Exhibit 99.1
364-DAY CREDIT AGREEMENT
Dated as of May 22, 2002
THE KROGER CO., an Ohio corporation (the "Borrower"), the banks,
--------
financial institutions and other institutional lenders (the "Initial Lenders")
---------------
listed on the signature pages hereof, and CITIBANK, N.A. ("Citibank"), as an
--------
administrative agent (in such capacity, an "Administrative Agent") for the
--------------------
Lenders (as hereinafter defined) and paying agent (in such capacity, the "Paying
------
Agent") for the Lenders, JPMORGAN CHASE BANK ("JPMorgan Chase"), as an
----- --------------
administrative agent (in such capacity, an "Administrative Agent"; the
--------------------
Administrative Agents and the Paying Agent are, collectively, the "Agents") for
------
the Lenders, and BANK OF AMERICA, N.A., BANK ONE, NA and THE BANK OF
TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH and UNION BANK OF CALIFORNIA, N.A. as
co-syndication agents for the Lenders, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
---------------------
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired EBITDA" means, for any period, with respect to any Acquired
---------------
Entity, (a) the sum of (i) Acquired Net Income for such period, (ii)
depreciation and amortization expense for such period, (iii) interest
expense net of interest income for such period, (iv) Federal and state
income taxes for such period as determined in accordance with GAAP, (v)
extraordinary losses that have been included in the calculation of Acquired
Net Income for such period, (vi) LIFO charges included in the calculation
of Acquired Net Income for such period and (vii) non-cash charges made with
respect to "expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No. 106 minus (b)
-----
the sum of (i) extraordinary gains that have been included in the
calculation of Acquired Net Income for such period and (ii) LIFO credits
included in the calculation of Acquired Net Income for such period.
"Acquired Entity" means any Person in the Borrower's line of business
---------------
or the assets of any Person in the Borrower's line of business to be
invested in or acquired.
"Acquired Entity Fiscal Quarter" means, with respect to any Acquired
------------------------------
Entity, any fiscal quarter of such Acquired Entity.
"Acquired Net Income" means, for any period, with respect to any
-------------------
Acquired Entity, the net income of such Acquired Entity for such period
before the payment of dividends on all capital stock, determined in
accordance with GAAP.
"Administrative Questionnaire" means an Administrative Questionnaire
----------------------------
in the form of Exhibit D.
"Advance" means a Revolving Credit Advance or a Competitive Bid
-------
Advance.
"Affiliate" means, with respect to any designated Person, any other
---------
Person that has a relationship with the designated Person whereby either of
such Persons directly or indirectly controls or is controlled by or is
under common control with the other of such Persons, or holds or
beneficially owns 10% or more of
the equity interest in the other Person or 10% or more of any class of
voting securities of the other Person. The term "control" means the
possession, directly or indirectly, of the power, whether or not exercised,
to direct or cause the direction of the management or policies of any
Person, whether through ownership of voting securities, by contract or
otherwise.
"Applicable Lending Office" means, with respect to each Lender, such
-------------------------
Lender's Domestic Lending Office in the case of a Base Rate Advance, such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance
and, in the case of a Competitive Bid Advance, the office of such Lender
specified in a notice of such Lender to the Paying Agent as such Lender's
Applicable Lending Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, as of any date prior to the Term Loan
-----------------
Conversion Date, a percentage per annum determined by reference to the
Borrower's Performance Level in effect on such date as set forth below:
---------------------------------------------------------------------------------------------------------
Performance Applicable Margin for Applicable Margin for
Level Base Rate Advances Eurodollar Rate Advances
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 0.330%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 0.525%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 0.625%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 0.800%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 1.000%
---------------------------------------------------------------------------------------------------------
and, as of any date on or after the Term Loan Conversion Date, a percentage
per annum determined by reference to the Borrower's Performance Level in
effect on such date as set forth below:
---------------------------------------------------------------------------------------------------------
Performance Applicable Margin for Applicable Margin for
Level Base Rate Advances Eurodollar Rate Advances
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 0.500%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 0.750%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 0.875%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 1.125%
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇ 0.0000% 1.500%
---------------------------------------------------------------------------------------------------------
provided that, in each case, the Applicable Margin for Eurodollar Rate
--------
Advances set opposite the Performance ▇▇▇▇▇ ▇ and Performance Level 2
above shall be increased by 0.125% until the date that the Borrower's
Commercial Paper is rated at least A2, P2 or F2 by at least two of S&P,
▇▇▇▇▇'▇ or Fitch, respectively.
"Applicable Percentage Ratio" means the ratio (determined as of the
---------------------------
last day of each Fiscal Quarter for the Rolling Period ending on such day)
of (a) Consolidated EBITDA for such Rolling Period to (b) Consolidated
Total Interest Expense for such Rolling Period.
"Assignment and Acceptance" means an assignment and acceptance entered
-------------------------
into by a Lender and an assignee, and to the extent required by Section
8.06, accepted by the Borrower and the Administrative Agents, in
substantially the form of Exhibit C hereto or such other form as shall be
approved by the Administrative Agents.
"Assuming Lender" has the meaning specified in Section 2.16(c).
---------------
"Assumption Agreement" has the meaning specified in Section 2.16(c).
--------------------
"Base Rate" means a fluctuating rate per annum equal to the highest
---------
from time to time of:
2
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearer 1/16 of 1% or, if there is
no nearest 1/16 of 1%, to the next higher 1/16 of 1%) of (i) 1/2 of 1%
per annum, plus (ii) the rate obtained by dividing (A) the latest
----
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being determined weekly
on each Monday (or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by the
Paying Agent from three New York certificate of deposit dealers of
recognized standing selected by the Paying Agent, by (B) a percentage
equal to 100% minus the average of the daily percentages specified
during such three-week period by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, but not limited to, any emergency,
supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other
liabilities) three-month U.S. dollar non-personal time deposits in the
United States, plus (iii) the average during such three-week period of
----
the daily annual assessment rates estimated by Citibank for
determining the current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any successor) for insuring
U.S. dollar deposits of Citibank in the United States; and
(c) a rate equal to 1/2 of 1% per annum above the Federal
Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that bears
-----------------
interest as provided in Section 2.06(a).
"Borrowing" means a Revolving Credit Borrowing or a Competitive Bid
---------
Borrowing.
"Business Day" means a day of the year on which banks are not required
------------
or authorized to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.
"Capital Lease Obligation" means, with respect to any lessee, the
------------------------
obligations under any lease of property that, in accordance with GAAP, should be
capitalized on such lessee's balance sheet.
"Change of Control" means any one or more of the following events:
-----------------
(a) the acquisition, by contract or otherwise (including the
entry into a contract or arrangement that upon consummation will
result in such acquisition), by any Person or group (as such term is
defined for purposes of Section 13(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and
------------
regulations pertaining thereto), other than the trusts for the
employee benefit plans (as defined in Section 3(2) of ERISA)
maintained by the Borrower or any Subsidiary of the Borrower that is
an ERISA Affiliate, of beneficial ownership (within the meaning of
Rule 13d-3, or any regulation or ruling promulgated to replace or
supplement Rule 13d-3, of the General Rules and Regulations under the
Exchange Act), directly or indirectly, of securities of the Borrower
representing 20% or more of the voting power of all securities of the
Borrower, or
(b) during any period of up to 24 consecutive months,
commencing before or after the date of this Agreement, individuals who
at the beginning of such period were directors of the Borrower
(together with any new directors whose election by the Board of
Directors or whose
3
nomination for election by the stockholders of the Borrower was
approved by a vote of at least 75% of the directors then in office who
either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) shall
cease for any reason to constitute at least 75% of the Board of
Directors of the Borrower.
"Commercial Paper" means any unsecured promissory note issued by the
----------------
Borrower pursuant to any commercial paper program (whether rated or unrated)
with a maturity of not more than nine months from the time of issuance,
exclusive of grace periods.
"Commercial Paper Set-Aside Amount" has the meaning specified in
---------------------------------
Section 2.01(c).
"Commitment" has the meaning specified in Section 2.01(a).
----------
"Competitive Bid Advance" means an advance by a Lender to the Borrower
-----------------------
as part of a Competitive Bid Borrowing resulting from the competitive bidding
procedure described in Section 2.01(b).
"Competitive Bid Borrowing" means a borrowing consisting of
-------------------------
simultaneous Competitive Bid Advances from each of the Lenders whose offer to
make one or more Competitive Bid Advances as part of such borrowing has been
accepted by the Borrower under the competitive bidding procedure described in
Section 2.01(b).
"Competitive Bid Reduction" has the meaning specified in Section
-------------------------
2.01(a).
"Consenting Lender" has the meaning specified in Section 2.16(b).
-----------------
"Consolidated" refers to the consolidation of accounts in accordance
------------
with GAAP, including principles of consolidation, consistent with those applied
in the preparation of the Consolidated financial statements referred to in
Section 4.01(e).
"Consolidated Cash Interest Expense" means, for any period, interest
----------------------------------
expense net of interest income, whether paid or accrued (including the interest
component of Capital Lease Obligations) on all Debt of the Borrower and its
Subsidiaries on a Consolidated basis for such period, including (a) commissions
and other fees and charges payable in connection with letters of credit, (b) net
payments payable in connection with all Interest Rate Agreements, (c) interest
capitalized during construction and (d) cash dividends paid in respect of any
preferred stock issued by the Borrower, but excluding, however, the sum of (i)
interest expense not payable in cash and (ii) amortization of discount and
deferred debt expense, all as determined in conformity with GAAP.
"Consolidated EBITDA" means, for any period, on a Consolidated basis
-------------------
for the Borrower and its Subsidiaries, (a) the sum of (i) Consolidated Net
Income for such period, (ii) depreciation and amortization expense for such
period, (iii) interest expense net of interest income for such period, (iv)
Federal and state income taxes for such period as determined in accordance with
GAAP, (v) extraordinary losses (and any unusual losses in excess of $1,000,000
arising in or outside of the ordinary course of business not included in
extraordinary losses (determined in accordance with GAAP) that have been
included in the calculation of Consolidated Net Income) for such period, (vi)
LIFO charges that have been included in the calculation of Consolidated Net
Income for such period and (vii) non-cash charges made with respect to "expected
post retirement benefit obligations" within the meaning of Statement of
Financial Accounting Standards No. 106 minus (b) the sum of (i) extraordinary
gains (and any unusual gains in excess of $1,000,000 arising in or outside of
the ordinary course of business not included in extraordinary gains (determined
in accordance with GAAP) that have been included in the calculation of
Consolidated Net Income) for such period and (ii) LIFO credits that have been
included in the calculation of Consolidated Net Income for such period.
4
"Consolidated Net Income" means, for any period, the net income of the
-----------------------
Borrower and its Consolidated Subsidiaries for such period, before the payment
of dividends on all capital stock, determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any period, the aggregate
---------------------------
rental expense (including any contingent or percentage rental expense) of the
Borrower and its Subsidiaries on a Consolidated basis for such period (excluding
real estate taxes and common area maintenance charges) in respect of all rent
obligations under all operating leases for real or personal property minus any
-----
rental income of the Borrower and its Subsidiaries on a Consolidated basis for
such period, all as determined in conformity with GAAP.
"Consolidated Total Interest Expense" means, for any period, interest
-----------------------------------
expense net of interest income, whether paid or accrued (including the interest
component of Capital Lease Obligations) on all Debt of the Borrower and its
Subsidiaries on a Consolidated basis for such period, including (a) commissions
and other fees and charges payable in connection with letters of credit, (b) net
payments payable in connection with all Interest Rate Agreements and (c) cash
dividends paid in respect of any preferred stock issued by the Borrower, but
excluding, however, (i) amortization of deferred debt expense and (ii) interest
--------- -------
capitalized during construction, all as determined in conformity with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion of
------- ---------- ---------
Revolving Credit Advances of one Type into Revolving Credit Advances of the
other Type pursuant to Section 2.02(b), 2.07 or 2.08.
"Debt" of any Person means, without duplication, (a) all indebtedness
----
of such Person for borrowed money or for the deferred purchase price of property
or services (including all obligations, contingent or otherwise, of such Person
in connection with letter of credit facilities, acceptance facilities or other
similar facilities and in connection with any agreement to purchase, redeem,
exchange into debt securities, convert into debt securities or otherwise acquire
for value (i) any capital stock of such Person or (ii) any warrants, rights or
options to acquire such capital stock, now or hereafter outstanding), (b) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (d) all Capital Lease Obligations of such Person, (e)
all Debt referred to in clause (a), (b), (c) or (d) above secured by (or for
which the holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any lien, security interest or other charge or encumbrance upon
or in property (including accounts and contract rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Debt, (f) all Guaranteed Debt of such Person and (g) any preferred stock of such
Person that is classified as a liability on such Person's Consolidated balance
sheet.
"Default" means any Event of Default or any event that would
-------
constitute an Event of Default but for the requirement that notice be given or
time elapse or both.
"Disclosed Litigation" has the meaning specified in Section 3.01(b)
--------------------
"Domestic Lending Office" means, with respect to any Lender, the
-----------------------
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance or the Assumption
Agreement, as the case may be, pursuant to which it became a Lender, or such
other office of such Lender as such Lender may from time to time specify to the
Borrower and the Paying Agent.
"Effective Date" has the meaning specified in Section 3.01.
--------------
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender;
-----------------
(iii) a commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of
5
$5,000,000,000; (iv) a savings and loan association or savings bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $5,000,000,000; (v) a commercial bank organized under the
laws of any other country that is a member of the Organization for Economic
Cooperation and Development or has concluded special lending arrangements with
the International Monetary Fund associated with its General Arrangements to
Borrow or of the Cayman Islands, or a political subdivision of any such country,
and having total assets in excess of $5,000,000,000 so long as such bank is
acting through a branch or agency located in the United States or in the country
in which it is organized or another country that is described in this clause
(v); (vi) the central bank of any country that is a member of the Organization
for Economic Cooperation and Development; or (vii) any other Person approved by
the Administrative Agents and the Borrower, such approval not to be unreasonably
withheld; provided, however, that neither the Borrower nor any
-------- -------
Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means all current and future Federal, state,
------------------
local and foreign laws, rules or regulations, codes, ordinances, orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder or other requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances, or wastes into the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or otherwise
relating to the manufacture, processing, distribution, use, generation,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions therefrom.
"ERISA" means the Employee Retirement Income Security Act of 1974, or
-----
any successor statute, as the same may be amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414 of the Internal Revenue Code.
"Eurocurrency Liabilities" has the meaning assigned to that term in
------------------------
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
-------------------------
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule I hereto or in the Assignment and Acceptance or the Assumption
Agreement, as the case may be, pursuant to which it became a Lender (or, if no
such office is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the
Paying Agent.
