transfer of Federal or other immediately available
funds (identifying each payment as "Fred Meyer, Inc., 7.88%
Senior Notes, Series C, due 2004, PPN 593098 B@ 4,
principal, premium or interest") to:
Mercantile National Bank of Indiana (ABA #0719-12813)
Hammond, Indiana
for credit to: Guarantee Reserve Life Insurance
Company
Account Number 17-74040
Notices
All notices and communications, including notices with
respect to payments and written confirmation of each such
payment, to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: GANT & CO
Taxpayer I.D. Number: 35-0815760
SCHEDULE II
(to Note Agreement)
SUBSIDIARIES OF THE COMPANY
1. RESTRICTED SUBSIDIARIES:
PERCENTAGE
OF VOTING
JURISDICTION STOCK OWNED BY
NAME OF OF COMPANY AND EACH
SUBSIDIARY INCORPORATION OTHER SUBSIDIARY
B&B Stores, Inc. Montana 100%
B&B Pharmacy, Inc. Montana 100%
CB&S Advertising Agency, Inc. Oregon 100%
Distribution Trucking Company Oregon 100%
FM Holding Corporation Delaware 100%
Grand Central, Inc. Utah 100%
FM Retail Services, Inc. Washington 100%
Fred Meyer, Inc.
(a Washington Corporation) Washington 100%
Fred Meyer of Alaska, Inc. Alaska 100%
Fred Meyer of California, Inc. California 100%
Natur Glo, Inc. Oregon 100%
Roundup Co. Washington 100%
2. SUBSIDIARIES (OTHER THAN RESTRICTED SUBSIDIARIES):
PERCENTAGE
OF VOTING
JURISDICTION STOCK OWNED BY
NAME OF OF COMPANY AND EACH
SUBSIDIARY INCORPORATION OTHER SUBSIDIARY
Fred Meyer (UK) Limited Hong Kong 100%
(inactive)
DESCRIPTION OF DEBT AND CAPITALIZED LEASES
1. Indebtedness of Restricted Subsidiaries outstanding on
the Closing Date and Liens (if any) securing any such
Indebtedness are as follows:
Roundup Co. Note and Trust Deed to $ 13,220,000
Nationwide Life
Fred Meyer of Alaska, Note and Trust Deed to $ 16,981,969
Inc. Nationwide Life
2. Funded Debt (other than Capitalized Rentals) of the
Company outstanding on the Closing Date and Liens (if
any) securing any such Funded Debt are as follows:
Unsecured Term Notes to Five Banks $ 70,000,000
Unsecured Zero Coupon Note to Prudential $ 28,335,620
Note and Trust Deed to Employers' Life $ 2,685,150
Note and Trust Deed to Nationwide Life $ 10,740,600
Unsecured Note to Rabobank $ 10,000,000
Unsecured Commercial Paper (as of July 8, 1994) $205,442,758
3. Capitalized Leases of the Company and its Restricted
Subsidiaries outstanding on the Closing Date and Liens
(if any) securing any such Capitalized Leases are as
follows:
Fred Meyer, Inc. to Duane Co. $ 6,950,000
Grand Central, Inc. to various investors $ 10,735,000
DESCRIPTION OF INSURANCE
A. Liability Insurance: Subject to $2,000,000 self-
insurance retention; $50,000,000 limit
B. Workers Compensation Insurance: Self-insured in major
states (Oregon and Washington); insurance carried for
losses in excess of $350,000 per incident.
C. Property Insurance: Values insured to replacement cost
including business interruption. Deductibles per
incident range up to $1,000,000 with a variety of sub-
limits. Earthquake coverage subject to a deductible of
5% of values.
EXHIBIT A-1
(to Note Agreement)
FRED MEYER, INC.
7.25% Senior Note, Series A,
Due July 15, 1999
PPN 593098 A@ 5
No. RA-__ July __, 1994
$
Fred Meyer, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of July, 1999
the principal amount of
Dollars ($_______________)
and to pay interest (computed on the basis of a 360-day year
of twelve 30-day months) on the principal amount from time
to time remaining unpaid hereon at the rate of 7.25% per
annum from the date hereof until maturity, payable
semiannually on the fifteenth day of January and July in
each year (commencing on January 15, 1995) and at maturity.
The Company agrees to pay interest on overdue principal
(including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the
rate of 8.25% per annum after the due date, whether by
acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are
payable at the principal office of the Company in Portland,
Oregon in coin or currency of the United States of America
which at the time of payment shall be legal tender for the
payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of
this Note becomes due and payable on any date which is not a
Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means
any day other than a Saturday, Sunday or other day on which
banks in Portland, Oregon or New York, New York are required
by law to close or are customarily closed.
This Note is one of the 7.25% Senior Notes, Series A,
due July 15, 1999 (the "Notes") of the Company in the
aggregate principal amount of $7,500,000 which, together
with the Company's $15,000,000 aggregate principal amount of
7.52% Senior Notes, Series B, due July 15, 2001 (the "Series
B Notes"), the Company's $20,000,000 aggregate principal
amount of 7.88% Senior Notes, Series C, due July 15, 2004
(the "Series C Notes") and the Company's $15,000,000
aggregate principal amount of 7.98% Senior Notes, Series D,
due July 15, 2007 (the "Series D Notes", said Series D
Notes together with the Series A Notes, the Series B
Notes and the Series C Notes are hereinafter referred to
collectively as the "Notes"), are issued or to be issued
under and pursuant to the terms and provisions of the
separate Note Agreements, each dated as of June 1, 1994
(the "Note Agreements"), entered into by the Company
with the original Purchasers therein referred to
and this Note and the holder hereof are entitled equally and
ratably with the holders of all other Notes outstanding
under the Note Agreements to all the benefits provided for
thereby or referred to therein. Reference is hereby made to
the Note Agreements for a statement of such rights and
benefits.
