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Exhibit 4.3
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THE KROGER CO.
AND THE GUARANTORS NAMED HEREIN
TO
FIRSTAR BANK, NATIONAL ASSOCIATION
Trustee
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SECOND SUPPLEMENTAL INDENTURE
Dated as of June 25, 1999
TO
INDENTURE
Dated as of June 25, 1999
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7.70% SENIOR NOTES DUE 2029
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TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS
Section 101. Definitions.................................................... 2
ARTICLE TWO
SECURITY FORMS
Section 201. Form of Securities of this Series.............................. 10
Section 202. Form of Face of Security....................................... 11
Section 203. Form of Reverse of Security.................................... 20
Section 204. Form of Guarantee.............................................. 25
Section 205. Global Securities.............................................. 29
ARTICLE THREE
TRANSFER AND EXCHANGE
Section 301. Transfer and Exchange.......................................... 31
ARTICLE FOUR
THE SERIES OF SECURITIES
Section 401. Title and Terms................................................ 34
ARTICLE FIVE
MODIFICATIONS AND ADDITIONS TO THE INDENTURE
Section 501. Modifications to the Consolidation, Merger, Conveyance,
Transfer or Lease Provisions................................... 36
Section 502. Other Modifications............................................ 37
Section 503. Additional Covenants; Defeasance and Covenant Defeasance....... 38
Section 504. Redemption of Securities....................................... 47
ARTICLE SIX
GUARANTEE
Section 601. Guarantee...................................................... 47
Section 602. Waiver of Demand............................................... 48
Section 603. Guarantee of Payment........................................... 49
Section 604. No Discharge or Diminishment of Guarantee...................... 49
Section 605. Defenses of Company Waived..................................... 49
Section 606. Continued Effectiveness........................................ 49
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Section 607. Subrogation.................................................... 50
Section 608. Information.................................................... 50
Section 609. Subordination.................................................. 50
Section 610. Termination.................................................... 51
Section 611. Guarantees of Other Indebtedness............................... 51
Section 612. Additional Guarantors.......................................... 51
Section 613. Limitation of Guarantor's Liability............................ 52
Section 614. Contribution from Other Guarantors............................. 52
Section 615. No Obligation to Take Action Against the Company............... 52
Section 616. Dealing with the Company and Others............................ 52
Section 617. Execution and Delivery of the Guarantee........................ 53
ARTICLE SEVEN
MISCELLANEOUS
Section 701. Miscellaneous.................................................. 54
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SECOND SUPPLEMENTAL INDENTURE, dated as of June 25, 1999, among The Kroger
Co., a corporation duly organized and existing under the laws of the State of
Ohio (herein called the "Company"), having its principal office at 1014 Vine
Street, Cincinnati, Ohio 45202, the guarantors listed on the signature pages and
Schedule I hereto (each, a "Guarantor") and Firstar Bank, National Association,
a banking corporation duly organized and existing under the laws of the State of
Ohio, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore executed and delivered to the Trustee an
Indenture dated as of June 25, 1999 (the "Indenture"), providing for the
issuance from time to time of the Company's unsecured debentures, securities or
other evidences of indebtedness (herein and therein called the "Securities"), to
be issued in one or more series as in the Indenture provided.
Section 201 of the Indenture permits the form of the Securities of any
series to be established pursuant to an indenture supplemental to the Indenture.
Section 301 of the Indenture permits the terms of the Securities of any
series to be established in an indenture supplemental to the Indenture.
Section 901(7) of the Indenture provides that, without the consent of any
Holders, the Company, when authorized by a Board Resolution, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental to the Indenture for the purpose of establishing the form or terms
of Securities of any series as permitted by Sections 201 and 301 of the
Indenture.
Section 901(9) of the Indenture provides that, without the consent of any
Holders, the Company, when authorized by a Board Resolution, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental to the Indenture to make any other provisions with respect to
matters or questions arising under the Indenture, provided that such action
shall not adversely affect the interests of the Holders of Securities of any
series in any material respect.
Each of the Guarantors has duly authorized the issuance of a guarantee of
the Securities, as set forth herein, and to provide therefor, each of the
Guarantors has duly authorized the execution and delivery of this Second
Supplemental Indenture.
The Company and the Guarantors, pursuant to the foregoing authority,
propose in and by this Second Supplemental Indenture to establish the terms and
form of the Securities of a new series and to amend and supplement the Indenture
in certain respects with respect to the Securities of such series.
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All things necessary to make this Second Supplemental Indenture a valid
agreement of the Company and the Guarantors, and a valid amendment of and
supplement to the Indenture, have been done.
NOW, THEREFORE, THIS Second Supplemental Indenture WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities of the series to be created hereby, as
follows:
ARTICLE ONE
DEFINITIONS
Section 101. DEFINITIONS.
(a) For all purposes of this Second Supplemental Indenture:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Second
Supplemental Indenture and, where so specified, to the Articles and
Sections of the Indenture as supplemented by this Second Supplemental
Indenture; and
(3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and
"herewith" refer to this Second Supplemental Indenture.
(b) For all purposes of the Indenture and this Second Supplemental
Indenture, with respect to the Securities of the series created hereby, except
as otherwise expressly provided or unless the context otherwise requires:
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the rate per annum equal to the semi-annual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption Date.
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"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, Euroclear and
Cedel, in each case to the extent applicable to such transaction and as in
effect at the time of such transfer or transaction.
"Attributable Debt" means, in connection with a Sale and Lease-Back
Transaction, as of any particular time, the aggregate of present values
(discounted at a rate per annum equal to the interest rate borne by the
Securities of the series created by this Second Supplemental Indenture) of
the obligations of the Company or any Restricted Subsidiary for net rental
payments during the remaining primary term of the applicable lease,
calculated in accordance with generally accepted accounting principles. The
term "net rental payments" under any lease for any period shall mean the
sum of the rental and other payments required to be paid in such period by
the lessee thereunder, not including, however, any amounts required to be
paid by such lessee (whether or not designated as rental or additional
rental) on account of maintenance and repairs, reconstruction, insurance,
taxes, assessments, water rates, operating and labor costs or similar
charges required to be paid by such lessee thereunder or any amounts
required to be paid by such lessee thereunder contingent upon the amount of
sales, maintenance and repairs, reconstruction, insurance, taxes,
assessments, water rates or similar charges.
"Book-Entry Security" means any Global Securities bearing the legend
specified in Section 202 evidencing all or part of a series of Securities,
authenticated and delivered to the Depositary for such series or its
nominee, and registered in the name of such Depositary or nominee.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in New York City or Cincinnati, Ohio are
authorized or obligated by law or executive order to close.
"Capital Lease" means any lease of property which, in accordance with
generally accepted accounting principles, should be capitalized on the
lessee's balance sheet or for
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which the amount of the asset and liability thereunder as if so capitalized
should be disclosed in a note to such balance sheet; and "Capitalized Lease
Obligation" means the amount of the liability which should be so
capitalized or disclosed.
"Cedel" means Cedel, S.A. (or any successor securities clearing
agency).
"Commission" means the United States Securities and Exchange
Commission.
"Comparable Treasury Issue" means the United States Treasury security
selected by a Quotation Agent as having a maturity comparable to the
remaining term of the Securities to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity
to the remaining term of such Securities.
"Comparable Treasury Price" means, with respect to any Redemption
Date, (i) the average of the Reference Treasury Dealer Quotations, after
excluding the highest and lowest such Reference Treasury Dealer Quotations
for such Redemption Date, or (ii) if the Trustee obtains fewer than three
such Reference Treasury Dealer Quotations, the average of all such
Quotations.
"Consolidated Net Tangible Assets" means, for the Company and its
Subsidiaries on a consolidated basis determined in accordance with
generally accepted accounting principles, the aggregate amounts of assets
(less depreciation and valuation reserves and other reserves and items
deductible from gross book value of specific asset accounts under generally
accepted accounting principles) which under generally accepted accounting
principles would be included on a balance sheet after deducting therefrom
(a) all liability items except deferred income taxes, commercial paper,
short-term bank Indebtedness, Funded Indebtedness, other long-term
liabilities and shareholders' equity and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, which in each case would be so included on such balance sheet.
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"Credit Facility" means any credit agreement, loan agreement or credit
facility, whether syndicated or not, involving the extension of credit by
banks or other credit institutions, entered into by the Company or Fred
Meyer, Inc. and outstanding on the date of this Second Supplemental
Indenture, and any refinancing or other restructuring of such agreement or
facility.
"Depositary" means, with respect to the Securities issued in the form
of one or more Book-Entry Securities, The Depository Trust Company ("DTC"),
its nominees and successors, or another Person designated as Depositary by
the Company, which must be a clearing agency registered under the Exchange
Act.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Exchange Act" means the Securities Exchange Act of 1934 or any
successor statute, and the rules and regulations promulgated by the
Commission thereunder.
"Exchange Offer" means the exchange offer by the Company of Series B
Securities for Series A Securities to be effected pursuant to the
Registration Rights Agreement.
"Exchange Offer Registration Statement" means the registration
statement under the Securities Act contemplated by the Registration Rights
Agreement.
"Funded Indebtedness" means any Indebtedness maturing by its terms
more than one year from the date of the determination thereof, including
(i) any Indebtedness having a maturity of 12 months or less but by its
terms renewable or extendible at the option of the obligor to a date later
than 12 months from the date of the determination thereof and (ii) rental
obligations payable more than 12 months from the date of determination
thereof under Capital Leases (such rental obligations to be included as
Funded Indebtedness at the amount so capitalized at the date of such
computation and to be included for the purposes of the definition of
Consolidated Net Tangible Assets both as an asset and as Funded
Indebtedness at the amount so capitalized).
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"Global Securities" means the Rule 144A Global Securities, the
Regulation S Global Securities and the Series B Global Securities to be
issued as Book-Entry Securities issued to the Depositary in accordance with
Section 205 hereof.
"Holder" means any holder of any security pursuant to, and in
accordance with, the terms of the Indenture.
"Initial Purchaser" means each of Goldman, Sachs & Co., Banc One
Capital Markets, Inc., Banc of America Securities LLC, Chase Securities
Inc. and Solomon Smith Barney Inc.