"Eurodollar Rate" means, with respect to each day during each Interest
---------------
Period for a Eurodollar Rate Advance, the rate of interest determined on the
basis of the rate for deposits in United States dollars for a period equal to
such Interest Period appearing on Page 3750 of the Telerate Markets screen as of
11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate Markets Service (or otherwise on such service), the "Eurodollar Rate"
for the purposes of this paragraph shall be determined by reference to such
other publicly available service for displaying eurodollar rates as may be
agreed upon by the Paying Agent and the Borrower or, in the absence of such
agreement, the "Eurodollar Rate" for the purposes of this paragraph shall
instead be an interest rate per annum equal to the rate of interest (rounded
upward to the nearest whole multiple of 1/100 of 1% per annum, if such average
is not such a multiple) of the rate per annum at which deposits in U.S. dollars
are offered by the principal office of each of the Reference Banks in London,
England, to prime banks in the London interbank market at 11:00 a.m. (London
time) two Business Days before the first day of such Interest Period in an
amount substantially equal to such Reference Bank's Eurodollar Rate Advance to
be outstanding during such Interest Period (or, if such Reference Bank shall not
have a Eurodollar Rate Advance that is to be outstanding during such Interest
Period, in an amount equal to $1,000,000) and for a period equal to such
Interest Period. The Eurodollar Rate for an Interest
6
Period shall be determined by the Paying Agent on the basis of applicable rates
furnished to and received by the Paying Agent two Business Days before the first
day of such Interest Period, subject, however, to the provisions of Section
------- -------
2.07.
"Eurodollar Rate Advance" means a Revolving Credit Advance that bears
-----------------------
interest as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" means the reserve percentage
----------------------------------
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York City
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate Advances is
determined).
"Events of Default" has the meaning specified in Section 6.01.
-----------------
"Extension Date" has the meaning specified in Section 2.16(b).
--------------
"Facility Fee Percentage" means, on any date, a percentage per annum
-----------------------
determined by reference to the Borrower's Performance Level in effect on such
date as set forth below:
--------------------------------------------------------------
Performance Facility Fee
Level Percentage
--------------------------------------------------------------
▇▇▇▇▇ ▇ 0.070%
--------------------------------------------------------------
▇▇▇▇▇ ▇ 0.100%
--------------------------------------------------------------
▇▇▇▇▇ ▇ 0.125%
--------------------------------------------------------------
▇▇▇▇▇ ▇ 0.200%
--------------------------------------------------------------
▇▇▇▇▇ ▇ 0.250%
--------------------------------------------------------------
"Facility Fees" has the meaning specified in Section 2.03.
-------------
"Facility Usage" means, at any time, without duplication, the sum of
--------------
(a) the amount of the Advances outstanding at such time and (b) the Commercial
Paper Set-Aside Amount at such time.
"Federal Funds Rate" means a fluctuating rate per annum equal for each
------------------
day to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Paying Agent from
three Federal funds brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any corporation, the chief
-----------------
financial officer, principal accounting officer, treasurer or controller of such
corporation.
"Fiscal Quarter" means (a) with respect to the first Fiscal Quarter of
--------------
any Fiscal Year, the first 16 calendar weeks of such Fiscal Year, (b) with
respect to the second Fiscal Quarter of such Fiscal Year, the next successive
period of 12 calendar weeks in such Fiscal Year, (c) with respect to the third
Fiscal Quarter of any Fiscal Year, the next successive period of 12 calendar
weeks in such Fiscal Year and (d) with respect to the last Fiscal Quarter of any
Fiscal Year, the period of time after the first three Fiscal Quarters of such
Fiscal Year through the last day of such Fiscal Year.
7
"Fiscal Year" means a year of 364 or 371 days, as the case may be,
-----------
ending on the Saturday closest to the 31st day of January in any calendar year,
and such Fiscal Year, when referred to from time to time herein by reference to
a calendar year shall be the Fiscal Year that includes February 28th of such
calendar year.
"Fitch" means Fitch, Inc.
-----
"Fixed Charge Coverage Ratio" means the ratio (determined as of the
---------------------------
last day of each Fiscal Quarter for the Rolling Period ending on such day) of
(a) the sum of (i) Consolidated EBITDA for such Rolling Period and (ii)
Consolidated Rental Expense for such Rolling Period to (b) the sum of (i)
Consolidated Cash Interest Expense for such Rolling Period and (ii) Consolidated
Rental Expense for such Rolling Period.
"Fixed Rate" means, for the period for each Fixed Rate Advance
----------
comprising part of the same Competitive Bid Borrowing, the fixed interest rate
per annum determined for such Advance, as provided in Section 2.01(b).
"Fixed Rate Advance" means a Competitive Bid Advance that bears
------------------
interest at a fixed rate per annum determined as provided in Section 2.01(b).
"GAAP" has the meaning specified in Section 1.03.
----
"Governmental Authority" means any Federal, state, local or foreign
----------------------
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantee Agreement" means the Guarantee Agreement, substantially in
-------------------
the form of Exhibit E, among the Guarantors and the Paying Agent, as amended,
supplemented or otherwise modified from time to time in compliance with Section
8.01.
"Guaranteed Debt" of any Person means all Debt referred to in clause
---------------
(a), (b), (c), (d) or (e) of the definition of the term "Debt" in this Section
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (a) to pay
or purchase such Debt or to advance or supply funds for the payment or purchase
of such Debt, (b) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss,
(c) to supply funds to, or in any other manner invest in, the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (d) otherwise to assure a
creditor against loss, but excluding leases at a rental at least as favorable to
the Borrower as could be obtained in an arm's-length transaction with a party
that is not an Affiliate.
"Guarantor" means (a) each existing and hereafter created or acquired
---------
Material Subsidiary of the Borrower and (b) each other existing or hereafter
acquired Subsidiary of the Borrower designated from time to time by the Borrower
as a Guarantor.
"Hazardous Materials" means any toxic substance, hazardous waste,
-------------------
hazardous constituents, hazardous materials, asbestos or asbestos containing
material, polychlorinated biphenyls, petroleum, including crude oil and any
fractions thereof, or other wastes, chemicals, substances or materials regulated
by any Environmental Laws.
"Information Memorandum" means the information memorandum dated April
----------------------
16, 2002 used by the Agents in connection with the syndication of the
Commitments.
"Interest Period" means, for each Eurodollar Rate Advance comprising
---------------
part of the same Revolving Credit Borrowing, the period commencing on the date
of such Eurodollar Rate Advance or the date of the
8
Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending
on the last day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing on the last
day of the immediately preceding Interest Period and ending on the last day of
the period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be seven days, one, two, three or
six months (or, if available from all the Lenders, nine months), as the Borrower
may, upon notice received by the Paying Agent not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the first day of such
Interest Period, select; provided, however, that:
-------- -------
(i) the Borrower may not select any Interest Period that ends after
the scheduled Revolver Termination Date then in effect or, if the Advances
have been converted to a term loan pursuant to Section 2.05 prior to such
selection, which ends after the Maturity Date;
(ii) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Revolving Credit Borrowing shall
be of the same duration;
(iii) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day of such Interest
--------
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial calendar
month by the number of months equal to the number of months in such
Interest Period, such Interest Period shall end on the last Business Day of
such succeeding calendar month.
"Interest Rate Agreement" means any forward contract, forward option,
-----------------------
futures contract, futures option, interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate floor agreement or
other similar agreement or arrangement entered into by the Borrower.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
---------------------
from time to time, and the regulations promulgated and rulings issued
thereunder.
"Lenders" means the Initial Lenders, each Assuming Lender that shall become
-------
a party hereto pursuant to Section 2.16 and each Person that shall become a
party hereto pursuant to Section 8.06.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
----
lien, pledge, assignment for security (whether collateral or otherwise),
hypothecation, encumbrance, lease, sublease, charge or security interest in or
on such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.
"LIFO" means the pretax charge against income determined by using the
----
last-in-first-out method of valuing inventory.
"Loan Documents" means this Agreement and Notes, if any, and each Guarantee
--------------
Agreement.
"Material Adverse Change" means any material adverse change in the
-----------------------
business, assets, operations, properties, prospects or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole.
9
"Material Adverse Effect" means (a) a materially adverse effect on the
-----------------------
business, assets, operations, properties, prospects or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, (b) material
impairment of the ability of the Borrower to perform any of its obligations
under any Loan Document to which it is or will be a party or (c) material
impairment of the rights of or benefits available to the Administrative Agents,
the Paying Agent or the Lenders under any Loan Document.
"Material Subsidiary" of the Borrower means, at any time, any
-------------------
Subsidiary of the Borrower (other than One Holdings, Inc. and any Subsidiary of
the Borrower that is a captive insurance company) having (a) assets with a value
of not less than 5% of the total value of the assets of the Borrower and its
Consolidated Subsidiaries, taken as a whole, or (b) Consolidated EBITDA not less
than 5% of the Consolidated EBITDA of the Borrower and its Consolidated
Subsidiaries, taken as a whole, in each case as of the end of or for the most
recently completed Fiscal Year of the Borrower.
"Maturity Date" means the earlier of (a) the first anniversary of the
-------------
Term Loan Conversion Date and (b) the date of termination in whole of the
aggregate Commitments pursuant to Section 2.04 or 6.01.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Multiemployer Plan" means a multiemployer plan, as defined in Section
------------------
4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate (other than
one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Internal Revenue Code) is making or accruing an obligation to
make contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Net Debt" means, on a Consolidated basis for the Borrower and its
--------
Subsidiaries as of any date, (a) Debt minus (b) the sum as of such date of (i)
-----
the aggregate outstanding amount of Debt represented by investments made by the
Borrower in Debt of another Person in connection with a real estate transaction,
so long as the Borrower or one of its Subsidiaries is or becomes an anchor
tenant of the real estate development with respect thereto and no more than two
anchor tenants exist with respect to such real estate development or the
Borrower or one of its Subsidiaries has a contractual obligation to make lease
or other payments to such Person as a result of the real estate transaction in
which such Debt was issued and (ii) the aggregate amount of Permitted
Investments in excess of $100,000,000.
"Non-Consenting Lender" has the meaning specified in Section 2.16(b).
---------------------
"Note" has the meaning specified in Section 2.14.
----
"Notice of Revolving Credit Borrowing" has the meaning specified in
------------------------------------
Section 2.02(a).
"Paying Agent's Account" means the account of the Paying Agent
----------------------
maintained by the Paying Agent at Citibank with its office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA or any successor thereto.
"Performance Level" means, as of any date of determination, the
-----------------
numerically lowest level set forth below as then in effect, as determined in
accordance with the following provisions of this definition:
▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Rating is A-, A3 or A- or better by two of S&P,
--
▇▇▇▇▇'▇ or Fitch, respectively, or the Applicable Percentage
Ratio is 5.25:1.00 or greater;
10
Level 2 The Public Debt Rating is BBB+, Baa1 or BBB+ by two of S&P,
▇▇▇▇▇'▇ or Fitch, respectively, or the Applicable Percentage
--
Ratio is 4.75:1.00 or greater but less than 5.25:1.00;
▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Rating is BBB, Baa2 or BBB by two of S&P, ▇▇▇▇▇'▇
or Fitch, respectively, or the Applicable Percentage Ratio is
--
4.00:1.00 or greater but less than 4.75:1.00;
▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Rating is BBB-, Baa3 or BBB- by two of S&P,
▇▇▇▇▇'▇ or Fitch, respectively, or the Applicable Percentage
--
Ratio is less than 4.00:1.00;
▇▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Rating is lower than BBB-, Baa3 or BBB- by two of
S&P, ▇▇▇▇▇'▇ or Fitch and the Applicable Percentage Ratio is
---
lower than 4.00:1.00;
provided (a) if any rating established or deemed to have been established by
--------
S&P, Moody's or Fitch shall be changed (other than as a result of a change in
the rating system of any of S&P, Moody's or Fitch), such change shall be
effective as of the date on which such change is first announced publicly by the
rating agency making such change, (b) any change in the Performance Level based
on a change in the Applicable Percentage Ratio shall be effective for all
purposes on and after the date of delivery to the Administrative Agents of a
certificate of the Borrower with respect to the financial statements to be
delivered, as applicable, pursuant to Section 5.01(h) for the most recently
ended Fiscal Quarter, (c) if two of the Public Debt Ratings by S&P, ▇▇▇▇▇'▇ and
Fitch and the Applicable Percentage Ratio shall fall within different Levels the
Applicable Margin, the Facility Fee Percentage and the Utilization Fee
Percentage shall be determined based upon the lower Level unless the Levels
determined based upon the Public Debt Ratings and Applicable Percentage Ratio
are two or more Levels apart, in which case the Applicable Margin and Facility
Fee Percentage shall be determined by reference to the Level next below the
higher of the two Levels (it being understood that Level 1 is the lowest Level
and Level 5 is the highest Level) and (d) notwithstanding the foregoing
provisions of clause (b), no reduction in the Performance Level shall be
effective if any Default shall have occurred and be continuing. Any change in
the Performance Level shall be effective on the effective date of such change in
the applicable Performance Level and shall apply to all Eurodollar Rate Advances
made or continued on or after the commencement of the period (and to Base Rate
Advances that are outstanding at any time during the period) commencing on the
effective date of such change in the applicable Performance Level and ending on
the date immediately preceding the effective date of the next such change in the
applicable Performance Level.
"Permitted Investments" means (a) cash, (b) readily marketable
---------------------
securities issued or guaranteed by the government of the United States of
America or any agency thereof having a maturity at the time of issuance not
exceeding one year, (c) commercial paper rated at least A-1 by S&P or P-1 by
Moody's, in each case having a maturity at the time of issuance not exceeding
one year, and (d) certificates of deposit of or time deposits with any
commercial bank, the long-term debt of which has been assigned a rating of at
least BBB by S&P or A3 by Moody's and which is a Lender and is organized and
existing under the laws of the United States of America or any state thereof or
the District of Columbia.
"Person" means an individual, partnership, corporation (including a
------
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government (domestic or
foreign) or any political subdivision or agency thereof.
"Plan" means any pension plan (other than a Multiemployer Plan)
----
subject to the provisions of Title IV of ERISA or Section 412 of the Internal
Revenue Code that is maintained for current or former employees, or any
beneficiary thereof, of the Borrower or any ERISA Affiliate.
