-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ei8090lh2pTjQ/4qqsa3tzu3a+cf4h7/RxzMLiCuDdpy4SObmwUOgL0n7Z4FXqqX yatv2/hEEQ56v4ed2EavgA== 0000950152-99-007076.txt : 19990824 0000950152-99-007076.hdr.sgml : 19990824 ACCESSION NUMBER: 0000950152-99-007076 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 24 FILED AS OF DATE: 19990820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KROGER CO CENTRAL INDEX KEY: 0000056873 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 310345740 STATE OF INCORPORATION: OH FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725 FILM NUMBER: 99697210 BUSINESS ADDRESS: STREET 1: 1014 VINE ST CITY: CINCINNATI STATE: OH ZIP: 45201 BUSINESS PHONE: 5137624000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRAWFORD STORES INC CENTRAL INDEX KEY: 0000025500 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] STATE OF INCORPORATION: CA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-01 FILM NUMBER: 99697211 BUSINESS ADDRESS: STREET 1: 1100 WEST ARTESIA BLVD CITY: COMPTON STATE: CA ZIP: 90220 BUSINESS PHONE: 3108849000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAND CENTRAL INC CENTRAL INDEX KEY: 0000043011 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 870277527 STATE OF INCORPORATION: UT FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-02 FILM NUMBER: 99697212 BUSINESS ADDRESS: STREET 1: 2233 S 300 EAST STREET 2: P O BOX 15507 CITY: SALT LAKE CITY STATE: UT ZIP: 84115 BUSINESS PHONE: 8014867611 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEYER FRED INC CENTRAL INDEX KEY: 0000701169 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 930798201 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-03 FILM NUMBER: 99697213 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: PO BOX 42121 CITY: PORTLAND STATE: OR ZIP: 97242 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUALITY FOOD CENTERS INC CENTRAL INDEX KEY: 0000804333 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 911330075 STATE OF INCORPORATION: WA FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-04 FILM NUMBER: 99697214 BUSINESS ADDRESS: STREET 1: 10116 NE 8TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 2064622210 MAIL ADDRESS: STREET 1: 10116 NE 8TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 FORMER COMPANY: FORMER CONFORMED NAME: QUALITY FOOD CENTER DATE OF NAME CHANGE: 19870726 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RALPHS GROCERY CO /DE/ CENTRAL INDEX KEY: 0000835676 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 954356030 STATE OF INCORPORATION: DE FISCAL YEAR END: 0128 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-05 FILM NUMBER: 99697215 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FORMER COMPANY: FORMER CONFORMED NAME: FOOD 4 LESS SUPERMARKETS INC DATE OF NAME CHANGE: 19931027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALA FOODS INC CENTRAL INDEX KEY: 0000838196 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 941342664 STATE OF INCORPORATION: CA FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-06 FILM NUMBER: 99697216 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7146268776 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMITHS FOOD & DRUG CENTERS INC CENTRAL INDEX KEY: 0000850309 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 870258768 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-07 FILM NUMBER: 99697217 BUSINESS ADDRESS: STREET 1: 1550 S REDWOOD RD CITY: SALT LAKE CITY STATE: UT ZIP: 84104 BUSINESS PHONE: 8019741400 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALPHA BETA COMPANY CENTRAL INDEX KEY: 0000880800 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 951456805 STATE OF INCORPORATION: CA FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-08 FILM NUMBER: 99697218 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HARSRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7146268776 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA HARSRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BELL MARKETS INC CENTRAL INDEX KEY: 0000880801 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 941569281 STATE OF INCORPORATION: CA FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-09 FILM NUMBER: 99697219 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HARSRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7146268776 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA HARSRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALA CO CENTRAL INDEX KEY: 0000880803 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 954200005 STATE OF INCORPORATION: DE FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-10 FILM NUMBER: 99697220 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA H\SRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOOD 4 LESS OF CALIFORNIA INC CENTRAL INDEX KEY: 0000880823 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 330293011 STATE OF INCORPORATION: CA FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-11 FILM NUMBER: 99697221 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7146268776 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LAHABRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOOD 4 LESS MERCHANDISING INC CENTRAL INDEX KEY: 0000880824 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 330483193 STATE OF INCORPORATION: CA FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-12 FILM NUMBER: 99697222 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7146268776 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOOD 4 LESS OF SOUTHERN CALIFORNIA INC CENTRAL INDEX KEY: 0000880825 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 330483203 STATE OF INCORPORATION: DE FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-13 FILM NUMBER: 99697223 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7146268776 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOOD 4 LESS GM INC CENTRAL INDEX KEY: 0000886141 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 954390407 STATE OF INCORPORATION: CA FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-14 FILM NUMBER: 99697224 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7146268776 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMITTYS SUPER VALU INC CENTRAL INDEX KEY: 0000927773 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 133054103 STATE OF INCORPORATION: DE FISCAL YEAR END: 0801 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-15 FILM NUMBER: 99697225 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMITTYS SUPERMARKETS INC CENTRAL INDEX KEY: 0000927774 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 860765032 STATE OF INCORPORATION: DE FISCAL YEAR END: 0801 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-16 FILM NUMBER: 99697226 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAINT LAWRENCE HOLDING CO CENTRAL INDEX KEY: 0000932550 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 860504830 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-17 FILM NUMBER: 99697227 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAY AREA WAREHOUSE STORES INC CENTRAL INDEX KEY: 0000932721 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 931087199 STATE OF INCORPORATION: CA FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-18 FILM NUMBER: 99697228 BUSINESS ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD CITY: LA HARSERA STATE: CA ZIP: 90631 BUSINESS PHONE: 7147382000 MAIL ADDRESS: STREET 1: 777 SOUTH HARBOR BLVD STREET 2: 777 SOUTH HARBOR BLVD CITY: LA HARSRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPARE INC CENTRAL INDEX KEY: 0000933086 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 860609950 STATE OF INCORPORATION: DE FISCAL YEAR END: 0801 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-19 FILM NUMBER: 99697229 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOOD 4 LESS HOLDINGS INC /DE/ CENTRAL INDEX KEY: 0000936523 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 330642810 STATE OF INCORPORATION: DE FISCAL YEAR END: 0202 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-20 FILM NUMBER: 99697230 BUSINESS ADDRESS: STREET 1: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 BUSINESS PHONE: 7147382000 MAIL ADDRESS: STREET 1: FOOD 4 LESS HOLDINGS INC /DE/ STREET 2: 777 S HARBOR BLVD CITY: LA HABRA STATE: CA ZIP: 90631 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUGHES MARKETS INC CENTRAL INDEX KEY: 0001040033 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 911947206 STATE OF INCORPORATION: CA FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-21 FILM NUMBER: 99697231 BUSINESS ADDRESS: STREET 1: 14005 LIVE OAK AVENUE CITY: IRWINDALE STATE: CA ZIP: 91706 BUSINESS PHONE: 8188566580 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KU ACQUISITION CORP CENTRAL INDEX KEY: 0001040034 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 911765648 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-22 FILM NUMBER: 99697232 BUSINESS ADDRESS: STREET 1: 10112 N.E. 10TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 2064553761 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUALITY FOOD HOLDINGS INC CENTRAL INDEX KEY: 0001040035 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 911765648 STATE OF INCORPORATION: WA FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-23 FILM NUMBER: 99697233 BUSINESS ADDRESS: STREET 1: 10112 N.E. 10TH STREET CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 2064553761 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUALITY FOOD INC CENTRAL INDEX KEY: 0001042811 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411] IRS NUMBER: 911829342 STATE OF INCORPORATION: WA FISCAL YEAR END: 0322 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-24 FILM NUMBER: 99697234 BUSINESS ADDRESS: STREET 1: 10116 NE 8TH ST CITY: BELLEVUE STATE: WA ZIP: 98004-4148 BUSINESS PHONE: 2064622210 MAIL ADDRESS: STREET 1: 10116 NE 8TH ST CITY: BELLEVUE STATE: WA ZIP: 98004-4148 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRED MEYER INC CENTRAL INDEX KEY: 0001043273 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 911826443 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-25 FILM NUMBER: 99697235 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FORMER COMPANY: FORMER CONFORMED NAME: MEYER SMITH HOLDCO INC DATE OF NAME CHANGE: 19970730 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QFC SUB INC CENTRAL INDEX KEY: 0001054051 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-26 FILM NUMBER: 99697236 BUSINESS ADDRESS: STREET 1: 10112 N.E. 10TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 4254622179 MAIL ADDRESS: STREET 1: 10112 N.E. 10TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECOND STORY INC CENTRAL INDEX KEY: 0001054052 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 911753356 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-27 FILM NUMBER: 99697237 BUSINESS ADDRESS: STREET 1: 10112 N.E. 10TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 4254622179 MAIL ADDRESS: STREET 1: 10112 N.E. 10TH ST CITY: BELLEVUE STATE: WA ZIP: 98004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUGHES REALTY INC CENTRAL INDEX KEY: 0001054054 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 952253719 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-28 FILM NUMBER: 99697238 BUSINESS ADDRESS: STREET 1: 14005 LIVE OAK AVE CITY: IROINDALE STATE: CA ZIP: 91706 BUSINESS PHONE: 4254622179 MAIL ADDRESS: STREET 1: 14005 LIVE OAK AVE CITY: IROINDALE STATE: CA ZIP: 91706 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMITHS BEVERAGE OF WYOMING INC CENTRAL INDEX KEY: 0001054186 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 800126833 STATE OF INCORPORATION: WY FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-29 FILM NUMBER: 99697239 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RICHIES INC CENTRAL INDEX KEY: 0001054190 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 742047032 STATE OF INCORPORATION: TX FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-30 FILM NUMBER: 99697240 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SMITTYS EQUIPMENT LEASING INC CENTRAL INDEX KEY: 0001054192 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 860758585 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-31 FILM NUMBER: 99697241 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TREASURE VALLEY LAND CO LC CENTRAL INDEX KEY: 0001054194 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 820474377 STATE OF INCORPORATION: ID FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-32 FILM NUMBER: 99697242 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN PROPERTY INVESTMENT GROUP INC CENTRAL INDEX KEY: 0001054195 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 870485081 STATE OF INCORPORATION: CA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-33 FILM NUMBER: 99697243 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROUNDUP CO CENTRAL INDEX KEY: 0001054196 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 930798202 STATE OF INCORPORATION: WA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-34 FILM NUMBER: 99697244 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CB&S ADVERTISING AGENCY INC CENTRAL INDEX KEY: 0001054202 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 930587794 STATE OF INCORPORATION: OR FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-35 FILM NUMBER: 99697245 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DISTRIBUTION TRUCKING CO CENTRAL INDEX KEY: 0001054203 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 930786441 STATE OF INCORPORATION: OR FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-36 FILM NUMBER: 99697246 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FM INC CENTRAL INDEX KEY: 0001054204 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 931197669 STATE OF INCORPORATION: UT FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-37 FILM NUMBER: 99697247 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FM HOLDING CORP CENTRAL INDEX KEY: 0001054206 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 930864902 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-38 FILM NUMBER: 99697248 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FM RETAIL SERVICES INC CENTRAL INDEX KEY: 0001054207 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 911628326 STATE OF INCORPORATION: WA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-39 FILM NUMBER: 99697249 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRED MEYER OF ALASKA INC CENTRAL INDEX KEY: 0001054208 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 930802793 STATE OF INCORPORATION: AK FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-40 FILM NUMBER: 99697250 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRED MEYER OF CALIFORNIA INC CENTRAL INDEX KEY: 0001054209 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 930979434 STATE OF INCORPORATION: CA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-41 FILM NUMBER: 99697251 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRED MEYER JEWELERS INC CENTRAL INDEX KEY: 0001054210 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 931197671 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-42 FILM NUMBER: 99697252 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERKSAMER JEWELERS INC CENTRAL INDEX KEY: 0001054212 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 680202947 STATE OF INCORPORATION: CA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-43 FILM NUMBER: 99697253 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JH PROPERTIES INC CENTRAL INDEX KEY: 0001054213 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 911816127 STATE OF INCORPORATION: WA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-44 FILM NUMBER: 99697254 BUSINESS ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 BUSINESS PHONE: 5032328844 MAIL ADDRESS: STREET 1: 3800 SE 22ND AVENUE CITY: PORTLAND STATE: OR ZIP: 97202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITY MARKET INC CENTRAL INDEX KEY: 0001092206 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-45 FILM NUMBER: 99697255 BUSINESS ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DILLON CO INC CENTRAL INDEX KEY: 0001092207 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-46 FILM NUMBER: 99697256 BUSINESS ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DILLON REAL ESTATE CO INC CENTRAL INDEX KEY: 0001092208 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-47 FILM NUMBER: 99697257 BUSINESS ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DRUG DISTRIBUTORS INC CENTRAL INDEX KEY: 0001092209 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-48 FILM NUMBER: 99697258 BUSINESS ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTER AMERICAN FOODS INC CENTRAL INDEX KEY: 0001092211 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-49 FILM NUMBER: 99697259 BUSINESS ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JACKSON ICE CREAM CO INC CENTRAL INDEX KEY: 0001092212 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-50 FILM NUMBER: 99697260 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JUNIOR FOOD STORES OF WEST FLORIDA INC CENTRAL INDEX KEY: 0001092213 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-51 FILM NUMBER: 99697261 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: J V DISTRIBUTING INC CENTRAL INDEX KEY: 0001092215 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-52 FILM NUMBER: 99697262 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRGP INC CENTRAL INDEX KEY: 0001092216 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-53 FILM NUMBER: 99697263 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRLP INC CENTRAL INDEX KEY: 0001092217 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-54 FILM NUMBER: 99697264 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KROGER CO OF MICHIGAN CENTRAL INDEX KEY: 0001092218 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-55 FILM NUMBER: 99697265 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KROGER LIMITED PARTNERSHIP 1 CENTRAL INDEX KEY: 0001092219 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-56 FILM NUMBER: 99697266 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KROGER LIMITED PARTNERSHIP II CENTRAL INDEX KEY: 0001092220 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-57 FILM NUMBER: 99697267 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KWIK SHOP INC CENTRAL INDEX KEY: 0001092221 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-58 FILM NUMBER: 99697268 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELLS AIRCRAFT INC CENTRAL INDEX KEY: 0001092222 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-59 FILM NUMBER: 99697269 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 MAIL ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MINI MART INC CENTRAL INDEX KEY: 0001092223 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-60 FILM NUMBER: 99697270 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEYTONS SOUTHEASTERN INC CENTRAL INDEX KEY: 0001092224 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-61 FILM NUMBER: 99697271 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUIK STOP MARKETS INC CENTRAL INDEX KEY: 0001092225 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-62 FILM NUMBER: 99697272 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROCKET NEWCO INC CENTRAL INDEX KEY: 0001092226 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-63 FILM NUMBER: 99697273 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THGP CO INC CENTRAL INDEX KEY: 0001092228 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-64 FILM NUMBER: 99697274 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THLP CO INC CENTRAL INDEX KEY: 0001092229 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-65 FILM NUMBER: 99697275 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOPVALCO INC CENTRAL INDEX KEY: 0001092230 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-66 FILM NUMBER: 99697276 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TURKEY HILL LP CENTRAL INDEX KEY: 0001092231 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-67 FILM NUMBER: 99697277 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 2029425658 MAIL ADDRESS: STREET 1: C/O BRUCE CACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HENPIL INC CENTRAL INDEX KEY: 0001092443 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-68 FILM NUMBER: 99697278 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 MAIL ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KROGER DEDICATED LOGISTICS CO CENTRAL INDEX KEY: 0001092444 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-69 FILM NUMBER: 99697279 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 MAIL ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VINE COURT ASSURANCE INC CENTRAL INDEX KEY: 0001092445 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-70 FILM NUMBER: 99697280 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 MAIL ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WYDIV INC CENTRAL INDEX KEY: 0001092447 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-85725-71 FILM NUMBER: 99697281 BUSINESS ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 MAIL ADDRESS: STREET 1: C/O BRUCE GACK STREET 2: 1014 VINE STREET CITY: CINCINNATI STATE: OH ZIP: 45202 S-4 1 THE KROGER CO. S-4 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 20, 1999. Registration No. 333-______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------- THE KROGER CO. (Exact name of registrant as specified in its charter)
OHIO 5411 31-0345740 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number)
1014 VINE STREET CINCINNATI, OHIO 45202 (513)762-4000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) ADDITIONAL REGISTRANTS
Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- Alpha Beta Company California 5411 95-1456805 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Bay Area Warehouse Stores, California 5411 93-1087199 1014 Vine Street Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Bell Markets, Inc. California 5411 94-1569281 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Cala Co. Delaware 5411 95-4200005 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
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Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- Cala Foods, Inc. California 5411 94-1342664 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- CB&S Advertising Agency, Oregon 7336 93-0587794 1014 Vine Street Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- City Market, Inc. Colorado 5411 84-0595476 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Compare, Inc. Delaware 5411 86-0609950 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Crawford Stores, Inc. California 5411 95-0657410 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Dillon Companies, Inc. Kansas 5411 48-0196590 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Dillon Real Estate Co., Inc. Kansas 6512 48-0680105 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Distribution Trucking Oregon 5141 93-0786441 1014 Vine Street Company Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Drug Distributors, Inc. Indiana 5122 31-1112998 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- FM Holding Corporation Delaware 5411 93-0864302 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
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Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- FM, Inc. Utah 7389 93-1197669 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- FM Retail Services, Inc. Washington 5411 91-1628326 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Food 4 Less GM, Inc. California 5411 95-4390406 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Food 4 Less Holdings, Inc. Delaware 5411 33-0642810 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Food 4 Less Merchandising, California 5411 33-0483193 1014 Vine Street Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Food 4 Less of California, California 5411 33-0293011 1014 Vine Street Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Food 4 Less of Southern Delaware 5411 33-0483203 1014 Vine Street California, Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Fred Meyer, Inc. Delaware 5411 91-1826443 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Fred Meyer Jewelers, Inc. Delaware 5944 93-1197671 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Fred Meyer of Alaska, Inc. Alaska 5411 93-0802793 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
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Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- Fred Meyer of California, Inc. California 5411 93-0979434 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Fred Meyer Stores, Inc. Delaware 5411 93-0798201 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Grand Central, Inc. Utah 5411 87-0277527 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Henpil, Inc. Texas 5921 74-6044519 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Hughes Markets, Inc. California 5411 95-1947206 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Hughes Realty, Inc. California 6512 95-2253719 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Inter-American Foods, Inc. Ohio 2099 74-1491846 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Jackson Ice Cream Co., Inc. Kansas 2024 48-0686152 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- JH Properties, Inc. Washington 6512 91-1816127 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
5
Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- Junior Food Stores of West Florida 5411 59-0980071 1014 Vine Street Florida, Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- J.V. Distributing, Inc. Michigan 5141 31-1107025 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- KRGP Inc. Ohio 6719 31-1569084 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- KRLP Inc. Ohio 6719 31-1579339 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- The Kroger Co. of Michigan Michigan 5411 38-0900860 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Kroger Dedicated Logistics Ohio 5141 31-1399126 1014 Vine Street Co. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Kroger Limited Partnership I Ohio 5411 31-1569568 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Kroger Limited Partnership II Ohio 2026 31-1569087 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- KU Acquisition Corporation Washington 5411 91-1765648 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Kwik Shop, Inc. Kansas 5411 48-6112339 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
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Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- Merksamer Jewelers, Inc. California 5944 68-0202947 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Mini Mart, Inc. Wyoming 5411 83-0208334 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Peyton's-Southeastern, Inc. Tennessee 5149 61-0942129 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- QFC Sub, Inc. Washington 5411 91-1931177 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Quality Food Centers, Inc. Washington 5411 91-1330075 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Quality Food Holdings, Inc. Delaware 6719 91-1829339 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Quality Food, Inc. Delaware 5411 91-1829342 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Quik Stop Markets, Inc. California 5411 94-1610162 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Ralphs Grocery Company Delaware 5411 95-4356030 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Richies Inc. Texas 5921 74-2047032 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
7
Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- Rocket Newco, Inc. Texas 5181 76-0542912 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Roundup Co. Washington 5411 93-0798202 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Saint Lawrence Holding Delaware 6719 86-0504830 1014 Vine Street Company Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Second Story, Inc. Washington 6512 91-1753356 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Smith's Beverage of Wyoming 5181 80-0126833 1014 Vine Street Wyoming, Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Smith's Food & Drug Delaware 5411 87-0258768 1014 Vine Street Centers, Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Smitty's Equipment Leasing, Delaware 7359 86-0758585 1014 Vine Street Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Smitty's Super Valu, Inc. Delaware 5411 13-3054103 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Smitty's Supermarkets, Inc. Delaware 5411 86-0765032 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- THGP Co., Inc. Pennsylvania 6719 23-2922125 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
8
Primary IRS Standard Employer Industrial Identifi- Jurisdiction of Classification cation Name of Registrant Number Organization Number Number Address and Telephone - ------------------------------------------------------------------------------------------------------------------------- THLP Co., Inc. Pennsylvania 6719 23-2922123 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Topvalco, Inc. Ohio 6512 31-0574717 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Treasure Valley Land Idaho 6512 82-0474377 1014 Vine Street Company, L.C. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Turkey Hill, L.P. Pennsylvania 5411 23-2922126 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Vine Court Assurance Vermont 6331 31-1192645 1014 Vine Street Incorporated Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Wells Aircraft, Inc. Kansas 4581 48-0690719 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Western Property Investment California 6512 87-0485081 1014 Vine Street Group, Inc. Cincinnati, Ohio 45202 (513) 762-4000 - ------------------------------------------------------------------------------------------------------------------------- Wydiv, Inc. Texas 5921 75-6032155 1014 Vine Street Cincinnati, Ohio 45202 (513) 762-4000 - -------------------------------------------------------------------------------------------------------------------------
9 PAUL W. HELDMAN, ESQ. SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL THE KROGER CO. 1014 VINE STREET CINCINNATI, OHIO 45202 (513) 762-4000 (Name, address, including zip code, and telephone number, including area code, of agent for service) With copy to: STEVEN KAPLAN ARNOLD & PORTER 555 TWELFTH STREET, N.W. WASHINGTON, D.C. 20004 (202) 942-5998 Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of the Registration Statement. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ] CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------ Proposed Proposed Title of each class of maximum maximum securities to be Amount to be offering price aggregate Amount of registered Registered per unit offering price(1) registration fee - ------------------------------------------------------------------------------------------------------------------ 6.34% Senior Exchange $250,000,000 100%(1) $250,000,000 $69,500.00 Notes due 2001 - ------------------------------------------------------------------------------------------------------------------ Guarantees of the $250,000,000(2) 6.34% Senior Exchange Notes due 2001(2) - ------------------------------------------------------------------------------------------------------------------ 7.25% Senior Exchange $350,000,000 100%(1) $350,000,000 $97,300.00 Notes due 2009 - ------------------------------------------------------------------------------------------------------------------ Guarantees of the $350,000,000(2) 7.25% Senior Exchange Notes due 2009(2) - ------------------------------------------------------------------------------------------------------------------
10
- ------------------------------------------------------------------------------------------------------------------ 7.70% Senior Exchange $300,000,000 100%(1) $300,000,000 $83,400.00 Notes due 2029 - ------------------------------------------------------------------------------------------------------------------ Guarantees of the $300,000,000(2) 7.70% Senior Exchange Notes due 2029(2) - ------------------------------------------------------------------------------------------------------------------ Total $900,000,000 100%(1) $900,000,000 $250,200.00 - ------------------------------------------------------------------------------------------------------------------
(1) Estimated pursuant to Rule 457(f)(2) of the Securities Act of 1933 solely for the purpose of computing the registration fee. (2) Pursuant to Rule 457(n) under the Securities Act of 1933, no separate registration fee is payable for the Guarantees. THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. 11 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. SUBJECT TO COMPLETION, DATED AUGUST 20, 1999 PRELIMINARY PROSPECTUS THE KROGER CO. Exchange Offer for $250,000,000 6.34% Senior Notes due 2001 $350,000,000 7.25% Senior Notes due 2009 $300,000,000 7.70% Senior Notes due 2029 ---------------------- Guaranteed by our subsidiaries listed on page 36 of this prospectus. ------------------------ - Expires 5:00 p.m., New York City time, on , 1999, unless extended. - All old notes issued on June 25, 1999 that are validly tendered and not withdrawn will be exchanged for new notes. - The only conditions to completing the exchange offer are that it does not violate applicable law or any applicable interpretation of the staff of the SEC and that no injunction, order or decree has been issued that would prohibit, prevent or materially impair our ability to proceed with the exchange offer. - You may withdraw your tender of old notes at any time prior to the expiration of the exchange offer. - The exchange will not be a taxable event for U.S. federal income tax purposes. - The terms of the new notes to be issued in the exchange offer are substantially identical to those of the old notes, except for some transfer restrictions, registration rights and liquidated damages relating to the old notes. - The old notes are, and the new notes will be, fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by most of the subsidiaries of our company. - Affiliates of our company may not participate in the exchange offer. - There is no existing market for the new notes, and we do not intend to apply for their listing on any securities exchange. Please refer to "Risk Factors" beginning on page 11 of this document for important information. ---------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ---------------------- The date of this prospectus is , 1999. 12 THIS PROSPECTUS INCORPORATES BY REFERENCE IMPORTANT BUSINESS AND FINANCIAL INFORMATION IN DOCUMENTS THAT ARE NOT CONTAINED IN OR DELIVERED WITH THE PROSPECTUS. THESE DOCUMENTS ARE AVAILABLE WITHOUT CHARGE UPON REQUEST FROM PAUL HELDMAN, 1014 VINE STREET, CINCINNATI, OHIO 45202-1100, TELEPHONE NUMBER (513) 762-4000. TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY , 1999. --------------- TABLE OF CONTENTS WHERE YOU CAN FIND MORE INFORMATION......................... 1 PROSPECTUS SUMMARY.......................................... 2 THE COMPANY................................................. 2 THE EXCHANGE OFFER.......................................... 2 SUMMARY OF THE TERMS OF THE NEW NOTES....................... 7 SELECTED FINANCIAL DATA..................................... 9 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES............. 10 RISK FACTORS................................................ 11 Our significant indebtedness could adversely affect us by reducing our flexibility to respond to changing business and economic conditions and increasing our borrowing costs........................................ 11 We cannot assure you that Kroger and Fred Meyer will be successfully combined or that Fred Meyer's recent acquisitions will be successfully combined............. 11 We may not achieve the expected cost savings and other benefits of the merger and we will have significant merger related costs that will have a material negative effect on our results of operations.................... 12 The guarantees of the notes by our subsidiaries may be inadequate............................................. 12 Federal and state statutes permit courts, under specific circumstances, to void guarantees and require the return of payments received from guarantors............ 12 You may not be able to sell your notes easily............. 13 The liquidity of any market for the old notes is likely to decline after the completion of the exchange offer..... 13 If you do not exchange your old notes for new notes, you will remain subject to transfer restrictions........... 13 USE OF PROCEEDS............................................. 14 THE EXCHANGE OFFER.......................................... 14 DESCRIPTION OF THE NEW NOTES................................ 22 FEDERAL INCOME TAX CONSIDERATIONS........................... 30 PLAN OF DISTRIBUTION........................................ 33 LEGAL MATTERS............................................... 34 EXPERTS..................................................... 34 FORWARD-LOOKING STATEMENTS.................................. 35 LIST OF SUBSIDIARY GUARANTORS............................... 36
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY ONLY BE ACCURATE ON THE DATE OF THIS DOCUMENT. i 13 WHERE YOU CAN FIND MORE INFORMATION We have filed with the SEC a registration statement on Form S-4 under the Securities Act of 1933 with respect to the new notes to be issued in the exchange offer. This prospectus, which forms a part of the registration statement, does not contain all of the information in the registration statement and the exhibits and schedules to the registration statement. Some parts of the registration statement are omitted here in accordance with the SEC's rules and regulations. Any statements made in this prospectus concerning the provisions of various documents are not necessarily complete. In each instance, we refer you to the copy of those documents filed as an exhibit to the registration statement for the full text of those provisions. Each statement is qualified in its entirety by that reference. Our common stock is listed on the New York Stock Exchange (symbol KR) and we file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549; Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, Suite 1300, New York, New York 10048. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our electronic SEC filings are also available to the public from the SEC's web site at http://www.sec.gov. In addition, our company maintains a web site at http://www.kroger.com that contains additional information, including news releases about our business and operations. The SEC allows us to "incorporate by reference" in this prospectus the information we file with the SEC. This means that we can disclose important information to you by referring you to these documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below, which we have already filed with the SEC, and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the completion of the exchange offer:
KROGER SEC FILINGS (FILE NO. 1-303) PERIOD ----------------------------------- ------ Annual Report on Form 10-K................... Year ended January 2, 1999, as amended. Quarterly Report on Form 10-Q................ Quarter ended May 22, 1999. Current Reports on Form 8-K or Form 8-K/A.... January 8, 1999; January 15, 1999; January 28, 1999; April 30, 1999; May 10, 1999; May 28, 1999, as amended as of the same date; June 17, 1999; June 23, 1999; June 25, 1999; July 20, 1999 and August 20, 1999.
You may request a copy of any filings made by us with the SEC, or any of the agreements or other documents that constitute exhibits to those filings, at no cost, by writing or telephoning us at the following address or phone number: The Kroger Co. 1014 Vine Street Cincinnati, Ohio 45202-1100 (513) 762-4000 Attention: Paul Heldman 1 14 PROSPECTUS SUMMARY This summary highlights selected information from this prospectus and may not contain all information that is important to you. This prospectus includes specific terms of the exchange offer, as well as information regarding our business and detailed financial data. We encourage you to read this prospectus in its entirety and the other documents referred to in this prospectus. THE COMPANY Kroger was founded in 1883 and was incorporated in 1902. We maintain our corporate offices in Cincinnati, Ohio, and are the nation's largest supermarket operator measured by sales in 1998. Our mailing address is The Kroger Co., 1014 Vine Street, Cincinnati, Ohio 45202-1100, telephone (513) 762-4000. On May 27, 1999, we completed our previously announced merger with Fred Meyer, Inc., creating the nation's largest supermarket company, with combined annual sales of $43.1 billion during 1998. Fred Meyer is now a wholly-owned subsidiary of Kroger. You should consider the new circumstances of Kroger that result from the merger. See "Risk Factors" contained in this prospectus. Audited supplemental consolidated financial statements for the combined company are available to you on our Current Report on Form 8-K dated May 28, 1999, which has been filed with the SEC. As of the completion of our merger with Fred Meyer, Inc., we operated approximately 2,200 supermarkets and multidepartment stores in 31 states, 797 convenience stores in 15 states and 381 fine jewelry stores in 25 states. One hundred thirteen of the convenience stores are franchised to third parties in three states. We also operate manufacturing facilities that permit us to offer quality, low-cost private label products. THE EXCHANGE OFFER On June 25, 1999, we completed the private placement of $250 million principal amount of our 6.34% Senior Notes due 2001, $350 million principal amount of our 7.25% Senior Notes due 2009 and $300 million principal amount of our 7.70% Senior Notes due 2029. The notes are guaranteed by most of our subsidiaries. A list of these subsidiary guarantors can be found on page 36 of this prospectus. The notes were not registered under the Securities Act and, therefore, they are subject to significant restrictions on resale. When we sold those notes, we and the subsidiary guarantors entered into a registration rights agreement with the initial purchasers -- Goldman, Sachs & Co., Banc One Capital Markets, Inc., Banc of America Securities LLC, Chase Securities Inc. and Salomon Smith Barney Inc. In this registration rights agreement, we agreed to deliver to you this prospectus and to permit you to exchange those old notes for new notes that have substantially identical terms and have been registered under the Securities Act. We believe that the new notes may be resold by you without compliance with the registration and prospectus delivery provisions of the Securities Act, subject to limited conditions. Following the exchange offer, any old notes that you did not exchange for new notes will continue to be subject to restrictions on resale and we will have no obligation to you to register those old notes under the Securities Act. We issued the old notes under an indenture, dated June 25, 1999, between our company and Firstar Bank, National Association, as trustee, as supplemented by the first supplemental indenture (relating to the 7.25% notes), the second supplemental indenture (relating to the 7.70% notes) and the third supplemental indenture (relating to the 6.34% notes), each dated June 25, 1999, among our company, the subsidiary guarantors and Firstar Bank, National Association, as trustee. Any reference to the "indenture" in this prospectus refers to the indenture as supplemented, unless the context otherwise requires. The indenture grants you certain rights. The new notes also will be issued under 2 15 that indenture and you will have the same rights under the indenture that you had as a holder of old notes. Any reference to "notes" in this prospectus refers to both old notes and new notes, unless the context otherwise requires. You should read the discussion under the headings "The Exchange Offer" and "Description of the New Notes" for further information regarding the new notes. THE EXCHANGE OFFER........................ We are offering to exchange $1,000 principal amount of Series B: - $250,000,000 6.34% Senior Notes due 2001; - $350,000,000 7.25% Senior Notes due 2009; and - $300,000,000 7.70% Senior Notes due 2029 that have been registered under the Securities Act for each $1,000 principal amount of the corresponding Series A: - $250,000,000 6.34% Senior Notes due 2001; - $350,000,000 7.25% Senior Notes due 2009; and - $300,000,000 7.70% Senior Notes due 2029 that were issued on June 25, 1999 in a private placement. In order to be exchanged, an old note must be properly tendered and accepted. All old notes that are validly tendered and not validly withdrawn will be exchanged. We will issue the new notes promptly after the expiration of the exchange offer. RESALE.................................... We believe that the new notes that you receive in the exchange offer may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act if you meet the following conditions: (1) you acquire the new notes in the ordinary course of your business; (2) you are not engaging in and do not intend to engage in a distribution of the new notes; (3) you do not have an arrangement or understanding with any person to participate in the distribution of the new notes; and (4) you are not an affiliate of our company as the term "affiliate" is defined in Rule 405 under the Securities Act. If you do not meet the above conditions, you may incur liability under the Securities Act if you transfer any new note without delivering a prospectus meeting the requirements of the Securities Act. We do not assume or indemnify you against that liability. Each broker-dealer that receives new notes in the exchange offer for its own account in exchange for old notes that it acquired as a result of market-making activities or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new notes. A broker-dealer may use this
3 16 prospectus for an offer to resell, resale or other transfer of the new notes. EXPIRATION DATE........................... The exchange offer will expire at 5:00 p.m., New York City time, on , 1999, unless we decide to extend the exchange offer. We do not intend to extend the exchange offer, although we reserve the right to do so. If we determine to extend the exchange offer, we do not intend to extend it beyond February 5, 2000. CONDITIONS TO THE EXCHANGE OFFER.......... The only conditions to completing the exchange offer are that it does not violate applicable law or any applicable interpretation of the staff of the SEC and that no injunction, order or decree has been issued which would prohibit, prevent or materially impair our ability to proceed with the exchange offer. See "The Exchange Offer -- Conditions." PROCEDURES FOR TENDERING OLD NOTES HELD IN THE FORM OF BOOK-ENTRY INTERESTS.......... The old notes were issued as global securities. Beneficial interests in the old notes that are held by direct or indirect participants in The Depository Trust Company through certificateless depositary interests are shown on, and transfers of the old notes can be made only through, records maintained in book-entry form by DTC with respect to its participants. If you are a holder of an old note held in the form of a book-entry interest and you wish to tender your old note for exchange, you must transmit to Firstar Bank, National Association, as exchange agent, on or before the expiration date, either: - a properly completed and duly executed letter of transmittal, or a facsimile of the letter of transmittal, together with any other required documentation; or - a computer-generated message transmitted by means of DTC's Automated Tender Offer Program system and forming a part of a confirmation of book-entry transfer in which you acknowledge and agree to be bound by the terms of the letter of transmittal.
4 17 The exchange agent must also receive on or before the expiration date either: - a timely confirmation of book-entry transfer of your old notes into the exchange agent's account at DTC, in accordance with the procedure for book-entry transfers described in this prospectus under the heading "The Exchange Offer -- Book-Entry Transfer;" or - the documents necessary for compliance with the guaranteed delivery procedures described below. A letter of transmittal accompanies this prospectus. By executing the letter of transmittal or delivering a computer-generated message through DTC's Automated Tender Offer Program system, you will represent to us that, among other things: (1) the new notes to be acquired by you in the exchange offer are being acquired in the ordinary course of your business; (2) you are not engaging in and do not intend to engage in a distribution of the new notes; (3) you do not have an arrangement or understanding with any person to participate in the distribution of the new notes; and (4) you are not our affiliate. PROCEDURES FOR TENDERING CERTIFICATED OLD NOTES..................................... If you are a holder of book-entry interests in the old notes, you are entitled to receive, in limited circumstances, in exchange for your book-entry interests, certificated notes which are in equal principal amounts to your book-entry interests. See "Description of the New Notes -- Form of New Notes." No certificated notes are issued and outstanding as of the date of this prospectus. If you acquire certificated old notes prior to the expiration of the exchange offer, you must tender your certificated old notes in accordance with the procedures described in this prospectus under the heading "The Exchange Offer -- Procedures for Tendering -- Certificated Old Notes." SPECIAL PROCEDURES FOR BENEFICIAL OWNER... If you are the beneficial owner of old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender those old notes for exchange, you should promptly contact the registered holder and instruct that person to tender on your behalf. If you wish to tender those notes yourself, you must either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership
5 18 may take considerable time and you may not be able to complete the transfer prior to the expiration date. See "The Exchange Offer -- Procedures for Tendering -- Procedures Applicable to All Holders." GUARANTEED DELIVERY PROCEDURES............ If you wish to tender your old notes and: (1) they are not immediately available; (2) time will not permit your old notes or other required documents to reach the exchange agent before the expiration of the exchange offer; or (3) you cannot complete the procedure for book-entry transfer on a timely basis, you may tender your old notes in accordance with the guaranteed delivery procedures described in "The Exchange Offer -- Procedures for Tendering -- Guaranteed Delivery Procedures." ACCEPTANCE OF OLD NOTES AND DELIVERY OF NEW NOTES................................. Subject to the conditions described in "The Exchange Offer -- Conditions," we will accept for exchange all old notes which are properly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date. The new notes to be issued to you in the exchange offer will be delivered promptly following the expiration date. See "The Exchange Offer -- Terms of the Exchange Offer." WITHDRAWAL................................ You may withdraw the tender of your old notes at any time prior to 5:00 p.m., New York City time, on the expiration date. We will return to you any old notes not accepted for exchange for any reason without expense to you as promptly as we can after the expiration or termination of the exchange offer. EXCHANGE AGENT............................ Firstar Bank, National Association is serving as the exchange agent in connection with the exchange offer. CONSEQUENCES OF FAILURE TO EXCHANGE....... If you do not participate in the exchange offer, upon completion of the exchange offer, the liquidity of the market for your old notes could be adversely affected. See "The Exchange Offer -- Consequences of Failure to Exchange." FEDERAL INCOME TAX CONSEQUENCES........... The exchange of the old notes will not be a taxable event for federal income tax purposes. See "Federal Income Tax Considerations." USE OF PROCEEDS........................... We will not receive any cash proceeds upon completion of the exchange offer.
6 19 SUMMARY OF THE TERMS OF THE NEW NOTES SECURITIES OFFERED........................ $250,000,000 6.34% Senior Notes due 2001 $350,000,000 7.25% Senior Notes due 2009 $300,000,000 7.70% Senior Notes due 2029 ISSUER.................................... The Kroger Co. MATURITY.................................. June 1, 2001 June 1, 2009 June 1, 2029 INTEREST PAYMENT DATES.................... June 1 and December 1 of each year, beginning December 1, 1999. Interest on the new notes that we will issue will accrue from the last interest payment date on which interest was paid on the old notes surrendered in exchange, or, if no interest has been paid on the old notes, from June 25, 1999, which was the date of original issuance of the old notes. OPTIONAL REDEMPTION....................... At our option, we may redeem some or all of the 7.25% notes and 7.70% notes at any time at the redemption prices listed under "Description of the New Notes -- Optional Redemption." The 6.34% notes are not subject to optional redemption. GUARANTEES................................ The new notes will be guaranteed on a senior unsecured basis by most of our subsidiaries. The guarantees will be equal in right of payment with all other unsecured and unsubordinated indebtedness of each guarantor subsidiary. The guarantees are subject to release in the circumstances described in "Description of the New Notes -- Subsidiary Guarantees." RANKING................................... The new notes will be senior to all of our existing and future subordinated indebtedness and will be equal in right of payment with all of our existing and future unsecured senior debt. BASIC COVENANTS OF INDENTURE.............. The indenture contains covenants that, subject to specified exceptions, restrict our ability and the ability of our restricted subsidiaries to: - assume or guarantee any secured debt; - merge with or into other companies; and - enter into some sale and lease-back transactions. In the future, some of our subsidiaries that we designate as non-restricted subsidiaries will not be subject to the covenants in the indenture. More detailed information about these covenants is included under "Description of New Notes -- Materials Covenants."
7 20 FORM OF NEW NOTES......................... The new notes will be represented by one or more global securities deposited with Firstar Bank, National Association for the benefit of DTC. You will not receive new notes in certificated form unless one of the events described under the heading "Description of the New Notes -- Form of New Notes" occurs. Instead, beneficial interests in the new notes will be shown on, and transfers of these interests will be effected only through, records maintained in book-entry form by DTC with respect to its participants.
8 21 SELECTED FINANCIAL DATA Included below is selected financial data for the periods shown. You should read this summary in conjunction with the audited and unaudited consolidated financial statements of Kroger and accompanying notes as well as with the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Kroger's Annual Report on Form 10-K for the fiscal year ended January 2, 1999 and in Kroger's Quarterly Report for the period ended May 22, 1999.