"Initial Securities" has the meaning stated in Section 401 hereof.
"Non-Restricted Subsidiary" means any Subsidiary that the Company's
Board of Directors has in good faith declared pursuant to a written
resolution not to be of material importance, either singly or together with
all other Non-Restricted Subsidiaries, to the business of the Company and
its consolidated Subsidiaries taken as a whole.
"Non-U.S. Person" means a Person who is not a "U.S. Person" as defined
in Regulation S under the Securities Act.
"Obligations" has the meaning stated in Section 601 hereof.
"Operating Assets" means all merchandise inventories, furniture,
fixtures and equipment (including all transportation and warehousing
equipment but excluding office equipment and data processing equipment)
owned or leased pursuant to Capital Leases by the Company or a Restricted
Subsidiary.
"Operating Property" means all real property and improvements thereon
owned or leased pursuant to Capital Leases by the Company or a Restricted
Subsidiary and constituting, without limitation, any store, warehouse,
service center or distribution center wherever located, provided that such
term shall not include any store, warehouse, service center or distribution
center which the Company's Board of Directors declares by written
resolution not to be of material
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importance to the business of the Company and its Restricted Subsidiaries.
"Private Placement Legend" has the meaning stated in Section 202
hereof.
"Prospectus" means the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any
portion of the Series A Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means (i) Goldman, Sachs & Co. and its
successors; provided, however, that if the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the
Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Company, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m. on the third Business Day preceding such Redemption Date.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement, dated as of June 25, 1999, by and among the Company, the
Guarantors and the Initial Purchasers, as such agreement may be amended,
modified or supplemented from time to time.
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"Registration Statement" means any registration statement of the
Company and the Guarantors which covers any of the Series A Securities (and
related guarantees) or Series B Securities (and related guarantees)
pursuant to the provisions of the Registration Rights Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Regulation S" means Regulation S promulgated under the Securities Act
or any successor rule or regulation substantially to the same effect.
"Regulation S Global Security" means one or more permanent Global
Securities in registered form representing the aggregate principal amount
of Securities sold in reliance on Regulation S under the Securities Act.
"Restricted Period" has the meaning stated in Section 201 hereof.
"Restricted Subsidiaries" means all Subsidiaries other than
Non-Restricted Subsidiaries.
"Rule 144" means Rule 144 promulgated under the Securities Act, any
successor rule or regulation to substantially the same effect or any
additional rule or regulation under the Securities Act that permits
transfers of restricted securities without registration such that the
transferee thereof holds securities that are freely tradable under the
Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act or
any successor rule or regulation to substantially the same effect.
"Rule 144A Global Securities" means one or more permanent Global
Securities in registered form representing the aggregate principal amount
of Securities sold in reliance on Rule 144A under the Securities Act.
"Sale and Lease-Back Transaction" has the meaning specified in Section
1010.
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"Securities" has the meaning stated in Section 401 hereof.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Series A Security" has the meaning stated in Section 401 hereof.
"Series B Security" has the meaning stated in Section 401 hereof.
"Series B Global Securities" means one or more permanent Global
Securities in registered form representing the aggregate principal amount
of Series B Securities exchanged for Series A Securities pursuant to the
Exchange Offer.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company and the Guarantors pursuant to the Registration Rights
Agreement, which covers all of the Registrable Securities (as defined in
the Registration Rights Agreement) on an appropriate form under Rule 415
under the Securities Act, or any similar rule that may be adopted by the
Commission, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Subsidiary" means (i) any corporation or other entity of which
securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by the
Company and/or one or more Subsidiaries or (ii) any partnership of which
more than 50% of the partnership interest is owned by the Company or any
Subsidiary.
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ARTICLE TWO
SECURITY FORMS
Section 201. FORM OF SECURITIES OF THIS SERIES.
The Securities of this series shall be in the form set forth in this
Article. Initial Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more Rule 144A Global Securities,
substantially in the form set forth in Section 202, deposited upon issuance with
the Trustee, as custodian for the Depositary, registered in the name of the
Depositary or its nominee, in each case for credit to an account of a direct or
indirect participant of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Rule 144A Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold in reliance on Regulation S shall be
initially issued in the form of one or more Regulation S Global Securities,
substantially in the form set forth in Section 202, deposited upon issuance with
the Trustee, as custodian for the Depositary, registered in the name of the
Depositary or its nominee, in each case for credit by the Depositary to an
account of a direct or indirect participant of the Depositary, duly executed by
the Company and authenticated by the Trustee as hereinafter provided; provided,
however, that upon such deposit through and including the 40th day after the
later of the commencement of the offering of the Securities and the original
issue date of the Securities (such period through and including such 40th day,
the "Restricted Period"), all such Securities shall be credited to or through
accounts maintained at the Depositary by or on behalf of Euroclear or Cedel
unless exchanged for interests in the Rule 144A Global Securities in accordance
with the transfer and certification requirements described below. The aggregate
principal amount of the Regulation S Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Series B Securities exchanged for Series A Securities shall be issued
initially in the form of one or more Series B Global Securities, substantially
in the form set forth in Section 202, deposited upon issuance with the Trustee,
as custodian for the Depositary, registered in the name of the Depositary or its
nominee, in each case for credit to an account of a direct or indirect
participant of the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of the
Series B Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
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Section 202. FORM OF FACE OF SECURITY.
(a) The form of the face of any Series A Securities authenticated and
delivered hereunder shall be substantially as follows:
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for a
Series B Security in connection with an effective Registration Statement,
in each case pursuant to the Registration Rights Agreement, then such
Initial Security which is a Rule 144A Global Security and such Initial
Security which is a Regulation S Global Security shall each bear the
respective legend set forth below (a "Private Placement Legend") on the
face thereof:
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[Legend if Rule 144A Global Security]
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OF FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH
RULE 903 OR RULE 904 OF REGULATIO S UNDER THE SECURITIES ACT, (3) TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
[Legend if Regulation S Global Security]
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD,
OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
ANY U.S. PERSON, UNLESS THE NOTES ARE REGISTERED UNDER THE SECURITIES ACT
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.
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[Legend if Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE KROGER CO.
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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THE KROGER CO.
7.70% Senior Notes due 2029, Series A
CUSIP No.__________
No. ......... $.........
The Kroger Co., a corporation duly organized and existing under the laws of
the State of Ohio (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ......................, or registered
assigns, the principal sum of ............................ Dollars on June 1,
2029, and to pay interest thereon from June 25, 1999 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
semi-annually on June 1 and December 1 in each year, commencing December 1,
1999, at the rate of interest of 7.70% per annum, subject to adjustment as
described in the next paragraph until the principal hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the May 15 or November 15 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
The Holder of this Series A Security is entitled to the benefits of the
Registration Rights Agreement among the Company, the Guarantors and the Initial
Purchasers, dated June 25, 1999, pursuant to which, subject to the terms and
conditions thereof, the Company and the Guarantors are obligated to consummate
the Exchange Offer pursuant to which the Holder of this Security (and the
related Guarantees) shall have the right to exchange this Security (and the
related Guarantees) for 7.70% Senior Notes due 2029, Series B and related
guarantees (herein called the "Series B Securities") in like principal amount as
provided therein. In addition, the Company and the Guarantors have agreed to use
their reasonable efforts to register the Securities for resale under the
Securities Act through a Shelf Registration Statement in the event that the
Exchange Offer is not consummated within 225 calendar days after the original
issue of
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the Securities or under certain other circumstances. The Series A Securities and
the Series B Securities are together (including related Guarantees) referred to
as the "Securities." The Series A Securities rank pari passu in right of payment
with the Series B Securities.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to the 90th calendar day following the
date of original issue of the Series A Securities, (b) the Shelf Registration
Statement is not filed with the Commission on or prior to the date is was
required to be filed in accordance with the terms of the Registration Rights
Agreement, (c) the Exchange Offer Registration Statement is not declared
effective within 180 days following the date of the original issue of the Series
A Securities, (d) a Shelf Registration Statement required to be filed is not
declared effective on or prior to 120 days after it was filed, (e) the Exchange
Offer is not consummated on or prior to the 225th calendar day following the
date of original issue of the Series A Securities, or (f) the Exchange Offer
Registration Statement or the Shelf Registration Statement is filed and declared
effective but shall thereafter either be withdrawn or become subject to an
effective stop order suspending its effectiveness (except as specifically
permitted in the Registration Rights Agreement) without being succeeded
immediately by an additional registration statement which becomes effective
(each such event referred to in clauses (a) through (f) above, a "Registration
Default"), the interest rate borne by the Series A Securities shall be increased
by one-quarter of one percent per annum upon the occurrence of any Registration
Default, which rate (as increased as aforesaid) will increase by an additional
one-quarter of one percent each 90-day period that such additional interest
continues to accrue under any such circumstance, with an aggregate maximum
increase in the interest rate equal to one percent (1%) per annum. Immediately
following the cure of a Registration Default the accrual of additional interest
with respect to that particular Registration Default will cease.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in Cincinnati, Ohio, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
In the case where any Interest Payment Date or the maturity date of this
Security does not fall on a Business Day, payment of interest or principal
otherwise payable on such day need not be made on such day, but may be made on
the next succeeding Business Day with the same form and effect as if made on
such Interest Payment Date or the maturity date of this Security.
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Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
THE KROGER CO.
By......................................
Attest:
........................................
-16-
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(b) The form of the face of any Series B Securities authenticated and
delivered hereunder shall be substantially as follows:
[Legend if Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE KROGER CO.
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
-17-
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THE KROGER CO.
7.70% Senior Notes due 2029, Series B
CUSIP No. 501044B59
No. ........ $........
The Kroger Co., a corporation duly organized and existing under the laws of
the State of Ohio (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to .............................., or
registered assigns, the principal sum of .....................................
Dollars on June 1, 2029, and to pay interest thereon from June 25, 1999 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on June 1 and December 1 in each year, commencing
December 1, 1999, at the rate of interest of 7.70% per annum until the principal
hereof is paid or made available for payment, provided that to the extent
interest has not been paid or duly provided for with respect to the Series A
Security exchanged for this Series B Security, interest on this Series B
Security shall accrue from the most recent Interest Payment Date to which
interest on the Series A Security which was exchanged for this Series B Security
has been paid or duly provided for. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the May 15 or November 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
This Series B Security was issued pursuant to the Exchange Offer pursuant
to which the 7.70% Senior Notes due 2029, Series A, and related Guarantees
(herein called the "Series A Securities") in like principal amount were
exchanged for the Series B Securities and related Guarantees. The Series B
Securities rank pari passu in right of payment with the Series A Securities.
