SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE (this "Subsidiary Guarantee"), dated as of
March 11, 198, is executed by each of the Guarantors listed on the signature
pages hereof (collectively the "Guarantors"), for the benefit of BANKERS TRUST
COMPANY, as administrative agent (the "Administrative Agent") under the Loan
Agreement (as defined below) and each Lender named therein (collectively, the
"Lenders"). Capitalized terms used but not otherwise defined herein shall have
the meanings provided for such terms in the Loan Agreement.
RECITALS:
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WHEREAS, it is a condition to the effectiveness of that certain Loan
Agreement (as amended, supplemented or otherwise modified from time to time, the
"Loan Agreement"), dated as of March 11, 1998, among FRED MEYER, INC., as
borrower (the "Borrower"), the Lenders, the Administrative Agent and The Chase
Manhattan Bank, as Syndication Agent, that the Guarantors execute and deliver
this Subsidiary Guarantee; and
WHEREAS, it is in the best interests of the Guarantors to execute this
Guarantee inasmuch as the Guarantors will derive substantial benefits from the
transactions contemplated by the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantors hereby agree as follows:
1. Each Guarantor hereby jointly, severally, irrevocably and
unconditionally guarantees:
(a) the full and prompt payment when due (whether at maturity, by
optional or mandatory prepayment, upon acceleration or otherwise) of the
principal and interest payable on the Loans;
(b) the payment of all other obligations and indebtedness
(including, without limitation, indemnities, fees and interest thereon and
all obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code and the operation of Sections 502(b) and 506(b) of the
SUBSIDIARY GUARANTEE
Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506 (b), would become due) of
the Borrower now existing or hereafter incurred under, arising out of, or
in connection with the Loan Agreement;
(c) the due performance and compliance by the Borrower with all
of the terms, conditions and agreements contained in the Loan Agreement;
(d) the payment of all sums advanced by the Lenders under or
pursuant hereto, with interest thereon from the due date thereof, until
paid, at the rate specified in Section 2.13(c) of the Loan Agreement; and
(e) all renewals, extensions, amendments and changes of, or
substitutions or replacements for, all or any part of the foregoing (all
such principal, premiums, interest, obligations, indebtedness, performance,
compliance and payments, collectively, the "Guaranteed Obligations").
All payments by the Guarantors under this Subsidiary Guarantee shall
be made on the same basis as payments by the Borrower under Section 2.17 of the
Loan Agreement.
This guarantee is a primary obligation of each Guarantor and is a
guarantee of payment, and not merely of collection.
2. The Lenders may, at any time and from time to time, without the
consent of, or notice to, the Guarantors, without incurring responsibility to
the Guarantors and without impairing or releasing the obligations of the
Guarantors hereunder, upon or without any terms or conditions and in whole or in
part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations, any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guarantee herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
there against;
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SUBSIDIARY GUARANTEE
(c) exercise or refrain from exercising any rights against the
Borrower, any other Guarantor or others, or otherwise act or refrain from
acting;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the Borrower
other than the Lenders and the Guarantors;
(e) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Lenders regardless of
what liabilities or liabilities of the Borrower remain unpaid;
(f) consent to or waive any breach of, or any act, omission or
default under, the Loan Agreement, or otherwise amend, modify or supplement
the Loan Agreement;
(g) act or fail to act in any manner referred to in this
Subsidiary Guarantee which may deprive the Guarantors of their right to
subrogation against the Borrower to recover full indemnity for any payments
made pursuant to this Subsidiary Guarantee.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guarantee of the indebtedness of
the Borrower whether executed by such Guarantor, any other Guarantor or by
any other Person, and the liability of each Guarantor hereunder shall not
be affected or impaired by any circumstance or occurrence whatsoever,
including, without limitation: (a) any direction as to the application of
payment by the Borrower or any other Person; (b) any other continuing or
other guarantee, undertaking or maximum liability of a Guarantor or of any
other Person as to the indebtedness of the Borrower; (c) any payment on or
in reduction of any such other guarantee or undertaking; (d) any
dissolution, termination or increase, decrease or change in personnel by
the Borrower; (e) any payment made to any Lender in respect of the
Guaranteed Obligations which any Lender repays the Borrower or any
Guarantor pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each
Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding; (f) any action or
inaction by any of the Lenders as contemplated by Section 2 hereof; or (g)
any invalidity, irregularity or unenforceability of all or part of the
Guaranteed
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SUBSIDIARY GUARANTEE
Obligations or any security therefor. Notwithstanding the foregoing, each of the
Guarantors agrees that this Guarantee shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Guaranteed Obligations is rescinded or must otherwise be restored
by any Guaranteed Party, upon the insolvency, bankruptcy or reorganization of
the Borrower or otherwise, as though such payment had not been made.