"Public Debt Rating" means, as of any date, the rating that has been
------------------
most recently announced by either S&P, ▇▇▇▇▇'▇ or Fitch, as the case may be, for
any class of non-credit enhanced long-term senior unsecured debt issued by the
Borrower. For purposes of the foregoing, (a) if only one of S&P, Moody's
11
and Fitch shall have in effect a Public Debt Rating, the Applicable Margin, the
Facility Fee Percentage and the Utilization Fee Percentage shall be determined
by reference to the available rating; (b) if none of S&P, Moody's or Fitch shall
have in effect a Public Debt Rating, the Applicable Margin, the Facility Fee
Percentage and the Utilization Fee Percentage will be set in accordance with the
Applicable Percentage Ratio; (c) if the ratings established by S&P, ▇▇▇▇▇'▇ and
Fitch shall fall within different levels, the Applicable Margin, the Facility
Fee Percentage and the Utilization Fee Percentage shall be based upon the
highest rating of two such agencies; (d) if any rating established by S&P,
Moody's or Fitch shall be changed, such change shall be effective as of the date
on which such change is first announced publicly by the rating agency making
such change; and (e) if S&P, Moody's or Fitch shall change the basis on which
ratings are established, or any such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of such amendment, the Applicable Margin, the Facility
Fee Percentage and the Utilization Fee Percentage shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.
"Reference Banks" means Citibank, JPMorgan Chase, Bank One, NA and
---------------
Bank of America, N.A.
"Register" has the meaning specified in Section 8.06(d).
--------
"Reportable Event" means any reportable event as defined in Section
----------------
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Internal
Revenue Code).
"Required Lenders" means, at any time, Lenders holding at least 51% of
----------------
the then aggregate unpaid principal amount of all outstanding Advances (other
than Competitive Bid Advances) or, if no such principal amount is then
outstanding, Lenders having at least 51% of the Commitments.
"Responsible Officer" of any corporation means any executive officer
-------------------
or Financial Officer of such corporation and any other officer or similar
official thereof responsible for the administration of the obligations of such
corporation in respect of this Agreement.
"Revolver Termination Date" means the earlier of (a) May 21, 2003,
-------------------------
subject to the extension thereof pursuant to Section 2.16, and (b) the date of
termination in whole of the aggregate Commitments pursuant to Section 2.04 or
6.01; provided, however, that the Revolver Termination Date of any Lender that
-------- -------
is a Non-Consenting Lender to any requested extension pursuant to Section 2.16
shall be the Revolver Termination Date in effect immediately prior to the
applicable Extension Date for all purposes of this Agreement.
"Revolving Credit Advance" means an advance by a Lender to the
------------------------
Borrower as part of a Revolving Credit Borrowing and, if the Borrower has made
the Term Loan Election in accordance with Section 2.05, includes each such
advance that remains outstanding after the Term Loan Conversion Date, and refers
to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a
"Type" of Revolving Credit Advance).
----
"Revolving Credit Borrowing" means a borrowing consisting of
--------------------------
simultaneous Revolving Credit Advances of the same Type made by each of the
Lenders pursuant to Section 2.01(a).
"Rolling Period" means, in respect of any Fiscal Quarter, such Fiscal
--------------
Quarter and the three preceding Fiscal Quarters.
"S&P" means Standard & Poor's Ratings Group, a division of The
---
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
12
"Subsidiary" of any Person means any corporation, partnership, joint
----------
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Term Loan Conversion Date" has the meaning specified in Section 2.05.
-------------------------
"Term Loan Election" has the meaning specified in Section 2.05.
------------------
"Utilization Fee Percentage" means, as of any date prior to the Term
--------------------------
Loan Conversion Date that the aggregate Advances exceed 50% of the
aggregate Commitments, a percentage per annum determined by reference to
the Borrower's Performance Level in effect on such date as set forth below:
------------------------------------------------------------
Performance Utilization Fee
Level Percentage
------------------------------------------------------------
▇▇▇▇▇ ▇ 0.100%
------------------------------------------------------------
▇▇▇▇▇ ▇ 0.125%
------------------------------------------------------------
▇▇▇▇▇ ▇ 0.125%
------------------------------------------------------------
▇▇▇▇▇ ▇ 0.125%
------------------------------------------------------------
▇▇▇▇▇ ▇ 0.250%
------------------------------------------------------------
"Withdrawal Liability" means liability to a Multiemployer Plan as a
--------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
---------------------------
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
----------------
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e) ("GAAP").
----
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Revolving Credit Advances. Each
------------ -----------------------------
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make Revolving Credit Advances to the Borrower from time to time on any Business
Day during the period from the Effective Date until the earlier of the Revolver
Termination Date and the Term Loan Conversion Date in an aggregate amount not to
exceed at any time outstanding the amount set forth opposite such Lender's name
on the signature pages hereof or, if such Lender has become a Lender hereunder
pursuant to an Assumption Agreement, the amount set forth as the Commitment of
such Lender in such Assumption Agreement or, if such Lender has entered into any
Assignment and Acceptance, set forth for such Lender in the Register maintained
by the Paying Agent pursuant to Section 8.06(d), as such amount may be reduced
pursuant to Section 2.04 (such Lender's "Commitment"), provided that (i) the
---------- --------
Facility Usage shall not exceed the aggregate amount of the Commitments of the
Lenders and (ii) the aggregate amount of the Commitments of the Lenders shall be
deemed used from time to time to the extent of the aggregate amount of the
Competitive Bid Advances then outstanding and such deemed use of the aggregate
amount of the Commitments shall be allocated
13
among the Lenders ratably according to their respective Commitments (such deemed
use of the aggregate amount of the Commitments being a "Competitive Bid
---------------
Reduction"). Each Revolving Credit Borrowing shall be in an aggregate minimum
---------
amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof and
shall consist of Revolving Credit Advances of the same Type made on the same day
by the Lenders ratably according to their respective Commitments. Within the
limits of each Lender's Commitment, the Borrower may borrow under this Section
2.01(a), prepay pursuant to Section 2.09 and reborrow under this Section
2.01(a).
(b) The Competitive Bid Advances. (i) Each Lender severally agrees
----------------------------
that the Borrower may make Competitive Bid Borrowings under this Section 2.01(b)
from time to time on any Business Day during the period from the date hereof
until the date occurring 30 days prior to the earlier of the Revolver
Termination Date and the Term Loan Conversion Date in the manner set forth
below; provided that, following the making of each Competitive Bid Borrowing,
--------
the aggregate amount of the Advances then outstanding shall not exceed the
aggregate amount of the Commitments of the Lenders (computed without regard to
any Competitive Bid Reduction).
(A) The Borrower, either directly or through the Specified
Administrative Agent (as defined in paragraph (B) below), may request a
Competitive Bid Borrowing or Competitive Bid Borrowings under this Section
2.01(b) by delivering to the Paying Agent and some or all of the Lenders,
by telephone, telex or cable, confirmed immediately in writing or by
telecopier, a notice of a Competitive Bid Borrowing or Borrowings (a
"Notice of Competitive Bid Borrowing"), in substantially the form of
-----------------------------------
Exhibit A-2 or in such other form as the Administrative Agents and the
Borrower may agree upon specifying the date and aggregate amount of the
proposed Competitive Bid Borrowing, the maturity date for repayment of each
Competitive Bid Advance to be made as part of such Competitive Bid
Borrowing (which maturity date may not be earlier than the date that is 27
days after the date of such Competitive Bid Borrowing in the case of
Eurodollar Rate Advances, may not be later than the date that is 270 days
after the date of such Competitive Bid Borrowing in the case of Fixed Rate
Advances, and in any case may not be later than the earlier of the Revolver
Termination Date and the Term Loan Conversion Date), whether the Lenders
should offer to make Fixed Rate Advances or Eurodollar Rate Advances, the
interest payment date or dates relating thereto and any other terms to be
applicable to such Competitive Bid Borrowing, not later than (1) 11:00 a.m.
(New York City time) on the same Business Day as any proposed Competitive
Bid Borrowing consisting of Fixed Rate Advances and (2) 12:00 noon (New
York City time) at least three Business Days, or, if through the Specified
Administrative Agent, 10:00 a.m. (New York City time) at least four
Business Days prior to the date of a proposed Competitive Bid Borrowing
consisting of Eurodollar Rate Advances.
(B) Each Lender so notified may, if, in its sole discretion, it
elects to do so, irrevocably offer to make one or more Competitive Bid
Advances (which Competitive Bid Advances may, subject to the provisos to
the first sentence to this Section 2.01(b), have a principal amount
exceeding such Lender's Commitment) to the Borrower as part of such
proposed Competitive Bid Borrowing at a Fixed Rate or Rates or a margin or
margins relative to the Eurodollar Rate, as requested by the Borrower. Each
Lender electing to make such an offer shall do so by notifying the Borrower
or one of the Administrative Agents, as shall be specified in the Notice of
Competitive Bid Borrowing (the "Specified Administrative Agent"), before
------------------------------
such time and date as is specified in the Notice of Competitive Bid
Borrowing in paragraph (A) above, of the minimum amount and maximum amount
of each Competitive Bid Advance that such Lender would be willing to make
as part of such proposed Competitive Bid Borrowing (which amount may exceed
such Lender's Commitment), the Fixed Rate or Rates or margin or margins
relative to the Eurodollar Rate, as requested by the Borrower, that such
Lender would be willing to accept for such Competitive Bid Advance and such
Lender's Applicable Lending Office with respect to such Competitive Bid
Advance, provided that, if the Specified Administrative Agent in its
--------
capacity as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer before 15 minutes prior
to the Borrower's deadline specified in paragraph (A) above on the date on
which notice of such election is to be given to such Administrative Agent
by the other Lenders. If any Lender shall elect not to make such an offer,
such Lender shall so notify the Specified Administrative Agent, before such
time as is specified in the Notice of Competitive Bid Borrowing on the date
on which notice of such election is to be given to the Borrower or the
Specified Administrative Agent, as the case may be, by the other Lenders,
and such Lender
14
shall not be obligated to, and shall not, make any Competitive Bid Advance
as part of such Competitive Bid Borrowing, provided that the failure by any
--------
Lender to give such notice shall not cause such Lender to be obligated to
make any Competitive Bid Advance as part of such proposed Competitive Bid
Borrowing.
(C) The Borrower (either directly or through the Specified
Administrative Agent) shall, in turn, before such time and date as is
specified in the Notice of Competitive Bid Borrowing, either
(1) cancel such Competitive Bid Borrowing by giving the
Lenders who received notice pursuant to paragraph (A) above notice to
that effect, or
(2) accept one or more of the offers (or portions of such
offers) made by any Lender or Lenders pursuant to paragraph (B) above,
in its sole discretion, by giving notice to the applicable Lender or
Lenders of the amount of each Competitive Bid Advance to be made by
each Lender as part of such Competitive Bid Borrowing, with
simultaneous notice thereof to the Paying Agent, and reject any
remaining offers made by Lenders pursuant to paragraph (B) above by
giving them notice to that effect.
(D) If the Borrower notifies the Paying Agent that such Competitive
Bid Borrowing is canceled pursuant to paragraph (C)(1) above, the Borrower
or the Specified Administrative Agent, as the case may be, shall give
prompt notice thereof to the Lenders and such Competitive Bid Borrowing
shall not be made.
(E) If the Borrower accepts one or more of the offers (or portions
of such offers) made by any Lender or Lenders pursuant to paragraph (C)(2)
above, the Borrower or the Specified Administrative Agent, as the case may
be, shall in turn promptly notify each Lender that is to make a Competitive
Bid Advance as part of such Competitive Bid Borrowing, of the amount of
each Competitive Bid Advance to be made by such Lender as part of such
Competitive Bid Borrowing.
(ii) Each Lender that is to make a Competitive Bid Advance as part
of a Competitive Bid Borrowing shall, before 12:00 noon (New York City time) on
the date of such Competitive Bid Borrowing specified in the Notice of
Competitive Bid Borrowing relating thereto, make available for the account of
its Applicable Lending Office to the Paying Agent in same day funds, such
Lender's ratable portion of such Competitive Bid Borrowing. Upon fulfillment of
the applicable conditions set forth in Article III and after receipt by the
Paying Agent of such funds, the Paying Agent will make such funds available to
the Borrower. Promptly after each Competitive Bid Borrowing, the Paying Agent
will notify each Lender of the amount of the Competitive Bid Borrowing, the
consequent Competitive Bid Reduction and the dates upon which such Competitive
Bid Reduction commenced and will terminate.
(iii) Each Competitive Bid Borrowing shall be in an aggregate
principal amount of not less than $1,000,000. Following the making of each
Competitive Bid Borrowing, the Borrower shall be in compliance with the
limitations set forth in the proviso to the first sentence of subsection (i)
above.
(iv) Within the limits and on the conditions set forth in this
Section 2.01(b), the Borrower may from time to time borrow under this Section
2.01(b), repay or prepay pursuant to subsection (v) below, and reborrow under
this Section 2.01(b).
(v) The Borrower shall repay to the Paying Agent for the account of
each Lender that has made, or holds the right to repayment of, a Competitive Bid
Advance on the maturity date of each Competitive Bid Advance (such maturity date
being that specified by the Borrower for repayment of such Competitive Bid
Advance in the related Notice of Competitive Bid Borrowing delivered pursuant to
subsection (i)(A) above) the then-unpaid principal amount of such Competitive
Bid Advance. The Borrower shall not have any right to prepay any principal
amount of any Competitive Bid Advance unless, and then only on the terms,
specified by the Borrower for such Competitive Bid Advance in the related Notice
of Competitive Bid Borrowing delivered pursuant to subsection (i)(A) above.
15
(vi) The Borrower shall pay interest on the unpaid principal amount
of each Competitive Bid Advance from and including the date of such Competitive
Bid Advance to but excluding the date the principal amount of such Competitive
Bid Advance is repaid in full, at the rate of interest for such Competitive Bid
Advance (including any rate specified for past due amounts) specified by the
Lender making such Competitive Bid Advance in its notice with respect thereto
delivered pursuant to subsection (i)(B) above, payable on the interest payment
date or dates specified by the Borrower for such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing delivered pursuant to subsection
(i)(A) above.
(c) Set Aside of Commitments to Backstop Commercial Paper. At any
-----------------------------------------------------
time during which the Borrower has outstanding any Commercial Paper, a portion
of the unused Commitments in an aggregate amount equal to the aggregate face
amount of such Commercial Paper outstanding at such time shall, without further
action on the part of any party, be deemed to be reserved for use as support for
the obligations of the Borrower under such Commercial Paper; provided that the
--------
reservation of Commitments described in this Section 2.01(c) shall terminate
upon notice from the Borrower at any time that the Borrower's Commercial Paper
is rated at least A2, P2 or F2 by any two of S&P, ▇▇▇▇▇'▇ or Fitch,
respectively. The amount of Commitments so reserved at any time pursuant to this
Section 2.01(c) is referred to herein as the "Commercial Paper Set-Aside
--------------------------
Amount".
