Fred Meyer, Inc.
$250,000,000 7.150% Notes Due March 1, 2003
$750,000,000 7.375% Notes Due March 1, 2005
$750,000,000 7.450% Notes Due March 1, 2008
Underwriting Agreement
New York, New York
March 4, 1998
Salomon Smith Barney
Salomon Brothers Inc
Donaldson Lufkin & Jenrette
Securities Corporation
BT Alex. Brown Incorporated
Chase Securities Inc.
Goldman Sachs & Co.
Morgan Stanley & Co. Incorporated
First Chicago Capital Markets, Inc.
NationsBanc Montgomery Securities LLC
Societe Generale Securities Corporation
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Fred Meyer, Inc., a Delaware corporation (the "Company"), proposes to
sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, $250,000,000 principal amount of its 7.150% Notes due March 1,
2003 (the "Notes due 2003"), $750,000,000 principal amount of its 7.375% Notes
Due March 1, 2005 (the "Notes due 2005") and $750,000,000 principal amount of
its 7.450% Notes Due March 1, 2008 (the Notes due 2008 and, together with the
Notes due 2003 and Notes due 2005, the "Notes"), each to be issued under an
indenture (the "Base Indenture") to be dated as of March 11, 1998, among the
Company, the Guarantors (as defined herein) and The First National Bank of
Chicago, as trustee (the "Trustee"), as supplemented by the First Supplemental
Indenture (the "Supplemental Indenture") to be dated as of March 11, 1998, among
the Company, the Guarantors and the Trustee. The Base Indenture, as supplemented
by the Supplemental Indenture, is sometimes referred to herein as the
"Indenture." The Notes will be guaranteed, on a senior unsecured basis, pursuant
to the terms of the Indenture (the "Guarantee" and, together with the Notes, the
"Securities") by
the persons listed on Annex A hereto (each, a "Guarantor," and collectively, the
"Guarantors" and, collectively with the Company, the "Issuers"); provided,
however, that each of QFC and the QFC Subsidiaries and Food 4 Less and the Food
4 Less Subsidiaries are not executing this Agreement as of the date hereof but
will execute an instrument in substantially the form attached hereto as Exhibit
A pursuant to which they will become a party to this Agreement as a Guarantor
upon the consummation of the Mergers (it being understood that upon becoming a
party to this Agreement, each of QFC and the QFC Subsidiaries and Food 4 Less
and the Food 4 Less Subsidiaries shall be deemed to have made all the
representations and warranties set forth herein and shall be subject to all the
agreements made and obligations set forth herein). The Securities are being
offered by the Issuers and are being purchased by the Underwriters in connection
with the Mergers. To the extent there are no additional Underwriters listed on
Schedule I other than you, the term "Representatives" as used herein shall mean
you, as Underwriters, and the terms "Representatives" and "Underwriters" shall
mean either the singular or plural as the context requires. Any reference herein
to the "Registration Statement", a "Preliminary Prospectus" or the "Prospectus"
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act which were filed under the
Exchange Act on or before the Effective Date of the Registration Statement or
the issue date of such Preliminary Prospectus or the Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Effective Date of the Registration Statement,
or the issue date of any Preliminary Prospectus or the Prospectus, as the case
may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties. Each of the Issuers, jointly and
severally, represent and warrant to, and agree with (both before and after
giving effect to the Mergers), each Underwriter as set forth below in this
Section 1 as of the Effective Time with respect to such Issuer.
(a) The Company and the transactions contemplated by this Agreement
meet the requirements for use of Form S-3 under the Act ("Form S-3") and
has prepared and filed with the Commission a registration statement (file
number 333-44537) on Form S-3, including a related Preliminary Prospectus,
for the registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto,
including a related Preliminary Prospectus, each of which has previously
been furnished to you. The Company will next file with the Commission one
of the following: (1) prior to the Effective Date of such Registration
Statement, a further amendment to such Registration Statement, including
the form of final Prospectus, (2) after the Effective Date of such
registration statement, a final Prospectus in accordance with Rules 430A
and 424(b), or (3) a final Prospectus in accordance with Rules 415 and
424(b). In the case of clause (2), the Issuers have included in such
Registration Statement, as amended at the Effective Date, all information
(other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed, such
amendment and form of final Prospectus, or such final Prospectus, shall
contain all Rule 430A Information or all information required by Rule
424(b)(2) under the Act, as applicable, together with all other such
required information, and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. If the Registration
Statement contains the undertaking specified by Regulation S-K Item 512(a),
the Registration Statement, at the Execution Time, meets the requirements
set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will, and
when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date, the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture Act and
the respective rules thereunder; on the Effective Date and at the Execution
Time, the Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the Indenture did
or will comply in all material respects with the requirements of the Trust
Indenture Act and the rules thereunder; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date and any
settlement date, the Prospectus (together with any supplement thereto) will
not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Issuers make no representations or warranties
as to (i) that part of the Registration Statement which shall constitute
the Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished herein or in writing to the Issuers by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement thereto).
(c) Each of the Issuers and their respective subsidiaries has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Prospectus, as well as to issue and sell the Securities and to enter
into each of the Transaction Documents, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which
requires such qualification except for those in which the failure to be so
qualified would not have a material adverse effect on the business,
condition (financial or other), results of operations or prospects of the
Company and its subsidiaries, taken as a whole (after giving effect to the
Mergers), whether or not arising from transactions in the ordinary course
of business (a "Material Adverse Effect").
(d) All the outstanding shares of capital stock of each direct or
indirect subsidiary of the Company (the "Subsidiaries") have been duly and
validly authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Prospectus, all outstanding shares of
capital stock of each of the Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear of any
perfected security interest or any other security interests, claims, liens
or encumbrances (other than security interests securing the New Bank
Facilities).
(e) The Company's authorized equity capitalization is as set forth in
the Prospectus.
(f) There is no franchise, contract or other document required to be
described in the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required.
(g) The execution, delivery and performance of this Agreement have
been duly authorized by each of the Issuers and this Agreement has been
duly executed and delivered by each of the Issuers. This Agreement conforms
in all material respects to the description thereof contained in the
Prospectus.
(h) Each of the Base Indenture, the Supplemental Indenture, the Notes
and the Guarantees have been duly and validly authorized and, in the case
of the Base Indenture and the Supplemental Indenture, when duly executed
and delivered by the Trustee, and in the case of the Securities, when duly
issued, authenticated and delivered in accordance with the terms of the
Indenture, endorsed by each Guarantor and paid for in accordance with the
terms of this Agreement, (A) each of the Base Indenture and the
Supplemental Indenture will constitute a valid and binding agreement of the
Issuers enforceable against the Issuers in accordance with its terms, (B)
the Notes will be validly issued and outstanding and will constitute valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture
and (C) the Guarantees will constitute valid and binding obligations of the
Guarantors enforceable against the Guarantors in accordance with their
terms, in each case, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization or other similar laws and
court decisions relating to or affecting the rights of creditors generally
or of general principles of equity (whether considered in a proceeding in
equity or at law). The Notes, the Guarantees, the Indenture and the New
Bank Facilities conform in all material respects to the descriptions
thereof contained in the Prospectus.