This Note and the other Notes outstanding under the
Note Agreements may be declared due prior to their expressed
maturity dates, in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption
at the option of the Company prior to their expressed
maturity dates except on the terms and conditions and in the
amounts and with the premium, if any, set forth in the Note
Agreements.
This Note is registered on the books of the Company and
is transferable only by surrender thereof at the principal
office of the Company duly endorsed or accompanied by a
written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall
be made only to or upon the order in writing of the
registered holder.
This Note and said Note Agreements are governed by and
construed in accordance with the laws of New York, including
all matters of construction, validity and performance.
FRED MEYER, INC.
By ________________________________
Its Vice President and
Corporate Treasurer
EXHIBIT A-2
(to Note Agreement)
FRED MEYER, INC.
7.52% Senior Note, Series B,
Due July 15, 2001
PPN 593098 B* 6
No. RB-__ July __, 1994
$
FRED MEYER, INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of July, 2001
the principal amount of
Dollars ($_______________)
and to pay interest (computed on the basis of a 360-day year
of twelve 30-day months) on the principal amount from time
to time remaining unpaid hereon at the rate of 7.52% per
annum from the date hereof until maturity, payable
semiannually on the fifteenth day of January and July in
each year (commencing on January 15, 1995) and at maturity.
The Company agrees to pay interest on overdue principal
(including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the
rate of 8.52% per annum after the due date, whether by
acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are
payable at the principal office of the Company in Portland,
Oregon in coin or currency of the United States of America
which at the time of payment shall be legal tender for the
payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of
this Note becomes due and payable on any date which is not a
Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means
any day other than a Saturday, Sunday or other day on which
banks in Portland, Oregon or New York, New York are required
by law to close or are customarily closed.
This Note is one of the 7.52% Senior Notes, Series B,
due July 15, 2001 (the "Notes") of the Company in the
aggregate principal amount of $15,000,000 which, together
with the Company's $7,500,000 aggregate principal amount of
7.25% Senior Notes, Series A, due July 15, 1999 (the
"Series A Notes"), the Company's $20,000,000 aggregate
principal amount of 7.88% Senior Notes, Series C, due
July 15, 2004 (the "Series C Notes") and the Company's
$15,000,000 aggregate principal amount of 7.98% Senior
Notes, Series D, due July 15, 2007 (the "Series D Notes",
said Series D Notes together with the Series A Notes,
the Series B Notes and the Series C Notes are hereinafter
referred to collectively as the "Notes"), are issued or
to be issued under and pursuant to the terms and provisions
of the separate Note Agreements, each dated as of June 1,
1994 (the "Note Agreements"), entered into by the Company
with the original Purchasers therein referred to and this
Note and the holder hereof are entitled equally and
ratably with the holders of all other Notes outstanding
under the Note Agreements to all the benefits provided for
thereby or referred to therein. Reference is hereby made to
the Note Agreements for a statement of such rights and
benefits.
This Note and the other Notes outstanding under the
Note Agreements may be declared due prior to their expressed
maturity dates, in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption
at the option of the Company prior to their expressed
maturity dates except on the terms and conditions and in the
amounts and with the premium, if any, set forth in the Note
Agreements.
This Note is registered on the books of the Company and
is transferable only by surrender thereof at the principal
office of the Company duly endorsed or accompanied by a
written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall
be made only to or upon the order in writing of the
registered holder.
This Note and said Note Agreements are governed by and
construed in accordance with the laws of New York, including
all matters of construction, validity and performance.
FRED MEYER, INC.
By ________________________________
Its Vice President and
Corporate Treasurer
EXHIBIT A-3
(to Note Agreement)
FRED MEYER, INC.
7.88% Senior Note, Series C,
Due July 15, 2004
PPN 593098 B@ 4
No. RC-__ July __, 1994
$
Fred Meyer, Inc., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of July, 2004
the principal amount of
Dollars ($_______________)
and to pay interest (computed on the basis of a 360-day year
of twelve 30-day months) on the principal amount from time
to time remaining unpaid hereon at the rate of 7.88% per
annum from the date hereof until maturity, payable
semiannually on the fifteenth day of January and July in
each year (commencing on January 15, 1995) and at maturity.
The Company agrees to pay interest on overdue principal
(including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the
rate of 8.88% per annum after the due date, whether by
acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are
payable at the principal office of the Company in Portland,
Oregon in coin or currency of the United States of America
which at the time of payment shall be legal tender for the
payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of
this Note becomes due and payable on any date which is not a
Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means
any day other than a Saturday, Sunday or other day on which
banks in Portland, Oregon or New York, New York are required
by law to close or are customarily closed.
