Exhibit 1.1.1
PRICING AGREEMENT
BANC ONE CAPITAL MARKETS, INC.
J.P. MORGAN SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
SALOMON SMITH BARNEY INC.
BNY CAPITAL MARKETS, INC.
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
THE ROYAL BANK OF SCOTLAND PLC
U.S. BANCORP PIPER JAFFRAY INC.
THE WILLIAMS CAPITAL GROUP, L.P.
As Representatives of the several
Underwriters named in Schedule II hereto,
January 21, 2003
Dear Sirs:
The Kroger Co., an Ohio corporation (the "Company"), and the Guarantors on
Schedule I and on the signature pages hereto propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated January 21,
2003 (the "Underwriting Agreement"), to issue and sell to the Underwriters named
in Schedule II hereto (the "Underwriters") the Securities (the "Designated
Securities") and related Guarantees specified in Schedule III hereto. Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities and related Guarantees. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of each of the
Underwriters of the Designated Securities and related Guarantees pursuant to
Section 12 of the Underwriting Agreement and the address of the Representatives
referred to in such Section 12 are set forth at the end of Schedule III hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities and
related Guarantees, in the form heretofore delivered to you is now proposed to
be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters, and under other terms and
conditions set forth in Schedule III hereto, the principal amount of Designated
Securities set forth opposite the name of such Underwriter in Schedule II
hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us thirteen counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Company and each of the Guarantors. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very Truly Yours,
THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Designated Securities
By:
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Name: Paul W. Heldman
Title: Senior Vice President/President/
Vice President
QUEEN CITY ASSURANCE, INC.
as Guarantor of the Designated Securities
RJD ASSURANCE, INC.
as Guarantor of the Designated Securities
VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Designated Securities
By:
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Name: Bruce M. Gack
Title: Senior Vice President/Vice President
RICHIE'S INC., as Guarantor of the Designated
Securities
By:
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Name: Paul Schweitzer
Title: President
ROCKET NEWCO, INC.
as Guarantor of the Designated Securities
HENPIL, INC.
as Guarantor of the Designated Securities
By:
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Name: Paul Schweitzer
Title: Vice President
Banc One Capital Markets, Inc.
J.P. Morgan Securities Inc.
Banc of America Securities LLC
Salomon Smith Barney Inc.
BNY Capital Markets, Inc.
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
The Royal Bank of Scotland plc
U.S. Bancorp Piper Jaffray Inc.
The Williams Capital Group, L.P.
By:
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(Banc One Capital Markets, Inc.)
On behalf of each of the Underwriters
By:
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(J.P. Morgan Securities Inc.)
On behalf of each of the Underwriters
SCHEDULE I
Name of Guarantor State of Organization
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Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
F4L L.P. Ohio
FM, Inc. Utah
FMJ, Inc. Delaware
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. California
Fred Meyer Stores, Inc. Delaware
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
The Kroger Co. of Michigan Michigan
Kroger Dedicated Logistics Co. Ohio
Kroger Group Cooperative, Inc. Ohio
Kroger Limited Partnership I Ohio
Kroger Limited Partnership II Ohio
Kroger Texas L.P. Ohio
Kwik Shop, Inc. Kansas
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Name of Guarantor State of Organization
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Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Turkey Hill, L.P. Pennsylvania
Wells Aircraft, Inc. Kansas
SCHEDULE II
UNDERWRITER PRINCIPAL AMOUNT OF 5.50% SENIOR
NOTES DUE 2013 TO BE PURCHASED
Banc One Capital Markets, Inc. $108,125,000
J.P. Morgan Securities Inc. $108,125,000
Banc of America Securities LLC $108,125,000
Salomon Smith Barney Inc. $108,125,000
BNY Capital Markets, Inc. $15,000,000
Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A. $15,000,000
The Royal Bank of Scotland plc $15,000,000
U.S. Bancorp Piper Jaffray Inc. $15,000,000
The Williams Capital Group, L.P. $7,500,000
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Total $500,000,000
SCHEDULE III
TITLE OF DESIGNATED SECURITIES:
5.50% Senior Notes due 2013
AGGREGATE PRINCIPAL AMOUNT:
$500,000,000 of 5.50% Senior Notes due 2013
PRICE TO PUBLIC:
99.809% of the principal amount of the 5.50% Senior Notes due 2013, plus
accrued interest from January 28, 2003.
PURCHASE PRICE BY UNDERWRITERS:
99.159% of the principal amount of the 5.50% Senior Notes due 2013, plus
accrued interest from January 28, 2003.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately available funds
INDENTURE:
Indenture dated as of June 25, 1999, between the Company, the Guarantors
and Firstar Bank, National Association, as Trustee, as supplemented by the
First Supplemental Indenture, dated June 25, 1999, the Second Supplemental
Indenture, dated June 25, 1999, the Third Supplemental Indenture, dated
June 25, 1999, the Fourth Supplemental Indenture, dated September 22, 1999,
the Fifth Supplemental Indenture, dated September 22, 1999, the Sixth
Supplemental Indenture, dated September 22, 1999, the Seventh Supplemental
Indenture, dated February 11, 2000, the Eighth Supplemental Indenture,
dated February 11, 2000, the Ninth Supplemental Indenture, dated August 21,
2000, the Tenth Supplemental Indenture, dated May 11, 2001, the Eleventh
Supplemental Indenture, dated May 11, 2001, the Twelfth Supplemental
Indenture, dated August 16, 2001, the Thirteenth Supplemental Indenture,
dated April 3, 2002, the Fourteenth Supplemental Indenture dated June 17,
2002 and the Fifteenth Supplemental Indenture dated January 28, 2003.
MATURITY:
The 5.50% Senior Notes due 2013 will mature on February 1, 2013.
INTEREST RATES:
The 5.50% Senior Notes due 2013 will bear interest from January 28, 2003 at
5.50%.
INTEREST PAYMENT DATES:
Interest on the 5.50% Senior Notes due 2013 is payable semiannually on
February 1 and August 1 of each year commencing on August 1, 2003.
REDEMPTION PROVISIONS:
As described in the Prospectus Supplement dated January 21, 2003.
SINKING FUND PROVISION:
No sinking fund provisions.
DEFEASANCE PROVISIONS:
As described in the Prospectus Supplement dated January 21, 2003.
GUARANTEES:
Guaranteed by the Guarantors set forth on the signature pages and Schedule
I to the Pricing Agreement.
TIME OF DELIVERY:
January 28, 2003
CLOSING LOCATION:
Offices of Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza,
New York, New York 10004
NAME AND ADDRESS OF REPRESENTATIVES:
Banc One Capital Markets, Inc.
1 Banc One Plaza - 8th Floor
Chicago, Illinois 60670
J.P. Morgan Securities Inc.
270 Park Avenue
New York, New York 10017