(i) None of the Issuers is and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will be an "investment company" as defined in
the Investment Company Act of 1940, as amended.
(j) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
issue and sale of the Securities hereunder or the execution, delivery or
performance of each of the Transaction Documents by any of the Issuers or
the consummation by the Issuers of the transactions contemplated in the
Transaction Documents, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus.
(k) Neither the issue and sale of the Securities, nor the execution,
delivery or performance of any of the Transaction Documents, nor the
consummation of any of the transactions therein contemplated nor the
fulfillment of the terms therein will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any
property or assets of any of the Issuers or their respective subsidiaries
pursuant to, (i) the charter or by-laws of any of the Issuers or their
respective subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which any of the Issuers
or their respective subsidiaries is a party or bound or to which any of
their respective properties is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to any of the Issuers or
their respective subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over any of the Issuers or their respective subsidiaries or
any of their respective properties.
(l) Except as set forth in the Prospectus and the Registration
Statement, no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(m) The financial statements and schedules of each of the Company and
its consolidated subsidiaries, QFC and its consolidated subsidiaries, Food
4 Less and its consolidated subsidiaries, Keith Uddenberg, Inc. ("KUI") and
its consolidated subsidiaries, Hughes Markets, Inc. ("Hughes") and its
consolidated subsidiaries and Smith's Food & Drug Centers, Inc. ("Smith's")
and its consolidated subsidiaries in the Prospectus present fairly in all
material respects the financial condition, results of operations and cash
flows of the Company and its consolidated subsidiaries, QFC and its
consolidated subsidiaries, Food 4 Less and its consolidated subsidiaries,
KUI and its consolidated subsidiaries, Hughes and its consolidated
subsidiaries and Smith's and its consolidated subsidiaries, as applicable,
as of the dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "Summary
of Selected Historical Financial and Other Data" in the Prospectus fairly
present, on the basis stated in the Prospectus, the information included
therein. The pro forma financial statements in the Prospectus and the
Registration Statement include assumptions that provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions and events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro forma
adjustments reflect the proper application of those adjustments to the
historical financial statement amounts in the pro forma financial
statements. The pro forma financial statements in the Prospectus and the
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act and the
pro forma adjustments have been properly applied to the historical amounts
in the compilation of those statements.
(n) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving any of
the Issuers or their respective subsidiaries or any of their respective
properties is pending or, to the best knowledge of any of the Issuers,
threatened that (i) could reasonably be expected to have a material adverse
effect on the performance of this Agreement or the consummation of any of
the transactions contemplated in the Transaction Documents or in the
Mergers or (ii) could reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(o) Each of the Issuers and their respective subsidiaries have good
and marketable title to all items of real property and good title to all
material personal property owned by each of them, in each case free and
clear of any security interests, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely affect the
value of such property and do not interfere with the use made or proposed
to be made of such property by such Issuer or such subsidiary, and each of
the Issuers and their respective subsidiaries have valid, subsisting and
enforceable leases for the properties described in the Prospectus as leased
by them, with exceptions in each case as are not material and do not
interfere with the business of the Company and its subsidiaries, taken as a
whole, in each case except as described in or contemplated by the
Prospectus (exclusive of any supplement thereto).
(p) None of the Issuers or any of their respective subsidiaries is in
violation or default of (i) any provision of its charter or bylaws, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
any of the Issuers or any of their respective subsidiaries or any of their
respective properties, as applicable, except (in the case of each of (i),
(ii), and (iii)) such as would not have a Material Adverse
Effect.
(q) Deloitte & Touche LLP, who has certified certain financial
statements included in the Prospectus, are independent public accountants
with respect to the Company, QFC and KUI within the meaning of the Act and
the applicable published rules and regulations thereunder and Arthur
Andersen LLP, who has certified certain financial information included in
the Prospectus, are independent accountants with respect to Food 4 Less and
Hughes within the meaning of the Act and the applicable published rules and
regulations thereunder and Ernst & Young LLP, who has certified certain
financial information included in the Prospectus, are independent
accountants with respect to Smith's within the meaning of the Act and the
applicable published rules and regulations thereunder.
(r) There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance or sale by the Issuers of the Securities.
(s) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), the Company has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to
file would not have a Material Adverse Effect,) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect.
(t) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), no labor problem or dispute with the
employees of the Issuers or any of their respective subsidiaries exists or
is, to the best knowledge of the Issuers, threatened or imminent, and the
Issuers are not aware of any existing or imminent labor disturbance by the
employees of any of the Issuers' or any of their respective subsidiaries'
principal suppliers, contractors or customers, that would have a Material
Adverse Effect.
(u) No Subsidiary is currently or will be after giving effect to the
Mergers and the related transactions contemplated thereby, prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or assets to
the Company or any other Subsidiary of the Company, except as described in
or contemplated by the Prospectus (exclusive of any supplement thereto).
(v) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), the Issuers and each of their
respective subsidiaries possess all
licenses, certificates, permits and other authorizations issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, except for those the failure of which
to possess would not have a Material Adverse Effect, and none of the
Issuers or any of their respective Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
(w) The Issuers and each of their respective subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any
differences.
(x) None of the Issuers have taken, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(y) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), each of the Issuers and their
respective subsidiaries are (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations and the common law
relating to pollution or the protection of human health and safety, the
environment or hazardous or toxic substances, materials, constituents or
wastes, or pollutants or contaminants ("Environmental Laws"), (ii) have
received and are in compliance with all permits, licenses or other
approvals required of them under Environmental Laws to conduct their
respective businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances, materials, constituents or
wastes, or pollutants or contaminants or any other claim or demand under
any Environmental Law, and there are no past or present events, conditions,
circumstances or activities which would reasonably be expected to prevent
compliance with or give rise to liability under any Environmental Law,
except where such non-compliance with Environmental Laws, failure to
receive required permits, licenses or other approvals, or liability, claim
or demand would not, individually or in the aggregate, have a Material
Adverse Effect. Except as set forth in the Prospectus, none of the Issuers
or any of their respective subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or any comparable
state or local law.
