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Exhibit 1.1.2
Pricing Agreement
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GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC.
As Representatives of the several
Underwriters named in Schedule II hereto,
September 15, 1999
Dear Sirs:
The Kroger Co., an Ohio corporation (the "Company"), and the
Guarantors on Schedule I and on the signature pages hereto propose, subject to
the terms and conditions stated herein and in the Underwriting Agreement, dated
September 15, 1999 (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule II hereto (the "Underwriters") the Securities
(the "Designated Securities") and related Guarantees specified in Schedule III
hereto. Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement,
except that each representation and warranty which refers to the Prospectus in
Section 2 of the Underwriting Agreement shall be deemed to be a representation
or warranty as of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities and related Guarantees. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of each of the Underwriters of the Designated Securities and
related Guarantees pursuant to Section 12 of the Underwriting Agreement and the
address of the Representatives referred to in such Section 12 are set forth at
the end of Schedule III hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities and
related Guarantees, in the form heretofore delivered to you is now proposed to
be filed with the Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters, and under other terms and
conditions set forth in Schedule III hereto, the principal amount of Designated
Securities set forth opposite the name of such Underwriter in Schedule II
hereto.
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If the foregoing is in accordance with your understanding,
please sign and return to us six counterparts hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters, the Company and each of the Guarantors. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very Truly Yours,
Attest: THE KROGER CO.
Each of the Guarantors Listed on Schedule I
hereto, as Guarantor of the Designated Securities
By:
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Assistant Secretary/Secretary Name: Lawrence M. Turner
Title: Vice President and Treasurer
Attest: VINE COURT ASSURANCE INCORPORATED,
as Guarantor of the Designated Securities
By:
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Assistant Treasurer Name: Bruce M. Gack
Title: Vice President
RICHIE'S INC., as Guarantor of the Designated
Securities
By: ________________________________
Name: Keith C. Larson
Title: Vice President and Secretary
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ROCKET NEWCO, INC.,
as Guarantor of the Designated Securities
HENPIL, INC.,
as Guarantor of the Designated Securities
WYDIV, INC.,
as Guarantor of the Designated Securities
By: ________________________________
Name: Steven McMillan
Title: Vice President and Secretary
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GOLDMAN, SACHS & CO.
SALOMON SMITH BARNEY INC.
By:
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(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
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SCHEDULE I
SCHEDULE I
Guarantors
Name of Guarantor State of Organization
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Alpha Beta Company California
Bay Area Warehouse Stores, Inc. California
Bell Markets, Inc. California
Cala Co. Delaware
Cala Foods, Inc. California
CB&S Advertising Agency, Inc. Oregon
City Market, Inc. Colorado
Compare, Inc. Delaware
Crawford Stores, Inc. California
Dillon Companies, Inc. Kansas
Dillon Real Estate Co., Inc. Kansas
Distribution Trucking Company Oregon
Drugs Distributors, Inc. Indiana
FM Holding Corporation Delaware
FM Retail Services, Inc. Washington
FM, Inc. Utah
Food 4 Less GM, Inc. California
Food 4 Less Holdings, Inc. Delaware
Food 4 Less Merchandising, Inc. California
Food 4 Less of California, Inc. California
Food 4 Less of Southern California, Inc. Delaware
Fred Meyer, Inc. Delaware
Fred Meyer Jewelers, Inc. Delaware
Fred Meyer of Alaska, Inc. Alaska
Fred Meyer of California, Inc. California
Fred Meyer Stores, Inc. Delaware
Grand Central, Inc. Utah
Hughes Markets, Inc. California
Hughes Realty, Inc. California
Inter-American Foods, Inc. Ohio