This Note is one of the 7.88% Senior Notes, Series C,
due July 15, 2004 (the "Notes") of the Company in the
aggregate principal amount of $20,000,000 which, together
with the Company's $7,500,000 aggregate principal amount of
7.25% Senior Notes, Series A, due July 15, 1999 (the
"Series A Notes"), the Company's $15,000,000 aggregate
principal amount of 7.52% Senior Notes, Series B, due
July 15, 2001 (the "Series B Notes") and the
Company's $15,000,000 aggregate principal amount of 7.98%
Senior Notes, Series D, due July 15, 2007 (the "Series D
Notes", said Series D Notes together with the Series A
Notes, the Series B Notes and the Series C Notes are
hereinafter referred to collectively as the "Notes"), are
issued or to be issued under and pursuant to the terms and
provisions of the separate Note Agreements, each dated as of
June 1, 1994 (the "Note Agreements"), entered into by the
Company with the original Purchasers therein referred to and
this Note and the holder hereof are entitled equally and
ratably with the holders of all other Notes outstanding
under the Note Agreements to all the benefits provided for
thereby or referred to therein. Reference is hereby made to
the Note Agreements for a statement of such rights and
benefits.
This Note and the other Notes outstanding under the
Note Agreements may be declared due prior to their expressed
maturity dates, in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption
at the option of the Company prior to their expressed
maturity dates except on the terms and conditions and in the
amounts and with the premium, if any, set forth in the Note
Agreements.
This Note is registered on the books of the Company and
is transferable only by surrender thereof at the principal
office of the Company duly endorsed or accompanied by a
written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall
be made only to or upon the order in writing of the
registered holder.
This Note and said Note Agreements are governed by and
construed in accordance with the laws of New York, including
all matters of construction, validity and performance.
FRED MEYER, INC.
By ________________________________
Its Vice President and
Corporate Treasurer
EXHIBIT A-4
(to Note Agreement)
FRED MEYER, INC.
7.98% Senior Note, Series D,
Due July 15, 2007
PPN 593098 B# 2
No. RD-__ July __, 1994
$
FRED MEYER, INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of July, 2007
the principal amount of
DOLLARS ($_______________)
and to pay interest (computed on the basis of a 360-day year
of twelve 30-day months) on the principal amount from time
to time remaining unpaid hereon at the rate of 7.98% per
annum from the date hereof until maturity, payable
semiannually on the fifteenth day of January and July in
each year (commencing on January 15, 1995) and at maturity.
The Company agrees to pay interest on overdue principal
(including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest, at the
rate of 8.98% per annum after the due date, whether by
acceleration or otherwise, until paid.
Both the principal hereof and interest hereon are
payable at the principal office of the Company in Portland,
Oregon in coin or currency of the United States of America
which at the time of payment shall be legal tender for the
payment of public and private debts. If any amount of
principal, premium, if any, or interest on or in respect of
this Note becomes due and payable on any date which is not a
Business Day, such amount shall be payable on the
immediately preceding Business Day. "Business Day" means
any day other than a Saturday, Sunday or other day on which
banks in Portland, Oregon or New York, New York are required
by law to close or are customarily closed.
This Note is one of the 7.98% Senior Notes, Series D,
due July 15, 2007 (the "Notes") of the Company in the
aggregate principal amount of $15,000,000 which, together
with the Company's $7,500,000 aggregate principal amount of
7.25% Senior Notes, Series A, due July 15, 1999 (the
"Series A Notes"), the Company's $15,000,000 aggregate
principal amount of 7.52% Senior Notes, Series B, due
July 15, 2001 (the "Series B Notes") and the Company's
$20,000,000 aggregate principal amount of 7.88%
Senior Notes, Series C, due July 15, 2004 (the
"Series C Notes", said Series C Notes together with the
Series A Notes, the Series B Notes and the Series D Notes
are hereinafter referred to collectively as the "Notes") are
issued or to be issued under and pursuant to the terms and
provisions of the separate Note Agreements, each dated as of
June 1, 1994 (the "Note Agreements"), entered into by the
Company with the original Purchasers therein referred to and
this Note and the holder hereof are entitled equally and
ratably with the holders of all other Notes outstanding
under the Note Agreements to all the benefits provided for
thereby or referred to therein. Reference is hereby made to
the Note Agreements for a statement of such rights and
benefits.
This Note and the other Notes outstanding under the
Note Agreements may be declared due prior to their expressed
maturity dates, in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption
at the option of the Company prior to their expressed
maturity dates except on the terms and conditions and in the
amounts and with the premium, if any, set forth in the Note
Agreements.
This Note is registered on the books of the Company and
is transferable only by surrender thereof at the principal
office of the Company duly endorsed or accompanied by a
written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of
principal, premium, if any, and interest on this Note shall
be made only to or upon the order in writing of the
registered holder.
This Note and said Note Agreements are governed by and
construed in accordance with the laws of New York, including
all matters of construction, validity and performance.
FRED MEYER, INC.
By ________________________________
Its Vice President and
Corporate Treasurer
EXHIBIT B
(to Note Agreement)
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. Schedule II attached to the
Agreements states the name of each of the Company's
Subsidiaries, its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and/or
its Subsidiaries. Those Subsidiaries listed in Section 1 of
said Schedule II constitute Restricted Subsidiaries. The
Company and each Subsidiary has good and marketable title to
all of the shares it purports to own of the stock of each
Subsidiary, free and clear in each case of any Lien. All
such shares have been duly issued and are fully paid and
non-assessable.