For any period in which the Series A Security exchanged for this Series B
Security was outstanding, in the event that (a) the Exchange Offer Registration
Statement
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shall not have been filed with the Commission on or prior to the 90th calendar
day following the date of original issue of the Series A Securities, (b) the
Shelf Registration Statement shall not have been filed with the Commission on or
prior to the date is was required to be filed in accordance with the terms of
the Registration Rights Agreement, (c) the Exchange Offer Registration Statement
shall not have been declared effective within 180 days following the date of the
original issue of the Series A Securities, (d) a Shelf Registration Statement
required to be filed shall not have been declared effective on or prior to 120
days after it was filed, (e) the Exchange Offer shall not have been consummated
on or prior to the 225th calendar day following the date of original issue of
the Series A Securities, or (f) the Exchange Offer Registration Statement or the
Shelf Registration Statement shall have been filed and declared effective but
shall thereafter be withdrawn or become subject to an effective stop order
suspending its effectiveness (except as specifically permitted in the
Registration Rights Agreement) without being succeeded immediately by an
additional registration statement which becomes effective (each such event
referred to in clauses (a) through (f) above, a "Registration Default"), the
interest rate borne by the Series A Securities shall have increased by
one-quarter of one percent per annum upon the occurrence of any Registration
Default, which rate (as increased as aforesaid) shall have increased by an
additional one-quarter of one percent each 90-day period that such additional
interest continued to accrue under any such circumstance, with an aggregate
maximum increase in the interest rate equal to one percent (1%) per annum.
Immediately following the cure of a Registration Default the accrual of
additional interest with respect to that particular Registration Default shall
have ceased; provided, however, that, if after any such reduction in interest
rate, a different event specified in clause (a) through (e) shall have occurred,
the interest rate again shall have increased pursuant to the foregoing
provisions. To the extent that interest at such increased rate shall not have
been paid or duly provided for with respect to the Series A Security exchanged
for this Series B Security, interest on this Series B Security shall accrue at
such increased rate, from the most recent Interest Payment Date to which
interest at such increased rate on the Series A Security exchanged for this
Series B Security has been paid or duly provided for, to the date on which the
particular Registration Default shall have been cured.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in Cincinnati, Ohio, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
In the case where any Interest Payment Date or the maturity date of this
Security does not fall on a Business Day, payment of interest or principal
otherwise payable on such day need not be made on such day, but may be made on
the next
-19-
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succeeding Business Day with the same form and effect as if made on such
Interest Payment Date or the maturity date of this Security.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
THE KROGER CO.
By......................................
Attest:
........................................
Section 203. FORM OF REVERSE OF SECURITY.
(a) The form of the reverse of the Series A Securities shall be
substantially as follows:
This Security is one of a duly authorized issue of Securities of the
Company (herein called the "Securities") issued and to be issued under an
Indenture dated as of June 25, 1999 between the Company and Firstar Bank,
National Association, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), as supplemented by the
Second Supplemental Indenture dated as of June 25, 1999 (as so
supplemented, herein called the "Indenture"), between the Company, the
Guarantors named therein and the Trustee, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Guarantors named therein, the Trustee and
the Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered. This Security is one of
the series designated on the face hereof, limited in aggregate principal
amount to $300,000,000.
-20-
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The Securities of this series will be redeemable, in whole or in part,
at the option of the Company at any time at a redemption price equal to the
greater of (i) 100% of the principal amount of such Securities or (ii) as
determined by a Quotation Agent, the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the date
of redemption) discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate plus 15 basis points, plus, in each case, accrued
interest thereon to the date of redemption.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of the Securities to
be redeemed. Unless the Company defaults in payment of the redemption
price, on and after the Redemption Date, interest will cease to accrue on
the Securities or portions thereof called for redemption.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Security or (ii) certain restrictive
covenants and Events of Default with respect to this Security, in each case
upon compliance with certain conditions set forth therein.
If an Event of Default shall occur and be continuing, the principal of
all Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities of each series
to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of 50% in aggregate principal
amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series
at the time Outstanding, on behalf of the Holders of all the Securities of
such series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange therefor or in lieu hereof, whether or
not notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing
Event of Default, the Holders of not less than 25%
-21-
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in principal amount of the Outstanding Securities shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in principal amount of the Outstanding Securities a
direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days; PROVIDED, HOWEVER, that such limitations do
not apply to a suit instituted by the Holder hereof for the enforcement of
payment of the principal of (and premium, if any) or any interest on this
Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in
the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of
Securities of like tenor, of a different authorized denomination, as
requested by the Holder surrendering the same.
Except where otherwise specifically provided in the Indenture, no
service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-22-
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(b) The form of the reverse of the Series B Securities shall be
substantially as follows:
This Security is one of a duly authorized issue of Securities of the
Company (herein called the "Securities") issued and to be issued under an
Indenture dated as of June 25, 1999 between the Company and Firstar Bank,
National Association, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), as supplemented by the
Second Supplemental Indenture dated as of June 25, 1999 (as so
supplemented, herein called the "Indenture"), between the Company, the
Guarantors named therein and the Trustee, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities
and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated
on the face hereof, limited in aggregate principal amount to $300,000,000.
The Securities of this series will be redeemable, in whole or in part,
at the option of the Company at any time at a redemption price equal to the
greater of (i) 100% of the principal amount of such Securities or (ii) as
determined by a Quotation Agent, the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not
including any portion of such payments of interest accrued as of the date
of redemption) discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Adjusted Treasury Rate plus 15 basis points, plus, in each case, accrued
interest thereon to the date of redemption.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each holder of the Securities to
be redeemed. Unless the Company defaults in payment of the redemption
price, on and after the Redemption Date, interest will cease to accrue on
the Securities or portions thereof called for redemption.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Security or (ii) certain restrictive
covenants and Events of Default with respect to this Security, in each case
upon compliance with certain conditions set forth therein.
If an Event of Default shall occur and be continuing, the principal of
all Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities of each series
to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of
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50% in aggregate principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders
of all the Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange therefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing
Event of Default, the Holders of not less than 25% in principal amount of
the Outstanding Securities shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a
majority in principal amount of the Outstanding Securities a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days; PROVIDED, HOWEVER, that such limitations do not
apply to a suit instituted by the Holder hereof for the enforcement of
payment of the principal of (and premium, if any) or any interest on this
Security on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in
the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the
Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like
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aggregate principal amount of Securities of like tenor, of a different
authorized denomination, as requested by the Holder surrendering the same.
Except where otherwise specifically provided in the Indenture, no
service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Section 204. FORM OF GUARANTEE.
The form of Guarantee shall be set forth on the Securities substantially as
follows:
GUARANTEE
For value received, each of the undersigned hereby absolutely, fully and
unconditionally and irrevocably guarantees, jointly and severally with each
other Guarantor, to the holder of this Security the payment of principal of,
premium, if any, and interest on this Security upon which this Guarantee is
endorsed in the amounts and at the time when due and payable whether by
declaration thereof, or otherwise, and interest on the overdue principal and
interest, if any, of this Security, if lawful, and the payment or performance of
all other obligations of the Company under the Indenture or the Securities, to
the holder of this Security and the Trustee, all in accordance with and subject
to the terms and limitations of this Security and Article Six of the Second
Supplemental Indenture to the Indenture. This Guarantee will not become
effective until the Trustee duly executes the certificate of authentication on
this Security. This Guarantee shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflict of law
principles thereof.
Dated:
-25-
29
Attest*: The Guarantors listed on Schedule I hereto
By*:
- -------------------------------- ---------------------------------------
Name:
Title:
Attest: HENPIL, INC., as Guarantor of the Securities
WYDIV, INC. , as Guarantor of the Securities
By:
- -------------------------------- ----------------------------------------
Name:
Title:
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Securities
By:
- -------------------------------- ----------------------------------------
Name:
Title:
Attest: KROGER DEDICATED LOGISTICS CO.,
as Guarantor of the Securities
By:
- -------------------------------- ----------------------------------------
Assistant Secretary Name:
Title:
- --------------------------------
*Signing as duly authorized officer for each such Guarantor.
-26-
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Attest: RICHIE'S, INC.,
as Guarantor of the Securities
By:
- -------------------------------- ----------------------------------------
Name:
Title:
-27-
31
SCHEDULE I
GUARANTORS
Name of Guarantor State of Organization
- --------------------------------------------------------------------------------
Dillon Companies, Inc. Kansas
Drug Distributors, Inc. Indiana
Inter-American Foods, Inc. Ohio
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
The Kroger Co. of Michigan Michigan
Kroger Limited Partnership I Ohio (limited partnership)
By: KRGP Inc., the General Partner
Kroger Limited Partnership II Ohio (limited partnership)
By: KRGP Inc., the General Partner
Peyton's-Southeastern, Inc. Tennessee
Rocket Newco, Inc. Texas
Topvalco, Inc. Ohio
City Market, Inc. Colorado
Dillon Real Estate Co., Inc. Kansas
Fry's Leasing Company, Inc. Arizona
Jackson Ice Cream Co., Inc. Kansas
Junior Food Stores of West Florida, Inc. Florida
Kwik Shop, Inc. Kansas
Mini Mart, Inc. Wyoming
Quik Stop Markets, Inc. California
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Turkey Hill, L.P. Pennsylvania (limited partnership)
Wells Aircraft, Inc. Kansas
Fred Meyer, Inc. Delaware
Fred Meyer Stores, Inc. Delaware
CB&S Advertising Agency, Inc. Oregon
Distribution Trucking Company Oregon
FM, Inc. Utah
FM Holding Corporation Delaware
Grand Central, Inc. Utah
FM Retail Services, Inc. Washington
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Jewelers, Inc. Delaware
-28-
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Name of Guarantor State of Organization
- --------------------------------------------------------------------------------
Merksamer Jewelers, Inc. California
Roundup Co. Washington
JH Properties, Inc. Washington
Smith's Food & Drug Centers, Inc. Delaware
Compare, Inc. Delaware
Saint Lawrence Holding Company Delaware
Smith's Beverage of Wyoming, Inc. Wyoming
Smitty's Supermarkets, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Treasure Valley Land Company, L.C. Idaho
Western Property Investment Group, Inc. California
Quality Food Centers, Inc. Washington
Hughes Markets, Inc. California
Hughes Realty, Inc. California
KU Acquisition Corporation Washington
Second Story, Inc. Washington
Quality Food, Inc. Delaware
Quality Food Holdings, Inc. Delaware
QFC Sub, Inc. Washington
Food 4 Less Holdings, Inc. Delaware
Ralphs Grocery Company Delaware
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
Crawford Stores, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less GM, Inc. California
-29-
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Section 205. GLOBAL SECURITIES.