------
SECTION 2.02. Making the Revolving Credit Advances. (a) Each Revolving
------------------------------------
Credit Borrowing shall be made on notice, given not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurodollar Rate Advances, or the Business Day of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Base Rate Advances, by the Borrower to the Paying Agent, which
shall give to each Lender prompt notice thereof by telecopier or telex. Each
such notice of a Revolving Credit Borrowing (a "Notice of Revolving Credit
--------------------------
Borrowing") shall be by telephone, confirmed immediately in writing, or
---------
telecopier or telex in substantially the form of Exhibit A-1 hereto, specifying
therein the requested (i) date of such Revolving Credit Borrowing, (ii) Type of
Advances comprising such Revolving Credit Borrowing, (iii) aggregate amount of
such Revolving Credit Borrowing, and (iv) in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
each such Revolving Credit Advance. Each Lender shall, before 12:00 noon (New
York City time) on the date of such Revolving Credit Borrowing, make available
for the account of its Applicable Lending Office to the Paying Agent at the
Paying Agent's Account, in same day funds, such Lender's ratable portion of such
Revolving Credit Borrowing. After the Paying Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Paying Agent will make such funds available to the Borrower at the Paying
Agent's address referred to in Section 8.02.
(b) Anything in subsection (a) above or Section 2.08 to the
contrary notwithstanding,
(i) if fewer than two Reference Banks furnish timely information to
the Paying Agent for determining the Eurodollar Rate for any Eurodollar
Rate Advances, (A) the Paying Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined for such Eurodollar
Rate Advances, (B) each such Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate
Advance (or if such Advance is then a Base Rate Advance, will continue as a
Base Rate Advance), and (C) the obligation of the Lenders to make
Eurodollar Rate Advances or to Convert Revolving Credit Advances into
Eurodollar Rate Advances shall be suspended until the Paying Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist,
(ii) if, with respect to any Eurodollar Rate Advances, the Lenders
required to make at least 51% of such Eurodollar Rate Advances notify the
Paying Agent that the Eurodollar Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lenders of making or
funding their respective Eurodollar Rate Advances for such Interest Period,
the Paying Agent shall forthwith so notify the Borrower and the Lenders,
whereupon (A) each Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance, and (B) the obligation of the Lenders to make, or to Convert
Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended
until the Paying Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and
16
(iii) if the Borrower shall select an Interest Period of six months
or nine months for any Eurodollar Rate Advances and any Lender shall notify
the Paying Agent that the Eurodollar Rate for such Interest Period will not
adequately reflect the cost to such Lender of making or funding its
Eurodollar Rate Advance for such Interest Period, the Paying Agent shall
forthwith so notify such Borrower and the Lenders, whereupon (A) each such
Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance, and
(B) the obligations of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances having an Interest Period of six months or nine
months shall be suspended until the Paying Agent shall notify the Borrower
and such Lenders that the circumstances causing such suspension no longer
exist.
(c) Each Notice of Borrowing shall be irrevocable and binding on
the Borrower and, in respect of any Borrowing comprised of or including
Eurodollar Rate Advances specified in such Notice of Borrowing, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender solely as a result of any failure by the Borrower to borrow on the date
specified in the Notice of Borrowing for such Borrowing, including any loss
(including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Eurodollar Rate Advance to be made by such Lender as part of
such Borrowing when such Eurodollar Rate Advance, solely as a result of such
failure, is not made on such date. Without prejudice to the survival of any
other provision of this Agreement, the provisions of this paragraph shall
survive any termination of this Agreement.
(d) Unless the Paying Agent shall have received notice from a
Lender prior to the date of any Revolving Credit Borrowing that such Lender will
not make available to the Paying Agent such Lender's ratable portion of such
Revolving Credit Borrowing, the Paying Agent may assume that such Lender has
made such portion available to the Paying Agent on the date of such Revolving
Credit Borrowing in accordance with subsection (a) of this Section 2.02 and the
Paying Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent such Lender
shall not have so made available to the Paying Agent on the date of any
Revolving Credit Borrowing such Lender's ratable portion of such Borrowing, such
Lender agrees, and the Borrower agrees, to pay or repay to the Paying Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is paid or repaid to the Paying Agent, at (in the case of such Lender)
the Federal Funds Rate and (in the case of the Borrower) the Base Rate plus the
Applicable Margin (provided that such payment at the Federal Funds Rate or the
Base Rate (plus the Applicable Margin) with respect to any Eurodollar Rate
Advance shall not affect the status of such Advance as a Eurodollar Rate
Advance). If such Lender shall pay to the Paying Agent such amount, the amount
so paid shall constitute such Lender's Revolving Credit Advance as part of such
Revolving Credit Borrowing for purposes of this Agreement from and including the
date of such Revolving Credit Borrowing.
(e) The failure of any Lender to make the Revolving Credit Advance
to be made by it as part of any Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Revolving Credit Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender on the date of any Revolving Credit
Borrowing.
SECTION 2.03. Fees. (a) Facility Fees. The Borrower agrees to pay to
---- -------------
the Paying Agent for distribution to each Lender until the earlier of the
Revolver Termination Date and the Term Loan Conversion Date a facility fee (the
"Facility Fee") with respect to such Lender's Commitment, at a rate per annum
------------
equal to the Facility Fee Percentage from time to time in effect on the
aggregate amount of such Lender's Commitment, regardless of usage. The Facility
Fees will commence to accrue on the date of execution of this Agreement and will
be payable in arrears on (i) the Effective Date, (ii) on the third day of each
January, April, July and October and (iii) on the Revolver Termination Date or
the Term Loan Conversion Date, as the case may be.
(b) Paying Agent's Fees. The Borrower agrees to pay to the Paying
-------------------
Agent, for its own account, such fees as may from time to time be agreed between
the Borrower and the Paying Agent.
SECTION 2.04. Termination or Reduction of the Commitments. (a) If the
-------------------------------------------
Borrower has not made the Term Loan Election on or prior to the Revolver
Termination Date, the Commitments shall be
17
automatically terminated on the Revolver Termination Date. If the Borrower has
made the Term Loan Election in accordance with Section 2.05, from time to time
after the Term Loan Conversion Date upon each prepayment of the Revolving Credit
Advances, the aggregate Commitments of the Lenders under this Agreement shall be
automatically and permanently reduced on a pro rata basis by an amount equal to
the amount by which the aggregate Commitments of the Lenders under this
Agreement immediately prior to such reduction exceeds the aggregate unpaid
principal amount of the Revolving Credit Advances outstanding at such time.
(b) The Borrower shall have the right, upon at least three Business
Days' notice to the Administrative Agents, to terminate in whole, or reduce
ratably in part (in a minimum principal amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof), the unused portion of the Commitments
(such unused portion having been determined after subtracting the Competitive
Bid Reduction and the Facility Usage).
SECTION 2.05. Repayment of Revolving Credit Advances; Term Loan
-------------------------------------------------
Election. (a) The Borrower shall, subject to the next succeeding sentence, repay
--------
to the Paying Agent for the account of the Lenders on the Revolver Termination
Date the aggregate principal amount of the Advances owing to the Lenders on such
date.
(b) The Borrower may, at any time prior to the Revolver Termination
Date and upon not less than 15 days' notice to the Paying Agent, elect (the
"Term Loan Election") to convert all of the Revolving Credit Advances
------------------
outstanding on the date specified in such notice (the "Term Loan Conversion
--------------------
Date") into a term loan which the Borrower shall repay in full ratably to the
----
Paying Agent for the account of the Lenders on the Maturity Date; provided that
--------
no Default has occurred and is continuing on the date of notice of the Term Loan
Election or on the Term Loan Conversion Date.
SECTION 2.06. Interest on Revolving Credit Advances. The Borrower
-------------------------------------
shall pay interest on the unpaid principal amount of each Revolving Credit
Advance owing to each Lender from the date of such Revolving Credit Advance
until such principal amount shall be paid in full, at the following rates per
annum:
(a) Base Rate Advances. During such periods as such Revolving
------------------
Credit Advance is a Base Rate Advance, a rate per annum equal at all times
to the sum of (x) the Base Rate in effect from time to time plus (y) the
Applicable Margin plus (z) the Utilization Fee Percentage, if any, payable
quarterly in arrears on the third day of each January, April, July and
October and on the date such Base Rate Advance shall be Converted into a
Eurodollar Rate Advance or paid in full; provided that commencing on the
--------
date and during the continuance of any Event of Default the applicable
interest rate for all outstanding Base Rate Advances shall be a rate per
annum equal at all times to 2% per annum above the rate otherwise in effect
for such Base Rate Advances pursuant to this Section 2.06(a) from time to
time.
(b) Eurodollar Rate Advances. During such periods as such Revolving
------------------------
Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (x) the
Eurodollar Rate for such Interest Period plus (y) the Applicable Margin
plus (z) the Utilization Fee Percentage, if any, payable on the last day of
each Interest Period and, if such Interest Period has a duration of six
months or nine months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period, provided
--------
that commencing on the date and during the continuance of any Event of
Default the applicable interest rate for all outstanding Eurodollar Rate
Advances shall be a rate per annum equal at all times to 2% per annum above
the rate otherwise in effect for such Eurodollar Rate Advances pursuant to
this Section 2.06(b).
SECTION 2.07. Interest Rate Determination. (a) Each Reference Bank
---------------------------
agrees to furnish to the Paying Agent timely information for the purpose of
determining each Eurodollar Rate. If any one or more of the Reference Banks
shall not furnish such timely information to the Paying Agent for the purpose of
determining any such interest rate (but at least two Reference Banks shall have
furnished such information), the Paying Agent shall determine such interest rate
on the basis of timely information furnished by the remaining Reference Banks.
(b) The Paying Agent shall give prompt notice to the Borrower and
the Lenders of the applicable interest rate determined by the Paying Agent for
purposes of Section 2.06(a) or (b), and the rate, if any, furnished by each
Reference Bank for the purpose of determining the interest rate under Section
2.06(b).
18
(c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Paying Agent will forthwith so notify the Borrower and the Lenders and such
Advances will automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances.
SECTION 2.08. Conversion of Revolving Credit Advances. (a) The
---------------------------------------
Borrower may on any Business Day, upon notice given to the Paying Agent not
later than 11:00 a.m. (New York City time) on the third Business Day prior to
the date of the proposed Conversion, and subject to the provisions of Sections
2.02(c), 2.06, 2.07, 2.08(d) and 2.10(c), Convert all or any Revolving Credit
Advances of one Type into Advances of the other Type; provided, however, that
-------- -------
(i) except as provided in Section 2.10(c), any Conversion of any Eurodollar Rate
Advances into Base Rate Advances shall be made on, and only on, the last day of
an Interest Period for such Eurodollar Rate Advances and (ii) the Borrower may
not Convert any Base Rate Advances into Eurodollar Rate Advances unless such
Base Rate Advances are in an aggregate amount not less than $10,000,000. Each
such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Type and aggregate amount of
Advances to be Converted and (iii) if such Conversion is into Eurodollar Rate
Advances, the duration of the Interest Period for such Advances.
(b) Each notice of Conversion shall be irrevocable and binding on
the Borrower and, in respect of any notice of Conversion to Eurodollar Rate
Advances, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender solely as a result of any failure to Convert on
the date specified in such notice, including any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Eurodollar Rate Advance to be made by such Lender as part of such Conversion
when such Eurodollar Rate Advance, solely as a result of such failure, is not
made on such date. Without prejudice to the survival of any other provision of
this Agreement, the provisions of this paragraph shall survive any termination
of this Agreement.
(c) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances having the same Interest Period shall be reduced, by
payment or prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(d) Upon the occurrence of any Default and so long as such Default
shall continue, (i) each Eurodollar Rate Advance will automatically, on the last
day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Lenders to make, or to Convert any
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.09. Optional Prepayments of Revolving Credit Advances. The
-------------------------------------------------
Borrower may, upon at least two Business Days' notice in the case of Eurodollar
Rate Advances, and upon at least one Business Day's notice in the case of Base
Rate Advances, to the Paying Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amount of the Revolving Credit Advances
comprising part of the same Revolving Credit Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
principal amount prepaid; provided, however, that (x) each partial prepayment
-------- -------
pursuant to this Section 2.09 shall be in an aggregate principal amount of
$5,000,000 or any whole multiple of $1,000,000 in excess thereof and (y) in the
event of any such prepayment of a Eurodollar Rate Advance, such prepayment shall
either be made on the last day of an Interest Period for such Eurodollar Rate
Advance or shall be made together with payment of all amounts required pursuant
to Section 8.03(c).
SECTION 2.10. Increased Costs; Illegality. (a) If, due to either (i)
---------------------------
the introduction of or any change (including any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) in or change in the interpretation of any law or regulation or (ii)
the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances, then the Borrower shall from time to time,
upon demand by such Lender (with a copy of such demand to the Administrative
Agents), pay to the Paying Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such
19
increased cost, submitted to the Borrower and the Administrative Agents by such
Lender, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's commitment
to lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Administrative Agents), the Borrower
shall pay to the Paying Agent for the account of such Lender, from time to time
as specified by such Lender, additional amounts sufficient to compensate such
Lender in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts,
submitted to the Borrower and the Administrative Agents by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(c) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, as determined by any Lender, or any central
bank or other Governmental Authority shall assert that it is unlawful, for such
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to the Borrower through the Administrative Agents, (i) the obligation of such
Lender to make Eurodollar Rate Advances and to Convert Advances into Eurodollar
Rate Advances shall terminate and (ii) the Borrower shall forthwith Convert all
Eurodollar Rate Advances of such Lender then outstanding into Base Rate Advances
in accordance with Section 2.08, except that such Conversion may occur,
notwithstanding Section 2.08, other than on the last day of the respective
Interest Periods for such Eurodollar Rate Advances, if the Borrower has paid all
amounts payable under Section 8.03(c).
SECTION 2.11. Payments and Computations. (a) The Borrower
-------------------------
shall make each payment hereunder and under the Notes, if any, without set-off
or counterclaim, not later than 12:00 noon (New York City time) on the day when
due in U.S. dollars to the Paying Agent at the Paying Agent's Account in same
day funds. The Paying Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest or facility fees
ratably (other than amounts payable pursuant to Section 2.03(b), 2.10, 2.13,
2.16 or 8.03(c)) to the Lenders for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Lender to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon any Assuming Lender becoming a Lender hereunder as a result of
an extension of the Revolver Termination Date pursuant to Section 2.16, and upon
the Paying Agent's receipt of such Lender's Assumption Agreement and recording
of the information contained therein in the Register, from and after the
applicable Extension Date, the Paying Agent shall make all payments hereunder
and under any Notes issued in connection therewith in respect of the interest
assumed thereby to the Assuming Lender. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 8.06(d), from and after the effective date specified in such
Assignment and Acceptance, the Paying Agent shall make all payments hereunder
and under the Notes, if any, in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under the
Note, if any, held by such Lender, to charge from time to time against any or
all of the Borrower's accounts with such Lender any amount so due to such Lender
prior to any sharing under Section 2.12. Nothing contained in this subsection
(b) shall impair the obligations of any Lender under Section 2.12, the rights of
the Administrative Agents, the Paying Agent or any Lender under Section 8.04 or
any other rights and remedies (including other rights of set-off) that the
Administrative Agents, the Paying Agent or such Lender may have.