(z) In the ordinary course of their respective businesses, each of the
Issuers
and their respective subsidiaries periodically reviews the effect of
Environmental Laws on the business, operations and properties of it and its
subsidiaries, in the course of which it identifies and evaluates associated
costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties). On the basis of such review, the Issuers have reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a Material Adverse Effect.
(aa) Each of the Issuers and their respective subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations thereunder
with respect to each plan (as defined in Section 3(3) of ERISA and such
regulations and published interpretations) in which employees of the
Issuers or any of their respective subsidiaries are eligible to participate
or with respect to which the Issuers or any of their respective
subsidiaries could incur liability (a "Plan") and each such Plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations. The
Issuers and their respective subsidiaries have not incurred, and are not
reasonably likely to incur, any unpaid liability to the Pension Benefit
Guaranty Corporation (other than for the payment of premiums in the
ordinary course) or to any such Plan under Title IV of ERISA.
(bb) The Guarantors listed on Annex A attached hereto are all the
subsidiaries of the Company (after giving effect to the Mergers) as of the
Closing Date (other than Insignificant Subsidiaries) (the "Subsidiaries").
(cc) The Issuers and each of their respective subsidiaries own,
possess, license or have other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trade and service
mark registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of
their respective businesses as now conducted or as proposed in the
Prospectus to be conducted, except for such Intellectual Property the
failure of which to own, possess, license or have other rights to use,
would not have a Material Adverse Effect. Except as set forth in the
Prospectus (a) there are no rights of third parties to any such
Intellectual Property; (b) there is no material infringement by third
parties of any such Intellectual Property; (c) there is no pending or, to
the best knowledge of the Issuers, threatened action, suit, proceeding or
claim by others challenging the Issuers' or any of their respective
subsidiaries' rights in or to any such Intellectual Property, and the
Issuers are unaware of any facts which would form a reasonable basis for
any such claim; (d) there is no pending or, to the best knowledge of the
Issuers, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property, and
the Issuers are unaware of any facts which would form a reasonable basis
for any such claim; (e) there is no pending or, to the best knowledge of
the Issuers, threatened action, suit, proceeding or claim by others that
the Issuers or any of their respective subsidiaries infringes or otherwise
violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Issuers are unaware of any other fact
which would form a reasonable basis for any such claim; (f) there is no
U.S. patent or published U.S. patent application which contains claims that
dominate or may dominate any Intellectual Property described in the
Prospectus as being owned by or licensed to the Issuers or any of their
respective subsidiaries or that interferes with the issued or pending
claims of any such Intellectual Property; and (g) there is no prior art of
which the Issuers are aware that may render any U.S. patent held by the
Issuers or any of their respective subsidiaries invalid or any U.S. patent
application held by the Issuers or any of their respective subsidiaries
unpatentable which has not been disclosed to the U.S. Patent and Trademark
Office except for patents which, if held invalid, would not have a Material
Adverse Effect.
(dd) Except as disclosed in the Registration Statement and the
Prospectus, the Company (i) does not have any material lending or other
relationship with any bank or lending affiliate of Salomon Smith Barney
Holdings Inc. and (ii) does not intend to use any of the proceeds from the
sale of the Securities hereunder to repay any outstanding debt owed to any
affiliate of Salomon Smith Barney Holding Inc.
(ee) The Company is in compliance with the Commission's staff legal
bulletin No. 5 dated October 8, 1997 related to Year 2000 compliance.
Any certificate signed by any officer of any Issuer and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by such
Issuer, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of 98.560% of the
principal amount thereof in the case of the Notes due 2003, at 98.358% of the
principal amount thereof in the case of the Notes due 2005 and at 98.122% of the
principal amount thereof in the case of the Notes due 2008, at the Closing Date,
the principal amount of the Notes set forth opposite such Underwriter's name in
Schedule I hereto, and the Guarantors hereby agree to issue the Guarantees. The
purchase and sale of each of the Notes due 2003, the Notes due 2005 and the
Notes due 2008 are conditioned upon the purchase and sale of each of the other.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 AM, New York City time, on March 11, 1998, or at such
time on such later date not more than three Business Days after the foregoing
date as the Representatives shall designate, which date and time may be
postponed by agreement between the Representatives and
the Company or as provided in Section 9 hereof (such date and time of delivery
and payment for the Securities being herein called the "Closing Date"). Delivery
of the Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the order
of the Company by wire transfer payable in same-day funds to an account
specified by the Company. Delivery of the Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. Each of the Issuers, jointly and severally, agrees with
the several Underwriters that:
(a) The Issuers will use their best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Issuers will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably object. Subject to the foregoing sentence, if filing
of the Prospectus is otherwise required under Rule 424(b), the Issuers will
cause the Prospectus, properly completed, and any supplement thereto to be
filed with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company will
promptly advise the Representatives (1) when the Registration Statement, if
not effective at the Execution Time, shall have become effective, (2) when
the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Prospectus or for any additional
information, (5) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by any Issuer of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Issuers will use their best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend the Registration Statement or supplement the Prospectus
to comply with the Act or the Exchange Act or the respective rules
thereunder, the Issuers promptly will (1) notify the Representatives of
such event; (2) prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement
which will correct such statement or omission or effect such compliance;
and (3) supply any supplemented Prospectus to you in such quantities as you
may reasonably request.
(c) As soon as practicable, the Company will make generally available
to their security holders and to the Representatives an earnings statement
or statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Issuers will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably request. The
Issuers will pay the expenses of printing or other production of all
documents relating to the offering.
(e) The Issuers will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay any
fee of the National Association of Securities Dealers, Inc., in connection
with its review of the offering; provided that in no event shall any Issuer
be obligated to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of process
in suits, other than those arising out of the offering or sale of the
Securities in any jurisdiction where it is not now so subject.
(f) The Issuers will not, without the prior written consent of Salomon
Smith Barney, for a period of 75 days following the Execution Time, offer,
sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Issuers or
any affiliate of the Issuers or any person in privity with any Issuer (or
any affiliate of any Issuer)) directly or indirectly, or announce the
offering of, any debt securities issued or guaranteed by the Issuers (other
than the Securities and commercial paper issued from time to time and other
than in connection with the New Bank Facilities or other bank lines of
credit).
(g) The Issuers will not take, directly or indirectly, any action
designed to or
which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of any of the Issuers to
facilitate the sale or resale of the Securities.
(h) The Company will apply the net proceeds from the offerings of the
Notes in the manner described in the "Use of Proceeds" section of the
Prospectus.