2. Corporate Organization and Authority. The
Company, and each Restricted Subsidiary,
(a) is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation;
(b) has all requisite power and authority and all
necessary licenses and permits to own and operate its
properties and to carry on its business as now
conducted and as presently proposed to be conducted;
and
(c) is duly licensed or qualified and is in good
standing as a foreign corporation in each jurisdiction
wherein the nature of the business transacted by it or
the nature of the property owned or leased by it makes
such licensing or qualification necessary.
3. Business and Property. You have heretofore been
furnished with a copy of the Private Placement Memorandum
dated March 1994 (the "Memorandum") prepared by BA
Securities, Inc. which generally sets forth the business
conducted and proposed to be conducted by the Company and
its Subsidiaries and the principal properties of the Company
and its Subsidiaries.
4. Financial Statements. (a) The consolidated
balance sheets of the Company and its consolidated
Subsidiaries as of February 3, 1990, February 2, 1991,
February 1, 1992, January 30, 1993 and January 29, 1994, and
the related statements of consolidated operations, changes
in consolidated stockholders' equity and consolidated cash
flows for the fiscal years ended on said dates, each
accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company
and otherwise without qualification except as therein noted,
by Deloitte & Touche, have been prepared in accordance with
GAAP consistently applied except as therein noted, are
correct and complete and present fairly the financial
position of the Company and its consolidated Subsidiaries as
of such dates and the results of their operations and their
cash flows for such periods.
(b) Since January 29, 1994, there has been no change
in the condition, financial or otherwise, of the Company and
its consolidated Subsidiaries as shown on the consolidated
balance sheet as of such date except changes in the ordinary
course of business, none of which individually or in the
aggregate has been materially adverse.
5. Indebtedness. Schedule II attached to the
Agreements correctly describes all Indebtedness of
Restricted Subsidiaries and all Funded Debt and Capitalized
Leases of the Company and its Restricted Subsidiaries
outstanding on the Closing Date.
6. Full Disclosure. Neither the financial statements
referred to in paragraph 4 hereof nor the Agreements, the
Memorandum or any other written statement furnished by the
Company to you in connection with the negotiation of the
sale of the Notes contains any untrue statement of a
material fact or omits a material fact necessary to make the
statements contained therein or herein not misleading.
There is no fact peculiar to the Company or its Subsidiaries
which the Company has not disclosed to you in writing which
materially affects adversely or, so far as the Company can
now foresee, will materially affect adversely the
properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole.
7. Pending Litigation. There are no proceedings
pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Restricted
Subsidiary in any court or before any governmental authority
or arbitration board or tribunal which involve the
possibility of materially and adversely affecting the
properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Restricted
Subsidiaries.
8. Title to Properties. The Company and each
Restricted Subsidiary has good and marketable title in fee
simple (or its equivalent under applicable law) to all
material parcels of real property and has good title to all
the other material items of property it purports to own,
including that reflected in the most recent balance sheet
referred to in paragraph 4 hereof, except as sold or
otherwise disposed of in the ordinary course of business and
except for Liens permitted by the Agreements.
9. Patents and Trademarks. The Company and each
Restricted Subsidiary owns or possesses all the patents,
trademarks, trade names, service marks, copyrights, licenses
and rights with respect to the foregoing necessary for the
present and planned future conduct of its business, without
any known conflict with the rights of others.
10. Sale is Legal and Authorized. The sale of the
Notes and compliance by the Company with all of the
provisions of the Agreements and the Notes--
(a) are within the corporate powers of the
Company;
(b) will not violate any provisions of any law or
any order of any court or governmental authority or
agency and will not conflict with or result in any
breach of any of the terms, conditions or provisions
of, or constitute a default under, the Certificate
of Incorporation or By-laws of the Company or any
indenture or other agreement or instrument to
which the Company is a party or by which it may be
bound or result in the imposition of any Liens or
encumbrances on any property of the Company; and
(c) have been duly authorized by proper corporate
action on the part of the Company (no action by the
stockholders of the Company being required by law, by
the Certificate of Incorporation or By-laws of the
Company or otherwise), executed and delivered by the
Company and the Agreements and the Notes constitute the
legal, valid and binding obligations, contracts and
agreements of the Company enforceable in accordance
with their respective terms.
11. No Defaults. No Default or Event of Default has
occurred and is continuing. The Company is not in default
in the payment of principal or interest on any Indebtedness
for borrowed money and is not in default under any
instrument or instruments or agreements under and subject to
which any Indebtedness for borrowed money has been issued
and no event has occurred and is continuing under the
provisions of any such instrument or agreement which with
the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
12. Governmental Consent. No approval, consent or
withholding of objection on the part of any regulatory body,
state, Federal or local, is necessary in connection with the
execution and delivery by the Company of the Agreements or
the issuance, sale or delivery of the Notes or compliance by
the Company with any of the provisions of the Agreements or
the Notes.
13. Taxes. All tax returns required to be filed by
the Company or any Restricted Subsidiary in any jurisdiction
have, in fact, been filed, and all taxes, assessments, fees
and other governmental charges upon the Company or any
Restricted Subsidiary or upon any of their respective
properties, income or franchises which are shown to be due
and payable in such returns have been paid. For all taxable
years ending on or before February 3, 1990, the Federal
income tax liability of the Company and its Restricted
Subsidiaries has been satisfied and either the period of
limitations on assessment of additional Federal income tax
has expired or the Company and its Restricted Subsidiaries
have entered into an agreement with the Internal Revenue
Service closing conclusively the total tax liability for the
taxable year. The Company does not know of any proposed
additional tax assessment against it for which adequate
provision has not been made on its accounts, and no material
controversy in respect of additional Federal or state income
taxes due since said date is pending or to the knowledge of
the Company threatened. The provisions for taxes on the
books of the Company and each Restricted Subsidiary are
adequate for all open years, and for its current fiscal
period.