(c) All computations of interest based on the Base Rate (when
determined pursuant to clause (a) of the definition thereof) and fees shall be
made by the Paying Agent on the basis of a year of 365 or 366 days, as
20
the case may be, and all computations of interest based on the Base Rate (when
determined pursuant to clause (b) or (c) of the definition thereof), the
Eurodollar Rate or the Federal Funds Rate shall be made by the Paying Agent on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the Paying Agent
of an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes, if any,
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fees, as the
case may be; provided, however, that if such extension would cause payment of
-------- -------
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Paying Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full, the Paying Agent
may assume that the Borrower has made such payment in full to the Paying Agent
on such date and the Paying Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Paying Agent, each Lender shall repay to the Paying
Agent forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Paying Agent, at the
Federal Funds Rate.
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall
------------------------
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Revolving Credit Advances made
by it (other than pursuant to Section 2.03(b), 2.10, 2.13, 2.16 or 8.03(c)) in
excess of its ratable share of payments on account of the Revolving Credit
Advances obtained by all the Lenders, such Lender shall forthwith purchase from
the other Lenders such participations in the Revolving Credit Advances made to
the other Lenders as shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them; provided, however, that if all or
-------- -------
any portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and each such other
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to each such other Lender's ratable
share (according to the proportion of (i) the amount of such other Lender's
required repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees that any Lender
so purchasing a participation from another Lender pursuant to this Section 2.12
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.13. Taxes. (a) Any and all payments by the Borrower
-----
hereunder or under any Note shall be made, in accordance with Section 2.11, free
and clear of and without deduction for any and all current or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto (including interest, additions to tax, and penalties thereon)
imposed by the United States of America or any political subdivision thereof
(or, in the event that the Borrower assigns any of its rights or obligations or
any interest hereunder or under any Notes, by any foreign country and its
political subdivisions in which the assignee is incorporated or is resident),
excluding, in the case of each Lender, the Paying Agent and each Administrative
---------
Agent, taxes imposed on or measured by its net income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Administrative
Agent, the Paying Agent or such Lender (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes imposed on
or measured by its net income, and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
-----
If the Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender, the Paying Agent or either
Administrative Agent, (i) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.13) such Lender, the Paying Agent
or such Administrative Agent (as the case may be) receives an amount equal to
the sum it would have received had no such
21
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any current or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or under any Note
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any Note (hereinafter referred to as "Other Taxes").
-----------
(c) The Borrower will indemnify each Lender, the Paying Agent
and each Administrative Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.13) paid by such Lender, the Paying Agent or such
Administrative Agent (as the case may be) and any liability (including interest,
expenses, additions to tax, and penalties) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payments under this indemnification shall be made within 30 days from
the date such Lender, the Paying Agent or such Administrative Agent (as the case
may be) makes written demand therefor. However, in the case of any Taxes not
required by law to be deducted by the Borrower from or in respect of any sum
payable hereunder to any Lender, the Paying Agent or either Administrative
Agent, payment under this indemnification must be made by the Borrower only if
such written demand has been made within 60 days from the date on which such
Lender, the Paying Agent or such Administrative Agent, as the case may be, makes
payment of the Taxes to the relevant taxing authority.
(d) Within 30 days after the reasonable request therefor by
the Paying Agent in connection with any payment of Taxes or Other Taxes, the
Borrower will furnish to the Paying Agent, at its address referred to in, or
determined pursuant to, Section 8.02, the original or a certified copy of an
official receipt from the jurisdiction to which payment is made evidencing
payment thereof or, if unavailable, a certificate from the Borrower's treasurer
or responsible officer that states that such payment has been made and that sets
forth the date and amount of such payment.
(e) Prior to or on the Effective Date in the case of each
Lender that is a Lender on the Effective Date, and on the date of the Assignment
and Acceptance or the Assumption Agreement, as the case may be, pursuant to
which it became a Lender in the case of each other Lender, and from time to time
thereafter if reasonably requested by the Borrower or the Paying Agent, each
Lender organized under the laws of a foreign jurisdiction that is exempt from
United States Federal withholding tax, or that is subject to such tax at a
reduced rate under an applicable treaty, with respect to payments under this
Agreement has provided or is herewith providing the Borrower or the Paying Agent
with an Internal Revenue Form W-8BEN or Form W-8ECI or other certificate or
document required under United States law to establish entitlement to such
exemption or reduced rate. A determination of whether a Lender is exempt from
United States Federal withholding tax or is subject to such tax at a reduced
rate shall be within the reasonable judgment of the Lender.
(f) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.13 shall survive the payment in full of principal
and interest hereunder.
SECTION 2.14. Evidence of Debt. (a) Each Lender shall maintain
----------------
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder. The Borrower agrees
that upon notice by any Lender to the Borrower (with a copy of such notice to
the Paying Agent) to the effect that a promissory note or other evidence of
indebtedness is required or appropriate in order for such Lender to evidence
(whether for purposes of pledge, enforcement or otherwise) the Advances owing
to, or to be made by, such Lender, the Borrower shall promptly execute and
deliver to such Lender a promissory note or other evidence of indebtedness, in
form and substance reasonably satisfactory to the Borrower and such Lender (each
a "Note"), payable to the order of such Lender in a principal amount equal to
----
the Commitment of such Lender.
(b) The Register maintained by the Paying Agent pursuant to
Section 8.06(d) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if
22
appropriate, the Interest Period applicable thereto, (ii) the terms of each
Assignment and Acceptance delivered to and accepted by it, (iii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder, and (iv) the amount of any sum received by
the Paying Agent from the Borrower hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Paying Agent in the
Register pursuant to subsection (b) above, and by each Lender in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement, absent manifest
error; provided, however, that the failure of the Paying Agent or such Lender to
-------- -------
make an entry, or any finding that an entry is incorrect, in the Register or
such account or accounts shall not limit or otherwise affect the obligations of
the Borrower under this Agreement.
SECTION 2.15. Use of Proceeds. The proceeds of the Advances
---------------
shall be available (and the Borrower agrees that it shall use such proceeds) for
general corporate purposes of the Borrower and its Subsidiaries.
SECTION 2.16. Extension of Termination Date. (a) At least 30
-----------------------------
days but not more than 60 days prior to the Revolver Termination Date in effect
at any time, the Borrower, by written notice to the Paying Agent, may request an
extension of the Revolver Termination Date in effect at such time for a period
of 364 days from its then scheduled expiration; provided, however, that the
-------- -------
Borrower shall not have made the Term Loan Election prior to the then scheduled
Revolver Termination Date. The Paying Agent shall promptly notify each Lender of
such request, and each Lender shall in turn, in its sole discretion, not earlier
than 30 days but at least 20 days prior to such Revolver Termination Date,
notify the Borrower and the Paying Agent in writing as to whether such Lender
will consent to such extension. If any Lender shall fail to notify the Paying
Agent and the Borrower in writing of its consent to any such request for
extension of the Revolver Termination Date at least 20 days prior to the
scheduled occurrence thereof at such time, such Lender shall be deemed to be a
Non-Consenting Lender with respect to such request. The Paying Agent shall
notify the Borrower not later than 15 days prior to the scheduled Revolver
Termination Date in effect at such time of the decision of the Lenders regarding
the Borrower's request for an extension of the Revolver Termination Date.
(b) If all of the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section 2.16, the Revolver
Termination Date shall, effective as at the Revolver Termination Date otherwise
in effect at such time (the "Extension Date"), be extended for a period of 364
--------------
days from such Extension Date; provided that on each Extension Date, no Default
--------
shall have occurred and be continuing, or shall occur as a consequence thereof
and the giving of a request for extension shall constitute a representation and
warranty by the Borrower that the representations and warranties contained in
Section 4.01 are correct in all material respects on and as of the date of such
notice and on such Extension Date, as though made on and as of such dates. If
Lenders holding at least a majority in interest of the aggregate Commitments at
such time consent in writing to any such request in accordance with subsection
(a) of this Section 2.16, the Revolver Termination Date in effect at such time
shall, effective as at the applicable Extension Date, be extended as to those
Lenders that so consented (each a "Consenting Lender") but shall not be extended
-----------------
as to any other Lender (each a "Non-Consenting Lender"). To the extent that the
---------------------
Revolver Termination Date is not extended as to any Lender pursuant to this
Section 2.16 and the Commitment of such Lender is not assumed in accordance with
subsection (c) of this Section 2.16 on or prior to the applicable Extension
Date, the Commitment of such Non-Consenting Lender shall automatically terminate
in whole on such unextended Revolver Termination Date without any further notice
or other action by the Borrower, such Lender or any other Person; provided that
--------
such Non-Consenting Lender's rights under Sections 2.10, 2.13, 8.03 and 8.07,
and its obligations under Section 7.05, shall survive the Revolver Termination
Date for such Lender as to matters occurring prior to such date. It is
understood and agreed that no Lender shall have any obligation whatsoever to
agree to any request made by the Borrower for any requested extension of the
Revolver Termination Date.
(c) If Lenders holding at least a majority in interest of the
aggregate Commitments at any time consent to any such request pursuant to
subsection (a) of this Section 2.16, the Borrower may arrange for one or more
Consenting Lenders or other Eligible Assignees (each such Eligible Assignee that
accepts an offer to assume a Non-Consenting Lender's Commitment as of the
applicable Extension Date being an "Assuming Lender") to assume, effective as of
---------------
the Extension Date, any Non-Consenting Lender's Commitment and all of the
obligations
23
of such Non-Consenting Lender under this Agreement thereafter arising, without
recourse to or warranty by, or expense to, such Non-Consenting Lender; provided,
--------
however, that the amount of the Commitment of any such Assuming Lender as a
-------
result of such substitution shall in no event be less than $10,000,000 unless
the amount of the Commitment of such Non-Consenting Lender is less than
$10,000,000, in which case such Assuming Lender shall assume all of such lesser
amount; and provided further that:
-------- -------
(i) any such Consenting Lender or Assuming Lender shall have
paid to such Non-Consenting Lender (A) the aggregate principal amount
of, and any interest accrued and unpaid to the effective date of the
assignment on, the outstanding Revolving Credit Advances, if any, of
such Non-Consenting Lender plus (B) any accrued but unpaid Facility
----
Fees owing to such Non-Consenting Lender as of the effective date of
such assignment;
(ii) all additional costs reimbursements, expense
reimbursements and indemnities payable to such Non-Consenting Lender,
and all other accrued and unpaid amounts owing to such Non-Consenting
Lender hereunder, as of the effective date of such assignment shall
have been paid to such Non-Consenting Lender; and
(iii) with respect to any such Assuming Lender, the applicable
processing and recordation fee required under Section 8.06(a) for such
assignment shall have been paid;
provided further that such Non-Consenting Lender's rights under Sections 2.10,
-------- -------
2.13, 8.03 and 8.07, and its obligations under Section 7.05, shall survive such
substitution as to matters occurring prior to the date of substitution. At least
three Business Days prior to any Extension Date, (A) each such Assuming Lender,
if any, shall have delivered to the Borrower and the Paying Agent an assumption
agreement, in form and substance satisfactory to the Borrower and the Paying
Agent (an "Assumption Agreement"), duly executed by such Assuming Lender, such
--------------------
Non-Consenting Lender, the Borrower and the Paying Agent, (B) any such
Consenting Lender shall have delivered confirmation in writing satisfactory to
the Borrower and the Paying Agent as to the increase in the amount of its
Commitment and (C) each Non-Consenting Lender being replaced pursuant to this
Section 2.16 shall have delivered to the Paying Agent any Note or Notes held by
such Non-Consenting Lender. Upon the payment or prepayment of all amounts
referred to in clauses (i), (ii) and (iii) of the immediately preceding
sentence, each such Consenting Lender or Assuming Lender, as of the Extension
Date, will be substituted for such Non-Consenting Lender under this Agreement
and shall be a Lender for all purposes of this Agreement, without any further
acknowledgment by or the consent of the other Lenders, and the obligations of
each such Non-Consenting Lender hereunder shall, by the provisions hereof, be
released and discharged.
(d) If all of the Lenders (after giving effect to any
assumptions pursuant to subsection (c) of this Section 2.16) consent in writing
to a requested extension (whether by execution or delivery of an Assumption
Agreement or otherwise) not later than one Business Day prior to such Extension
Date, the Paying Agent shall so notify the Borrower, and, so long as no Default
shall have occurred and be continuing as of such Extension Date, or shall occur
as a consequence thereof, the Revolver Termination Date then in effect with
respect to the Commitments of such Consenting Lenders and Assuming Lenders shall
be extended for the 364-day period described in subsection (a) of this Section
2.16, and all references in this Agreement, and in the Notes, if any, to the
"Revolver Termination Date" shall, with respect to each Consenting Lender and
-------------------------
each Assuming Lender for such Extension Date, refer to the Revolver Termination
Date as so extended. Promptly following each Extension Date, the Paying Agent
shall notify the Lenders (including, without limitation, each Assuming Lender)
of the extension of the scheduled Revolver Termination Date in effect
immediately prior thereto and shall thereupon record in the Register the
relevant information with respect to each such Consenting Lender and each such
Assuming Lender.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section
------------------------------------------------
2.01. Section 2.01 of this Agreement shall become effective on and as of the
----
first date (the "Effective Date") on which the following conditions precedent
--------------
have been satisfied:
24
(a) There shall have occurred no Material Adverse Change since
February 2, 2002.
(b) There shall exist no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its
Subsidiaries pending or threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect other than the matters described on Schedule
3.01(b) hereto (the "Disclosed Litigation") or (ii) purports to affect
--------------------
the legality, validity or enforceability of this Agreement or any Note
or the consummation of the transactions contemplated hereby, and there
shall have been no adverse change in the status, or financial effect on
the Borrower or any of its Subsidiaries, of the Disclosed Litigation
from that described on Schedule 3.01(b) hereto.
(c) Nothing shall have come to the attention of the Lenders
during the course of their due diligence investigation to lead them to
believe that the Information Memorandum was or has become misleading,
incorrect or incomplete in any material respect; without limiting the
generality of the foregoing, the Lenders shall have been given such
access to the management, records, books of account, contracts and
properties of the Borrower and its Subsidiaries as they shall have
requested.