(i) The Company will cooperate with the Representatives and use its
best efforts to permit the Notes to be eligible for clearance and
settlement through the Depository Trust Company.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Securities shall be subject to the accuracy
of the representations and warranties on the part of the Issuers contained
herein as of the Execution Time and the Closing Date, to the accuracy of the
statements of the Issuers made in any certificates pursuant to the provisions
hereof, to the performance by the Issuers of their respective obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Issuers shall have furnished to the Representatives the
opinion of Stoel Rives LLP, counsel for the Company and the subsidiaries of
the Company other than QFC, the QFC subsidiaries, Food 4 Less and the Food
4 Less Subsidiaries, dated the Closing Date and addressed to the
Representatives, to the effect that
(i) each of the Issuers has been duly incorporated and is validly
existing as a corporation in good standing or of current status, as
the case may be, under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to own
or lease, as the case may be, and to operate its properties and
conduct its business as described in the Prospectus, and to issue and
sell the Securities and to enter into each of the Transaction
Documents and is duly qualified to do business as a foreign
corporation and is in good standing or current status, as the case may
be, under the laws of those jurisdictions designated as material on an
attached officer's certificate;
(ii) all the outstanding shares of capital stock of each Guarantor
have been duly and validly authorized and issued and are fully paid
and nonassessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Guarantors
are owned of record by the Company either directly or through wholly
owned subsidiaries and, to the knowledge of such counsel, as to all
Guarantors other than FFL and the FFL Subsidiaries, free and clear of
any perfected security interest (other than security interests
securing the New Bank Facilities);
(iii) the Company's authorized equity capitalization is as set forth
in the Prospectus and the Securities, the Indenture and the New Bank
Facilities conform in all material respects to the descriptions
thereof contained in the Prospectus;
(iv) each of the Base Indenture and the Supplemental Indenture has
been duly authorized, executed and delivered by each of the Issuers,
and constitutes a legal, valid and binding instrument enforceable
against each of the Issuers in accordance with its terms (subject, as
to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect); the Notes
and the Guarantees are in the form contemplated by the Indenture and
have been duly and validly authorized and, when the Notes are executed
and authenticated in accordance with the provisions of the Indenture
and endorsed by each Guarantor and delivered to and paid for by
Underwriters pursuant to this Agreement, (A) the Notes will constitute
legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture and (B) the Guarantees will constitute
legal, valid and binding obligations of each of the Guarantors
enforceable against each of the Guarantors in accordance with their
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, moratorium, reorganization or other similar laws and court
decisions relating to or affecting the rights of creditors generally
or of general principles of equity (whether considered in a proceeding
in equity or at law);
(v) this Agreement has been duly authorized, executed and delivered by
each of the Issuers;
(vi) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Issuers or any of their respective subsidiaries or their respective
properties of a character required to be disclosed therein (other than
with respect to FFL and the FFL subsidiaries) or which could result in
the prevention of the transactions contemplated by the Transaction
Documents, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit to the Registration
Statement, which is not described or filed as required;
(vii) the Registration Statement has become effective under the Act;
any required filing of the Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the knowledge of such counsel,
no stop order suspending the effectiveness of the Registration
Statement has been issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement and the
Prospectus (including those documents incorporated by reference
therein) (other than the financial statements and other financial
information contained or incorporated by reference therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder (it being understood that in passing upon compliance as to
form of the Registration Statement and Prospectus (including the
incorporated documents), such counsel may assume that the statements
made therein are correct and complete);
(viii) none of the Issuers are nor, after giving effect to the
offering and sale of the Securities and the application of the net
proceeds therefrom as described in the Prospectus, will be an
"investment company" as defined in the Investment Company Act of 1940,
as amended;
(ix) no consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with
the transactions contemplated herein and in the other Transaction
Documents, except such as have been obtained under the Act and such as
may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and in the
Prospectus;
(x) the execution and delivery of the Transaction Documents by the
Issuers, the issuance and sale of the Notes pursuant to this Agreement
and the making of the Guarantees pursuant to the Indenture will not
result in a breach or violation of, or imposition of any lien, charge
or encumbrance upon any property or assets of any of the Issuers or
their respective subsidiaries (other than the stock pledges securing
the New Bank Facilities), pursuant to, (i) the charter or by-laws of
any of the Issuers or their respective subsidiaries, (ii) the terms of
the contracts identified on an annex to such opinion identified as
material to the Company and its subsidiaries, taken as a whole, or
(iii) any statute, law, rule, regulation, or, to the knowledge of such
counsel, any judgment, order or decree applicable to any of the
Issuers or their respective subsidiaries, of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over any of the Issuers or their
respective subsidiaries or any of its or their properties, which
breach or violation or imposition of a lien would, in the case of
clause (ii) or (iii) above, have a Material Adverse Effect;
(xi) except as set forth in the Prospectus and the Registration
Statement, to the knowledge of such counsel, no holders of securities
of the Company have rights to the registration of such securities
under the Registration Statement.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Company and its
subsidiaries, representatives of the independent public accountants for the
Company and its subsidiaries, and representatives of the Underwriters, at
which the contents of the Registration Statement and Prospectus were
discussed, and although such counsel are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained therein and have not made any independent check or
verification thereof (except with respect to its opinion in paragraph
(iii)), during the course of such participation (relying as to materiality
to a large extent on the representations of officers and other
representatives of the Company and the Guarantors), no facts have come to
the attention of such counsel which caused them to believe that on the
Effective Date or at the Execution Time the Registration Statement contains
or contained any untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of its date
and on the Closing Date includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (in each case, other than the financial statements, including
the notes thereto, financial data and supporting schedules and other
statistical data contained or incorporated by reference therein, as to
which such counsel need express no opinion).
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Oregon or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters, (B) as to the opinions set forth in
paragraphs (i), (ii), (iv), (v) (as to authorization), (vi), (vii) (as to
compliance as to form), and (x) (with respect to subclauses (i) and (ii)
therein), to the extent they relate to FFL and the FFL Subsidiaries and to
the extent such counsel deem proper and specified in such opinion, upon the
opinion of Latham & Watkins, counsel for FFL and the FFL Subsidiaries, and
(C) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Issuers and public officials. References to
the Prospectus in this paragraph (b) include any supplements thereto at the
Closing Date. The opinion or opinions of such counsel shall be rendered to
the Underwriters at the request of the Company and shall so state therein.