14. Use of Proceeds. The net proceeds from the sale
of the Notes will be used to refinance commercial paper and
other short-term Indebtedness (characterized on the
Company's balance sheet as Funded Debt in accordance with
GAAP). None of the transactions contemplated in the
Agreements (including, without limitation thereof, the use
of proceeds from the issuance of the Notes) will violate or
result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulation issued
pursuant thereto, including, without limitation, Regulations
G, T and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. Neither the Company nor any
Subsidiary owns or intends to carry or purchase any "margin
stock" within the meaning of said Regulation G. None of the
proceeds from the sale of the Notes will be used to
purchase, or refinance any borrowing the proceeds of which
were used to purchase, any "security" within the meaning of
the Securities Exchange Act of 1934, as amended.
15. Private Offering. Neither the Company, directly
or indirectly, nor any agent on its behalf has offered or
will offer the Notes or any similar Security to or has
solicited or will solicit an offer to acquire the Notes or
any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the
Notes or any similar Security with any Person other than the
Purchasers and not more than 125 other institutional
investors, each of whom was offered a portion of the Notes
at private sale for investment. Neither the Company,
directly or indirectly, nor any agent on its behalf has
offered or will offer the Notes or any similar Security to
or has solicited or will solicit an offer to acquire the
Notes or any similar Security from any Person so as to bring
the issuance and sale of the Notes within the provisions of
Section 5 of the Securities Act of 1933, as amended.
16. ERISA. Based, to the extent relevant, upon the
accuracy of the representations of the Purchasers set forth
in Section 3.2(b) of the Agreements, the consummation of the
transactions provided for in the Agreements and compliance
by the Company with the provisions thereof and the Notes
issued thereunder will not involve any prohibited
transaction within the meaning of ERISA or Section 4975 of
the Internal Revenue Code of 1986, as amended. Each Plan
complies in all material respects with all applicable
statutes and governmental rules and regulations, and (a) no
Reportable Event has occurred and is continuing with respect
to any Plan, (b) neither the Company nor any ERISA Affiliate
has withdrawn from any Plan or Multiemployer Plan or
instituted steps to do so, and (c) no steps have been
instituted to terminate any Plan. No condition exists or
event or transaction has occurred in connection with any
Plan which could result in the incurrence by the Company or
any ERISA Affiliate of any material liability, fine or
penalty. No Plan maintained by the Company or any ERISA
Affiliate, nor any trust created thereunder, has incurred
any "accumulated funding deficiency" as defined in Section
302 of ERISA nor does the present value of all benefits
vested under all Plans exceed, as of the last annual
valuation date, the value of the assets of the Plans
allocable to such vested benefits. Neither the Company nor
any ERISA Affiliate has any contingent liability with
respect to any post-retirement "welfare benefit plan" (as
such term is defined in ERISA) except as has been disclosed
to the Purchasers.
17. Compliance with Law. (a) Neither the Company nor
any Restricted Subsidiary (1) is in violation of any law,
ordinance, franchise, governmental rule or regulation to
which it is subject; or (2) has failed to obtain any
license, permit, franchise or other governmental
authorization necessary to the ownership of its property or
to the conduct of its business, which violation or failure
to obtain would materially affect adversely the business,
prospects, profits, properties or condition (financial
or otherwise) of the Company and its Restricted
Subsidiaries, taken as a whole, or impair the ability of the
Company to perform its obligations contained in the
Agreements or the Notes. Neither the Company nor any
Restricted Subsidiary is in default with respect to any
order of any court or governmental authority or arbitration
board or tribunal.
(b) Without limiting the provisions of clause (a) of
this paragraph 17, the Company and its Subsidiaries are in
compliance with all applicable Environmental Laws the
failure to comply with which would materially affect
adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations under the Agreements or
the Notes.
18. Investment Company Act. The Company is not, and
is not directly or indirectly controlled by or acting on
behalf of any Person which is, required to register as an
"investment company" under the Investment Company Act of
1940, as amended.
19. Foreign Assets Control Regulations, etc. The
Company and its Subsidiaries are not by reason of being a
"national" of "designated foreign country" or a "specially
designated national" within the meaning of the Regulations
of the Office of Foreign Assets Control, United States
Treasury Department (31 C.F.R., Subtitle B, Chapter V), or
for any other reason, subject to any restriction or
prohibition under, or in violation of, any Federal statue or
Presidential Executive Order, or any rules or regulations of
any department, agency or administrative body promulgated
under any such statute or order, concerning trade or other
relations with any foreign country or any citizen or
national thereof or the ownership or operation of any
property.
EXHIBIT C
(to Note Agreement)
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler, special
counsel to the Purchasers, called for by Section 4.1 of the
Note Agreements, shall be dated the Closing Date and
addressed to the Purchasers, shall be satisfactory in form
and substance to the Purchasers and shall be to the effect
that:
1. The Company is a corporation, validly
existing and in good standing under the laws of the
State of Delaware and has the corporate power and the
corporate authority to execute and deliver the Note
Agreements and to issue the Notes.