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against each Guarantor
whether or not action is brought against any other Guarantor, any other
guarantor or the Borrower, and whether or not any other Guarantor, any other
guarantor or the Borrower be joined in any such action or actions.
5. In order to induce the Lenders to make Loans pursuant to the Loan
Agreement, each Guarantor makes the following representations, warranties and
agreements:
5.1 Such Guarantor (a) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, (b) has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged and (c) is duly
qualified as a foreign corporation and in good standing in each jurisdiction
where the ownership, leasing or operation of property or the conduct of its
business requires such qualification, except where failure to so qualify does
not have a Material Adverse Effect with respect to such Guarantor.
5.2 Such Guarantor has the corporate power to execute, deliver and
perform the terms and provisions of this Subsidiary Guarantee and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of this Subsidiary Guarantee. Such Guarantor has duly executed and
delivered this Subsidiary Guarantee, and this Subsidiary Guarantee constitutes
the legal, valid and binding obligation of such Guarantor enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law).
5.3 Neither the execution, delivery or performance by such Guarantor
of this Subsidiary Guarantee, nor compliance by any with the terms and
provisions hereof, (a) will contravene any provision of any law, statute, rule
or
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SUBSIDIARY GUARANTEE
regulation or any order, writ, injunction or decree of any court or governmental
instrumentality, (b) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
such Guarantor pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement, loan agreement or any other agreement, contract or instrument
to which such Guarantor is a party or by which it or any of its property or
assets is bound or to which it may be subject or (c) will violate any provision
of the Certificate of Incorporation, Articles of Incorporation (as applicable)
or By-Laws of such Guarantor.
5.4 No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made prior to the Closing Date), or exemption by, any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (a) the execution, delivery and performance of this
Subsidiary Guarantee or (b) the legality, validity, binding effect or
enforceability of this Subsidiary Guarantee.
5.5 There are no actions, suits or proceedings pending or, to the best
knowledge of such Guarantor, threatened that are reasonably likely to have a
Material Adverse Effect with respect to such Guarantor.
5.6 All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of the Subsidiary Guarantor in
writing to the Administrative Agent (including, without limitation, all
information contained herein) for purposes of or in connection with this
Subsidiary Guarantee or any transaction contemplated herein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of such Guarantor in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided.
5.7 Such Guarantor has filed all tax returns required to be filed by
it and has paid all income taxes payable by it which have become due pursuant to
such tax returns and all other taxes and assessments payable by it which have
become due, other than those not yet delinquent and except for those contested
in good faith and for which adequate reserves have been established. Such
Guarantor has paid, or has provided adequate reserves (in the good faith
judgment of the management of the Subsidiary Guarantor) for the payment of, all
federal and state income taxes
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SUBSIDIARY GUARANTEE
applicable for all prior fiscal years and for the current fiscal year to the
date hereof, if any.
5.8 On the date hereof, all outstanding shares of capital stock of
such Guarantor have been duly and validly issued, are fully paid and
non-assessable. Such Guarantor has no outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
5.9 Such Guarantor is in compliance with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls) except where such noncompliance could not reasonably be expected to
have a Material Adverse Effect.
5.10 Such Guarantor is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
5.11 Such Guarantor is not a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
5.12 Such Guarantor has good and marketable title to, or valid
leasehold interests in, all its properties and assets. Such Guarantor is in
compliance in all respects with all obligations under all leases to which it is
a party, except where such non-compliance could not reasonably be expected to
have a Material Adverse Effect. All such leases are in full force and effect and
such Guarantor enjoys peaceful and undisturbed possession under all such leases,
except where the lack of force or effect or the failure to enjoy peaceful and
undisturbed possession could not reasonably be expected to have a Material
Adverse Effect.