(c) The Issuers shall have furnished to the Representatives the
opinion of Latham & Watkins, special counsel for Food 4 Less and the Food 4
Less Subsidiaries (other than Falley's (as defined herein)), dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of Food 4 Less and the Food 4 Less Subsidiaries (other than
Falley's) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its state of
incorporation, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and conduct
its business as described in the Prospectus, and to make its Guarantee
and to enter into each of the Transaction Documents and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of those jurisdictions designated as material
on an attached officer's certificate;
(ii) all the outstanding shares of capital stock of each of Food 4
Less and the Food 4 Less Subsidiaries (other than Falley's) have been
duly authorized and validly issued and are fully paid and
nonassessable, and, all of the outstanding shares of capital stock of
the Food 4 Less Subsidiaries (other than Falley's) are owned of record
by Food 4 Less either directly or through wholly owned subsidiaries;
(iii) each of this Agreement, the Base Indenture, the Supplemental
Indenture and the Guarantees has been duly authorized by each of Food
4 Less and the Food 4 Less Subsidiaries (other than Falley's);
(iv) to the knowledge of such counsel, except with respect to the
terms of the Settlement Agreement (as defined in the Prospectus) as it
addresses the State Claims (as defined in the Prospectus) as described
in the Prospectus, there is no pending or threatened action, suit or
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving Food 4 Less or the Food 4 Less
Subsidiaries or their respective properties that seeks to restrain,
enjoin or prevent the consummation of or otherwise challenge the
transactions contemplated by the Transaction Documents, and there is
no contract or other document to which Food 4 Less or any of the Food
4 Less Subsidiaries is a party or by which it is bound that is of a
character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit to the Registration
Statement, which is not described or filed as required;
(v) the sections of the Prospectus described on a schedule to such
opinion and the documents incorporated by reference into the
Registration Statement and the Prospectus that were filed by Food 4
Less (other than the financial statements and other financial
information contained or incorporated by reference therein, as to
which such counsel need express no opinion) (the "Food 4 Less
Sections") comply as to form in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder (it being understood that in passing upon
compliance as to form of the Food 4 Less Sections, such counsel may
assume that the statements made therein are correct and complete);
(vi) the execution and delivery of the Transaction Documents by each
of Food 4 Less and the Food 4 Less Subsidiaries (other than Falley's)
and the making of
the Guarantees by Food 4 Less and the Food 4 Less Subsidiaries (other
than Falley's) pursuant to the Indenture will not result in a breach
or violation of, or imposition of any lien, charge or encumbrance
(other than stock pledges securing the New Bank Facilities) upon any
property or assets of any of Food 4 Less or the Food 4 Less
Subsidiaries (other than Falley's) pursuant to, (i) the charter or
by-laws of any of Food 4 Less or the Food 4 Less Subsidiaries (other
than Falley's) or, (ii) the terms of the contracts identified on an
annex to such opinion identified as material to Food 4 Less and the
Food 4 Less Subsidiaries, taken as a whole, which breach or violation
or imposition of a lien would, in the case of clause (ii) above, have
a Material Adverse Effect;
In addition, such counsel shall state that in its limited capacity as
special counsel to Food 4 Less, it has participated in conferences with
officers and other representatives of Food 4 Less and the Company, counsel
to the Company, representatives of the independent public accountants for
Food 4 Less and the Company, and your representatives, at which the Food 4
Less Sections were discussed, and although its review was limited strictly
to the Food 4 Less Sections and it is not passing upon, and does not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Food 4 Less Sections and has not made any
independent check or verification thereof, during the course of such
participation, no facts came to such counsel's attention that caused it to
believe that the Food 4 Less Sections, as of the date of the Prospectus
Supplement and on the Closing Date, and taken as a description of the
historical operations of Food 4 Less prior to the Mergers, contained or
will contain an untrue statement of a material fact or omitted or will omit
to state a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading; it being
understood that such counsel expresses no belief with respect to (i) the
financial statements, financial statement schedules and other financial
data included or incorporated by reference in the Food 4 Less Sections or
(ii) any other contents of the Registration Statement or Prospectus other
than the Food 4 Less Sections.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of California or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of Food 4 Less and public officials. References to the Prospectus
in this paragraph (c) include any supplements thereto at the Closing Date.
The opinion or opinions of such counsel shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(d) The Issuers shall have furnished to the Representatives the
opinion of Squadron, Ellenoff, Plesent, Sheinfeld & Sorhin, special New
York counsel for the Issuers, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) each of the Base Indenture and the Supplemental Indenture
constitutes a
legal, valid and binding instrument enforceable against each of the
Issuers in accordance with its terms (subject, as to the enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect); when the Notes are executed and authenticated
in accordance with the provisions of the Indenture and endorsed by
each Guarantor and delivered to and paid for by Underwriters pursuant
to this Agreement, (A) the Notes will constitute legal, valid and
binding obligations of the Company enforceable against the Company in
accordance with their terms and entitled to the benefits of the
Indenture and (B) the Guarantees will constitute legal, valid and
binding obligations of each of the Guarantors enforceable against each
of the Guarantors in accordance with their terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, moratorium,
reorganization or other similar laws and court decisions relating to
or affecting the rights of creditors generally or of general
principles of equity (whether considered in a proceeding in equity or
at law);
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York or the Federal laws of the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact,
to the extent they deem proper, on certificates of responsible officers of
the Issuers and public officials. References to the Prospectus in this
paragraph (d) include any supplements thereto at the Closing Date. The
opinion or opinions of such counsel shall be rendered to the Underwriters
at the request of the Company and shall so state therein.
(e) The Issuers shall have furnished to the Representatives, the
opinion of Clutter, Hinkel & Aadalen, LLP, special Kansas counsel to
Falley's, Inc. ("Falley's"), dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) Falley's has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Kansas, with full
corporate power and authority to own or lease, as the case may be, and
to operate its properties and conduct its business as described in the
Prospectus, and to make its Guarantee and to enter into each of the
Transaction Documents;
(ii) all of the outstanding shares of capital stock of Falley's has
been duly authorized and validly issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of Falley's are owned of
record by Food 4 Less either directly or through wholly owned
subsidiaries;
(iii) this Agreement, the Base Indenture, the Supplemental Indenture
and the Guarantee have been duly authorized by Falley's;
(iv) the execution and delivery of the Transaction Documents by
Falley's and the making of the Guarantee by Falley's will not result
in a breach or violation of, or imposition of any lien, charge or
encumbrance (other than stock pledges securing the New Bank
Facilities) upon any property or assets of Falley's, pursuant to the
charter or by-laws of Falley's.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of Kansas or the Federal laws of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel of
good standing whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of Falley's and
public officials. References to the Prospectus in this paragraph (e)
include any supplements thereto at the Closing Date. The opinion or
opinions of such counsel shall be rendered to the Underwriters at the
request of the Company and shall so state therein.