2. The Note Agreements have been duly authorized
by all necessary corporate action on the part of the
Company, have been duly executed and delivered by the
Company and constitute the legal, valid and binding
contracts of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting
creditors' rights generally, and general principles of
equity (regardless of whether the application of such
principles is considered in a proceeding in equity or
at law).
3. The Notes have been duly authorized by all
necessary corporate action on the part of the Company,
have been duly executed and delivered by the Company
and constitute the legal, valid and binding obligations
of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights
generally, and general principles of equity (regardless
of whether the application of such principles is
considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes
under the circumstances contemplated by the Note
Agreements does not, under existing law, require the
registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture
under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that
the opinion of Stoel Rives Boley Jones & Grey is
satisfactory in scope and form to Chapman and Cutler and
that, in their opinion, the Purchasers are justified in
relying thereon.
In rendering the opinion set forth in paragraph 1
above, Chapman and Cutler may rely solely upon an
examination of the Certificate of Incorporation certified
by, and a certificate of good standing of the Company from,
the Secretary of State of the State of Delaware, the By-laws
of the Company and the general business corporation law of
the State of Delaware. The opinion of Chapman and Cutler is
limited to the laws of the State of New York, the general
business corporation law of the State of Delaware and the
Federal laws of the United States.
With respect to matters of fact upon which such opinion
is based, Chapman and Cutler may rely on appropriate
certificates of public officials and officers of the
Company.
EXHIBIT D
(to Note Agreement)
DESCRIPTION OF CLOSING OPINION OF
COUNSEL TO THE COMPANY
The closing opinion of Stoel Rives Boley Jones & Grey,
counsel for the Company, which is called for by Section 4.1
of the Note Agreements, shall be dated the Closing Date and
addressed to the Purchasers, shall be satisfactory in scope
and form to the Purchasers and shall be to the effect that:
1. The Company is a corporation, duly
incorporated, validly existing and in good standing
under the laws of the State of Delaware, has the
corporate power and the corporate authority to execute
and perform the Note Agreements and to issue the Notes
and has the full corporate power and the corporate
authority to conduct the activities in which it is now
engaged and is in good standing or of current status as
a foreign corporation, as the case may be, in each
jurisdiction set forth in the certificate of the
Company attached to this opinion (the "Company
Certificate") as a jurisdiction where the Company has
material assets or conducts a material portion of its
business.
2. Each Subsidiary is a corporation duly
organized, validly existing and in good standing or of
current status, as the case may be, under the laws of
its jurisdiction of incorporation and is in good
standing or of current status as a foreign corporation,
as the case may be, in each jurisdiction set forth in
the Company Certificate as a jurisdiction where such
Subsidiary has material assets or conducts a material
portion of its business. All of the issued and
outstanding shares of capital stock of each such
Subsidiary are owned of record by the Company, by one
or more Subsidiaries, or by the Company and one or more
Subsidiaries.
3. Each Note Agreement has been duly authorized
by all necessary corporate action on the part of the
Company, has been duly executed and delivered by the
Company and constitutes the legal, valid and binding
contract of the Company enforceable in accordance with
its terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting
creditors' rights generally, and general principles of
equity (regardless of whether the application of such
principles is considered in a proceeding in equity or
at law).
4. The Notes have been duly authorized by all
necessary corporate action on the part of the Company,
have been duly executed and delivered by the Company
and constitute the legal, valid and binding obligations
of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights
generally, and general principles of equity (regardless
of whether the application of such principles is
considered in a proceeding in equity or at law).
5. No approval, consent or withholding of
objection on the part of, or filing, registration or
qualification with, any governmental body, Federal,
state or local, is necessary in connection with the
execution and delivery of the Note Agreements or the Notes.
6. The issuance and sale of the Notes and the
execution, delivery and performance by the Company of
the Note Agreements do not conflict with or result in
any breach of any of the provisions of or constitute a
default under or result in the creation or imposition
of any Lien upon any of the property of the Company
pursuant to the provisions of the Certificate of
Incorporation or By-laws of the Company or any
agreement or other instrument listed as a "Material
Agreement" in the Company Certificate attached to this
opinion.
7. The issuance, sale and delivery of the Notes
under the circumstances contemplated by the Note
Agreements does not, under existing law, require the
registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture
under the Trust Indenture Act of 1939, as amended.
8. The issuance of the Notes and the use of the
proceeds of the sale of the Notes in accordance with
the provisions of and contemplated by the Note
Agreements do not violate or conflict with Regulation
G, T, U or X of the Board of Governors of the Federal
Reserve System.
9. There is no litigation pending or, to the
best knowledge of such counsel, threatened which in
such counsel's opinion could reasonably be expected to
have a materially adverse effect on the Company's
business or assets or which would impair the ability of
the Company to issue and deliver the Notes or to comply
with the provisions of the Note Agreements.
The opinion of Stoel Rives Boley Jones & Grey shall
cover such other matters relating to the sale of the Notes
as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel
shall be entitled to rely on appropriate certificates of
public officials and officers of the Company and, with
respect to the opinion numbered (7) upon, to the extent
relevant, the accuracy of the representations of the
Purchasers set forth in Section 3.2(a) of the Note
Agreements.