5.13 No event has occurred or has failed to occur which, with the
giving of notice, lapse of time or both, would constitute an event of default,
default, violation or breach of or under any indenture, mortgage, deed of trust,
franchise or other agreement or instrument to which such Guarantor is a party or
by which such Guarantor or any of its properties or assets may be bound.
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SUBSIDIARY GUARANTEE
6. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of this Subsidiary Guarantee:
6.1 Except as otherwise permitted under the Loan Agreement, it will
maintain its existence and rights as a corporation in full force and effect so
long as this Subsidiary Guarantee is outstanding, and will perform all of its
obligations under the terms of each indenture, mortgage, deed of trust, credit
agreement, loan agreement or any other agreement, contract or instrument by
which it is bound.
6.2 It will, at any time and from time to time, upon the request of a
Lender and at such Guarantor's expense, promptly and duly execute and deliver or
cause to be executed and delivered any and all further instruments and documents
and take such further action as such Lender may reasonably request to effect the
purposes of this Subsidiary Guarantee.
7. This Subsidiary Guarantee is a continuing one and all liabilities
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Lender in exercising any right, power or privilege hereunder and no
course of dealing between any Guarantor and any Lender shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights, powers and remedies
herein expressly provided are cumulative and not exclusive of any rights, powers
or remedies which any Lender would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle any Guarantor to any other further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
any Lender to any other or further action in any circumstances without notice or
demand.
8. This Subsidiary Guarantee shall be binding upon each Guarantor and
its successors and assigns and shall inure to the benefit of the Administrative
Agent, the Lenders and their respective successors and assigns.
9. This Subsidiary Guarantee will terminate upon the occurrence of all
of the following: (a) the Commitments have expired and been terminated; (b) the
principal and interest on each Loan and all fees, indemnities, costs, expenses
and other amounts payable under the Loan Agreement shall have been paid in full,
without respect to any termination of the Loan Agreement; (c) all Letters of
Credit shall have expired or terminated; and (d) all LC Disbursements shall have
been paid in full. Neither this Subsidiary Guarantee nor any provision hereof
may be changed,
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SUBSIDIARY GUARANTEE
waived, discharged or terminated except as provided in Section 9.2 of the Loan
Agreement.
10. Each Guarantor acknowledges that an executed (or conformed) copy
of the Loan Agreement has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
11. All notices and other communications hereunder shall be made at
the addresses, in the manner and with the effect provided in Section 9.1 of the
Loan Agreement, provided that, for this purpose, the address of each Guarantor
shall be in care of the Borrower or as otherwise specified in writing by any
Guarantor to each of the parties to this Subsidiary Guarantee.
12. If claim is ever made upon any Lender for repayment or recovery of
any amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (b) any settlement
or compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event each Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon it,
notwithstanding any revocation hereof or the cancellation of the Loan Agreement
or other instrument evidencing any liability of the Borrower, and each Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
13. Any acknowledgment or new promise, whether by payment of principal
or interest or otherwise and whether by the Borrower or others (including each
Guarantor), with respect to any of the Guaranteed Obligations shall, if the
statute of limitations in favor of such Guarantor against any Lender shall have
commenced to run, toll the running of such statute of limitations, and if the
period of such statute of limitations shall have expired, prevent the operation
of such statute of limitations.
14. Each Guarantor confirms that it is the intention of all parties to
the Loan Agreement that neither the guarantee by such Guarantor pursuant to this
Subsidiary Guarantee nor any liability or payment by it hereunder shall (i)
render such Guarantor "insolvent," or (ii) constitute a fraudulent transfer or
conveyance, or (iii) constitute a transaction at an undervalue or preference, or
(iv) give rise to any similar or analogous event, thing or circumstance, in each
case, for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyances
Act, the Uniform Fraudulent
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SUBSIDIARY GUARANTEE
Transfer Act or any similar federal or state law. To effectuate the foregoing
intention, the Lenders and each Guarantor hereby irrevocably agree that the
Guaranteed Obligations of such Guarantor shall be limited to the maximum amount
as will, after giving effect to all other contingent and fixed liabilities of
such Guarantor and after giving effect to any collections from or payments made
by or on behalf of any other Guarantor in respect of the Guaranteed Obligations
of such other Guarantor under this Guarantee, result in the Guaranteed
Obligations of such Guarantor hereunder neither rendering the Guarantor
"insolvent" nor constituting such fraudulent transfer or conveyance, such
transaction at an undervalue or preference or such other event, thing or
circumstance, in each case, under any such law.