QUARTER ENDED FISCAL YEARS ENDED ----------------------- ------------------------------------------------------------------------ MAY 22, MARCH 21, JANUARY 2, DECEMBER 27, DECEMBER 28, DECEMBER 30, DECEMBER 31, 1999 1998 1999 1997 1996 1995 1994 (16 WEEKS) (12 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) ---------- ---------- ------------ ------------ ------------ ------------ ------------ (IN MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) Sales.................. $8,789 $6,389 $28,203 $26,567 $25,171 $23,938 $22,959 Earnings before extraordinary loss... 176 51 450 444 353 319 269 Extraordinary loss (net of income tax benefit) (A)......... -- (4) (39) (32) (3) (16) (27) Net earnings........... 176 47 411 412 350 303 242 Diluted earnings per share Earnings before extraordinary loss............... 0.33 0.10 1.70 1.69 1.36 1.28 1.10 Extraordinary Loss (A)................ -- (0.01) (0.15) (0.12) (0.01) (0.06) (0.10) Net Earnings......... 0.33 0.09 1.55 1.57 1.35 1.22 1.00 Total assets........... 6,734 6,779 6,700 6,301 5,892 5,045 4,708 Long-term obligations, including obligations under capital leases............... 3,212 3,302 3,229 3,493 3,659 3,490 3,889 Shareowners' deficit... (164) (349) (388) (785) (1,182) (1,603) (2,154) Cash dividends per common share......... (B) (B) (B) (B) (B) (B) (B)
- --------------- (A) The extraordinary loss relates to premiums paid to retire certain indebtedness early and the write-off of related deferred financing costs. (B) The Company is prohibited from paying cash dividends under the terms of its Credit Agreement. 9 22 CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES The tables below present the calculation of our historical and supplemental consolidated ratio of earnings to fixed charges for the periods shown. The supplemental consolidated ratio of earnings to fixed charges reflects the retroactive effect given to the merger of Kroger and Fred Meyer, Inc., which has been accounted for as a pooling of interests. HISTORICAL CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
QUARTER ENDED FISCAL YEARS ENDED ----------------------- ------------------------------------------------------------------------ MAY 22, MARCH 21, JANUARY 2, DECEMBER 27, DECEMBER 28, DECEMBER 30, DECEMBER 31, 1999 1998 1999 1997 1996 1995 1994 (16 WEEKS) (12 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) ---------- ---------- ------------ ------------ ------------ ------------ ------------ (IN MILLIONS OF DOLLARS) Earnings Earnings from continuing operations before tax expense and extraordinary loss............... $280 $ 83 $ 713 $ 713 $ 567 $510 $421 Fixed charges.......... 139 113 479 482 483 490 501 Capitalized interest... (2) (2) (8) (9) (11) (7) (3) ---- ---- ------ ------ ------ ---- ---- $417 $194 $1,184 $1,186 $1,039 $993 $919 ==== ==== ====== ====== ====== ==== ==== Fixed charges Interest............. $ 79 $ 66 $ 276 $ 295 $ 312 $320 $331 Portion of rental payments deemed to be interest........ 60 47 203 187 171 170 170 ---- ---- ------ ------ ------ ---- ---- $139 $113 $ 479 $ 482 $ 483 $490 $501 ==== ==== ====== ====== ====== ==== ==== Ratio of earnings to fixed charges........ 3.0 1.7 2.5 2.5 2.2 2.0 1.8
SUPPLEMENTAL CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
QUARTER ENDED FISCAL YEARS ENDED ----------------------- ------------------------------------------------------------------------ MAY 22, MARCH 21, JANUARY 2, DECEMBER 27, DECEMBER 28, DECEMBER 30, DECEMBER 31, 1999 1998 1999 1997 1996 1995 1994 (16 WEEKS) (12 WEEKS) (53 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) (52 WEEKS) ---------- ---------- ------------ ------------ ------------ ------------ ------------ (IN MILLIONS OF DOLLARS) Earnings Earnings (loss) from continuing operations before tax expense and extraordinary loss............... $347 ($ 7) $ 871 $ 954 $ 701 $ 591 $ 473 Fixed charges.......... 325 268 1,038 679 595 596 582 Capitalized interest... 2 2 (9) (10) (12) (11) (5) ---- ---- ------ ------ ------ ------ ------ $674 $263 $1,900 $1,623 $1,284 $1,176 $1,050 ==== ==== ====== ====== ====== ====== ====== Fixed charges Interest............. $201 $166 $ 654 $ 397 $ 361 $ 369 $ 356 Portion of rental payments deemed to be interest........ 124 102 384 282 234 227 226 ---- ---- ------ ------ ------ ------ ------ $325 $268 $1,038 $ 679 $ 595 $ 596 $ 582 ==== ==== ====== ====== ====== ====== ====== Ratio of earnings to fixed charges........ 2.1 1.0 1.8 2.4 2.2 2.0 1.8
10 23 RISK FACTORS You should carefully consider the risks described below before making a decision to tender your old notes for exchange. Unless otherwise noted, amounts provided below are for the combined company as if the merger between Kroger and Fred Meyer took place prior to May 22, 1999. OUR SIGNIFICANT INDEBTEDNESS COULD ADVERSELY AFFECT US BY REDUCING OUR FLEXIBILITY TO RESPOND TO CHANGING BUSINESS AND ECONOMIC CONDITIONS AND INCREASING OUR BORROWING COSTS. As of May 22, 1999, our total outstanding indebtedness, including capital leases and the current portion thereof, was approximately $8.5 billion, including approximately $4.0 billion under several bank credit facilities. As of May 22, 1999, we had credit facilities totaling $5.5 billion, with approximately $1.5 billion available for additional borrowings under these credit facilities. As of the date of this prospectus, we have permanently reduced the commitments under our credit facilities by $1.5 billion. In addition, as of May 22, 1999, we had a $500 million synthetic lease credit facility and a $125 million money market line with unused balances of $128 million and $108 million, respectively. This significant amount of indebtedness could reduce our ability to obtain additional financing for working capital, acquisitions or other purposes and could make us more vulnerable to economic downturns and competitive pressures. Our needs for cash in the future will depend on many factors that are difficult to predict. These factors include results of operations, the timing and cost of acquisitions and efforts to expand existing operations. We believe that we will have sufficient funds from all sources to meet our needs over the next several years. We cannot assure you, however, that our business will generate cash flow at or above current levels or that anticipated cost savings from the merger with Fred Meyer can be fully achieved. If we are unable to generate sufficient cash flow from operations in the future to pay our debt and make necessary investments, we will be required to: - refinance all or a portion of our existing debt; - seek new borrowings; - forego strategic opportunities; or - delay, scale back or eliminate some aspects of our operations. If necessary, any of these actions could have a material negative impact on our business, financial condition or results of operations. Some of our subsidiaries will guarantee the notes. As a result, the notes will effectively rank equal in right of payment with approximately $8.3 billion of indebtedness of these subsidiaries as of July 17, 1999. If one of these subsidiaries becomes insolvent, however, the guarantee of that subsidiary could be held by a court to be unenforceable under applicable fraudulent transfer or similar laws. The notes will effectively rank junior in right of payment to indebtedness of our subsidiaries that do not guarantee the notes. As of July 17, 1999, the indebtedness of the subsidiaries who will not guarantee the notes totaled approximately $252 million. WE CANNOT ASSURE YOU THAT KROGER AND FRED MEYER WILL BE SUCCESSFULLY COMBINED OR THAT FRED MEYER'S RECENT ACQUISITIONS WILL BE SUCCESSFULLY COMBINED. If we cannot successfully combine our operations we may experience a material negative effect on our business, financial condition or results of operations. The merger involves the combining of companies that have previously operated separately. This involves a number of risks, including: - demands on management related to the significant increase in size of Kroger after the merger, including the combining of operations resulting from Fred Meyer's recent acquisitions of Smith's Food & Drug Centers, Inc., Quality Food Centers, Inc. and Food 4 Less Holdings, Inc.; 11 24 - the diversion of management's attention to the combining of operations; - difficulties in the combining of operations and systems, including plans to update systems for "Year 2000" compliance; - difficulties in the assimilation and retention of employees; - challenges in keeping customers; and - potential adverse short-term effects on operating results. We may not be able to maintain the levels of operating efficiency that we have previously achieved or might achieve separately. Because of difficulties in combining operations, we may not be able to achieve the cost savings and other size related benefits that we hope to achieve from the merger. Also, an element of our growth strategy has been the pursuit of strategic acquisitions that either expand or complement our business. Future acquisitions may further complicate this process. WE MAY NOT ACHIEVE THE EXPECTED COST SAVINGS AND OTHER BENEFITS OF THE MERGER AND WE WILL HAVE SIGNIFICANT MERGER RELATED COSTS THAT WILL HAVE A MATERIAL NEGATIVE EFFECT ON OUR RESULTS OF OPERATIONS. We expect that the cost savings and other benefits from the merger will exceed those which we could achieve separately. However, our cost savings estimates are based on many assumptions, including future sales levels and other operating results, the availability of funds for investment, the timing of events, as well as general industry and business conditions and other matters. Many of these factors are beyond our control. Our actual cost savings, if any, could differ from our estimates and these differences could be material. There may be unforeseen costs and expenses or other factors that will offset the estimated cost savings or other components of our plan. They also may result in delays in the realization of cost savings. We will have substantial costs in connection with the merger. The merger will result in a charge to operations of approximately $75 million for transaction fees and costs. This charge represents direct costs only. The costs of combining our companies will also result in other one-time charges to the results of operations of the combined company. The actual amount of these charges cannot be determined until the plan for combining the companies is completed. We expect that these charges will have a material negative effect on the combined company's results of operations for the second quarter of fiscal year 1999. We also expect to have significant charges resulting from the merger in the future. THE GUARANTEES OF THE NOTES BY OUR SUBSIDIARIES MAY BE INADEQUATE. Although most of our subsidiaries have guaranteed our obligation to pay the notes, the available assets of those subsidiaries may be insufficient for these purposes. Some of those subsidiaries are direct borrowers under, or guarantors of, our bank credit facility. FEDERAL AND STATE STATUTES PERMIT COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID GUARANTEES AND REQUIRE THE RETURN OF PAYMENTS RECEIVED FROM GUARANTORS. Under the U.S. Bankruptcy Code and comparable provisions of state fraudulent transfer laws, a court has the power to void a guarantee, or to subordinate claims in respect of a guarantee to all other debts of the guarantor, if, among other things, at the time the guarantor incurred the indebtedness evidenced by its guarantee, it received less than reasonably equivalent value or fair consideration for the incurrence of the guarantee, and either - was insolvent or rendered insolvent by reason of that incurrence; - was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or 12 25 - intended to incur, or believed that it would incur, debts beyond its ability to pay as those debts mature. In addition, the court may void any payment by that guarantor pursuant to its guarantee and require the return of that payment to the guarantor or to a fund for the benefit of the creditors of the guarantor. The measures of insolvency for these purposes will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if: - the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets; - the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or - it could not pay its debts as they become due. On the basis of our historical financial results, recent operating history and other factors, we believe that each subsidiary that has guaranteed the notes, after giving effect to that guarantee, will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay as those debts mature. However, we cannot assure you of the particular standard that might be applied by a court in making its determinations or that a court would agree with our conclusions in this regard. YOU MAY NOT BE ABLE TO SELL YOUR NOTES EASILY. There is no established trading market for the notes and we cannot assure you that an active or liquid trading market will develop for the notes. The notes are expected to be eligible for trading in the PORTAL Market, a subsidiary of The Nasdaq Stock Market, Inc. However, we do not intend to apply for listing of the old notes, or the new notes that may be issued in exchange for the old notes, on any securities exchange or automated dealer quotation system. The liquidity of any market for the notes will depend upon the number of holders of the notes, our own financial performance, the market for similar securities, the interest of securities dealers in making a market in the notes and other factors. THE LIQUIDITY OF ANY MARKET FOR THE OLD NOTES IS LIKELY TO DECLINE AFTER THE COMPLETION OF THE EXCHANGE OFFER. After old notes are tendered and accepted in the exchange offer, the principal amount of old notes remaining after the completion of the exchange offer will decrease. This decrease will reduce the liquidity of the trading market for the original notes. We cannot assure you that any trading market that has developed for the old notes will continue to exist after the completion of the exchange offer. Please refer to the section entitled "The Exchange Offer -- Consequences of Failure to Exchange." IF YOU DO NOT EXCHANGE YOUR OLD NOTES FOR NEW NOTES, YOU WILL REMAIN SUBJECT TO TRANSFER RESTRICTIONS. We have not registered the old notes under the federal securities laws. Old notes that are not exchanged after the completion of this exchange offer will remain subject to the transfer restrictions under applicable securities laws. This means that you will not be able to transfer, sell or trade your old notes except based upon an exemption from the registration requirements of the federal securities laws. Please refer to the section entitled "The Exchange Offer -- Consequences of a Failure to Exchange." 13 26 USE OF PROCEEDS This exchange offer does not involve the sale of securities for cash. Therefore, we will not receive any proceeds from the issuance of the new notes in exchange for the old notes. The net proceeds from the sale of old notes were approximately $893 million, after deducting the discount to the initial purchasers and other offering expenses that were payable by us. We used these proceeds to prepay a portion of the amounts outstanding under our 1998 Senior Credit Facility dated as of March 1998 between Fred Meyer and the lenders under that credit agreement. The interest rates for borrowings under the credit facilities, as amended, are detailed in the supplemental consolidated financial statements attached to our Current Report on Form 8-K dated May 28, 1999 which has been filed with the SEC. THE EXCHANGE OFFER PURPOSE AND EFFECT We issued the old notes on June 25, 1999, in a private placement. In connection with this issuance, we and the subsidiary guarantors entered into a registration rights agreement dated June 25, 1999, with the initial purchasers -- Goldman, Sachs & Co., Banc One Capital Markets, Inc., Banc of America Securities LLC, Chase Securities Inc. and Salomon Smith Barney Inc. This registration rights agreement requires that we file a registration statement under the Securities Act for the new notes that we are issuing in the exchange offer and, upon the effectiveness of the registration statement, offer to you the opportunity to exchange your notes for a like principal amount of new, registered notes. We will issue registered notes without a restrictive legend and, except as described below, they may be reoffered and resold by you without registration under the Securities Act. After we complete the exchange offer, our obligations with respect to the registration of the old notes and the registered notes will terminate, except as provided in the last paragraph of this section. A copy of the indenture relating to the notes and the registration rights agreement have been filed as exhibits to the registration statement of which this prospectus is a part. As a result of the filing and the effectiveness of the registration statement, of which this prospectus is a part, assuming we complete the exchange offer by February 5, 2000, certain prospective increases in the interest rate on the old notes provided for in the registration rights agreement will not occur. Based on an interpretation by the staff of the SEC contained in no-action letters issued to third parties, if you are not our "affiliate" within the meaning of Rule 405 under the Securities Act or a broker-dealer referred to in the next paragraph, we believe that you may offer for resale, resell or otherwise transfer the registered notes that we are issuing to you in the exchange offer, without compliance with the registration and prospectus delivery provisions of the Securities Act. This interpretation, however, is based on your representation to us that: (1) the registered notes that we are issuing to you in the exchange offer are acquired in the ordinary course of your business; (2) you are not engaging in and do not intend to engage in a distribution of the registered notes that we are issuing to you in the exchange offer; (3) you have no arrangement or understanding with any person to participate in the distribution of the registered notes that we are issuing to you in the exchange offer; and (4) you are not our "affiliate," as defined in Rule 405 under the Securities Act. If you tender your notes in the exchange offer for the purpose of participating in a distribution of the registered notes that we are issuing to you in the exchange offer, you cannot rely on this interpretation by the staff of the SEC. Under those circumstances, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale 14 27 transaction. Each broker-dealer that receives registered notes in the exchange offer for its own account in exchange for old notes that were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of those registered notes. We have agreed that a broker-dealer may use this prospectus for a period of 180 days after the expiration date, or, if earlier, when a broker-dealer has disposed of all the new notes. See "Plan of Distribution." If you will not receive freely tradeable registered notes in the exchange offer or are not eligible to participate in the exchange offer, you can elect, by indicating on the letter of transmittal and providing the additional necessary information, to have your old notes registered in a "shelf" registration statement on an appropriate form under Securities Act Rule 415. In the event that we are obligated to file a shelf registration statement, we will be required to keep the shelf registration statement effective for a period of two years or for a shorter period that will terminate when all of the old notes covered by the shelf registration statement have been sold pursuant to the shelf registration statement. Other than as described in this paragraph, you will not have the right to require us to register your old notes under the Securities Act. See " -- Procedures for Tendering." CONSEQUENCES OF FAILURE TO EXCHANGE After we complete the exchange offer, if you have not tendered your old notes, you will not have any further registration rights, except as described above. Your old notes will continue to be subject to various restrictions on transfer. Therefore, the liquidity of the market for your old notes could be adversely affected upon completion of the exchange offer if you do not participate in the exchange offer. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal, we will accept all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date. After the trustee authenticates the registered notes, we will issue $1,000 principal amount of registered notes in exchange for each $1,000 principal amount of old notes we accept in the exchange offer. You may tender some or all of your old notes in the exchange offer. However, old notes may be tendered only in integral multiples of $1,000 in principal amount. The form and terms of the registered notes are substantially the same as the form and terms of the old notes, except that the registered notes that we are issuing in the exchange offer have been registered under the Securities Act and will not bear legends restricting their transfer. We will issue the registered notes under, and they will be entitled to the benefits of, the indenture. The indenture also governs the old notes. The registered notes and the old notes will be deemed one issue of notes under the indenture. As of the date of this prospectus, $900,000,000 aggregate principal amount of the old notes is outstanding, consisting of $250,000,000 6.34% Senior Notes due 2001, $350,000,000 7.25% Senior Notes due 2009 and $300,000,000 7.70% Senior Notes due 2029. This prospectus, together with the letter of transmittal, is being sent to all registered holders and to others believed to have beneficial interests in the old notes. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC. We will be deemed to have accepted validly tendered old notes when we have given oral or written notice of our acceptance to the exchange agent. The exchange agent will receive the new notes from us and deliver them to the tendering holders. If we do not accept any tendered notes because of an invalid tender, the occurrence of various other events described in this prospectus or otherwise, we will return certificates for any unaccepted old notes at our cost, to the tendering holder as promptly as practicable after the expiration date. 15 28 You will not be required to pay brokerage commissions or fees or, except as described below under " -- Transfer Taxes," transfer taxes for the exchange of your old notes in the exchange offer. We will pay all charges and expenses, other than specific applicable taxes, in connection with the exchange offer. See " -- Fees and Expenses" below. EXPIRATION DATE; AMENDMENTS The exchange offer will expire at 5:00 p.m., New York City time, on , 1999, unless we determine, in our sole discretion, to extend the exchange offer, in which case, it will expire at the later date and time to which it is extended. We do not intend to extend the exchange offer, although we reserve the right to do so. If we determine to extend the exchange offer, we do not intend to extend it beyond February 5, 2000. If we extend the exchange offer, we will give oral or written notice of the extension to the exchange agent and give each registered holder notice by means of a press release or other public announcement of any extension prior to 9:00 a.m., New York City time, on the next business day after the scheduled expiration date. We also reserve the right, in our sole discretion, (1) to delay accepting any old notes or, if any of the conditions described below under " -- Conditions" have not been satisfied or waived, to terminate the exchange offer; or (2) to amend the terms of the exchange offer in any manner, by giving oral or written notice of the delay or termination to the exchange agent, and by complying with Rule 14e-l(d) under the Exchange Act to the extent that rule applies. We acknowledge and undertake to comply with the provisions of Rule 14e-l(c) under the Exchange Act, which requires us to pay the consideration offered, or return the old notes surrendered for exchange, promptly after the termination or withdrawal of the exchange offer. We will notify you as promptly as we can of any extension, termination or amendment. PROCEDURES FOR TENDERING Book-Entry Interests. The old notes were issued as global securities. Beneficial interests in the global securities, held by direct or indirect participants in DTC, are shown on, and transfers of these interests are effected only through, records maintained in book-entry form by DTC with respect to its participants. If you hold your old notes in the form of book-entry interests and you wish to tender your old notes for exchange in the exchange offer, you must transmit to the exchange agent on or prior to the expiration date either: (1) a written or facsimile copy of a properly completed and duly executed letter of transmittal, including all other documents required by the letter of transmittal, to the exchange agent at the address shown on the cover page of the letter of transmittal; or (2) a computer-generated message transmitted by means of DTC's Automated Tender Offer Program system and received by the exchange agent and forming a part of a confirmation of book-entry transfer, in which you acknowledge and agree to be bound by the terms of the letter of transmittal. In addition, in order to deliver old notes held in the form of book-entry interests: (1) a timely confirmation of book-entry transfer of the notes into the exchange agent's account at DTC under the procedure for book-entry transfers described below under " -- Book-Entry Transfer" must be received by the exchange agent prior to the expiration date; or (2) you must comply with the guaranteed delivery procedures described below. 16 29 THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK. INSTEAD OF DELIVERY BY MAIL, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. YOU SHOULD NOT SEND THE LETTER OF TRANSMITTAL OR OLD NOTES TO US. YOU MAY REQUEST THAT YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR NOMINEE COMPLETE THE ABOVE TRANSACTIONS FOR YOU. Certificated Old Notes. Only registered holders of certificated old notes may tender those notes in the exchange offer. If your old notes are certificated notes and you wish to tender those notes for exchange under the exchange offer, you must transmit to the exchange agent on or prior to the expiration date, a written or facsimile copy of a properly completed and duly executed letter of transmittal, including all other required documents, to the address shown below under " -- Exchange Agent." In addition, in order to validly tender your certificated old notes: (1) the certificates representing your old notes must be received by the exchange agent prior to the expiration date; or (2) you must comply with the guaranteed delivery procedures described below. Procedures Applicable To All Holders. If you tender an old note and you do not withdraw the tender prior to the expiration date, you will have made an agreement with us in accordance with the terms and subject to the conditions contained in this prospectus and in the letter of transmittal. If your old notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your notes, you should contact the registered holder promptly and instruct the registered holder to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your old notes, either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. Signatures on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible institution unless: (1) old notes tendered in the exchange offer are tendered either (a) by a registered holder who has not completed the box entitled "Special Delivery Instructions" on the letter of transmittal; or (b) for the account of an eligible institution; and (2) the box entitled "Special Registration Instructions" on the letter of transmittal has not been completed. If signatures on a letter of transmittal or a notice of withdrawal are required to be guaranteed, the guarantee must be by an eligible financial institution. This includes most banks, savings and loan associations and brokerage houses, that are participants in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Program or the Stock Exchanges Medallion Program. If the letter of transmittal is signed by a person other than you, your old notes must be endorsed or accompanied by a properly completed bond power and signed by you as your name appears on those old notes. If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless we waive this 17 30 requirement, in this instance you must submit with the letter of transmittal proper evidence satisfactory to us of their authority to act on your behalf. We will determine, in our sole discretion, all questions regarding the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tendered old notes. This determination will be final and binding. We reserve the absolute right to reject any old notes not properly tendered or any old notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. You must cure any defects or irregularities in connection with tenders of your old notes within the time period we will determine unless we waive that defect or irregularity. Although we intend to notify you of defects or irregularities with respect to your tender of old notes, neither we, the exchange agent nor any other person will incur any liability for failure to give this notification. Your tender will not be deemed to have been made and your notes will be returned to you if: - you improperly tender your old notes; - you have not cured any defects or irregularities in your tender; and - we have not waived those defects, irregularities or improper tender. The exchange agent will return your notes, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration of the exchange offer. By tendering, you will represent to us that, among other things: - the registered notes to be acquired by you in the exchange offer are being acquired in the ordinary course of your business; - you are not engaging in and do not intend to engage in a distribution of the registered notes that you are acquiring in the exchange offer; - you do not have an arrangement or understanding with any person to participate in the distribution of the registered notes that you are acquiring in the exchange offer; and - you are not our "affiliate," as defined in Rule 405 under the Securities Act. In all cases, we will issue registered notes for old notes that are accepted for exchange in the exchange offer only after timely receipt of the following by the exchange agent: - certificates for your old notes or a timely book-entry confirmation of your old notes into the exchange agent's account at DTC; - a properly completed and duly executed letter of transmittal, or a computer-generated message instead of the letter of transmittal; and - all other required documents. If we do not accept any tendered old notes for any reason described in the terms and conditions of the exchange offer or if you submit old notes for a greater principal amount than you desire to exchange, we will return the unaccepted or non-exchanged old notes without expense to you. In addition, in the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC under the book-entry transfer procedures described below, we will credit the non-exchanged old notes to your account maintained with DTC, as promptly as practicable after the expiration or termination of the exchange offer. 18 31 Guaranteed Delivery Procedures. If you desire to tender your old notes and your old notes are not immediately available or one of the situations described in the immediately preceding paragraph occurs, you may tender if: (1) you tender through an eligible financial institution; (2) on or prior to 5:00 p.m., New York City time, on the expiration date, the exchange agent receives from an eligible institution, a written or facsimile copy of a properly completed and duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us; and (3) the exchange agent receives the certificates for all certificated old notes, in proper form for transfer, or a book-entry confirmation, and all other documents required by the letter of transmittal, within three NYSE trading days after the date of execution of the notice of guaranteed delivery. You may send the notice of guaranteed delivery by facsimile transmission, mail or hand delivery. The notice of guaranteed delivery must include: (1) your name and address; (2) the amount of old notes you are tendering; and (3) a statement that your tender is being made by the notice of guaranteed delivery and that you guarantee that within three NYSE trading days after the execution of the notice of guaranteed delivery, the eligible institution will deliver the following documents to the exchange agent: (a) the certificates for all certificated old notes being tendered, in proper form for transfer or a book-entry confirmation of tender; (b) a written or facsimile copy of the letter of transmittal, or a book-entry confirmation instead of the letter of transmittal; and (c) any other documents required by the letter of transmittal. Book-Entry Transfer. The exchange agent will establish an account for the book-entry interests at DTC for purposes of the exchange offer promptly after the date of this prospectus. You must deliver your book-entry interest by book-entry transfer to the account maintained by the exchange agent at DTC. Any financial institution that is a participant in DTC's systems may make book-entry delivery of book-entry interests by causing DTC to transfer the book-entry interests into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. If one of the following situations occur: (1) you cannot deliver a book-entry confirmation of book-entry delivery of your book-entry interests into the exchange agent's account at DTC; or (2) you cannot deliver all other documents required by the letter of transmittal to the exchange agent prior to the expiration date, then you must tender your book-entry interests according to the guaranteed delivery procedures discussed above. Depositary Procedures. We provide the following description of the operations and procedures of DTC solely as a matter of convenience. These operations and procedures are solely within the control of this settlement system and are subject to change by it. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters. 19 32 When the global notes are deposited with DTC, DTC will credit the accounts of participants designated by the initial purchasers with portions of the principal amount of the global notes. The ownership of interests in the global notes will be shown on, and the transfer of these interests will be effected only through, records maintained by DTC or by its participants. The conveyance of notices and other communications by DTC to its participants and by the participants to owners of beneficial interests in the notes will be governed by arrangements among them, subject to any statutory or regulatory requirements. Since the laws of some states require people to take physical delivery of securities that they own, the ability to transfer beneficial interests in a global note to these persons will be limited. Except as described below, the global notes will not be registered in the name of the owners of beneficial interest in the notes. These owners will not receive certificated notes and will not be considered as the registered owners or holders of these notes under the indenture for any purpose. Principal and interest payments on the global notes will be made to DTC or its nominee as the sole registered owner of the global notes. Therefore, we and the exchange agent will not have any responsibility or liability for: - any aspect of DTC's or its participants' records relating to, or payments made on account of, beneficial ownership interests in the global notes; - maintaining, supervising or reviewing any of DTC's or its participants' records; or - any other matter relating to the actions and practices of DTC or its participants. DTC has advised us that when DTC receives any payment on a global note, it immediately credits the accounts of the relevant participants with the payment on the payment date, in amounts proportionate to their holdings in the principal amount of the relevant global note. Payments by the participants to owners of beneficial interests in a global note are governed by standing instructions and customary practices and will be the sole responsibility of the participants. DTC will take an action permitted to be taken by a holder of notes: - only if a participant to whose account DTC has credited the interests in the global notes directs DTC to take that action; and - only in respect of that portion of the principal amount of the notes as to which that participant has given that direction. However, if there is an event of default under the notes, DTC may exchange the global notes for certificated notes, and distribute the certificated notes to its participants. Although DTC has agreed to the foregoing procedures to facilitate transfers of interests in the global notes among participants in DTC, it is not required to perform these procedures. Neither we nor the exchange agent will have any responsibility for the performance by DTC or its participants of their obligations under the rules and procedures governing their operations. Same Day Settlement and Payment. We must make payments in respect of the global notes by wire transfer of immediately available funds to the accounts specified by the global note holders. For certificated notes, we will make all payments of principal and interest: - by wire transfer of immediately available funds to the accounts specified by the holders of the certificated notes; or - if no account is specified, by mailing a check to each holder's registered address. Interests in global notes are expected to be eligible to trade in the PORTAL Market and to trade in DTC's Same-Day Funds Settlement System. Therefore, permitted secondary market trading activity in 20 33 interests in global notes will have to be settled in immediately available funds. We expect that secondary trading in any certificated notes will also be settled in immediately available funds. WITHDRAWAL RIGHTS You may withdraw tenders of your old notes at any time prior to 5:00 p.m., New York City time, on the expiration date. For your withdrawal to be effective, the exchange agent must receive a written or facsimile transmission notice of withdrawal at its address included below under " -- Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date. The notice of withdrawal must: - state your name; - identify the specific old notes to be withdrawn, including the certificate number or numbers and the principal amount of withdrawn notes; - be signed by you in the same manner as you signed the letter of transmittal when you tendered your old notes, including any required signature guarantees or be accompanied by documents of transfer sufficient for the exchange agent to register the transfer of the old notes into your name; and - specify the name in which the old notes are to be registered, if different from yours. We will determine all questions regarding the validity, form, and eligibility, including time of receipt, of withdrawal notices. Our determination will be final and binding on all parties. Any old notes withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes which have been tendered for exchange but which are not exchanged for any reason will be returned to you without cost as soon as practicable after withdrawal, rejection of tender, or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures described under " -- Procedures for Tendering" above at any time on or prior to 5:00 p.m., New York City time, on the expiration date. CONDITIONS Notwithstanding any other provision of the exchange offer and subject to our obligations under the registration rights agreement, we will not be required to accept for exchange, or to issue registered notes in exchange for, any old notes and may terminate or amend the exchange offer, if at any time before the acceptance of any old notes for exchange any of the following events occur: (1) any injunction, order or decree is issued by any court or any governmental agency that prohibits, prevents or otherwise materially impairs our ability to proceed with the exchange offer; or (2) the exchange offer violates any applicable law or any applicable interpretation of the staff of the SEC. These conditions are for our sole benefit and we may assert them regardless of the circumstances giving rise to any condition, subject to applicable law. We also may waive in whole or in part at any time and from time to time any particular condition in our sole discretion. If we waive a condition, we may be required in order to comply with applicable securities laws, to extend the expiration date of the exchange offer. Our failure at any time to exercise any of the foregoing rights will not be deemed a waiver of these rights and these rights will be deemed ongoing rights which may be asserted at any time and from time to time. In addition, we will not accept for exchange any old notes tendered, and we will not register any notes that we will issue in exchange for any of those old notes, if at the time the notes are tendered any 21 34 stop order is threatened by the SEC or in effect with respect to the registration statement of which this prospectus is a part or the qualification of the indenture under the Trust Indenture Act of 1939. The exchange offer is not conditioned on any minimum principal amount of old notes being tendered for exchange. EXCHANGE AGENT We have appointed Firstar Bank, National Association as exchange agent for the exchange offer. You should direct questions, requests for assistance and requests for additional copies of the prospectus, the letter of transmittal and other related documents to the exchange agent addressed as follows: (By Registered or Certified Mail or by Hand or Overnight Courier) Firstar Bank, N.A. 425 Walnut Street 6th Floor Cincinnati, Ohio 45202 By Facsimile: (513) 632-5511 By Telephone: (513) 632-4278 Firstar Bank, National Association also acts as trustee under the indenture, performs banking and other services for us, and is a lender under some of our credit facilities. FEES AND EXPENSES We will not pay brokers, dealers, or others soliciting acceptances of the exchange offer. The principal solicitation is being made by mail. Additional solicitations, however, may be made in person or by telephone by our officers and employees. We will pay the estimated cash expenses to be incurred in connection with the exchange offer. We estimate that these expenses will be approximately $100,000 in the aggregate, which includes fees and expenses of the exchange agent, accounting, legal, printing and related fees and expenses. TRANSFER TAXES You will not be obligated to pay any transfer taxes in connection with a tender of your old notes for exchange unless you instruct us to register registered notes in the name of, or request that old notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder, in which event the registered tendering holder will be responsible for the payment of any applicable transfer tax. ACCOUNTING TREATMENT We will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offer. We will amortize the expense of the exchange offer over the term of the registered notes under generally accepted accounting principles. DESCRIPTION OF THE NEW NOTES In this section, the words "we," "our," "our company" and "us" refer only to The Kroger Co., as a separate entity, and do not include any of our subsidiaries. We will issue the new notes under the indenture, dated June 25, 1999, as supplemented, among our company, the subsidiary guarantors and Firstar Bank, National Association, as trustee, which we 22 35 entered into in connection with the issuance of the old notes. A copy of the indenture has been filed as an exhibit to the registration statement of which this prospectus is a part. The terms of the new notes include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939. The following description of the new notes is only a summary of the material provisions of the indenture. We urge you to read the indenture because that document, and not this description, defines your rights as holders of the new notes. You may obtain a copy of the indenture by following the procedures described under "Where You Can Find More Information." Any reference to "notes" in this section refers to both old notes and new notes, unless the context otherwise requires. The new notes: - are our senior unsecured obligations; - rank equally in right of payment with all of our unsecured and unsubordinated senior debt; - rank senior in right of payment to all of our existing and future subordinated debt; and - are effectively junior to all of our secured obligations, to the extent of the collateral securing those obligations. The new notes are guaranteed by each of our existing subsidiaries, except those prohibited from so doing and those without any significant assets or operations, subject to certain limitations described below. Future subsidiaries of ours will be required to guarantee the new notes under the circumstances described below under the caption " -- Certain Covenants -- Additional Subsidiary Guarantees." The guarantees: - are senior unsecured obligations of each guarantor; - rank equally in right of payment with all other unsecured and unsubordinated debt of each guarantor; - rank senior in right of payment to all subordinated debt of each guarantor; and - are effectively junior to the secured obligations of each guarantor, to the extent of the collateral securing those obligations. PRINCIPAL, MATURITY AND INTEREST We will issue new notes with a maximum aggregate principal amount of $900,000,000, comprised of $250,000,000 6.34% Senior Notes due 2001; $350,000,000 7.25% Senior Notes due 2009 and $300,000,000 7.70% Senior Notes due 2029, in denominations of $1,000 and integral multiples of $1,000. The new notes will mature on June 1, 2001, June 1, 2009 and June 1, 2029, respectively. Interest on the new notes will be payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 1999. We will make each interest payment to those holders of the new notes who were holders of record on the immediately preceding May 15 or November 15, respectively. Interest on the new notes will accrue from June 25, 1999 or, if interest has already been paid, from the date it was most recently paid. If you tender your old notes and they are accepted for exchange, you will receive accrued interest on your old notes to, but not including, the date of issuance of the new notes. This interest will be payable with the first interest payment on the new notes and you will not receive any payment in respect of interest on your old notes accrued after the issuance of the new notes. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. We are permitted by the indenture to issue additional senior debt in the future. 23 36 FORM OF NEW NOTES The certificates representing the new notes will be issued in fully registered form, without coupons. Except as described in the next paragraph, the new notes will be deposited with, or on behalf of, DTC, and registered in the name of Cede & Co., as DTC's nominee, in the form of a global note. Holders of the new notes will own book-entry interests in the global note evidenced by records maintained by DTC. Book-entry interests may be exchanged for certificated notes of like tenor and equal aggregate principal amount, if: (1) DTC notifies us that it is unwilling or unable to continue as depositary for the global securities or DTC at any time ceases to be a clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within 90 days; (2) we determine that the book-entry interests will no longer be represented by global notes and we execute and deliver to the trustee instructions to that effect; or (3) a default has occurred and is continuing with respect to the notes. As of the date of this prospectus, no certificated notes are issued and outstanding. METHODS OF RECEIVING PAYMENTS ON THE NEW NOTES All payments on the new notes will be made at the office or agency of our company in the City of Cincinnati, State of Ohio, unless we elect to make interest payments by check mailed to the holders at their address shown in the register of holders. PAYING AGENT AND REGISTRAR FOR THE NEW NOTES The trustee will initially act as paying agent and registrar. We may change the paying agent or registrar without prior notice to you. TRANSFER AND EXCHANGE You may transfer or exchange your notes in accordance with the indenture. The registrar and the trustee may require you to furnish, among other things, appropriate endorsements and transfer documents and we may require you to pay any taxes and fees required by law or permitted by the indenture. We are not required to transfer or exchange any note selected for redemption. We also are not required to transfer or exchange any note for a period of 15 days before the day of the mailing of a notice of redemption of the notes. The registered holder of a new note will be treated as the owner of the new note for all purposes. SUBSIDIARY GUARANTEES All of our subsidiaries, except those prohibited from so doing and those without any significant assets or operations, will guarantee our obligations under the new notes, subject to the limitations described below. In addition, if, in the future, any of our existing or future subsidiaries guarantees any of our indebtedness, that subsidiary will also be required to guarantee our obligations under the notes, unless it is prohibited from doing so. If we default in payment of the principal, interest or any premium due under the notes, the guarantors will be obligated to pay these amounts. Each guarantee will rank equal in right of payment with all other unsecured and unsubordinated indebtedness of the guarantor and will rank senior in right of payment to all subordinated indebtedness of the guarantor. As a result, the notes will effectively rank equal in right of payment with approximately $7.6 billion of indebtedness of these subsidiaries as of July 17, 1999. We used the proceeds from the sale of the old notes as part of a $900 million permanent reduction of the commitments under our 1998 Senior Credit Facility dated as of March 1998 between Fred Meyer and the lenders under that 24 37 credit agreement. Kroger and the guarantors had approximately $8.3 billion of indebtedness outstanding as of July 17, 1999, of which approximately $7.3 billion was unsecured and unsubordinated indebtedness, $273 million was secured and unsubordinated, and the balance of which was unsecured and subordinated indebtedness. The notes will effectively rank junior in right of payment to indebtedness of our subsidiaries that do not guarantee the notes. As of July 17, 1999, the indebtedness of the subsidiaries who will not guarantee the notes totaled approximately $252 million. If one of these subsidiaries becomes insolvent, however, the guarantee of that subsidiary could be held by a court to be unenforceable under applicable fraudulent transfer or similar laws. Accordingly, the obligations of each guarantor under its guarantee are limited to the maximum amount enforceable under applicable fraudulent conveyance or fraudulent transfer laws. This maximum amount will be calculated after giving effect to all other liabilities of the guarantor and after giving effect to all contribution and other obligations among the guarantors under the indenture. Each guarantor that makes a payment or distribution under its guarantee will be entitled to a contribution from each other guarantor in a pro rata amount based on the net assets of each guarantor. For information about the meaning and consequences of a fraudulent conveyance, we refer you to the discussion under the heading "Federal and state statutes permit courts, under specific circumstances, to void guarantees and require the return of payments received from guarantors" in the "Risk Factors" section of this prospectus. A guarantee issued by a guarantor will automatically and unconditionally be released and discharged in the following situations if doing so will not result in any downgrade of the notes by Moody's Investors Service and Standard & Poor's Ratings Services: - upon any sale, exchange or transfer to any person of all of the capital stock, or all or substantially all of the assets, of the guarantor in a transaction that complies with the indenture, except that such a transaction will not release or discharge a guarantee if the guarantor continues to be a guarantor of any of our bank credit facilities; or - at our request at any time if we no longer have in force guarantees under our bank credit facilities. Except as otherwise described above, as long as the notes are guaranteed we will add comparable release provisions to any existing debt that we modify after the date of this prospectus to add guarantees, and to any future debt securities (excluding asset backed securities) issued by us and guaranteed by our subsidiaries. We have recently added guarantees to most of our existing debt with similar release provisions as described above. Approximately $4.0 billion of debt issued by Fred Meyer and its subsidiaries is guaranteed by Fred Meyer's subsidiaries, and does not contain similar guarantee release provisions. OPTIONAL REDEMPTION The 7.25% notes and 7.70% notes will be redeemable, in whole or in part, at our option at any time. The redemption price for these notes will equal the greater of: - 100% of the principal amount of the notes; and - the sum of the present values of the remaining scheduled payments of principal and interest on the notes being redeemed, excluding accrued interest on the date of redemption, from the redemption date to the maturity date. The discount to the redemption date will be made on a semiannual basis based on a 360-day year, with each month consisting of 30 days. The discount rate will equal the equivalent yield to maturity of U.S. Treasury securities having a comparable maturity to the notes being redeemed, plus 10 basis points for the 7.25% notes and 15 basis points for the 7.70% notes, plus, in each case, accrued interest to the redemption date. The determination of the rate will be made by an agent we appoint. Initially, that agent will be Goldman, Sachs & Co. 25 38 The 6.34% notes are not subject to optional 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 notes to be redeemed. Unless we default in payment of the redemption price, interest will cease to accrue on and after the redemption date on the notes or portions of the notes called for redemption. If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption by such method as the trustee deems fair and appropriate. We will not redeem in part notes in denominations of $1,000 or less. MATERIAL COVENANTS The indenture provides that the following covenants will apply to us and to our restricted subsidiaries. A "restricted subsidiary" is any subsidiary that is not a "non-restricted subsidiary." We may designate a subsidiary as a non-restricted subsidiary if our board of directors declares in good faith that a subsidiary is not of material importance, either singularly, or together with all other non-restricted subsidiaries, to the business of our company and our consolidated subsidiaries taken as a whole. Non-restricted subsidiaries are not subject to any of the covenants contained in the indenture. A "subsidiary" is an entity that we directly or indirectly control, including partnerships in which we or our subsidiaries own a greater than 50% interest. The covenants applicable to the notes would not necessarily afford holders protection in the event of a highly leveraged or other transaction involving us or in the event of a material adverse change in our financial condition or results of operation, and the notes do not contain any other provisions that are designed to afford protection in the event of a highly leveraged transaction involving us. Limitations on Liens. We covenant that, so long as any notes remain outstanding, neither we nor any of our restricted subsidiaries will issue, assume or guarantee any secured debt or other agreement comparable to secured debt unless these notes and, if we choose, other debt ranking equally to these notes also is so secured on an equal basis. This restriction will not apply to the following: (1) liens on any assets of any corporation existing at the same time the corporation becomes a restricted subsidiary provided that the lien does not extend to any of our other property or that of any other restricted subsidiaries; (2) liens existing on assets acquired by us, to secure the purchase price of assets, or to obtain a release of liens from any of our other property, incurred no later than 18 months after the acquisition, assumption, guarantee, or, in the case of real estate, completion of construction and commencement of operations; (3) liens securing indebtedness owing by any restricted subsidiary to us or another restricted subsidiary; (4) liens on any assets existing upon acquisition of a corporation through merger or by acquisition of all or substantially all of the assets by us or a restricted subsidiary; (5) liens in favor of the U.S., a foreign country, or any political subdivision to secure payments of debt incurred to finance the purchase of assets; (6) liens on our or any of our restricted subsidiaries' assets existing on the date of the indenture, provided that those liens secure only those obligations which they secure on the date of the indenture or any extension, renewal or replacement of those liens; (7) any extension, renewal or replacement (or successive extensions, renewals or replacements) in whole or in part, of any lien referred to in (1) through (6) above; 26 39 (8) some statutory liens or other similar liens arising in the ordinary course of our or any of our restricted subsidiaries' business, or some liens arising out of governmental contracts; (9) some pledges, deposits or liens made or arising under worker's compensation or similar legislation or in some other circumstances; (10) some liens in connection with legal proceedings, including some liens arising out of judgments or awards; (11) liens for some taxes or assessments, landlord's liens, mechanic's liens and liens and charges incidental to the conduct of the business, or the ownership of our or any of our restricted subsidiaries' assets which were not incurred in connection with the borrowing of money and which do not in our opinion, materially impair the use of the assets in the operation of our business or that of a restricted subsidiary or the value of the assets for its purposes; or (12) any other liens not included above, which together with amounts described in paragraph (1) of the next section do not exceed 10% of our consolidated net tangible assets. Limitation on Sale and Lease-Back Transactions. We and our restricted subsidiaries will not sell and lease-back for a term greater than three years under a capital lease any material real property or operating assets unless: (1) we could incur secured debt on that property equal to the present value of rentals under the lease without having to equally secure the notes; or (2) the sale proceeds equal or exceed the fair market value of the property and the net proceeds are used within 180 days to acquire material real property or operating assets or to purchase or redeem notes offered hereby or long term debt, including capital leases, that are senior to or rank on parity with these notes. This restriction does not apply to sale and lease-back transactions of material real property or operating assets acquired or constructed after 18 months prior to the date of the indenture as long as a commitment for the sale and lease-back is made within 18 months of acquisition, in the case of operating assets, and of completion of construction and commencement of operations, in the case of material real property. Merger and Consolidation. The indenture provides that we will not merge or consolidate with any corporation, partnership or other entity and will not sell, lease or convey all or substantially all of our assets to any entity, unless: - we are the surviving entity, or the surviving or successor entity is a corporation or partnership organized under the laws of the United States or a State thereof or the District of Columbia and expressly assumes all our obligations under the indenture and the notes; and - immediately after the transaction, we or the surviving or successor entity are not in default in the performance of the covenants and conditions of the indenture. Additional Subsidiary Guarantees. The indenture provides that we will not permit any of our subsidiaries to become a guarantor with respect to any indebtedness of our company unless that subsidiary simultaneously executes and delivers a supplemental indenture pursuant to which it will become a guarantor under the indenture. Notwithstanding the preceding sentence, any such guarantee of the notes will provide by its terms that it will automatically and unconditionally be released and discharged under the circumstances described above under the caption "-- Subsidiary Guarantees." 27 40 For the purposes of the proceeding paragraph, "indebtedness" means with respect to any individual or entity: (1) every obligation of the individual or entity for money borrowed; (2) every obligation of the individual or entity evidenced by bonds, debentures, notes or other similar instruments; (3) every obligation of the individual or entity issued or assumed as the deferred purchase price of property, every conditional sale obligation and every obligation under any title retention agreement, in each case if on terms permitting any portion of the purchase price to be paid beyond one year from the date of purchase (but excluding trade accounts payable arising in the ordinary course of business which are not overdue by more than 90 days or which are being contested in good faith); (4) every obligation of the individual or entity issued or contracted for as payment in consideration of the purchase by the individual or entity or an affiliate of the individual or entity of all of the corporate stock or rights to the corporate state or substantially all of the assets of another individuals or entities or a merger or consolidation to which the individual or entity or an affiliate of the individual or entity was a party; (5) every obligation of the type referred to in paragraphs (1) through (4) of other individuals or entities and all dividends at which at any particular time its corporate trust business shall be administered. Reports. The indenture requires us to provide the trustee with any information, documents or reports required to be filed with the SEC pursuant to Section 13 or 15(d) of the Exchange Act within 15 days after they are required to be filed with the SEC. EVENTS OF DEFAULT Holders of notes have special rights if an event of default occurs and is not cured, as described later in this subsection. An event of default occurs when: - we fail to pay the principal or any premium on a note on its due date; - we fail to pay interest on a note within 30 days of its due date; - we fail to deposit any sinking fund payment on its due date; - we fail to comply with any other restrictive covenant described in this prospectus or any other term of the indenture, and this failure continues for 60 days after we receive written notice of it; - we default in any of our other indebtedness in excess of $50,000,000, and the default results in an acceleration of maturity; or - we take specified actions relating to our bankruptcy, insolvency or reorganization. If an event of default on the notes of any series occurs and is continuing, the trustee or the holders of at least 25% in principal amount of all of the outstanding notes of that series may require us to immediately repay all of the principal and interest due on the notes of that series. The holders of a majority in principal amount of all of the notes of that series may rescind this accelerated payment requirement, if the rescission would not conflict with any judgment or decree by a court and if all existing events of default have been cured or waived. If an event of default occurs and is continuing, the trustee may pursue any remedy available to it to collect payment or to enforce the performance of any provision of the outstanding notes of that series or the indenture. 28 41 The holders of a majority in principal amount of the outstanding notes of that series may generally waive an existing default and its consequences. MODIFICATION OF THE INDENTURE The indenture may be amended without the consent of any holder of the notes: - to cure any ambiguity, defect or inconsistency; - to permit a successor to assume our obligations under the indenture; - to add additional covenants for the benefit of the holders; - to add additional events of default; - to add or change provisions necessary to facilitate the issuance of the notes; or - to entitle the notes to the benefit of security. The indenture may be amended with the written consent of the holders of at least 50% in principal amount of the notes of the series affected by the amendment. Holders of at least 50% in principal amount of the notes of the series affected by the amendment may waive our compliance with any provision of the indenture or the notes by giving notice to the trustee. However, no amendment or waiver that: - changes the maturity of principal or any installment of principal or interest; - reduces the amount of principal or interest or premium payable on redemption; - reduces the amount of the notes whose holders must consent to an amendment or waiver; - modifies provisions related to rights of holders to redeem notes at their option; or - changes other rights of holders as specifically identified in the indenture will be effective against any holder of the series of notes affected by the amendment or waiver without the holder's consent. DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE We may, at our option and at any time, elect to have all of our obligations discharged with respect to the outstanding notes and all obligations of the guarantors discharged with respect to their subsidiary guarantees except for certain obligations. This is known as "legal defeasance." We may not exercise our legal defeasance option with respect to: - the rights of holders of outstanding notes to receive payments in respect of the principal of, premium, if any, or interest, if any, on those notes when these payments are due from the trust referred to below; - our obligations with respect to the notes concerning the issuance of temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust; - the rights, powers, trusts, duties and immunities of the trustee; and - the legal defeasance provisions of the indenture. In addition, we may, at our option and at any time, elect to have the obligations of our company and the guarantors released with respect to certain covenants that are specified in the indenture. This is known as "covenant defeasance." If we exercise our covenant defeasance option, any failure to comply with those covenants will not constitute a default or event of default with respect to the notes. In the 29 42 event covenant defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an event of default with respect to the notes. Legal defeasance or covenant defeasance may be effected only if, among other things: - we irrevocably deposit with the trustee cash or U.S. government obligations as trust funds in an amount certified to be sufficient to pay at maturity the principal of and interest on all outstanding notes; - no default or event of default under the indenture shall have occurred and be continuing either on the date of the deposit or at any time in the period ending on the 121st day after the date of the deposit; - in the case of legal defeasance, we deliver to the trustee an opinion of counsel to the effect that the holders of the notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance and that defeasance will not otherwise alter the holders' U.S. federal income tax treatment of principal and interest payments on the notes. The opinion must be based on a ruling of the Internal Revenue Service or a change in U.S. federal income tax law occurring after the date of the indenture, since that result would not occur under current tax law; - legal defeasance or covenant defeasance will not result in a breach or violation of, or constitute a default under the indenture or any material agreement or instrument to which we are a party or by which we are bound; and - we deliver to the trustee an officer's certificate and an opinion of counsel, each stating that all conditions precedent relating to the legal defeasance or the covenant defeasance have been complied with. CONCERNING THE TRUSTEE If the trustee becomes a creditor of our company or any subsidiary guarantor, the indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any claim as security or otherwise. The trustee may acquire our obligations for its own account. The trustee performs banking and other services for us, and is a lender under some of our credit facilities. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate that conflict or resign. The holders of a majority in principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee, subject to certain exceptions. In the performance of its duties, the trustee is entitled to indemnification for any act which would involve it in expense or liability and will not be liable as a result of any action taken in connection with the performance of its duties except for its own gross negligence or default. The trustee is protected in acting upon any direction or document reasonably believed by it to be genuine and to be signed by the proper party or parties or upon the opinion or advice of counsel. The trustee may resign upon written notice to us as provided in the indenture. FEDERAL INCOME TAX CONSIDERATIONS The following is a summary of certain U.S. federal income tax considerations that may be relevant to the exchange of old notes for new notes pursuant to the exchange offer and the ownership or disposition of new notes. This summary is based on U.S. federal tax laws in effect on the date of this prospectus. All of these laws and authorities are subject to change, and any change could be effective retroactively. No assurances can be given that any change in these laws or authorities will not affect the accuracy of the discussion described in this summary. 30 43 This summary deals only with holders that hold the old notes and new notes as capital assets as defined in the U.S. federal tax laws. This summary does not address tax considerations applicable to: - investors who did not acquire an old note at the initial offering from Goldman, Sachs & Co., Banc One Capital Markets, Inc., Banc of America Securities LLC, Chase Securities Inc. or Salomon Smith Barney for the original offering price of the old note or who do not acquire the new note pursuant to the exchange offer; - special classes of holders, such as dealers in securities or currencies, banks, tax-exempt organizations, or life insurance companies; and - persons that hold old notes or new notes as a hedge (or as a hedged item) or as part of a straddle or conversion transaction. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR IN DETERMINING THE TAX TREATMENT OF THE EXCHANGE OF OLD NOTES FOR NEW NOTES PURSUANT TO THE EXCHANGE OFFER AND OF THE OWNERSHIP AND DISPOSITION OF NEW NOTES, INCLUDING THE APPLICATION TO YOUR PARTICULAR CIRCUMSTANCES OF THE TAX CONSIDERATIONS DISCUSSED BELOW AND OF ANY RELEVANT FOREIGN, STATE, LOCAL OR OTHER TAX LAWS. As used herein, the term "United States Holder" means a holder of old notes who or that is: - a citizen or resident of the United States; - a domestic corporation or partnership; - an estate the income of which is subject to regular U.S. federal income taxation regardless of its source; or - a trust if a court within the United States is able to exercise primary supervision over the administration of that trust and one or more U.S. persons have the authority to control all substantial decisions of that trust. UNITED STATES HOLDERS The following discussion applies to you if you are a U.S. Holder. Treatment of Exchange of Old Notes for New Notes. An exchange of old notes for new notes will be considered for U.S. federal income tax purposes to be a modification of the old notes. The tax consequences of such a modification depend on whether the modification is considered to be significant. The exchange of an old note for a new note pursuant to the exchange offer will not constitute a significant modification of the old note for United States federal income tax purposes. Therefore, you will treat the new note as a continuation of the old note. As a result, you will have no United States federal income tax consequences from exchanging an old note for a new note pursuant to the exchange offer. Your adjusted tax basis and holding period in the new note will be the same as you had in the old note immediately before the exchange. Payments of Interest. You will include in your gross income as ordinary income the stated interest payable on a new note at the time it is accrued or received, in accordance with your method of accounting for United States federal income tax purposes. Disposition of the New Notes. When you sell, exchange, or otherwise dispose of a new note, or when we retire the new note (collectively, a "disposition") you generally will recognize capital gain or loss equal to the difference between the amount you realize and your adjusted tax basis in the new note. However, to the extent such amount is attributable to accrued interest, it will be treated as ordinary interest income. The capital gain or loss will be long-term capital gain or loss if your holding period for the new note exceeds one year at the time of the disposition. 31 44 UNITED STATES TAXATION OF NON-U.S. HOLDERS The following discussion applies to you if you are not a U.S. Holder, referred to below as a "Non-U.S. Holder." Treatment of Exchange of Old Notes for New Notes. An exchange of an old note for a new note pursuant to the exchange offer will not constitute a taxable exchange of the old note for Non-U.S. Holders. See "United States Holders -- Treatment of Exchange of Old Notes for New Notes." Payments of Interest. In general, if you are a non-U.S. holder, payments of interest you receive will not be subject to United States federal withholding tax, provided that one of the following conditions applies: - you do not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote, you are not a controlled foreign corporation that is related to us actually or constructively through stock ownership and you, as beneficial owner of the new note, provide us or our agent under penalties of perjury your name and address and you certify that you are a Non-U.S. Holder; - the interest you receive on the new note is effectively connected with your conduct of a trade or business within the United States and you comply with certain reporting requirements; or - you are entitled to the benefits of an income tax treaty under which the interest is exempt from United States withholding tax and you comply with certain reporting requirements. Payments of interest not exempt from the United States federal withholding tax as described above will be subject to withholding tax at the rate of 30% (subject to reduction under an applicable income tax treaty). Disposition of the New Notes. As a Non-U.S. Holder you generally will not be subject to United States federal income tax (and generally no tax will be withheld) with respect to gain you realize on the disposition of a new note, unless one of the following conditions applies: - the gain is effectively connected with your United States trade or business; - you are an individual who is present in the United States for 183 or more days during the taxable year of the disposition and certain other requirements are satisfied; or - you are subject to certain provisions of United States federal income tax law applicable to certain expatriates. Effectively Connected Income. If interest and other payments you receive with respect to the new notes (including proceeds from the disposition of the new notes) are effectively connected with your conduct of a trade or business within the United States (or you are otherwise subject to United States federal income taxation on a net basis with respect to your ownership of the new notes), you will generally be subject to other rules described above under "United States Taxation of United States Holders" (subject to any modification provided under an applicable income tax treaty). You may also be subject to the "branch profits tax" if you are a corporation. BACKUP WITHHOLDING AND INFORMATION REPORTING Certain non-corporate United States Holders may be subject to backup withholding at a rate of 31% on payments of principal, premium and interest on, and the proceeds of the disposition of, the new notes. In general, backup withholding will be imposed only if you: - fail to furnish your taxpayer identification number ("TIN"), which, for an individual, would be your Social Security number; 32 45 - you furnish an incorrect TIN; or - you have been notified by the IRS that you are subject to backup withholding tax for failure to report interest or dividend payments. In addition, if you are a United States Holder, payments of principal and interest will generally be subject to information reporting. You should consult your tax advisor regarding qualification of the payments for exemption from backup withholding and the procedure for obtaining such an exemption, if applicable. Backup withholding and information reporting generally will not apply to interest payments made to you if you are a Non-U.S. Holder of a new note and you provide the certification described under "United States Taxation of Non-U.S. Holders -- Payments of Interest" or otherwise establish an exemption from backup withholding. If you are a Non-U.S. Holder, payment of the proceeds of a disposition of the new notes by or through a United States office of a broker generally will be subject to backup withholding at a rate of 31% and information reporting unless you certify that you are a Non-U.S. Holder under penalties of perjury or otherwise establish an exemption. Payments of the proceeds of a disposition of the new notes by or through a foreign office of a United States broker, a controlled foreign corporation for United States federal income tax purposes or a foreign broker with certain relationships to the United States generally will be subject to information reporting, but not backup withholding. The amount of any backup withholding will be allowed as a credit against your United States federal income tax liability and may entitle you to a refund, provided that you furnish the required information to the IRS. RECENTLY ISSUED TREASURY REGULATIONS The U.S. Treasury Department recently issued final Treasury regulations governing information reporting and the certification procedures regarding withholding and backup withholding on certain amounts paid to Non-U.S. Holders. The new Treasury regulations are generally effective for payments made after December 31, 2000. In addition, the new Treasury regulations would alter the procedures for claiming the benefits of an income tax treaty and may change the certification procedures relating to the receipt by intermediaries of payments on behalf of a beneficial owner of a new note. With some exceptions, the new regulations treat a payment to a foreign partnership as a payment directly to the partners. Prospective investors should consult their tax advisors concerning the effect, if any, of such new Treasury regulations on an investment in the new notes. PLAN OF DISTRIBUTION Based on interpretations by the SEC described in no-action letters issued to third parties in similar transactions, we believe that the new notes issued in the exchange offer in exchange for the old notes may be offered for resale, resold and otherwise transferred by holders without compliance with the registration and prospectus delivery provisions of the Securities Act, as long as the new notes are acquired in the ordinary course of such holders' business and the holders are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of new notes. This position does not apply to any holder that is: (1) an "affiliate" of ours within the meaning of Rule 406 under the Securities Act; (2) a broker-dealer who acquired notes directly from us; or (3) a broker-dealer who acquired notes as a result of market-making or other trading activities. Each broker-dealer that receives new notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of those notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new notes received in exchange for old notes that had been acquired as a 33 46 result of market-making or other trading activities. We have agreed that, for a period of 180 days after the expiration date of the exchange offer, we will make this prospectus, as it may be amended or supplemented, available to any broker-dealer for use in connection with any such resale. We will not receive any proceeds from any sales of notes by broker-dealers. New notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on those notes or a combination of those methods, at market prices prevailing at the time of resale, at prices related to prevailing market prices or at negotiated prices. These resales may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from the selling broker-dealer or the purchasers of the new notes. Any broker-dealer that resells registered notes that it received for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of those notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of those notes and any commission or concessions received by any participating broker or dealer may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. LEGAL MATTERS The validity of the new notes and the guarantees will be passed upon for Kroger by Paul Heldman, Esq., Senior Vice President, Secretary and General Counsel of Kroger. As of May 30, 1999, Mr. Heldman owned approximately 44,137 shares of Kroger common stock and had options to acquire an additional 204,583 shares. EXPERTS The financial statements incorporated in this prospectus by reference to Kroger's Annual Report on Form 10-K for the year ended January 2, 1999 and to the Current Report on Form 8-K dated August 20, 1999 have been so incorporated in reliance on the reports (which contain an explanatory paragraph that describes a change in Kroger's application of the LIFO method of accounting for store inventories) of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The financial statements incorporated in this prospectus by reference to Kroger's Current Report on Form 8-K dated May 10, 1999 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The supplemental consolidated financial statements incorporated in this prospectus by reference to the Current Report on Form 8-K dated May 28, 1999, have been so incorporated in reliance on the report (which contains an explanatory paragraph that describes a change in Kroger's application of the LIFO method of accounting for store inventories and an explanatory paragraph that describes the retroactive effect given to the merger of Kroger and Fred Meyer, Inc., which has been accounted for as a pooling of interests) of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The consolidated financial statements of Fred Meyer, Inc. as of January 30, 1999 and January 31, 1998 and for the fiscal years ended January 30, 1999, January 31, 1998 and February 1, 1997, incorporated in this prospectus by reference to the Fred Meyer, Inc. Form 10-K, for the fiscal year ended January 30, 1999 have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report included in that Form 10-K. 34 47 FORWARD-LOOKING STATEMENTS This prospectus contains, or incorporates by reference, certain statements that may be deemed "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. These statements are based on certain assumptions and assessments made by our management in light of its experience and its perception of historical trends, current conditions, expected future developments and other factors it believes to be appropriate. The forward-looking statements included in this prospectus are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting our operations, markets, products, services and prices, and other factors discussed in our filings under the Securities Act and the Exchange Act. Prospective investors are cautioned that these forward-looking statements are not guarantees of future performance and that actual results, developments and business decisions may differ from those envisaged by these forward-looking statements. 35 48 LIST OF SUBSIDIARY GUARANTORS