(d) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Lenders) and shall remain in effect, and no law
or regulation shall be applicable in the reasonable judgment of the
Lenders that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(e) The Borrower shall have notified each Lender and the
Agents in writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and expenses
of the Agents and the Lenders (including the accrued fees and expenses
of counsel to the Agents).
(g) On the Effective Date, the following statements shall be
true and the Agents shall have received for the account of each Lender
a certificate signed by a duly authorized officer of the Borrower,
dated the Effective Date, stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
(h) The Agents shall have received on or before the Effective
Date the following, each dated such day, in form and substance
satisfactory to the Agents and in sufficient copies for each Lender:
(i) The Guarantee Agreement, duly executed by each
Guarantor existing on the Effective Date.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement, certified
copies of the resolutions of the Board of Directors of each
Guarantor approving the Guarantee Agreement and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement
and the other Loan Documents.
(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower and each Guarantor certifying the
names and true signatures of the officers of the Borrower or
such Guarantor, as applicable, authorized to sign this
Agreement, each other Loan Document to which it is a party and
the other documents to be delivered hereunder or thereunder.
25
(iv) A favorable opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice
President, Secretary and General Counsel for the Borrower,
substantially in the form of Exhibit D hereto and as to such
other matters as any Lender through the Agents may reasonably
request.
(v) A favorable opinion of Shearman & Sterling, counsel
for the Agents, in form and substance satisfactory to the
Agents.
(i) The termination of the commitments of the lenders and the
payment in full of all Debt outstanding under (i) the 364-Day Credit
Agreement dated as of May 23, 2001 among the Borrower, the lenders
parties thereto, Citibank and The Chase Manhattan Bank, as
administrative agents, and Bank of America, N.A., Bank One, NA and The
Bank of New York, as co-syndication agents, and (ii) the Loan Agreement
dated as of March 11, 1998, amended and restated as of December 18,
1998, among ▇▇▇▇ ▇▇▇▇▇, Inc., as borrower, the lenders parties thereto,
Chase Securities Inc., as lead arranger and book manager, Bankers Trust
Company, as administrative agent, The Chase Manhattan Bank, as
syndication agent, and NationsBank of Texas, N.A. and Salomon Brothers
Holding Co Inc., as co-documentation agents.
SECTION 3.02. Conditions Precedent to Each Revolving Credit
---------------------------------------------
Borrowing. The obligation of each Lender to make a Revolving Credit Advance on
---------
the occasion of each Revolving Credit Borrowing shall be subject to the
conditions precedent that the Effective Date shall have occurred and on the date
of such Revolving Credit Borrowing (a) the following statements shall be true
(and each of the giving of the applicable Notice of Revolving Credit Borrowing
and the acceptance by the Borrower of the proceeds of such Revolving Credit
Borrowing shall constitute a representation and warranty by the Borrower that on
the date of such Borrowing such statements are true):
(i) the representations and warranties contained in Section
4.01 are correct in all material respects on and as of the date of such
Revolving Credit Borrowing, before and after giving effect to such
Revolving Credit Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and
(ii) no event has occurred and is continuing, or would result
from such Revolving Credit Borrowing or from the application of the
proceeds therefrom, that constitutes a Default;
and (b) the Agents shall have received such other approvals, opinions or
documents as any Lender through the Agents may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes
---------------------------------
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of any Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agents shall promptly notify the Lenders of the
occurrence of the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
----------------------------------------------
The Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio. Each
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.
26
(b) The execution, delivery and performance by the Borrower
and each Guarantor of this Agreement and the Notes, if any, delivered
hereunder, in the case of the Borrower, or the Guarantee Agreement, in
the case of each Guarantor, and the consummation of the transactions
contemplated hereby, are within the Borrower's or such Guarantor's
corporate powers, have been duly authorized by all necessary corporate
action, and do not contravene (i) the Borrower's or such Guarantor's
charter, regulations or by-laws, as applicable, or (ii) law or any
contractual restriction binding on or affecting the Borrower or such
Guarantor.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery
and performance by the Borrower of this Agreement or the Notes, if any,
delivered hereunder, or by any Guarantor of the Guarantee Agreement,
except for those authorizations, approvals, actions, notices and
filings listed on Schedule 4.01(c) hereto, all of which have been duly
obtained, taken, given or made and are in full force and effect.
(d) This Agreement has been, and each of the Notes, if any,
will have been, duly executed and delivered by the Borrower. The
Guarantee Agreement has been duly executed and delivered by each
Guarantor. This Agreement and the Guarantee Agreement are, and each of
the Notes, when delivered hereunder, will be, the legal, valid and
binding obligation of the Borrower and each Guarantor party thereto, as
the case may be, enforceable against the Borrower and such Guarantor,as
the case may be, in accordance with their respective terms.
(e) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at February 2, 2002, and the related Consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for the Fiscal Year then ended, accompanied by an opinion
of PricewaterhouseCoopers LLP, independent public accountants, copies
of which have been furnished to each Lender, fairly present the
Consolidated financial condition of the Borrower and its Subsidiaries
as at such date and the Consolidated results of the operations of the
Borrower and its Subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently
applied. Since February 2, 2002, there has been no Material Adverse
Change.
(f) There is no pending or threatened action, suit,
investigation, litigation or proceeding affecting the Borrower or any
of its Subsidiaries before any court, governmental agency or arbitrator
that (i) could be reasonably likely to have a Material Adverse Effect
(other than the Disclosed Litigation) or (ii) purports to affect the
legality, validity or enforceability of the Loan Documents or the
consummation of the transactions contemplated hereby and thereby, and
there has been no adverse change in the status, or financial effect on
the Borrower or any of its Subsidiaries, of the Disclosed Litigation
from that described on Schedule 3.01(b) hereto.
(g) Neither the Borrower nor any Guarantor is engaged in the
business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any
Advance will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin
stock.
(h) Neither the Borrower nor any Guarantor is (i) an
"investment company", within the meaning of the Investment Company Act
of 1940, as amended or (ii) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of
1935, as amended.
ARTICLE V
COVENANTS OF THE BORROWER
27
SECTION 5.01. Affirmative Covenants. So long as any Advance
---------------------
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
-------------------------
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and Environmental Laws.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
---------------------
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property;
provided, however, that neither the Borrower nor any of its
-------- -------
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained.
(c) Maintenance of Insurance. Maintain, and cause each of its
------------------------
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates; provided, however, that the
-------- -------
Borrower and its Subsidiaries may self-insure to the same extent as
other companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such
Subsidiary operates and to the extent consistent with prudent business
practice.
(d) Preservation of Corporate Existence, Etc. Preserve and
----------------------------------------
maintain, and cause each of its Subsidiaries to preserve and maintain,
its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Borrower and its Subsidiaries may
-------- -------
consummate any merger or consolidation permitted under Section 5.02(b)
and provided further that neither the Borrower nor any of its
-------- -------
Subsidiaries shall be required to preserve any right or franchise if a
Responsible Officer of the Borrower or such Subsidiary shall determine
that the preservation thereof is no longer desirable in the conduct of
the business of the Borrower or such Subsidiary, as the case may be,
and that the loss thereof is not disadvantageous in any material
respect to the Borrower, such Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and from time to
-----------------
time, permit any Agent or any of the Lenders or any agents or
representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of,
the Borrower and any of its Subsidiaries, and to discuss the affairs,
finances and accounts of the Borrower and any of its Subsidiaries with
any of their officers or directors and with their independent certified
public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries
----------------
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve all
------------------------------
of its properties in good working order and condition, ordinary wear
and tear excepted, and maintain all necessary licenses and permits if,
in each case, failure to so maintain and preserve would result in a
Material Adverse Effect.
(h) Reporting Requirements. Furnish to the Lenders:
----------------------
(i) as soon as available and in any event within 50 days
after the end of each of the first three quarters of each
Fiscal Year of the Borrower, Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such quarter
and Consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for the period commencing at the
end of the previous Fiscal Year and ending with the end of
such quarter, duly certified (subject to year-end audit
adjustments) by a Financial Officer of the Borrower as having
been prepared in accordance
28
with generally accepted accounting principles and certificates
of a Financial Officer of the Borrower as to compliance with
the terms of this Agreement and setting forth in reasonable
detail the calculations necessary to demonstrate compliance
with Section 5.03, provided that in the event of any change in
--------
generally accepted accounting principles used in the
preparation of such financial statements, the Borrower shall
also provide, if necessary for the determination of compliance
with Section 5.03, a statement of reconciliation conforming
such financial statements to GAAP;
(ii) as soon as available and in any event within
100 days after the end of each Fiscal Year of the Borrower, a
copy of the annual audit report for such year for the Borrower
and its Subsidiaries, containing Consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such Fiscal
Year and Consolidated statements of income and cash flows of
the Borrower and its Subsidiaries for such Fiscal Year, in
each case accompanied by an opinion acceptable to the Required
Lenders by PricewaterhouseCoopers LLP or other independent
public accountants acceptable to the Required Lenders,
provided that in the event of any change in generally accepted
--------
accounting principles used in the preparation of such
financial statements, the Borrower shall also provide, if
necessary for the determination of compliance with Section
5.03, a statement of reconciliation conforming such financial
statements to GAAP;
(iii) as soon as possible and in any event within
five days after the occurrence of each Default continuing on
the date of such statement, a statement of a Financial Officer
of the Borrower setting forth details of such Default and the
action that the Borrower has taken and proposes to take with
respect thereto;
(iv) promptly after the sending or filing thereof,
copies of all quarterly and annual reports and proxy
solicitations that the Borrower sends to any of its
securityholders, and copies of all reports on Form 8-K that
the Borrower or any Subsidiary files with the Securities and
Exchange Commission (other than reports on Form 8-K filed
solely for the purpose of incorporating exhibits into a
registration statement previously filed with the Securities
and Exchange Commission);
(v) promptly after the commencement thereof, notice
of all actions and proceedings before any court, governmental
agency or arbitrator affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(f); and
(vi) such other information respecting the Borrower
or any of its Subsidiaries as any Lender through the Agents
may from time to time reasonably request.
The financial statements required to be delivered pursuant to
clauses (i) and (ii) and the reports required to be delivered
pursuant to clause (iv) of this Section 5.01(h) shall be
deemed to have been delivered on the date on which the same
have been posted on the SEC's website at ▇▇▇.▇▇▇.▇▇▇; provided
----------- --------
that the Borrower shall deliver paper copies of the reports
referred to in clauses (i), (ii) and (iv) above to the Agent
or any Lender who requests the Borrower to deliver such paper
copies until written notice to cease delivering paper copies
is given by the Agent or such Lender.
(i) Guarantors. Cause (i) each Material Subsidiary
----------
organized under the laws of the United States of America or any
political subdivision thereof created or acquired by it from time to
time and (ii) each Subsidiary that is not a Material Subsidiary
immediately prior to becoming such a Material Subsidiary to undertake
the obligation of and to become a Guarantor pursuant to the Guarantee
Agreement pursuant to one or more instruments or agreements
satisfactory in form and substance to the Paying Agent.
SECTION 5.02. Negative Covenants. So long as any Advance
------------------
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will not:
29
(a) Liens, Etc. Create or suffer to exist, or permit any of
----------
its Subsidiaries to create or suffer to exist, any Lien on or with
respect to any of its properties, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income, other than:
(i) Liens on any property or assets of any corporation
existing at the time such corporation becomes a Subsidiary
provided that such Lien does not extend to any other property
--------
of the Borrower or any of its Subsidiaries;
(ii) Liens on any property or assets (including stock)
existing at the time of acquisition of such property or assets
by the Borrower or any of its Subsidiaries, 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 Borrower or any of its
Subsidiaries or to secure Debt incurred, assumed or guaranteed
by the Borrower or any of its Subsidiaries 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 Borrower to obtain the release of a Lien on other property
of the Borrower on which a Lien then exists, which Debt 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, completion of construction (including any
improvements on an existing asset) or commencement of full
operations 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 Borrower or any of its Subsidiaries;
(iii) Liens securing Debt owing by any Subsidiary of the
Borrower to the Borrower or to another Subsidiary of the
Borrower;
(iv) Liens on any property or assets of the Borrower or
any of its Subsidiaries 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 Debt 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
financing);
(v) Liens existing on properties or assets of the
Borrower or any of its Subsidiaries existing on the Effective
Date and described on Schedule 5.02(a); provided that such
--------
Liens shall secure only those obligations which they secure on
the Effective Date or any extension, renewal or replacement
thereof;
(vi) 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 (i) to (v),
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);
(vii) 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 Borrower or any of its Subsidiaries,
or governmental (federal, state or municipal) Liens arising
out of contracts for the sale of products or services by the
Borrower or any of its Subsidiaries, or deposits or pledges to
obtain the release of any of the foregoing Liens;
30
(viii) 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 Borrower or any
of its Subsidiaries is a party, or to secure the public or
statutory obligations of the Borrower or any of its
Subsidiaries, 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 Borrower or any of its Subsidiaries 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;
(ix) 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 Borrower or any of its
Subsidiaries, with respect to which the Borrower or such
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 Borrower or any of its Subsidiaries for
the purpose of obtaining a stay or discharge in the course of
any litigation or other proceeding to which the Borrower or
such Subsidiary is a party;
(x) Liens for taxes or assessments of 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
Borrower or any of its Subsidiaries 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
Borrower, materially impair the use of such property or assets
in the operation of the business of the Borrower or such
Subsidiary or the value of such property or assets for the
purposes of such business; or
(xi) Liens not permitted by the foregoing clauses
(i) to (x), inclusive, if at the time of, and after giving
effect to, the creation or assumption of such Lien, the
aggregate amount of all Debt of the Borrower and its
Subsidiaries secured by all Liens not so permitted by the
foregoing clauses (i) through (x) above does not exceed 10% of
the total assets from time to time before giving effect to the
LIFO reserve of the Borrower and its Subsidiaries on a
Consolidated basis.
(b) Mergers, Etc. Merge or consolidate with or into any
------------
Person, or permit any of its Subsidiaries to do so, except that any
Subsidiary of the Borrower may merge or consolidate with or into any
other Subsidiary of the Borrower, and except that any Subsidiary of the
Borrower or any other Person may merge into the Borrower or into any
other Person (so long as the surviving corporation is a Subsidiary of
the Borrower), provided, in each case, that no Default shall have
--------
occurred and be continuing at the time of such proposed transaction or
would result therefrom.