Jackson Ice Cream Co., Inc. Kansas
JH Properties, Inc. Washington
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Junior Food Stores of West Florida, Inc. Florida
J.V. Distributing, Inc. Michigan
KRGP Inc. Ohio
KRLP Inc. Ohio
Kroger Dedicated Logistics Co. Ohio
Kroger Limited Partnership I Ohio (limited partnership)
Kroger Limited Partnership II Ohio (limited partnership)
KU Acquisition Corporation Washington
Kwik Shop, Inc. Kansas
Merksamer Jewelers, Inc. California
Mini Mart, Inc. Wyoming
Peyton's-Southeastern, Inc. Tennessee
QFC Sub, Inc. Washington
Quality Food Centers, Inc. Washington
Quality Food Holdings, Inc. Delaware
Quality Food, Inc. Delaware
Quik Stop Markets, Inc. California
Ralphs Grocery Company Delaware
Roundup Co. Washington
Saint Lawrence Holding Company Delaware
Second Story, Inc. Washington
Smith's Beverage of Wyoming, Inc. Wyoming
Smith's Food & Drug Centers, Inc. Delaware
Smitty's Equipment Leasing, Inc. Delaware
Smitty's Super Valu, Inc. Delaware
Smitty's Supermarkets, Inc. Delaware
The Kroger Co. of Michigan Michigan
THGP Co., Inc. Pennsylvania
THLP Co., Inc. Pennsylvania
Topvalco, Inc. Ohio
Treasure Valley Land Company, L.C. Idaho
Turkey Hill, L.P. Pennsylvania (limited partnership)
Wells Aircraft, Inc. Kansas
Western Property Investment Group, Inc. California
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SCHEDULE II
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES TO BE
UNDERWRITER PURCHASED
Goldman, Sachs & Co. $137,500,000
Salomon Smith Barney Inc $137,500,000
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Total $275,000,000
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SCHEDULE III
TITLE OF DESIGNATED SECURITIES:
Puttable Reset Securities PURSSM due October 1, 2010
AGGREGATE PRINCIPAL AMOUNT:
$275,000,000
PRICE TO PUBLIC:
100% of the principal amount of the Designated Securities, plus accrued
interest from September 22, 1999
PURCHASE PRICE BY UNDERWRITERS:
99.750% of the principal amount of the Designated Securities, plus
accrued interest from September 22, 1999
In addition, in consideration of the Call Option they will have with
respect to the Designated Securities, Goldman, Sachs & Co. will pay the
Company an amount equal to 2.22% of the principal amount of the
Designated Securities.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately available funds
INDENTURE:
Indenture dated as of June 25, 1999, between the Company, the
Guarantors and Firstar Bank, National Association, as Trustee, as
amended by the First Supplemental Indenture, dated June 25, 1999, the
Second Supplemental Indenture, dated June 25, 1999, the Third
Supplemental Indenture, dated June 25, 1999, the Fourth Supplemental
Indenture, dated September 22, 1999, the Fifth Supplemental Indenture,
dated September 22, 1999, and the Sixth Supplemental Indenture, dated
September 22, 1999.
MATURITY:
October 1, 2010
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INTEREST RATE:
A floating rate as described under "Interest Rate" in the Prospectus
Supplement dated September 15, 1999 from and including September 22,
1999 to but excluding October 1, 2000 and upon such date (or the next
business day) reset so as to equal a fixed rate as described under
"Reset of Interest Rate," in the Prospectus Supplement dated September
15, 1999
INTEREST PAYMENT DATES:
Through October 1, 2000: December 22, 1999; March 22, 2000; June 22,
2000; October 1, 2000 commencing January 1, 2000.
After October 1, 2000: April 1 and October 1
REDEMPTION PROVISIONS:
As described in the Prospectus Supplement dated September 15, 1999.
SINKING FUND PROVISIONS:
No sinking fund provisions
CALL OPTION:
As described in the Prospectus Supplement under the caption
"Description of PURS--Call Option".
PUT OPTION:
As described in the Prospectus Supplement under the caption
"Description of PURS--Put Option".
DEFEASANCE PROVISIONS:
As described in the Prospectus Supplement dated September 15, 1999.
GUARANTEES:
Guaranteed by the Guarantors set forth on the signature pages and
Schedule I to the Pricing Agreement.
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TIME OF DELIVERY:
September 22 , 1999
CLOSING LOCATION:
The Offices of Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza, New York, New York 10004
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representative: Goldman, Sachs & Co.
Address for Notices, etc.: 85 Broad Street
New York, New York