(a) Each Global Security initially shall (i) be registered in the name of
the Depositary for such Global Security or the nominee of such Depositary, (ii)
be deposited with, or on behalf of, the Depositary or with the Trustee as
custodian for such Depositary and (iii) bear legends as set forth in Section
202.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under such Global
Security, and the Depositary may be treated by the Company, the Guarantors, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Guarantors, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or shall
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
Security.
(b) [Intentionally Omitted].
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Trustee, as Security Registrar, for exchange or cancellation
as provided in this Section 205 and the Indenture. If any Global Security is to
be exchanged for other Securities or canceled in part, or if another Security is
to be exchanged in whole or in part for a beneficial interest in any Global
Security, then either (i) such Global Security shall be so surrendered for
exchange or cancellation as provided in this Section 205 and the Indenture or
(ii) the principal amount thereof shall be reduced or increased by an amount
equal to the portion thereof to be so exchanged or canceled, or equal to the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Trustee, as Security Registrar, whereupon the Trustee, in
accordance with the Applicable Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender or adjustment of a Global Security, the Trustee shall,
subject to this Section 205 and the Indenture, authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative
-30-
34
which is given or made pursuant to this Section 205 and the Indenture if such
order, direction or request is given or made in accordance with the Applicable
Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under the
Indenture and the Securities, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members.
ARTICLE THREE
TRANSFER AND EXCHANGE
Section 301. TRANSFER AND EXCHANGE.
(a) CERTAIN TRANSFERS AND EXCHANGES. Transfers and exchanges of Securities
and beneficial interests in a Global Security of the kinds specified in this
Section 301 shall be made only in accordance with this Section 301.
(i) RULE 144A GLOBAL SECURITY TO REGULATION S GLOBAL SECURITY. If the
owner of a beneficial interest in the Rule 144A Global Security wishes at
any time to transfer such interest to a Person who wishes to acquire the
same in the form of a beneficial interest in the Regulation S Global
Security, such transfer may be effected only in accordance with the
provisions of this paragraph and paragraph (iv) below and subject to the
Applicable Procedures. Upon receipt by the Trustee, as Security Registrar,
of (a) an order given by the Depositary or its authorized representative
directing that a beneficial interest in the Regulation S Global Security in
a specified principal amount be credited to a specified Agent Member's
account and that a beneficial interest in the Rule 144A Global Security in
an equal principal amount be debited from another specified Agent Member's
account and (b) a Regulation S Certificate in the form of Exhibit A hereto,
satisfactory to the Trustee and duly executed by the owner of such
beneficial interest in the Rule 144A Global Security or his attorney duly
authorized in writing, then the Trustee, as Security Registrar but subject
to paragraph (iv) below, shall reduce the principal amount of the
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Rule 144A Global Security and increase the principal amount of the
Regulation S Global Security by such specified principal amount as provided
in Section 205(c).
(ii) REGULATION S GLOBAL SECURITY TO RULE 144A GLOBAL SECURITY. If the
owner of a beneficial interest in the Regulation S Global Security wishes
at any time to transfer such interest to a Person who wishes to acquire the
same in the form of a beneficial interest in the Rule 144A Global Security,
such transfer may be effected only in accordance with this paragraph (ii)
and subject to the Applicable Procedures. Upon receipt by the Trustee, as
Security Registrar, of (a) an order given by the Depositary or its
authorized representative directing that a beneficial interest in the Rule
144A Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Regulation S Global Security in an equal principal amount be debited from
another specified Agent Member's account and (b) if such transfer is to
occur during the Restricted Period, a Restricted Securities Certificate in
the form of Exhibit B hereto, satisfactory to the Trustee and duly executed
by the owner of such beneficial interest in the Regulation S Global
Security or his attorney duly authorized in writing, then the Trustee, as
Security Registrar, shall reduce the principal amount of the Regulation S
Global Security and increase the principal amount of the Rule 144A Global
Security by such specified principal amount as provided in Section 205(c).
(iii) EXCHANGES BETWEEN GLOBAL SECURITY AND NON-GLOBAL SECURITY. A
beneficial interest in a Global Security may be exchanged for a Security
that is not a Global Security as provided in Section 301(b), PROVIDED that,
if such interest is a beneficial interest in the Rule 144A Global Security,
or if such interest is a beneficial interest in the Regulation S Global
Security and such exchange is to occur during the Restricted Period, then
such interest shall bear the appropriate Private Placement Legend (subject
in each case to Section 301(b). Securities which are not in global form may
not be exchanged for beneficial interests in any global note unless the
transferor first delivers to the trustee a written certificate to the
effect that the transfer will comply with the appropriate transfer
restrictions applicable to those securities.
(iv) REGULATION S GLOBAL SECURITY TO BE HELD THROUGH EUROCLEAR OR
CEDEL DURING RESTRICTED PERIOD. The Company shall use its reasonable
efforts to cause the Depositary to ensure that, until the expiration of the
Restricted Period, beneficial interests in the Regulation S Global Security
may be held only in or through accounts maintained at the Depositary by
Euroclear or Cedel (or by Agent Members acting for the account thereof),
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and no person shall be entitled to effect any transfer or exchange that
would result in any such interest being held otherwise than in or through
such an account; PROVIDED that this paragraph (iv) shall not prohibit any
transfer or exchange of such an interest in accordance with paragraph (ii)
above.
(b) PRIVATE PLACEMENT LEGENDS. Rule 144A Securities and their Successor
Securities and Regulation S Securities and their Successor Securities shall bear
a Private Placement Legend, subject to the following:
(i) subject to the following clauses of this Section 301(b), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Private Placement Legend borne by such Global Security while represented
thereby;
(ii) subject to the following Clauses of this Section 301(b), a new
Security which is not a Global Security and is issued in exchange for
another Security (including a Global Security) or any portion thereof, upon
transfer or otherwise, shall bear the Private Placement Legend borne by
such other Security;
(iii) Exchange Securities, and all other Securities sold or otherwise
disposed of pursuant to an effective registration statement under the
Securities Act, together with their respective Successor Securities, shall
not bear a Private Placement Legend;
(iv) at any time after the Securities may be freely transferred
without registration under the Securities Act or without being subject to
transfer restrictions pursuant to the Securities Act, a new Security which
does not bear a Private Placement Legend may be issued in exchange for or
in lieu of a Security (other than a Global Security) or any portion thereof
which bears such a legend if the Trustee has received an Unrestricted
Securities Certificate substantially in the form of Exhibit C hereto,
satisfactory to the Trustee and duly executed by the Holder of such
legended Security or his attorney duly authorized in writing, and after
such date and receipt of such certificate, the Trustee shall authenticate
and deliver such a new Security in exchange for or in lieu of such other
Security as provided in this Section 301 and the Indenture;
(v) a new Security which does not bear a Private Placement Legend may
be issued in exchange for or in lieu of a Security (other than a Global
Security) or any portion thereof which bears such a legend if, in the
Company's judgment, placing such a legend upon such new Security is not
necessary to ensure compliance with the registration requirements of the
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Securities Act, and the Trustee, at the direction of the Company, shall
authenticate and deliver such a new Security as provided in this Section
301 and the Indenture; and
(vi) notwithstanding the foregoing provisions of this Section 301(b),
a Successor Security of a Security that does not bear a particular form of
Private Placement Legend shall not bear such form of legend unless the
Company has reasonable cause to believe that such Successor Security is a
"restricted security" within the meaning of Rule 144, in which case the
Trustee, at the direction of the Company, shall authenticate and deliver a
new Security bearing a Private Placement Legend in exchange for such
Successor Security as provided in this Section 301 and the Indenture.
By its acceptance of any Security bearing the Private Placement Legend,
each Holder of such a Security acknowledges the restrictions on transfer of such
Security set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Security only as provided in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 205 or this Section
301. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Security Registrar.
ARTICLE FOUR
THE SERIES OF SECURITIES
Section 401. TITLE AND TERMS.
There shall be a series of securities designated as the "7.70% Senior Notes
due 2029, Series A" of the Company (the "Series A Securities" or the "Initial
Securities") and a series of securities designated as the "7.70% Senior Notes
due 2029, Series B" of the Company (the "Series B Securities" and, together with
the Series A Securities, the "Securities"). The Stated Maturity of the
Securities shall be June 1, 2029, and they shall bear interest at the rate of
7.70% per annum, subject to increase as set forth in the Registration Rights
Agreement.
Interest on the Securities of this series will be payable semi-annually on
June 1 and December 1 of each year, commencing December 1, 1999, until the
principal thereof is made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will be paid
to the Person in whose name
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the Securities of this series (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the May 15 or November 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
In the case where any Interest Payment Date or the maturity date of the
Securities of this series does not fall on a Business Day, payment of interest
or principal otherwise payable on such date need not be made on such day, but
may be made on the next succeeding Business Day with the same force and effect
as if made on such Interest Payment Date or the maturity date of the Securities
of this series.
The aggregate principal amount of Securities of this series which may be
authenticated and delivered under this Second Supplemental Indenture is limited
to $300,000,000, except for Securities authenticated and delivered upon
registration or transfer of, or in exchange for, or in lieu of, other Securities
of this series pursuant to Section 304, 305 and 306 of the Indenture and except
for any Securities of this series which, pursuant to Section 303 of the
Indenture, are deemed never to have been authenticated and delivered under the
Indenture.