NAME OF GUARANTOR JURISDICTION OF ORGANIZATION ----------------- ---------------------------- 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 Drug Distributors, Inc...................................... Indiana FM Holding Corporation...................................... Delaware FM, Inc..................................................... Utah FM Retail Services, Inc..................................... Washington 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 Henpil, Inc................................................. Texas Hughes Markets, Inc......................................... California Hughes Realty, Inc.......................................... California Inter-American Foods, Inc................................... Ohio Jackson Ice Cream Co., Inc.................................. Kansas JH Properties, Inc.......................................... Washington Junior Food Stores of West Florida, Inc..................... Florida J.V. Distributing, Inc...................................... Michigan KRGP Inc.................................................... Ohio KRLP Inc.................................................... Ohio The Kroger Co. of Michigan.................................. Michigan Kroger Dedicated Logistics Co............................... Ohio
36 49
NAME OF GUARANTOR JURISDICTION OF ORGANIZATION ----------------- ---------------------------- Kroger Limited Partnership I................................ Ohio Kroger Limited Partnership II............................... Ohio 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 Richie's Inc................................................ Texas Rocket Newco, Inc........................................... Texas 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 THGP Co., Inc............................................... Pennsylvania THLP Co., Inc............................................... Pennsylvania Topvalco, Inc............................................... Ohio Treasure Valley Land Company, L.C........................... Idaho Turkey Hill, L.P............................................ Pennsylvania Vine Court Assurance Incorporated........................... Vermont Wells Aircraft, Inc......................................... Kansas Western Property Investment Group, Inc...................... California Wydiv, Inc.................................................. Texas
37 50 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 1701.13 of the Ohio General Corporation Law, inter alia, empowers an Ohio corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. Similar indemnity is authorized for such person against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of any such threatened, pending or completed action or suit if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation; provided, that (unless a court of competent jurisdiction otherwise provides), such a person shall not have been adjudged liable to the corporation. Unless ordered by a court, any such indemnification may be made only as authorized in each specific case upon a determination by the shareholders or disinterested directors or by independent legal counsel in a written opinion that indemnification is proper because the indemnitee has met the applicable standard of conduct. Provided, however, that to the extent that a director, officer, employee or agent has been successful on the merits or otherwise in defense of any action, suit or proceeding or in defense of any claim, issue or matter therein, the corporation shall indemnify him or her against expenses, including attorneys' fees, actually and reasonably incurred in connection with the action, suit or proceeding. Under The Kroger Co. (the "Company") Regulations (or bylaws), each present or former director, officer or employee of the Company and each person who is serving or shall have served at the request of the Company as a director, officer, or employee of another corporation (and his heirs, executors and administrators) will be indemnified by the Company against expenses actually and necessarily incurred by him, and also against expenses, judgments, decrees, fines, penalties, or amounts paid in settlement, in connection with the defense of any pending or threatened action, suit, or proceeding, criminal or civil, to which he is or may be made a party by reason of being or having been such director, officer, or employee, provided (1) he is adjudicated or determined not to have been negligent or guilty of misconduct in the performance of his duty to the Company or such other corporation, (2) he is determined to have acted in good faith in what he reasonably believed to be the best interest of the Company or of such other II-1 51 corporation, and (3) in any matter the subject of a criminal action, suit, or proceeding, he is determined to have had no reasonable cause to believe that his conduct was unlawful. Section 1701.13 of the Ohio General Corporation Law further authorizes a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or enterprise, against any liability asserted against him or her and incurred in any such capacity, or arising out of his or her status as such, whether or not the corporation would otherwise have the power to indemnify him or her under Section 1701.13. The Company maintains such directors' and officers' reimbursement and liability insurance pursuant to policies with aggregate limits of $125 million. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Exhibit Description - ------- ----------- 3.1 Amended Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q for the Quarter ended October 3, 1998). 3.2 Regulations (Bylaws) of the Company (incorporated by reference to Exhibit 4.2 of the Company's Registration Statement on Form S-3 (No. 33-57552), dated January 28, 1993.) 4.1 Indenture dated as of June 25, 1999, between the Company and Firstar Bank, National Association, as Trustee (filed herewith). 4.2 First Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of June 25, 1999, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, relating to the 7.25% Senior Notes (filed herewith). 4.3 Second Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of June 25, 1999, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, relating to the 7.70% Senior Notes (filed herewith). 4.4 Third Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of June 25, 1999, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, relating to the 6.34% Senior Notes (filed herewith). 4.5 Registration Rights Agreement dated as of June 25, 1999, among the Company, the Guarantors listed therein, Goldman Sachs & Co., Banc One Capital Markets, Inc., Banc of America Securities LLC, Chase Securities Inc. and Salomon Smith Barney (filed herewith). 4.6 Second Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of October 15, 1993, by and among the Company, the Guarantors II-2 52 listed therein and Firstar Bank, National Association, as Trustee, adding guarantors to the Company's existing debt (filed herewith). 4.7 Fourth Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of May 1, 1998, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, adding guarantors to the Company's existing debt (filed herewith). 4.8 Fourth Supplemental Indenture dated June 25, 1999, to Indenture dated as of July 15, 1996, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, adding guarantors to the Company's existing debt (filed herewith). 4.9 Seventh Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of April 1, 1992, by and among the Company, the Guarantors listed therein and Harris Trust and Savings Bank, as Trustee, adding guarantors to the Company's existing debt (filed herewith). 4.10 Second Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of March 11, 1998, between Fred Meyer, Inc., the Guarantors listed therein and The First National Bank of Chicago, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.11 Third Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of June 1, 1995, between Ralphs Grocery Company (Food 4 Less Supermarkets, Inc.), the Guarantors listed therein and Norwest Bank Minnesota, N.A., adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.12 Fourth Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of March 30, 1993, between Ralphs Grocery Company, the Guarantors listed therein and United States Trust Company, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.13 Third Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of June 1, 1995, between Ralph Grocery Company (Food 4 Less Supermarkets, Inc.), the Guarantors listed therein and United States Trust Company of New York, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.14 Second Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of March 19, 1997, between Quality Food Centers, Inc., the Guarantors listed therein and First Trust, N.A., adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.15 Second Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of May 23, 1996, between Smith's Food & Drug Centers, Inc., the Guarantors listed therein and State Street Bank and Trust Company, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). II-3 53 5.1 Opinion of Paul W. Heldman, Esq., Senior Vice President, Secretary and General Counsel to the Company (filed herewith). 12.1 Statement re: computation of ratios (included in the prospectus). 21.1 List of Company's subsidiaries (filed herewith). 23.1 Consent of PricewaterhouseCoopers LLP, independent auditors for the Company (filed herewith). 23.2 Consent of Deloitte & Touche LLC, independent auditors for the Company (filed herewith). 23.3 Consent of Paul W. Heldman, Esq. (included in Exhibit 5.1). 24.1 Powers of Attorney of directors and officers of the Company (filed herewith). 25.1 Statement of Eligibility of Trustee on Form T-1 (incorporated by reference to the existing exhibit 25.1 to the Company's Current Report on Form 8-K dated April 30, 1999). 99.1 Form of Letter of Transmittal (filed herewith). 99.2 Form of Notice of Guaranteed Delivery (filed herewith). 99.3 Form of Tender Instructions (filed herewith). II-4 54 ITEM 22. UNDERTAKINGS The undersigned Registrants hereby undertake: (A) (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (a) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933 (the "Securities Act"). (b) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (ss.230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (c) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (B) That, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration II-5 55 statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (C) That, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provision described under Item 20 or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (D) To respond to requests for information that is incorporated by reference into the Prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (E) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. II-6 56 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cincinnati, State of Ohio, on August 20, 1999. THE KROGER CO. By: /s/ Bruce M. Gack --------------------- Bruce M. Gack Assistant Secretary Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated:
Signature Title Date --------- ----- ---- /s/ * Chairman of the Board of Directors, Director, August 20, 1999 - ------------------------- and Chief Executive Officer (Principal Joseph A. Pichler Executive Officer) /s/ * Executive Vice President and Chief Financial August 20, 1999 - ------------------------- Officer (Principal Financial Officer) W. Rodney McMullen /s/ * Vice President and Corporate Controller August 20, 1999 - ------------------------- (Principal Accounting Officer) J. Michael Schlotman /s/ * Director August 20, 1999 - ------------------------- Reuben V. Anderson /s/ * Director August 20, 1999 - ------------------------- Robert D. Beyer /s/ * Director August 20, 1999 - ------------------------- Ronald W. Burkle /s/ * Director August 20, 1999 - ------------------------- John L. Clendenin /s/ * Director and President August 20, 1999 - ------------------------- David B. Dillon /s/ * Director August 20, 1999 - ------------------------- Carlton J. Jenkins
II-7 57
Signature Title Date --------- ----- ---- /s/ * Director August 20, 1999 - ------------------------ Bruce Karatz /s/ * Director August 20, 1999 - ------------------------ John T. LaMacchia /s/ * Director August 20, 1999 - ------------------------ Edward M. Liddy /s/ * Director August 20, 1999 - ------------------------ Robert G. Miller /s/ * Director August 20, 1999 - ------------------------ Clyde R. Moore /s/ * Director August 20, 1999 - ------------------------ T. Ballard Morton, Jr. /s/ * Director August 20, 1999 - ------------------------ Thomas H. O'Leary /s/ * Director August 20, 1999 - ------------------------ Katherine D. Ortega /s/ * Director August 20, 1999 - ------------------------ Martha R. Seger /s/ * Director August 20, 1999 - ------------------------ Bobby S. Shackouls /s/ * Director August 20, 1999 - ------------------------ James D. Woods
*By: /s/ Bruce M. Gack --------------------- Bruce M. Gack Attorney in Fact II-8 58 CO-REGISTRANT OFFICERS AND DIRECTORS
SIGNATURE TITLE DATE --------- ----- ---- All as of August 20, 1999 Dillon Companies, Inc. /s/ DAVID B. DILLON Director and Chairman of - --------------------------------------------- the Board (Principal David B. Dillon Executive Officer) /s/ FRANK J. REMAR Director and - --------------------------------------------- Vice President, Frank J. Remar Secretary and Treasurer (Principal Financial Officer) /s/ SCOTT M. HENDERSON Vice President and - --------------------------------------------- Controller (Principal Scott M. Henderson Accounting Officer) Director - --------------------------------------------- Warren F. Bryant /s/ PAUL W. HELDMAN Director, Vice President, - --------------------------------------------- and Assistant Secretary Paul W. Heldman Director and Vice - --------------------------------------------- President W. Rodney McMullen Drug Distributors, Inc. /s/ J. ROBERT RICE Director and President - --------------------------------------------- (Principal Executive J. Robert Rice Officer)
II-9 59
SIGNATURE TITLE --------- ----- /s/ LAWRENCE M. TURNER Treasurer (Principal - --------------------------------------------- Financial and Accounting Lawrence M. Turner Officer) /s/ PAUL W. HELDMAN Director and Secretary - --------------------------------------------- Paul W. Heldman Director - --------------------------------------------- Thomas P. O'Brien, Jr. Henpil, Inc. /s/ LEE BREWER President and Director - --------------------------------------------- (Principal Executive Lee Brewer Officer) /s/ STEVEN MCMILLAN Director, Treasurer, and - --------------------------------------------- Secretary (Principal Steven McMillan Financial and Accounting Officer) Director - --------------------------------------------- Thomas P. O'Brien, Jr. Inter-American Foods, Inc. /s/ GEOFFREY J. COVERT President (Principal - --------------------------------------------- Executive Officer) Geoffrey J. Covert /s/ W. RODNEY MCMULLEN Vice President and Chief - --------------------------------------------- Financial Officer W. Rodney McMullen (Principal Financial Officer) /s/ LAWRENCE M. TURNER Treasurer (Principal - --------------------------------------------- Accounting Officer) Lawrence M. Turner /s/ PAUL W. HELDMAN Director and Vice - --------------------------------------------- President Paul W. Heldman
II-10 60
SIGNATURE TITLE --------- ----- Director - --------------------------------------------- Thomas P. O'Brien, Jr. /s/ BRUCE M. GACK Director - --------------------------------------------- Bruce M. Gack J. V. Distributing, Inc. /s/ W. RODNEY MCMULLEN President (Principal - --------------------------------------------- Executive Officer) W. Rodney McMullen /s/ LAWRENCE M. TURNER Treasurer (Principal - --------------------------------------------- Financial and Accounting Lawrence M. Turner Officer) /s/ PAUL W. HELDMAN Director and Vice - --------------------------------------------- President Paul W. Heldman Director - --------------------------------------------- Thomas P. O'Brien, Jr. /s/ BRUCE M. GACK Director and Secretary - --------------------------------------------- Bruce M. Gack KRGP Inc. KRLP Inc. Kroger Limited Partnership I By KRGP, Inc., the General Partner Kroger Limited Partnership II By KRGP, Inc., the General Partner /s/ JOSEPH A. PICHLER Director, Chairman of the - --------------------------------------------- Board, and Chief Executive Joseph A. Pichler Officer (Principal Executive Officer) /s/ LAWRENCE M. TURNER Vice President and - --------------------------------------------- Treasurer (Principal Lawrence M. Turner Financial and Accounting Officer) /s/ PAUL W. HELDMAN Director, Vice President, - --------------------------------------------- and Secretary Paul W. Heldman
II-11 61
SIGNATURE TITLE --------- ----- Director - --------------------------------------------- Thomas P. O'Brien, Jr. /s/ BRUCE M. GACK Director - --------------------------------------------- Bruce M. Gack The Kroger Co. of Michigan /s/ M. MARNETTE PERRY Director, Chairman of the - --------------------------------------------- Board, and Chief Executive M. Marnette Perry Officer (Principal Executive Officer) /s/ KENNETH CORNISH Treasurer and Secretary - --------------------------------------------- (Principal Financial and Kenneth Cornish Accounting Officer) Director and Vice - --------------------------------------------- President Paul W. Heldman /s/ JAMES PERUN Director and Vice - --------------------------------------------- President-Operations James Perun Kroger Dedicated Logistics Co. /s/ PAUL W. HELDMAN Director and President - --------------------------------------------- (Principal Executive Paul W. Heldman Officer) /s/ LAWRENCE M. TURNER Director, Vice President, - --------------------------------------------- and Treasurer (Principal Lawrence M. Turner Financial and Accounting Officer) Director - --------------------------------------------- W. Rodney McMullen Peyton's Southeastern, Inc. /s/ J. ROBERT RICE Director and President - --------------------------------------------- (Principal Executive J. Robert Rice Officer)
II-12 62
SIGNATURE TITLE --------- ----- /s/ ROBERT WELTY Treasurer and Secretary - --------------------------------------------- (Principal Financial and Robert Welty Accounting Officer) Director - --------------------------------------------- Terry L. Cox /s/ PAUL W. HELDMAN Director and Assistant - --------------------------------------------- Secretary Paul W. Heldman Rocket Newco, Inc. /s/ THOMAS P. O'BRIEN, JR. Director and President - --------------------------------------------- (Principal Executive Thomas P. O'Brien, Jr. Officer) /s/ STEVEN MCMILLAN Vice President, Treasurer, - --------------------------------------------- and Secretary (Principal Steven McMillan Financial and Accounting Officer) Director and Vice - --------------------------------------------- President Lee Brewer Topvalco, Inc. /s/ JAMES E. HODGE President (Principal - --------------------------------------------- Executive Officer) James E. Hodge /s/ LAWRENCE M. TURNER Director, Vice President, - --------------------------------------------- Treasurer, and Assistant Lawrence M. Turner Secretary (Principal Financial and Accounting Officer) Director and Vice - --------------------------------------------- President Paul W. Heldman /s/ THOMAS P. O'BRIEN, JR. Director and Assistant - --------------------------------------------- Secretary Thomas P. O'Brien, Jr.
II-13 63
SIGNATURE TITLE --------- ----- Vine Court Assurance Incorporated /s/ J. MICHAEL SCHLOTMAN Director and President - --------------------------------------------- (Principal Executive J. Michael Schlotman Officer) /s/ LAWRENCE M. TURNER Treasurer (Principal - --------------------------------------------- Financial Officer) Lawrence M. Turner /s/ DAN L. MCDANIEL Director, Controller, and - --------------------------------------------- Chief Accounting Officer Dan L. McDaniel (Principal Accounting Officer) /s/ BRUCE M. GACK Director and Vice - --------------------------------------------- President Bruce M. Gack Director and Vice - --------------------------------------------- President Robert Dinges Director and Assistant - --------------------------------------------- Secretary Douglas C. Pierson Wydiv, Inc. /s/ JACK CANNON Director and President - --------------------------------------------- (Principal Executive Jack Cannon Officer) /s/ STEVEN MCMILLAN Director, Vice President, - --------------------------------------------- Treasurer and Secretary Steven McMillan (Principal Financial and Accounting Officer) Director - --------------------------------------------- Thomas P. O'Brien, Jr.
II-14 64
SIGNATURE TITLE --------- ----- City Market, Inc. /s/ ANTHONY PRINSTER President (Principal - --------------------------------------------- Executive Officer) Anthony Prinster /s/ RONALD WARREN Vice President, Secretary, - --------------------------------------------- and Treasurer (Principal Ronald Warren Financial Officer) /s/ STAN HOSMAN Controller (Principal - --------------------------------------------- Accounting Officer) Stan Hosman /s/ DAVID B. DILLON Director - --------------------------------------------- David B. Dillon /s/ FRANK J. REMAR Director - --------------------------------------------- Frank J. Remar Director - --------------------------------------------- Warren F. Bryant Dillon Real Estate Co., Inc. /s/ FRANK J. REMAR Director and President - --------------------------------------------- (Principal Executive Frank J. Remar Officer) /s/ SCOTT M. HENDERSON Secretary and Treasurer - --------------------------------------------- (Principal Financial and Scott M. Henderson Accounting Officer) /s/ DAVID B. DILLON Director and Vice - --------------------------------------------- President David B. Dillon Director and Vice - --------------------------------------------- President Warren F. Bryant Jackson Ice Cream Co., Inc. /s/ JOHN D. COX President (Principal - --------------------------------------------- Executive Officer) John D. Cox
II-15 65
SIGNATURE TITLE --------- ----- /s/ FRANK J. REMAR Director, Vice President, - --------------------------------------------- Secretary, and Treasurer Frank J. Remar (Principal Financial and Accounting Officer) /s/ DAVID B. DILLON Director - --------------------------------------------- David B. Dillon Director - --------------------------------------------- Warren F. Bryant Junior Food Stores of West Florida, Inc. /s/ MARK SALISBURY President (Principal - --------------------------------------------- Executive Officer) Mark Salisbury /s/ FRANK J. REMAR Director, Vice President, - --------------------------------------------- Secretary, and Treasurer Frank J. Remar (Principal Financial and Accounting Officer) /s/ DAVID B. DILLON Director - --------------------------------------------- David B. Dillon Director - --------------------------------------------- Warren F. Bryant Kwik Shop, Inc. /s/ HENRY R. WAGUESPACK President (Principal - --------------------------------------------- Executive Officer) Henry R. Waguespack /s/ FRANK J. REMAR Director, Vice President, - --------------------------------------------- Secretary, and Treasurer Frank J. Remar (Principal Financial and Accounting Officer) /s/ DAVID B. DILLON Director - --------------------------------------------- David B. Dillon Director - --------------------------------------------- Warren F. Bryant
II-16 66
SIGNATURE TITLE --------- ----- Mini Mart, Inc. /s/ SAMUEL L. SHARP President (Principal - --------------------------------------------- Executive Officer) Samuel L. Sharp /s/ FRANK J. REMAR Director, Secretary, and - --------------------------------------------- Treasurer Frank J. Remar (Principal Financial and Accounting Officer) /s/ DAVID B. DILLON Director - --------------------------------------------- David B. Dillon Director - --------------------------------------------- Warren F. Bryant Quik Stop Markets, Inc. /s/ VAN S. TARVER President (Principal - --------------------------------------------- Executive Officer) Van S. Tarver /s/ FRANK J. REMAR Director, Vice President, - --------------------------------------------- Secretary, and Treasurer Frank J. Remar (Principal Financial and Accounting Officer) /s/ DAVID B. DILLON Director - --------------------------------------------- David B. Dillon Director - --------------------------------------------- Warren F. Bryant
II-17 67
SIGNATURE TITLE --------- ----- THGP Co., Inc. THLP Co., Inc. Turkey Hill, L.P. By THGP Co., Inc., its General Partner /s/ WARREN F. BRYANT Director and President - --------------------------------------------- (Principal Executive Warren F. Bryant Officer) /s/ FRANK J. REMAR Director, President, Chief - --------------------------------------------- Financial Officer, and Frank J. Remar Treasurer (Principal Financial and Accounting Officer) Director, Vice President, - --------------------------------------------- and Assistant Secretary Robert Moeder Wells Aircraft, Inc. /s/ GARY W. CROW President (Principal - --------------------------------------------- Executive Officer) Gary W. Crow /s/ FRANK J. REMAR Director, Vice President, - --------------------------------------------- Secretary, and Treasurer Frank J. Remar (Principal Financial and Accounting Officer) /s/ DAVID B. DILLON Director - --------------------------------------------- David B. Dillon Director - --------------------------------------------- Warren F. Bryant Fred Meyer Stores, Inc. /s/ MARY F. SAMMONS President and Chief - --------------------------------------------- Executive Officer Mary F. Sammons (Principal Executive Officer) /s/ ROBERT B. DIMOND Vice President and Chief - --------------------------------------------- Financial Officer Robert B. Dimond (Principal Financial Officer)
II-18 68
SIGNATURE TITLE --------- ----- /s/ LAWRENCE M. TURNER Vice President and - --------------------------------------------- Treasurer (Principal Lawrence M. Turner Accounting Officer) Director - --------------------------------------------- Joseph A. Pichler /s/ ROBERT G. MILLER Director - --------------------------------------------- Robert G. Miller /s/ PAUL W. HELDMAN Director - --------------------------------------------- Paul W. Heldman Fred Meyer, Inc. CB&S Advertising Agency, Inc. Distribution Trucking Company FM, Inc. FM Holding Corporation Grand Central, Inc. FM Retail Services, Inc. Fred Meyer of Alaska, Inc. Fred Meyer of California, Inc. Roundup Co. JH Properties, Inc. Smith's Beverage of Wyoming, Inc. Smitty's Supermarkets, Inc. Smitty's Super Valu, Inc. Compare, Inc. Saint Lawrence Holding Company Smitty's Equipment Leasing, Inc. Treasure Valley Land Company, L.C. Western Property Investment Group, Inc. Hughes Markets, Inc. Hughes Realty, Inc. KU Acquisition Corporation /s/ WARREN F. BRYANT President and Chief - --------------------------------------------- Executive Officer Warren F. Bryant (Principal Executive Officer)
II-19 69
SIGNATURE TITLE --------- ----- /s/ ROBERT B. DIMOND Vice President and Chief - --------------------------------------------- Financial Officer Robert B. Dimond (Principal Financial Officer) /s/ LAWRENCE M. TURNER Vice President and - --------------------------------------------- Treasurer (Principal Lawrence M. Turner Accounting Officer) Director - --------------------------------------------- Joseph A. Pichler /s/ ROBERT G. MILLER Director - --------------------------------------------- Robert G. Miller /s/ PAUL W. HELDMAN Director, Vice President, - --------------------------------------------- and Secretary Paul W. Heldman Fred Meyer Jewelers, Inc. Merksamer Jewelers, Inc. /s/ MICHAEL H. DON Chief Executive Officer - --------------------------------------------- (Principal Executive Michael H. Don Officer) /s/ ROBERT B. DIMOND Vice President and Chief - --------------------------------------------- Financial Officer Robert B. Dimond (Principal Financial Officer) /s/ LAWRENCE M. TURNER Vice President and - --------------------------------------------- Treasurer (Principal Lawrence M. Turner Accounting Officer) Director - --------------------------------------------- Joseph A. Pichler /s/ ROBERT G. MILLER Director - --------------------------------------------- Robert G. Miller /s/ PAUL W. HELDMAN Director, Vice President, - --------------------------------------------- and Secretary Paul W. Heldman
II-20 70
SIGNATURE TITLE --------- ----- Smith's Food & Drug Centers, Inc. /s/ WARREN F. BRYANT Chief Executive Officer - --------------------------------------------- (Principal Executive Warren F. Bryant Officer) /s/ ROBERT B. DIMOND Vice President and Chief - --------------------------------------------- Financial Officer Robert B. Dimond (Principal Financial Officer) /s/ LAWRENCE M. TURNER Vice President and - --------------------------------------------- Treasurer (Principal Lawrence M. Turner Accounting Officer) Director - --------------------------------------------- Joseph A. Pichler /s/ ROBERT G. MILLER Director - --------------------------------------------- Robert G. Miller /s/ PAUL W. HELDMAN Director, Vice President, - --------------------------------------------- and Secretary Paul W. Heldman Richie's, Inc. /s/ ARTURO YE Director and President - --------------------------------------------- (Principal Executive Arturo Ye Officer) /s/ KEITH C. LARSON Director, Vice President, - --------------------------------------------- and Secretary (Principal Keith C. Larson Financial and Accounting Officer) Director - --------------------------------------------- Paul W. Heldman
II-21 71
SIGNATURE TITLE --------- ----- Quality Food Centers, Inc. Quality Food, Inc. Quality Food Holdings, Inc. QFC Sub, Inc. Second Story, Inc. /s/ MICHAEL HUSE President and Chief - --------------------------------------------- Executive Officer Michael Huse (Principal Executive Officer) /s/ ROBERT B. DIMOND Vice President and Chief - --------------------------------------------- Financial Officer Robert B. Dimond (Principal Financial Officer) /s/ LAWRENCE M. TURNER Vice President and - --------------------------------------------- Treasurer (Principal Lawrence M. Turner Accounting Officer) Director - --------------------------------------------- Joseph A. Pichler /s/ ROBERT G. MILLER Director - --------------------------------------------- Robert G. Miller /s/ PAUL W. HELDMAN Director, Vice President, - --------------------------------------------- and Secretary Paul W. Heldman
II-22 72
SIGNATURE TITLE --------- ----- Food 4 Less Holdings, Inc. Ralphs Grocery Company Cala Co. Bay Area Warehouse Stores, Inc. Bell Markets, Inc. Cala Foods, Inc. Crawford Stores, Inc. Food 4 Less of Southern California, Inc. Alpha Beta Company Food 4 Less GM, Inc. Food 4 Less of California, Inc. Food 4 Less Merchandising, Inc. /s/ SAMMY K. DUNCAN President (Principal - --------------------------------------------- Executive Officer) Sammy K. Duncan /s/ ROBERT B. DIMOND Vice President and Chief - --------------------------------------------- Financial Officer Robert B. Dimond (Principal Financial Officer) /s/ LAWRENCE M. TURNER Vice President and - --------------------------------------------- Treasurer (Principal Lawrence M. Turner Accounting Officer) Director - --------------------------------------------- Joseph A. Pichler /s/ ROBERT G. MILLER Director - --------------------------------------------- Robert G. Miller /s/ PAUL W. HELDMAN Director, Vice President, - --------------------------------------------- and Secretary Paul W. Heldman
II-23 73 INDEX OF EXHIBITS Exhibit Description - ------- ----------- 3.1 Amended Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company's Quarterly Report on Form 10-Q for the Quarter ended October 3, 1998). 3.2 Regulations (Bylaws) of the Company (incorporated by reference to Exhibit 4.2 of the Company's Registration Statement on Form S-3 (No. 33-57552), dated January 28, 1993.) 4.1 Indenture dated as of June 25, 1999, between the Company and Firstar Bank, National Association, as Trustee (filed herewith). 4.2 First Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of June 25, 1999, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, relating to the 7.25% Senior Notes (filed herewith). 4.3 Second Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of June 25, 1999, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, relating to the 7.70% Senior Notes (filed herewith). 4.4 Third Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of June 25, 1999, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, relating to the 6.34% Senior Notes (filed herewith). 4.5 Registration Rights Agreement dated as of June 25, 1999, among the Company, the Guarantors listed therein, Goldman Sachs & Co., Banc One Capital Markets, Inc., Banc of America Securities LLC, Chase Securities Inc. and Salomon Smith Barney (filed herewith). 4.6 Second Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of October 15, 1993, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, adding guarantors to the Company's existing debt (filed herewith). 4.7 Fourth Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of May 1, 1998, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, adding guarantors to the Company's existing debt (filed herewith). 4.8 Fourth Supplemental Indenture dated June 25, 1999, to Indenture dated as of July 15, 1996, by and among the Company, the Guarantors listed therein and Firstar Bank, National Association, as Trustee, adding guarantors to the Company's existing debt (filed herewith). II-24 74 4.9 Seventh Supplemental Indenture dated as of June 25, 1999, to Indenture dated as of April 1, 1992, by and among the Company, the Guarantors listed therein and Harris Trust and Savings Bank, as Trustee, adding guarantors to the Company's existing debt (filed herewith). 4.10 Second Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of March 11, 1998, between Fred Meyer, Inc., the Guarantors listed therein and The First National Bank of Chicago, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.1 Third Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of June 1, 1995, between Ralphs Grocery Company (Food 4 Less Supermarkets, Inc.), the Guarantors listed therein and Norwest Bank Minnesota, N.A., adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.12 Fourth Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of March 30, 1993, between Ralphs Grocery Company, the Guarantors listed therein and United States Trust Company, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.13 Third Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of June 1, 1995, between Ralph Grocery Company (Food 4 Less Supermarkets, Inc.), the Guarantors listed therein and United States Trust Company of New York, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.14 Second Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of March 19, 1997, between Quality Food Centers, Inc., the Guarantors listed therein and First Trust, N.A., adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 4.15 Second Supplemental Indenture dated as of July 30, 1999, to Indenture dated as of May 23, 1996, between Smith's Food & Drug Centers, Inc., the Guarantors listed therein and State Street Bank and Trust Company, adding guarantors to existing debt of Fred Meyer, Inc. and its subsidiaries (filed herewith). 5.1 Opinion of Paul W. Heldman, Esq., Senior Vice President, Secretary and General Counsel to the Company (filed herewith). 12.1 Statement re: computation of ratios (included in the prospectus). 21.1 List of Company's subsidiaries (filed herewith). 23.1 Consent of PricewaterhouseCoopers LLP, independent auditors for the Company (filed herewith). 23.2 Consent of Deloitte & Touche LLC, independent auditors for the Company (filed herewith). 23.3 Consent of Paul W. Heldman, Esq. (included in Exhibit 5.1). 24.1 Powers of Attorney of directors and officers of the Company (filed herewith). II-25 75 25.1 Statement of Eligibility of Trustee on Form T-1 (incorporated by reference to the existing exhibit 25.1 to the Company's Current Report on Form 8-K dated April 30, 1999). 99.1 Form of Letter of Transmittal (filed herewith). 99.2 Form of Notice of Guaranteed Delivery (filed herewith). 99.3 Form of Tender Instructions (filed herewith). II-26 EX-4.1 2 EXHIBIT 4.1 1 Exhibit-4.1 ================================================================================ THE KROGER CO. TO Firstar Bank, National Association Trustee ---------- INDENTURE Dated as of June 25, 1999 ---------- SENIOR DEBT SECURITIES ================================================================================ 2 THE KROGER CO. Certain Sections of this Indenture relating to Sections 310 through 318, inclusive, of the Trust Indenture Act of 1939:
Trust Indenture Act Section Indenture Section ' 310(a)(1) ............................................... 609 (a)(2) ............................................... 609 (a)(3) ............................................... Not Applicable (a)(4) ............................................... Not Applicable (b) ............................................... 608 610 ' 311(a) ............................................... 613 (b) ............................................... 613 ' 312(a) ............................................... 701 702(a) (b) ............................................... 702(b) (c) ............................................... 702(c) ' 313(a) ............................................... 703(a) (b) ............................................... 703(a) (c) ............................................... 703(a) (d) ............................................... 703(b) ' 314(a) ............................................... 704 (a)(4) ............................................... 101 1004 (b) ............................................... Not Applicable (c)(1) ............................................... 102 (c)(2) ............................................... 102 (c)(3) ............................................... Not Applicable (d) ............................................... Not Applicable (e) ............................................... 102 ' 315(a) ............................................... 601 (b) ............................................... 602 (c) ............................................... 601 (d) ............................................... 601 (e) ............................................... 514 ' 316(a) ............................................... 101 (a)(1)(A) ............................................... 502 512 (a)(1)(B) ............................................... 513 (a)(2) ............................................... Not Applicable (b) ............................................... 508 (c) ............................................... 104(c) ' 317(a)(1) ............................................... 503 (a)(2) ............................................... 504 (b) ............................................... 1003 ' 318(a) ............................................... 107 - -------------------
-2- 3 NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. -3- 4 TABLE OF CONTENTS ----------
Page ---- PARTIES............................................................................................ 1 RECITALS OF THE COMPANY............................................................................ 1 ARTICLE ONE ----------- DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 101. Definitions............................................................. 1 Act..................................................................... 2 Administrative Agents................................................... 2 Affiliate; control...................................................... 2 Authenticating Agent.................................................... 3 Bank Agreement.......................................................... 3 Board of Directors...................................................... 3 Board Resolution........................................................ 3 Business Day............................................................ 3 Capital Stock........................................................... 3 Commission.............................................................. 3 Company................................................................. 4 Company Request; Company Order.......................................... 4 Corporate Trust Office.................................................. 4 corporation............................................................. 4 Defaulted Interest...................................................... 4 Depositary.............................................................. 4 Event of Default........................................................ 4 Exchange Act............................................................ 4 Global Security......................................................... 4 Holder.................................................................. 5 Indebtedness............................................................ 5 Indenture............................................................... 5 interest................................................................ 6 Interest Payment Date................................................... 6 Lien.................................................................... 6 Maturity................................................................ 6 Officers' Certificate................................................... 6 Opinion of Counsel...................................................... 7 Original Issue Discount Security........................................ 7 Outstanding............................................................. 7 Paying Agent............................................................ 8 Person.................................................................. 8 Place of Payment........................................................ 8 Predecessor Security.................................................... 9 Redemption Date......................................................... 9 Redemption Price........................................................ 9 Regular Record Date..................................................... 9 Securities.............................................................. 9
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Page ---- Security Register and Security Registrar.............................................................. 9 Special Record Date..................................................... 9 Stated Maturity......................................................... 9 Subsidiary.............................................................. 9 Trustee................................................................. 10 Trust Indenture Act..................................................... 10 Vice President.......................................................... 10 Wholly-owned Subsidiary................................................. 10 Section 102. Compliance Certificates and Opinions.................................... 10 Section 103. Form of Documents Delivered to Trustee.................................. 11 Section 104. Acts of Holders; Record Dates........................................... 12 Section 105. Notices, Etc., to Trustee and Company................................... 14 Section 106. Notice to Holders; Waiver............................................... 15 Section 107. Conflict with Trust Indenture Act....................................... 15 Section 108. Effect of Headings and Table of Contents...................................................... 16 Section 109. Successors and Assigns.................................................. 16 Section 110. Separability Clause..................................................... 16 Section 111. Benefits of Indenture................................................... 16 Section 112. Governing Law........................................................... 16 Section 113. Legal Holidays.......................................................... 16 ARTICLE TWO ----------- SECURITY FORMS Section 201. Forms Generally......................................................... 17 Section 202. Form of Face of Security................................................ 20 Section 203. Form of Reverse of Security............................................. 20 Section 204. Form of Legend for Global Securities.................................... 25 Section 205. Form of Trustee's Certificate of Authentication......................................................... 26 ARTICLE THREE ------------- THE SECURITIES Section 301. Amount Unlimited; Issuable in Series.................................... 26 Section 302. Denominations........................................................... 30 Section 303. Execution, Authentication, Delivery and Dating............................................................. 31 Section 304. Temporary Securities.................................................... 33 Section 305. Registration, Registration of Transfer and Exchange........................................................... 34 Section 306. Mutilated, Destroyed, Lost and Stolen Securities............................................................. 36 Section 307. Payment of Interest; Interest Rights Preserved.............................................................. 37 Section 308. Persons Deemed Owners................................................... 39
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Page ---- Section 309. Cancellation............................................................ 39 Section 310. Computation of Interest................................................. 40 ARTICLE FOUR ------------ SATISFACTION AND DISCHARGE Section 401. Satisfaction and Discharge of Indenture................................. 40 Section 402. Application of Trust Money.............................................. 42 ARTICLE FIVE ------------ REMEDIES Section 501. Events of Default....................................................... 42 Section 502. Acceleration of Maturity; Rescission and Annulment.......................................................... 45 Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee............................................. 47 Section 504. Trustee May File Proofs of Claim........................................ 48 Section 505. Trustee May Enforce Claims Without Possession of Securities............................................... 48 Section 506. Application of Money Collected.......................................... 49 Section 507. Limitation on Suits..................................................... 49 Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest............................................................... 50 Section 509. Restoration of Rights and Remedies...................................... 51 Section 510. Rights and Remedies Cumulative.......................................... 51 Section 511. Delay or Omission Not Waiver............................................ 51 Section 512. Control by Holders...................................................... 52 Section 513. Waiver of Past Defaults................................................. 52 Section 514. Undertaking for Costs................................................... 53 Section 515. Waiver of Usury, Stay or Extension Laws................................. 53 ARTICLE SIX ----------- THE TRUSTEE Section 601. Certain Duties and Responsibilities..................................... 53 Section 602. Notice of Defaults...................................................... 54 Section 603. Certain Rights of Trustee............................................... 54 Section 604. Not Responsible for Recitals or Issuance of Securities................................................. 56 Section 605. May Hold Securities..................................................... 56 Section 606. Money Held in Trust..................................................... 56 Section 607. Compensation and Reimbursement.......................................... 57 Section 608. Disqualification; Conflicting Interests.............................................................. 57
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Page ---- Section 609. Corporate Trustee Required; Eligibility............................................................ 58 Section 610. Separate Trustee; Resignation and Removal; Appointment of Successor............................................... 58 Section 611. Acceptance of Appointment by Successor.................................. 60 Section 612. Merger, Conversion, Consolidation or Succession to Business................................................. 62 Section 613. Preferential Collection of Claims Against Company........................................................ 62 Section 614. Appointment of Authenticating Agent..................................... 63 ARTICLE SEVEN ------------- HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY Section 701. Company to Furnish Trustee Names and Addresses of Holders................................................... 65 Section 702. Preservation of Information; Communications to Holders.............................................. 66 Section 703. Reports by Trustee...................................................... 66 Section 704. Reports by Company...................................................... 67 ARTICLE EIGHT ------------- CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 801. Company and Subsidiaries May Consolidate, Etc., Only on Certain Terms........................................................... 67 Section 802. Successor Substituted................................................... 68 ARTICLE NINE ------------ SUPPLEMENTAL INDENTURES Section 901. Supplemental Indentures Without Consent of Holders............................................................. 68 Section 902. Supplemental Indentures with Consent of Holders................................................................ 70 Section 903. Execution of Supplemental Indentures.................................... 72 Section 904. Effect of Supplemental Indentures....................................... 72 Section 905. Conformity with Trust Indenture Act..................................... 72 Section 906. Reference in Securities to Supplemental Indentures............................................................. 72
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Page ---- ARTICLE TEN ----------- COVENANTS Section 1001. Payment of Principal, Premium and Interest............................................................... 73 Section 1002. Maintenance of Office or Agency......................................... 73 Section 1003. Money for Securities Payments to Be Held in Trust.......................................................... 74 Section 1004. Statement by Officers as to Default..................................... 75 Section 1005. Existence............................................................... 76 Section 1006. Maintenance of Properties............................................... 76 Section 1007. Payment of Taxes and Other Claims....................................... 76 Section 1008. Waiver of Certain Covenants............................................... 77 ARTICLE ELEVEN -------------- REDEMPTION OF SECURITIES Section 1101. Applicability of Article................................................ 77 Section 1102. Election to Redeem; Notice to Trustee................................... 77 Section 1103. Selection by Trustee of Securities to Be Redeemed............................................................ 78 Section 1104. Notice of Redemption.................................................... 79 Section 1105. Deposit of Redemption Price............................................. 79 Section 1106. Securities Payable on Redemption Date................................... 80 Section 1107. Securities Redeemed in Part............................................. 80 ARTICLE TWELVE -------------- SINKING FUNDS Section 1201. Applicability of Article................................................ 81 Section 1202. Satisfaction of Sinking Fund Payments with Securities........................................................ 81 Section 1203. Redemption of Securities for Sinking Fund................................................................... 82 TESTIMONIUM........................................................................................ 83 SIGNATURES AND SEALS............................................................................... 83 ACKNOWLEDGMENTS.................................................................................... 84
INDENTURE, dated as of ........, 19.., between 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, and .............................., a -v- 9 ........................... duly organized and existing under the laws of ........, as Trustee (herein called the "Trustee"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the "Securities"), to be issued in one or more series as in this Indenture provided. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. NOW, THEREFORE, THIS 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 or of series thereof, as follows: ARTICLE ONE Definitions and Other Provisions of General Application Section 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; -2- 10 (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted and applied by the Company on March 22, 1997; and (4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder, has the meaning specified in Section 104. "Administrative Agents" means Citibank, N.A. and The Chase Manhattan Bank, as Administrative Agents under the Bank Agreement, and, upon notice to the Company and the Trustee, any successors thereto under the Bank Agreement. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate Securities of one or more series. "Bank Agreement" means the 364-Day Credit Agreement and the Five-Year Credit Agreement, both dated as of May 28, 1997, among the Company, the Lenders named therein, the Administrative Agents, and the Syndication Agent and Documentation Agent named therein, as such Agreement (including, without limitation, any "Loan Documents" (as defined in the Bank Agreement)) has been or may be amended, amended and restated, supplemented or otherwise modified from time to time, and includes any -3- 11 agreement extending the maturity of, refinancing or otherwise restructuring (including, but not limited to, the inclusion of additional borrowers thereunder that are Subsidiaries of the Company) all or any portion of the Obligations under such Agreement or any successor agreement. "Board of Directors" means either the board of directors of the Company or any duly authorized committee of that board. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day", when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close. "Capital Stock" means any and all shares, interests, participations, warrants, rights or other equivalents (however designated) of corporate stock. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the Trustee. "Corporate Trust Office" means the principal office of the Trustee in ................................. -4- 12 .............................. at which at any particular time its corporate trust business shall be administered. "corporation" means a corporation, association, company, joint-stock company or business trust. "Defaulted Interest" has the meaning specified in Section 307. "Depositary" means, with respect to the Securities of any series issuable in whole or in part in the form of one or more Global Securities, the clearing agency registered under the Exchange Act specified for that purpose as contemplated by Section 301. "Event of Default" has the meaning specified in Section 501. "Exchange Act" means the Securities Exchange Act of 1934 as it may be amended and any successor act thereto. "Global Security" means a Security bearing the legend specified in Section 204 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. "Holder" means a Person in whose name a Security is registered in the Security Register. "Indebtedness" means (without duplication), with respect to any Person, (i) every obligation of such Person for money borrowed, (ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) every obligation of such Person issued or assumed as the deferred purchase price of property, every conditional sale obligation and every obligation under any title retention agreement, in each case if on terms permitting any portion of the purchase price to be paid beyond one year from the date of purchase (but excluding trade accounts payable arising in the ordinary course of business which are not overdue by more than 90 days or which are being contested in good faith), (iv) every obligation of such Person issued or contracted for as payment in consideration of the purchase by such Person or an Affiliate of such Person of the Capital Stock or substantially all of the assets of another Person or a merger or consolidation to which such Person or an Affiliate of such Person was a party, (v) every obligation of the type referred to in clauses (i) through (iv) of other Persons and all dividends -5- 13 of other Persons for the payment of which, in either case, such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, and (vi) every obligation of the type referred to in clauses (i) through (v) of other Persons secured by any Lien on any property or asset of such Person (whether or not such obligation is assumed by such Person), the amount of such obligation being deemed to be the lesser of the value of such property or assets or the amount of the obligation so secured. "Indebtedness," however, does not include any obligation of any Person under any interest rate swap, cap, collar or similar arrangement. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument, and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term "Indenture" shall also include the terms of particular series of Securities established as contemplated by Section 301. "interest", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "Interest Payment Date", when used with respect to any Security, means the Stated Maturity of an instalment of interest on such Security. "Lien" means, with respect to any property or asset, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement (other than any easement not materially impairing usefulness or marketability), encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or asset (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). "Maturity", when used with respect to any Security, means the date on which the principal of such Security or an instalment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity -6- 14 or by declaration of acceleration, call for redemption or otherwise. "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 1004 shall be the principal executive, financial or accounting officer of the Company. "Opinion of Counsel" means a written opinion of counsel, who may be an employee of the Company or counsel for the Company, and who shall be acceptable to the Trustee. "Original Issue Discount Security" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, EXCEPT: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; PROVIDED that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been pre- -7- 15 sented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; PROVIDED, HOWEVER, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 502, (ii) the principal amount of a Security denominated in one or more foreign currencies or currency units shall be the U.S. dollar equivalent, determined in the manner provided as contemplated by Section 301 on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the U.S. dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security, and (iii) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company. "Person" means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment", when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the -8- 16 Securities of that series are payable as specified as contemplated by Section 301. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "Regular Record Date" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "Securities" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "Security Register" and "Security Registrar" have the respective meanings specified in Section 305. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "Stated Maturity", when used with respect to any Security or any instalment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such instalment of principal or interest is due and payable. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock which ordinarily has voting power for the election of directors, whether at all times or only so long -9- 17 as no senior class of stock has such voting power by reason of any contingency. "Trustee" initially means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; PROVIDED, HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Vice President", when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". "Wholly-owned Subsidiary" means a Subsidiary, all of the outstanding Capital Stock of which (other than directors' qualifying shares) shall at the time be owned by the Company or by one or more Wholly-owned Subsidiaries or by the Company and one or more Wholly-owned Subsidiaries. Section 102. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers' Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include -10- 18 (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. -11- 19 Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 104. ACTS OF HOLDERS; RECORD DATES. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section. Without limiting the generality of the foregoing, a Holder, including a Depositary that is a Holder of a Global Security, may make, give or take, by a proxy, or proxies, duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and a Depositary that is a Holder of a Global Security may provide its proxy or proxies to the beneficial owners of interests in any such Global Security. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be -12- 20 proved in any other manner which the Trustee deems sufficient. (c) The Company may, in the circumstances permitted by the Trust Indenture Act, and to the extent required by this Indenture shall, fix any day as the record date for the purpose of determining the Holders of Securities of any series entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders of Securities of such series; PROVIDED, HOWEVER, that in no event may the Company set a record date for the purpose of determining the Holders of the Securities entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action pursuant to Section 501, 502 (other than the second paragraph thereof), 507 or 512. Except as otherwise provided herein, if not set by the Company prior to the first solicitation of a Holder of Securities of such series made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 701) prior to such first solicitation or vote, as the case may be. With regard to any record date for action to be given or taken or voted upon by the Holders of one or more series of Securities, only the Holders of Securities of such series on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action. (d) The ownership of Securities shall be proved by the Security Register. (e) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. Section 105. NOTICES, ETC., TO TRUSTEE AND COMPANY. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, -13- 21 (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: ................., or (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company. Section 106. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. Section 107. CONFLICT WITH TRUST INDENTURE ACT. -14- 22 If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded. Section 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 109. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. Section 110. SEPARABILITY CLAUSE. In case any provision in this Indenture or in the Securities 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. Section 111. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 112. GOVERNING LAW. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. Section 113. LEGAL HOLIDAYS. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of the Securities of any -15- 23 series which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, PROVIDED that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be. ARTICLE TWO Security Forms Section 201. FORMS GENERALLY. The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution of the Securities. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities. The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. Section 202. FORM OF FACE OF SECURITY. [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.] THE KROGER CO. -16- 24 ............................................ 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 ...................... ........................... [IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- , and to pay interest thereon from ............. or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ............ and ............ in each year, commencing ........., at the rate of ....% per annum, until the principal hereof is paid or made available for payment [IF APPLICABLE, INSERT -- , and at the rate of ....% per annum on any overdue principal and premium and on any overdue instalment of interest]. 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 ....... or ....... (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 of this series 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]. [IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated -17- 25 Maturity and in such case the overdue principal of this Security shall bear interest at the rate of ....% per annum, which shall accrue from the date of such default in payment to the date payment of such principal has been made or duly provided for. Interest on any overdue principal shall be payable on demand. Any such interest on any overdue principal that is not so paid on demand shall bear interest at the rate of ......% per annum, which shall accrue from the date of such demand for payment to the date payment of such interest has been made or duly provided for, and such interest shall also be payable on demand.] Payment of the principal of (and premium, if any) and [IF APPLICABLE, INSERT -- any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in ............, 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 [IF APPLICABLE, INSERT - -- ; 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]. 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: ........................... -18- 26 Section 203. FORM OF REVERSE OF SECURITY. This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of ............., 1998 (herein called the "Indenture"), between the Company and ..............., as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), 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 $...........]. [IF APPLICABLE, INSERT -- The Securities of this series are subject to redemption upon not less than 30 days' notice by mail, [IF APPLICABLE, INSERT -- (1) on ........... in any year commencing with the year ...... and ending with the year ...... through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [on or after .........., 19..], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [on or before ..............., __%, and if redeemed] during the 12-month period beginning ............. of the years indicated, Year Redemption Year Redemption - ---- Price ---- Price ----- ----- -19- 27 and thereafter at a Redemption Price equal to .....% of the principal amount, together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [IF APPLICABLE, INSERT -- The Securities of this series are subject to redemption upon not less than 30 days' notice by mail, (1) on ............ in any year commencing with the year .... and ending with the year .... through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after ............], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning ............ of the years indicated, Year Redemption Price - ---- For Redemption Redemption Price For Through Operation Redemption Otherwise of the Than Through Operation Sinking Fund of the Sinking Fund ------------ ------------------- and thereafter at a Redemption Price equal to .....% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest instalments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record -20- 28 at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [Notwithstanding the foregoing, the Company may not, prior to ............., redeem any Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than .....% per annum.] [The sinking fund for this series provides for the redemption on ............ in each year beginning with the year ....... and ending with the year ...... of [not less than $.......... ("mandatory sinking fund") and not more than] $......... aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made [in the inverse order in which they become due].] [IF THE SECURITY IS SUBJECT TO REDEMPTION, INSERT -- In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.] [IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] [IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE AMOUNT. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal and overdue -21- 29 interest, all of the Company's obligations in respect of the payment of the principal of and interest, if any, on the Securities of this series shall terminate.] 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 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 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 herefor 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. -22- 30 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 this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $....... and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. 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 LEGEND FOR GLOBAL SECURITIES. Any Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form: "This Security is a Global Security within the meaning of the Indenture hereinafter referred -23- 31 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." Section 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's certificates of authentication shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. .............................. As Trustee By............................ Authorized Officer ARTICLE THREE The Securities Section 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 303, set forth, or determined in the manner provided, in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series, (1) the title of the Securities of the series (which shall distinguish the Securi- -24- 32 ties of the series from Securities of any other series); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); (3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (4) the date or dates on which the principal of the Securities of the series is payable; (5) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any interest payable on any Interest Payment Date; (6) the place or places where the principal of and any premium and interest on Securities of the series shall be payable; (7) the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Company; (8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a -25- 33 Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (9) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable; (10) the currency, currencies or currency units in which payment of the principal of and any premium and interest on any Securities of the series shall be payable if other than the currency of the United States of America and the manner of determining the equivalent thereof in the currency of the United States of America for purposes of the definition of "Outstanding" in Section 101; (11) if the amount of payments of principal of or any premium or interest on any Securities of the series may be determined with reference to an index, the manner in which such amounts shall be determined; (12) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or a Holder thereof, in one or more currencies or currency units other than that or those in which the Securities are stated to be payable, the currency, currencies or currency units in which payment of the principal of and any premium and interest on Securities of such series as to which such election is made shall be payable, and the periods within which and the terms and conditions upon which such election is to be made; (13) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502; -26- 34 (14) whether the Securities of the Series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depositary or Depositaries with respect to such Global Security or Securities and the circumstances under which any such Global Security may be registered for transfer or exchange, or authenticated and delivered, in the name of a Person other than such Depositary or its nominee, if other than as set forth in Section 305; (15) any other event or events of default applicable with respect to the Securities of the series in addition to those provided in Section 501(1) through (7); (16) any other covenant or warranty included for the benefit of Securities of the series in addition to (and not inconsistent with) those included in this Indenture for the benefit of Securities of all series, or any other covenant or warranty included for the benefit of Securities of the series in lieu of any covenant or warranty included in this Indenture for the benefit of Securities of all series, or any provision that any covenant or warranty included in this Indenture for the benefit of Securities of all series shall not be for the benefit of Securities of such series, or any combination of such covenants, warranties or provisions; (17) the terms pursuant to which (i) the Company may consolidate with or merge into any other Person, (ii) any Subsidiary of the Company may consolidate with or merge into another Person in a transaction in which such Subsidiary remains a Subsidiary, (iii) any other Person may consolidate with or merge into any Subsidiary in which such Subsidiary remains a Subsidiary, or (iv) any other Person may, directly or indirectly, sell, assign, convey, transfer or lease its properties substantially as an entirety to the Company; and (18) any other terms of the series (which terms shall not be inconsistent with -27- 35 the provisions of this Indenture, except as permitted by Section 901(5)). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers' Certificate referred to above or in any such indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. Section 302. DENOMINATIONS. The Securities of each series shall be issuable in registered form without coupons in such denominations as shall be specified as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof. Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its President or one of its Vice Presidents, under its corporate seal reproduced thereon attested by its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile. -28- 36 Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any Series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating, (a) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture; (b) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and (c) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion -29- 37 of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered -30- 38 hereunder and shall never be entitled to the benefits of this Indenture. Section 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor. Section 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby -31- 39 appointed "Security Registrar" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security of any series at the office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor. At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer. The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening -32- 40 of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1103 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Notwithstanding the foregoing, no Global Security shall be registered for transfer or exchange, or authenticated and delivered, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, in the name of a Person other than the Depositary for such Global Security or its nominee until (i) the Depositary with respect to a Global Security notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security or the Depositary ceases to be a clearing agency registered under the Exchange Act, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Security shall be so transferable and exchangeable or (iii) there shall have occurred and be continuing an Event of Default, or any event which after notice or lapse of time, or both, would constitute an Event of Default, with respect to the Securities of such series. Upon the occurrence in respect of any Global Security of any series of any one or more of the conditions specified in clauses (i), (ii) or (iii) of the preceding sentence or such other conditions as may be specified as contemplated by Section 301 for such series, such Global Security may be registered for transfer or exchange for Securities registered in the names of, or authenticated and delivered to, such Persons as the Depositary with respect to such series shall direct. Except as provided in the preceding paragraph, any Security authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, any Global Security, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall also be a Global Security and bear the legend specified in Section 204. Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee -33- 41 shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. -34- 42 Except as otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such -35- 43 Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to -36- 44 interest accrued and unpaid, and to accrue, which were carried by such other Security. Section 308. PERSONS DEEMED OWNERS. Prior to due presentment of a 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 such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary. Section 309. CANCELLATION. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of as directed by a Company Order. Section 310. COMPUTATION OF INTEREST. Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. ARTICLE FOUR -37- 45 Satisfaction and Discharge Section 401. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or -38- 46 caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2 the Company has paid or caused to be paid all other sums payable hereunder by the Company; and (3 the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive. Section 402. APPLICATION OF TRUST MONEY. Subject to provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities 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 Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee. ARTICLE FIVE -39- 47 Remedies Section 501. EVENTS OF DEFAULT. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1 default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or (2 default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or (3 default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or (4 default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (5 a default under any Indebtedness by the Company (including a default with respect -40- 48 to Securities of any series other than that series) or under any bond, debenture, note, mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness by the Company (including this Indenture) with a principal amount then outstanding in excess of $50,000,000, whether such Indebtedness now exists or shall hereafter be created, which default shall constitute a failure to pay the principal of such Indebtedness at final maturity or shall have resulted in such Indebtedness becoming or being declared due and payable prior to the date on which it would otherwise have become due and payable, without such Indebtedness having been discharged, or such acceleration having been rescinded or annulled, within a period of 10 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default and requiring the Company to cause such Indebtedness to be discharged or cause such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder; or (6 the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or -41- 49 order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or (7 the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of a general assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or (8 any other Event of Default provided with respect to Securities of that series. Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if any of the Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof) of all -42- 50 of the Securities of that series to be due and payable immediately, by a notice in writing to the Company and the Administrative Agents (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become due and payable five Business Days after the receipt by the Company and the Administrative Agents of such written notice, provided such Event of Default is then continuing; PROVIDED, HOWEVER, that the preceding proviso shall not restrict the availability of other rights or remedies that the Trustee or the Holders may have. At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all Securities of that series, (B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities, (C) interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and -43- 51 advances of the Trustee, its agents and counsel; and (2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. The Company covenants that if (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of -44- 52 Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 504. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; PROVIDED, HOWEVER, the Trustees may vote on behalf of the Holders for the election of a trustee in bankruptcy or similar official and may be a member of a creditors or other similar committee. Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any -45- 53 proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 506. APPLICATION OF MONEY COLLECTED. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 607; and SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively. Section 507. LIMITATION ON SUITS. No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series; -46- 54 (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) any interest on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. -47- 55 Section 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. Section 510. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 511. DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 512. CONTROL BY HOLDERS. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of -48- 56 conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, PROVIDED that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Section 513. WAIVER OF PAST DEFAULTS. The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default (1) in the payment of the principal of or any premium or interest on any Security of such series, or (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 514. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs against any -49- 57 such party litigant, in the manner and to the extent provided in the Trust Indenture Act; PROVIDED that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company. Section 515. WAIVER OF USURY, STAY OR EXTENSION LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SIX The Trustee Section 601. CERTAIN DUTIES AND RESPONSIBILITIES. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 602. NOTICE OF DEFAULTS. If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the -50- 58 Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; PROVIDED, HOWEVER, that in the case of any default of the character specified in Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. Section 603. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of Section 601: (a the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; (c whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, -51- 59 suffered or omitted by it hereunder in good faith and in reliance thereon; (e the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; and (g the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. -52- 60 Section 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 605. MAY HOLD SECURITIES. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. Section 606. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company. Section 607. COMPENSATION AND REIMBURSEMENT. The Company agrees (1 to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2 except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any -53- 61 provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3 to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. Section 608. DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Section 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000 [and its Corporate Trust Office in ...............................]. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 610. SEPARATE TRUSTEE; RESIGNATION AND REMOVAL; -54- 62 APPOINTMENT OF SUCCESSOR. (a The Company may, but need not, appoint a separate Trustee for any one or more series of Securities. (b) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611. (c) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (d) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. (e) If at any time: (1) the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, -55- 63 then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (f) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any Series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any Series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (g) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. -56- 64 Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of -57- 65 the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) and (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. Section 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the -58- 66 Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor). Section 614. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper -59- 67 or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve, as their names and addresses appear in the Security Register. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed for such payments, subject to the provisions of Section 607. If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternative certificate of authentication in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. ........................, As Trustee By......................, As Authenticating Agent -60- 68 By...................... Authorized Officer ARTICLE SEVEN Holders' Lists and Reports by Trustee and Company Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. The Company will furnish or cause to be furnished to the Trustee (a semi-annually, either (i) not later than _______________ and ___________________ in each year in the case of Original Issue Discount Securities of any series which by their terms bear interest only after Maturity, or (ii) not more than 15 days after each Regular Record Date in the case of Securities of any other series, a list of each series of Securities, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of each such series as of the preceding ______________ or ______________ or Regular Record Date, as the case may be, and (b at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; EXCLUDING from any such list names and addresses received by the Trustee in its capacity as Security Registrar. Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. -61- 69 (b) The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. (c Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. Section 703. REPORTS BY TRUSTEE. (a) The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange. Section 704. REPORTS BY COMPANY. The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; PROVIDED that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease Section 801. COMPANY AND SUBSIDIARIES MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. -62- 70 The Company (a) shall not consolidate with or merge into any other Person or, directly or indirectly, transfer, convey, sell, lease or otherwise dispose of all or substantially all of its properties and assets as an entirety to any Person; (b) shall not permit any Subsidiary to consolidate with or merge into another Person (other than a Wholly-owned Subsidiary) in a transaction in which such Subsidiary remains a Subsidiary; (c) shall not permit (i) any other Person to consolidate with or merge into the Company or (ii) any other Person (other than a Wholly-owned Subsidiary) to consolidate with or merge into any Subsidiary in a transaction in which such Subsidiary remains a Subsidiary; and (d) shall not permit any other Person to, directly or indirectly, sell, assign, convey, transfer or lease its properties substantially as an entirety to the Company except as provided pursuant to Section 301(17). Section 802. SUCCESSOR SUBSTITUTED. Upon any consolidation of the Company with, or merger of the Company into, any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease 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. ARTICLE NINE Supplemental Indentures Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. 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 hereto, in form satisfactory to the Trustee, for any of the following purposes: (1 to evidence the succession of another Person to the Company and the assump- -63- 71 tion by any such successor of the covenants of the Company herein and in the Securities; or (2 to add to the covenants of the Company for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company; or (3 to add any additional Events of Default; or (4 to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or (5 to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, PROVIDED that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding; or (6 to secure the Securities; or (7 to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or (8 to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or -64- 72 change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); or (9) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, PROVIDED that such action pursuant to this clause (9) shall not adversely affect the interests of the Holders of Securities of any series in any material respect. Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the consent of the Holders of not less than 50% in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any instalment of principal of or interest on, any Security, or reduce the principal amount thereof or (unless otherwise specified as contemplated by Section 301) the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after -65- 73 the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1008, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, PROVIDED, HOWEVER, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section and Section 1008, or the deletion of this proviso, in accordance with the requirements of Sections 611(b) and 901(8). A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. -66- 74 Section 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act. Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. -67- 75 ARTICLE TEN Covenants Section 1001.PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture. Section 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Section 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it -68- 76 will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, and upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company -69- 77 Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 1004. STATEMENT BY OFFICERS AS TO DEFAULT. The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. Section 1005 EXISTENCE. Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company. Section 1006. MAINTENANCE OF PROPERTIES. The Company will cause all properties used or useful in the conduct of its business or the business of any material Subsidiary to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary -70- 78 repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; PROVIDED, HOWEVER, that nothing in this Section shall prevent the Company from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its business or the business of any Subsidiary. Section 1007. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (1) all taxes, assessments and governmental charges levied or imposed upon the Company or any material Subsidiary or upon the income, profits or property of the Company or any material Subsidiary, and (2) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the property of the Company or any material Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings, if a reserve or other appropriate provision shall have been made therefor in accordance with generally accepted accounting principles. Section 1008. WAIVER OF CERTAIN COVENANTS. The Company may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1006 to 1007, inclusive, with respect to the Securities of any series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. ARTICLE ELEVEN -71- 79 Redemption of Securities Section 1101. APPLICABILITY OF ARTICLE. Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article. Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 35 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. -72- 80 Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less than all the Securities of any series are to be redeemed (unless all of the Securities of such series and of a specified tenor are to be redeemed), the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series. If less than all of the Securities of such series and of a specified tenor are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence. The Trustee shall promptly notify the Company and the Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 1104. NOTICE OF REDEMPTION. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, -73- 81 (3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption of any Securities, the principal amounts) of the particular Securities to be redeemed, (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (5) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company and shall be irrevocable. Section 1105. DEPOSIT OF REDEMPTION PRICE. Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, -74- 82 together with accrued interest to the Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as contemplated by Section 301, instalments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. Section 1107. SECURITIES REDEEMED IN PART. Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. ARTICLE TWELVE Sinking Funds Section 1201. APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If -75- 83 provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. Section 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; PROVIDED that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 45 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107. -76- 84 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. ----------------------------- -77- 85 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. THE KROGER CO. By /s/ Lawrence M. Turner Attest: /s/ Paul Heldman FIRSTAR BANK, NATIONAL ASSOCIATION, as Trustee By /s/ William Sicking Attest: ........................ -78- 86 Exhibit 4.1 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 24th day of June, 1999, before me personally came Lawrence M. Turner, to me known, who, being by me duly sworn, did depose and say that he is Vice President and Treasurer of The Kroger Co., 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. Brenda R. Andes Notary Public, State of Ohio My Commission Expires June 20, 2003 ........................ STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 24th day of June, 1999, before me personally came William Sicking, to me known, who, being by me duly sworn, did depose and say that he is Trust Officer 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. Andre C. Porter, Notary Public In and for the State of Ohio My Commission Expires August 29, 2001 -79- EX-4.2 3 EXHIBIT 4.2 1 Exhibit 4.2 ================================================================================ THE KROGER CO. AND THE GUARANTORS NAMED HEREIN TO FIRSTAR BANK, NATIONAL ASSOCIATION Trustee ---------- FIRST SUPPLEMENTAL INDENTURE Dated as of June 25, 1999 TO INDENTURE Dated as of June 25, 1999 ---------- 7.25% SENIOR NOTES DUE 2009 ================================================================================ 2 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...................................37 Section 504. Redemption of Securities...................................................................46 ARTICLE SIX GUARANTEE Section 601. Guarantee..................................................................................47 Section 602. Waiver of Demand...........................................................................48 Section 603. Guarantee of Payment.......................................................................48 Section 604. No Discharge or Diminishment of Guarantee..................................................48 Section 605. Defenses of Company Waived.................................................................48 Section 606. Continued Effectiveness....................................................................49
-i- 3 Section 607. Subrogation................................................................................49 Section 608. Information................................................................................49 Section 609. Subordination..............................................................................50 Section 610. Termination................................................................................50 Section 611. Guarantees of other Indebtedness...........................................................51 Section 612. Additional Guarantors......................................................................51 Section 613. Limitation of Guarantor's Liability........................................................51 Section 614. Contribution from Other Guarantors.........................................................51 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....................................................52 ARTICLE SEVEN MISCELLANEOUS Section 701. Miscellaneous..............................................................................53
-ii- 4 FIRST 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 First Supplemental Indenture. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this First 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. -1- 5 All things necessary to make this First 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 FIRST 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 First 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 First Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this First Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this First Supplemental Indenture. (b) For all purposes of the Indenture and this First 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. -2- 6 "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 First 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 -3- 7 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. -4- 8 "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 First 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). -5- 9 "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 -6- 10 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. -7- 11 "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 tradeable 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. -8- 12 "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. -9- 13 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. -10- 14 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: -11- 15 [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 REGULATION 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. -12- 16 [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. -13- 17 THE KROGER CO. 7.25% Senior Notes due 2009, 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, 2009, 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 7.25% 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 7.25% Senior Notes due 2009, 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 -14- 18 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. -15- 19 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- 20 (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- 21 THE KROGER CO. 7.25% Senior Notes due 2009, Series B 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, 2009, 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 7.25% 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 7.25% Senior Notes due 2009, 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 -18- 22 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- 23 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 First 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 $350,000,000. -20- 24 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 10 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- 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 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- 26 (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 First 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 $350,000,000. 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 10 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 -23- 27 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 -24- 28 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 First 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: - -------------------------- ------------------------------------------ Assistant Secretary 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- 30 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- 32 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 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. -29- 33 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 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 -30- 34 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 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 -31- 35 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), 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. -32- 36 (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 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 -33- 37 (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 "7.25% Senior Notes due 2009, Series A" of the Company (the "Series A Securities" or the "Initial Securities") and a series of securities designated as the "7.25% Senior Notes due 2009, 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, 2009, and they shall bear interest at the rate of 7.25% 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 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. -34- 38 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 First Supplemental Indenture is limited to $350,000,000, 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 $350,000,000 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 First 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 First Supplemental Indenture. 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. -35- 39 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 First Supplemental Indenture, including the due and punctual payment of the principal of and interest on all the Securities of the series created by the First 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. 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 -36- 40 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." 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 First Supplemental Indenture): -37- 41 "Section 1009. LIMITATIONS ON LIENS. After the date hereof and so long as any Securities of the series created by the First 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 First 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 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; -38- 42 (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); (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; -39- 43 (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 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 -40- 44 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 First 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 First 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 fund or redemption provision and other than Indebtedness owned by the Company or any Restricted Subsidiary) of Securities of the series created by the First 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 First 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 -41- 45 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 First 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 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 -42- 46 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. 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 -43- 47 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 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. -44- 48 (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 First 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." 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. -45- 49 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. 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 10 -46- 50 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, 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 -47- 51 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. 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 First Supplemental Indenture, the obligations of each of the Guarantors hereunder shall not be subject to any reduction, limitation, impairment or 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 -48- 52 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 First 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. 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 First 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, -49- 53 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 First Supplemental Indenture is subject to Section 607 hereof. 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 First 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 First 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 First Supplemental Indenture and its Guarantee. -50- 54 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 First Supplemental Indenture, if it has not already done so or unless the Guarantor is 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 First 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 First 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. -51- 55 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; (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 -52- 56 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 First 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 delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Guarantee set forth in this First Supplemental Indenture on behalf of each Guarantor. ARTICLE SEVEN MISCELLANEOUS Section 701. MISCELLANEOUS. (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this First Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this First 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 First 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 First Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (e) All covenants and agreements in this First Supplemental Indenture by the Company, the Trustee and each Guarantor shall bind its respective successors and assigns, whether so expressed or not. -53- 57 (f) In case any provisions in this First 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 First 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 First 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 First Supplemental Indenture as so modified or excluded, as the case may be. (i) This First 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 First Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this First 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. -54- 58 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 - -------------------------- ----------------------------------------- Assistant Secretary Name: Bruce M. Gack Title: Vice President Attest: KROGER DEDICATED LOGISTICS CO., as Guarantor of the Securities By: /s/ Paul Heldman - -------------------------- ----------------------------------------- Assistant Secretary Name: Paul Heldman Title: President - ------------------- * Signing as duly authorized officer for each such Guarantor. -55- 59 Attest: RICHIE'S, INC., as Guarantor of the Securities By: /s/ Keith C. Larson - -------------------------- ----------------------------------------- Name: Keith C. Larson Title: Vice President and Secretary -56- 60 Attest: HENPIL, INC., as Guarantor of the Securities WYDIV, INC. , as Guarantor of the Securities By: /s/ Steven McMillan - -------------------------- ----------------------------------------- Name: Steve McMillan Title: Vice President and Secretary -57- 61 Attest: FIRSTAR BANK, NATIONAL ASSOCIATION, as Trustee - -------------------------- By: /s/ William Sicking Assistant Secretary --------------------------------------- Name: William Sicking Title: Trust Officer -58- 62 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. -------------------------- -59- 63 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. -------------------------- -60- EX-4.3 4 EXHIBIT 4.3 1 Exhibit 4.3 ================================================================================ THE KROGER CO. AND THE GUARANTORS NAMED HEREIN TO FIRSTAR BANK, NATIONAL ASSOCIATION Trustee ---------- SECOND SUPPLEMENTAL INDENTURE Dated as of June 25, 1999 TO INDENTURE Dated as of June 25, 1999 ---------- 7.70% SENIOR NOTES DUE 2029 ================================================================================ 2 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 -i- 3 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 -ii- 4 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. -1- 5 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. -2- 6 "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 -3- 7 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. -4- 8 "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). -5- 9 "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 -6- 10 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. -7- 11 "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. -8- 12 "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. -9- 13 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. -10- 14 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: -11- 15 [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. -12- 16 [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. -13- 17 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 -14- 18 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. -15- 19 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- 20 (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- 21 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 -18- 22 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- 23 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- 24 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- 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 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- 26 (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 -23- 27 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 -24- 28 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- 30 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- 32 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- 33 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 -31- 35 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), -32- 36 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 -33- 37 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 -34- 38 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. -35- 39 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. -36- 40 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." -37- 41 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 -38- 42 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); -39- 43 (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 -40- 44 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 -41- 45 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 -42- 46 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. -43- 47 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 -44- 48 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." -45- 49 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. -46- 50 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, -47- 51 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. -48- 52 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. -49- 53 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. -50- 54 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 -51- 55 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; -52- 56 (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. -53- 57 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. -54- 58 (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. -55- 59 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. -56- 60 Attest: RICHIE'S, INC., as Guarantor of the Securities By: /s/ Keith C. Larson --------------------------------------- Name: Keith C. Larson Title: Vice President Secretary -57- 61 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 -58- 62 Attest: FIRSTAR BANK, NATIONAL ASSOCIATION, as Trustee By: /s/ William Sicking - -------------------------------- --------------------------------------- Assistant Secretary Name: William Sicking Title: Trust Officer -59- 63 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. ---------------------------------------- -60- 64 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. ---------------------------------------- -61- 65 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. ---------------------------------------- -62- 66 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: -1- 67 (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 -2- 68 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. -3- 69 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.) -4- 70 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: -1- 71 (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. -2- 72 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.) -3- 73 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 -1- 74 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.) -2- 75 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 -1- 76 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 -2- 77 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. ---------------------------------------- -61- EX-4.4 5 EXHIBIT 4.4 1 Exhibit 4.4 ================================================================================ THE KROGER CO. AND THE GUARANTORS NAMED HEREIN TO FIRSTAR BANK, NATIONAL ASSOCIATION Trustee ---------- THIRD SUPPLEMENTAL INDENTURE Dated as of June 25, 1999 TO INDENTURE Dated as of June 25, 1999 ---------- 6.34% SENIOR NOTES DUE 2001 ================================================================================ 2 TABLE OF CONTENTS
ARTICLE ONE DEFINITIONS SECTION 101. DEFINITIONS..........................................................................................2 ARTICLE TWO SECURITY FORMS Section 201. Form of Securities of this Series...................................................................8 Section 202. Form of Face of Security............................................................................9 Section 203. Form of Reverse of Security........................................................................19 Section 204. Form of Guarantee..................................................................................23 Section 205. Global Securities..................................................................................28 ARTICLE THREE TRANSFER AND EXCHANGE Section 301. Transfer and Exchange..............................................................................29 ARTICLE FOUR THE SERIES OF SECURITIES Section 401. Title and Terms.....................................................................................32 ARTICLE FIVE MODIFICATIONS AND ADDITIONS TO THE INDENTURE Section 501. Modifications to the Consolidation, Merger, Conveyance, Transfer or Lease Provisions................34 Section 502. Other Modifications.................................................................................35 Section 503. Additional Covenants; Defeasance and Covenant Defeasance............................................35 Section 504. Redemption of Securities............................................................................44
-i- 3
ARTICLE SIX GUARANTEE Section 601. Guarantee...........................................................................................44 Section 602. Waiver of Demand....................................................................................45 Section 603. Guarantee of Payment................................................................................46 Section 604. No Discharge or Diminishment of Guarantee...........................................................46 Section 605. Defenses of Company Waived..........................................................................46 Section 606. Continued Effectiveness.............................................................................46 Section 607. Subrogation.........................................................................................47 Section 608. Information.........................................................................................47 Section 609. Subordination.......................................................................................47 Section 610. Termination.........................................................................................48 Section 611. Guarantees of Other Indebtedness....................................................................48 Section 612. Additional Guarantors...............................................................................48 Section 613. Limitation of Guarantor's Liability.................................................................49 Section 614. Contribution from Other Guarantors..................................................................49 Section 615. No Obligation to Take Action Against the Company....................................................49 Section 616. Dealing with the Company and Others.................................................................49 Section 617. Execution and Delivery of the Guarantee.............................................................50 ARTICLE SEVEN MISCELLANEOUS Section 701. Miscellaneous.......................................................................................51
-ii- 4 THIRD 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 Third Supplemental Indenture. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Third 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. -1- 5 All things necessary to make this Third 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 Third 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 Third 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 Third Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Third Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this Third Supplemental Indenture. (b) For all purposes of the Indenture and this Third Supplemental Indenture, with respect to the Securities of the series created hereby, except as otherwise expressly provided or unless the context otherwise requires: "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 -2- 6 equal to the interest rate borne by the Securities of the series created by this Third 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 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. -3- 7 "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. "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 Third 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. -4- 8 "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). "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. -5- 9 "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 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. "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. "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 -6- 10 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 tradeable 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. "Securities" has the meaning stated in Section 401 hereof. -7- 11 "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. 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 -8- 12 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. 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 -9- 13 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: -10- 14 [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 REGULATION 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. -11- 15 [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. -12- 16 THE KROGER CO. 6.34% Senior Notes due 2001, 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, 2001, 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 6.34% 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 6.34% Senior Notes due 2001, 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 -13- 17 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. -14- 18 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: .................................... -15- 19 (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. -16- 20 THE KROGER CO. 6.34% Senior Notes due 2001, Series B 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, 2001, 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 6.34% 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 6.34% Senior Notes due 2001, 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 -17- 21 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 -18- 22 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 Third 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 $250,000,000. -19- 23 The Securities of this series will not be redeemable. 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% 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. -20- 24 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 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. (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 Third 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 -21- 25 be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $250,000,000. The Securities of this series will not be redeemable. 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% 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 -22- 26 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 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 -23- 27 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 Third 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: 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: - ---------------- * Signing as duly authorized officer for each such Guarantor. -24- 28 Attest: KROGER DEDICATED LOGISTICS CO., as Guarantor of the Securities By: - --------------------------- ----------------------------------- Name: Title: Attest: RICHIE'S, INC., as Guarantor of the Securities By: - --------------------------- ----------------------------------- Name: Title: -25- 29 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 -26- 30 Name of Guarantor State of Organization - ----------------------------------------------------------------------------- FM Retail Services, Inc. Washington Fred Meyer of Alaska, Inc. Alaska Fred Meyer of California, Inc. California Fred Meyer Jewelers, Inc. Delaware 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 -27- 31 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 -28- 32 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 -29- 33 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), -30- 34 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 Securities Act, and the Trustee, at the direction of the Company, shall -31- 35 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 "6.34% Senior Notes due 2001, Series A" of the Company (the "Series A Securities" or the "Initial Securities") and a series of securities designated as the "6.34% Senior Notes due 2001, 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, 2001, and they shall bear interest at the rate of 6.34% 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 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 -32- 36 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 Third Supplemental Indenture is limited to $250,000,000, 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 $250,000,000 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 Third 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 Third Supplemental Indenture. 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. -33- 37 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 Third Supplemental Indenture, including the due and punctual payment of the principal of and interest on all the Securities of the series created by the Third 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. 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 -34- 38 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." 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 Third Supplemental Indenture): "Section 1009. LIMITATIONS ON LIENS. -35- 39 After the date hereof and so long as any Securities of the series created by the Third 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 Third 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 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; -36- 40 (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); (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; -37- 41 (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 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 -38- 42 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 Third 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 Third 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 fund or redemption provision and other than Indebtedness owned by the Company or any Restricted Subsidiary) of Securities of the series created by the Third 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 Third 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 -39- 43 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 Third 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 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 -40- 44 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. 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 -41- 45 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 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. -42- 46 (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 Third 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." 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. -43- 47 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. 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, Article 11 of the Indenture shall be deleted in its entirety and shall be replaced with the statement "[Intentionally Omitted]." 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 -44- 48 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, 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. -45- 49 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 Third 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 Third 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. -46- 50 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 Third 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 Third Supplemental Indenture is subject to Section 607 hereof. -47- 51 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 Third 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 Third 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 Third 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 Third Supplemental Indenture, if it has not already done so or unless the Guarantor is -48- 52 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 Third 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 Third 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; -49- 53 (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 Third 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 delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Guarantee set forth in this Third Supplemental Indenture on behalf of each Guarantor. -50- 54 ARTICLE SEVEN MISCELLANEOUS Section 701. MISCELLANEOUS. (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this Third Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Third 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 Third 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 Third Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (e) All covenants and agreements in this Third 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 Third 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 Third 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 Third 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 Third Supplemental Indenture as so modified or excluded, as the case may be. -51- 55 (i) This Third 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 Third Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Third 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. -52- 56 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. -53- 57 Attest: RICHIE'S, INC., as Guarantor of the Securities By: /S/ KEITH C. LARSON - --------------------------- ---------------------------------------- Name: Keith C. Larson Title: Vice President Secretary -54- 58 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 -55- 59 Attest: FIRSTAR BANK, NATIONAL ASSOCIATION, as Trustee By: /s/ WILLIAM SICKING - --------------------------- ---------------------------------------- Assistant Secretary Name: William Sicking Title: Trust Officer -56- 60 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. ---------------------------- -57- 61 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. ---------------------------- -58- 62 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. ---------------------------- -59- 63 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: 6.34% Securities due 2001 Reference is hereby made to the Indenture, dated as of June 25, 1999 as amended by the Third 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 -1- 64 accordance with Rule 904: (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 -2- 65 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. -3- 66 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.) -4- 67 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: 6.34% Securities due 2001 Reference is hereby made to the Indenture, dated as of June 25, 1999 as amended by the Third 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: -1- 68 (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. -2- 69 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.) -3- 70 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: 6.34% Securities due 2001 Reference is hereby made to the Indenture, dated as of June 25, 1999 as amended by the Third 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 -1- 71 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.) -2- 72 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 -1- 73 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 -2- EX-4.5 6 EXHIBIT 4.5 1 Exhibit 4.5 THE KROGER CO. $250,000,000 6.34% SENIOR NOTES DUE 2001 $350,000,000 7.25% SENIOR NOTES DUE 2009 $300,000,000 7.70% SENIOR NOTES DUE 2029 UNCONDITIONALLY GUARANTEED AS TO THE PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST BY THE GUARANTORS LISTED ON SIGNATURE PAGES AND SCHEDULE I HERETO ----- EXCHANGE AND REGISTRATION RIGHTS AGREEMENT ------------------------------------------ June 25, 1999 Goldman, Sachs & Co., As representatives of the several Purchasers named in Schedule I to the Purchase Agreement Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Ladies and Gentlemen: The Kroger Co., an Ohio corporation (the "Company"), proposes to issue and sell to the Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) its $250,000,000 6.34% Senior Notes due 2001, $350,000,000 7.25% Senior Notes due 2009, and $300,000,000 7.70% Senior Notes due 2029, which are unconditionally guaranteed by the guarantors set forth on Schedule I hereto. As an inducement to the Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company and the Guarantors agree with the Purchasers for the benefit of holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows: 1. Certain Definitions. For purposes of this Exchange and Registration Rights Agreement, the following terms shall have the following respective meanings: "Base Interest" shall mean the interest that would otherwise accrue on the Securities under the terms thereof and the Indenture, without giving effect to the provisions of this Agreement. The term "broker-dealer" shall mean any broker or dealer registered with the Commission under the Exchange Act. -1- 2 "Closing Date" shall mean the date on which the Securities are initially issued. "Commission" shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. "Effective Time," in the case of (i) an Exchange Registration, shall mean the time and date as of which the Commission declares the Exchange Registration Statement effective or as of which the Exchange Registration Statement otherwise becomes effective and (ii) a Shelf Registration, shall mean the time and date as of which the Commission declares the Shelf Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective. "Electing Holder" shall mean any holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof. "Exchange Act" shall mean the Securities Exchange Act of 1934, or any successor thereto, as the same shall be amended from time to time. "Exchange Offer" shall have the meaning assigned thereto in Section 2(a) hereof. "Exchange Registration" shall have the meaning assigned thereto in Section 3(c) hereof. "Exchange Registration Statement" shall have the meaning assigned thereto in Section 2(a) hereof. "Exchange Securities" shall have the meaning assigned thereto in Section 2(a) hereof. "Guarantors" shall mean the parties listed as guarantors on the signature pages and Schedule I hereto. The term "holder" shall mean each of the Purchasers and other persons who acquire Registrable Securities from time to time (including any successors or assigns), in each case for so long as such person owns any Registrable Securities. "Indenture" shall mean the Indenture, dated as of June 25, 1999, between the Company, the Guarantors and Firstar, National Association, as Trustee, as the same shall be amended from time to time. "Notice and Questionnaire" means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Exhibit A hereto. The term "person" shall mean a corporation, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency. "Purchase Agreement" shall mean the Purchase Agreement, dated as of June 18, 1999, between the Purchasers, the Guarantors and the Company relating to the Securities. "Purchasers" shall mean the Purchasers named in Schedule I to the Purchase Agreement. 2 3 "Registrable Securities" shall mean the Securities; provided, however, that a Security shall cease to be a Registrable Security when (i) in the circumstances contemplated by Section 2(a) hereof, the Security has been exchanged for an Exchange Security in an Exchange Offer as contemplated in Section 2(a) hereof; provided that any Exchange Security that, pursuant to the last two sentences of Section 2(a), is included in a prospectus for use in connection with resales by broker-dealers shall be deemed to be a Registrable Security with respect to Sections 5, 6 and 9 until resale of such Registrable Security has been effected within the 180-day period referred to in Section 2(a); (ii) in the circumstances contemplated by Section 2(b) hereof, a Shelf Registration Statement registering such Security under the Securities Act has been declared or becomes effective and such Security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (iii) such Security is sold pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; (iv) such Security is eligible to be sold pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to be outstanding. "Registration Default" shall have the meaning assigned thereto in Section 2(c) hereof. "Registration Expenses" shall have the meaning assigned thereto in Section 4 hereof. "Resale Period" shall have the meaning assigned thereto in Section 2(a) hereof. "Restricted Holder" shall mean (i) a holder that is an affiliate of the Company within the meaning of Rule 405, (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder's business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a holder that is a broker-dealer, but only with respect to Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company. "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such rule promulgated under the Securities Act (or any successor provision), as the same shall be amended from time to time. "Securities" shall mean, collectively, the $250,000,000 6.34% Senior Notes due 2001, the $350,000,000 7.25% Senior Notes due 2009 and the $300,000,000 7.70% Senior Notes due 2029 of the Company, to be issued and sold to the Purchasers, and securities issued in exchange therefor or in lieu thereof pursuant to the Indenture. Each Security is entitled to the benefit of the guarantee provided for in the Indenture (the "Guarantee") and, unless the context otherwise requires, any reference herein to a "Security," an "Exchange Security" or a "Registrable Security" shall include a reference to the related Guarantee. "Securities Act" shall mean the Securities Act of 1933, or any successor thereto, as the same shall be amended from time to time. "Shelf Registration" shall have the meaning assigned thereto in Section 2(b) hereof. 3 4 "Shelf Registration Statement" shall have the meaning assigned thereto in Section 2(b) hereof. "Special Interest" shall have the meaning assigned thereto in Section 2(c) hereof. "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time. Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Exchange and Registration Rights Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Exchange and Registration Rights Agreement as a whole and not to any particular Section or other subdivision. 2. Registration Under the Securities Act. (a) Except as set forth in Section 2(b) below, the Company agrees to file under the Securities Act, as soon as practicable, but no later than 90 days after the Closing Date, a registration statement relating to an offer to exchange (such registration statement, the "Exchange Registration Statement", and such offer, the "Exchange Offer") any and all of the Securities for a like aggregate principal amount of debt securities issued by the Company and guaranteed by the Guarantors, which debt securities and guarantees are substantially identical to the Securities and the related Guarantee, respectively (and are entitled to the benefits of a trust indenture which is substantially identical to the Indenture or is the Indenture and which has been qualified under the Trust Indenture Act), except that they have been registered pursuant to an effective registration statement under the Securities Act and do not contain provisions for the additional interest contemplated in Section 2(c) below (such new debt securities hereinafter called "Exchange Securities"). The Company agrees to use its best efforts to cause the Exchange Registration Statement to become effective under the Securities Act as soon as practicable, but no later than 180 days after the Closing Date. The Exchange Offer will be registered under the Securities Act on the appropriate form and will comply with all applicable tender offer rules and regulations under the Exchange Act. The Company further agrees to use its best efforts to commence and complete the Exchange Offer promptly, but no later than 45 days after such registration statement has become effective, hold the Exchange Offer open for at least 30 days and exchange Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn on or prior to the expiration of the Exchange Offer. The Exchange Offer will be deemed to have been "completed" only if the debt securities and related guarantees received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are, upon receipt, transferable by each such holder without restriction under the Securities Act and the Exchange Act and without material restrictions under the blue sky or securities laws of a substantial majority of the States of the United States of America. The Exchange Offer shall be deemed to have been completed upon the earlier to occur of (i) the Company having exchanged the Exchange Securities for all outstanding Registrable Securities pursuant to the Exchange Offer and (ii) the Company having exchanged, pursuant to the Exchange Offer, Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn before the expiration of the Exchange Offer, which shall be on a date that is at least 30 days following the commencement of the Exchange Offer. The Company agrees (x) to include in the Exchange Registration Statement a prospectus for use in any resales by any holder of 4 5 Exchange Securities that is a broker-dealer and (y) to keep such Exchange Registration Statement effective for a period (the "Resale Period") beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 180th day after the Exchange Offer has been completed or such time as such broker-dealers no longer own any Registrable Securities. With respect to such Exchange Registration Statement, such holders shall have the benefit of the rights of indemnification and contribution set forth in Sections 6(a), (c), (d) and (e) hereof." (b) If (i) on or prior to the time the Exchange Offer is completed existing Commission interpretations are changed such that the debt securities or the related guarantees received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are not or would not be, upon receipt, transferable by each such holder without restriction under the Securities Act, (ii) the Exchange Offer has not been completed within 225 days following the Closing Date or (iii) the Exchange Offer is not available to any holder of the Securities, the Company shall, in lieu of (or, in the case of clause (iii), in addition to) conducting the Exchange Offer contemplated by Section 2(a), file under the Securities Act as promptly as practicable a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission (such filing, the "Shelf Registration" and such registration statement, the "Shelf Registration Statement"). The Company agrees to use its best efforts (x) to cause the Shelf Registration Statement to become or be declared effective no later than 120 days after such Shelf Registration Statement is filed and to keep such Shelf Registration Statement continuously effective for a period ending on the earlier of the second anniversary of the Effective Time or such time as there are no longer any Registrable Securities outstanding, provided, however, that no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the prospectus forming a part thereof for resales of Registrable Securities unless such holder is an Electing Holder, and (y) after the Effective Time of the Shelf Registration Statement, promptly upon the request of any holder of Registrable Securities that is not then an Electing Holder, to take any action reasonably necessary to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities, including, without limitation, any action necessary to identify such holder as a selling securityholder in the Shelf Registration Statement, provided, however, that nothing in this Clause (y) shall relieve any such holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(iii) hereof. The Company further agrees to supplement or make amendments to the Shelf Registration Statement, as and when required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or rules and regulations thereunder for shelf registration, and the Company agrees to furnish to each Electing Holder copies of any such supplement or amendment prior to its being used or promptly following its filing with the Commission. (c) In the event that (i) the Company has not filed the Exchange Registration Statement or Shelf Registration Statement on or before the date on which such registration statement is required to be filed pursuant to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration Statement or Shelf Registration Statement has not become effective or been declared effective by the Commission on or before the date on which such registration statement is required to become or be declared effective pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer has not been completed within 45 days after the -5- 6 initial effective date of the Exchange Registration Statement relating to the Exchange Offer (if the Exchange Offer is then required to be made) or (iv) any Exchange Registration Statement or Shelf Registration Statement required by Section 2(a) or 2(b) hereof is filed and declared effective but shall thereafter either be withdrawn by the Company or shall become subject to an effective stop order issued pursuant to Section 8(d) of the Securities Act suspending the effectiveness of such registration statement (except as specifically permitted herein) without being succeeded immediately by an additional registration statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default" and each period during which a Registration Default has occurred and is continuing, a "Registration Default Period"), then, as liquidated damages for such Registration Default, subject to the provisions of Section 9(b), special interest ("Special Interest"), in addition to the Base Interest, shall accrue at a per annum rate of 0.25% for the first 90 days of the Registration Default Period, at a per annum rate of 0.50% for the second 90 days of the Registration Default Period, at a per annum rate of 0.75% for the third 90 days of the Registration Default Period and at a per annum rate of 1.0% thereafter for the remaining portion of the Registration Default Period. (d) The Company shall take, and shall cause the Guarantors to take, all actions necessary or advisable to be taken by it to ensure that the transactions contemplated herein are effected as so contemplated, including all actions necessary or desirable to register the Guarantee under the registration statement contemplated in Section 2(a) or 2(b) hereof, as applicable. (e) Any reference herein to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time and any reference herein to any post-effective amendment to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time. 3. Registration Procedures. If the Company files a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: (a) At or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be, the Company shall qualify the Indenture under the Trust Indenture Act of 1939. (b) In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (c) In connection with the Company's obligations with respect to the registration of Exchange Securities as contemplated by Section 2(a) (the "Exchange Registration"), if applicable, the Company shall, as soon as practicable (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but no later than 90 days after the Closing Date, an Exchange Registration Statement on any form which may be utilized by the Company and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a), and use its best efforts to -6- 7 cause such Exchange Registration Statement to become effective as soon as practicable thereafter, but no later than 180 days after the Closing Date; (ii) as soon as practicable prepare and file with the Commission such amendments and supplements to such Exchange Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Exchange Registration Statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities; (iii) promptly notify each broker-dealer that has requested or received copies of the prospectus included in such registration statement, and confirm such advice in writing, (A) when such Exchange Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Exchange Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (F) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (iv) in the event that the Company would be required, pursuant to Section 3(e)(iii)(F) above, to notify any broker-dealers holding Exchange Securities, without delay prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the -7- 8 Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (v) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such Exchange Registration Statement or any post-effective amendment thereto at the earliest practicable date; (vi) use its reasonable best efforts to (A) register or qualify the Exchange Securities under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 2(a) no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker-dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions; provided, however, that neither the Company nor the Guarantors shall be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its certificate of incorporation or by-laws or any agreement between it and its stockholders; (vii) use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period; (viii) provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; (ix) comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable but no later than eighteen months after the effective date of such Exchange Registration Statement, an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder). (d) In connection with the Company's obligations with respect to the Shelf Registration, if applicable, the Company shall, as soon as practicable (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but in any case within the time periods specified in Section 2(b), a Shelf Registration Statement on any form which may be utilized by the Company and which shall register all of the Registrable Securities for resale by the holders thereof in accordance with such method or methods of disposition as may be specified by such of the holders as, from time to time, may be Electing Holders and use its best efforts to cause such Shelf Registration Statement to become effective as soon as practicable but in any case within the time periods specified in Section 2(b); -8- 9 (ii) not less than 30 calendar days prior to the Effective Time of the Shelf Registration Statement, mail the Notice and Questionnaire to the holders of Registrable Securities; no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no holder shall be entitled to use the prospectus forming a part thereof for resales of Registrable Securities at any time, unless such holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein; provided, however, holders of Registrable Securities shall have at least 28 calendar days from the date on which the Notice and Questionnaire is first mailed to such holders to return a completed and signed Notice and Questionnaire to the Company; (iii) after the Effective Time of the Shelf Registration Statement, upon the request of any holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such holder; provided that the Company shall not be required to take any action to name such holder as a selling securityholder in the Shelf Registration Statement or to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities until such holder has returned a completed and signed Notice and Questionnaire to the Company; (iv) as soon as practicable prepare and file with the Commission such amendments and supplements to such Shelf Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Shelf Registration Statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Shelf Registration Statement, and furnish to the Electing Holders copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission; (v) comply with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities covered by such Shelf Registration Statement in accordance with the intended methods of disposition by the Electing Holders provided for in such Shelf Registration Statement; (vi) provide (A) the Electing Holders, (B) the underwriters (which term, for purposes of this Exchange and Registration Rights Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act), if any, thereof, (C) any sales or placement agent therefor, (D) counsel for any such underwriter or agent and (E) not more than one counsel for all the Electing Holders the opportunity to participate in the preparation of such Shelf Registration Statement, each prospectus included therein or filed with the Commission and each amendment or supplement thereto; (vii) for a reasonable period prior to the filing of such Shelf Registration Statement, and throughout the period specified in Section 2(b), make available at reasonable times at the Company's principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(vi) who shall certify to the Company that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information -9- 10 and books and records of the Company, and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by the Company as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such registration statement or otherwise), or (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the Company prompt prior written notice of such requirement), or (C) such information is required to be set forth in such Shelf Registration Statement or the prospectus included therein or in an amendment to such Shelf Registration Statement or an amendment or supplement to such prospectus in order that such Shelf Registration Statement, prospectus, amendment or supplement, as the case may be, complies with applicable requirements of the federal securities laws and the rules and regulations of the Commission and does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (viii) promptly notify each of the Electing Holders, any sales or placement agent therefor and any underwriter thereof (which notification may be made through any managing underwriter that is a representative of such underwriter for such purpose) and confirm such advice in writing, (A) when such Shelf Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Shelf Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the representations and warranties of the Company contemplated by Section 3(d)(xvii) or Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (F) if at any time when a prospectus is required to be delivered under the Securities Act, that such Shelf Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; -10- 11 (ix) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (x) if requested by any managing underwriter or underwriters, any placement or sales agent or any Electing Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information as is reasonably required by the applicable rules and regulations of the Commission and as such managing underwriter or underwriters, such agent or such Electing Holder specifies should be included therein relating to the terms of the sale of such Registrable Securities, including information with respect to the principal amount of Registrable Securities being sold by such Electing Holder or agent or to any underwriters, the name and description of such Electing Holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities to be sold by such Electing Holder or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; (xi) furnish to each Electing Holder, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(vi) an executed copy (or, in the case of an Electing Holder, a conformed copy) of such Shelf Registration Statement, each such amendment and supplement thereto (in each case including all exhibits thereto (in the case of an Electing Holder of Registrable Securities, upon request) and documents incorporated by reference therein) and such number of copies of such Shelf Registration Statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such Electing Holder, agent or underwriter, as the case may be) and of the prospectus included in such Shelf Registration Statement (including each preliminary prospectus and any summary prospectus), in conformity in all material respects with the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, and such other documents, as such Electing Holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such Electing Holder, offered or sold by such agent or underwritten by such underwriter and to permit such Electing Holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and the Company hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such Electing Holder and by any such agent and underwriter, in each case in the form most recently provided to such person by the Company, in connection with the offering and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto; (xii) use its reasonable best efforts to (A) register or qualify the Registrable Securities to be included in such Shelf Registration Statement under such securities laws or blue sky laws of such jurisdictions as any Electing Holder and each -11- 12 placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is required to remain effective under Section 2(b) above and for so long as may be necessary to enable any such Electing Holder, agent or underwriter to complete its distribution of Securities pursuant to such Shelf Registration Statement and (C) take any and all other actions as may be reasonably necessary or advisable to enable each such Electing Holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions of such Registrable Securities; provided, however, that neither the Company nor the Guarantors shall not be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(xii), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its certificate of incorporation or by-laws or any agreement between it and its stockholders; (xiii) use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities; (xiv) Unless any Registrable Securities shall be in book-entry only form, cooperate with the Electing Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates, if so required by any securities exchange upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders, and which certificates shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities; (xv) provide a CUSIP number for all Registrable Securities, not later than the applicable Effective Time; (xvi) enter into one or more underwriting agreements, engagement letters, agency agreements, "best efforts" underwriting agreements or similar agreements, as appropriate, including customary provisions relating to indemnification and contribution, and take such other actions in connection therewith as any Electing Holders aggregating at least 20% in aggregate principal amount of the Registrable Securities at the time outstanding shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; (xvii) whether or not an agreement of the type referred to in Section 3(d)(xvi) hereof is entered into and whether or not any portion of the offering contemplated by the Shelf Registration is an underwritten offering or is made through a placement or sales agent or any other entity, (A) make such representations and warranties to the Electing Holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof in form, substance and scope as are customarily made -12- 13 by the Company in connection with an offering of debt securities pursuant to any appropriate agreement or to a registration statement filed on the form applicable to the Shelf Registration; (B) obtain an opinion of counsel to the Company in the customary form used by the Company and covering such matters, of the type customarily covered by such an opinion, as the managing underwriters, if any, or as any Electing Holders of at least 20% in aggregate principal amount of the Registrable Securities at the time outstanding, may reasonably request, addressed to such Electing Holder or Electing Holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof and dated the effective date of such Shelf Registration Statement (and if such Shelf Registration Statement contemplates an underwritten offering of a part or all of the Registrable Securities, dated the date of the closing under the underwriting agreement relating thereto); (C) obtain a "cold comfort" letter or letters from the independent certified public accountants of the Company addressed to the selling Electing Holders, the placement or sales agent, if any, therefor or the underwriters, if any, thereof, dated (i) the effective date of such Shelf Registration Statement and (ii) the effective date of any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus (and, if such Shelf Registration Statement contemplates an underwritten offering pursuant to any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus, dated the date of the closing under the underwriting agreement relating thereto), such letter or letters to be in customary form delivered by the Company's independent certified public accountants and covering such matters of the type customarily covered by letters of such type; (D) deliver such documents and certificates, including officers' certificates, as may be reasonably requested by any Electing Holders of at least 20% in aggregate principal amount of the Registrable Securities at the time outstanding or the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above or those contained in Section 5(a) hereof and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by the Company or the Guarantors; and (E) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Section 6 hereof; (xviii) notify in writing each holder of Registrable Securities of any proposal by the Company to amend or waive any provision of this Exchange and Registration Rights Agreement pursuant to Section 9(h) hereof and of any amendment or waiver effected pursuant thereto, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be; (xix) in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Conduct Rules) of the National Association of -13- 14 Securities Dealers, Inc. ("NASD") or any successor thereto, as amended from time to time) thereof, whether as a holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such broker-dealer in complying with the requirements of such Conduct Rules, including by (A) if such Conduct Rules shall so require, engaging a "qualified independent underwriter" (as defined in such Conduct Rules) to participate in the preparation of the Shelf Registration Statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Shelf Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (B) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof (or to such other customary extent as may reasonably be requested by such underwriter), and (C) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Conduct Rules; and (xx) comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable but in any event not later than eighteen months after the effective date of such Shelf Registration Statement, an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder). (e) In the event that the Company would be required, pursuant to Section 3(d)(viii)(F) above, to notify the Electing Holders, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, the Company shall without delay prepare and furnish to each of the Electing Holders, to each placement or sales agent, if any, and to each such underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each Electing Holder agrees that upon receipt of any notice from the Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder shall forthwith discontinue the disposition of Registrable Securities pursuant to the Shelf Registration Statement applicable to such Registrable Securities until such Electing Holder shall have received copies of such amended or supplemented prospectus, and if so directed by the Company, such Electing Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Electing Holder's possession of the prospectus covering such Registrable Securities at the time of receipt of such notice. (f) In the event of a Shelf Registration, in addition to the information required to be provided by each Electing Holder in its Notice Questionnaire, the Company may require such Electing Holder to furnish to the Company such additional information regarding such Electing Holder and such Electing Holder's intended method of distribution of Registrable Securities as may be required in order to comply with the Securities Act. Each such Electing Holder agrees to notify the Company as promptly as practicable of any inaccuracy -14- 15 or change in information previously furnished by such Electing Holder to the Company or of the occurrence of any event in either case as a result of which any prospectus relating to such Shelf Registration contains or would contain an untrue statement of a material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such Electing Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. (g) Until the expiration of two years after the Closing Date, the Company will not, and will not permit any of its "affiliates" (as defined in Rule 144) to, resell any of the Securities that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act. 4. Registration Expenses. The Company agrees to bear and to pay or cause to be paid promptly all expenses incident to the Company's performance of or compliance with this Exchange and Registration Rights Agreement, including (a) all Commission and any NASD registration, filing and review fees and expenses including fees and disbursements of counsel for the placement or sales agent or underwriters in connection with such registration, filing and review, (b) all fees and expenses in connection with the qualification of the Securities for offering and sale under the State securities and blue sky laws referred to in Section 3(d)(xii) hereof and determination of their eligibility for investment under the laws of such jurisdictions as any managing underwriters or the Electing Holders may designate, including any reasonable fees and disbursements of a single counsel for the Electing Holders or underwriters in connection with such qualification and determination, (c) all expenses relating to the preparation, printing, production, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing the Securities for delivery and the expenses of printing or producing any underwriting agreements, agreements among underwriters, selling agreements and blue sky or legal investment memoranda and all other documents in connection with the offering, sale or delivery of Securities to be disposed of (including certificates representing the Securities), (d) messenger, telephone and delivery expenses relating to the offering, sale or delivery of Securities and the preparation of documents referred in clause (c) above, (e) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian, (f) internal expenses (including all salaries and expenses of the Company's officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of any "qualified independent underwriter" engaged pursuant to Section 3(d)(xix) hereof, (i) fees, disbursements and expenses of one counsel for the Electing Holders retained in connection with a Shelf Registration, as selected by the Electing Holders of at least a majority in aggregate principal -15- 16 amount of the Registrable Securities held by Electing Holders (which counsel shall be reasonably satisfactory to the Company), (j) any fees charged by securities rating services for rating the Securities, and (k) fees, expenses and disbursements of any other persons, including special experts, retained by the Company in connection with such registration (collectively, the "Registration Expenses"). To the extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof, the Company shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a request therefor. Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency fees and commissions and underwriting discounts and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above. 5. Representations and Warranties. The Company represents and warrants to, and agrees with, each Purchaser and each of the holders from time to time of Registrable Securities that: (a) Each registration statement covering Registrable Securities and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and any further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, and, in the case of an underwritten offering of Registrable Securities, at the time of the closing under the underwriting agreement relating thereto, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at all times subsequent to the Effective Time when a prospectus would be required to be delivered under the Securities Act, other than from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an amended or supplemented prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof, as then amended or supplemented, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein. (b) Any documents incorporated by reference in any prospectus referred to in Section 5(a) hereof, when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the -16- 17 statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein. (c) The compliance by the Company with all of the provisions of this Exchange and Registration Rights Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any subsidiary of the Company is a party or by which the Company or any subsidiary of the Company is bound or to which any of the property or assets of the Company or any subsidiary of the Company is subject, nor will such action result in any violation of (i) the provisions of the certificate of incorporation, as amended, or the by-laws of the Company or any Guarantor or (ii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any subsidiary of the Company or any of their respective properties, except, in the case of this clause (ii), such violations as would not have a material adverse effect upon the business or financial condition of the Company and its subsidiaries, taken as a whole;and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Company and the Guarantors of the transactions contemplated by this Exchange and Registration Rights Agreement, except the registration under the Securities Act of the Securities, qualification of the Indenture under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under State securities or blue sky laws in connection with the offering and distribution of the Securities. (d) This Exchange and Registration Rights Agreement has been duly authorized, executed and delivered by the Company and the Guarantors. 6. Indemnification. (a) Indemnification by the Company and the Guarantors. The Company and the Guarantors, jointly and severally, will indemnify and hold harmless each of the holders of Registrable Securities included in an Exchange Registration Statement, each of the Electing Holders of Registrable Securities included in a Shelf Registration Statement and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities against any losses, claims, damages or liabilities, joint or several, to which such holder, agent or underwriter may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Registration Statement or Shelf Registration Statement, as the case may be, under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such holder, Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such holder, such Electing Holder, such agent and such underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, -17- 18 that neither the Company nor the Guarantors shall be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus, or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein. (b) Indemnification by the Holders and any Agents and Underwriters. The Company will require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2(b) hereof and to entering into any underwriting agreement with respect thereto, that the Company shall have received an undertaking reasonably satisfactory to it from the Electing Holder of such Registrable Securities and from each underwriter named in any such underwriting agreement, severally and not jointly, to (i) indemnify and hold harmless the Company, the Guarantors, and all other holders of Registrable Securities, against any losses, claims, damages or liabilities to which the Company , the Guarantors or such other holders of Registrable Securities may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Electing Holder or underwriter expressly for use therein, and (ii) reimburse the Company and the Guarantors for any legal or other expenses reasonably incurred by the Company and the Guarantors in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Electing Holder shall be required to undertake liability to any person under this Section 6(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Electing Holder from the sale of such Electing Holder's Registrable Securities pursuant to such registration. (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 6, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under the indemnification provisions of or contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any -18- 19 other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) Contribution. If for any reason the indemnification provisions contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 6(d) were determined by pro rata allocation (even if the holders or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 6(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The holders' and any underwriters' obligations in this Section 6(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint. -19- 20 (e) The obligations of the Company and the Guarantors under this Section 6 shall be in addition to any liability which the Company or the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each holder, agent and underwriter and each person, if any, who controls any holder, agent or underwriter within the meaning of the Securities Act; and the obligations of the holders and any agents or underwriters contemplated by this Section 6 shall be in addition to any liability which the respective holder, agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company or the Guarantors and to each person, if any, who controls the Company within the meaning of the Securities Act. 7. Underwritten Offerings. (a) Selection of Underwriters. If any of the Registrable Securities covered by the Shelf Registration are to be sold pursuant to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by Electing Holders holding at least a majority in aggregate principal amount of the Registrable Securities to be included in such offering, provided that such designated managing underwriter or underwriters is or are reasonably acceptable to the Company. (b) Participation by Holders. Each holder of Registrable Securities hereby agrees with each other such holder that no such holder may participate in any underwritten offering hereunder unless such holder (i) agrees to sell such holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 8. Rule 144. The Company covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities in connection with that holder's sale pursuant to Rule 144, the Company shall deliver to such holder a written statement as to whether it has complied with such requirements. 9. Miscellaneous. (a) No Inconsistent Agreements. The Company represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities which would be inconsistent with the terms contained in this Exchange and Registration Rights Agreement. -20- 21 (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its obligations hereunder and that the Purchasers and the holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and accordingly agree that the Purchasers and such holders, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of the Company under this Exchange and Registration Rights Agreement in accordance with the terms and conditions of this Exchange and Registration Rights Agreement, in any court of the United States or any State thereof having jurisdiction. (c) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: If to the Company, to it at 1014 Vine Street, Cincinnati, Ohio 45202, Attention, General Counsel, and if to a holder, to the address of such holder set forth in the security register or other records of the Company, or to such other address as the Company or any such holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (d) Parties in Interest. All the terms and provisions of this Exchange and Registration Rights Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and the holders from time to time of the Registrable Securities and the respective successors and assigns of the parties hereto and such holders. In the event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable Securities shall be held subject to all of the terms of this Exchange and Registration Rights Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms and provisions of this Exchange and Registration Rights Agreement. If the Company shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the applicable terms hereof. (e) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Exchange and Registration Rights Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer. (f) GOVERNING LAW. THIS EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (g) Headings. The descriptive headings of the several Sections and paragraphs of this Exchange and Registration Rights Agreement are inserted for convenience only, do -21- 22 not constitute a part of this Exchange and Registration Rights Agreement and shall not affect in any way the meaning or interpretation of this Exchange and Registration Rights Agreement. (h) Entire Agreement; Amendments. This Exchange and Registration Rights Agreement and the other writings referred to herein (including the Indenture and the form of Securities) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter. This Exchange and Registration Rights Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter. This Exchange and Registration Rights Agreement may be amended and the observance of any term of this Exchange and Registration Rights Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company and the holders of at least a majority in aggregate principal amount of the Registrable Securities at the time outstanding. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 9(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder. (i) Inspection. For so long as this Exchange and Registration Rights Agreement shall be in effect, this Exchange and Registration Rights Agreement and a complete list of the names and addresses of all the holders of Registrable Securities shall be made available for inspection and copying on any business day by any holder of Registrable Securities for proper purposes only (which shall include any purpose related to the rights of the holders of Registrable Securities under the Securities, the Indenture and this Agreement) at the offices of the Company at the address thereof set forth in Section 9(c) above and at the office of the Trustee under the Indenture. (j) Counterparts. This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. -22- 23 If the foregoing is in accordance with your understanding, please sign and return to us ONE FOR THE COMPANY AND EACH OF THE REPRESENTATIVES PLUS ONE FOR EACH COUNSEL counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Purchasers, this letter and such acceptance hereof shall constitute a binding agreement between each of the Purchasers, the Guarantors and the Company. It is understood that your acceptance of this letter on behalf of each of the Purchasers is pursuant to the authority set forth in a form of Agreement among Purchasers, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof. Very truly yours, THE KROGER CO. By: /s/ Lawrence M. Turner -------------------------------------- Name: Lawrence M. Turner Title: Vice President and Treasurer The Guarantors listed on Schedule I hereto By: /s/ Paul Heldman -------------------------------------- Name: Paul Heldman Title: Vice President HENPIL, INC., as Guarantor of the Securities WYDIV, INC. , as Guarantor of the Securities By: /s/ Steven McMillan -------------------------------------- Name: Steven McMillan Title: Vice President & Secretary VINE COURT ASSURANCE INCORPORATED, as Guarantor of the Securities By: /s/ Bruce M. Gack -------------------------------------- Name: Bruce M. Gack Title: Vice President KROGER DEDICATED LOGISTICS CO., as Guarantor of the Securities By: /s/ Paul Heldman -------------------------------------- Name: Paul Heldman Title: President -23- 24 RICHIE'S, INC., as Guarantor of the Securities By: (Keith C. Larson) ------------------------------------------ Name: Keith C. Larson Title: Vice President and Secretary -24- 25 Accepted as of the date hereof: Goldman, Sachs & Co. Banc One Capital Markets, Inc. Banc of America Securities LLC Chase Securities Inc. Salomon Smith Barney By: ................................................. (Goldman, Sachs & Co.) On behalf of each of the Purchasers -25- 26 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 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 Rocket Newco, Inc. Texas 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 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 -26- 27 Name of Guarantor State of Organization - -------------------------------------------------------------------------------- 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 -27- 28 EXHIBIT A THE KROGER CO. INSTRUCTION TO DTC PARTICIPANTS ------------------------------- (Date of Mailing) URGENT - IMMEDIATE ATTENTION REQUESTED DEADLINE FOR RESPONSE: [DATE] * ------------------------------- The Depository Trust Company ("DTC") has identified you as a DTC Participant through which beneficial interests in The Kroger Co. (the "Company") $250,000,000 6.34% Senior Notes due 2001, $350,000,000 7.25% Senior Notes due 2009, and $300,000,000 7.70% Senior Notes due 2029 (the "Securities") are held. The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire. IT IS IMPORTANT THAT BENEFICIAL OWNERS OF THE SECURITIES RECEIVE A COPY OF THE ENCLOSED MATERIALS AS SOON AS POSSIBLE as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact The Kroger Co., 1014 Vine Street, Cincinnati, Ohio 4520, 513 762-4000, Attention, Law Department. - --------------------- *Not less than 28 calendar days from date of mailing. -1- 29 THE KROGER CO. Notice of Registration Statement and SELLING SECURITYHOLDER QUESTIONNAIRE ------------------------------------ (Date) Reference is hereby made to the Exchange and Registration Rights Agreement (the "Exchange and Registration Rights Agreement") between The Kroger Co. (the "Company") and the Purchasers named therein. Pursuant to the Exchange and Registration Rights Agreement, the Company has filed with the United States Securities and Exchange Commission (the "Commission") a registration statement on Form [__] (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Company's $250,000,000 6.34% Senior Notes due 2001, $350,000,000 7.25% Senior Notes due 2009, and $300,000,000 7.70% Senior Notes due 2029 (the "Securities"). A copy of the Exchange and Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Exchange and Registration Rights Agreement. Each beneficial owner of Registrable Securities (as defined below) is entitled to have the Registrable Securities beneficially owned by it included in the Shelf Registration Statement. In order to have Registrable Securities included in the Shelf Registration Statement, this Notice of Registration Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to the Company's counsel at the address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners of Registrable Securities who do not complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities. Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. The term "REGISTRABLE SECURITIES" is defined in the Exchange and Registration Rights Agreement. -2- 30 ELECTION The undersigned holder (the "Selling Securityholder") of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Exchange and Registration Rights Agreement, including, without limitation, Section 6 of the Exchange and Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto. Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement. The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: -3- 31 QUESTIONNAIRE (1) (a) Full Legal Name of Selling Securityholder: -------------------------------------------------------------------- (b) Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in Item (3) below: -------------------------------------------------------------------- (c) Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) Through Which Registrable Securities Listed in Item (3) below are Held: -------------------------------------------------------------------- (2) Address for Notices to Selling Securityholder: ----------------------------------- ----------------------------------- ----------------------------------- Telephone: ----------------------------------- Fax: ----------------------------------- Contact Person: ----------------------------------- (3) Beneficial Ownership of Securities: Except as set forth below in this Item (3), the undersigned does not beneficially own any Securities. (a) Principal amount of Registrable Securities beneficially owned:______ CUSIP No(s). of such Registrable Securities: ------------------------ (b) Principal amount of Securities other than Registrable Securities beneficially owned: -------------------------------------------------------------------- CUSIP No(s). of such other Securities: ------------------------------ (c) Principal amount of Registrable Securities which the undersigned wishes to be included in the Shelf Registration Statement: ---------- CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement: --------------------------------------- (4) Beneficial Ownership of Other Securities of the Company: Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any other securities of the Company, other than the Securities listed above in Item (3). State any exceptions here: -4- 32 (5) Relationships with the Company: Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. State any exceptions here: (6) Plan of Distribution: Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registered Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities. State any exceptions here: By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M. In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Exchange and Registration Rights Agreement. By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related Prospectus. -5- 33 In accordance with the Selling Securityholder's obligation under Section 3(d) of the Exchange and Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Exchange and Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery as follows: (i) To the Company: ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- (ii) With a copy to: ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company's counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above. This Agreement shall be governed in all respects by the laws of the State of New York. -6- 34 IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. Dated: -------------------- -------------------------------------------------------------------------- Selling Securityholder (Print/type full legal name of beneficial owner of Registrable Securities) By: ----------------------------------------------------------------------- Name: Title: PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT: ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- -7- 35 EXHIBIT B NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT THE KROGER CO. c/o Firstar, N.A. [ADDRESS OF TRUSTEE] Attention: Trust Officer Re: The Kroger Co. (the "Company") $250,000,000 6.34% Senior Notes due 2001, $350,000,000 7.25% Senior Notes due 2009, and $300,000,000 7.70% Senior Notes due 2029 Dear Sirs: Please be advised that ____________________________ has transferred $ __________ aggregate principal amount of the above-referenced Notes pursuant to an effective Registration Statement on Form [__] (File No. 333- ______) filed by the Company. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied and that the above-named beneficial owner of the Notes is named as a "Selling Holder" in the Prospectus dated [DATE] or in supplements thereto, and that the aggregate principal amount of the Notes transferred are the Notes listed in such Prospectus opposite such owner's name. Dated: Very truly yours, ------------------------- (Name) By: ------------------------- (Authorized Signature) -1- EX-4.6 7 EXHIBIT 4.6 1 Exhibit 4.6 ================================================================================ THE KROGER CO. and certain of its Subsidiaries, as Guarantors TO FIRSTAR BANK, NATIONAL ASSOCIATION Trustee ---------- SECOND SUPPLEMENTAL INDENTURE Dated as of June 25, 1999 TO INDENTURE Dated as of October 15, 1993 ---------- $200,000,000 General Term Notes(SM), Series B ================================================================================ 2 TABLE OF CONTENTS
ARTICLE ONE DEFINITIONS Section 101. Definitions...................................................................................2 ARTICLE TWO GUARANTEE Section 201. Guarantee.....................................................................................3 Section 202. Waiver of Demand..............................................................................4 Section 203. Guarantee of Payment..........................................................................4 Section 204. No Discharge or Diminishment of Guarantee.....................................................5 Section 205. Defenses of Company Waived....................................................................5 Section 206. Continued Effectiveness.......................................................................5 Section 207. Subrogation...................................................................................6 Section 208. Information...................................................................................6 Section 209. Subordination.................................................................................6 Section 210. Termination...................................................................................7 Section 211. Guarantees of other Indebtedness..............................................................7 Section 212. Additional Guarantors.........................................................................7 Section 213. Limitation of Guarantor's Liability...........................................................8 Section 214. Contribution from Other Guarantors............................................................8 Section 215. No Obligation to Take Action Against the Company..............................................8 Section 216. Dealing with the Company and Others...........................................................8 Section 217. Subordination of Guarantee....................................................................9 ARTICLE THREE SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. Guarantee Obligations Subordinated to Senior Indebtedness of Guarantors.......................9 Section 302. Payment Over of Proceeds Upon Dissolution, Etc...............................................10 Section 303. No Payment When Senior Indebtedness in Default...............................................11 Section 304. Payment Permitted if no Default..............................................................12 Section 305. Subrogation to Rights of Holders of Senior Indebtedness......................................12 Section 306. Provisions Solely to Define Relative Rights..................................................13 Section 307. Trustee to Effectuate Subordination..........................................................13 Section 308. No Waiver of Subordination Provisions........................................................13 Section 309. Notice to Trustee............................................................................14 Section 310. Reliance on Judicial Order or Certificate of Liquidating Agent...............................15 Section 311. Trustee Not Fiduciary for Holders of Senior Indebtedness.....................................15
-i- 3 Section 312. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights........15 Section 313. Article Applicable to Paying Agents..........................................................15 Section 314. Authorization to File Claims; Reinstatement of Subordination.................................16 ARTICLE FOUR MISCELLANEOUS Section 401. Miscellaneous................................................................................16
-ii- 4 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, each of the guarantors signatory hereto as set forth on the signature pages and Schedule I (collectively, the "Guarantors") 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 October 15, 1993 (as amended and supplemented, the "Indenture") providing for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided. The Indenture has been supplemented by the First Supplemental Indenture, dated as of October 15, 1993 (the "First Supplemental Indenture"), providing for the issuance of the $200,000,000 General Term Notes(SM), Series B (the "Securities"). 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 Fourth Supplemental 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. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Second Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities issued thereunder. All things necessary to make this Second Supplemental Indenture a valid agreement of the Company and each of the Guarantors, and a valid amendment of and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE ----------- DEFINITIONS Section 101. DEFINITIONS. 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 Fourth Supplemental Indenture. (4) "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 any such agreement or facility. (5) "Guarantee" has the meaning specified in Section 201. (6) "Guaranteed Obligations" has the meaning specified in Section 201. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. (8) "Notifying Holder" has the meaning specified in Section 303. (9) "Payment Blockage Period" has the meaning specified in Section 303. -2- 6 (10) "Senior Indebtedness" means, with respect to any Guarantor, the principal of (and premium, if any) and interest on, and all other amounts payable in respect of, (a) all Indebtedness of such Guarantor, whether outstanding on the date of this Indenture or thereafter Incurred, (b) any obligations of such Guarantor under interest rate swaps, caps, collars and similar arrangements, (c) any obligations of such Guarantor under foreign currency hedges entered into in respect of any such Indebtedness or obligation and (d) any amendments, renewals, extensions, modifications, and refundings of any such Indebtedness or obligation, except (i) any Indebtedness or obligation owed to a Subsidiary, (ii) any Indebtedness or obligation which by the terms of the instrument creating or evidencing the same is not superior in right of payment to such Guarantor's Guarantee, (iii) any Indebtedness or obligation which is subordinated or junior in any respect to any other Indebtedness or obligation of such Guarantor, and (iv) any Indebtedness or obligation constituting a trade account payable of such Guarantor. Any obligation under any Senior Indebtedness shall continue to constitute Senior Indebtedness despite a determination that the Incurrence of such obligation by a Guarantor was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or transfer under Federal or state law. ARTICLE TWO ----------- GUARANTEE Section 201. 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, 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 "Guaranteed 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 Guaranteed 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 Guaranteed Obligations, for whatever reason, each Guarantor shall be obligated to pay, or -3- 7 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 Guaranteed Obligations of the Guarantor hereunder in the same manner and to the same extent as the Guaranteed 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 Guaranteed Obligations may be accelerated as provided in Article Five of the Indenture for the purposes of its Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Five of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of its Guarantee. Section 202. 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 Guaranteed Obligations, and also waives notice of acceptance of its Guarantee and notice of protest for nonpayment. Section 203. 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 Guaranteed Obligations. Section 204. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. Subject to Section 210 of this Second Supplemental Indenture, the obligations of each of the Guarantors hereunder shall not be subject to any reduction, -4- 8 limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations). Section 205. 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 Guaranteed 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 Guaranteed 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 206. CONTINUED EFFECTIVENESS. Subject to Section 210 of this Fourth 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 Guaranteed 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. Section 207. 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 Guaranteed 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 -5- 9 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 Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations and (b) all the Guaranteed 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 Guaranteed Obligations resulting from such payment by such Guarantor. Section 208. 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 Guaranteed 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 209. 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 Guaranteed 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 207 hereof. -6- 10 Section 210. 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 & Poor's Ratings 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 211. 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 210 hereof. Section 212. 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 -7- 11 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 213. 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 214. 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 215. 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 Guaranteed 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 216. 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: -8- 12 (a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (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 Guaranteed 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 Guaranteed 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 217. SUBORDINATION OF GUARANTEE. The obligations of each Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantee and this Indenture are expressly subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness of such Guarantor, to the extent and in the manner provided in Article Three. ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. GUARANTEE OBLIGATIONS SUBORDINATED TO SENIOR INDEBTEDNESS OF GUARANTORS. Each Guarantor covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the Indebtedness represented by the Guarantee of such Guarantor, including the obligations of such Guarantor in respect of the payment of the principal of (and premium, if any) and interest on each and all of the Securities, is hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of such Guarantor. -9- 13 Section 302. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to any Guarantor or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of such Guarantor, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of such Guarantor, then and in any such event the holders of Senior Indebtedness of such Guarantor shall be entitled to receive payment in full in cash of all amounts due or to become due on or in respect of all Senior Indebtedness of such Guarantor before the Holders of the Securities, are entitled to receive any payment in respect of such Guarantor's Guarantee, including on account of principal of (or premium, if any) or interest on the Securities and to that end the holders of Senior Indebtedness of such Guarantor shall be entitled to receive, for application to the payment of all Senior Indebtedness of such Guarantor remaining unpaid (to the extent necessary to pay all Senior Indebtedness of such Guarantor in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness), any payment or distribution of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of such Guarantor being subordinated to the payment of the Guarantee of such Guarantor, which may be payable or deliverable in respect of such Guarantee in any such case, proceeding, dissolution, liquidation or other winding up or event. In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Security shall have received any payment or distribution of assets of any Guarantor of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of such Guarantor being subordinated to the payment of the Guarantee of such Guarantor, before all Senior Indebtedness of such Guarantor is paid in full, then and in such event such payment or distribution shall be held in trust by any such Holder for the holders of Senior Indebtedness of such Guarantor, and if such fact shall, at or prior to the time of such payment or distribution, have been made known to the Trustee, shall be held by the Trustee in a separate account, and shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of such Guarantor for application to the payment of all Senior Indebtedness of such Guarantor remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of such Guarantor. -10- 14 The consolidation of any Guarantor with, or the merger of any Guarantor into, another Person or the liquidation or dissolution of any Guarantor following the sale, assignment, conveyance or transfer of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article Eight of the Indenture shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshalling of assets and liabilities of such Guarantor for the purposes of this Section 302 if the Person formed by such consolidation or into which such Guarantor is merged or the Person which acquires by sale, assignment, conveyance or transfer such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, sale, assignment, conveyance or transfer, comply with the conditions set forth in Article Eight of the Indenture. Section 303. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. No Guarantor may make any payments in respect of its Guarantee, including any payment in respect of principal of, premium, if any, or interest on the Securities if (i) any Senior Indebtedness of such Guarantor is not paid when due and such default is not cured or waived, (ii) any other event of default on Senior Indebtedness of such Guarantor occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms and such acceleration is not rescinded or (iii) judicial proceedings shall be pending with respect to such default in payment or event of default. During the continuance of any default (other than a default in payment or any other event of default and acceleration as described in the preceding sentence) with respect to any Senior Indebtedness, upon the receipt by the Trustee and any Guarantor of written notice thereof from any holder of such Senior Indebtedness or a representative of such holder (each a "Notifying Holder"), such Guarantor may not during the period (the "Payment Blockage Period") commencing on the date of such receipt of such written notice and ending on the earlier of (i) the date on which such event of default shall have been cured or waived or cease to exist or all obligations of each such Guarantor in respect of such Senior Indebtedness shall have been discharged and (ii) the 179th day after the date of the receipt of such notice, take any action which would be prohibited by the first sentence of this Section if any Senior Indebtedness of such Guarantor had not been paid. Any number of such notices may be given; PROVIDED, HOWEVER, that during any 360-day period the aggregate of all Payment Blockage Periods shall not exceed 179 days and there shall be a period of at least 181 consecutive days in each 360-day period when no Payment Blockage Period is in effect. For all purposes of this Section 303, no default which existed or was continuing on the date of the commencement of any Payment Blockage Period and was known to a Notifying Holder shall be, or be made, the basis for the commencement of a second Payment Blockage Period by the Notifying Holder, whether or not within a period of 360 consecutive days, unless such default shall have been cured or waived for a period of not less than 90 consecutive days. -11- 15 In the event that, notwithstanding the foregoing, any Guarantor shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, then and in such event such payment shall be held in trust by any such Holder for the holders of Senior Indebtedness of such Guarantor, and if such fact shall, at or prior to the time of such payment, have been made known to the Trustee, shall be held by the Trustee in a separate account, and shall be paid over and delivered forthwith to such Guarantor. The provisions of this Section shall not apply to any payment with respect to which Section 302 would be applicable. Section 304. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this Article or elsewhere in this Indenture or in any Guarantee or any Securities shall prevent (a) any Guarantor, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of such Guarantor referred to in Section 302 or under the conditions described in Section 303, from making payments at any time under its Guarantee, including of principal of, premium, if any, or interest on the Securities or (b) the application by the Trustee of any money deposited with it hereunder to the payment of or on account of the principal of or interest on the Securities or the retention of such payment by the Holders, if, at the time of such application by the Trustee, it did not have written notice as provided in Section 309, of any event prohibiting such application. Section 305. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS. Subject to the payment in full of all Senior Indebtedness of each Guarantor, the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness of such Guarantor pursuant to the provisions of this Article to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness of such Guarantor until the principal of and interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to which the holders of the Senior Indebtedness of any Guarantor or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among such Guarantor, its creditors other than holders of its Senior Indebtedness and the Holders of the Securities, be deemed to be a payment or distribution by such Guarantor to or on account of the Senior Indebtedness of such Guarantor. -12- 16 Section 306. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in the Indenture or in the Securities is intended to or shall (a) impair, as among any Guarantor, its creditors and the Holders of the Securities, the obligation of such Guarantor, which is absolute and unconditional (and which, subject to the rights under this Article of the holders of Senior Indebtedness of such Guarantor, is intended to rank equally with all other general obligations of such Guarantor), to pay to the Holders of the Securities the principal of (and premium, if any) and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against any Guarantor of the Holders of the Securities and creditors of such Guarantor other than the holders of Senior Indebtedness of such Guarantor; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under the Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder. Section 307. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate, as between the Holders and the holders of Senior Indebtedness, the subordination provided for in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes. Section 308. NO WAIVER OF SUBORDINATION PROVISIONS. No right of any present or future holder of any Senior Indebtedness of any Guarantor to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such Guarantor or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by such Guarantor with the terms, provisions and covenants of the Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article or the obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (i) -13- 17 change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any Person liable in any manner for the collection of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the Company and any other Person. Section 309. NOTICE TO TRUSTEE. Each Guarantor shall give prompt written notice to the Trustee of any fact known to such Guarantor which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of the Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from any Guarantor, any Holder, any Paying Agent, any holder of any class of Senior Indebtedness, or any Notifying Holder who shall have been certified by any Guarantor or otherwise established to the reasonable satisfaction of the Trustee to be such holder, or from any trustee therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 601 of the Indenture, shall be entitled in all respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall not have received the notice provided for in this Section at least 2 Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (or premium, if any) or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within 2 Business Days prior to such date. Subject to the provisions of Section 601 of the Indenture, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may -14- 18 request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 310. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT. Upon any payment or distribution of assets of any guarantor referred to in this Article, the Trustee, subject to the provisions of Section 601 of the Indenture, and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the Person entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other Indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. Section 311. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to any Guarantor or to any other Person cash, property or securities to which any holders of Senior Indebtedness of such Guarantor shall be entitled by virtue of this Article or otherwise. Section 312. Rights of Trustee as Holder of Senior INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 607 of the Indenture. Section 313. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents -15- 19 and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; PROVIDED, HOWEVER, that this Section 313 shall not apply to the Company or any affiliate of the Company if it or such Affiliate acts as Paying Agent. Section 314. AUTHORIZATION TO FILE CLAIMS; REINSTATEMENT OF SUBORDINATION. (a) Each Notifying Holder is hereby irrevocably authorized and empowered (in its own name or in the name of the Holders or the Trustee or otherwise), but shall have no obligation, to file claims and proofs of claim in respect of the Securities in proceedings referred to in Section 302 in the event such claims or proofs of claim have not been filed prior to 30 days before such filings would be barred. (b) The provisions of this Article Three shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any obligations in respect of any Senior Indebtedness is rescinded or must otherwise be returned by any holder of such Senior Indebtedness upon the insolvency, bankruptcy or reorganization of any Guarantor, all as though such payment had not been made, PROVIDED, HOWEVER, that this paragraph (b) shall only apply to payments which had been so rescinded or required to be returned as a result of a determination that such payment was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or fraudulent transfer under Federal or State law. ARTICLE FOUR ------------ MISCELLANEOUS Section 401. 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) 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. -16- 20 (d) All covenants and agreements in this Second Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) 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. (f) 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. (g) 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 Fourth 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. (h) This Second Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) 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 Fourth 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. -17- 21 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. -18- 22 Attest: RICHIE'S, INC., as Guarantor of the Securities By: /s/ Keith C. Larson - ------------------------------ ---------------------------------------- Name: Keith C. Larson Title: Vice President Secretary -19- 23 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 -20- 24 Attest: FIRSTAR BANK, NATIONAL ASSOCIATION, as Trustee By: /s/ William Sicking - --------------------------- ------------------------------------------ Assistant Secretary Name: William Sicking Title: Trust Officer -21- 25 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 ____________ 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. -------------------------------- -1- 26 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. -------------------------------- -2- 27 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. -3- 28 SCHEDULE I Guarantors ---------- Name of Guarantor State of Incorporation/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 -4- 29 Name of Guarantor State of Incorporation/organization - ----------------- ----------------------------------- Fred Meyer Jewelers, Inc. Delaware 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 -5- EX-4.7 8 EXHIBIT 4.7 1 Exhibit 4.7 ================================================================================ THE KROGER CO. and certain of its Subsidiaries, as Guarantors TO FIRSTAR BANK, NATIONAL ASSOCIATION Trustee ---------- FOURTH SUPPLEMENTAL INDENTURE Dated as of June 25, 1999 TO INDENTURE Dated as of May 1, 1998 ---------- $200,000,000 7% Senior Notes due 2018 $200,000,000 6% Puttable Reset Securities PURS(SM) due 2010 $300,000,000 6.8% Senior Notes due 2018 ================================================================================ 2 TABLE OF CONTENTS ARTICLE ONE DEFINITIONS Section 101. Definitions...................................................... 2 ARTICLE TWO GUARANTEE Section 201. Guarantee........................................................ 3 Section 202. Waiver of Demand................................................. 4 Section 203. Guarantee of Payment............................................. 4 Section 204. No Discharge or Diminishment of Guarantee........................ 4 Section 205. Defenses of Company Waived....................................... 5 Section 206. Continued Effectiveness.......................................... 5 Section 207. Subrogation...................................................... 5 Section 208. Information...................................................... 6 Section 209. Subordination.................................................... 6 Section 210. Termination...................................................... 6 Section 211. Guarantees of other Indebtedness................................. 7 Section 212. Additional Guarantors............................................ 7 Section 213. Limitation of Guarantor's Liability.............................. 7 Section 214. Contribution from Other Guarantors............................... 8 Section 215. No Obligation to Take Action Against the Company................. 8 Section 216. Dealing with the Company and Others.............................. 8 -i- 3 ARTICLE THREE MISCELLANEOUS Section 301. Miscellaneous.................................................... 9 -ii- 4 FOURTH 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, each of the guarantors signatory hereto as set forth on the signature pages and Schedule I (collectively, the "Guarantors") 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 May 1, 1998 (as amended and supplemented, the "Indenture") providing for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided. The Indenture has been supplemented by the First Supplemental Indenture, dated as of May 11, 1998 (the "First Supplemental Indenture"), the Second Supplemental Indenture dated as of June 26, 1998 (the "Second Supplemental Indenture"), and the Third Supplemental Indenture, dated as of December 11, 1998 (the "Third Supplemental Indenture"), providing for the issuance of the $200,000,000 7% Senior Notes due 2018, the $200,000,000 6% Senior Notes due 2010 and the $300,000,000 6.8% Senior Notes due 2018, respectively (collectively, the "Securities"). 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 Fourth Supplemental 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. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Fourth Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities issued thereunder. All things necessary to make this Fourth Supplemental Indenture a valid agreement of the Company and each of the Guarantors, and a valid amendment of and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE DEFINITIONS Section 101. DEFINITIONS. For all purposes of this Fourth 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 Fourth Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Fourth Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this Fourth Supplemental Indenture. (4) "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 Fourth Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (5) "Guarantee" has the meaning specified in Section 201. (6) "Guaranteed Obligations" has the meaning specified in Section 201. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. -2- 6 ARTICLE TWO GUARANTEE Section 201. 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, 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 "Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations of the Guarantor hereunder in the same manner and to the same extent as the Guaranteed 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 Guaranteed Obligations may be accelerated as provided in Article Five of the Indenture for the purposes of its Guarantee, notwithstanding any stay, injunction or other -3- 7 prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Five of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of its Guarantee. Section 202. 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 Guaranteed Obligations, and also waives notice of acceptance of its Guarantee and notice of protest for nonpayment. Section 203. 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 Guaranteed Obligations. Section 204. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. Subject to Section 210 of this Fourth 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 Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations). -4- 8 Section 205. 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 Guaranteed 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 Guaranteed 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 206. CONTINUED EFFECTIVENESS. Subject to Section 210 of this Fourth 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 Guaranteed 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. Section 207. 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 Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations and (b) all the Guaranteed Obligations and all other amounts payable under this Fourth 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 -5- 9 transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor. Section 208. 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 Guaranteed 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 209. 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 Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Guarantor may have pursuant to this Fourth Supplemental Indenture is subject to Section 207 hereof. Section 210. 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 Fourth 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 & Poor's Ratings 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 Fourth 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 -6- 10 (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 Fourth Supplemental Indenture and its Guarantee. Section 211. 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 210 hereof. Section 212. 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 Fourth Supplemental Indenture, if it has not already done so or unless the Guarantor is 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 213. 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 Fourth 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 Fourth Supplemental Indenture, will result in the obligations of such Guarantor under its Guarantee not constituting such fraudulent transfer or conveyance. -7- 11 Section 214. 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 215. 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 Guaranteed 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 216. 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; (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 Guaranteed 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 Guaranteed 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. -8- 12 ARTICLE THREE MISCELLANEOUS Section 301. MISCELLANEOUS. (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this Fourth Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Fourth 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 Fourth Supplemental Indenture. (c) Each of the Company and the Trustee makes and reaffirms as of the date of execution of this Fourth Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (d) All covenants and agreements in this Fourth Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) In case any provisions in this Fourth 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. (f) Nothing in this Fourth 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. (g) 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 Fourth 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 Fourth Supplemental Indenture as so modified or excluded, as the case may be. (h) This Fourth Supplemental Indenture shall be governed by and -9- 13 construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) All provisions of this Fourth Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Fourth 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. -10- 14 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 M. 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. -11- 15 Attest: RICHIE'S, INC., as Guarantor of the Securities By: - -------------------------------- --------------------------------------- Name: Title: -12- 16 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 -13- 17 Attest: FIRSTAR BANK, NATIONAL ASSOCIATION, as Trustee By: /s/ William Sicking - -------------------------------- --------------------------------------- Assistant Secretary Name: William Sicking Title: Trust Officer -14- 18 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 ___________ 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. ---------------------------------------- -1- 19 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. ---------------------------------------- -2- 20 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. ---------------------------------------- -3- 21 SCHEDULE I GUARANTORS Name of Guarantor State of Incorporation/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 -4- 22 Name of Guarantor State of Incorporation/Organization - ----------------- ----------------------------------- Fred Meyer Jewelers, Inc. Delaware 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 -5- EX-4.8 9 EXHIBIT 4.8 1 Exhibit 4.8 ================================================================================ THE KROGER CO. and certain of its Subsidiaries, as Guarantors TO FIRSTAR BANK, NATIONAL ASSOCIATION Trustee ---------- FOURTH SUPPLEMENTAL INDENTURE Dated as of June 25, 1999 TO INDENTURE Dated as of July 15, 1996 ---------- $240,000,000 8.15% Senior Notes due 2006 $200,000,000 7.65% Senior Notes due 2007 $200,000,000 6 3/8% Senior Notes due 2008 ================================================================================ 2 TABLE OF CONTENTS ARTICLE ONE DEFINITIONS Section 101. Definitions..................................................... 2 ARTICLE TWO GUARANTEE Section 201. Guarantee....................................................... 3 Section 202. Waiver of Demand................................................ 4 Section 203. Guarantee of Payment............................................ 4 Section 204. No Discharge or Diminishment of Guarantee....................... 4 Section 205. Defenses of Company Waived...................................... 5 Section 206. Continued Effectiveness......................................... 5 Section 207. Subrogation..................................................... 5 Section 208. Information..................................................... 6 Section 209. Subordination................................................... 6 Section 210. Termination..................................................... 6 Section 211. Guarantees of other Indebtedness................................ 7 Section 212. Additional Guarantors........................................... 7 Section 213. Limitation of Guarantor's Liability............................. 7 Section 214. Contribution from Other Guarantors.............................. 8 Section 215. No Obligation to Take Action Against the Company................ 8 Section 216. Dealing with the Company and Others............................. 8 ARTICLE THREE MISCELLANEOUS Section 301. Miscellaneous................................................... 9 -i- 3 FOURTH 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, each of the guarantors signatory hereto as set forth on the signature pages and Schedule I (collectively, the "Guarantors") 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 July 15, 1996 (as amended and supplemented, the "Indenture") providing for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided. The Indenture has been supplemented by the First Supplemental Indenture, dated as of July 29, 1996 (the "First Supplemental Indenture"), the Second Supplemental Indenture dated as of April 28, 1997 (the "Second Supplemental Indenture"), and the Third Supplemental Indenture, dated as of February 25, 1998 (the "Third Supplemental Indenture"), providing for the issuance of the $240,000,000 8.15% Senior Notes due 2006, the $200,000,000 7.65% Senior Notes due 2007 and the $200,000,000 6 3/8% Senior Notes due 2008, respectively (collectively, the "Securities"). 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 Fourth Supplemental 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. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Fourth Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities issued thereunder. All things necessary to make this Fourth Supplemental Indenture a valid agreement of the Company and each of the Guarantors, and a valid amendment of and supplement to the Indenture, have been done. -1- 4 NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE DEFINITIONS Section 101. DEFINITIONS. For all purposes of this Fourth 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 Fourth Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Fourth Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this Fourth Supplemental Indenture. (4) "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 Fourth Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (5) "Guarantee" has the meaning specified in Section 201. (6) "Guaranteed Obligations" has the meaning specified in Section 201. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. -2- 5 ARTICLE TWO GUARANTEE Section 201. 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, 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 "Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations of the Guarantor hereunder in the same manner and to the same extent as the Guaranteed 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 Guaranteed Obligations may be accelerated as provided in Article Five of the Indenture for the purposes of its Guarantee, notwithstanding any stay, injunction or other -3- 6 prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Five of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of its Guarantee. Section 202. 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 Guaranteed Obligations, and also waives notice of acceptance of its Guarantee and notice of protest for nonpayment. Section 203. 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 Guaranteed Obligations. Section 204. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. Subject to Section 210 of this Fourth 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 Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations). -4- 7 Section 205. 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 Guaranteed 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 Guaranteed 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 206. CONTINUED EFFECTIVENESS. Subject to Section 210 of this Fourth 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 Guaranteed 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. Section 207. 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 Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations and (b) all the Guaranteed Obligations and all other amounts payable under this Fourth 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 -5- 8 transfer by subrogation to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor. Section 208. 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 Guaranteed 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 209. 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 Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Guarantor may have pursuant to this Fourth Supplemental Indenture is subject to Section 207 hereof. Section 210. TERMINATION. A Guarantor shall, upon the occurrence of either of the following events, be unconditionally released and discharged from all obligations under this Fourth 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 & Poor's Ratings 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 Fourth 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 -6- 9 (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 Fourth Supplemental Indenture and its Guarantee. Section 211. 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 210 hereof. Section 212. 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 Fourth Supplemental Indenture, if it has not already done so or unless the Guarantor is 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 213. 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 or state law. To effectuate the foregoing intention, the Holders and such Guarantor hereby irrevocably agree that the obligations of such Guarantor under this Fourth 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 Fourth Supplemental Indenture, will result in the obligations of such Guarantor under its Guarantee not constituting such fraudulent transfer or conveyance. -7- 10 Section 214. 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 215. 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 Guaranteed 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 216. 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; (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 Guaranteed 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 Guaranteed 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. -8- 11 ARTICLE THREE MISCELLANEOUS Section 301. MISCELLANEOUS. (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this Fourth Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Fourth 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 Fourth Supplemental Indenture. (c) Each of the Company and the Trustee makes and reaffirms as of the date of execution of this Fourth Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (d) All covenants and agreements in this Fourth Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) In case any provisions in this Fourth 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. (f) Nothing in this Fourth 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. (g) 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 Fourth 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 Fourth Supplemental Indenture as so modified or excluded, as the case may be. -9- 12 (h) This Fourth Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) All provisions of this Fourth Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Fourth 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. -10- 13 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. -11- 14 Attest: RICHIE'S, INC., as Guarantor of the Securities By: /s/ Keith C. Larson - ---------------------------------- --------------------------------------- Name: Keith C. Larson Title: Vice President Secretary -12- 15 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 -13- 16 Attest: FIRSTAR BANK, NATIONAL ASSOCIATION, as Trustee By: /s/ William Sicking - ---------------------------------- --------------------------------------- Assistant Secretary Name: William Sicking Title: Trust Officer -14- 17 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 ____________ 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. ---------------------------------------- -15- 18 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. ---------------------------------------- -16- 19 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. ---------------------------------------- -17- 20 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 -18- 21 Name of Guarantor State of Organization - -------------------------------------------------------------------------------- Fred Meyer of California, Inc. California Fred Meyer Jewelers, Inc. Delaware 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 EX-4.9 10 EXHIBIT 4.9 1 Exhibit 4.9 ================================================================================ THE KROGER CO. and certain of its Subsidiaries, as Guarantors TO HARRIS TRUST AND SAVINGS BANK Trustee ---------- SEVENTH SUPPLEMENTAL INDENTURE Dated as of June 25, 1999 TO INDENTURE Dated as of April 1, 1992 ---------- $250,000,000 9 7/8% Senior Subordinated Notes due 2002 $250,000,000 General Term Notes(SM), Series A ================================================================================ 2 TABLE OF CONTENTS
ARTICLE ONE DEFINITIONS Section 101. Definitions..........................................................................................2 ARTICLE TWO GUARANTEE Section 201. Guarantee............................................................................................3 Section 202. Waiver of Demand.....................................................................................4 Section 203. Guarantee of Payment.................................................................................4 Section 204. No Discharge or Diminishment of Guarantee............................................................4 Section 205. Defenses of Company Waived...........................................................................5 Section 206. Continued Effectiveness..............................................................................5 Section 207. Subrogation..........................................................................................5 Section 208. Information..........................................................................................6 Section 209. Subordination........................................................................................6 Section 210. Termination..........................................................................................6 Section 211. Guarantees of other Indebtedness.....................................................................7 Section 212. Additional Guarantors................................................................................7 Section 213. Limitation of Guarantor's Liability..................................................................8 Section 214. Contribution from Other Guarantors...................................................................8 Section 215. No Obligation to Take Action Against the Company.....................................................8 Section 216. Dealing with the Company and Others..................................................................8 Section 217. Subordination of Guarantee...........................................................................9 ARTICLE THREE SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. Guarantee Obligations Subordinated to Senior Indebtedness of Guarantors..............................9 Section 302. Payment Over of Proceeds Upon Dissolution, Etc.......................................................9 Section 303. No Payment When Senior Indebtedness in Default......................................................10 Section 304. Payment Permitted if no Default.....................................................................11 Section 305. Subrogation to Rights of Holders of Senior Indebtedness.............................................12 Section 306. Provisions Solely to Define Relative Rights.........................................................12 Section 307. Trustee to Effectuate Subordination.................................................................13 Section 308. No Waiver of Subordination Provisions...............................................................13 Section 309. Notice to Trustee...................................................................................13 Section 310. Reliance on Judicial Order or Certificate of Liquidating Agent......................................14