(c) Accounting Changes. Make or permit, or permit any of its
------------------
Subsidiaries to make or permit, any significant change in accounting
policies or reporting practices, except as required by generally
accepted accounting principles; provided, however, that the Borrower
-------- -------
may make or permit its Subsidiaries to make any changes in accounting
policies or reporting practices in order to conform to any policies or
practices of ▇▇▇▇ ▇▇▇▇▇, Inc. and its Subsidiaries or to conform any
policies or practices of ▇▇▇▇ ▇▇▇▇▇, Inc., or its Subsidiaries to those
of Borrower or its Subsidiaries. The parties acknowledge that the
Borrower and its Subsidiaries may change their fiscal years to conform
the fiscal years of the Borrower and its Subsidiaries (including ▇▇▇▇
▇▇▇▇▇, Inc. and its Subsidiaries).
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
---------------------
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any assets, or grant any option or other right
to
31
purchase, lease or otherwise acquire any assets, except (i)
dispositions of assets in the ordinary course of its business, (ii) in
a transaction authorized by subsection (b) of this Section, (iii)
pursuant to sale-leaseback transactions for not less than fair market
value, (iv) in a transaction with any Subsidiary that is, or as a
result of such transaction becomes, a Material Subsidiary and (v) sales
of assets for fair value, provided that the aggregate value of such
--------
assets sold, leased, transferred or otherwise disposed of pursuant to
clause (v) during the term of this Agreement shall not be greater than
10% of the total assets from time to time before giving effect to the
LIFO reserve of the Borrower and its Subsidiaries on a Consolidated
basis.
SECTION 5.03. Financial Covenants. So long as any Advance
-------------------
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:
(a) Leverage Ratio. Maintain a ratio (determined as of the
--------------
last day of each Fiscal Quarter for the Rolling Period ending on such
day) of (i) Net Debt on such day to (ii) the sum of (A) Consolidated
EBITDA for such Rolling Period and (B) from and after the making of any
investment or acquisition, the Acquired EBITDA for such Rolling Period
for any Acquired Entity so invested in or acquired (determined as of
the last day of the Acquired Entity Fiscal Quarter ending during such
Rolling Period) of not greater than: 3.50:1.00.
(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge
---------------------------
Coverage Ratio (determined as of the last day of any Fiscal Quarter for
the Rolling Period ending on such day) of not less than 1.70:1.00.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
-----------------
events ("Events of Default") shall occur and be continuing:
-----------------
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or the Borrower shall
fail to pay any interest on any Advance or make any other payment of
fees or other amounts payable under this Agreement or any Note within
three Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein
or by the Borrower (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made; or
(c) (i) The Borrower shall fail to perform or observe any
term, covenant or agreement contained in Section 5.01(d), (e) or (h),
5.02 or 5.03, or (ii) the Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement on its
part to be performed or observed if such failure shall remain
unremedied for 30 days after written notice thereof shall have been
given to the Borrower by any Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall fail to pay
any principal of or premium or interest on any Debt that is outstanding
in a principal or notional amount of at least $50,000,000 in the
aggregate (but excluding Debt outstanding hereunder) of the Borrower or
such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a
regularly
32
scheduled required prepayment or redemption), purchased or defeased, or
an offer to prepay, redeem, purchase or defease such Debt shall be
required to be made, in each case prior to the stated maturity thereof;
or
(e) The Borrower or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower or any of its Subsidiaries
seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 30
days, or any of the actions sought in such proceeding (including,
without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or
the Borrower or any of its Subsidiaries shall take any corporate action
to authorize any of the actions set forth above in this subsection (e);
or
(f) Any judgment or order for the payment of money in excess
of $50,000,000 shall be rendered against the Borrower or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 10 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that any such
-------- -------
judgment or order shall not be an Event of Default under this Section
6.01(f) if and for so long as (i) the amount of such judgment or order
is covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (ii) such
insurer, which shall be rated at least "A" by A.M. Best Company, has
been notified of, and has not disputed the claim made for payment of,
the amount of such judgment or order; or
(g) Any non-monetary judgment or order shall be rendered
against the Borrower or any of its Subsidiaries that could be
reasonably expected to have a Material Adverse Effect, and there shall
be any period of 10 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(h) Any Change in Control shall have occurred; or
(i) A Reportable Event or Reportable Events, or a failure to
make a required installment or other payment (within the meaning of
Section 412(n)(l) of the Internal Revenue Code), shall have occurred
with respect to any Plan or Plans that reasonably could be expected to
result in liability of the Borrower or any of its Subsidiaries to the
PBGC or to a Plan in an aggregate amount exceeding $50,000,000 and,
within 30 days after the Borrower has provided written notice of any
such Reportable Event to the Administrative Agents, the Administrative
Agents shall have notified the Borrower in writing that (i) the
Required Lenders have determined that, on the basis of such Reportable
Event or Reportable Events or the failure to make a required payment,
there are reasonable grounds (A) for the termination of such Plan or
Plans by the PBGC, (B) for the appointment by the appropriate United
States District Court of a trustee to administer such Plan or Plans or
(C) for the imposition of a lien in favor of a Plan and (ii) as a
result thereof an Event of Default exists hereunder; or a trustee shall
be appointed by a United States District Court to administer any such
Plan or Plans; or the PBGC shall institute proceedings (including
giving notice of intent thereof) to terminate any Plan or Plans; or
(j) (i) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan, (ii) the Borrower or
such ERISA Affiliate does not have reasonable grounds for contesting
such Withdrawal Liability or is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner and (iii) the amount of
the Withdrawal Liability specified in such notice, when aggregated with
all other amounts required to be
33
paid to Multiemployer Plans in connection with Withdrawal Liabilities
(determined as of the date or dates of such notification), either (A)
exceeds $100,000,000 or requires payments exceeding $50,000,000 in any
year or (B) is less than $100,000,000 but any Withdrawal Liability
payment remains unpaid 30 days after such payment is due (unless such
Withdrawal Liability is being contested in good faith by the Borrower
or any ERISA Affiliate); or
(k) the Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is
in reorganization or is being terminated, within the meaning of Title
IV of ERISA, if solely as a result of such reorganization or
termination the aggregate contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization
or have been or are being terminated have been or will be increased
over the amounts required to be contributed to such Multiemployer
Plans for their most recently completed plan years by an amount
exceeding $50,000,000; or
(l) this Agreement, any Note or any Guarantee Agreement shall not
be for any reason, or shall be asserted by the Borrower or any
Guarantor party thereto (except as otherwise expressly provided in
this Agreement or Section 11 of the Guarantee Agreement) not to be, in
full force and effect and enforceable in all material respects in
accordance with its terms;
then, and in any such event, the Agents (i) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
-------- -------
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to
make Advances shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender hereby
------------------------
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement as are delegated
to the Agents by the terms hereof, together with such powers and discretion as
are reasonably incidental thereto. As to any matters not expressly provided for
by this Agreement (including, without limitation, enforcement or collection of
the Advances), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that no Agent shall be required to
-------- -------
take any action that exposes such Agent to personal liability or that is
contrary to this Agreement or applicable law. Each Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. No Agent nor any of its
---------------------
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agents: (i) may treat the
Lender which made any Advance as the holder of the Debt resulting therefrom
until the Paying Agent receives and accepts an Assumption Agreement entered into
by an Assuming Lender as provided in Section 2.16, or an Assignment and
Acceptance entered into by such Lender, as assignor, and an Eligible Assignee,
as assignee, as provided in Section 8.06; (ii) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or
34
experts; (iii) make no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement; (iv)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement on the
part of the Borrower or to inspect the property (including the books and
records) of the Borrower; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other instrument or document furnished pursuant hereto;
and (vi) shall incur no liability under or in respect of this Agreement by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 7.03. Citibank, JPMorgan Chase and Affiliates. With respect to
---------------------------------------
its Commitment, the Advances made by it and any Note or Notes issued to it, each
of Citibank and JPMorgan Chase shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not an
Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include each of Citibank and JPMorgan Chase in its individual
capacity. Each of Citibank and JPMorgan Chase and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who may do business
with or own securities of the Borrower or any such Subsidiary, all as if it were
not an Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it
----------------------
has, independently and without reliance upon any Agent or any other Lender and
based on the financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
---------------
Agents in their capacity as such (to the extent not reimbursed by the Borrower
without limiting the obligations of the Borrower to do so), ratably according to
the respective principal amounts of the Revolving Credit Advances then owing to
each of them (or if no Revolving Credit Advances are at the time outstanding or
if any Revolving Credit Advances are then owing to Persons that are not Lenders,
ratably according to the respective amounts of their Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against any
Agent in any way relating to or arising out of this Agreement or any action
taken or omitted by such Agent under this Agreement (collectively, the
"Indemnified Costs"), provided that no Lender shall be liable for any portion of
----------------- --------
the Indemnified Costs resulting from such Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
each Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by such Agent in connection with the
preparation, execution, delivery, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that such Agent is not reimbursed for such expenses by the Borrower. In
the case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 7.05 applies whether any such investigation,
litigation or proceeding is brought by any Agent, any Lender or a third party.
SECTION 7.06. Successor Agents. The Administrative Agents and
----------------
the Paying Agent may resign at any time by giving written notice thereof to the
Lenders and the Borrower and may be removed at any time with or without cause by
the Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent or Paying
Agent, as the case may be. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion,
35
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article VII shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Waivers; Amendments, Etc. (a) No failure or
------------------------
delay on the part of the Administrative Agents, the Paying Agent or any Lender
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agents, the Paying
Agent and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by the Borrower therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b) below
(other than a waiver of the minimum amount of Commitment assumed by an Assuming
Lender pursuant to Section 2.16 or by an Eligible Assignee pursuant to Section
8.03, which may be waived by unilateral consent of the Borrower), and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except (i) in the case of this Agreement, pursuant
to an agreement or agreements in writing entered into by the Borrower and the
Required Lenders or (ii) in the case of the Guarantee Agreement, pursuant to an
agreement or agreements in writing entered into by the Guarantors and the Paying
Agent and consented to by the Required Lenders; provided, however, that no such
-------- -------
agreement shall (A) change the principal amount of any Advance, extend the final
scheduled maturity of any Advance, extend the scheduled date for payment (but
not prepayments) of principal of or interest on any Advance (other than as
provided in Sections 2.05 and 2.16), forgive any such payment or any part
thereof or reduce the rate of interest on any Advance, in each case without the
prior written consent of each Lender affected thereby, (B) increase the amount
or extend the termination date of the Commitment of any Lender or reduce or
extend the date for payment of the Facility Fees or other amounts payable under
this Agreement to any Lender, in each case without the prior written consent of
such Lender or (C) amend or modify the provisions of this Section 8.01(b) or
Section 8.05 or the definition of the term "Required Lenders" without the prior
written consent of each Lender; and provided further that no such agreement
-------- -------
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agents or the Paying Agent hereunder without the prior written
consent of the Administrative Agents or the Paying Agent, respectively.
SECTION 8.02. Notices, Etc. Except as otherwise expressly
-------
permitted herein, notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
or sent by telecopy, as follows:
(a) If to the Borrower, to it at The Kroger Co., ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); with a copy to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------
(Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇).
(b) If to Citibank in its capacity as an Administrative Agent
or Paying Agent, to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); with a copy to
Bank Loan Syndications, ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇. If to JPMorgan Chase in its capacity as an
Administrative Agent, to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of Ms. . ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇).
36
(c) If to a Lender, at its address (or telecopy number) as set
forth on Schedule 2.01 or in the Assumption Agreement or Assignment and
Acceptance pursuant to which such Lender shall have become a party
hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in Section 8.02 or in accordance with the
latest unrevoked direction from such party given in accordance with this Section
8.02. The Administrative Agents shall deliver to the Borrower a copy of each
Administrative Questionnaire received by it.
SECTION 8.03. Expenses; Indemnity. (a) The Borrower agrees to
-------------------
pay (i) the reasonable fees, disbursements and other charges of counsel for the
Administrative Agents and the Paying Agent incurred in connection with the
preparation of this Agreement and the other Loan Documents or in connection with
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby contemplated shall be consummated) and
(ii) all reasonable out-of-pocket expenses incurred by the Administrative
Agents, the Paying Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other Loan
Documents or in connection with the Advances, including the reasonable fees,
disbursements and other charges of Shearman & Sterling, counsel for the
Administrative Agents and the Paying Agent, in connection with any such
enforcement or protection and the reasonable fees, disbursements and other
charges of any other counsel for the Administrative Agents, the Paying Agent or
any Lender. The Borrower further agrees that it shall indemnify the
Administrative Agents, the Paying Agent and the Lenders from, and hold them
harmless against, any documentary taxes, assessments or similar charges made by
any Governmental Authority by reason of the execution and delivery of this
Agreement or any Note.
(b) The Borrower agrees to indemnify the Administrative
Agents, the Paying Agent and each Lender and each of their respective directors,
officers, employees and agents (each such person being called an "Indemnitee")
----------
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
disbursements and other charges, incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any agreement or instrument contemplated hereby
or thereby, the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) the use of the proceeds of the Advances or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto, provided that such
--------
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses have resulted from the
gross negligence or wilful misconduct of such Indemnitee.
(c) If any payment of principal of any Eurodollar Rate Advance
is made other than on the last day of the Interest Period for such Advance, as a
result of any Conversion, payment pursuant to Section 2.05, prepayment pursuant
to clause (ii) of the proviso to Section 2.09(a) or acceleration of the maturity
of the Advances pursuant to Section 6.01 or for any other reason, the Borrower
shall, upon demand by any Lender (with a copy of such demand to the
Administrative Agents), pay to the Paying Agent for the account of such Lender
any amounts required to compensate such Lender for any additional losses, costs
or expenses that such Lender may incur as a result of such payment, including
any loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
any Lender to fund or maintain such Advance.
(d) The provisions of this Section 8.03 shall remain operative
and in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Advances, the invalidity or unenforceability of any term
or provision of this Agreement, or any investigation made by or on behalf of the
Administrative Agents, the Paying Agent or any Lender. All amounts due under
this Section 8.03 shall be payable on written demand therefor.
37
SECTION 8.04. Right of Set-off. If an Event of Default shall
----------------
have occurred and be continuing, each Lender is hereby authorized, in addition
to any other right or remedy that any Lender may have by operation of law or
otherwise, at any time and from time to time, without notice to the Borrower
(any such notice being expressly waived by the Borrower), to exercise its
banker's lien or right of setoff and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the Borrower
now or hereafter existing under this Agreement and any Note held by such Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or any Note and although such obligations may be unmatured.