The Securities of this series will be represented by one or more Global
Securities representing the entire $300,000,000 aggregate principal amount of
the Securities of this series, and the Depositary with respect to such Global
Security or Global Securities will be The Depository Trust Company.
The Place of Payment for the principal of (and premium, if any) and
interest on the Securities of this series shall be the office or agency of the
Company in the City of Cincinnati, State of Ohio, maintained for such purpose,
which shall be the Corporate Trust Office of the Trustee and at any other office
or agency maintained by the Company for such purpose; PROVIDED, HOWEVER, that at
the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
The Securities of this series are redeemable prior to maturity at the
option of the Company as provided in this Second Supplemental Indenture.
The Securities of this series are not subject to a sinking fund and the
provisions of Section 501(3) and Article Twelve of the Indenture shall not be
applicable to the Securities of this series.
The Securities of this series are subject to defeasance at the option of
the Company as provided in this Second Supplemental Indenture.
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For all purposes hereunder, the Series A Securities and the Series B
Securities will be treated as one class and are together referred to as the
"Securities." The Series A Securities rank pari passu in right of payment with
the Series B Securities.
ARTICLE FIVE
MODIFICATIONS AND ADDITIONS TO THE INDENTURE
Section 501. MODIFICATIONS TO THE CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR
LEASE PROVISIONS.
With respect to the Securities of this series, Section 801 of the Indenture
shall be deleted in its entirety and the following shall be substituted
therefor:
"Section 801. Covenant Not to Merge, Consolidate, Sell or Convey
PROPERTY EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge with or into or
consolidate with any corporation, partnership, or other entity or
sell, lease or convey all or substantially all of its assets to any
other Person, unless (i) either the Company shall be the continuing
corporation, or the successor entity or the Person which acquires by
sale, lease or conveyance all or substantially all the assets of the
Company (if other than the Company) shall be a corporation or
partnership organized under the laws of the United States of America
or any State thereof or the District of Columbia and shall expressly
assume all obligations of the Company under this Indenture and the
Securities of the series created by the Second Supplemental Indenture,
including the due and punctual payment of the principal of and
interest on all the Securities of the series created by the Second
Supplemental Indenture according to their tenor, and the due and
punctual performance and observance of all of the covenants and
conditions of the Indenture to be performed or observed by the
Company, by supplemental indenture in form satisfactory to the
Trustee, executed and delivered to the Trustee by such entity, and
(ii) the Company, such person or such successor entity, as the case
may be, shall not, immediately after such merger or consolidation, or
such sale, lease or conveyance, be in default in the performance of
any such covenant or condition and, immediately after giving effect to
such transaction, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing.
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Section 802. SUCCESSOR SUBSTITUTED
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any sale, lease or conveyance of all or
substantially all of the assets of the Company in accordance with
Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such sale, lease or conveyance
is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants under this
Indenture and the Securities."
Section 502. OTHER MODIFICATIONS.
With respect to the Securities of this series, the Indenture shall be
modified as follows:
(a) The eighth paragraph of Section 305 of the Indenture shall be modified
by inserting, "and a successor Depositary is not appointed by the Company
within 90 days" at the end of clause (i) in such paragraph; and
(b) Section 401 of the Indenture shall be modified by adding to the end of
such Section the following paragraph:
"For the purpose of this Section 401, trust funds may consist of (A) money
in an amount, or (B) U.S. Government Obligations (as defined in Section
1304) which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment, money in an amount, or (C) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, the principal of,
premium, if any, and each installment of interest on the Securities of this
series on the Stated Maturity of such principal or installment of interest
on the day on which such payments are due and payable in accordance with
the terms of this Indenture and of such Securities of this series."
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Section 503. ADDITIONAL COVENANTS; DEFEASANCE AND COVENANT DEFEASANCE.
(a) With respect to the Securities of this series, the following provisions
shall be added as Sections 1009 and 1010 and as Article Thirteen (Section
references contained in these additional provisions are to the Indenture as
supplemented by this Second Supplemental Indenture):
"Section 1009. LIMITATIONS ON LIENS.
After the date hereof and so long as any Securities of the series
created by the Second Supplemental Indenture are Outstanding, the Company
will not issue, assume or guarantee, and will not permit any Restricted
Subsidiary to issue, assume or guarantee, any Indebtedness which is secured
by a mortgage, pledge, security interest, lien or encumbrance of any kind
(including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any of the
foregoing) (each being hereinafter referred to as a "lien" or "liens") of
or upon any Operating Property or Operating Asset, whether now owned or
hereafter acquired, of the Company or any Restricted Subsidiary without
effectively providing that the Securities of the series created by the
Second Supplemental Indenture (together with, if the Company shall so
determine, any other Indebtedness of the Company ranking equally with the
Securities) shall be equally and ratably secured by a lien on such assets
ranking ratably with and equal to (or at the Company's option prior to)
such secured Indebtedness; provided that the foregoing restriction shall
not apply to:
(a) liens on any property or assets of any corporation existing
at the time such corporation becomes a Restricted Subsidiary provided
that such lien does not extend to any other property of the Company or
any of its Restricted Subsidiaries;
(b) liens on any property or assets (including stock) existing at
the time of acquisition of such property or assets by the Company or a
Restricted Subsidiary, or liens to secure the payment of all or any
part of the purchase price of such property or assets (including
stock) upon the acquisition of such property or assets by the Company
or a Restricted Subsidiary or to secure any indebtedness incurred,
assumed or guaranteed by the Company or a Restricted Subsidiary for
the purpose of financing all or any part of the purchase price of such
property or, in the case of real property, construction or
improvements thereon or attaching to property substituted by the
Company to obtain the release of a lien on other property of the
Company on which a lien then exists, which indebtedness is incurred,
assumed or
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guaranteed prior to, at the time of, or within 18 months after such
acquisition (or in the case of real property, the completion of
construction (including any improvements on an existing asset) or
commencement of full operation at such property, whichever is later
(which in the case of a retail store is the opening of the store for
business to the public)); provided that in the case of any such
acquisition, construction or improvement, the lien shall not apply to
any other property or assets theretofore owned by the Company or a
Restricted Subsidiary;
(c) liens on any property or assets to secure Indebtedness of a
Restricted Subsidiary to the Company or to another Restricted
Subsidiary;
(d) liens on any property or assets of a corporation existing at
the time such corporation is merged into or consolidated with the
Company or a Restricted Subsidiary or at the time of a purchase, lease
or other acquisition of the assets of a corporation or firm as an
entirety or substantially as an entirety by the Company or a
Restricted Subsidiary provided that such lien does not extend to any
other property of the Company or any of its Restricted Subsidiaries;
(e) liens on any property or assets of the Company or a
Restricted Subsidiary in favor of the United States of America or any
State thereof, or any department, agency or instrumentality or
political subdivision of the United States of America or any State
thereof, or in favor of any other country, or any political
subdivision thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure any
Indebtedness incurred or guaranteed for the purpose of financing all
or any part of the purchase price (or, in the case of real property,
the cost of construction) of the property or assets subject to such
liens (including, but not limited to, liens incurred in connection
with pollution control, industrial revenue or similar financings);
(f) liens existing on properties or assets of the Company or any
Restricted Subsidiary existing on the date hereof; provided that such
liens secure only those obligations which they secure on the date
hereof or any extension, renewal or replacement thereof;
(g) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part, of any lien
referred to in the foregoing clauses (a) through (f), inclusive;
provided that such extension, renewal or replacement shall be limited
to all or a part of the property or assets which secured the lien so
extended, renewed or replaced (plus improvements and construction on
real property);
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(h) liens imposed by law, such as mechanics', workmen's,
repairmen's, materialmen's, carriers', warehouseman's, vendors', or
other similar liens arising in the ordinary course of business of the
Company or a Restricted Subsidiary, or governmental (federal, state or
municipal) liens arising out of contracts for the sale of products or
services by the Company or any Restricted Subsidiary, or deposits or
pledges to obtain the release of any of the foregoing liens;
(i) pledges, liens or deposits under worker's compensation laws
or similar legislation and liens or judgments thereunder which are not
currently dischargeable, or in connection with bids, tenders,
contracts (other than for the payment of money) or leases to which the
Company or any Restricted Subsidiary is a party, or to secure the
public or statutory obligations of the Company or any Restricted
Subsidiary, or in connection with obtaining or maintaining
self-insurance or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age pensions,
social security or similar matters, or to secure surety, appeal or
customs bonds to which the Company or any Restricted Subsidiary is a
party, or in litigation or other proceedings such as, but not limited
to, interpleader proceedings, and other similar pledges, liens or
deposits made or incurred in the ordinary course of business;
(j) liens created by or resulting from any litigation or other
proceeding which is being contested in good faith by appropriate
proceedings, including liens arising out of judgments or awards
against the Company or any Restricted Subsidiary with respect to which
the Company or such Restricted Subsidiary is in good faith prosecuting
an appeal or proceedings for review or for which the time to make an
appeal has not yet expired; or final unappealable judgment liens which
are satisfied within 30 days of the date of judgment; or liens
incurred by the Company or any Restricted Subsidiary for the purpose
of obtaining a stay or discharge in the course of any litigation or
other proceeding to which the Company or such Restricted Subsidiary is
a party;
(k) liens for taxes or assessments or governmental charges or
levies not yet due or delinquent, or which can thereafter be paid
without penalty, or which are being contested in good faith by
appropriate proceedings; landlord's liens on property held under
lease; and any other liens or charges incidental to the conduct of the
business of the Company or any Restricted Subsidiary or the ownership
of the property or assets of any of them which were not incurred in
connection with the borrowing of money or the obtaining of advances or
credit and which do not, in the opinion of the Company, materially
impair the use of such property or assets in the
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operation of the business of the Company or such Restricted Subsidiary
or the value of such property or assets for the purposes of such
business; or
(l) liens not permitted by clauses (a) through (k) above if at
the time of, and after giving effect to, the creation or assumption of
any such lien, the aggregate amount of all Indebtedness of the Company
and its Restricted Subsidiaries secured by all such liens not so
permitted by clauses (a) through (k) above together with the
Attributable Debt in respect of Sale and Lease-Back Transactions
permitted by paragraph (a) of Section 1010 does not exceed 10% of
Consolidated Net Tangible Assets.