(f) The Representatives shall have received from Cahill Gordon &
Reindel, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration
Statement, the Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the
Issuers shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(g) The Issuers shall have furnished to the Representatives a
certificate of the Company, QFC and Food 4 Less signed by the Chairman of
the Board, the President or a Senior Vice President and the principal
financial or accounting officer of the Company, QFC and Food 4 Less, as
applicable, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of, in the case of the
certificate of the Company, the Issuers, and in the case of the
certificate of QFC and Food 4 Less, QFC and the QFC Subsidiaries and
Food 4 Less and the Food 4 Less Subsidiaries, respectively, in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date and the Issuers and QFC and
the QFC Subsidiaries and Food 4 Less and Food 4 Less Subsidiaries, as
applicable, have complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have
been instituted or, to such officers' knowledge, threatened; and
(iii) since the dates of the most recent financial statements in the
Prospectus of each of the Company, QFC and Food 4 Less, (exclusive of
any supplement thereto), there has been no material adverse change in
the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and its subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(h) At the Execution Time and at the Closing Date, Deloitte & Touche
LLP (with respect to the Company and QFC) and Arthur Andersen LLP (with
respect to Food 4 Less and Hughes) shall have furnished to the
Representatives comfort letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to the
Representatives.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (h) of this Section 6 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto), the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and the
Prospectus (exclusive of any supplement thereto).
(j) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Issuers' debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(k) Prior to the Closing Date, the Issuers shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request.
(l) The Mergers shall have been consummated on the terms contemplated
by each of the Merger Agreements (as in effect at the Execution Time), and
each of QFC and the QFC Subsidiaries and Food 4 Less and the Food 4 Less
Subsidiaries shall have become parties to this Agreement as Guarantors
pursuant to an instrument in substantially the form attached hereto as
Exhibit A.
(m) The Representatives shall have received true and correct executed
copies
of the New Bank Facilities, the New Bank Facilities shall be in form and
substance reasonably satisfactory to the Representatives and all conditions
to the initial borrowings thereunder shall have been satisfied in all
material respects.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Stoel Rives LLP, counsel for the Company, at 900 SW
Fifth Avenue, Suite 2300, Portland, Oregon, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of any of the Issuers to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, each of the Issuers, jointly and severally,
agree to reimburse the Underwriters severally through Salomon Smith Barney on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel for the Underwriters) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) Each of the Issuers, jointly
and severally, agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement for the registration of the Securities as originally filed or in any
amendment thereof, or in any Preliminary Prospectus or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, in light of the circumstances under which they were made)
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Issuers will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein;
provided, further, however, that with respect to any untrue statement or
omission of a material fact made in any Preliminary Prospectus, the indemnity
agreement contained in this Section 8(a) shall not inure to the benefit of any
Underwriter (or any of the directors, officers, employees and agents of such
Underwriter or any person who controls such Underwriter within the meaning of
either the Act or the Exchange Act) from whom the person asserting any such
loss, claim, damage or liability purchased the Securities concerned, to the
extent that any such loss, claim, damage or liability of such Underwriter occurs
under circumstances where it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment that (x) the Company had
previously furnished copies of the Prospectus to the Underwriters, (y) the
untrue statement or omission of a material fact contained in the Preliminary
Prospectus was corrected in the Prospectus and (z) there was not sent or given
to such person, at or prior to the written confirmation of the sale of such
Securities to such person, a copy of the Prospectus, in any case where such
delivery was required by the Act. This indemnity agreement will be in addition
to any liability which the Issuers may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Issuers, each of their directors, each of their officers who
signs the Registration Statement, and each person who controls any of the
Issuers within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity to each Underwriter, but only with reference
to written information relating to such Underwriter furnished to the Company by
or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Issuers acknowledge that the (i) statements set forth
regarding delivery of the Securities on the cover page and the legend in block
capital letters related to stabilization, syndicate covering transactions and
penalty bids on the second page and (ii) the third and fifth paragraphs under
the heading "Underwriting" in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Issuers jointly and severally on the one
hand and the Underwriters severally on the other agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Issuers and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Issuers on the one hand and by the Underwriters on the
other from the offering of the Securities; provided, however, that in no case
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Issuers
jointly and severally on the one hand and the Underwriters severally on the
other shall contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Issuers on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Issuers shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page
of the Prospectus. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information provided by the Issuers on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Issuers and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter, and
each person who controls any of the Issuers within the meaning of either the Act
or the Exchange Act, each officer of the Issuers who shall have signed the
Registration Statement and each director of the any of the Issuers shall have
the same rights to contribution as any of the Issuers subject in each case to
the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Notes due 2003, the Notes due 2005 or
the Notes due 2008 agreed to be purchased by such Underwriter or Underwriters
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the principal amount of Notes due 2003, the Notes
due 2005 or Notes due 2008, as the case may be, set forth opposite their names
in Schedule I hereto bears to the aggregate principal amount of Notes due 2003,
the Notes due 2005 or Notes due 2008, as the case may be, set forth opposite the
names of all the remaining Underwriters) the Notes due 2003, Notes due 2005 or
Notes due 2008, as the case may be, which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of the Notes due 2003, the Notes due 2005 or
the Notes due 2008 which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of the
Notes due 2003, 10% of the aggregate principal amount of the Notes due 2005 or
10% of the aggregate principal amount of the Notes due 2008, as the case may be,
set forth in Schedule I hereto, the remaining Underwriters shall have the right
to purchase all, but shall not be under any obligation to purchase any, of the
Notes, and if such nondefaulting Underwriters do not purchase all the Notes,
this Agreement will terminate without liability to any nondefaulting Underwriter
or to any Issuer. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Issuers and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the Securities as contemplated by the
Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Issuers or their respective officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Issuers or
any of the officers, directors or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7, 8, 12, 13 and 14 hereof shall survive the termination
or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Salomon Smith Barney General Counsel (fax no.:
(212) 783-1752) and confirmed to the General Counsel, Salomon Smith Barney, at 7
World Trade Center, New York, New York, 10048, Attention: General Counsel; or,
if sent to the Company, will be mailed, delivered or telefaxed to Fred Meyer,
P.O. Box 42121, 3800 S.E. 22nd Ave., Portland, Oregon, 97242-0121, Telecopy No.
(503) 797-5299.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York without regard to
principles of conflicts of law.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean, with respect to a party to this
Agreement, the date and time that this Agreement (or an instrument
providing that such party agrees to become a party to this Agreement) is
executed and delivered by such party.
"Food 4 Less" means Food 4 Less Holdings, Inc., a Delaware
corporation.
"Food 4 Less Merger Agreement" means the Agreement and Plan of Merger
dated as of November 6, 1997 among Food 4 Less Holdings, Inc., FFL
Acquisition Corp. and Fred Meyer, Inc., as amended, as in effect at the
Execution Time.