-i- 3 Section 311. Trustee Not Fiduciary for Holders of Senior Indebtedness............................................14 Section 312. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights...............15 Section 313. Article Applicable to Paying Agents.................................................................15 Section 314. Authorization to File Claims; Reinstatement of Subordination........................................15 ARTICLE FOUR MISCELLANEOUS Section 401. Miscellaneous.......................................................................................16
-ii- 4 SEVENTH 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, each of the guarantors signatory hereto as set forth on the signature pages and Schedule I (collectively, the "Guarantors") and Harris Trust and Savings Bank, an Illinois banking corporation duly organized and existing under the laws of the State of Illinois, 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 April 1, 1992 (as amended and supplemented, the "Indenture") providing for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided. The Indenture has been supplemented by, among other supplemental indentures, the Fourth Supplemental Indenture dated as of August 1, 1992 (the "Fourth Supplemental Indenture"), and the Sixth Supplemental Indenture, dated as of April 8, 1993 (the "Sixth Supplemental Indenture"), providing for the issuance of the no longer outstanding, $250,000,000 9 7/8% Senior Subordinated Notes due 2002, and the $250,000,000 General Term Notes(SM), Series A, respectively (collectively, the "Securities"). 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 Seventh Supplemental 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. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Seventh Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities issued thereunder. All things necessary to make this Seventh Supplemental Indenture a valid agreement of the Company and each of the Guarantors, and a valid amendment of and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS SEVENTH SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE ----------- DEFINITIONS Section 101. DEFINITIONS. For all purposes of this Seventh 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 Seventh Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Seventh Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this Seventh Supplemental Indenture. (4) "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 Seventh Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (5) "Guarantee" has the meaning specified in Section 201. (6) "Guaranteed Obligations" has the meaning specified in Section 201. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. (8) "Notifying Holder" has the meaning specified in Section 303. (9) "Payment Blockage Period" has the meaning specified in Section 303. (10) "Senior Indebtedness" means, with respect to any Guarantor, the principal of (and premium, if any) and interest on, and all other amounts payable in respect of, (a) all -2- 6 Indebtedness of such Guarantor, whether outstanding on the date of this Indenture or thereafter Incurred, (b) any obligations of such Guarantor under interest rate swaps, caps, collars and similar arrangements, (c) any obligations of such Guarantor under foreign currency hedges entered into in respect of any such Indebtedness or obligation and (d) any amendments, renewals, extensions, modifications, and refundings of any such Indebtedness or obligation, except (i) any Indebtedness or obligation owed to a Subsidiary, (ii) any Indebtedness or obligation which by the terms of the instrument creating or evidencing the same is not superior in right of payment to such Guarantor's Guarantee, (iii) any Indebtedness or obligation which is subordinated or junior in any respect to any other Indebtedness or obligation of such Guarantor, and (iv) any Indebtedness or obligation constituting a trade account payable of such Guarantor. Any obligation under any Senior Indebtedness shall continue to constitute Senior Indebtedness despite a determination that the Incurrence of such obligation by a Guarantor was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or transfer under Federal or state law. ARTICLE TWO ----------- GUARANTEE Section 201. 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, 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 "Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed -3- 7 Obligations of the Guarantor hereunder in the same manner and to the same extent as the Guaranteed 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 Guaranteed Obligations may be accelerated as provided in Article Five of the Indenture for the purposes of its Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Five of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of its Guarantee. Section 202. 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 Guaranteed Obligations, and also waives notice of acceptance of its Guarantee and notice of protest for nonpayment. Section 203. 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 Guaranteed Obligations. Section 204. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. Subject to Section 210 of this Seventh 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 Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever -4- 8 by reason of the invalidity, illegality or unenforceability of the Guaranteed 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 Guaranteed 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 Guaranteed Obligations). Section 205. 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 Guaranteed 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 Guaranteed 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 206. CONTINUED EFFECTIVENESS. Subject to Section 210 of this Seventh 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 Guaranteed 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. Section 207. 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 Guaranteed 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 Guaranteed 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 -5- 9 the Guaranteed 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 Guaranteed 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 Guaranteed Obligations and (b) all the Guaranteed Obligations and all other amounts payable under this Seventh 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 Guaranteed Obligations resulting from such payment by such Guarantor. Section 208. 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 Guaranteed 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 209. 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 Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Guarantor may have pursuant to this Seventh Supplemental Indenture is subject to Section 207 hereof. Section 210. 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 Seventh 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 & Poor's Ratings 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 -6- 10 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 Seventh 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 Seventh Supplemental Indenture and its Guarantee. Section 211. 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 210 hereof. Section 212. 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 Seventh Supplemental Indenture, if it has not already done so or unless the Guarantor is 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 213. 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 or state law. To effectuate the foregoing intention, the Holders and such Guarantor hereby irrevocably agree that the obligations of such Guarantor under -7- 11 this Seventh 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 Seventh Supplemental Indenture, will result in the obligations of such Guarantor under its Guarantee not constituting such fraudulent transfer or conveyance. Section 214. 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 215. 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 Guaranteed 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 216. 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; (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 Guaranteed Obligations; (d) accept compromises or arrangements from the Company; -8- 12 (e) apply all monies at any time received from the Company or from any security to such part of the Guaranteed 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 217. SUBORDINATION OF GUARANTEE. The obligations of each Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantee and this Indenture are expressly subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness of such Guarantor, to the extent and in the manner provided in Article Three. ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. GUARANTEE OBLIGATIONS SUBORDINATED TO SENIOR INDEBTEDNESS OF GUARANTORS. Each Guarantor covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the Indebtedness represented by the Guarantee of such Guarantor, including the obligations of such Guarantor in respect of the payment of the principal of (and premium, if any) and interest on each and all of the Securities, is hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of such Guarantor. Section 302. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to any Guarantor or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of such Guarantor, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshaling of assets and liabilities of such Guarantor, then and in any such event the holders of Senior Indebtedness of such Guarantor shall be entitled to receive payment in full in cash of all amounts due or to become due on or in respect of all Senior Indebtedness of such Guarantor before the Holders of the Securities are entitled to receive any payment in respect of such Guarantor's Guarantee, including on account of principal of (or premium, if any) or interest on the Securities, and to that end the holders of Senior Indebtedness of such Guarantor shall be entitled to receive, for application to the payment of all Senior Indebtedness of such Guarantor remaining unpaid (to the extent necessary to pay all -9- 13 Senior Indebtedness of such Guarantor in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness), any payment or distribution of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of such Guarantor being subordinated to the payment of the Guarantee of such Guarantor, which may be payable or deliverable in respect of such Guarantee in any such case, proceeding, dissolution, liquidation or other winding up or event. In the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Security shall have received any payment or distribution of assets of any Guarantor of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of such Guarantor being subordinated to the payment of the Guarantee of such Guarantor, before all Senior Indebtedness of such Guarantor is paid in full, then and in such event such payment or distribution shall be held in trust by any such Holder for the holders of Senior Indebtedness of such Guarantor, and if such fact shall, at or prior to the time of such payment or distribution, have been made known to the Trustee, shall be held by the Trustee in a separate account, and shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of such Guarantor for application to the payment of all Senior Indebtedness of such Guarantor remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of such Guarantor. The consolidation of any Guarantor with, or the merger of any Guarantor into, another Person or the liquidation or dissolution of any Guarantor following the sale, assignment, conveyance or transfer of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article Eight of the Indenture shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshaling of assets and liabilities of such Guarantor for the purposes of this Section 302 if the Person formed by such consolidation or into which such Guarantor is merged or the Person which acquires by sale, assignment, conveyance or transfer such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, sale, assignment, conveyance or transfer, comply with the conditions set forth in Article Eight of the Indenture. Section 303. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. No Guarantor may make any payments in respect of its Guarantee, including any payment in respect of principal of, premium, if any, or interest on the Securities if (i) any Senior Indebtedness of such Guarantor is not paid when due and such -10- 14 default is not cured or waived, (ii) any other event of default on Senior Indebtedness of such Guarantor occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms and such acceleration is not rescinded or (iii) judicial proceedings shall be pending with respect to such default in payment or event of default. During the continuance of any default (other than a default in payment or any other event of default and acceleration as described in the preceding sentence) with respect to any Senior Indebtedness, upon the receipt by the Trustee and any Guarantor of written notice thereof from any holder of such Senior Indebtedness or a representative of such holder (each a "Notifying Holder"), such Guarantor may not during the period (the "Payment Blockage Period") commencing on the date of such receipt of such written notice and ending on the earlier of (i) the date on which such event of default shall have been cured or waived or cease to exist or all obligations of each such Guarantor in respect of such Senior Indebtedness shall have been discharged and (ii) the 179th day after the date of the receipt of such notice, take any action which would be prohibited by the first sentence of this Section if any Senior Indebtedness of such Guarantor had not been paid. Any number of such notices may be given; PROVIDED, HOWEVER, that during any 360-day period the aggregate of all Payment Blockage Periods shall not exceed 179 days and there shall be a period of at least 181 consecutive days in each 360-day period when no Payment Blockage Period is in effect. For all purposes of this Section 303, no default which existed or was continuing on the date of the commencement of any Payment Blockage Period and was known to a Notifying Holder shall be, or be made, the basis for the commencement of a second Payment Blockage Period by the Notifying Holder, whether or not within a period of 360 consecutive days, unless such default shall have been cured or waived for a period of not less than 90 consecutive days. In the event that, notwithstanding the foregoing, any Guarantor shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, then and in such event such payment shall be held in trust by any such Holder for the holders of Senior Indebtedness of such Guarantor, and if such fact shall, at or prior to the time of such payment, have been made known to the Trustee, shall be held by the Trustee in a separate account, and shall be paid over and delivered forthwith to such Guarantor. The provisions of this Section shall not apply to any payment with respect to which Section 302 would be applicable. Section 304. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this Article or elsewhere in this Indenture or in any Guarantee or any Securities shall prevent (a) any Guarantor, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshaling of assets and liabilities of such Guarantor referred to in Section 302 or under the conditions described in Section 303, -11- 15 from making payments at any time under its Guarantee, including of principal of, premium, if any, or interest on the Securities or (b) the application by the Trustee of any money deposited with it hereunder to the payment of or on account of the principal of or interest on the Securities or the retention of such payment by the Holders, if, at the time of such application by the Trustee, it did not have written notice as provided in Section 309, of any event prohibiting such application. Section 305. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS. Subject to the payment in full of all Senior Indebtedness of each Guarantor, the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Indebtedness of such Guarantor pursuant to the provisions of this Article to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness of such Guarantor until the principal of and interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to which the holders of the Senior Indebtedness of any Guarantor or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among such Guarantor, its creditors other than holders of its Senior Indebtedness and the Holders of the Securities, be deemed to be a payment or distribution by such Guarantor to or on account of the Senior Indebtedness of such Guarantor. Section 306. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in the Indenture or in the Securities is intended to or shall (a) impair, as among any Guarantor, its creditors and the Holders of the Securities, the obligation of such Guarantor, which is absolute and unconditional (and which, subject to the rights under this Article of the holders of Senior Indebtedness of such Guarantor, is intended to rank equally with all other general obligations of such Guarantor), to pay to the Holders of the Securities the principal of (and premium, if any) and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against any Guarantor of the Holders of the Securities and creditors of such Guarantor other than the holders of Senior Indebtedness of such Guarantor; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under the Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness to receive cash, property and securities otherwise payable or deliverable to the Trustee or such Holder. -12- 16 Section 307. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate, as between the Holders and the holders of Senior Indebtedness, the subordination provided for in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes. Section 308. NO WAIVER OF SUBORDINATION PROVISIONS. No right of any present or future holder of any Senior Indebtedness of any Guarantor to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such Guarantor or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by such Guarantor with the terms, provisions and covenants of the Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article or the obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any Person liable in any manner for the collection of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights against the Company and any other Person. Section 309. NOTICE TO TRUSTEE. Each Guarantor shall give prompt written notice to the Trustee of any fact known to such Guarantor which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of the Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from any Guarantor, any Holder, any Paying Agent, any holder of any class of Senior Indebtedness or any Notifying Holder, who shall have been certified by any Guarantor or otherwise established to the reasonable satisfaction of the Trustee to be such holder, or from any trustee therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 601 of the Indenture, shall be -13- 17 entitled in all respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall not have received the notice provided for in this Section at least 2 Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (or premium, if any) or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within 2 Business Days prior to such date. Subject to the provisions of Section 601 of the Indenture, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 310. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT. Upon any payment or distribution of assets of any guarantor referred to in this Article, the Trustee, subject to the provisions of Section 601 of the Indenture, and the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the Person entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other Indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. Section 311. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall in good faith -14- 18 mistakenly pay over or distribute to Holders of Securities or to any Guarantor or to any other Person cash, property or securities to which any holders of Senior Indebtedness of such Guarantor shall be entitled by virtue of this Article or otherwise. Section 312. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS.. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 607 of the Indenture. Section 313. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; PROVIDED, HOWEVER, that this Section 313 shall not apply to the Company or any affiliate of the Company if it or such Affiliate acts as Paying Agent. Section 314. AUTHORIZATION TO FILE CLAIMS; REINSTATEMENT OF SUBORDINATION. (a) Each Notifying Holder is hereby irrevocably authorized and empowered (in its own name or in the name of the Holders or the Trustee or otherwise), but shall have no obligation, to file claims and proofs of claim in respect of the Securities in proceedings referred to in Section 302 in the event such claims or proofs of claim have not been filed prior to 30 days before such filings would be barred. (b) The provisions of this Article Three shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any obligations in respect of any Senior Indebtedness is rescinded or must otherwise be returned by any holder of such Senior Indebtedness or any other Lender under any Bank Agreement upon the insolvency, bankruptcy or reorganization of any Guarantor, all as though such payment had not been made, PROVIDED, HOWEVER, that this paragraph (b) shall only apply to payments which had been so rescinded or required to be returned as a result of a determination that such payment was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or fraudulent transfer under Federal or State law. -15- 19 ARTICLE FOUR ------------ MISCELLANEOUS Section 401. MISCELLANEOUS. (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this Seventh Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Seventh 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 Seventh Supplemental Indenture. (c) Each of the Company and the Trustee makes and reaffirms as of the date of execution of this Seventh Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (d) All covenants and agreements in this Seventh Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) In case any provisions in this Seventh 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. (f) Nothing in this Seventh 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. (g) 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 Seventh 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 Seventh Supplemental Indenture as so modified or excluded, as the case may be. (h) This Seventh Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. -16- 20 (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) All provisions of this Seventh Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Seventh 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. -17- 21 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. -18- 22 Attest: RICHIE'S, INC., as Guarantor of the Securities By: /s/ Keith C. Larson - ------------------------- ---------------------------------------- Name: Keith C. Larson Title: Vice President Secretary -19- 23 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 -20- 24 Attest: HARRIS TRUST AND SAVINGS BANK, as Trustee By: - ----------------------------- ------------------------------------------ Assistant Secretary Name: Title: -21- 25 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 ____________ 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. ------------------------ -22- 26 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. ------------------------ -23- 27 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/she is a _____________ of Harris Trust and Savings Bank, one of the corporations described in and which executed the foregoing instrument; that he/she 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/she signed his name thereto by like authority. ------------------------ -24- 28 SCHEDULE I Guarantors ---------- Name of Guarantor State of Incorporation/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 Merksamer Jewelers, Inc. California Roundup Co. Washington JH Properties, Inc. Washington -25- 29 Name of Guarantor State of Incorporation/organization - ----------------- ----------------------------------- 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 -26- EX-4.10 11 EXHIBIT 4.10 1 Exhibit 4.10 ================================================================================ FRED MEYER, INC., and certain Guarantors TO THE FIRST NATIONAL BANK OF CHICAGO Trustee ---------- SECOND SUPPLEMENTAL INDENTURE Dated as of July 30, 1999 TO INDENTURE Dated as of March 11, 1998 ---------- $250,000,000 7.150% Notes due March 1, 2003 $750,000,000 7.375% Notes due March 1, 2005 $750,000,000 7.450% Notes due March 1, 2008 ================================================================================ 2 TABLE OF CONTENTS ARTICLE ONE DEFINITIONS Section 101. Definitions..................................................... 2 ARTICLE TWO ADDITIONAL GUARANTEE Section 201. ADDITIONAL GUARANTEE............................................ 3 Section 202. WAIVER OF DEMAND................................................ 4 Section 203. ADDITIONAL GUARANTEE OF PAYMENT................................. 4 Section 204. NO DISCHARGE OR DIMINISHMENT OF ADDITIONAL GUARANTEE............ 4 Section 205. DEFENSES OF COMPANY WAIVED...................................... 4 Section 206. CONTINUED EFFECTIVENESS......................................... 5 Section 207. SUBROGATION..................................................... 5 Section 208. INFORMATION..................................................... 6 Section 209. SUBORDINATION................................................... 6 Section 210. TERMINATION..................................................... 6 Section 211. ADDITIONAL GUARANTEES OF OTHER INDEBTEDNESS..................... 7 Section 212. ADDITIONAL GUARANTORS........................................... 7 Section 213. LIMITATION OF ADDITIONAL GUARANTOR'S LIABILITY.................. 7 Section 214. CONTRIBUTION FROM OTHER ADDITIONAL GUARANTORS................... 7 Section 215. NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY................ 8 Section 216. Dealing with the Company and Others............................. 8 -i- 3 ARTICLE THREE MISCELLANEOUS Section 301. MISCELLANEOUS................................................... 9 -ii- 4 SECOND SUPPLEMENTAL INDENTURE, dated as of July 30, 1999 (this "Second Supplemental Indenture"), among Fred Meyer, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company") having its principal office at 3800 SE 22nd Avenue, Portland, Oregon 97202 each of the guarantors signatory hereto as set forth on the signature pages and Schedule I (collectively, the "Pre-Existing Guarantors"), each of the additional guarantors signatory hereto as set forth on the signature pages and Schedule II (collectively, the "Additional Guarantors" and collectively with the Pre-Existing Guarantors, the "Guarantors"), and First National Bank of Chicago, a national banking association, 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 March 11, 1998 (as amended and supplemented, the "Indenture") providing for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness (herein and therein called the "Securities"), to be issued in one or more series as in the Indenture provided. The Indenture has been supplemented by the First Supplemental Indenture, dated as of March 11, 1998 (the "First Supplemental Indenture"), providing for the issuance of the $250,000,000 7.150% Notes due March 1, 2003, the $750,000,000 7.375% Notes due March 1, 2005, and the $750,000,000 7.450% Notes due March 1, 2008 (collectively, the "Securities"). Each of the Additional Guarantors has duly authorized the issuance of a guarantee of the Securities, as set forth herein, and to provide therefor, each of the Additional Guarantors has duly authorized the execution and delivery of this Second Supplemental Indenture. Section 901(10) of the Indenture provides that, without the consent of any Holders, the Company, when authorized by a Board Resolution, the Guarantors 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, the Securities, or any Guarantee provided that such action shall not adversely affect the rights of the Holders of Securities of any series in any material respect. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Second Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities. All things necessary to make this Second Supplemental Indenture a valid agreement of the Company and each of the Guarantors, and a valid amendment of, and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE DEFINITIONS Section 101. DEFINITIONS. 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. (4) "Additional Guarantee" has the meaning specified in Section 201. (5) "Additional Guaranteed Obligations" has the meaning specified in Section 201. (6) "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 Kroger Co. or the Company. and outstanding on the date of this Second Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. -2- 6 ARTICLE TWO ADDITIONAL GUARANTEE Section 201. ADDITIONAL GUARANTEE. Each Additional Guarantor hereby jointly and severally fully and unconditionally guarantees (each an "Additional 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 Additional Guarantor to the Holders or the Trustee hereunder or thereunder, 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 Additional Guarantor to the Holders of or the Trustee under the Indenture or the Securities hereunder (including fees, expenses or others) (collectively, the "Additional Guaranteed 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 Additional Guaranteed 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 Additional Guaranteed Obligations, for whatever reason, each Additional 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 Additional Guarantee, and shall entitle the Holders of Securities to accelerate the Additional Guaranteed Obligations of the Additional Guarantor hereunder in the same manner and to the same extent as the Additional Guaranteed Obligations of the Company. Each Additional 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 an Additional 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 Additional 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 Additional Guaranteed Obligations may be accelerated as provided in Article Five of the Indenture for the purposes of its Additional Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Additional Guaranteed Obligations, and (b) in the event of any acceleration of such Additional -3- 7 Guaranteed Obligations as provided in Article Five of the Indenture, such Additional Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Additional Guarantor for the purposes of its Additional Guarantee. Section 202. WAIVER OF DEMAND. To the fullest extent permitted by applicable law, each of the Additional Guarantors waives presentment to, demand of payment from and protest of any of the Additional Guaranteed Obligations, and also waives notice of acceptance of its Additional Guarantee and notice of protest for nonpayment. Section 203. ADDITIONAL GUARANTEE OF PAYMENT. Each of the Additional Guarantors further agrees that its Additional 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 Additional Guaranteed Obligations. Section 204. NO DISCHARGE OR DIMINISHMENT OF ADDITIONAL GUARANTEE. Subject to Section 210 of this Second Supplemental Indenture, the obligations of each of the Additional 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 Additional Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Additional Guaranteed 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 Additional Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each of the Additional 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 Additional Guaranteed Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Additional Guarantor or that would otherwise operate as a discharge of any Additional Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Additional Guaranteed Obligations). Section 205. DEFENSES OF COMPANY WAIVED. To the extent permitted by applicable law, each of the Additional Guarantors waives any defense based on or arising out of any defense of the Company or any other Guarantor or the unenforceability of the Additional Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the -4- 8 Company, other than final and indefeasible payment in full in cash of the Additional Guaranteed Obligations. Each of the Additional 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 Additional Guarantors against the Company or any security. Section 206. CONTINUED EFFECTIVENESS. Subject to Section 210 of this Second Supplemental Indenture, each of the Additional Guarantors further agrees that its Additional 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 Additional Guaranteed 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. Section 207. SUBROGATION. In furtherance of the foregoing and not in limitation of any other right of each of the Additional Guarantors by virtue hereof, upon the failure of the Company to pay any Additional Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each of the Additional 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 Additional Guaranteed Obligations, and thereupon the Holders shall, assign (except to the extent that such assignment would render an Additional 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 Additional Guaranteed Obligations owed to it and paid by such Additional Guarantor pursuant to this Additional Guarantee to such Additional Guarantor, such assignment to be PRO RATA to the extent the Additional Guaranteed Obligations in question were discharged by such Additional Guarantor, or make such other disposition thereof as such Additional Guarantor shall direct (all without recourse to the Holders, and without any representation or warranty by the Holders). If (a) an Additional Guarantor shall make payment to the Holders of all or any part of the Additional Guaranteed Obligations and (b) all the Additional Guaranteed Obligations and all other amounts payable under this Second Supplemental Indenture shall be indefeasibly paid in full, the Trustee will, at such Additional Guarantor's request, execute and deliver to such Additional Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Additional Guarantor of an interest in the Additional Guaranteed Obligations resulting from such payment by such Additional Guarantor. -5- 9 Section 208. INFORMATION. Each of the Additional 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 Additional Guaranteed Obligations and the nature, scope and extent of the risks that each of the Additional Guarantors assumes and incurs hereunder, and agrees that the Trustee and the Holders of the Securities will have no duty to advise the Additional Guarantors of information known to it or any of them regarding such circumstances or risks. Section 209. SUBORDINATION. Upon payment by any Additional Guarantor of any sums to the Holders, as provided above, all rights of such Additional 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 Additional Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Additional Guarantor may have pursuant to this Second Supplemental Indenture is subject to Section 207 hereof. Section 210. TERMINATION. An Additional 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 Additional 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 Ratings Services: (a) upon any sale, exchange, transfer or other disposition (by merger or otherwise) of all of the Capital Stock of an Additional Guarantor or all, or substantially all, of the assets of such Additional Guarantor, which sale or other disposition is otherwise in compliance with the terms of the Indenture; provided, however, that such Additional Guarantor shall not be released and discharged from its obligations under this Second Supplemental Indenture and its Additional Guarantee if, upon consummation of such sale, exchange, transfer or other disposition (by merger or otherwise), such Additional 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 Additional Guarantor not so released will remain -6- 10 liable for the full amount of the principal of, premium, if any, and interest on the Securities provided in the Indenture and its Guarantee. Section 211. ADDITIONAL GUARANTEES OF OTHER INDEBTEDNESS. As long as the Securities are guaranteed by the Additional 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 210 hereof. Section 212. 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 an Additional Guarantor under this Second Supplemental Indenture, if it has not already done so or unless the Additional Guarantor is 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 213. LIMITATION OF ADDITIONAL GUARANTOR'S LIABILITY. Each Additional Guarantor, other than The Kroger Co., and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Additional Guarantee by such Additional 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 Additional Guarantor hereby irrevocably agree that the obligations of such Additional Guarantor under this Second Supplemental Indenture and its Additional Guarantee shall be limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Additional Guarantor, and after giving effect to any collections from or payments made by or on behalf of, any other Additional Guarantor in respect of the obligations of such Additional Guarantor under its Additional Guarantee or pursuant to its contribution obligations under this Second Supplemental Indenture, will result in the obligations of such Additional Guarantor under its Additional Guarantee not constituting such fraudulent transfer or conveyance. Section 214. CONTRIBUTION FROM OTHER ADDITIONAL GUARANTORS. Each Additional Guarantor that makes a payment or distribution under its Additional Guarantee shall be entitled to a contribution from each other Additional Guarantor in a pro rata amount based on the net assets of each Additional Guarantor, -7- 11 determined in accordance with generally accepted accounting principles in effect in the United States of America as of the date hereof. Section 215. 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 Additional Guaranteed 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 Additional Guarantors of their liabilities and obligations under their Additional Guarantee. Section 216. 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 Additional Guarantor hereunder and without the consent of or notice to any Additional Guarantor, may: (a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (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 Additional Guaranteed 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 Additional Guaranteed 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. -8- 12 ARTICLE THREE MISCELLANEOUS Section 301. 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) Each of the Company, the Pre-Existing Guarantors 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. (d) All covenants and agreements in this Second Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) 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. (f) 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. (g) 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. (h) This Second Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. -9- 13 (j) 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. -10- 14 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: FRED MEYER INC. /s/ Bruce M. Gack By: (Paul W. Heldman) - ---------------------------------- --------------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest*: Each of the Guarantors Listed on Schedule I hereto, as Guarantor of the Securities Bruce M. Gack By*: (Paul W. Heldman) - ---------------------------------- -------------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest: RICHIE'S INC., as Guarantor of the Securities By: (Keith C. Larson) - ---------------------------------- --------------------------------------- Name: Keith C. Larson Title: Vice President Attest: THE KROGER CO., as Additional Guarantor of the Securities /s/ Bruce M. Gack By: (Paul W. Heldman) - ---------------------------------- --------------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Senior Vice President - ---------------------------------- *Signing as duly authorized officer for each such Guarantor. -11- 15 Attest:** Each of the Additional Guarantors Listed on Schedule II hereto, as Additional Guarantor of the Securities /s/ Bruce M. Gack By**: (Paul W. Heldman) - ---------------------------------- ------------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest: HENPIL, INC., as Additional Guarantor of the Securities WYDIV, INC., as Additional Guarantor of the Securities By: (Steven McMillan) - ---------------------------------- --------------------------------------- Name: Steven McMillan Title: Vice President - ---------------------------------- **Signing as duly authorized officer for each such Additional Guarantor. -12- 16 Attest: VINE COURT ASSURANCE INCORPORATED, as Additional Guarantor of the Securities (Beth Van Oflen) By: (Bruce M. Gack) - ---------------------------------- --------------------------------------- Beth Van Oflen, Assistant Treasurer Name: Bruce M. Gack Title: Vice President Attest: KROGER DEDICATED LOGISTICS CO., as Additional Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - ---------------------------------- --------------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: President -13- 17 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Paul W. Heldman, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Ralphe Grocery Company and Vice President of each of the Guarantors Listed on Schedule I hereto and Vice President of each of the Additional Guarantors listed on Schedule II hereto, and Senior Vice President of The Kroger Co., 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. (Brenda R. Andes) ---------------------------------------- Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 STATE OF TEXAS ) ) ss.: COUNTY OF HARRIS ) On the 5th day of August, 1999, before me personally came Steven McMillan, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Henpil, Inc. and Wydiv, Inc., corporations described in and which executed the foregoing instrument; that he knows the seal 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. (Barbara Edwards) ---------------------------------------- Notary Public Barbara Edwards [Notarial Seal] Notary Public, State of Texas My Commission Expires October 20, 2001 18 STATE OF TEXAS ) ) ss.: COUNTY OF EL PASO ) On the 30th day of July, 1999, before me personally came Keith C. Larson, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Mercedes Flores) ---------------------------------------- Notary Public Mercedes Flores [Notarial Seal] Notary Public, State of Texas My Commission Expires 10/23/99 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Bruce M. Gack, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Brenda R. Andes) ---------------------------------------- Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 19 SCHEDULE I GUARANTORS Name of Guarantor State of Organization - ----------------- --------------------- CB&S Advertising Agency, Inc. Oregon Distribution Trucking Company Oregon FM Holding Corporation Delaware FM Retail Services, Inc. Washington FM, Inc. Utah 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 JH Properties, Inc. Washington Merksamer Jewelers, Inc. California Roundup Co. Washington Compare, Inc. Delaware Saint Lawrence Holding Company Delaware 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 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 QFC Sub, Inc. Washington Quality Food Holdings, Inc. Delaware Quality Food, Inc. Delaware Second Story, Inc. Washington Food 4 Less Holdings, Inc. 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 20 Name of Guarantor State of Organization - ----------------- --------------------- Food 4 Less GM, Inc. California Food 4 Less Merchandising, Inc. California Food 4 Less of California, Inc. California Food 4 Less of Southern California, Inc. Delaware Ralphs Grocery Company Delaware 21 SCHEDULE II ADDITIONAL GUARANTORS Name of Additional 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 EX-4.11 12 EXHIBIT 4.11 1 EXHIBIT 4.11 ---------------------------------------------------------------------- RALPHS GROCERY COMPANY and certain Guarantors TO NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION Trustee ---------- THIRD SUPPLEMENTAL INDENTURE Dated as of July 30, 1999 TO INDENTURE Dated as of June 1, 1995 ---------- $520,326,000 10.45% Senior Notes due 2004 ---------------------------------------------------------------------- 2 TABLE OF CONTENTS ARTICLE ONE DEFINITIONS
Section 101. Definitions....................................................2 -----------
ARTICLE TWO ADDITIONAL GUARANTEE Section 201. Additional Guarantee...........................................3 -------------------- Section 202. Waiver of Demand...............................................4 ---------------- Section 203. Additional Guarantee of Payment................................4 ------------------------------- Section 204. No Discharge or Diminishment of Additional Guarantee...........4 ---------------------------------------------------- Section 205. Defenses of Company Waived.....................................5 -------------------------- Section 206. Continued Effectiveness........................................5 ----------------------- Section 207. Subrogation....................................................5 ----------- Section 208. Information....................................................6 ----------- Section 209. Subordination..................................................6 ------------- Section 210. Termination....................................................6 ----------- Section 211. Additional Guarantees of Other Indebtedness....................7 ------------------------------------------- Section 212. Additional Guarantors..........................................7 --------------------- Section 213. Limitation of Additional Guarantor's Liability.................7 ---------------------------------------------- Section 214. Contribution from Other Guarantors.............................8 ---------------------------------- Section 215. No Obligation to Take Action Against the Company...............8 ------------------------------------------------ Section 216. Dealing with the Company and Others............................8 -----------------------------------
ARTICLE THREE -i- 3
MISCELLANEOUS Section 301. Miscellaneous..................................................9 -------------
-ii- 4 THIRD SUPPLEMENTAL INDENTURE, dated as of July 30, 1999 (this "Third Supplemental Indenture"), among Ralphs Grocery Company, a Delaware corporation having its principal office at 1100 West Artesia Boulevard, Compton, California 90220 (herein called the "Company"), each of the guarantors signatory hereto as set forth on the signature pages and on Schedule I (collectively, the "Guarantors"), each of the additional guarantors signatory hereto as set forth on the signature pages and Schedule II (collectively, the "Additional Guarantors"), and Norwest Bank Minnesota, a national banking association, 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 1, 1995 (as amended and supplemented, the "Indenture") providing for the issuance of the $520,326,000 10.45% Senior Notes Due 2004 (the "Securities"). The Indenture has been supplemented by the First Supplemental Indenture, dated as of June 14, 1995 (the "First Supplemental Indenture") and the Second Supplemental Indenture dated as of February 26, 1998 (the "Second Supplemental Indenture"). Each of the Additional Guarantors has duly authorized the issuance of a guarantee of the Securities, as set forth herein, and to provide therefor, each of the Additional Guarantors has duly authorized the execution and delivery of this Third Supplemental Indenture. Section 9.01(4) of the Indenture provides that, without the notice to and consent of any Holders, the Company and the Guarantors, when authorized by a Board Resolution, and the Trustee, together, may amend or supplement the Indenture to make any other change that does not adversely affect the rights of any Security holders in any material respect. The Company, each of the Guarantors and each of the Additional Guarantors, pursuant to the foregoing authority, propose in and by this Third Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities. All things necessary to make this Third Supplemental Indenture a valid agreement of the Company, each of the Guarantors and each of the Additional Guarantors, and a valid amendment of, and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company, each of the Guarantors and each of the Additional Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE ----------- DEFINITIONS Section 101. Definitions. ------------ For all purposes of this Third 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 Third Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Third Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this Third Supplemental Indenture. (4) "Additional Guarantee" has the meaning specified in Section 201. (5) "Additional Guaranteed Obligations" has the meaning specified in Section 201. (6) "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 Kroger Co. or Fred Meyer, Inc. and outstanding on the date of this Third Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. -2- 6 ARTICLE TWO ----------- ADDITIONAL GUARANTEE Section 201. Additional Guarantee. --------------------- Each Additional Guarantor hereby jointly and severally fully and unconditionally guarantees (each an "Additional 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 Additional Guarantor to the Holders or the Trustee hereunder or thereunder, 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 Additional Guarantor to the Holders of or the Trustee under the Indenture or the Securities hereunder (including fees, expenses or others) (collectively, the "Guaranteed 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 Guaranteed 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 Guaranteed Obligations, for whatever reason, each Additional 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 Additional Guarantee, and shall entitle the Holders of Securities to accelerate the Guaranteed Obligations of the Additional Guarantor hereunder in the same manner and to the same extent as the Guaranteed Obligations of the Company. Each Additional 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 Additional Guarantor, the recovery of any judgment against the Company, any action to enforce the same, whether or not an Additional Guarantee is affixed to any particular Security, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of an Additional Guarantor. Each Additional 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 Guaranteed Obligations may be accelerated as provided in Article Six of the Indenture -3- 7 for the purposes of its Additional Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Six of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Additional Guarantor for the purposes of its Additional Guarantee. Section 202. Waiver of Demand. ---------------- To the fullest extent permitted by applicable law, each of the Additional Guarantors waives presentment to, demand of payment from and protest of any of the Guaranteed Obligations, and also waives notice of acceptance of its Additional Guarantee and notice of protest for nonpayment. Section 203. Additional Guarantee of Payment. ------------------------------- Each of the Additional Guarantors further agrees that its Additional Guarantee constitutes an Additional 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 Guaranteed Obligations. Section 204. No Discharge or Diminishment of Additional Guarantee. ---------------------------------------------------- Subject to Section 210 of this Third Supplemental Indenture, the obligations of each of the Additional 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 Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed 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 Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each of the Additional 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 Additional 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 Guaranteed Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Additional Guarantor or that would otherwise operate as a discharge of any Additional Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Guaranteed Obligations). -4- 8 Section 205. Defenses of Company Waived. -------------------------- To the extent permitted by applicable law, each of the Additional Guarantors waives any defense based on or arising out of any defense of the Company or any other Additional Guarantor or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Company, other than final and indefeasible payment in full in cash of the Guaranteed Obligations. Each of the Additional 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 Additional Guarantors against the Company or any security. Section 206. Continued Effectiveness. ----------------------- Subject to Section 210 of this Third Supplemental Indenture, each of the Additional Guarantors further agrees that its Additional 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 Guaranteed 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. Section 207. Subrogation. ----------- In furtherance of the foregoing and not in limitation of any other right of each of the Additional Guarantors by virtue hereof, upon the failure of the Company to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each of the Additional 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 Guaranteed Obligations, and thereupon the Holders shall, assign (except to the extent that such assignment would render an Additional 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 Guaranteed Obligations owed to it and paid by such Additional Guarantor pursuant to this Additional Guarantee to such Additional Guarantor, such assignment to be PRO RATA to the extent the Guaranteed Obligations in question were discharged by such Additional Guarantor, or make such other disposition thereof as such Additional Guarantor shall direct (all without recourse to the Holders, and without any representation or warranty by the Holders). If (a) an Additional Guarantor shall make payment to the Holders of all or any part of the Guaranteed Obligations and (b) all the Guaranteed Obligations and all other amounts payable under this Third Supplemental Indenture shall be indefeasibly paid in full, the Trustee will, at such Guarantor's request, execute and deliver to such Additional Guarantor appropriate -5- 9 documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Additional Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Additional Guarantor. Section 208. Information. ----------- Each of the Additional 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 Guaranteed Obligations and the nature, scope and extent of the risks that each of the Additional Guarantors assumes and incurs hereunder, and agrees that the Trustee and the Holders of the Securities will have no duty to advise the Additional Guarantors of information known to it or any of them regarding such circumstances or risks. Section 209. Subordination. ------------- Upon payment by any Additional Guarantor of any sums to the Holders, as provided above, all rights of such Additional 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 Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Additional Guarantor may have pursuant to this Third Supplemental Indenture is subject to Section 207 hereof. Section 210. Termination. ----------- An Additional Guarantor shall, upon the occurrence of either of the following events, be automatically and unconditionally released and discharged from all obligations under this Third Supplemental Indenture and its Additional 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 & Poor's Ratings Services: (a) upon any sale, exchange, transfer or other disposition (by merger or otherwise) of all of the Capital Stock of an Additional Guarantor or all, or substantially all, of the assets of such Additional Guarantor, which sale or other disposition is otherwise in compliance with the terms of the Indenture; provided, however, that such Additional Guarantor shall not be released and discharged from its obligations under this Third Supplemental Indenture and its Additional Guarantee if, upon consummation of such sale, exchange, transfer or other disposition (by merger or otherwise), such Additional Guarantor remains or becomes an Additional Guarantor under any Credit Facility; or -6- 10 (b) at the request of the Company, at any time 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 Additional Guarantor not so released will remain liable for the full amount of the principal of, premium, if any, and interest on the Securities provided in this Third Supplemental Indenture and its Guarantee. Section 211. Additional Guarantees of Other Indebtedness. ------------------------------------------- As long as the Securities are guaranteed by the Additional 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 210 hereof. Section 212. 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 an Additional Guarantor under this Third Supplemental Indenture, if it has not already done so or unless the Guarantor is 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 213. Limitation of Additional Guarantor's Liability. ---------------------------------------------- Each Additional Guarantor, other than The Kroger Co., and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Additional Guarantee by such Additional 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 Additional Guarantor hereby irrevocably agree that the obligations of such Additional Guarantor under this Third Supplemental Indenture and its Additional Guarantee shall be limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Additional Guarantor, and after giving effect to any collections from or payments made by or on behalf of, any other Additional Guarantor in respect of the obligations of such Additional Guarantor under its Additional Guarantee or pursuant to its contribution obligations under this Third Supplemental Indenture, will result in the -7- 11 obligations of such Additional Guarantor under its Additional Guarantee not constituting such fraudulent transfer or conveyance. Section 214. Contribution from Other Additional Guarantors. --------------------------------------------- Each Additional Guarantor that makes a payment or distribution under its Additional Guarantee shall be entitled to a contribution from each other Additional Guarantor in a pro rata amount based on the net assets of each Additional Guarantor, determined in accordance with generally accepted accounting principles in effect in the United States of America as of the date hereof. Section 215. 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 Guaranteed 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 Additional Guarantee. Section 216. 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 Additional Guarantor hereunder and without the consent of or notice to any Additional Guarantor, may: (a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (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 Guaranteed 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 Guaranteed 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 -8- 12 (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. ARTICLE THREE ------------- MISCELLANEOUS Section 301. Miscellaneous. ------------- (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this Third Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Third 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 Third Supplemental Indenture. (c) Each of the Company, the Guarantors and the Trustee makes and reaffirms as of the date of execution of this Third Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (d) All covenants and agreements in this Third Supplemental Indenture by the Company, the Guarantors, the Additional Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) In case any provisions in this Third 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. (f) Nothing in this Third 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. (g) 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 Third 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 Third Supplemental Indenture as so modified or excluded, as the case may be. -9- 13 (h) This Third Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) All provisions of this Third Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Third 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. -10- 14 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. RALPHS GROCERY COMPANY Attest: Bruce M. Gack By: (Paul W. Heldman) - ---------------------------------- ---------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest*: Each of the Guarantors Listed on Schedule I hereto, as Guarantor of the Securities Bruce M. Gack By: (Paul W. Heldman) - ---------------------------------- ---------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest: THE KROGER CO., as Additional Guarantor of the Securities Bruce M. Gack By: (Paul W. Heldman) - ---------------------------------- ---------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest**: Each of the Additional Guarantors Listed on Schedule II hereto, as Additional Guarantor of the Securities Bruce M. Gack By: (Paul W. Heldman) - ---------------------------------- ---------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President
* Signing as duly authorized officer for each such Guarantor. ** Signing as duly authorized officer for each such Additional Guarantor. -11- 15 Attest: HENPIL, INC., as Additional Guarantor of the Securities WYDIV, INC. , as Additional Guarantor of the Securities By: (Steven McMillan) - --------------------------------- ----------------------------------- Name: Steven McMillan Title: Vice President Attest: RICHIE'S INC., as Additional Guarantor of the Securities By: (Keith C. Larson) - --------------------------------- ----------------------------------- Name: Keith C. Larson Title: Vice President Attest: VINE COURT ASSURANCE INCORPORATED, as Additional Guarantor of the Securities (Beth Van Oflen) By: (Bruce M. Gack) - --------------------------------- ----------------------------------- Beth Van Oflen, Assistant Treasurer Name: Bruce M. Gack Title: Vice President Attest: KROGER DEDICATED LOGISTICS CO., as Additional Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - --------------------------------- ----------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: President
-12- 16 Attest: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee ____________________________ By: ______________________________ Name: Title: -13- 17 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Paul W. Heldman, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Ralphe Grocery Company and Vice President of each of the Guarantors listed on Schedule I hereto and Vice President of each of the Additional Guarantors listed on Schedule II hereto, and Senior Vice President of The Kroger Co., 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. (Brenda R. Andes) ---------------------------- Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 26, 2003 STATE OF TEXAS ) ) ss.: COUNTY OF HARRIS ) On the 5th day of August, 1999, before me personally came Steven McMillan, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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. (Barbara Edwards) ---------------------------- Notary Public Barbara Edwards [Notarial Seal] Notary Public, State of Texas My Commission Expires October 19, 2001 18 STATE OF TEXAS ) ) ss.: COUNTY OF EL PASO ) On the 30th day of July, 1999, before me personally came Keith C. Larson, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Mercedes Flores) ---------------------------- Notary Public Mercedes Flores [Notary Seal] Notary Public, State of Texas My Commission Expires 10/23/99 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Bruce M. Gack, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Brenda R. Andes) ---------------------------------- Notary Public Brenda R. Andes [Notary Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 19 STATE OF __________ ) ) ss.: COUNTY OF ________ ) On the ____ day of July, 1999, before me personally came _________________, to me known, who, being by me duly sworn, did depose and say that he/she is a _____________ of Norwest Bank Minnesota, National Association, one of the corporations described in and which executed the foregoing instrument; that he/she 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/she signed his/her name thereto by like authority. ____________________________ 20 SCHEDULE I Guarantors ---------- Name of Guarantor State of Organization - ----------------- --------------------- 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 GM, Inc. California Food 4 Less Merchandising, Inc. California Food 4 Less of California, Inc. California Food 4 Less of Southern California, Inc. Delaware 21 SCHEDULE II Additional Guarantors --------------------- Name of Additional 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 22 Name of Additional 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 EX-4.12 13 EXHIBIT 4.12 1 Exhibit 4.12 ================================================================================ RALPHS GROCERY COMPANY and certain Guarantors TO UNITED STATES TRUST COMPANY OF NEW YORK Trustee ---------- FOURTH SUPPLEMENTAL INDENTURE Dated as of July 30, 1999 TO INDENTURE Dated as of March 30, 1993 ---------- $150,000,000 9% Senior Subordinated Notes due 2003 and 9% Series B Senior Subordinated Notes due 2003 ================================================================================ 2 TABLE OF CONTENTS -----------------
ARTICLE ONE ----------- DEFINITIONS ----------- Section 101. DEFINITIONS.................................................................................2 ARTICLE TWO ----------- GUARANTEE --------- Section 201. GUARANTEE...................................................................................3 Section 202. WAIVER OF DEMAND............................................................................4 Section 203. GUARANTEE OF PAYMENT........................................................................4 Section 204. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE...................................................5 Section 205. DEFENSES OF COMPANY WAIVED..................................................................5 Section 206. CONTINUED EFFECTIVENESS.....................................................................5 Section 207. SUBROGATION.................................................................................5 Section 208. INFORMATION.................................................................................6 Section 209. SUBORDINATION...............................................................................6 Section 210. TERMINATION.................................................................................7 Section 211. GUARANTEES OF OTHER INDEBTEDNESS............................................................7 Section 212. GUARANTORS..................................................................................7 Section 213. LIMITATION OF GUARANTOR'S LIABILITY.........................................................8 Section 214. CONTRIBUTION FROM OTHER GUARANTORS..........................................................8 Section 215. NO OBLIGATION TO TAKE ACTION AGAINST THE COMPANY............................................8 Section 216. DEALING WITH THE COMPANY AND OTHERS.........................................................8 Section 217. SUBORDINATION OF GUARANTEE..................................................................9
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PAGE ---- ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS -------------------------------------- Section 301. GUARANTEE OBLIGATIONS SUBORDINATE TO SENIOR INDEBTEDNESS OF GUARANTORS......................9 Section 302. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.............................................10 Section 303. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.............................................11 Section 304. PAYMENT PERMITTED IF NO DEFAULT............................................................12 Section 305. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS....................................12 Section 306. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS................................................13 Section 307. TRUSTEE TO EFFECTUATE SUBORDINATION........................................................13 Section 308. NO WAIVER OF SUBORDINATION PROVISIONS......................................................14 Section 309. NOTICE TO TRUSTEE..........................................................................14 Section 310. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.............................15 Section 311. RIGHTS OF TRUSTEE AS A HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS.....15 Section 312. ARTICLE APPLICABLE TO PAYING AGENTS........................................................16 ARTICLE FOUR ------------ MISCELLANEOUS ------------- Section 401. MISCELLANEOUS..............................................................................16