Section 1010. LIMITATIONS ON SALE AND LEASE-BACK TRANSACTIONS.
After the date hereof and so long as any Securities of the series created
by the Second Supplemental Indenture are Outstanding, the Company agrees that it
will not, and will not permit any Restricted Subsidiary to, enter into any
arrangement with any Person providing for the leasing by the Company or a
Restricted Subsidiary of any Operating Property or Operating Asset (other than
any such arrangement involving a lease for a term, including renewal rights, for
not more than 3 years and leases between the Company and a Restricted Subsidiary
or between Restricted Subsidiaries), whereby such Operating Property or
Operating Asset has been or is to be sold or transferred by the Company or any
Restricted Subsidiary to such Person (herein referred to as a "Sale and
Lease-Back Transaction"), unless:
(a) the Company or such Restricted Subsidiary would, at the time of
entering into a Sale and Lease-Back transaction, be entitled to incur
Indebtedness secured by a lien on the Operating Property or Operating Asset
to be leased in an amount at least equal to the Attributable Debt in
respect of such Sale and Lease-Back Transaction without equally and ratably
securing the Securities of the series created by the Second Supplemental
Indenture pursuant to Section 1009; or
(b) the proceeds of the sale of the Operating Property or Operating
Asset to be leased are at least equal to the fair market value of such
Operating Property or Operating Asset (as determined by the chief financial
officer or chief accounting officer of the Company) and an amount in cash
equal to the net proceeds from the sale of the Operating Property or
Operating Asset so leased is applied, within 180 days of the effective date
of any such Sale and Lease-Back Transaction, to the purchase or acquisition
(or, in the case of Operating Property, the construction) of Operating
Property or Operating Assets or to the retirement, repurchase, redemption
or repayment (other than at maturity or pursuant to a mandatory sinking
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fund or redemption provision and other than Indebtedness owned by the
Company or any Restricted Subsidiary) of Securities of the series created
by the Second Supplemental Indenture or of Funded Indebtedness of the
Company ranking on a parity with or senior to the Securities of the series
created by the Second Supplemental Indenture, or in the case of a Sale and
Lease-Back Transaction by a Restricted Subsidiary, of Funded Indebtedness
of such Restricted Subsidiary; provided that in connection with any such
retirement, any related loan commitment or the like shall be reduced in an
amount equal to the principal amount so retired.
The foregoing restriction shall not apply to, in the case of any
Operating Property or Operating Asset acquired or constructed subsequent to
the date eighteen months prior to the date of this Indenture, any Sale and
Lease-Back Transaction with respect to such Operating Asset or Operating
Property (including presently owned real property upon which such Operating
Property is to be constructed) if a binding commitment is entered into with
respect to such Sale and Lease-Back Transaction within 18 months after the
later of the acquisition of the Operating Property or Operating Asset or
the completion of improvements or construction thereon or commencement of
full operations at such Operating Property (which in the case of a retail
store is the opening of the store for business to the public).
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may at its option by Board Resolution, at any time,
elect to have either Section 1302 or Section 1303 applied to the
Outstanding Securities of this series upon compliance with the
conditions set forth below in this Article Thirteen.
Section 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of the option provided in Section
1301 applicable to this Section, the Company shall be deemed to have
been discharged from its obligations with respect to the Outstanding
Securities of the series created by the Second Supplemental Indenture
on the date the conditions set forth below are satisfied (hereinafter,
"Defeasance"). For this purpose, such Defeasance means that the
Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of this series
and to have
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satisfied all its other obligations under such Securities of this
series and this Indenture insofar as such Securities of this series
are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Outstanding Securities of this
series to receive, solely from the trust fund described in Section
1304 and as more fully set forth in such Section, payments in respect
of the principal of (and premium, if any) and interest on such
securities when such payments are due, (B) the Company's obligations
with respect to such Securities of this series under Sections 304,
305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (D) this Article Thirteen.
Subject to compliance with this Article Thirteen, the Company may
exercise its option under this Section 1302 notwithstanding the prior
exercise of its option under Section 1303.
Section 1303. COVENANT DEFEASANCE.
Upon the Company's exercise of the option provided in Section
1301 applicable to this Section, the Company shall be released from
its obligations under Section 501(4) (in respect of the covenants in
Sections 1008 through 1010), Section 801 and Sections 1008 through
1010, the Securities of this series and the Holders of Securities of
this series, on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant Defeasance"). For this purpose, such
covenant Defeasance means that the Company may omit to comply with and
shall have no liability in respect of any term, condition or
limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this
Indenture and such Securities of this series shall be unaffected
thereby.
Section 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Securities of this
series:
(1) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 609 who shall agree to comply with
the provisions of this Article Thirteen applicable to it) as
trust funds in trust for the purpose of making the following
payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities of this
series, (A) money in an amount, or (B) U.S.
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Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due
date of any payment, money in an amount, or (C) a combination
thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of,
premium, if any, and each installment of interest on the
Securities of this series on the Stated Maturity of such
principal or installment of interest on the day on which such
payments are due and payable in accordance with the terms of this
Indenture and of such Securities of this series. For this
purpose, "U.S. Government Obligations" means securities that are
(x) direct obligations of the United States of America for the
payment of which its full faith and credit is pledged or (y)
obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the
Company thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities
Act of 1933, as amended) as custodian with respect to any such
U.S. Government Obligation or a specific payment of principal of
or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository
receipt, PROVIDED that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or
the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depositary receipt.
(2) No Event of Default or event which with notice or lapse
of time or both would become an Event of Default shall have
occurred and be continuing on the date of such deposit or,
insofar as subsections 501(6) and (7) are concerned, at any time
during the period ending on the 121st day after the date of such
deposit (it being understood that
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this condition shall not be deemed satisfied until the expiration
of such period).
(3) Such Defeasance or covenant Defeasance shall not cause
the Trustee to have a conflicting interest as defined in Section
608 and for purposes of the Trust Indenture Act with respect to
any securities of the Company.
(4) Such Defeasance or covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, this
Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound.
(5) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent provided for relating to either the
Defeasance under Section 1302 or the covenant Defeasance under
Section 1303 (as the case may be) have been complied with.
(6) In the case of an election under Section 1302, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (y) since
the date of this Second Supplemental Indenture there has been a
change in the applicable Federal income tax law, in either case
to the effect that and based thereon such opinion shall confirm
that, the Holders of the Outstanding Securities of this series
will not recognize income, gain or loss for Federal income tax
purposes as a result of such Defeasance or covenant Defeasance
and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case
if such Defeasance or covenant Defeasance had not occurred."
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Section 1305. DEPOSITED MONEY AND U.S. GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee (or other qualifying
trustee--collectively, for purposes of this Section 1305, the
"Trustee") pursuant to Section 1304 in respect of the Securities
of this series shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities of this
series and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Holders of
such Securities of this series, of all sums due and to become due
thereon in respect of principal (and premium, if any) and
interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 1304 or the
principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of
the Holders of the Outstanding Securities of this series.
Anything in this Article Thirteen to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company
from time to time upon Company Request any money or U.S.
Government Obligations held by it as provided in Section 1304
which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of
the amount thereof which would then be required to be deposited
to effect an equivalent Defeasance or covenant Defeasance.
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Section 1306. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 1302 or 1303 by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the
Securities of this series shall be revived and reinstated as
though no deposit had occurred pursuant to this Article Thirteen
until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 1302 or 1303;
PROVIDED, HOWEVER, that if the Company makes any payment of
principal of (and premium, if any) or interest on any Security of
this series following the reinstatement of its obligations, the
Company shall be subjugated to the rights of the Holders of such
Securities of this series to receive such payment from the money
held by the Trustee or the Paying Agent.
Section 504. REDEMPTION OF SECURITIES.
With respect to Securities of this series, Section 1101 of the Indenture
shall be deleted in its entirety and the following shall be substituted
therefor:
"Section 1101. OPTIONAL REDEMPTION.
The Securities will be redeemable, in whole or in part, at the option
of the Company at any time at a redemption price equal to the greater of
(i) 100% of the principal amount of such Securities or (ii) as determined
by a Quotation Agent, the sum of the present values of the remaining
scheduled payments of principal and interest thereon (not including any
portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Adjusted Treasury
Rate plus 15 basis points plus, in each case, accrued interest thereon to
the date of redemption."
ARTICLE SIX
GUARANTEE
Section 601. GUARANTEE.
Each Guarantor hereby jointly and severally fully and unconditionally
guarantees (each a "Guarantee") to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture or the
Securities or the obligations of the Company or any other Guarantor to the
Holders or the Trustee hereunder or thereunder,
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that (a) the principal of, premium, if any, and interest on the Securities will
be duly and punctually paid in full when due, whether at maturity, upon
redemption, by acceleration or otherwise, and interest on the overdue principal
and (to the extent permitted by law) interest, if any, on the Securities and all
other obligations of the Company or the Guarantor to the Holders of or the
Trustee under the Indenture or the Securities hereunder (including fees,
expenses or others) (collectively, the "Obligations") will be promptly paid in
full or performed, all in accordance with the terms of the Indenture and the
Securities; and (b) in case of any extension of time of payment or renewal of
any Obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at Stated
Maturity, by acceleration or otherwise. If the Company shall fail to pay when
due, or to perform, any Obligations, for whatever reason, each Guarantor shall
be obligated to pay, or to perform or cause the performance of, the same
immediately. An Event of Default under the Indenture or the Securities shall
constitute an event of default under this Guarantee, and shall entitle the
Holders of Securities to accelerate the Obligations of the Guarantor hereunder
in the same manner and to the same extent as the Obligations of the Company.
Each Guarantor hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Securities or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect to any provisions
of the Indenture or the Securities, any release of any other Guarantor, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a Guarantee is affixed to any particular Security, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor.
Each Guarantor further agrees that, as between it, on the one hand, and the
Holders of Securities and the Trustee, on the other hand, (a) the maturity of
the Obligations may be accelerated as provided in Article Five of the Indenture
for the purposes of the Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations, and (b)
in the event of any acceleration of such Obligations as provided in Article Five
of the Indenture, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of its
Guarantee.