"Food 4 Less Subsidiaries" means the direct and indirect subsidiaries
of Food 4 Less.
"Insignificant Subsidiary" means any inactive or otherwise immaterial
direct or indirect subsidiaries of the Company; provided that the assets
and pre-tax income of, and the Company's net investment in, such
Insignificant Subsidiaries on an individual and a combined basis will not
exceed three percent (3%) of the Company's consolidated pre-tax income or
assets, as applicable.
"Merger Agreements" means the QFC Merger Agreement and the FFL Merger
Agreement.
"Mergers" shall mean (i) the merger of Q-Acquisition Corp., a
Washington corporation, with and into QFC with QFC becoming a wholly owned
direct subsidiary of the Company, pursuant to the QFC Merger Agreement and
(ii) the merger of FFL Acquisition Corp., a Delaware corporation, with and
into Food 4 Less with Food 4 Less becoming a wholly owned direct subsidiary
of the Company, pursuant to the Food 4 Less
Merger Agreement.
"New Bank Facilities" means (i) the Loan Agreement to be entered into
on the Closing Date among the Company, the Guarantors, Bankers Trust
Company, as Administrative Agent, The Chase Manhattan Bank, as Syndication
Agent, and the other lenders party thereto, and (ii) the Participation
Agreement to be entered into on the Closing Date among the Company, as
lessee, FMS Trust 1997-1, as lessor, Wilmington Trust Company, as owner
trustee, Bankers Trust Company, as Administrative Agent, The Chase
Manhattan Bank, as Syndication Agent, and the other investors and lenders
party thereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary supplemental
prospectus filed with the Commission pursuant to Rule 424, including the
Prospectus Supplement dated February 17, 1998.
"Prospectus" shall mean the prospectus relating to the Securities,
including the Prospectus Supplement dated as of March 4, 1998, that is
first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"QFC" means Quality Food Centers, Inc., a Washington corporation.
"QFC Merger Agreement" means that the Agreement and Plan of Merger
dated as of November 6, 1997 among Quality Food Centers, Inc.,
Q-Acquisition Corp. and Fred Meyer, Inc., as amended, as in effect at the
Execution time.
"QFC Subsidiaries" means the direct and indirect subsidiaries of QFC.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424", "Rule 430A", "Rule 462" and "Rule 415" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial registration statement.
"Transaction Documents" shall mean, collectively, this Agreement, the
Base Indenture, the Supplemental Indenture and the New Bank Facilities.
"Salomon Smith Barney" shall mean Smith Barney Inc. or Salomon
Brothers Inc. to the extent that any such party is a signatory to this
Agreement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
[Signature Page Follows]
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Issuers
and the several Underwriters.
Very truly yours,
FRED MEYER, INC.
By: DAVID R. JESSICK
-------------------------------------
Name: David R. Jessick
Title: Senior Vice President and
Chief Financial Officer
B&B STORES, INC.
B&B PHARMACY, INC.
CB&S ADVERTISING AGENCY, INC.
DISTRIBUTION TRUCKING COMPANY
FM, INC.
FM HOLDING CORPORATION
FRED MEYER JEWELERS, INC.
FM RETAIL SERVICES, INC.
FRED MEYER OF ALASKA, INC.
FRED MEYER OF CALIFORNIA, INC.
FRED MEYER STORES, INC.
GRAND CENTRAL, INC.
JH PROPERTIES, INC.
MERKSAMER JEWELERS, INC.
ROUNDUP CO.
SMITH'S FOOD & DRUG CENTERS, INC.
COMPARE, INC.
SAINT LAWRENCE HOLDING COMPANY
SMITH'S BEVERAGE OF WYOMING, INC.
SMITTY'S EQUIPMENT LEASING, INC.
SMITTY'S SUPERMARKETS, INC.
SMITTY'S SUPER VALU, INC.
By: KENNETH THRASHER
-------------------------------------
Name: Kenneth Thrasher
Title: Vice President
WESTERN PROPERTY INVESTMENT
GROUP, INC.
By: KENNETH THRASHER
-------------------------------------
Name: Kenneth Thrasher
Title: Vice President
TREASURE VALLEY LAND
COMPANY, L.C.
By: Smith's Food & Drug Centers, Inc.,
its member
By: KENNETH THRASHER
-------------------------------------
Name: Kenneth Thrasher
Title: Executive Vice President
RICHIES, INC.
By: ROGER A. COOKE
-------------------------------------
Name: Roger A. Cooke
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
Salomon Smith Barney
Donaldson Lufkin & Jenrette
Securities Corporation
BT Alex. Brown Incorporated
Chase Securities Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated.
First Chicago Capital Markets, Inc.
NationsBanc Montgomery Securities LLC
Societe Generale Securities Corporation
By: Salomon Brothers Inc
By: CHAD A. LEAT
------------------------------
Name: Chad A. Leat
Title: Managing Director
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
Principal Amount Principal Amount Principal Amount
of Notes due 2003 of Notes due 2005 of Notes due 2008
Underwriters to be Purchased to be Purchased to be Purchased
- ------------ ----------------- ----------------- -----------------
Salomon Brothers Inc....................... $ 60,417,000 $181,250,000 $181,250,000
Donaldson Lufkin & Jenrette
Securities Corporation................. 60,417,000 181,250,000 181,250,000
BT Alex. Brown Incorporated................ 60,417,000 181,250,000 181,250,000
Chase Securities Inc....................... 25,000,000 75,000,000 75,000,000
Goldman, Sachs & Co........................ 12,500,000 37,500,000 37,500,000
Morgan Stanley & Co. Incorporated.......... 12,500,000 37,500,000 37,500,000
First Chicago Capital Markets, Inc. ....... 6,250,000 18,750,000 18,750,000
NationsBanc Montgomery Securities, LLC..... 6,250,000 18,750,000 18,750,000
Societe Generale Securities Corporation.... 6,249,000 18,750,000 18,750,000
Total...................................... $250,000,000 $750,000,000 $750,000,000
ANNEX A
-------
Guarantors
----------
State Where States Where
Subsidiary Incorporated Qualified
- ---------- ------------ ---------
B&B Stores, Inc. Montana None
B&B Pharmacy, Inc. Montana None
CB&S Advertising Agency, Inc. Oregon None
Distribution Trucking Company Oregon Idaho, Utah
FM, Inc. Utah None
FM Holding Corporation Delaware None
Fred Meyer Jewelers, Inc. Delaware Arizona, California,
Oregon, Washington
FM Retail Services, Inc. Washington None
Fred Meyer of Alaska, Inc. Alaska None