-ii- 4 FOURTH SUPPLEMENTAL INDENTURE, dated as of July 30, 1999 (this "Fourth Supplemental Indenture"), among Ralphs Grocery Company, a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company"), having its principal office at 1100 West Artesia Boulevard, Compton, California 90220, each of the guarantors signatory hereto as set forth on the signature pages and on Schedule I (collectively, the "Guarantors"), and United States Trust Company of New York, a New York corporation, 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 March 30, 1993 (as amended and supplemented, the "Indenture") providing for the issuance of $150,000,000 aggregate principal amount of the Company's 9% Senior Subordinated Notes due 2003 (the "Initial Securities"). Pursuant to the First Supplemental Indenture dated as of June 23, 1993 (the "First Supplemental Indenture"), between the Company and the Trustee, the Company consummated an exchange offer for the Initial Securities whereby the Company offered to exchange $1,000 principal amount of its 9% Series B Senior Subordinated Notes due 2003 (the "Exchange Securities," and together with the Initial Securities, the "Securities"), for each $1,000 principal amount of its Initial Securities. The Indenture has been supplemented by the First Supplemental Indenture, Second Supplemental Indenture dated as of May 30, 1995 (the "Second Supplemental Indenture") and the Third Supplemental Indenture dated as of June 14, 1995 (the "Third Supplemental Indenture"). 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 Fourth Supplemental Indenture. Section 901(c) 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, in form satisfactory to the Trustee, 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 in any material respect. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Fourth Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities. All things necessary to make this Fourth Supplemental Indenture a valid -1- 5 agreement of the Company and each of the Guarantors, and a valid amendment of, and supplement to the Indenture, have been done. NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE ----------- DEFINITIONS ----------- Section 101. DEFINITIONS. For all purposes of this Fourth 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 Fourth Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Fourth Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this Fourth Supplemental Indenture. (4) "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 Kroger Co. or Fred Meyer, Inc. and outstanding on the date of this Fourth Supplemental Indenture and any refinancing or other restructuring of any such agreement or facility. (5) "Guarantee" has the meaning specified in Section 201. (6) "Guaranteed Obligations" has the meaning specified in Section 201. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. (8) "Obligations" means all obligations for the reimbursement of amounts drawn under any letter of credit or for the payment of principal, premium, interest (including, without limitation, interest whether or not allowed after the filing of a petition initiating -2- 6 any proceeding referred to in Section 501 (6) or (7) of the Indenture at the rate specified in the instrument governing the relevant Indebtedness), penalties, fees, expenses, indemnities or other amounts, now or hereafter existing, with respect to any Indebtedness. (9) "Senior Indebtedness" means, with respect to any Guarantor, the principal of (and premium, if any) and interest on, and all other amounts payable in respect of, (a) all Indebtedness of such Guarantor, whether outstanding on the date of the Indenture or thereafter Incurred, (b) any obligations of such Guarantor under interest rate swaps, caps, collars and similar arrangements, (c) any obligations of such Guarantor under foreign currency hedges entered into in respect of any such Indebtedness or obligation and (d) any amendments, renewals, extensions, modifications, and refundings of any such Indebtedness or obligation, except (i) any Indebtedness or obligation owed to a Subsidiary, (ii) any Indebtedness or obligation which by the terms of the instrument creating or evidencing the same is not superior in right of payment to such Guarantor's Guarantee, (iii) any Indebtedness or obligation which is subordinated or junior in any respect to any other Indebtedness or obligation of such Guarantor, and (iv) any indebtedness or obligation constituting a trade account payable of such Guarantor. Any obligation under any Senior Indebtedness shall continue to constitute Senior Indebtedness despite a determination that the Incurrence of such obligation by a Guarantor was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or transfer under Federal or State Law. ARTICLE TWO ----------- GUARANTEE Section 201. 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, 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 "Guaranteed 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 Guaranteed 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 -3- 7 acceleration or otherwise. If the Company shall fail to pay when due, or to perform, any Guaranteed 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 Guaranteed Obligations of the Guarantor hereunder in the same manner and to the same extent as the Guaranteed 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 Guaranteed Obligations may be accelerated as provided in Article Five of the Indenture for the purposes of its Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Five of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of its Guarantee. Section 202. 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 Guaranteed Obligations, and also waives notice of acceptance of its Guarantee and notice of protest for nonpayment. Section 203. 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 Guaranteed Obligations. -4- 8 Section 204. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. Subject to Section 210 of this Fourth 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 Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations). Section 205. 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 Guaranteed 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 Guaranteed 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 206. CONTINUED EFFECTIVENESS. Subject to Section 210 of this Fourth 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 Guaranteed 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. Section 207. 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 -5- 9 Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed 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 Guaranteed Obligations and (b) all the Guaranteed Obligations and all other amounts payable under this Fourth 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 Guaranteed Obligations resulting from such payment by such Guarantor. Section 208. 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 Guaranteed 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 209. 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 Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Guarantor may have pursuant to this Fourth Supplemental Indenture is subject to Section 207 hereof. -6- 10 Section 210. 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 Fourth 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 Services and Standard & 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 Fourth 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 Fourth Supplemental Indenture and its Guarantee. Section 211. 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 210 hereof. Section 212. 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 Fourth Supplemental Indenture, if it has not already done so or unless the Guarantor is -7- 11 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 213. LIMITATION OF GUARANTOR'S LIABILITY. Each Guarantor, other than The Kroger Co., 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 Fourth 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 Fourth Supplemental Indenture, will result in the obligations of such Guarantor under its Guarantee not constituting such fraudulent transfer or conveyance. Section 214. 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 215. 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 Guaranteed 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 216. 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; -8- 12 (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 Guaranteed 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 Guaranteed 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 217. SUBORDINATION OF GUARANTEE. The obligations of each Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantee and this Indenture are expressly subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness of such Guarantor, to the extent and in the manner provided in Article Three. ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. GUARANTEE OBLIGATIONS SUBORDINATE TO SENIOR INDEBTEDNESS OF GUARANTORS. Each Guarantor covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the indebtedness represented by the Guarantee of such Guarantor, including the obligation of such Guarantor in respect of the payment of the principal of and premium, if any, and interest (including any payments required due to the occurrence of a Change of Control Triggering Event) on each and all of the Securities, is hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness of such Guarantor (including any interest accruing after the occurrence of an Event of Default under Section 501(f) or (g) of the Indenture). -9- 13 Section 302. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to any Guarantor or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of such Guarantor, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of such Guarantor, then and in any such event: (1) the holders of Senior Indebtedness of such Guarantor shall be entitled to receive payment in full of all amounts due or to become due on or in respect of all Senior Indebtedness of such Guarantor, or provision shall be made for such payment in cash or cash equivalents, before the Holders of the Securities are entitled to receive any payment in respect of such Guarantor's Guarantee, including on account of principal of (or premium, if any) or interest on the Securities; and (2) any payment or distribution of assets of such Guarantor of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which the Holders or the Trustee would be entitled but for the provisions of this Article, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of such Guarantor being subordinated to the payment of the Guarantee of such Guarantor (except, so long as the effect of this parenthetical clause is not to cause the Guarantee of such Guarantor to be treated in any case or proceeding or similar event described in Subsection (a), (b) or (c) of this Section 302 as part of the same class of claims as the Senior Indebtedness of such Guarantor or any class of claims on a parity with or senior to the Senior Indebtedness of such Guarantor, for any such payment or distribution (x) authorized by an order or decree giving effect, and stating in such order or decree that effect is given, to the subordination of the Guarantees to the Senior Indebtedness of such Guarantor, and made by a court of competent jurisdiction in a reorganization proceeding under any applicable bankruptcy law, or (y) of securities that (i) are unsecured, (ii) have an Average Life to Stated Maturity and final maturity that are no shorter than the Average Life to Stated Maturity of the Securities and (iii) are subordinated, to at least the same extent as the Guarantees, to the payment of all Senior -10- 14 Indebtedness of such Guarantor then outstanding), shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of Senior Indebtedness of such Guarantor or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness of such Guarantor may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the principal of, and premium, if any, and interest on, and other amounts due on or in connection with, the Senior Indebtedness of such Guarantor to the extent necessary to make payment in full of all Senior Indebtedness of such Guarantor remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness of such Guarantor; and (3) in the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the Holder of any Security shall have received any such payment or distribution of assets of any Guarantor of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of such Guarantor being subordinated to the payment of the Guarantee of such Guarantor, before all Senior Indebtedness of such Guarantor is paid in full or payment thereof provided for, then and in such event such payment or distribution shall be paid over or delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other Person making payment or distribution of assets of such Guarantor for application to the payment of all Senior Indebtedness of such Guarantor remaining unpaid to the extent necessary to pay all Senior Indebtedness of such Guarantor in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness of such Guarantor. Section 303. NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT. (i) In the event of and during the continuation of any default in the payment of principal of (or premium, if any) or interest on any Senior Indebtedness of any Guarantor beyond any applicable grace period with respect thereto, or (ii) in the event that any other event of default with respect to any Senior Indebtedness of any -11- 15 Guarantor shall have occurred and be continuing that permits the holders of such Senior Indebtedness (or a trustee on behalf of such holders) to declare such Senior Indebtedness due and payable prior to the date on which it would otherwise have become due and payable either without further notice or upon the expiration of any grace period applicable to such event of default, and written notice thereof shall have been given to each of such Guarantor and the Trustee by the trustee or representative for, or the holders of at least a majority of the principal amount of the Senior Indebtedness of such Guarantor (the "Payment Notice"), then no payment shall be made by such Guarantor in respect of its Guarantee including on account of the principal of (or premium, if any) or interest on the Securities or on account of the purchase or redemption or other acquisition of Securities until (x) in case of an event of default described in clause (i), unless and until such payment event of default shall have been cured or waived or shall have ceased to exist or the holders of such Senior Indebtedness or their agents have waived the benefits of this Section, or (y) in case of any event of default specified in clause (ii), until the earlier of (1) 179 days after the date on which a Payment Notice shall have been given and (2) the date, if any, on which such event of default is waived by the holders of such Senior Indebtedness or otherwise cured or has ceased to exist or the Senior Indebtedness to which such event of default relates is discharged (provided that further written notice relating to the same or any other event of default specified in clause (ii) above with respect to any Senior Indebtedness received by such Guarantor or the Trustee within 12 months after such prior receipt of a Payment Notice shall not be effective to further prohibit such payments). In the event that, notwithstanding the foregoing, any Guarantor shall make any payment to the Trustee or the Holder of any Security prohibited by the foregoing provisions of this Section, then and in such event such payment shall be paid over and delivered forthwith to such Guarantor. The provisions of this Section shall not apply to any payment with respect to which Section 302 would be applicable. Section 304. PAYMENT PERMITTED IF NO DEFAULT. Nothing in this Article or elsewhere in the Indenture or in any Guarantee or in any of the Securities shall prevent any Guarantor, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of such Guarantor referred to in Section 302 or under the conditions described in Section 303, from making payments at any time under its Guarantee, including of principal of (and premium, if any) or interest on the Securities. Section 305. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS. Subject to the payment in full of all Senior Indebtedness of each Guarantor, -12- 16 the Holders of the Securities shall be subrogated (equally and ratably with the holders of all indebtedness of such Guarantor which by its express terms is subordinated to Senior Indebtedness of such Guarantor to the same extent as the Securities are subordinated and which is entitled to like rights of subrogation) to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness of such Guarantor until the principal of (and premium, if any) and interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which the holders of the Senior Indebtedness of any Guarantor or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among such Guarantor, its creditors other than holders of Senior Indebtedness, and the Holders of the Securities, be deemed to be a payment or distribution by such Guarantor to or on account of the Senior Indebtedness of such Guarantor. Section 306. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in the Indenture or in the Securities is intended to or shall (a) impair, as among any Guarantor, its creditors other than holders of Senior Indebtedness and the Holders of the Securities, the obligation of such Guarantor which is absolute and unconditional, to pay to the Holders of the Securities the principal of (and premium, if any) and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against any Guarantor of the Holders of the Securities and creditors of such Guarantor other than the holders of Senior Indebtedness of such Guarantor; or (c) prevent the Trustee or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the express limitations set forth in Article Five of the Indenture and to the rights, if any, under this Article of the holders of Senior Indebtedness of such Guarantor (1) in any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshalling of assets and liabilities of such Guarantor referred to in Section 302, to receive, pursuant to and in accordance with such Section, cash, property and securities otherwise payable or deliverable to the Trustee or such Holder, or (2) under the conditions specified in Section 303, to prevent any payment prohibited by such Section. Section 307. TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to -13- 17 effectuate the subordination provided in this Article and appoints the Trustee his attorney-in-fact for any and all such purposes. Section 308. NO WAIVER OF SUBORDINATION PROVISIONS. No rights of any present or future holder of any Senior Indebtedness of any Guarantor to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of such Guarantor or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by such Guarantor with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in this Article or the obligations hereunder of the Holder of the Securities to the holders of Senior Indebtedness, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any Person liable in any manner for the collection of Senior Indebtedness; and (d) exercise or refrain from exercising any rights against the Company and any other Person. Section 309. NOTICE TO TRUSTEE. Each Guarantor shall give prompt written notice to the Trustee of any fact known to such Guarantor which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of the Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from any Guarantor or a holder of Senior Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 601 of the Indenture, shall be entitled in all respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the Trustee shall not have received the notice provided for in this Section at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (and premium, if any) or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money -14- 18 and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it which three Business Days prior to such date. Subject to the provisions of Section 601 of the Indenture, the Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be holder of Senior Indebtedness (or a trustee, fiduciary to agent therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request that such Person furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. Section 310. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT. Upon any amount or distribution of assets of any Guarantor referred to in this Article, the Trustee, subject to the provisions of Section 601 of the Indenture, and the Holders of the Securities shall be entitled to rely upon any other or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution delivered to the Trustee and to the Holders of Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. Section 311. RIGHTS OF TRUSTEE AS A HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS. The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in the Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 606 of the Indenture. -15- 19 Section 312. ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting thereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; PROVIDED, HOWEVER, that Section 311 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent. ARTICLE FOUR ------------ MISCELLANEOUS Section 401. MISCELLANEOUS. (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this Fourth Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Fourth 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 Fourth Supplemental Indenture. (c) Each of the Company and the Trustee makes and reaffirms as of the date of execution of this Fourth Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (d) All covenants and agreements in this Fourth Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) In case any provisions in this Fourth 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. (f) Nothing in this Fourth 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. (g) If any provision hereof limits, qualifies or conflicts with a provision -16- 20 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 Fourth 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 Fourth Supplemental Indenture as so modified or excluded, as the case may be. (h) This Fourth Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) All provisions of this Fourth Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Fourth 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. -17- 21 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: RALPHS GROCERY COMPANY (Bruce M. Gack) By: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest: THE KROGER CO., as Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - ---------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Senior Vice President Each of the Guarantors Listed on Schedule I hereto, as Guarantor of the Securities Attest: (Bruce M. Gack) By: (Paul W. Heldman) - ---------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest: HENPIL, INC., as Guarantor of the Securities WYDIV, INC. , as Guarantor of the Securities - ---------------------------------- By: (Steven McMillan) -------------------------------- Name: Steven McMillan Title: Vice President * Signing as duly authorized officer for each such Guarantor. -18- 22 Attest: RICHIE'S, INC. , as Guarantor of the Securities By: (Keith C. Larson) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Keith C. Larson Attest: VINE COURT ASSURANCE INCORPORATED, as Guarantor of the Securities (Beth Van Oflen) By: (Bruce M. Gack) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Bruce M. Gack Title: Vice President Attest: KROGER DEDICATED LOGISTICS CO., as Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: Vice President
-19- 23 Attest: UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee __________________ By: ________________________________ Name: Title: -20- 24 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Paul W. Haldman, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Ralphs Grocery Company and each of the Guarantors Listed on Schedule I hereto, and Senior Vice President of The Kroger Co., 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. (Brenda R. Andes) ------------------------------ Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 STATE OF TEXAS ) ) ss.: COUNTY OF HARRIS ) On the 5th day of August, 1999, before me personally came Steven McMillan, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Henpil, Inc. and Wydiv, Inc., the 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. (Barbara Edwards) ------------------------------ Notary Public Barbara Edwards [Notarial Seal] Notary Public, State of Texas My Commission Expires October 19, 2001 25 STATE OF TEXAS ) ) ss.: COUNTY OF EL PASO ) On the 30th day of July, 1999, before me personally came Keith C. Larson, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Mercedes Flores) ------------------------------ Notary Public Mercedes Flores [Notarial Seal] Notary Public, State of Texas My Commission Expires 10/23/00 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Bruce M. Gack, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Brenda R. Andes) ------------------------------ Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 26 SCHEDULE I Guarantors ---------- Name of Guarantor State of Incorporation/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 Merksamer Jewelers, Inc. California 27 Name of Guarantor State of Incorporation/organization - ----------------- ----------------------------------- 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 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 EX-4.13 14 EXHIBIT 4.13 1 EXHIBIT 4.13 ---------------------------------------------------------------- RALPHS GROCERY COMPANY and certain Guarantors TO UNITED STATES TRUST COMPANY OF NEW YORK Trustee ---------- THIRD SUPPLEMENTAL INDENTURE Dated as of July 30, 1999 TO INDENTURE Dated as of June 1, 1995 ---------- $524,055,000 11% Senior Subordinated Notes due 2005 ---------------------------------------------------------------- 2 TABLE OF CONTENTS ----------------- ARTICLE ONE ----------- DEFINITIONS
Section 101. Definitions......................................................2 -----------
ARTICLE TWO ----------- GUARANTEE Section 201. Additional Guarantee.............................................3 -------------------- Section 202. Waiver of Demand.................................................4 ---------------- Section 203. Additional Guarantee of Payment..................................4 ------------------------------- Section 204. No Discharge or Diminishment of Additional Guarantee.............4 ---------------------------------------------------- Section 205. Defenses of Company Waived.......................................5 -------------------------- Section 206. Continued Effectiveness..........................................5 ----------------------- Section 207. Subrogation......................................................5 ----------- Section 208. Information......................................................6 ----------- Section 209. Subordination....................................................6 ------------- Section 210. Termination......................................................6 ----------- Section 211. Additional Guarantees of Other Indebtedness......................7 ------------------------------------------- Section 212. Additional Guarantors............................................7 --------------------- Section 213. Limitation of Additional Guarantor's Liability...................7 ---------------------------------------------- Section 214. Contribution from Other Guarantors...............................8 ---------------------------------- Section 215. No Obligation to Take Action Against the Company.................8 ------------------------------------------------ Section 216. Dealing with the Company and Others..............................8 ----------------------------------- Section 217. Subordination of Guarantee.......................................9 --------------------------
-i- 3 Page ---- ARTICLE THREE -------------
SUBORDINATION OF ADDITIONAL GUARANTEE OBLIGATIONS Section 301. Additional Guarantee Obligations Subordinated to Senior ------------------------------------------------------- Indebtedness of Additional Guarantors.............................9 -------------------------------------
ARTICLE FOUR ------------ MISCELLANEOUS Section 401. Miscellaneous.....................................................9
-ii- 4 THIRD SUPPLEMENTAL INDENTURE, dated as of July 30, 1999 (this "Third Supplemental Indenture"), among Ralphs Grocery Company, a Delaware corporation having its principal office at 1100 West Artesia Boulevard, Compton, California 90220 (herein called the "Company"), each of the subsidiary guarantors signatory hereto as set forth on Schedule I (collectively, the "Subsidiary Guarantors"), each of the additional guarantors signatory hereto as set forth on the signature pages and Schedule II (collectively, the "Additional Guarantors" and collectively with the Subsidiary Guarantors, the "Guarantors"), and United States Trust Company of New York, a New York corporation, 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 1, 1995 (as amended and supplemented, the "Indenture") providing for the issuance of the $524,055,000 11% Senior Subordinated Notes Due 2005 (the "Securities"). The Indenture has been supplemented by the First Supplemental Indenture, dated as of June 14, 1995 (the "First Supplemental Indenture") and the Second Supplemental Indenture dated as of February 26, 1998 (the "Second Supplemental Indenture"). Each of the Additional Guarantors has duly authorized the issuance of a guarantee of the Securities, as set forth herein, and to provide therefor, each of the Additional Guarantors has duly authorized the execution and delivery of this Third Supplemental Indenture. Section 10.01(4) of the Indenture provides that, without the notice to and consent of any Holders, the Company and the Subsidiary Guarantors, when authorized by a Board Resolution, and the Trustee together, may amend or supplement the Indenture to make any other change that does not adversely affect the rights of any Securityholder in any material respect. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Third Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities. All things necessary to make this Third Supplemental Indenture a valid agreement of the Company, each of the Subsidiary Guarantors and each of the Additional Guarantors, and a valid amendment of, and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE ----------- DEFINITIONS Section 101. Definitions. - ------------ ------------ For all purposes of this Third 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 Third Supplemental Indenture and, where so specified, to the Articles and Sections of the Indenture as supplemented by this Third Supplemental Indenture; and (3) The terms "hereof", "herein", "hereby", "hereto", "hereunder" and "herewith" refer to this Third Supplemental Indenture. (4) "Additional Guarantee" has the meaning specified in Section 201. (5) "Additional Guaranteed Obligations" has the meaning specified in Section 201. (6) "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 Kroger Co. or Fred Meyer, Inc. and outstanding on the date of this Third Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. (8) "Senior Indebtedness" means, with respect to any Additional Guarantor, the principal of (and premium if any) and interest on, and all other amounts payable in respect of, (a) any all Indebtedness of such Additional Guarantor, whether outstanding on the date of the Indenture or thereafter Incurred, (b) any obligations of such Additional Guarantor under interest rate swaps, caps. collars and similar arrangements, -2- 6 (c) obligations of such Additional Guarantor under foreign currency hedges entered into in respect of any such Indebtedness or obligation and (d) any amendments, renewals, extensions, modifications, and refundings of any such Indebtedness or obligation, except (i) any Indebtedness or obligation owed to a Subsidiary, (ii) any Indebtedness or obligation which by the terms of the instrument creating or evidencing the same is not superior in right of payment to such Additional Guarantor's Additional Guarantee, (iii) any Indebtedness or obligation which is subordinated or junior in any respect to any other Indebtedness or obligation of such Additional Guarantor, and (iv) any indebtedness or obligation constituting a trade account payable of such Additional Guarantor. Any obligation under any Senior Indebtedness shall continue to constitute Senior Indebtedness despite a determination that the Incurrence of such obligation by an Additional Guarantor was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or transfer under Federal or State Law. ARTICLE TWO ----------- GUARANTEE Section 201. Additional Guarantee. -------------------- Each Additional Guarantor hereby jointly and severally fully and unconditionally guarantees (each an "Additional 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 Additional Guarantor to the Holders or the Trustee hereunder or thereunder, 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 Additional Guarantor to the Holders of or the Trustee under the Indenture or the Securities hereunder (including fees, expenses or others) (collectively, the "Guaranteed 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 Guaranteed 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 Guaranteed Obligations, for whatever reason, each Additional 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 Additional Guarantee, and shall entitle the Holders of Securities to accelerate the Guaranteed Obligations of the Additional Guarantor hereunder in the same manner and to the same extent as the Guaranteed Obligations of the Company. -3- 7 Each Additional 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 an Additional Guarantee is affixed to any particular Security, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of Guarantor. Each Additional 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 Guaranteed Obligations may be accelerated as provided in Article Seven of the Indenture for the purposes of its Additional Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Seven of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Additional Guarantor for the purposes of its Additional Guarantee. Section 202. Waiver of Demand. ---------------- To the fullest extent permitted by applicable law, each of the Additional Guarantors waives presentment to, demand of payment from and protest of any of the Guaranteed Obligations, and also waives notice of acceptance of its Additional Guarantee and notice of protest for nonpayment. Section 203. Additional Guarantee of Payment. ------------------------------- Each of the Additional Guarantors further agrees that its Additional Guarantee constitutes an Additional 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 Guaranteed Obligations. Section 204. No Discharge or Diminishment of Additional Guarantee. ---------------------------------------------------- Subject to Section 210 of this Third Supplemental Indenture, the obligations of each of the Additional 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 Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed 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 Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each of the -4- 8 Additional 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 Additional 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 Guaranteed Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Additional Guarantor or that would otherwise operate as a discharge of any Additional Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Guaranteed Obligations). Section 205. Defenses of Company Waived. -------------------------- To the extent permitted by applicable law, each of the Additional Guarantors waives any defense based on or arising out of any defense of the Company or any other Guarantor or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Company, other than final and indefeasible payment in full in cash of the Guaranteed Obligations. Each of the Additional 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 Additional Guarantors against the Company or any security. Section 206. Continued Effectiveness. ----------------------- Subject to Section 210 of this Third Supplemental Indenture, each of the Additional Guarantors further agrees that its Additional 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 Guaranteed 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. Section 207. Subrogation. ----------- In furtherance of the foregoing and not in limitation of any other right of each of the Additional Guarantors by virtue hereof, upon the failure of the Company to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each of the Additional 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 Guaranteed Obligations, and thereupon the Holders shall, assign (except to the extent that such assignment would render an Additional 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 -5- 9 successor statute) the amount of the Guaranteed Obligations owed to it and paid by such Additional Guarantor pursuant to this Additional Guarantee to such Additional Guarantor, such assignment to be PRO RATA to the extent the Guaranteed Obligations in question were discharged by such Additional Guarantor, or make such other disposition thereof as such Additional Guarantor shall direct (all without recourse to the Holders, and without any representation or warranty by the Holders). If (a) an Additional Guarantor shall make payment to the Holders of all or any part of the Guaranteed Obligations and (b) all the Guaranteed Obligations and all other amounts payable under this Third Supplemental Indenture shall be indefeasibly paid in full, the Trustee will, at such Guarantor's request, execute and deliver to such Additional Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Additional Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Additional Guarantor. Section 208. Information. ----------- Each of the Additional 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 Guaranteed Obligations and the nature, scope and extent of the risks that each of the Additional Guarantors assumes and incurs hereunder, and agrees that the Trustee and the Holders of the Securities will have no duty to advise the Additional Guarantors of information known to it or any of them regarding such circumstances or risks. Section 209. Subordination. ------------- Upon payment by any Additional Guarantor of any sums to the Holders, as provided above, all rights of such Additional 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 Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Additional Guarantor may have pursuant to this Third Supplemental Indenture is subject to Section 207 hereof. Section 210. Termination. ----------- An Additional Guarantor shall, upon the occurrence of either of the following events, be automatically and unconditionally released and discharged from all obligations under this Third Supplemental Indenture and its Additional 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 Services and Standard & Poor's Rating Services: -6- 10 (a) upon any sale, exchange, transfer or other disposition (by merger or otherwise) of all of the Capital Stock of an Additional Guarantor or all, or substantially all, of the assets of such Additional Guarantor, which sale or other disposition is otherwise in compliance with the terms of the Indenture; provided, however, that such Additional Guarantor shall not be released and discharged from its obligations under this Third Supplemental Indenture and its Additional Guarantee if, upon consummation of such sale, exchange, transfer or other disposition (by merger or otherwise), such Additional 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 Additional Guarantor not so released will remain liable for the full amount of the principal of, premium, if any, and interest on the Securities provided in this Third Supplemental Indenture and its Guarantee. Section 211. Additional Guarantees of Other Indebtedness. ------------------------------------------- As long as the Securities are guaranteed by the Additional 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 210 hereof. Section 212. 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 an Additional Guarantor under this Third Supplemental Indenture, if it has not already done so or unless the Guarantor is 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 213. Limitation of Additional Guarantor's Liability. ---------------------------------------------- Each Additional Guarantor, other than The Kroger Co., and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Additional Guarantee by such Additional 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 -7- 11 of state law. To effectuate the foregoing intention, the Holders and such Additional Guarantor hereby irrevocably agree that the obligations of such Additional Guarantor under this Third Supplemental Indenture and its Additional Guarantee shall be limited to the maximum amount which, after giving effect to all other contingent and fixed liabilities of such Additional Guarantor, and after giving effect to any collections from or payments made by or on behalf of, any other Additional Guarantor in respect of the obligations of such Additional Guarantor under its Additional Guarantee or pursuant to its contribution obligations under this Third Supplemental Indenture, will result in the obligations of such Additional Guarantor under its Additional Guarantee not constituting such fraudulent transfer or conveyance. Section 214. Contribution from Other Additional Guarantors. --------------------------------------------- Each Additional Guarantor that makes a payment or distribution under its Additional Guarantee shall be entitled to a contribution from each other Additional Guarantor in a pro rata amount based on the net assets of each Additional Guarantor, determined in accordance with generally accepted accounting principles in effect in the United States of America as of the date hereof. Section 215. 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 Guaranteed 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 Additional Guarantee. Section 216. 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 Additional Guarantor hereunder and without the consent of or notice to any Additional Guarantor, may: (a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (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, -8- 12 mortgages or other security given by the Company or any third party with respect to the Guaranteed 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 Guaranteed 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 217. Subordination of Guarantee. -------------------------- The obligations of each Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantee and this Indenture are expressly subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness of such Guarantor, to the extent and in the manner provided in Article Three. ARTICLE THREE ------------- SUBORDINATION OF ADDITIONAL GUARANTEE OBLIGATIONS Section 301. Additional Guarantee Obligations Subordinated to Senior ------------------------------------------------------- Indebtedness of Additional Guarantors. ------------------------------------- Article Twelve of the Indenture is hereby incorporated by reference herein in its entirety herein, except that each reference to "Subsidiary Guarantor" shall become a reference to "Additional Guarantor," each reference to "Guarantee Obligations" shall become a reference to "Additional Guarantee Obligations" and each reference to "Guarantor Senior Indebtedness" shall become a reference to "Additional Guarantor Senior Indebtedness." ARTICLE FOUR ------------ MISCELLANEOUS Section 401. Miscellaneous. ------------- (a) The Trustee accepts the trusts created by the Indenture, as supplemented by this Third Supplemental Indenture, and agrees to perform the same upon the terms and conditions of the Indenture, as supplemented by this Third Supplemental Indenture. -9- 13 (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 Third Supplemental Indenture. (c) Each of the Company, the Subsidiary Guarantors and the Trustee makes and reaffirms as of the date of execution of this Third Supplemental Indenture all of its respective representations, covenants and agreements set forth in the Indenture. (d) All covenants and agreements in this Third Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) In case any provisions in this Third 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. (f) Nothing in this Third 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. (g) 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 Third 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 Third Supplemental Indenture as so modified or excluded, as the case may be. (h) This Third Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) All provisions of this Third Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented by this Third 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. -10- 14 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: RALPHS GROCERY COMPANY (Bruce M. Gack) By: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest: Each of the Subsidiary Guarantors Listed on Schedule I hereto, as Subsidiary Guarantor of the Securities (Bruce M. Gack) By*: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President * Signing as duly authorized officer for each such Subsidiary Guarantor. Attest: THE KROGER CO., as Additional Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest**: Each of the Additional Guarantors Listed on Schedule II hereto, as Additional Guarantor of the Securities (Bruce M. Gack) By:** (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President _____________________
** Signing as duly authorized officer for each such Additional Guarantor. -11- 15 Attest: HENPIL, INC., as Additional Guarantor of the Securities WYDIV, INC., as Additional Guarantor of the Securities By: (Steven McMillan) - ----------------------------------- ------------------------------- Name: Steven McMillan Title: Vice President Attest: RICHIE'S, INC., as Additional Guarantor of the Securities By: (Keith C. Larson) - ----------------------------------- ------------------------------- Name: Keith C. Larson Title: Vice President Attest: VINE COURT ASSURANCE INCORPORATED, as Additional Guarantor of the Securities (Beth Van Olfen) By: (Bruce M. Gack) - ----------------------------------- ------------------------------- Beth Van Olfen, Assistant Treasurer Name: Bruce M. Gack Title: Vice President Attest: KROGER DEDICATED LOGISTICS CO., as Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - --------------------------------- ------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: Vice President
-12- 16 Attest: UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee _____________________________ By: _______________________ Name: Title: -13- 17 STATE OF OHIO ) ) SS: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Paul W. Heldman, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Ralphs Grocery Company and Vice President of each of the Guarantors Listed on Schedule I hereto, and Vice President of each of the Additional Guarantors listed on Schedule II hereto, and Senior Vice President of The Kroger Co., 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. (Brenda R. Andes) -------------------------------------- Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 STATE OF TEXAS ) ) SS: COUNTY OF HARRIS ) On the 5th day of August, 1999, before me personally came Steven McMillan, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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. (Barbara Edwards) -------------------------------------- Notary Public Barbara Edwards [Notarial Seal] Notary Public, State of Texas My Commission Expires October 19, 2001 18 STATE OF TEXAS ) ) SS: COUNTY OF EL PASO ) On the 30th day of July, 1999, before me personally came Keith C. Larson, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Mercedes Flores) ------------------------------ Notary Public Mercedes Flores [Notarial Seal] Notary Public, State of Texas My Commission Expires 10/23/99 STATE OF OHIO ) ) SS: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Bruce M. Gack, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Brenda R. Andes) ------------------------------ Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 19 SCHEDULE I Subsidiary Guarantors --------------------- Name of Subsidiary Guarantor State of Organization ---------------------------- --------------------- 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 GM, Inc. California Food 4 Less Merchandising, Inc. California Food 4 Less of California, Inc. California Food 4 Less of Southern California, Inc. Delaware 20 SCHEDULE II Additional Guarantors --------------------- Name of Additional 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 By: KRGP Inc., the General Partner partnership) Kroger Limited Partnership II Ohio (limited By: KRGP Inc., the General Partner partnership) 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 21 Name of Additional Guarantor State of - ---------------------------- -------- Organization ------------ 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 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 EX-4.14 15 EXHIBIT 4.14 1 EXHIBIT 4.14 ---------------------------------------------------------------------- QUALITY FOOD CENTERS, INC. and certain Guarantors TO U.S. BANK TRUST NATIONAL ASSOCIATION Trustee ---------- SECOND SUPPLEMENTAL INDENTURE Dated as of July 30, 1999 TO INDENTURE Dated as of March 19, 1997 ---------- $150,000,000 8.70% Senior Subordinated Notes due 2007 ---------------------------------------------------------------------- 2 TABLE OF CONTENTS ----------------- ARTICLE ONE ----------- DEFINITIONS
Section 101. Definitions.......................................................2
ARTICLE TWO ----------- ADDITIONAL GUARANTEE Section 201. Additional Guarantee.............................................3 -------------------- Section 202. Waiver of Demand.................................................4 ---------------- Section 203. Additional Guarantee of Payment..................................4 ------------------------------- Section 204. No Discharge or Diminishment of Additional Guarantee.............4 ---------------------------------------------------- Section 205. Defenses of Company Waived.......................................5 -------------------------- Section 206. Continued Effectiveness..........................................5 ----------------------- Section 207. Subrogation......................................................5 ----------- Section 208. Information......................................................6 ----------- Section 209. Subordination....................................................6 ------------- Section 210. Termination......................................................6 ----------- Section 211. Additional Guarantees of Other Indebtedness......................7 ------------------------------------------- Section 212. Additional Guarantors............................................7 --------------------- Section 213. Limitation of Additional Guarantor's Liability...................7 ---------------------------------------------- Section 214. Contribution from Other Additional Guarantors....................8 --------------------------------------------- Section 215. No Obligation to Take Action Against the Company.................8 ------------------------------------------------ Section 216. Dealing with the Company and Others..............................8 -----------------------------------
-i- 3 ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS
Section 301. Additional Guarantee Obligations Subordinated to Senior Indebtedness of ----------------------------------------------------------------------- Additional Guarantors........................................................9 ---------------------
ARTICLE FOUR ------------ MISCELLANEOUS Section 401. Miscellaneous................................................................9 -------------
-ii- 4 SECOND SUPPLEMENTAL INDENTURE, dated as of July 30, 1999 (this "Second Supplemental Indenture"), among Quality Food Centers, Inc., a corporation duly organized and existing under the laws of the State of Washington (herein called the "Company"), having its principal office at 10112 NE 10th Street, Suite 201, Bellevue, Washington 98004, each of the guarantors signatory hereto as set forth on Schedule I (collectively, the "Pre-Existing Guarantors") each of the additional guarantors signatory hereto, as set forth on the signature pages and Schedule II (collectively, the "Additional Guarantors" and collectively with the Pre-Existing Guarantors the "Guarantors"), and U.S. Bank Trust National Association, a national banking association, 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 March 19, 1997 (as amended and supplemented, the "Indenture") providing for the issuance of the $150,000,000 8.70% Senior Subordinated Notes due 2007 (the "Securities"). The Indenture has been supplemented by the First Supplemental Indenture, dated as of March 10, 1998 (the "First Supplemental Indenture"). Each of the Additional Guarantors has duly authorized the issuance of a guarantee of the Securities, as set forth herein, and to provide therefor, each of the Additional Guarantors has duly authorized the execution and delivery of this Second Supplemental Indenture. Section 9.1(12) of the Indenture provides that, without the consent of any Holders, the Company, when authorized by a Board Resolution, the Guarantors, when authorized by Board Resolutions (or, if any Guarantor is not a corporation, when otherwise appropriately authorized) and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Indenture, in form satisfactory to the Trustee, to make change that does not adversely affect the rights of any Holder of Securities in any material respect. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Second Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities. All things necessary to make this Second Supplemental Indenture a valid agreement of the Company and each of the Guarantors and a valid amendment of, and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE ----------- DEFINITIONS Section 101. Definitions. ----------- 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. (4) "Additional Guarantee" has the meaning specified in Section 201. (5) "Additional Guaranteed Obligations" has the meaning specified in Section 201. (6) "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 Kroger Co. or Fred Meyer, Inc. and outstanding on the date of this Second Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. (8) "Senior Indebtedness" means, with respect to any Additional Guarantor, the principal of (and premium, if any) and interest on, and all other amounts payable in respect of, (a) all Indebtedness of such Guarantor, whether outstanding on the date of the Indenture or thereafter Incurred, (b) any obligations of such Additional Guarantor under interest rate swaps, caps, collars and similar arrangements, (c) any obligations of such -2- 6 Additional Guarantor under foreign currency hedges entered into in respect of any such Indebtedness or obligation and (d) any amendments, renewals, extensions, modifications, and refundings of any such Indebtedness or obligation, except (i) any Indebtedness or obligation owed to a Subsidiary, (ii) any Indebtedness or obligation which by the terms of the instrument creating or evidencing the same is not superior in right of payment to such Additional Guarantor's Additional Guarantee, (iii) any Indebtedness or obligation which is subordinated or junior in any respect to any other Indebtedness or obligation of such Additional Guarantor, and (iv) any indebtedness or obligation constituting a trade account payable of such Additional Guarantor. Any obligation under any Senior Indebtedness shall continue to constitute Senior Indebtedness despite a determination that the Incurrence of such obligation by an Additional Guarantor was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or transfer under Federal or State Law. ARTICLE TWO ----------- ADDITIONAL GUARANTEE Section 201. Additional Guarantee. -------------------- Each Additional Guarantor hereby jointly and severally fully and unconditionally guarantees (each an "Additional 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 Additional Guarantor to the Holders or the Trustee hereunder or thereunder, 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 Additional Guarantor to the Holders of or the Trustee under the Indenture or the Securities hereunder (including fees, expenses or others) (collectively, the "Guaranteed 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 Guaranteed 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 Guaranteed Obligations, for whatever reason, each Additional 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 Additional Guarantee, and shall entitle the Holders of Securities to accelerate the Guaranteed Obligations of the Additional Guarantor hereunder in the same manner and to the same extent as the Guaranteed Obligations of the Company. -3- 7 Each Additional 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 an Additional 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 Additional 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 Guaranteed Obligations may be accelerated as provided in Article Six of the Indenture for the purposes of its Additional Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (b) in the event of any acceleration of such Guaranteed Obligations as provided in Article Six of the Indenture, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Additional Guarantor for the purposes of its Additional Guarantee. Section 202. Waiver of Demand. ---------------- To the fullest extent permitted by applicable law, each of the Additional Guarantors waives presentment to, demand of payment from and protest of any of the Guaranteed Obligations, and also waives notice of acceptance of its Additional Guarantee and notice of protest for nonpayment. Section 203. Additional Guarantee of Payment. ------------------------------- Each of the Additional Guarantors further agrees that its Additional Guarantee constitutes an Additional 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 Guaranteed Obligations. Section 204. No Discharge or Diminishment of Additional Guarantee. ---------------------------------------------------- Subject to Section 210 of this Second Supplemental Indenture, the obligations of each of the Additional 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 Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed 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 Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, -4- 8 the obligations of each of the Additional 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 Additional 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 Guaranteed Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Additional Guarantor or that would otherwise operate as a discharge of any Additional Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Guaranteed Obligations). Section 205. Defenses of Company Waived. -------------------------- To the extent permitted by applicable law, each of the Additional Guarantors waives any defense based on or arising out of any defense of the Company or any other Guarantor or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Company, other than final and indefeasible payment in full in cash of the Guaranteed Obligations. Each of the Additional 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 Additional Guarantors against the Company or any security. Section 206. Continued Effectiveness. ----------------------- Subject to Section 210 of this Second Supplemental Indenture, each of the Additional Guarantors further agrees that its Additional 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 Guaranteed 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. Section 207. Subrogation. ----------- In furtherance of the foregoing and not in limitation of any other right of each of the Additional Guarantors by virtue hereof, upon the failure of the Company to pay any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each of the Additional 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 Guaranteed Obligations, and thereupon the Holders shall, assign (except to the extent that such assignment would render an Additional 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 -5- 9 successor statute) the amount of the Guaranteed Obligations owed to it and paid by such Additional Guarantor pursuant to this Additional Guarantee to such Additional Guarantor, such assignment to be PRO RATA to the extent the Guaranteed Obligations in question were discharged by such Additional Guarantor, or make such other disposition thereof as such Additional Guarantor shall direct (all without recourse to the Holders, and without any representation or warranty by the Holders). If (a) an Additional Guarantor shall make payment to the Holders of all or any part of the Guaranteed Obligations and (b) all the Guaranteed Obligations and all other amounts payable under this Second Supplemental Indenture shall be indefeasibly paid in full, the Trustee will, at such Additional Guarantor's request, execute and deliver to such Additional Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Additional Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Additional Guarantor. Section 208. Information. ----------- Each of the Additional 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 Guaranteed Obligations and the nature, scope and extent of the risks that each of the Additional Guarantors assumes and incurs hereunder, and agrees that the Trustee and the Holders of the Securities will have no duty to advise the Additional Guarantors of information known to it or any of them regarding such circumstances or risks. Section 209. Subordination. ------------- Upon payment by any Additional Guarantor of any sums to the Holders, as provided above, all rights of such Additional 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 Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Additional Guarantor may have pursuant to this Second Supplemental Indenture is subject to Section 207 hereof. Section 210. Termination. ----------- An Additional Guarantor shall, upon the occurrence of either of the following events, be automatically and unconditionally be released and discharged from all obligations under this Second Supplemental Indenture and its Additional 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 Ratings Services: -6- 10 (a) upon any sale, exchange, transfer or other disposition (by merger or otherwise) of all of the Capital Stock of an Additional Guarantor or all, or substantially all, of the assets of such Additional Guarantor, which sale or other disposition is otherwise in compliance with the terms of the Indenture; provided, however, that such Additional Guarantor shall not be released and discharged from its obligations under this Second Supplemental Indenture and its Additional Guarantee if, upon consummation of such sale, exchange, transfer or other disposition (by merger or otherwise), such Additional Guarantor remains or becomes an Additional 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 Additional 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 211. Additional Guarantees of Other Indebtedness. ------------------------------------------- As long as the Securities are guaranteed by the Additional 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 such guarantor provisions similar to those set forth in Section 210 hereof. Section 212. 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 an Additional Guarantor under this Second Supplemental Indenture, if it has not already done so or unless the Additional Guarantor is 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 213. Limitation of Additional Guarantor's Liability. ---------------------------------------------- Each Additional Guarantor, other than The Kroger Co., and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Additional Guarantee by such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Title 11 of the United States Code, the Uniform Fraudulent -7- 11 Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal of state law. To effectuate the foregoing intention, the Holders and such Additional Guarantor hereby irrevocably agree that the obligations of such Additional Guarantor under this Second Supplemental Indenture and its Additional 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 Additional 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 Additional Guarantor under its Additional Guarantee not constituting such fraudulent transfer or conveyance. Section 214. Contribution from Other Additional Guarantors. --------------------------------------------- Each Additional Guarantor that makes a payment or distribution under its Additional Guarantee shall be entitled to a contribution from each other Additional Guarantor in a pro rata amount based on the net assets of each Additional Guarantor, determined in accordance with generally accepted accounting principles in effect in the United States of America as of the date hereof. Section 215. 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 Guaranteed 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 Additional Guarantors of their liabilities and obligations under their Additional Guarantee. Section 216. 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 Additional Guarantor hereunder and without the consent of or notice to any Additional Guarantor, may: (a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (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, -8- 12 mortgages or other security given by the Company or any third party with respect to the Guaranteed 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 Guaranteed 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. ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. Additional Guarantee Obligations Subordinated to Senior ------------------------------------------------------- Indebtedness of Additional Guarantors. ------------------------------------- Article Twelve of the Indenture is hereby incorporated by reference herein in its entirety herein, except that each reference to "Guarantor" shall become a reference to "Additional Guarantor" and each reference to "Senior Debt" shall become a reference to "Additional Guarantor Senior Indebtedness". ARTICLE FOUR ------------ MISCELLANEOUS Section 401. 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) Each of the Company, the Pre-Existing Guarantors, 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. -9- 13 (d) All covenants and agreements in this Second Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) 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. (f) 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. (g) 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. (h) This Second Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) 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. -10- 14 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: QUALITY FOOD CENTERS, INC. (Bruce M. Gack) By: (Paul W. Heldman) - ---------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Each of the Guarantors Listed on Schedule I hereto, as Guarantor of the Securities Attest*: (Bruce M. Gack) By*: (Paul W. Heldman) - ---------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President THE KROGER CO., as Additional Guarantor of the Securities Attest: (Bruce M. Gack) By: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President
* Signing as duly authorized officer for each such Guarantor. -11- 15 Each of the Additional Guarantors Listed on Schedule II hereto, as Additional Guarantor of the Securities Attest**: (Bruce M. Gack) By**: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President HENPIL, INC., as Additional Guarantor of the Securities Attest: WYDIV, INC., as Additional Guarantor of the Securities By: (Steven McMillan) - -------------------------------- ------------------------------- Name: Steven McMillan Title: Vice President RICHIE'S, INC., as Additional Guarantor of the Securities Attest: By: (Keith C. Larson) - -------------------------------- ------------------------------- Name: Keith C. Larson Title: Vice President
** Signing as duly authorized officer for each such Additional Guarantor. -12- 16 Attest: VINE COURT ASSURANCE INCORPORATED, as Additional Guarantor of the Securities (Beth Van Oflen) By: (Bruce M. Gack) - ----------------------------------- --------------------------------- Beth Van Oflen, Assistant Treasurer Name: Bruce M. Gack Title: Vice President Attest: KROGER DEDICATED LOGISTICS CO., as Additional Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - ----------------------------------- --------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: President -13- 17 Attest: U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee By: ________________________________ Name: ________________________________ Title: -14- 18 STATE OF OHIO ) ) SS: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Paul W. Heldman, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Quality Food Centers, Inc. and Vice President of each of the Guarantors Listed on Schedule I and Vice President of Additional Guarantors listed on Schedule II hereto, and Senior Vice President of The Kroger Co., 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. (Brenda R. Andes) -------------------------------------- Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 STATE OF TEXAS ) ) SS: COUNTY OF HARRIS ) On the 5th day of August, 1999, before me personally came Steven McMillan, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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. (Barbara Edwards) -------------------------------------- Notary Public Barbara Edwards [Notarial Seal] Notary Public, State of Texas My Commission Expires October 19, 2001 19 SCHEDULE I Guarantors ---------- Name of Guarantor State of Organization ----------------- --------------------- Hughes Markets, Inc. California KU Acquisition Corporation Washington Quality Food Holdings, Inc. Delaware 20 SCHEDULE II Additional Guarantors --------------------- Name of Additional 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 Merksamer Jewelers, Inc. California 21 Name of Additional Guarantor State of Organization - ---------------------------- --------------------- 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 Hughes Realty, Inc. California 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 EX-4.15 16 EXHIBIT 4.15 1 EXHIBIT 4.15 ---------------------------------------------------------------------- SMITH'S FOOD & DRUG CENTERS, INC. and certain Guarantors TO STATE STREET BANK AND TRUST COMPANY Trustee ---------- SECOND SUPPLEMENTAL INDENTURE Dated as of July 30, 1999 TO INDENTURE Dated as of May 23, 1996 ---------- $575,000,000 11 1/4% Senior Subordinated Notes due 2007 ---------------------------------------------------------------------- 2 TABLE OF CONTENTS -----------------
ARTICLE ONE ----------- DEFINITIONS Section 101. Definitions.......................................................2 -----------
ARTICLE TWO ----------- ADDITIONAL GUARANTEE Section 201. Additional Guarantee..............................................3 -------------------- Section 202. Waiver of Demand..................................................4 ---------------- Section 203. Additional Guarantee of Payment...................................4 ------------------------------- Section 204. No Discharge or Diminishment of Additional Guarantee..............4 ---------------------------------------------------- Section 205. Defenses of Company Waived........................................5 -------------------------- Section 206. Continued Effectiveness...........................................5 ----------------------- Section 207. Subrogation.......................................................5 ----------- Section 208. Information.......................................................6 ----------- Section 209. Subordination.....................................................6 ------------- Section 210. Termination.......................................................6 ----------- Section 211. Additional Guarantees of Other Indebtedness.......................7 ------------------------------------------- Section 212. Additional Guarantors.............................................7 --------------------- Section 213. Limitation of Additional Guarantor's Liability....................7 ---------------------------------------------- Section 214. Contribution from Other Additional Guarantors.....................8 --------------------------------------------- Section 215. No Obligation to Take Action Against the Company..................8 ------------------------------------------------ Section 216. Dealing with the Company and Others...............................8 ----------------------------------- Section 217. Subordination of Guarantee........................................9 --------------------------
-i- 3
ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. Guarantee Obligations Subordinated to Senior Indebtedness of Guarantors.........9 -----------------------------------------------------------------------
ARTICLE FOUR ------------ MISCELLANEOUS Section 401. Miscellaneous...................................................................9 -------------
-ii- 4 SECOND SUPPLEMENTAL INDENTURE, dated as of July 30, 1999 (this "Second Supplemental Indenture"), among Smith's Food & Drug Centers, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the "Company") having its principal office at 1550 S. Redwood Road, Salt Lake City, Utah 84104, and each of the Additional Guarantors signatory hereto as set forth on the signature pages and on Schedule I (collectively, the "Additional Guarantors" and collectively with any persons who become guarantors under Section 5.17 of the Indenture (as defined below), the "Guarantors"), and State Street Bank and Trust Company, 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 May 23, 1996 (as amended and supplemented, the "Indenture") providing for the issuance of the $575,00,000 11 1/4% Senior Subordinated Notes due 2007 (collectively, the "Securities"). The Indenture has been supplemented by the First Supplemental Indenture, dated as of August 25, 1997 (the "First Supplemental Indenture"). Each of the Additional Guarantors has duly authorized the issuance of a guarantee of the Securities, as set forth herein, and to provide therefor, each of the Additional Guarantors has duly authorized the execution and delivery of this Second Supplemental Indenture. Section 10.01(3) of the Indenture provides that, without the consent of any Holders, the Company and the Guarantors (if any), when authorized by a Board Resolution, and the Trustee, together, may amend or supplement the Indenture, the Securities, or the Guarantees to make any other change that does not adversely affect the rights of any Holder of Securities in any material respect. The Company and the Guarantors, pursuant to the foregoing authority, propose in and by this Second Supplemental Indenture to amend and supplement the Indenture in certain respects with respect to the Securities. All things necessary to make this Second Supplemental Indenture a valid agreement of the Company and each of the Guarantors, and a valid amendment of, and supplement to the Indenture, have been done. -1- 5 NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises, the Company and each of the Guarantors hereby covenants and agrees with the Trustee and its successor or successors in said trust under the Indenture, as follows: ARTICLE ONE ----------- DEFINITIONS Section 101. Definitions. ----------- 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. (4) "Additional Guarantee" has the meaning specified in Section 201. (5) "Additional Guaranteed Obligations" has the meaning specified in Section 201. (6) "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 Kroger Co. or Fred Meyer, Inc. and outstanding on the date of this Second Supplemental Indenture, and any refinancing or other restructuring of any such agreement or facility. (7) "Holder" means any Holder of any Security pursuant to, and in accordance with the terms of, the Indenture. (8) "Senior Indebtedness" means, with respect to any Additional Guarantor, the principal of (and premium, if any) and interest on, and all other amounts payable in respect of, (a) all Indebtedness of such Guarantor, whether outstanding on the date of the Indenture or thereafter Incurred, (b) any obligations of such Additional Guarantor under interest rate swaps, caps, collars and similar arrangements, (c) any obligations of such Additional Guarantor under foreign currency hedges entered into in respect of any such -2- 6 Indebtedness or obligation and (d) any amendments, renewals, extensions, modifications, and refundings of any such Indebtedness or obligation, except (i) any Indebtedness or obligation owed to a Subsidiary, (ii) any Indebtedness or obligation which by the terms of the instrument creating or evidencing the same is not superior in right of payment to such Additional Guarantor's Additional Guarantee, (iii) any Indebtedness or obligation which is subordinated or junior in any respect to any other Indebtedness or obligation of such Additional Guarantor, and (iv) any indebtedness or obligation constituting a trade account payable of such Additional Guarantor. Any obligation under any Senior Indebtedness shall continue to constitute Senior Indebtedness despite a determination that the Incurrence of such obligation by an Additional Guarantor was a preference under Section 547(b) of Title 11 of the United States Code (or any successor thereto) or was a fraudulent conveyance or transfer under Federal or State Law. ARTICLE TWO ----------- ADDITIONAL GUARANTEE Section 201. Additional Guarantee. -------------------- Each Additional Guarantor hereby jointly and severally fully and unconditionally guarantees (each an "Additional 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 Additional Guarantor to the Holders or the Trustee hereunder or thereunder, 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 Additional Guarantor to the Holders of or the Trustee under the Indenture or the Securities hereunder (including fees, expenses or others) (collectively, the "Additional Guaranteed 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 Additional Guaranteed 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 Additional Guaranteed Obligations, for whatever reason, each Additional 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 Additional Guarantee, and shall entitle the Holders of Securities to accelerate the Additional Guaranteed Obligations of the Additional Guarantor hereunder in the same manner and to the same extent as the Additional Guaranteed Obligations of the Company. -3- 7 Each Additional 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 an Additional 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 Additional 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 Additional Guaranteed Obligations may be accelerated as provided in Article Seven of the Indenture for the purposes of its Additional Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Additional Guaranteed Obligations, and (b) in the event of any acceleration of such Additional Guaranteed Obligations as provided in Article Seven of the Indenture, such Additional Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Additional Guarantor for the purposes of its Additional Guarantee. Section 202. Waiver of Demand. ---------------- To the fullest extent permitted by applicable law, each of the Additional Guarantors waives presentment to, demand of payment from and protest of any of the Additional Guaranteed Obligations, and also waives notice of acceptance of its Additional Guarantee and notice of protest for nonpayment. Section 203. Additional Guarantee of Payment. ------------------------------- Each of the Additional Guarantors further agrees that its Additional 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 Additional Guaranteed Obligations. Section 204. No Discharge or Diminishment of Additional Guarantee. ---------------------------------------------------- Subject to Section 210 of this Second Supplemental Indenture, the obligations of each of the Additional 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 Additional Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Additional Guaranteed 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 Additional Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each of the Additional Guarantors hereunder shall not be discharged or impaired or otherwise affected by the failure of the -4- 8 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 Additional Guaranteed Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Additional Guarantor or that would otherwise operate as a discharge of any Additional Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Additional Guaranteed Obligations). Section 205. Defenses of Company Waived. -------------------------- To the extent permitted by applicable law, each of the Additional Guarantors waives any defense based on or arising out of any defense of the Company or any other Guarantor or the unenforceability of the Additional Guaranteed 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 Additional Guaranteed Obligations. Each of the Additional 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 Additional Guarantors against the Company or any security. Section 206. Continued Effectiveness. ----------------------- Subject to Section 210 of this Second Supplemental Indenture, each of the Additional Guarantors further agrees that its Additional 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 Additional Guaranteed 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. Section 207. Subrogation. ----------- In furtherance of the foregoing and not in limitation of any other right of each of the Additional Guarantors by virtue hereof, upon the failure of the Company to pay any Additional Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each of the Additional 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 Additional Guaranteed Obligations, and thereupon the Holders shall, assign (except to the extent that such assignment would render an Additional 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 Additional Guaranteed Obligations owed to it and paid by such Additional Guarantor pursuant to this Additional Guarantee to such Additional Guarantor, such assignment to be PRO RATA to the -5- 9 extent the Additional Guaranteed Obligations in question were discharged by such Additional Guarantor, or make such other disposition thereof as such Additional Guarantor shall direct (all without recourse to the Holders, and without any representation or warranty by the Holders). If (a) an Additional Guarantor shall make payment to the Holders of all or any part of the Additional Guaranteed Obligations and (b) all the Additional Guaranteed Obligations and all other amounts payable under this Second Supplemental Indenture shall be indefeasibly paid in full, the Trustee will, at such Additional Guarantor's request, execute and deliver to such Additional Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Additional Guarantor of an interest in the Additional Guaranteed Obligations resulting from such payment by such Additional Guarantor. Section 208. Information. ----------- Each of the Additional 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 Additional Guaranteed Obligations and the nature, scope and extent of the risks that each of the Additional Guarantors assumes and incurs hereunder, and agrees that the Trustee and the Holders of the Securities will have no duty to advise the Additional Guarantors of information known to it or any of them regarding such circumstances or risks. Section 209. Subordination. ------------- Upon payment by any Additional Guarantor of any sums to the Holders, as provided above, all rights of such Additional 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 Additional Guaranteed Obligations to the Trustee; PROVIDED, HOWEVER, that any right of subrogation that such Additional Guarantor may have pursuant to this Second Supplemental Indenture is subject to Section 207 hereof. Section 210. Termination. ----------- An Additional 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 Additional 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 & Poor's Ratings Services: (a) upon any sale, exchange, transfer or other disposition (by merger or otherwise) of all of the Capital Stock of an Additional Guarantor or all, or substantially all, of the assets of such Additional Guarantor, which sale or other disposition is -6- 10 otherwise in compliance with the terms of the Indenture; provided, however, that such Additional Guarantor shall not be released and discharged from its obligations under this Second Supplemental Indenture and its Additional Guarantee if, upon consummation of such sale, exchange, transfer or other disposition (by merger or otherwise), such Additional 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 Additional Guarantor not so released will remain liable for the full amount of the principal of, premium, if any, and interest on the Securities provided in the Indenture and its Guarantee. Section 211. Additional Guarantees of Other Indebtedness. ------------------------------------------- As long as the Securities are guaranteed by the Additional 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 such guarantee provisions similar to those set forth in Section 210 hereof. Section 212. 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 an Additional Guarantor under this Second Supplemental Indenture, if it has not already done so or unless the Guarantor is 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 213. Limitation of Additional Guarantor's Liability. ---------------------------------------------- Each Additional Guarantor, other than The Kroger Co., and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Additional Guarantee by such Additional 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 Additional Guarantor hereby irrevocably agree that the obligations of such Additional Guarantor under this Second Supplemental Indenture and its Additional Guarantee shall be limited to the maximum amount which, after giving effect to all other contingent and fixed -7- 11 liabilities of such Additional Guarantor, and after giving effect to any collections from or payments made by or on behalf of, any other Additional Guarantor in respect of the obligations of such Additional Guarantor under its Additional Guarantee or pursuant to its contribution obligations under this Second Supplemental Indenture, will result in the obligations of such Additional Guarantor under its Additional Guarantee not constituting such fraudulent transfer or conveyance. Section 214. Contribution from Other Additional Guarantors. --------------------------------------------- Each Additional Guarantor that makes a payment or distribution under its Additional Guarantee shall be entitled to a contribution from each other Additional Guarantor in a pro rata amount based on the net assets of each Additional Guarantor, determined in accordance with generally accepted accounting principles in effect in the United States of America as of the date hereof. Section 215. 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 Additional Guaranteed 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 Additional Guarantors of their liabilities and obligations under their Additional Guarantee. Section 216. 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 Additional Guarantor hereunder and without the consent of or notice to any Additional Guarantor, may: (a) grant time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other Person; (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 Additional Guaranteed Obligations; (d) accept compromises or arrangements from the Company; -8- 12 (e) apply all monies at any time received from the Company or from any security to such part of the Additional Guaranteed 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 217. Subordination of Guarantee. -------------------------- The obligations of each Guarantor to the Holders of the Securities and to the Trustee pursuant to the Guarantee and this Indenture are expressly subordinate and subject in right of payment to the prior payment in full in cash of all Senior Indebtedness of such Guarantor, to the extent and in the manner provided in Article Three. ARTICLE THREE ------------- SUBORDINATION OF GUARANTEE OBLIGATIONS Section 301. Guarantee Obligations Subordinated to Senior Indebtedness of ------------------------------------------------------------ Guarantors. ---------- Article Twelve of the Indenture is hereby incorporated by reference herein in its entirety herein, except that each reference to "Guarantor" shall become a reference to "Additional Guarantor," each reference to "Guarantee Obligations" shall become a reference to "Additional Guarantee Obligations," and each reference to "Guarantor Senior Indebtedness" shall become a reference to "Additional Guarantor Senior Indebtedness. ARTICLE FOUR ------------ MISCELLANEOUS Section 401. 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) 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. -9- 13 (d) All covenants and agreements in this Second Supplemental Indenture by the Company, the Guarantors and the Trustee shall bind its respective successors and assigns, whether so expressed or not. (e) 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. (f) 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. (g) 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. (h) This Second Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. (i) All amendments to the Indenture made hereby shall affect any and all series of Securities created under the Indenture. (j) 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. -10- 14 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: SMITH'S FOOD & DRUG CENTERS, INC. (Bruce M. Gack) By: (Paul W. Heldman) - ---------------------------------- ------------------------------- Bruce M. Gack, Assistant Secretary Name: Paul W. Heldman Title: Vice President Attest: THE KROGER CO., as Additional Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - ---------------------------------- ------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: Vice President Each of the Additional Guarantors Listed on Schedule I hereto, as Additional Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - ---------------------------------- ------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: Vice President ______________________ * Signing as duly authorized officer for each such Additional Guarantor.