Section 602. WAIVER OF DEMAND.
To the fullest extent permitted by applicable law, each of the Guarantors
waives presentment to, demand of payment from and protest of any of the
Obligations, and also waives notice of acceptance of its Guarantee and notice of
protest for nonpayment.
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Section 603. GUARANTEE OF PAYMENT.
Each of the Guarantors further agrees that its Guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by the Trustee or any Holder of the Securities to
the security, if any, held for payment of the Obligations.
Section 604. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE.
Subject to Section 610 of this Second Supplemental Indenture, the
obligations of each of the Guarantors hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each of the Guarantors hereunder
shall not be discharged or impaired or otherwise affected by the failure of the
Trustee or any Holder of the Securities to assert any claim or demand or to
enforce any remedy under the Indenture or the Securities, any other guarantee or
any other agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or that
would otherwise operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations).
Section 605. DEFENSES OF COMPANY WAIVED.
To the extent permitted by applicable law, each of the Guarantors waives
any defense based on or arising out of any defense of the Company or any other
Guarantor or the unenforceability of the Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of the Company,
other than final and indefeasible payment in full in cash of the Obligations.
Each of the Guarantors waives any defense arising out of any such election even
though such election operates to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of each of the Guarantors
against the Company or any security.
Section 606. CONTINUED EFFECTIVENESS.
Subject to Section 610 of this Second Supplemental Indenture, each of the
Guarantors further agrees that its Guarantee hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Obligation is rescinded or must
otherwise be restored by the Trustee or any Holder of the Securities upon the
bankruptcy or reorganization of the Company.
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Section 607. SUBROGATION.
In furtherance of the foregoing and not in limitation of any other right of
each of the Guarantors by virtue hereof, upon the failure of the Company to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each of the Guarantors
hereby promises to and will, upon receipt of written demand by the Trustee or
any Holder of the Securities, forthwith pay, or cause to be paid, to the Holders
in cash the amount of such unpaid Obligations, and thereupon the Holders shall,
assign (except to the extent that such assignment would render a Guarantor a
"creditor" of the Company within the meaning of Section 547 of Title 11 of the
United States Code as now in effect or hereafter amended or any comparable
provision of any successor statute) the amount of the Obligations owed to it and
paid by such Guarantor pursuant to this Guarantee to such Guarantor, such
assignment to be PRO RATA to the extent the Obligations in question were
discharged by such Guarantor, or make such other disposition thereof as such
Guarantor shall direct (all without recourse to the Holders, and without any
representation or warranty by the Holders). If (a) a Guarantor shall make
payment to the Holders of all or any part of the Obligations and (b) all the
Obligations and all other amounts payable under this Second Supplemental
Indenture shall be indefeasibly paid in full, the Trustee will, at such
Guarantor's request, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Obligations resulting from such payment by such Guarantor.
Section 608. INFORMATION.
Each of the Guarantors assumes all responsibility for being and keeping
itself informed of the Company's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Obligations and
the nature, scope and extent of the risks that each of the Guarantors assumes
and incurs hereunder, and agrees that the Trustee and the Holders of the
Securities will have no duty to advise the Guarantors of information known to it
or any of them regarding such circumstances or risks.
Section 609. SUBORDINATION.
Upon payment by any Guarantor of any sums to the Holders, as provided
above, all rights of such Guarantor against the Company, arising as a result
thereof by way of right of subrogation or otherwise, shall in all respects be
subordinated and junior in right of payment to the prior indefeasible payment in
full in cash of all the Obligations to the Trustee; PROVIDED, HOWEVER, that any
right of subrogation that such Guarantor may have pursuant to this Second
Supplemental Indenture is subject to Section 607 hereof.
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Section 610. TERMINATION.
A Guarantor shall, upon the occurrence of either of the following events,
be automatically and unconditionally released and discharged from all
obligations under this Second Supplemental Indenture and its Guarantee without
any action required on the part of the Trustee or any Holder if such release and
discharge will not result in any downgrade in the rating given to the Securities
by Moody's Investors Service and Standard and Poor's Rating Services:
(a) upon any sale, exchange, transfer or other disposition (by merger
or otherwise) of all of the Capital Stock of a Guarantor or all, or
substantially all, of the assets of such Guarantor, which sale or other
disposition is otherwise in compliance with the terms of the Indenture;
provided, however, that such Guarantor shall not be released and discharged
from its obligations under this Second Supplemental Indenture and its
Guarantee if, upon consummation of such sale, exchange, transfer or other
disposition (by merger or otherwise), such Guarantor remains or becomes a
guarantor under any Credit Facility; or
(b) at the request of the Company, at any time that none of the Credit
Facilities are guaranteed by any Subsidiary of the Company.
The Trustee shall deliver an appropriate instrument evidencing such release upon
receipt of a request of the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section. Any Guarantor not so released
will remain liable for the full amount of the principal of, premium, if any, and
interest on the Notes provided in this Second Supplemental Indenture and its
Guarantee.
Section 611. GUARANTEES OF OTHER INDEBTEDNESS.
As long as the Securities are guaranteed by the Guarantors, the Company
will cause each of its Subsidiaries that becomes a guarantor in respect of (i)
any Indebtedness of the Company which is outstanding on the date hereof and (ii)
any Indebtedness incurred by the Company after the date hereof (other than in
respect of asset-backed securities), to include in any guarantee given by any
such guarantor, provisions similar to those set forth in Section 610 hereof.
Section 612. ADDITIONAL GUARANTORS.
The Company will cause each of its Subsidiaries that becomes a guarantor in
respect of any Indebtedness of the Company following the date hereof to execute
and deliver a supplemental indenture pursuant to which it will become a
Guarantor under this Second Supplemental Indenture, if it has not already done
so or unless the Guarantor is
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prohibited from doing so by applicable law or a provision of a contract to which
it is a party or by which it is bound.
Section 613. LIMITATION OF GUARANTOR'S LIABILITY.
Each Guarantor, and by its acceptance hereof each Holder, hereby confirms
that it is the intention of all such parties that the Guarantee by such
Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal of state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under this Second
Supplemental Indenture and its Guarantee shall be limited to the maximum amount
which, 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 obligations of such
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Second Supplemental Indenture, will result in the obligations of such
Guarantor under its Guarantee not constituting such fraudulent transfer or
conveyance.
Section 614. CONTRIBUTION FROM OTHER GUARANTORS.
Each Guarantor that makes a payment or distribution under its Guarantee
shall be entitled to a contribution from each other Guarantor in a pro rata
amount based on the net assets of each Guarantor, determined in accordance with
generally accepted accounting principles in effect in the United States of
America as of the date hereof.
Section 615. NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY.
Neither the Trustee, any Holder nor any other Person shall have any
obligation to enforce or exhaust any rights or remedies or take any other steps
under any security for the Obligations or against the Company or any other
Person or any property of the Company or any other Person before the Trustee,
such Holder or such other Person is entitled to demand payment and performance
by any or all Guarantors of their liabilities and obligations under their
Guarantee.
Section 616. DEALING WITH THE COMPANY AND OTHERS.
The Holders, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Guarantor
hereunder and without the consent of or notice to any Guarantor, may:
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases, discharges and other indulgences to the Company or any
other Person;
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(b) take or abstain from taking security or collateral from the
Company or from perfecting security or collateral from the Company;
(c) release, discharge, compromise, realize, enforce or otherwise deal
with or do any act or thing in respect of (with or without consideration)
any and all collateral, mortgages or other security given by the Company or
any third party with respect to the Obligations;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or from any
security to such part of the Obligations as the Holders may see fit or
change any such application in whole or in part from time to time as the
Holders may see fit; and
(f) otherwise deal with, or waive or modify their right to deal with,
the Company and all other Persons and any security as the Holders or the
Trustee may see fit.
Section 617. EXECUTION AND DELIVERY OF THE GUARANTEE.
(a) To further evidence the Guarantee set forth in this Article Six, each
Guarantor hereby agrees that a notation of such Guarantee shall be endorsed on
each Security authenticated and delivered by the Trustee and executed by either
manual or facsimile signature of an officer of each Guarantor. The corporate
seal of a Guarantor may be reproduced on the executed Guarantee and the
execution thereof may be attested to by any appropriate officer of the
Guarantor, but neither such reproduction nor such attestation is or shall be
required.
(b) Each of the Guarantors hereby agrees that its Guarantee set forth in
this Article Six shall remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Guarantee.
(c) If an officer of a Guarantor whose signature is on this Second
Supplemental Indenture or a Guarantee no longer holds that office at the time
the Trustee authenticates such Guarantee or at any time thereafter, such
Guarantor's Guarantee of such Security shall be valid nevertheless.
(d) The deliver of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Second Supplemental Indenture on behalf of each Guarantor.
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ARTICLE SEVEN
MISCELLANEOUS
Section 701. MISCELLANEOUS.
(a) The Trustee accepts the trusts created by the Indenture, as
supplemented by this Second Supplemental Indenture, and agrees to perform the
same upon the terms and conditions of the Indenture, as supplemented by this
Second Supplemental Indenture.
(b) The recitals contained herein shall be taken as statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Second Supplemental Indenture.
(c) All capitalized terms used and not defined herein shall have the
respective meanings assigned to them in the Indenture.
(d) Each of the Company and the Trustee makes and reaffirms as of the date
of execution of this Second Supplemental Indenture all of its respective
representations, covenants and agreements set forth in the Indenture.
(e) All covenants and agreements in this Second Supplemental Indenture by
the Company, the Trustee and each Guarantor shall bind its respective successors
and assigns, whether so expressed or not.
(f) In case any provisions in this Second Supplemental Indenture shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
(g) Nothing in this Second Supplemental Indenture, express or implied,
shall give to any Person, other than the parties hereto and their successors
under the Indenture and the Holders of the series of Securities created hereby,
any benefit or any legal or equitable right, remedy or claim under the
Indenture.
(h) If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act of 1939, as may be amended from time to time, that is
required under such Act to be a part of and govern this Second Supplemental
Indenture, the latter provision shall control. If any provision hereof modifies
or excludes any provision of such Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Second Supplemental Indenture
as so modified or excluded, as the case may be.