Fred Meyer of California, Inc. California None
Fred Meyer Stores, Inc. Delaware Idaho, Oregon
Grand Central, Inc. Utah Idaho, Oregon
JH Properties, Inc. Washington None
Merksamer Jewelers, Inc. California Illinois, Indiana,
Iowa, Kansas, Maryland,
Michigan, Missouri,
Ohio, Virginia,
Wisconsin, Washington
Roundup Co. Washington Oregon
Smith's Food & Drug Centers, Inc. Delaware Arizona, California,
Idaho, Nevada, New
Mexico, Texas,
Utah, Wyoming
Compare, Inc. Delaware Arizona
Richie's, Inc. Texas None
Saint Lawrence Holding Company Delaware Arizona
Smith's Beverage of Wyoming, Inc. Wyoming None
Smitty's Equipment Leasing, Inc. Delaware Arizona
Smitty's Supermarkets, Inc. Delaware Arizona
Smitty's Super Valu, Inc. Delaware Arizona
Treasure Valley Land Company, L.C. Idaho None
Western Property Investment Group, Inc. California None
Quality Food Centers, Inc. Washington Oregon, Connecticut
Hughes Markets, Inc. California None
State Where States Where
Subsidiary Incorporated Qualified
- ---------- ------------ ---------
Hughes Realty, Inc. California None
KU Acquisition Corporation Washington None
QFC Sub, Inc. Washington None
Quality Food, Inc. Delaware None
Quality Food Holdings, Inc. Delaware None
Second Story, Inc. Washington None
Food 4 Less Holdings, Inc. Delaware California
Alpha Beta Company California None
Bay Area Warehouse Stores, Inc. California None
Bell Markets, Inc. California None
Cala Co. Delaware California
Cala Foods, Inc. California None
Crawford Stores, Inc. California None
Falley's, Inc. Kansas Missouri, Texas
Food 4 Less GM, Inc. California None
Food 4 Less Merchandising, Inc. California None
Food 4 Less of California, Inc. California None
Food 4 Less of Southern California, Inc. Delaware California
Ralphs Grocery Company Delaware California
Exhibit A
---------
Fred Meyer, Inc.
$250,000,000 7.150% Notes Due 2003
$750,000,000 7.375% Notes Due 2005
$750,000.000 7.450% Notes Due 2008
Joinder Agreement
New York, New York
March [ ], 1998
Salomon Smith Barney
Salomon Brothers Inc
Donaldson Lufkin & Jenrette
Securities Corporation
BT Alex. Brown Incorporated
Chase Securities Inc.
Goldman Sachs & Co.
Morgan Stanley & Co. Incorporated
First Chicago Capital Markets, Inc.
NationsBanc Montgomery Securities LLC
Societe Generale Securities Corporation
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
7 World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Reference is hereby made to that certain underwriting agreement (the
"Underwriting Agreement") dated as of March 4, 1998 among Fred Meyer, Inc., a
Delaware corporation (the "Company"), the guarantors named therein (the
"Guarantors") and Salomon Smith Barney, Salomon Brothers Inc, Donaldson Lufkin &
Jenrette Securities Corporation, BT Alex. Brown Incorporated, Chase Securities
Inc., Goldman Sachs & Co., Morgan Stanley & Co. Incorporated, First Chicago
Capital Markets, Inc., NationsBanc Montgomery Securities LLC, and Societe
Generale Securities Corporation. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Underwriting Agreement.
Each of the undersigned hereby acknowledges that it has received and
reviewed a copy of the Underwriting Agreement, and acknowledges and agrees to
(i) join and become a party to the Underwriting Agreement as a Guarantor as
indicated by its signature below and to execute and deliver the Base Indenture
and the Supplemental Indenture and to deliver a notation of its Guarantee to be
endorsed on each Note authenticated under the Indenture; (ii) be bound by all
covenants, agreements and acknowledgments attributable to a Guarantor in the
Underwriting Agreement; and (iii) perform all obligations and duties required of
a Guarantor pursuant to the Underwriting Agreement. Each of the undersigned
hereby makes as of the date hereof all of the representations and warranties of
a Guarantor in the Underwriting Agreement.
The jurisdiction of incorporation of each of the undersigned is as set
forth on Annex A hereto.
This Joinder Agreement will be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed within the State of New York without regard to principles of conflicts
of law.
IN WITNESS WHEREOF, each of the undersigned has caused this Joinder
Agreement to be duly executed and delivered in New York, New York, by its proper
and duly authorized officer as of the date set forth above.
QUALITY FOOD CENTERS, INC.
HUGHES MARKETS, INC.
HUGHES REALTY, INC.
KU ACQUISITION CORPORATION
QFC SUB, INC.
QUALITY FOOD, INC.
QUALITY FOOD HOLDINGS, INC.
SECOND STORY, INC.
FOOD 4 LESS HOLDINGS, INC.
ALPHA BETA COMPANY
BAY AREA WAREHOUSE STORES, INC.
BELL MARKETS, INC.
CALA CO.
CALA FOODS, INC.
CRAWFORD STORES, INC.
FALLEY'S, INC.
FOOD 4 LESS GM, INC.
FOOD 4 LESS MERCHANDISING, INC.
FOOD 4 LESS OF CALIFORNIA, INC.
FOOD 4 LESS OF SOUTHERN
CALIFORNIA, INC.
RALPHS GROCERY COMPANY
By:
-------------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
Salomon Smith Barney
Donaldson Lufkin & Jenrette
Securities Corporation
BT Alex. Brown Incorporated
Chase Securities Inc.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated.
First Chicago Capital Markets, Inc.
NationsBanc Montgomery Securities LLC
Societe Generale Securities Corporation
By: Salomon Brothers Inc
By:
------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
Annex A
-------
Subsidiary State of Incorporation States Where Qualified
- ---------- ---------------------- ----------------------
Quality Food Centers, Inc. Washington Oregon, Connecticut
Hughes Markets, Inc. California None
Hughes Realty, Inc. California None
KU Acquisition Corporation Washington None
QFC Sub, Inc. Washington None
Quality Food, Inc. Delaware None
Quality Food Holdings, Inc. Delaware None
Second Story, Inc. Washington None
Food 4 Less Holdings, Inc. Delaware California
Alpha Beta Company California None
Bay Area Warehouse Stores, Inc. California None
Bell Markets, Inc. California None
Cala Co. Delaware California
Cala Foods, Inc. California None
Crawford Stores, Inc. California None
Falley's, Inc. Kansas Missouri, Texas
Food 4 Less GM, Inc. California None
Food 4 Less Merchandising, Inc. California None
Food 4 Less of California, Inc. California None
Food 4 Less of Southern California, Inc. Delaware California
Ralphs Grocery Company Delaware California