-11- 15 Attest: HENPIL, INC., as Additional Guarantor of the Securities WYDIV, INC. , as Additional Guarantor of the Securities By: (Steven McMillan) - ----------------------------------- ------------------------------- Name: Steven McMillan Title: Vice President Attest: RICHIE'S, INC., as Additional Guarantor of the Securities By: (Keith C. Larson) - ----------------------------------- ------------------------------- Name: Keith C. Larson Title: Vice President Attest: VINE COURT ASSURANCE INCORPORATED, as Additional Guarantor of the Securities (Beth Van Oflen) By: (Bruce M. Gack) - ----------------------------------- ------------------------------- Beth Van Oflen, Assistant Treasurer Name: Bruce M. Gack Title: Vice President
-12- 16 Attest: KROGER DEDICATED LOGISTICS CO., as Additional Guarantor of the Securities (Bruce M. Gack) By: (Paul W. Heldman) - -------------------------------- ------------------------------- Bruce M. Gack, Secretary Name: Paul W. Heldman Title: Vice President
-13- 17 Attest: STATE STREET BANK AND TRUST COMPANY, as Trustee ________________________________ By: ______________________________ Name: Title: -14- 18 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Paul W. Heldman, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Smith's Food & Drug Centers, Inc. and Vice President of each of the Additional Guarantors Listed on Schedule I and Senior Vice President of The Kroger Co., 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. (Brenda R. Andes) ------------------------------ Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 STATE OF TEXAS ) ) ss.: COUNTY OF HARRIS ) On the 5th day of August, 1999, before me personally came Steven McMillan, to me known, who, being by me duly sworn, did depose and say that he is Vice President of Henpil, Inc. and Wydiv, Inc., the corporations described in and which executed the foregoing instrument; that he knows the seals of said corporations; that the seal 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. (Barbara Edwards) ------------------------------ Notary Public Barbara Edwards [Notarial Seal] Notary Public, State of Texas My Commission Expires October 19, 2001 19 STATE OF TEXAS ) ) ss.: COUNTY OF EL PASO ) On the 30th day of July, 1999, before me personally came Keith C. Larson, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Mercedes Flores) -------------------------------------- Notary Public Mercedes Flores [Notarial Seal] Notary Public, State of Texas My Commission Expires 10/23/99 STATE OF OHIO ) ) ss.: COUNTY OF HAMILTON ) On the 30th day of July, 1999, before me personally came Bruce M. Gack, to me known, who, being by me duly sworn, did depose and say that he is Vice President 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 Board of Directors of said corporation, and that he signed his name thereto by like authority. (Brenda R. Andes) -------------------------------------- Notary Public Brenda R. Andes [Notarial Seal] Notary Public, State of Ohio My Commission Expires June 20, 2003 20 SCHEDULE I Additional Guarantors --------------------- Name of Additional 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 21 Name of Additional Guarantor State of Organization - ---------------------------- --------------------- Merksamer Jewelers, Inc. California Roundup Co. Washington JH Properties, Inc. Washington 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 EX-5.1 17 EXHIBIT 5.1 1 Exhibit 5.1 The Kroger Co. 1014 Vine Street Cincinnati, OH 45202-1100 August 20, 1999 Board of Directors The Kroger Co. 1014 Vine Street Cincinnati, OH 45202 Ladies and Gentlemen: I am familiar with the proceedings taken and proposed to be taken by The Kroger Co., an Ohio corporation (the "Company"), in connection with the issuance of up to $900,000,000 aggregate principal amount of debt securities (the "Securities") in exchange for existing debt securities issued by the Company on June 25, 1999. I have acted as counsel to the Company in connection with its preparation of a Registration Statement relating to such issuance of the Securities on Form S-4 filed by the Company with the Securities and Exchange Commission (the "Registration Statement") for the registration of the Securities under the Securities Act of 1933, as amended (the "Act"). I have examined the Registration Statement and the exhibits thereto; the Amended Articles of Incorporation and Regulations of the Company; the corporate minutes of the proceedings of the directors and shareholders of the Company; and such other records and documents as I have deemed necessary in order to express the opinions hereinafter set forth. Based upon the foregoing, I am of the opinion that, when the indenture has been duly executed and delivered, and the Securities have been duly executed, authenticated, and issued in accordance with the terms of the instruments under which they are being issued, the Securities will constitute the valid and binding obligations of the Company. The foregoing opinion is subject to applicable bankruptcy, insolvency, or other laws affecting creditors' rights generally, as from time to time in effect, and to general equity principles. 2 Exhibit 5.1 I consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me in the Registration Statement under the caption "Legal Matters" therein. In giving such consent, I do not admit that I am in the category of persons whose consent is required under Section 7 of the Act. Very truly yours, (Paul W. Heldman) Paul W. Heldman Senior Vice President, Secretary and General Counsel EX-21.1 18 EXHIBIT 21.1 1 Exhibit 21.1 SUBSIDIARIES OF THE KROGER CO. Name State of Incorporation/Organization ---- ----------------------------------- Dillon Companies, Inc. Kansas Drug Distributors, Inc. Indiana Henpil, Inc. Texas Inter-American Foods, Inc. Ohio J. V. Distributing, Inc. Michigan KRGP Inc. Ohio KRLP Inc. Ohio The Kroger Co. of Michigan Michigan Kroger Dedicated Logistics Co. Ohio Kroger Limited Partnership I Ohio Kroger Limited Partnership II Ohio Peyton's-Southeastern, Inc. Tennessee Rocket Newco, Inc. Texas Topvalco, Inc. Ohio Vine Court Assurance Incorporated Vermont Wydiv, Inc. Texas 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 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 Merksamer Jewelers, Inc. California Roundup Co. Washington JH Properties, Inc. Washington Smith's Food & Drug Centers, Inc. Delaware Compare, Inc. Delaware Richie's, Inc. Texas Saint Lawrence Holding Company Delaware Smith's Beverage of Wyoming, Inc. Wyoming 2 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 Agri Products, Inc. Arkansas Bluefield Beverage Co. Ohio Fred Meyer HK Limited Hong Kong Fred Meyer, Inc. Washington Fry's Leasing Company, Inc. Arizona Ft. Wayne Food Stores, Inc. Ohio Healthy Options Inc. Delaware Jero, Inc. Wyoming Kroger Management Co. Michigan MANUCO Incorporated Ohio Natur Glo, Inc. Oregon One Holdings, Inc. Delaware Pontiac Foods, Inc. South Carolina SLHC 2, Inc. Delaware Southern Ice Cream Ohio Specialties, Inc. Ten Holdings, Inc. Delaware Three Holdings, Inc. Delaware Two Holdings, Inc. Delaware EX-23.1 19 EXHIBIT 23.1 1 Exhibit 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Registration Statement of The Kroger Co. on Form S-4 of our report (which contains an explanatory paragraph relating to the Company's change in its application of the LIFO method of accounting for store inventories) dated January 28, 1999, on our audits of the consolidated financial statements of The Kroger Co. as of January 2, 1999 and December 27, 1997, and for the years ended January 2, 1999, December 27, 1997, and December 28, 1996, which report is included in the Company's Annual Report on Form 10-K for the fiscal year ended January 2, 1999, our report dated April 30, 1999, on our audit of the financial statements of The Kroger Co. as of and for the twenty-eight days ended January 30, 1999, which report is included in the Company's Current Report on Form 8-K dated May 10, 1999, our report (which contains an explanatory paragraph that describes a change in the Company's application of the LIFO method of accounting for store inventories and an explanatory paragraph that discloses that the supplemental financial statements give retroactive effect to the merger of The Kroger Co. and Fred Meyer, Inc. on May 27, 1999, which has been accounted for as a pooling of interests), dated May 28, 1999 on our audit of the supplemental consolidated financial statements of The Kroger Co. as of January 2, 1999 and December 27, 1997, and for the years ended January 2, 1999, December 27, 1997, and December 28, 1996, which report is included in the Company's Current Report on Form 8-K dated May 28, 1999, and our report (which contains an explanatory paragraph relating to the Company's change in its application of the LIFO method of accounting for store inventories) dated January 28, 1999, except for the Guarantor Subsidiaries note, as to which the date is August 13, 1999, on our audits of the consolidated financial statements of The Kroger Co. as of January 2, 1999 and December 27, 1997, and for the years ended January 2, 1999, December 27, 1997, and December 28, 1996, which report is included in the Company's Current Report on Form 8-K dated August 20, 1999. We also consent to the references to our firm under the caption "Experts" in such Registration Statement. (PricewaterhouseCoopers LLP) PricewaterhouseCoopers LLP Cincinnati, Ohio August 20, 1999 EX-23.2 20 EXHIBIT 23.2 1 Exhibit 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of The Kroger Co. on Form S-4 of our report dated March 10, 1999 on the consolidated financial statements of Fred Meyer, Inc., appearing in the Annual Report on Form 10-K of Fred Meyer, Inc. for the year ended January 30, 1999, and to the use of our report dated March 10, 1999, appearing in the Current Report on Form 8-K dated May 28, 1999 of The Kroger Co., and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Portland, Oregon August 20, 1999 EX-24.1 21 EXHIBIT 24.1 1 Exhibit 24.1 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned directors of THE KROGER CO. (the "Company") hereby make, constitute and appoint Paul W. Heldman and Bruce M. Gack, or either one of them, his or her true and lawful attorneys-in-fact to sign and execute for and on his or her behalf, a registration statement and any and all amendments thereto with respect to the issuance and sale by the Company of up to $900,000,000 of Securities to be filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, in such form as they, or either of them, may approve and to do any and all other acts which said attorneys-in-fact, or either one of them, may deem necessary or desirable to enable The Kroger Co. to comply with said Act and the rules and regulations thereunder in connection with such sale. IN WITNESS WHEREOF, the undersigned directors have hereunto set their hands and seal, as of the 22nd day of July, 1999. s/s Clyde R. Moore s/s Ronald W. Burkle - ------------------------- -------------------------------- s/s Martha R. Seger s/s T. Ballard Morton, Jr. - ------------------------- -------------------------------- s/s John T. LaMacchia s/s Thomas H. O'Leary - ------------------------- -------------------------------- s/s Bobby S. Shackouls s/s Katherine D. Ortega - ------------------------- -------------------------------- s/s Edward M. Liddy s/s Bruce Karatz - ------------------------- -------------------------------- s/s James D. Woods s/s Reuben V. Anderson - ------------------------- -------------------------------- s/s Robert D. Beyer s/s John L. Clendenin - ------------------------- -------------------------------- s/s David B. Dillon s/s Carlton J. Jenkins - ------------------------- -------------------------------- s/s Joseph A. Pichler - ------------------------- s/s Robert G. Miller - ------------------------- 2 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer of THE KROGER CO. (the "Company") hereby makes, constitutes and appoints Paul W. Heldman and Bruce M. Gack, or either one of them, his true and lawful attorneys-in-fact to sign and execute for and on his behalf, a registration statement and any and all amendments thereto with respect to the issuance and sale by the Company of up to $900,000,000 of Securities to be filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, in such form as they, or either of them, may approve and to do any and all other acts which said attorneys-in-fact, or either one of them, may deem necessary or desirable to enable The Kroger Co. to comply with said Act and the rules and regulations thereunder in connection with such sale. IN WITNESS WHEREOF, I have hereunto set my hand. s/s W. Rodney McMullen July 22, 1999 - ----------------------------- W. Rodney McMullen Executive Vice President and Chief Financial Officer 3 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer and director of THE KROGER CO. (the "Company") hereby makes, constitutes and appoints Paul W. Heldman and Bruce M. Gack, or either one of them, his true and lawful attorneys-in-fact to sign and execute for and on his behalf, a registration statement and any and all amendments thereto with respect to the issuance and sale by the Company of up to $900,000,000 of Securities to be filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, in such form as they, or either of them, may approve and to do any and all other acts which said attorneys-in-fact, or either one of them, may deem necessary or desirable to enable The Kroger Co. to comply with said Act and the rules and regulations thereunder in connection with such sale. IN WITNESS WHEREOF, I have hereunto set my hand. s/s Joseph A. Pichler July 22, 1999 - ---------------------------- Joseph A. Pichler Chairman of the Board, Chief Executive Officer and Director 4 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, That the undersigned officer of THE KROGER CO. (the "Company") hereby makes, constitutes and appoints Paul W. Heldman and Bruce M. Gack, or either one of them, his true and lawful attorneys-in-fact to sign and execute for and on his behalf, a registration statement and any and all amendments thereto with respect to the issuance and sale by the Company of up to $900,000,000 of Securities to be filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, in such form as they, or either of them, may approve and to do any and all other acts which said attorneys-in-fact, or either one of them, may deem necessary or desirable to enable The Kroger Co. to comply with said Act and the rules and regulations thereunder in connection with such sale. IN WITNESS WHEREOF, I have hereunto set my hand. s/s J. Michael Schlotman July 22, 1999 - ----------------------------------- J. Michael Schlotman Vice President and Corporate Controller 5 RESOLUTION WHEREAS, On June 25, 1999, the Company issued $250,000,000 of its 6.34% Senior Notes due 2001, $350,000,000 of its 7.25% Senior Notes due 2009, and $300,000,000 of its 7.70% Senior Notes due 2029 (collectively, the "Notes"); and WHEREAS, The Notes were issued under Rule 144A of the Securities Act of 1933, and the Company agreed to give the holders of the Notes certain registration rights; now, therefore RESOLVED, That the Company is authorized to issue, in exchange for the Notes, registered securities (the "Securities") with terms substantially identical to the Notes; and further RESOLVED, The Securities may be issued by the Company and the determination of all terms and conditions of the Securities is delegated to a Management Committee made up of Joseph A. Pichler, David B. Dillon, W. Rodney McMullen, and Lawrence M. Turner, any three of whom can act for the Management Committee; and further RESOLVED, That the Management Committee may designate one or more persons, who may or may not be a member of the Committee, to act as and for the Committee in any capacity as the Committee may direct; and further RESOLVED, That the Management Committee may authorize the issuance of the Securities by the Company in exchange for the Notes and, in connection with any such authorization, issue, determine, approve, or appoint, as the case may be: (a) the type of Security or Securities and title or titles thereof; (b) the aggregate principal amount, not to exceed $900,000,000, the denominations, and terms, of the Securities; (c) the price at which the Securities are to be sold (which may be issued at an "original issue discount" within the meaning of the Internal Revenue Code of 1986, as amended), and the interest rate or rates, if any, to be established for the Securities, which rate or rates may vary from time to time; (d) the issuance of the Securities in any foreign currency or European currency units and if European currency units are issued, the currency or 6 currencies in which interest is payable; (e) the maturity or maturities; (f) the sinking fund, if any, and related redemption prices of the Securities; (g) the optional redemption rights, if any, of the Company and of the holders of the Securities, and related redemption prices and any limitations on such redemption; (h) the restrictive covenants, if any, to be imposed upon the Company relating to any of the Securities; (i) the form of Registration Statement on Form S-4, or such other form as the Management Committee determines (the "Registration Statement"), for the purpose of registering the Securities, if so required, under the Securities Act of 1933, as amended, and any amendments thereto; (j) any underwriting, standby, or similar agreement between the Company and an underwriter or underwriters; (k) the use, form, execution, and delivery of the Securities, indentures, note agreement, loan agreement, distribution agreement, reimbursement agreement, warrant agreement, notes, or any other contracts or agreements, including listing applications, as the Management Committee deems necessary or appropriate; (l) any transfer, authenticating, placement, exchange, distribution, or paying agent, or registrar, trustee or underwriter, or any other person or entity to act in connection with the Securities or the Notes; including the selection of a financial institution or institutions, whether foreign or domestic, to advise the Company; (m) any other terms, conditions, and provisions as the Management Committee deems necessary or appropriate; and further RESOLVED, That the elected officers of the Company be, and each of them hereby is, authorized, in the name and on behalf of the Company, to execute the Registration Statement with such changes therein as the officer executing the same may approve, such execution to be conclusive evidence of such approval, and to execute any and all amendments thereto as deemed necessary or desirable; and further RESOLVED, That upon the execution of the Registration Statement or any amendments thereto, including post-effective amendments, by directors and 7 officers of the Company, as required by law, either in person or by a duly authorized attorney or attorneys, the elected officers of the Company be, and each of them hereby is, authorized to cause the Registration Statement and any amendments thereto to be filed with the Securities and Exchange Commission (the "Commission") and to execute and file all such instruments, make all such payments, and to do such other acts and things as, in their opinion or in the opinion of any of them, may be necessary or desirable in order to effect such filing, to cause the Registration Statement to become effective, and to maintain the Registration Statement in effect for as long as they deem it to be in the best interests of the Company; and further RESOLVED, That Paul W. Heldman and Bruce M. Gack, or either one of them, be, and each of them hereby is, made, constituted, and appointed the true and lawful attorneys-in-fact, with authority to sign and execute on behalf of this Company, and on behalf of the directors and officers thereof in their official capacities, the Registration Statement and any and all amendments thereto, which either of them, in their discretion, deem necessary or advisable to be filed with the Commission; and further RESOLVED, That Paul W. Heldman, Senior Vice President, Secretary and General Counsel of the Company, whose address is 1014 Vine Street, Cincinnati, Ohio, be, and he hereby is, designated as the Agent for Service to be named in the Registration Statement, with authority to receive notices and communications with respect to such Registration Statement and with all powers consequent upon such designation under the rules and regulations of the Commission; and further RESOLVED, That, subject to the limitations set forth in these resolutions, the Management Committee may approve the form of the Securities; that the elected officers of the Company be, and each of them hereby is, authorized to execute, in the name and on behalf of the Company, the Securities; that the signature of each of such officers on the Securities may be manual or by facsimile; that Securities bearing the manual or facsimile signatures of individuals who were at any time the elected officers of the Company will bind the Company notwithstanding that such individuals or any of them cease to hold such offices; that the elected officers of the Company be, and each of them hereby is, authorized to deliver or cause to be delivered the Securities for authentication and delivery in the principal amount thereof as shall have been determined by the Board or a Committee; and further RESOLVED, That the elected officers of the Company be, and each of them hereby is, authorized and directed, if such officer or officers deems it necessary in connection with the offering of any of the Securities, to appoint a withholding agent and attorney for the Company for the purpose of withholding any and all 8 taxes required to be withheld by the Company, under any Federal or other laws or regulations from time to time in effect, from the interest paid from time to time on the Securities, and to authorize and direct such agent to make any and all payments and reports and to file any and all returns and accompanying certificates with any governmental authority which such agent may be permitted or required to make or file as such agent under such laws or regulations; and further RESOLVED, That the elected officers of the Company be, and each of them hereby is, authorized in the name and on behalf of this Company to take any and all action which they deem necessary or advisable to effect the registration or qualification (or exemptions therefrom) of the Securities for issue, offer, sale, or trade under the Blue Sky or securities laws of any State of the United States of America, any Province of Canada, or of any other country and in connection therewith to sign, execute, acknowledge, verify, deliver, file, and publish all such applications, issuer's covenants, consents to service of process, resolutions, and other papers and documents as may be required under such laws, and to take any and all further action which they deem necessary or advisable in order to maintain such registration or qualification of the Securities for as long as they may deem necessary or as required by law; and further RESOLVED, That the elected officers of the Company be, and each of them hereby is, authorized in the name and on behalf of this Company to execute and file an application or applications for the listing of the Securities on the New York Stock Exchange, to appear before officials of the New York Stock Exchange and to take any and all action, and prepare, execute, and file any and all other applications and agreements, including an indemnity agreement relating to the use of facsimile signatures in the execution of the Securities, necessary, incidental, or convenient to effectuate such listing; and further RESOLVED, That the elected officers of the Company be, and each of them hereby is, authorized in the name and on behalf of this Company to execute and cause to be filed with the Commission and the New York Stock Exchange an application on Form 8-A, or such other form as may be required for the purpose of registering the Securities on a national securities exchange, pursuant to the Securities Exchange Act of 1934; and further RESOLVED, That the elected officers of the Company be, and each of them hereby is, authorized and directed to advise the Company's senior lenders and the trustees under the indentures of its publicly issued debt of the issuance of Securities, as any such officer deems necessary or appropriate; and further RESOLVED, That the Management Committee and each of the elected officers of the Company be, and each of them hereby is, authorized and directed to do 9 and perform, or cause to be done and performed, all such acts, deeds, and things and to make, execute, and deliver, or cause to be made, executed, and delivered, all such agreements, undertakings, documents, instruments, or certificates, in the name and on behalf of the Company or otherwise, including, without limitation, indentures, loan agreements, underwriting, placement, exchange or agency agreements, and trust agreements, all as the applicable Committee or any of the elected officers deem necessary or appropriate to effect the purposes and intent of the foregoing resolutions. EX-99.1 22 EXHIBIT 99.1 1 Exhibit 99.1 THE KROGER CO. LETTER OF TRANSMITTAL FOR ITS OFFER TO EXCHANGE ITS SERIES B 6.34% SENIOR NOTES DUE 2001, SERIES B 7.25% SENIOR NOTES DUE 2009 AND/OR SERIES B 7.70% SENIOR NOTES DUE 2029, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR ITS CORRESPONDING SERIES A 6.34% SENIOR NOTES DUE 2001, SERIES A 7.25% SENIOR NOTES DUE 2009 AND/OR SERIES A 7.70% SENIOR NOTES DUE 2029, WHICH HAVE NOT BEEN SO REGISTERED. PURSUANT TO THE PROSPECTUS DATED ________, 1999 - -------------------------------------------------------------------------------- THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON ______, 1999 UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. - -------------------------------------------------------------------------------- FIRSTAR BANK, NATIONAL ASSOCIATION, EXCHANGE AGENT BY REGISTERED OR CERTIFIED MAIL OR BY HAND OR OVERNIGHT COURIER: FIRSTAR BANK, N.A. 425 WALNUT STREET 6TH FLOOR CINCINNATI, OHIO 45202 CONFIRM BY TELEPHONE: 513-632-4278 DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. The undersigned acknowledges that he or she has received and reviewed the Prospectus, dated _______, 1999 (the "Prospectus"), of The Kroger Co. (the "Company") and this Letter of Transmittal (the "Letter"), which together constitute the Company's offer (the "Exchange Offer") to exchange up to $250,000,000 aggregate principal amount of the Company's Series B 6.34% Senior Notes Due 2001, $350,000,000 aggregate principal amount of the Company's Series B 7.25% Senior Notes due 2009 and $300,000,000 aggregate principal amount of the Company's Series B 7.70% Senior Notes due 2029 (the "New Notes"), which have been registered under the Securities Act of 1933 (the "Securities Act"), for a like corresponding principal amount of the Company's issued and outstanding Series A 6.34% Senior Notes Due 2001, Series A 7.25% Senior Notes due 2009 and Series A 7.70% Senior Notes due 2029 (the "Old Notes"), which have not been so registered. For each Old Note accepted for exchange, the registered holder of such Old Note (collectively with all other registered holders of Old Notes, the "Holders") will receive a New Note having a principal amount equal to that of the surrendered Old Note. Registered holders of New Notes on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the most recent date to which interest has been paid or, if no interest has been paid, from June 25, 1999. Old Notes accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Accordingly, Holders whose Old Notes are accepted for exchange will not receive any payment in respect of accrued interest on such Old Notes otherwise payable on any interest payment date the record date for which occurs on or after consummation of the Exchange Offer. This Letter is to be completed by a Holder of Old Notes either if certificates are to be forwarded herewith or if a tender of certificates for Old Notes, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in "The Exchange Offer - Procedures for Tendering" section of the Prospectus. Holders of Old Notes whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility (a "Book-Entry Confirmation") and all other documents required by this Letter to the Exchange Agent on or prior to the Expiration Date, must tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer - Guaranteed Delivery Procedures" section of the Prospectus. See Instruction 1. Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent. THE UNDERSIGNED HAS COMPLETED THE APPROPRIATE BOXES BELOW AND SIGNED THIS LETTER TO INDICATE THE ACTION THE UNDERSIGNED DESIRES TO TAKE WITH RESPECT TO THE EXCHANGE OFFER. 2 PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the aggregate principal amount of Old Notes indicated below. Subject to, and effective upon, the acceptance for exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of the Company all right, title and interest in and to such Old Notes as are being tendered hereby. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Company. The undersigned hereby further represents that any New Notes acquired in exchange for Old Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such New Notes, whether or not such person is the undersigned, that neither the Holder of such Old Notes nor any such other person has an arrangement or understanding with any person to participate in the distribution of such New Notes and that neither the Holder of such Old Notes nor any such other person is an "affiliate" (as defined in Rule 405 under the Securities Act) of the Company. The undersigned also acknowledges that this Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the "SEC"), as set forth in no-action letters issued to third parties, that the New Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be offered for resale, resold and otherwise transferred by a Holder thereof (other than a Holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Notes are acquired in the ordinary course of such Holder's business and such Holder has no arrangement with any person to participate in a distribution of such New Notes. However, the SEC has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in other circumstances. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes and has no arrangement or understanding to participate in a distribution of New Notes. If any Holder is an affiliate of the Company, is engaged in or intends to engage in, or has any arrangement or understanding with any person to participate in, a distribution of the New Notes to be acquired pursuant to the Exchange Offer, such Holder could not rely on the applicable interpretations of the staff of the SEC and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes. However, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Old Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in "The Exchange Offer - Withdrawal Rights" section of the Prospectus. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" herein, please issue the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Old Notes, please credit the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" herein, please send the New Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) to the undersigned at the address shown in the boxes herein entitled "Description of Old Notes Delivered." 3 THE UNDERSIGNED, BY COMPLETING THE BOX BELOW ENTITLED "DESCRIPTION OF OLD NOTES DELIVERED" AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED OLD NOTES AS SET FORTH IN SUCH BOX List below the Old Notes to which this Letter relates. If the space provided below is inadequate, the certificate numbers and principal amount of Old Notes should be listed on a separate signed schedule affixed hereto.
- --------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES DELIVERED - --------------------------------------------------------------------------------------------------------------------- SERIES A 6.34% SENIOR NOTES DUE 2001 - --------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS OF REGISTERED HOLDER AGGREGATE PRINCIPAL PRINCIPAL AMOUNT (PLEASE FILL IN, IF BLANK) CERTIFICATE NUMBER(S)* AMOUNT TENDERED** - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- Totals: - -------------------------------------------- --------------------------- --------------------- ----------------------
- --------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES DELIVERED - --------------------------------------------------------------------------------------------------------------------- SERIES A 7.25% SENIOR NOTES DUE 2009 - --------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS OF REGISTERED HOLDER AGGREGATE PRINCIPAL PRINCIPAL AMOUNT (PLEASE FILL IN, IF BLANK) CERTIFICATE NUMBER(S)* AMOUNT TENDERED** - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- Totals: - -------------------------------------------- --------------------------- --------------------- ----------------------
4
- --------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES DELIVERED - --------------------------------------------------------------------------------------------------------------------- SERIES A 7.70% SENIOR NOTES DUE 2029 - --------------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS OF REGISTERED HOLDER AGGREGATE PRINCIPAL PRINCIPAL AMOUNT (PLEASE FILL IN, IF BLANK) CERTIFICATE NUMBER(S)* AMOUNT TENDERED** - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- - -------------------------------------------- --------------------------- --------------------- ---------------------- Totals: - -------------------------------------------- --------------------------- --------------------- ----------------------
* Need not be completed if Old Notes are being tendered by book-entry transfer. ** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old Notes represented by the listed certificates. See Instruction 2. Old Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See Instruction 1. [ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name of Tendering Institution__________________________________________ Account Number ____________________ Transaction Code Number____________ [ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name of Registered Holder______________________________________________ Window Ticket Number (if any)__________________________________________ Date of Execution of Notice of Guaranteed Delivery_____________________ Name of Institution Which Guaranteed Delivery__________________________ If Delivered by Book-Entry Transfer, Complete the Following: Account Number ____________________ Transaction Code Number____________ 5 [ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE ADDITIONAL COPIES OF THE PROSPECTUS AND ANY AMENDMENTS OR SUPPLEMENTS THERETO. (UNLESS OTHERWISE SPECIFIED, 10 ADDITIONAL COPIES WILL BE FURNISHED.) NAME___________________________________________________________________ ADDRESS________________________________________________________________
- -------------------------------------------------------- -------------------------------------------------------- SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 3 AND 4) (SEE INSTRUCTIONS 3 AND 4) To be completed ONLY if certificates for Old To be completed ONLY if OLD Notes not Notes not exchanged and/or New Notes are to be exchanged and/or New Notes are to be sent to someone other issued in the name of someone other than the person other than the person or persons whose signature(s) or persons whose signature(s) appear(s) on this Letter appear(s) on this Letter below or to such person or persons below or to such below, or if Old Notes delivered by at an address other than shown in the box entitled book-entry transfer which are not accepted for "Description of Old Notes delivered" on this Letter above. exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other Mail New Notes and/or Old Notes to: than the account indicated above. Issue New Notes and/or Old Notes to: Name:______________________________________________ Name:______________________________________________ (Please Type or Print) (Please Type or Print) Address:___________________________________________ Address:___________________________________________ ___________________________________________________ ___________________________________________________ (Zip Code) (Zip Code) [ ] Credit unexchanged Old Notes delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below. ___________________________________________________ (Book-Entry Transfer Facility Account) - -------------------------------------------------------- --------------------------------------------------------
6 IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF OR AN AGENCY'S MESSAGE IN LIEU HEREOF (TOGETHER WITH THE CERTIFICATES FOR OLD NOTES OR A BOOK- ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE. PLEASE READ THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX ABOVE PLEASE SIGN HERE (ALL TENDERING HOLDERS MUST COMPLETE THIS LETTER AND THE ACCOMPANYING SUBSTITUTE FORM W-9) Dated:_____________________, 1999 X_______________________________________________________________________________ X_______________________________________________________________________________ Signature(s) Area Code and Telephone Number:_________________________________________________ If a holder is tendering any Old Notes, this letter must be signed by the Holder(s) as the name(s) appear(s) on the certificate(s) for the Old Notes or by any person(s) authorized to become Holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3. Name:___________________________________________________________________________ ________________________________________________________________________________ (Please Type or Print) Capacity (full title):__________________________________________________________ Address:________________________________________________________________________ ________________________________________________________________________________ Telephone:______________________________________________________________________ SIGNATURE GUARANTEE (IF REQUIRED BY INSTRUCTION 3) Signature(s) Guaranteed by an Eligible Institution:_____________________________ (Authorized Signature) ________________________________________________________________________________ (Title) ________________________________________________________________________________ (Name and Firm) Dated:_____________________________________________________________________,1999 7 IMPORTANT TAX INFORMATION Under current federal income tax law, a holder of New Notes is required to provide the Company (as payor) with such holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 or otherwise establish a basis for exemption from backup withholding to prevent backup withholding on any New Notes delivered pursuant to the Exchange Offer and any payments received in respect of the New Notes. If a holder of New Notes is an individual, the TIN is such holder's social security number. If the Company is not provided with the correct taxpayer identification number, a holder of New Notes may be subject to a $50 penalty imposed by the Internal Revenue Service. Accordingly, each prospective holder of New Notes to be issued pursuant to Special Issuance Instructions should complete the attached Substitute Form W-9. The Substitute Form W-9 need not be completed if the box entitled Special Issuance Instructions has not been completed. Certain holders of New Notes (including among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. Exempt prospective holders of New Notes should indicate their exempt status on Substitute Form W-9. A foreign individual may qualify as an exempt recipient by submitting to the Company, through the Exchange Agent, a properly completed Internal Revenue Service form W-8 (which the Exchange Agent will provide upon request) signed under penalty of perjury, attesting to the holder's exempt status. See the enclosed Guidelines for Certification of Taxpayer Identification Number or Substitute Form W-9 for additional instructions. If backup withholding applies, the Company is required to withhold 31% of any payment made to the holder of New Notes or other payee. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on any New Notes delivered pursuant to the Exchange Offer and any payments received in respect of the New Notes, each prospective holder of New Notes to be issued pursuant to Special Issuance Instructions should provide the Company, through the Exchange Agent, with either: (i) such prospective holder's correct TIN by completing the form below, certifying that the TIN provided on Substitute Form W-9 is correct (or that such prospective holder is awaiting a TIN) and that (A) such prospective holder has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of a failure to report all interest or dividends or (B) the Internal Revenue Service has notified such prospective holder that he or she is no longer subject to backup withholding; or (ii) an adequate basis for exemption. WHAT NUMBER TO GIVE THE EXCHANGE AGENT The prospective holder of New Notes to be issued pursuant to Special Issuance Instructions is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the prospective record owner of the New Notes. If the New Notes will be held in more than one name or are not held in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance regarding which number to report. 8 TO BE COMPLETED BY ALL TENDERING HOLDERS (SEE IMPORTANT TAX INFORMATION) PAYOR'S NAME: FIRSTAR BANK, NATIONAL ASSOCIATION
- ---------------------------------------------------------------------------------------------------------------------------- PART 1 - PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT OR INDICATE THAT TIN:______________________________ YOU APPLIED FOR A TIN AND CERTIFY BY Social Security Number or Employer SIGNING AND DATING BELOW. Identification Number (or circle below) TIN Applied for ------------------------------------------------------------------------------------- SUBSTITUTE PART 2 - CERTIFICATION - UNDER PENALTIES OF PERJURY, I CERTIFY THAT: FORM W-9 (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); Department of the Treasury (2) I am not subject to backup withholding either because: (a) I am exempt from Internal Revenue Service backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a PAYOR'S REQUEST FOR TAXPAYER failure to report all interest or dividends, or (c) the IRS has notified me that I IDENTIFICATION NUMBER ("TIN") am no longer subject to backup withholding; and AND CERTIFICATION (3) any other information provided on this form is true and correct. Signature:___________________________________ Date:______________________ - ----------------------------------------------------------------------------------------------------------------------------
You must cross out item (2) of the above certification if you have been notified by the IRS that you are subject to backup withholding because of underreporting of interest or dividends on your tax return and you have not been notified by the IRS that you are no longer subject to backup withholding. NOTE: FAILURE BY A PROSPECTIVE HOLDER OF EXCHANGE NOTES TO BE ISSUED PURSUANT TO THE SPECIAL ISSUANCE INSTRUCTIONS ABOVE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF THE EXCHANGE NOTES DELIVERED TO YOU PURSUANT TO THE EXCHANGE OFFER AND ANY PAYMENTS RECEIVED BY YOU IN RESPECT OF THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 2 OF SUSTITUTE FORM W-9 - -------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or a Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of the exchange, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number. ___________________________________________ ________________________________ Signature Date - -------------------------------------------------------------------------------- 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER TO EXCHANGE THE SERIES B 6.34% SENIOR NOTES DUE 2001, SERIES B 7.25% SENIOR NOTES DUE 2009 AND SERIES B 7.70% SENIOR NOTES DUE 2029 OF THE KROGER CO. WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR THE CORRESPONDING OUTSTANDING SERIES A 6.34% SENIOR NOTES DUE 2001, SERIES A 7.25% SENIOR NOTES DUE 2009 AND SERIES A 7.70% SENIOR NOTES DUE 2029 WHICH HAVE NOT BEEN SO REGISTERED. 1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES. This Letter is to be completed by Holders of Old Notes either if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in "The Exchange Offer - Procedures for Tendering" section of the Prospectus. Certificates for all physically tendered Old Notes, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof) and any other documents required by this Letter, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Old Notes tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. Holders whose certificates for Old Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Old Notes pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer - - Guaranteed Delivery Procedures" section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through an Eligible Institution (as defined below), (ii) on or prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Letter (or a facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form provided by the Company (by telegram, telex, facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Old Notes and the amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange ("NYSE") trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, and any other documents required by this Letter will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Old Notes, in proper form for transfer, or Book-Entry Confirmation, as the case may be, and any other documents required by this Letter, are deposited by the Eligible Institution within three NYSE trading days after the date of execution of the Notice of Guaranteed Delivery. The method of delivery of this Letter, the Old Notes and all other required documents is at the election and risk of the tendering Holders, but the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. If Old Notes are sent by mail, it is suggested that the mailing be registered mail, properly insured, with return receipt requested, and made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. See "The Exchange Offer" section of the Prospectus. 2. PARTIAL TENDERS (NOT APPLICABLE TO NOTEHOLDERS WHO TENDER BY BOOK- ENTRY TRANSFER). If less than all of the Old Notes evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount of Old Notes to be tendered in the boxes above entitled "Description of Old Notes Delivered - Principal Amount Tendered." A reissued certificate representing the balance of nontendered Old Notes will be sent to such tendering Holder, unless otherwise provided in the appropriate box of this Letter, promptly after the Expiration Date. All of the Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. 10 3. SIGNATURES ON THIS LETTER, BOND POWERS AND ENDORSEMENTS, GUARANTEE OF SIGNATURES. If this Letter is signed by the Holder of the Old Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates without any change whatsoever. If any tendered Old Notes are owned of record by two or more joint owners, all of such owners must sign this Letter. If any tendered Old Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this letter as there are different registrations of certificates. When this letter is signed by the Holder or Holders of the Old Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If however, the New Notes are to be issued, or any untendered Old Notes are to be reissued, to a person other than the Holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) must be guaranteed by an Eligible Institution. If this letter is signed by a person other than the Holder or Holders of any certificate(s) specified herein, such certificate(s) must be endorsed accompanied by appropriate bond powers, in either case signed exactly as the name or names of the Holder or Holders appear(s) on the certificate(s) and signatures on such certificate(s) must be guaranteed by an Eligible Institution. If this Letter or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted. ENDORSEMENTS ON CERTIFICATES FOR OLD NOTES OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FINANCIAL INSTITUTION (INCLUDING MOST BANKS, SAVINGS AND LOAN ASSOCIATIONS AND BROKERAGE HOUSES) THAT IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM, THE NEW YORK STOCK EXCHANGE MEDALLION SIGNATURE PROGRAM OR THE STOCK EXCHANGES MEDALLION PROGRAM (EACH, AN "ELIGIBLE INSTITUTION"). SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION, PROVIDED THE OLD NOTES ARE TENDERED: (I) BY A REGISTERED HOLDER OF OLD NOTES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH OLD NOTES) WHO HAS NOT COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR "SPECIAL DELIVERY INSTRUCTIONS" ON THIS LETTER, OR (II) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION. 4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering Holders of Old Notes should indicate in the applicable box the name and address to which New Notes issued pursuant to the Exchange Offer and/or substitute certificates evidencing Old Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such Holder may designate hereon. If no such instructions are given, such Old Notes not exchanged will be returned to the name and address of the person signing this Letter. 11 5. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the transfer of Old Notes to it or its order pursuant to the Exchange Offer. If, however, New Notes and/or substitute Old Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the Holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this Letter, or if a transfer tax is imposed for any reason other than the transfer of Old Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed to such tendering Holder and the Exchange Agent will retain possession of an amount of New Notes with a face amount equal to the amount of such transfer taxes due by such tendering Holder pending receipt by the Exchange Agent of the amount of such taxes. Except as provided in this Instruction 5, it will not be necessary for transfer tax stamps to be affixed to the Old Notes specified in this Letter. 6. WAIVER OF CONDITIONS The Company reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus. 7. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering Holders of Old Notes, by execution of this Letter, shall waive any right to receive notice of the acceptance of their Old Notes for exchange. Although the Company intends to notify Holders of defects or irregularities with respect to tenders of Old Notes, neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to give any such notice. 8. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any Holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. W9. WITHDRAWAL OF TENDERS. Tenders of Old Notes may be withdrawn at any time prior to 5:00 P.M., New York City time, on the Expiration Date. For a withdrawal to be effective, a written notice of withdrawal must be received by the Exchange Agent at one of the addresses set forth above. Any such notice of withdrawal must specify the name of the person having tendered the Old Notes to be withdrawn, identify the Old Notes to be withdrawn (including the principal amount of such Old Notes), and (where certificates for Old Notes have been transmitted) specify the name in which such Old Notes are registered, if different from that of the withdrawing Holder. If certificates for Old Notes have been delivered or otherwise identified to the Exchange Agent, then prior to the release of such certificates the withdrawing Holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution unless such Holder is an Eligible Institution in which case such guarantee will not be required. If Old Notes have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Old Notes and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination will be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Old Notes which have been tendered for exchange but which are not exchanged for any 12 reason will be returned to the Holder thereof without cost to such Holder (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book Entry Transfer Facility pursuant to the book-entry transfer procedures described above, such Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility for the Old Notes) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following one of the procedures set forth in "The Exchange Offer - Procedures for Tendering " set forth in the Prospectus at any time on or prior to the Expiration Date. 10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus, this Letter and other related documents may be directed to the Exchange Agent, at (513) 632-4278. EX-99.2 23 EXHIBIT 99.2 1 Exhibit 99.2 THE KROGER CO. NOTICE OF GUARANTEED DELIVERY FOR TENDER OF ANY AND ALL OF THE OUTSTANDING SERIES A 6.34% SENIOR NOTES DUE 2001, SERIES A 7.25% SENIOR NOTES DUE 2009 AND/OR SERIES A 7.70% SENIOR NOTES DUE 2029 OF THE KROGER CO. WHICH HAVE BEEN FULLY AND UNCONDITIONALLY GUARANTEED BY CERTAIN SUBSIDIARIES OF THE KROGER CO. NOT FORBIDDEN TO ISSUE SUCH GUARANTEE. This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used to accept the Exchange Offer (as defined below) if (i) certificates for the Company's (as defined below) Series A 6.34% Senior Notes Due 2001, Series A 7.25% Senior Notes Due 2009 and/or Series A 7.70% Senior Notes Due 2029 (the "Old Notes") are not immediately available, (ii) Old Notes, the Letter of Transmittal and all other required documents cannot be delivered to Firstar Bank, National Association ("Exchange Agent") on or prior to the Expiration Date (as defined in the Prospectus referred to below) or (iii) the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight courier or mail, or transmitted by facsimile transmission, to the Exchange Agent on or prior to the Expiration Date. See "The Exchange Offer - Procedures for Tendering" in the Prospectus. In addition, in order to utilize the guaranteed delivery procedure to tender Old Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal relating to the Old Notes (or facsimile thereof) must also be received by the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. Capitalized terms used but not defined herein have the meanings given them in the Prospectus. THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: FIRSTAR BANK NATIONAL ASSOCIATION BY REGISTERED OR CERTIFIED MAIL OR BY HAND OR OVERNIGHT COURIER: FIRSTAR BANK, N.A. 425 WALNUT STREET 6TH FLOOR CINCINNATI, OHIO 45202 FACSIMILE TRANSMISSIONS: (ELIGIBLE INSTITUTIONS ONLY) (513) 632-5511 TO CONFIRM BY TELEPHONE OR FOR INFORMATION CALL: (513) 632-4278 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 2 Ladies and Gentlemen: The undersigned hereby tenders to The Kroger Co., an Ohio corporation (the "Company"), upon the terms and subject to the conditions set forth in the Prospectus dated _________, 1999 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer - Guaranteed Delivery Procedures."
- -------------------------------------------------------------------------------- Name(s) of Registered Holder(s): All authority herein conferred or ___________________________________ agreed to be conferred in this Notice ___________________________________ of Guaranteed Delivery shall survive the death, incapacity or dissolution of the undersigned and any obligation of Address:___________________________ the undersigned hereunder shall be ___________________________________ binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned. Certificate No.(s)(if available):__ ___________________________________ PLEASE SIGN HERE: _________________________________________ Total Principal amount _________________________________________ Represented by Old Notes:$_________ (Signature(s) of Owner(s) or Authorized Signatory) If Old Notes will be tendered by Book entry Transfer, provide the following information: ________________________________,1999 ________________________________,1999 DTC Account Number:_________________ Area Code and Date:__________________________,1999 Telephone number:____________________
- -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- Must be signed by the holder(s) of the Old Notes exactly as their name(s) appear(s) on certificate(s) for the Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by an attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth the signer's full title and the other information below. Names:__________________________________________________________________________ ________________________________________________________________________________ Capacity:_______________________________________________________________________ Address:________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ - -------------------------------------------------------------------------------- THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. 4 - -------------------------------------------------------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker or government securities dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association recognized program (each of the foregoing being referred to as an "Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at one of its addresses set forth above, either the Old Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes to the Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with one or more properly completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and any other required documents within three NYSE trading days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must deliver the Letter(s) of Transmittal (or facsimile thereof) and the Old Notes tendered hereby to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. ___________________________________ _____________________________________ Name of Firm Authorized Signature ___________________________________ Name:________________________________ Address (Please Type or Print) ___________________________________ Title_________________________________ (Zip Code) ___________________________________ Date:_________________________________ Area code and telephone number - -------------------------------------------------------------------------------- NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS. EX-99.3 24 EXHIBIT 99.3 1 Exhibit 99.3 INSTRUCTIONS TO REGISTERED HOLDER AND/OR BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM BENEFICIAL OWNER OF SERIES A 6.34% SENIOR NOTES DUE 2001, SERIES A 7.25% SENI0R NOTES DUE 2009 AND/OR SERIES A 7.70% SENIOR NOTES DUE 2029 OF THE KROGER CO. To Registered Holder and/or Participant of the Book-Entry Transfer Facility: The undersigned hereby acknowledges receipt of the Prospectus, dated ________, 1999 (the "Prospectus"), of The Kroger Co., an Ohio corporation (the "Company") and the accompanying Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Company's offer (the "Exchange Offer"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus. This will instruct you, the registered holder and/or book-entry transfer facility participant, as to action to be taken by you relating to the Exchange Offer with respect to the Series A 6.34% Senior Notes due 2001, Series A 7.25% Senior Notes due 2009 and Series A 7.70% Senior Notes due 2029 (the "Old Notes") held by you for the account of the undersigned. The aggregate face amount of the Old Notes held by you for the account of the undersigned is (FILL IN AMOUNT): $ ___________________ of the 6.34% Series A Senior Notes due 2001 $ ___________________ of the 7.25% Series A Senior Notes due 2009 $ ___________________ of the 7.70% Series A Senior Notes due 2029 With respect to the Exchange Offer, the undersigned hereby instructs you (CHECK APPROPRIATE BOX): [_] TO TENDER the following Old Notes held by you for the account of the undersigned (INSERT PRINCIPAL AMOUNT OF NOTES TO BE TENDERED, IF ANY): $ ___________________ of the 6.34% Series A Senior Notes due 2001. $ ___________________ of the 7.25% Series A Senior Notes due 2009 $ ___________________ of the 7.70% Series A Senior Notes due 2029 [_] NOT TO TENDER any Old Notes held by you for the account of the undersigned. If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the undersigned is acquiring the New Notes in the ordinary course of business of the undersigned, (ii) the undersigned is not participating, does not 2 participate, and has no arrangement or understanding with any person to participate in the distribution of the New Notes, (iii) the undersigned acknowledges that any person participating in the Exchange Offer for the purpose of distributing the New Notes must comply with the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the "Securities Act"), in connection with a secondary resale transaction of the New Notes acquired by such person and cannot rely on the position of the Staff of the Securities and Exchange Commission set forth in no-action letters that are discussed in the section of the Prospectus entitled "The Exchange Offer -Purpose and Effect," and (iv) the undersigned is not an "affiliate," as defined in Rule 405 under the Securities Act, of the Company; (b) to agree, on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c) to take such other action as necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of such Old Notes. SIGN HERE Name of Beneficial Owners:____________________________________ Signature(s):_________________________________________________ Names (please print):_________________________________________ Address: ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ Telephone Number:_______________________________________________________ Taxpayer Identification or Social Security Number:____________ Date:_________________________________________________________ 2 -----END PRIVACY-ENHANCED MESSAGE-----