15. This Subsidiary Guarantee and the rights and obligations of the
Lenders and each Guarantor hereunder shall be construed in accordance with and
governed by the law of the State of New York.
15.1 Any legal action or proceeding with respect to this Subsidiary
Guarantee may be brought in the courts of the State of New York or of the United
States for the Southern District of New York, and, by execution and delivery of
this Agreement, each Guarantor hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.
15.2 Each Guarantor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to each Guarantor at its address set forth opposite its signature
below, such service to become effective 5 days after such mailing. Nothing
herein shall affect the right of any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any Guarantor in any other jurisdiction.
15.3 Each Guarantor hereby irrevocably waives any objection it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Subsidiary Guarantee
brought in the courts referred to above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient forum.
16. Each Guarantor hereby:
(a) waives any right to require any Lender to (i) proceed against
the Borrower, any other guarantor or any other party, (ii) proceed against
or
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SUBSIDIARY GUARANTEE
exhaust any security held from the Borrower, any other guarantor or any
other party or (iii) pursue any other remedy in the Lenders' power
whatsoever;
(b) waives any defense based on or arising out of any defense of
the Borrower, any other guarantor or any other party other than payment in
full of the Guaranteed Obligations, including, without limitation, any
defense based on or arising out of the disability of the Borrower, any
other guarantor or any other party, the absence of any other party in any
proceeding or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the
liability of the Borrower other than payment in full of the Guaranteed
Obligations;
(c) agrees that the Lenders may, at their election, foreclose on
any security held by them by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to
the extent such sale is permitted by applicable law), or exercise any other
right or remedy the Lenders may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder, and waives any defense arising out of
any such election by the Lenders, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other
right or remedy of any Guarantor against the Borrower or any other party or
any security;
(d) waives all presentments, demands for performance, protests
and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Subsidiary Guarantee, and notices of the existence, creation or incurring
of new or additional indebtedness;
(e) assumes all responsibility for being and keeping itself
informed of the financial condition and assets of the Borrower, and of all
other circumstances bearing upon the risk of non-payment of the Guaranteed
Obligations and the nature, scope and extent of the risks such Guarantor
assumes and incurs hereunder, and agrees that the Lenders shall have no
duty to advise the Guarantors of information known to it regarding such
circumstances or risks;
(f) so long as any of the Guaranteed Obligations remain unpaid,
each Guarantor hereby agrees that it will not claim and hereby irrevocably
waives for such period all rights of subrogation it may at any time
otherwise have as a result of this Subsidiary Guarantee (whether
contractual, under
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SUBSIDIARY GUARANTEE
Section 509 of the United States Bankruptcy Code, or otherwise) to the
claims of the Lenders against the Borrower or any other guarantor of the
Guaranteed Obligations (collectively, the "Other Parties") and all
contractual, statutory or common law rights of reimbursement, contribution
or indemnity from any Other Party it may at any time otherwise have as a
result of this Subsidiary Guarantee;
(g) waives any right to enforce any other remedy that the Lenders
now have or may hereafter have against any Other Party, any endorser or any
other guarantor of all or any part of the Guaranteed Obligations and any
benefit of, and any right to participate in, any security or collateral
given to or for the benefit of the Lenders to secure payment of Guaranteed
Obligations; and
(h) waives all claims (as such term is defined in the United
States Bankruptcy Code) it may at any time otherwise have against the
Borrower arising from any transaction whatsoever, including, without
limitation, its right to assert or enforce any such claims.
Each Guarantor warrants and agrees that each of the waivers set forth in this
Subsidiary Guarantee is made with full knowledge of its significance and
consequences and that if any of such waivers are determined to be contrary to
any applicable law or public policy, such waivers shall be effective only to the
maximum extent permitted by law.