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(i) This Second Supplemental Indenture shall be governed by and construed
in accordance with the laws of the State of New York.
(j) All amendments to the Indenture made hereby shall have effect only with
respect to the series of Securities created hereby.
(k) All provisions of this Second Supplemental Indenture shall be deemed to
be incorporated in, and made a part of, the Indenture; and the Indenture, as
supplemented by this Second Supplemental Indenture, shall be read, taken and
construed as one and the same instrument.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: THE KROGER CO.
/s/ Bruce M. Gack By: /s/ Paul Heldman
- --------------------------------- ---------------------------------------
Assistant Secretary Name: Paul Heldman
Title: Senior Vice President
Attest*: Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Securities
/s/ Bruce M. Gack By*: /s/ Paul Heldman
- --------------------------------- --------------------------------------
(Assistant) Secretary Name: Paul Heldman
Title: Vice President
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Securities
By: /s/ Bruce M. Gack
- --------------------------------- ---------------------------------------
Name: Bruce Gack
Title: Vice President
Attest: KROGER DEDICATED LOGISTICS CO.,
as Guarantor of the Securities
/s/ Bruce M. Gack By: /s/ Paul Heldman
- --------------------------------- ---------------------------------------
Secretary Name: Paul Heldman
Title: President
- ---------------------------------
*Signing as duly authorized officer for each such Guarantor.
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Attest: RICHIE'S, INC.,
as Guarantor of the Securities
By: /s/ Keith C. Larson
---------------------------------------
Name: Keith C. Larson
Title: Vice President Secretary
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Attest: HENPIL, INC., as Guarantor of the Securities
WYDIV, INC. , as Guarantor of the Securities
By: /s/ Steve McMillan
----------------------------------------
Name: Steve McMillan
Title: Vice President and Secretary
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Attest: FIRSTAR BANK, NATIONAL ASSOCIATION,
as Trustee
By: /s/ William Sicking
- -------------------------------- ---------------------------------------
Assistant Secretary Name: William Sicking
Title: Trust Officer
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STATE OF _________ )
) ss.:
COUNTY OF ________ )
On the ________ day of June, 1999, before me personally came _____________,
to me known, who, being by me duly sworn, did depose and say that he is
__________________ of The Kroger Co., and ____________________ of each of the
Guarantors Listed on Schedule I hereto and President of Kroger Dedicated
Logistics Co., corporations described in and which executed the foregoing
instrument; that he knows the seals of said corporations; that the seals affixed
to said instrument are such corporate seals; that they were so affixed by
authority of the Boards of Directors of said corporations, and that he signed
his name thereto by like authority.
----------------------------------------
STATE OF _________ )
) ss.:
COUNTY OF ________ )
On the ________ day of June, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ________________ of Henpil, Inc. and Wydiv, Inc., corporations
described in and which executed the foregoing instrument; that he knows the
seals of said corporations; that the seals affixed to said instrument are such
corporate seals; that they were so affixed by authority of the Boards of
Directors of said corporations, and that he signed his name thereto by like
authority.
----------------------------------------
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STATE OF _________ )
) ss.:
COUNTY OF ________ )
On the ________ day of June, 1999, before me personally came
_______________, to me known, who, being by me duly sworn, did depose and say
that he is _________________ of Vine Court Assurance Incorporated, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Boards of
Directors of said corporations, and that he signed his name thereto by like
authority.
----------------------------------------
STATE OF _________ )
) ss.:
COUNTY OF ________ )
On the ________ day of June, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is ____________ of Richie's, Inc., one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Boards of Directors of said
corporations, and that he signed his name thereto by like authority.
----------------------------------------
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STATE OF _________ )
) ss.:
COUNTY OF ________ )
On the ________ day of June, 1999, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of Firstar Bank, National Association, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
----------------------------------------
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EXHIBIT A
REGULATION S CERTIFICATE
(For transfers pursuant to section 301(a)(i) of the Indenture)
Firstar Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
Re: 7.70% Securities due 2029
Reference is hereby made to the Indenture, dated as of June 25, 1999 as
amended by the Second Supplemental Indenture, dated as of June 25, 1999
(collectively, the "Indenture"), between The Kroger Co., as issuer (the
"Company"), the Guarantors named therein, and Firstar Bank, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This certificate relates to US$____________ principal amount of Securities,
which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Securities are represented by a Global Security and are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Regulation S
Global Security. In connection with such transfer, the Owner hereby certifies
that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 904 or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
(1) RULE 904 TRANSFERS. If the transfer is being effected in
accordance with Rule 904:
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(A) the Owner is not a distributor of the Securities, an
affiliate of the Company or any such distributor or a person acting on
behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was originated, the Transferee
was outside the United States or the Owner and any person acting
on its behalf reasonably believed that the Transferee was outside
the United States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another designated
offshore securities market and neither the Owner nor any person
acting on its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a
selling concession, fee or other remuneration in respect of the
Specified Securities, and the transfer is to occur during the
Restricted Period, then the requirements of Rule 904(c)(1) have been
satisfied;
(F) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(G) if the transfer occurs during the Restricted Period, the
interest transferred will be held immediately through Euroclear or
Cedel.
(2) RULE 144 TRANSFERS. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last
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acquired from the Company or from an affiliate of the Company,
whichever is later, and is being effected in accordance with the
applicable amount, manner of sale and notice requirements of Rule 144;
or
(B) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: (Print the name of the Undersigned, as
such term is defined in the second
paragraph of this certificate.)
By:
------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of
the person signing on behalf of the
Undersigned must be stated.)
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EXHIBIT B
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to section 301(a)(ii) of the Indenture)
Firstar Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
Re: 7.70% Securities due 2029
Reference is hereby made to the Indenture, dated as of June 25, 1999 as
amended by the Second Supplemental Indenture, dated as of June 25, 1999
(collectively, the "Indenture"), between The Kroger Co., as issuer (the
"Company")"), the Guarantors named therein, and Firstar Bank, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
ISIN No(s). If any.____________________
CERTIFICATE No(s)._____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
The Specified Securities are represented by a Global Security and are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 under the Securities Act and all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
(1) RULE 144A TRANSFERS. If the transfer is being effected in
accordance with Rule 144A:
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(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner
may be relying on Rule 144A in connection with the transfer; and
(2) RULE 144 TRANSFERS. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and
is being effected in accordance with the applicable amount, manner of
sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
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This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:
(Print the name of the Undersigned, as
such term is defined in the second
paragraph of this certificate.)
By:
------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of
the person signing on behalf of the
Undersigned must be stated.)
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EXHIBIT C
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to section 301(b))
Firstar Bank, National Association
425 Walnut Street
Cincinnati, Ohio 45202
Re: 7.70% Securities due 2029
Reference is hereby made to the Indenture, dated as of June 25, 1999 as
amended by the Second Supplemental Indenture, dated as of June 25, 1999
(collectively, the "Indenture"), between The Kroger Co., as issuer (the
"Company"), the Guarantors named therein, and Firstar Bank, National
Association, as trustee. Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This certificate relates to US$_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Private Placement Legend pursuant to Section 301(b) of the
Indenture. In connection with such exchange, the Owner hereby certifies that the
exchange is occurring after a holding period of at least two years (computed in
accordance with paragraph (d) of Rule 144) has elapsed since the Specified
Securities were last acquired from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must
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comply with all applicable securities laws of the states of the United States
and other jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:
(Print the name of the Undersigned, as
such term is defined in the second
paragraph of this certificate.)
By:
------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of
the person signing on behalf of the
Undersigned must be stated.)
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SCHEDULE I
GUARANTORS
Name of Guarantor State or Organization
- --------------------------------------------------------------------------------
Dillon Companies, Inc. Kansas
Drug Distributors, Inc. Indiana
Inter-American Foods, Inc. Ohio
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
The Kroger Co. of Michigan Michigan
Kroger Limited Partnership I Ohio (limited partnership)
By: KRGP Inc., the General Partner
Kroger Limited Partnership II Ohio (limited partnership)
By: KRGP Inc., the General Partner
Peyton's-Southeastern, Inc. Tennessee
Rocket Newco, Inc. Texas
Topvalco, Inc. Ohio
City Market, Inc. Colorado
Dillon Real Estate Co., Inc. Kansas
Fry's Leasing Company, Inc. Arizona
Jackson Ice Cream Co., Inc. Kansas
Junior Food Stores of West Florida, Inc. Florida
Kwik Shop, Inc. Kansas
Mini Mart, Inc. Wyoming
Quik Stop Markets, Inc. California
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Turkey Hill, L.P. Pennsylvania (limited partnership)
Wells Aircraft, Inc. Kansas
Fred Meyer, Inc. Delaware
Fred Meyer Stores, Inc. Delaware
CB&S Advertising Agency, Inc. Oregon
Distribution Trucking Company Oregon
FM, Inc. Utah
FM Holding Corporation Delaware
Grand Central, Inc. Utah
FM Retail Services, Inc. Washington
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Jewelers, Inc. Delaware
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Name of Guarantor State or Organization
- --------------------------------------------------------------------------------
Merksamer Jewelers, Inc. California
Roundup Co. Washington
JH Properties, Inc. Washington
Smith's Food & Drug Centers, Inc. Delaware
Compare, Inc. Delaware
Saint Lawrence Holding Company Delaware
Smith's Beverage of Wyoming, Inc. Wyoming
Smitty's Supermarkets, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Treasure Valley Land Company, L.C. Idaho
Western Property Investment Group, Inc. California
Quality Food Centers, Inc. Washington
Hughes Markets, Inc. California
Hughes Realty, Inc. California
KU Acquisition Corporation Washington
Second Story, Inc. Washington
Quality Food, Inc. Delaware
Quality Food Holdings, Inc. Delaware
QFC Sub, Inc. Washington
Food 4 Less Holdings, Inc. Delaware
Ralphs Grocery Company Delaware
Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
Crawford Stores, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less GM, Inc. California
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STATE OF _________ )
) ss.:
COUNTY OF ________ )
On the ________ day of June, 1999, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is a ____________ of Firstar Bank, National Association, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
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