EXHIBIT E
(to Note Agreement)
SUBORDINATION PROVISIONS APPLICABLE TO
SUBORDINATED FUNDED DEBT
(a) The indebtedness evidenced by the subordinated
notes*, any renewals or extensions thereof, premium, if any,
interest (including, without limitation, any such interest
accruing subsequent to the filing by or against the Company
of any proceeding brought under Chapter 11 of the Bankruptcy
Code (11 U.S.C. Section 100 et seq.)) and any fees, charges,
expenses or other sums payable under or in respect of the
agreements pursuant to which such subordinated notes were
issued, shall at all times be wholly and unconditionally
subordinate and junior in right of payment to all principal,
premium, if any, and interest (including, without
limitation, any such interest accruing subsequent to the
filing by or against the Company of any proceeding brought
under Chapter 11 of the Bankruptcy Code (11 U.S.C. Section
100 et seq.) whether or not such interest is allowed as a
claim pursuant to the provisions of such Chapter) and all
other fees, charges, expenses and other sums payable in
respect of (1) the Company's $7,500,000 aggregate principal
amount 7.25% Senior Notes, Series A, due July 15, 1999 (the
"Series A Notes"), the Company's $15,000,000 aggregate
principal amount 7.52% Senior Notes, Series B, due July 15,
2001 (the "Series B Notes"), the Company's $20,000,000
aggregate principal amount 7.88% Senior Notes, Series C, due
July 15, 2004 (the "Series C Notes") and the Company's
$15,000,000 aggregate principal amount 7.98% Senior Notes,
Series D, due June 15, 2007 (the "Series D Notes," said
Series D Notes together with the Series A Notes, the Series
B Notes and the Series C Notes being hereinafter
collectively referred to as the "Notes") issued pursuant to
the separate and several Note Agreements, each dated as of
June 1, 1994 between the Company and, respectively, Phoenix
Home Life Mutual Insurance Company, The Variable Annuity
Life Insurance Company, The Minnesota Mutual Life Insurance
Company, The Canada Life Assurance Company, Canada Life
Insurance Company of America, Canada Life Insurance Company
of New York, The Franklin Life Insurance Company, Knights of
Columbus, SAFECO Life Insurance Company, The Security Mutual
Life Insurance Company of Lincoln, Nebraska, Standard
Insurance Company, Woodmen Accident and Life Company, Mutual
Trust Life Insurance Company, Security Life Insurance
Company, National Travelers Life Company, Colorado Bankers
Life Insurance Company and Guarantee Reserve Life Insurance
Company, and (2) any other indebtedness for money borrowed
of the Company not expressed to be subordinate or junior to
any other indebtedness of the Company (the indebtedness
described in the preceding clauses (1) and (2) is
hereinafter called "Superior Indebtedness"), in the manner
and with the force and effect hereafter set forth:
____________________
* Or debentures or other designation as may be appropriate.
(1) In the event of (i) any liquidation,
dissolution or other winding up of the Company,
voluntary or involuntary, (ii) any execution, sale,
receivership, insolvency, bankruptcy, liquidation,
readjustment, reorganization, composition or other
similar proceeding relative to the Company or its
property, (iii) any general assignment by the Company
for the benefit of creditors, or (iv) any distribution,
division, marshalling or application of any of the
properties or assets of the Company or the
proceeds thereof to creditors, voluntary or
involuntary, and whether or not involving legal
proceedings, then and in any event:
(A) all principal, premium, if any, any interest
and all other sums owing on all Superior Indebtedness
shall first be paid in full in cash before any payment
or distribution of any kind or character, whether in
cash, property or securities (other than in securities,
including equity securities, or other evidences of
indebtedness, the payment of which is unconditionally
subordinated to the payment of all Superior
Indebtedness which may at the time be outstanding)
shall be made on indebtedness evidenced by the
subordinated notes;
(B) all principal and interest on the
subordinated notes shall forthwith become due and
payable, and any payment or distribution of any kind or
character, whether in cash, property or securities
(other than securities, including equity securities or
other evidences of indebtedness, the payment of which
is unconditionally subordinated to the payment of all
Superior Indebtedness which may at the time be
outstanding), which would otherwise (but for the terms
hereof) be payable or deliverable in respect of the
subordinated notes, shall be paid or delivered directly
to the holders of the Superior Indebtedness, for
application to the payment of the Superior Indebtedness,
until all Superior Indebtedness shall have been paid in
full, and the holders of the subordinated notes at the
time outstanding irrevocably authorize, empower and direct
all receivers, trustees, liquidators, conservators,
fiscal agents and others having authority in the
premises to effect all such payments and deliveries;
(C) any payment or distribution of any kind or
character, whether in cash, property or securities
(other than in securities, including equity securities
or other evidences of indebtedness, the payment of
which is unconditionally subordinated to the payment of
all Superior Indebtedness which may at the time be
outstanding) which shall be made upon or in respect of
the subordinated notes shall be paid over to the
holders of Superior Indebtedness, pro rata, for
application and payment thereof unless and until such
Superior Indebtedness shall have been paid or satisfied
in full; and
(D) notwithstanding the foregoing provisions, if
for any reason whatsoever any payment or distribution
of any kind or character, whether in cash, property or
securities (other than in securities, including equity
securities or other evidences of indebtedness, the
payment of which is unconditionally subordinated to the
payment of all Superior Indebtedness which may at the
time be outstanding), should be received by a holder of
the subordinated notes before all such Superior
Indebtedness is paid in full, such payment or
distribution shall be held in trust for the benefit of,
and shall be immediately paid or delivered by such
holder to, as the case may be, the holders of such
Superior Indebtedness remaining unpaid, or their
representative or representatives, for application to
the payment of all such Superior Indebtedness, pro
rata, unless and until such Superior Indebtedness shall
have been paid or satisfied in full.