17. Any rights of any Guarantor, whether now existing or later
arising, to receive payment on account of any indebtedness (including interest)
owed to it by Borrower or to receive any payment from Borrower shall at all
times be subordinate as to lien and time of payment and in all other respects to
the full and prior repayment of the Guaranteed Obligations and any obligations
under the Other Corporate Loan Documents. The Guarantors shall not be entitled
to enforce or receive payment of any sums hereby subordinated until the
Guaranteed Obligations and any obligations under the Other Corporate Loan
Documents have been paid and performed in full and any such sums received in
violation of this Guarantee shall be received by the Guarantors in trust for the
Administrative Agent and the Lenders.
18. In order to provide for just and equitable contribution among the
Guarantors, the Guarantor agrees, that in the event any payment or distribution
is made by any other Guarantor (a "Funding Guarantor") under its Guarantee, such
Funding Guarantor shall be entitled to a contribution from all other Guarantors,
including the Guarantor, in a pro rata amount based on the Adjusted Net Assets
of
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SUBSIDIARY GUARANTEE
each Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Obligations of
the Borrower, and the Guarantor agrees (i) to cooperate with the other
Guarantors to determine whether such contributions are required and (ii) to make
such contribution, if the Guarantors agree that such contribution is required by
the Guarantor. "Adjusted Net Assets" of such Guarantor at any date shall mean
the lesser of (x) the amount by which the fair value of the property of such
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date (other than liabilities
of such Guarantor subject to a Subordination Agreement)), but excluding
liabilities under the Guarantee, of such Guarantor at such date and (y) the
amount by which the present fair salable value of the assets of such Guarantor
at such date exceeds the amount that will be required to pay the probable
liabilities of such Guarantor on its debts, excluding debt in respect of the
Guaranty of such Guarantor, as they become absolute and matured.
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SUBSIDIARY GUARANTEE
IN WITNESS WHEREOF, each Guarantor has caused this Subsidiary
Guarantee to be executed and delivered as of the date first above written.
Fred Meyer Stores, Inc.
Roundup Co.
Fred Meyer of Alaska, Inc.
Fred Meyer of California, Inc.
Distribution Trucking Company
B & B Stores, Inc.
B&B Pharmacy, Inc.
CB&S Advertising Agency, Inc.
FM Holding Corporation.
Grand Central, Inc.
F M Retail Services, Inc.
Fred Meyer Jewelers, Inc.
Merksamer Jewelers, Inc.
FM Inc.
J H Properties, Inc.
Compare, Inc.
Richie's, Inc.
Quality Food Centers, Inc.
Hughes Markets, Inc.
Hughes Realty, Inc.
KU Acquisition Corporation
Second Story, Inc.
Quality Food, Inc.
Quality Food Holdings, Inc.
QFC Sub, Inc.
Natur Glo, Inc.
Western Property Investment Group, Inc.
ROGER A. COOKE
By: ------------------------------
Name: Roger A. Cooke
Title: Vice President and Secretary
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SUBSIDIARY GUARANTEE
Smith's Food & Drug Centers, Inc.
Smith's Beverage of Wyoming
Smitty's Supermarkets, Inc.
Smitty's Super Valu, Inc.
Saint Lawrence Holding Company
Smitty's Equipment Leasing, Inc.
Food 4 Less Holdings, Inc.
Ralphs Grocery Company
Falley's, Inc.
Cala Co.
Bay Area Warehouse Stores, Inc.
Cala Foods, Inc.
Bell Markets, Inc.
Food 4 Less of Southern California, Inc.
Alpha Beta Company
Food 4 Less GM, Inc.
Food 4 Less Merchandising, Inc.
Food 4 Less of California, Inc.
Crawford Stores, Inc.
ROGER A. COOKE
All By: ------------------------------
Name: Roger A. Cooke
Title: Vice President and Secretary
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SUBSIDIARY GUARANTEE
Treasure Valley Land Company, L.C.
By Smith's Food and Drug Centers, Inc., member
ROGER A. COOKE
By: ------------------------------
Name: Roger A. Cooke
Title: Vice President and Secretary
S-3