(2) In the event that the subordinated notes are
declared or become due and payable because of the
occurrence of any event of default hereunder (or under
the agreement or indenture, as appropriate) or
otherwise than at the option of the Company, under
circumstances when the foregoing clause (1) shall not
be applicable, then each holder of any Superior
Indebtedness then outstanding shall have the right to
declare immediately due and payable all or any part of
the Superior Indebtedness owing and payable to such
holder and the holders of the subordinated notes shall
be entitled to payments only after there shall first
have been paid in full in cash all Superior
Indebtedness outstanding at the time the subordinated
notes so become due and payable because of any such
event.
(3) In case either (i) default in respect of the
payment of the principal of, premium if any, or
interest on any Superior Indebtedness, or (ii) any
other default on any Superior Indebtedness as a result
of which the holders thereof shall then be entitled to
accelerate such Superior Indebtedness shall in either
such case have occurred and be continuing with respect
to any Superior Indebtedness, unless and until all
Superior Indebtedness shall have been paid in full in
cash, the Company will not, and will not permit any
subsidiary to, directly or indirectly, make or agree to
make, and neither the holder nor any assignee or
successor holder of any subordinated notes will demand,
accept or receive, (A) any payment in cash, property,
securities (other than in securities, including equity
securities or other evidences of indebtedness, the
payment of which is unconditionally subordinated to the
payment of all Superior Indebtedness which may at the
time be outstanding) or otherwise, direct or indirect,
of or on account of any principal of, premium, if any,
interest or any other sum owing in respect of any
subordinated notes, or (B) any payment for the purpose
of any redemption, purchase or other acquisition,
direct or indirect, of any subordinated notes, and no
such payments shall be due.
(b) If any payment or distribution of any kind or
character (whether in cash, securities or other property) or
any security shall be received by any holder of the
subordinated notes in contravention of any of the terms of
this Section ___, such payment or distribution or security
shall be held in trust for the benefit of, and shall be paid
over or delivered and transferred to, holders of the
Superior Indebtedness pro rata for application to the
payment of all Superior Indebtedness remaining unpaid, to
the extent necessary to pay all such Superior Indebtedness
in full in cash. In the event of the failure of any holder
of the subordinated notes to endorse or assign any such
payment, distribution or security, any holder of the
Superior Indebtedness or such holder's representative is
hereby irrevocably authorized to endorse or assign the same.
(c) The holder of each subordinated note undertakes
and agrees for the benefit of each holder of Superior
Indebtedness to execute, verify, deliver and file any proofs
of claim within 30 days before the expiration of the time to
file the same which any holder of Superior Indebtedness may
at any time require in order to prove and realize upon any
rights or claims pertaining to the subordinated notes and to
effectuate the full benefit of the subordination contained
herein; and upon failure of the holder of any subordinated
note so to do, any such holder of Superior Indebtedness
shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the holder of such note to execute,
verify, deliver and file any such proofs of claim.
(d) No right of any holder of any Superior
Indebtedness to enforce subordination as herein provided
shall at any time or in any way be affected or impaired by
any failure to act on the part of the Company or the holders
of Superior Indebtedness, or by any noncompliance by the
Company with any of the terms, provisions and covenants of
the subordinated notes or the agreement under which they are
issued, regardless of any knowledge thereof that any such
holder of Superior Indebtedness may have or be otherwise
charged with.
(e) No holder of any subordinated notes will sell,
assign, pledge, encumber or otherwise dispose of any of its
subordinated notes unless such sale, assignment, pledge,
encumbrance or disposition is made expressly subject to the
foregoing provisions.
(f) The Company agrees, for the benefit of the holders
of Superior Indebtedness, that in the event that any
subordinated note is declared due and payable before its
expressed maturity because of the occurrence of a default
hereunder, (1) the Company will give prompt notice in
writing of such happening to the holders of Superior
Indebtedness, (2) all Superior Indebtedness shall forthwith
become immediately due and payable upon demand, regardless
of the expressed maturity thereof and (3) the holders of
such subordinated notes shall not be entitled to receive any
payment or distribution in respect thereof or applicable
thereto until all Superior Indebtedness at the time
outstanding shall have been paid in full.
(g) The subordination effected by the foregoing
provisions and the rights created thereby of the holders of
the Superior Indebtedness shall not be affected by (1) any
amendment of or addition or supplement to any Superior
Indebtedness or any instrument or agreement relating
thereto, (2) any exercise or non-exercise of any right,
power or remedy under or in respect of any Superior
Indebtedness or any instrument or agreement relating
thereto, or (3) the giving or denial of any waiver, consent,
release, indulgence, extension, renewal, modification or
delay or the taking or nontaking of any other action,
inaction or omission, in respect of any Superior
Indebtedness or any instrument or agreement relating thereto
or to any securities relating thereto or any guarantee
thereof, whether or not any holder of any subordinated notes
shall have had notice or knowledge of any of the foregoing.