SECTION 8.05. Binding Effect. This Agreement shall become
--------------
effective (other than Section 2.01, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower, the Administrative Agents and the
Paying Agent and when the Paying Agent shall have been notified by each Initial
Lender that such Initial Lender has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agents, the
Paying Agent and each Lender and their respective successors and assigns, except
that the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION 8.06. Successors and Assigns. (a) Subject to Section
----------------------
8.05, whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Borrower, the
Administrative Agents, the Paying Agent or the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitments and the Advances at the time owing to it);
provided, however, that (i) except in the case of an assignment to a Lender or
-------- -------
an Affiliate of a Lender, each of the Administrative Agents and the Borrower
must give its prior written consent to such assignment (which consent shall not
be unreasonably withheld); provided further, however, the consent of the
-------- ------- -------
Borrower shall not be required if a Default has occurred and is continuing on
the date of the Assignment and Acceptance, (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender, the amount of the Commitment
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agents) shall not be less than $5,000,000 (or an amount
equal to the remaining balance of such Lender's Commitment), (iii) the parties
to each such assignment shall execute and deliver to the Paying Agent (with a
copy to the other Administrative Agent) an Assignment and Acceptance, together
with a processing and recordation fee of $3,500 (except that such fee shall not
be required with respect to assignments to Affiliates), and (iv) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agents an
Administrative Questionnaire. Each assignment shall be of a constant, and not a
varying, percentage of the assigning Lender's rights and obligations under this
Agreement (other than any right to make Competitive Bid Advances and Competitive
Bid Advances owing to it). Upon acceptance and recording pursuant to paragraph
(e) of this Section 8.06, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof and in no event shall precede the date of such
recording, (i) the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, shall have
the rights and obligations of a Lender under this Agreement and (ii) the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto, but shall continue to
be entitled to the benefits of Sections 2.10, 2.13 and 8.03, as well as to any
Facility Fees accrued for its account and not yet paid). Notwithstanding the
foregoing, any Lender assigning its rights and obligations under this Agreement
may retain any Competitive Bid Advances made by it outstanding at such time, and
in such case shall retain its rights hereunder in respect of any Advances so
retained until such Advances have been repaid in full in accordance with this
Agreement.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim created
by it and that its Commitment, and the outstanding
38
balances of its Advances, in each case without giving effect to assignments
thereof that have not become effective, are as set forth in such Assignment and
Acceptance; (ii) except as set forth in clause (i) above, such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto, or the financial condition of the Borrower
or the performance or observance by the Borrower of any of its obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee represents and warrants that it is legally authorized to
enter into such Assignment and Acceptance; (iv) such assignee confirms that it
has received a copy of this Agreement, together with copies of any amendments or
consents entered into prior to the date of such Assignment and Acceptance and
copies of the most recent financial statements delivered pursuant to Section
5.01(h) and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon the
Administrative Agents, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee confirms that it is an Eligible Assignee;
(vii) such assignee appoints and authorizes the Administrative Agents and the
Paying Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement as are delegated to the Administrative Agents and
the Paying Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (viii) such assignee agrees that it will
perform in accordance with their terms all the obligations that by the terms of
this Agreement are required to be performed by it as a Lender.
(d) The Paying Agent shall maintain at its address referred to in, or
determined pursuant to, Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register (the "Register") for the
--------
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time and
whether such Lender is a Lender on the Effective Date, or the assignee of such a
Lender or an Assuming Lender. The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent, the Paying Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with an Administrative Questionnaire completed in
respect of the assignee (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b)
above to the extent required under paragraph (b) above and the written consent
(to the extent required under paragraph (b) above), of the Administrative Agents
and the Borrower, the Administrative Agents shall (i) accept such Assignment and
Acceptance, (ii) in the case of the Paying Agent, record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders. No assignment shall be effective unless it has been recorded in the
Register as provided in this paragraph (e).
(f) Each Lender may, without the consent of the Borrower or the
Administrative Agents, sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Advances owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
-------- -------
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.10, 2.13 and 8.03 to the same extent as if
they were Lenders (provided that the Borrower shall not be required to reimburse
--------
the participating banks or other entities pursuant to Section 2.10, 2.13 or 8.03
in an amount that exceeds the amount that would have been payable thereunder to
such Lender had such Lender not sold such participation) and (iv) the Borrower,
the Administrative Agents, the Paying Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower and to approve any
amendment, modification or waiver of any provision of this Agreement (provided
--------
that the participating bank or other entity may be provided with the right to
approve amendments, modifications or waivers affecting it with respect to (A)
any decrease in the Facility Fees payable hereunder with respect to Commitments
in which the participating bank or other entity has purchased a participation,
(B) any change in the amount of principal of, or decrease in the rate at
39
which interest is payable on, the Advances in which the participating bank or
other entity has purchased a participation or (C) any extension of the final
scheduled maturity of any Advance in which the participating bank or other
entity has purchased a participation.
(g) Notwithstanding the limitations set forth in paragraph (b)
above, any Lender may at any time assign all or any portion of its rights under
this Agreement to a Federal Reserve Bank without the prior written consent of
the Borrower or the Administrative Agents, provided that no such assignment
--------
shall release a Lender from any of its obligations hereunder or substitute any
such Bank for such Lender as a party hereto.
(h) The Borrower may, with the prior written consent of the
Administrative Agents, replace any of the Lenders with one or more assignees,
provided (i) that the Lender being replaced has been paid in full for all
--------
Advances made by such Lender and all other amounts accrued or due to such Lender
hereunder, (ii) that the full amount of the Commitments remain unchanged and
(iii) that the percentages of the total Commitments allocated to the Lenders
(other than any replaced Lenders) remain unchanged unless prior written consent
from any such affected Lenders has been obtained. Upon any such replacement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.10, 2.13 and 8.03, as well as to any Facility Fees
accrued for its account under Section 2.03 and not yet paid.
(i) In the event that:
(i) any Lender shall have refused (and shall not have
retracted such refusal) to make available any Advance on its part to be
made available hereunder, other than solely as a result of the failure
of any condition set forth in Article III to be satisfied (such
condition not having been effectively waived in accordance with the
terms hereof);
(ii) any Lender shall have notified either the Administrative
Agents or the Borrower (and shall not have retracted such notification)
that it does not intend to comply with any of its obligations
hereunder, other than solely as a result of the failure of any
condition set forth in Article III to be satisfied (such condition not
having been effectively waived in accordance with the terms hereof);
(iii) (A) a receiver, trustee, conservator or other custodian
shall have been appointed with respect to any Lender or its property at
the direction or request of any Governmental Authority or (B) an order,
action, process or proceeding of the type contemplated by paragraph (e)
of Section 6.01 shall be commenced by or against such Lender (or such
Lender shall have consented to the entry of any such order, action,
process or proceeding); or
(iv) any Lender shall make demand upon the Borrower for any
amount pursuant to Section 2.10 or 2.13;
the Borrower shall have the right, at its own expense, upon notice to such
Lender and the Administrative Agents (A) to require such Lender, and such Lender
hereby agrees, to use commercially reasonable efforts to transfer and assign
without recourse (in accordance with and subject to the restrictions contained
in Section 8.06(b)) all the interests, rights and obligations of such Lender to
an assignee; provided, however, that (1) no such assignment shall conflict with
-------- -------
any law, rule or regulation or order of any Governmental Authority and (2) the
Borrower or such assignee, as the case may be, shall pay to such Lender in same
day funds on the date of such assignment the principal of and interest accrued
on the date of payment on the Advances made by such Lender hereunder and all
other amounts accrued for such Lender's account or owed to it hereunder or (B)
to replace such Lender with one or more assignees, provided, in the case of this
--------
clause (B), (1) that the Lender being replaced has been paid in full for all
Advances made by such Lender and all other amounts accrued or due to such Lender
hereunder, (2) that the full amount of the Commitments remains unchanged and (3)
that the percentage of the total Commitments allocated to the Lenders (other
than any replaced Lenders) remains unchanged unless prior written consent from
such Lenders has been obtained, (4) no Default shall have occurred and be
continuing, (5) the replacement Lender is acceptable to the Paying Agent and (6)
if such replacement Lender is not an existing Lender, the Borrower shall have
paid the Paying Agent a processing and recordation fee of $3,500. Upon any
assignment, such Lender shall cease to be a
40
party hereto but shall continue to be entitled to the benefits of Sections 2.10,
2.13 and 8.03, as well as to any fees accrued for its account under Section 2.03
and not yet paid.
(j) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
---------------
(an "SPC") of such Granting Lender, identified as such in writing from time to
---
time by the Granting Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement provided that (i) nothing herein shall constitute a commitment to make
--------
any Advance by any SPC and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting Lender
shall be obligated to make such Advance pursuant to the terms hereof. The making
of an Advance by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Advance were made by the Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
payment under this Agreement for which a Lender would otherwise be liable, for
so long as, and to the extent, the related Granting Lender makes such payment.
In furtherance of the foregoing, each party hereto hereby agrees that, prior to
the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or similar
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this Section
8.06, any SPC may (i) with notice to, but without the prior written consent of,
the Borrower or the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Advances to its
Granting Lender or to any financial institutions (if consented to by the
Borrower and the Administrative Agent) providing liquidity and/or credit
facilities to or for the account of such SPC to fund the Advances made by such
SPC or to support the securities (if any) issued by such SPC to fund such
Advances and (ii) disclose on a confidential basis any non-public information
relating to its Advances to any rating agency, commercial paper dealer or
provider of a surety, guarantee or credit or liquidity enhancement to such SPC.
SECTION 8.07. Confidentiality. Unless otherwise agreed to in
---------------
writing by the Borrower, each Administrative Agent, the Paying Agent and each
Lender hereby agree to keep all Proprietary Information (as defined below)
confidential and not to disclose or reveal any Proprietary Information to any
Person other than such Administrative Agent's, the Paying Agent's or such
Lender's directors, officers, employees, Affiliates and agents and to actual or
potential assignees and participants, and then only on a confidential basis;
provided, however, that either Administrative Agent, the Paying Agent or any
-------- -------
Lender may disclose Proprietary Information (a) as required by law, rule,
regulation or judicial process or in connection with any litigation or other
proceeding relating to this Agreement (provided that the applicable Person shall
give the Borrower notice of such disclosure on the same day on which it
determines such disclosure to be necessary and in any event prior to such
disclosure to the extent not prohibited by law, and if prior notice is
prohibited by law, shall give notice of such disclosure as promptly as is
legally permitted), (b) to its attorneys and accountants or (c) as requested or
required by any state, or Federal or foreign authority or examiner regulating
banks or banking. For purposes of this Agreement, the term "Proprietary
-----------
Information" shall include all information about the Borrower or any of its
-----------
Affiliates that has been furnished by the Borrower or any of its Affiliates,
whether furnished before or after the Effective Date, and regardless of the
manner in which it is furnished; provided, however, that Proprietary Information
-------- -------
does not include information that (i) is or becomes generally available to the
public other than as a result of a disclosure by either Administrative Agent,
the Paying Agent or any Lender not permitted by this Agreement, (ii) was
available to either Administrative Agent, the Paying Agent or any Lender on a
nonconfidential basis prior to its disclosure by either Administrative Agent,
the Paying Agent or such Lender by the Borrower or any of its Affiliates or
(iii) becomes available to either Administrative Agent, the Paying Agent or any
Lender on a nonconfidential basis from a Person other than the Borrower or its
Affiliates who, to the best knowledge of either Administrative Agent, the Paying
Agent or such Lender, as the case may be, is not otherwise bound by a
confidentiality agreement with the Borrower or any of its Affiliates, or is not
otherwise prohibited from transmitting the information to either Administrative
Agent, the Paying Agent or such Lender.
SECTION 8.08. Governing Law. This Agreement shall be governed
-------------
by, and construed in accordance with, the laws of the State of New York.
SECTION 8.09. Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
41
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 8.10. Jurisdiction; Consent to Service of Process. (a)
-------------------------------------------
The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that any Lender may otherwise
have to bring any action or proceeding relating to this Agreement against the
Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any New
York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 8.02. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
Agents and the Lenders hereby irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the actions of any
Agent or any Lender in the negotiation, administration, performance or
enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
THE KROGER CO.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Treasurer
CITIBANK, N.A., as Administrative Agent and as
Paying Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
JPMORGAN CHASE BANK, as
Administrative Agent
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
42
Initial Lenders
---------------
Commitment Administrative Agents
---------- ---------------------
$ 82,669,000 CITIBANK, N.A.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Title: Vice President
$106,820,000 JPMORGAN CHASE BANK
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Title: Vice President
Co-Syndication Agents
---------------------
$117,188,000 BANK OF AMERICA, N.A.
By /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Title: Vice President
$ 94,460,000 BANK ONE, NA
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Title: Director
Senior Managing Agents
----------------------
$ 50,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
CHICAGO BRANCH
By /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
Title: Deputy General Manager
$ 35,227,000 UNION BANK OF CALIFORNIA
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Vice President
$ 78,125,000 COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND" NEW YORK BRANCH
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Managing Director
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Managing Director
43
$ 85,227000 THE ROYAL BANK OF SCOTLAND
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Senior Vice President
$ 85,227,000 FIRSTAR BANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
$ 63,920,000 BNP PARIBAS
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Director
$ 56,818,000 COBANK, ACB
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Senior Vice President
$ 56,818,000 ▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Vice President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Title: Vice President
$ 49,716,500 FIFTH THIRD BANK
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Vice President
$ 42,613,500 THE BANK OF NEW YORK
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President
$ 42,613,500 WACHOVIA BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Title: Director
44
$58,239,000 THE BANK OF NOVA SCOTIA
By /s/ ▇. ▇▇▇▇
---------------------------------
Title: Senior Manager
Co-Agents
---------
$28,409,000 COMERICA BANK
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: Account Officer
$28,409,000 SUMITOMO MITSUI BANKING CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
---------------------------------
Title: Senior Vice President
Lenders
-------
$14,205,000 FLEET NATIONAL BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇
---------------------------------
Title: Managing Director
$9,943,000 MELLON BANK, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President
$14,205,000 NATIONAL CITY BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
$14,205,000 THE NORINCHUKIN BANK, NEW YORK
BRANCH
By /s/ ▇▇▇▇▇▇▇ ▇▇▇
---------------------------------
Title: General Manager
$15,000,000 KBC BANK, N.V.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: First Vice President
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
45
$7,102,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President
$10,000,000 AMSOUTH BANK
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
$2,841,000 HIBERNIA BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
---------------------------------
Title: Vice President
$1,250,000,000 Total of Commitments
46
SCHEDULE I
THE KROGER CO.
364-DAY CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
Name of Initial Lenders Domestic Lending Office Eurodollar Lending Office
------------------------------------------------------------------------------------------------
AMSOUTH BANK ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BANK OF AMERICA, N.A. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Portfolio Management Portfolio Management
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
THE BANK OF NOVA SCOTIA ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ 30308 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Law ▇▇▇▇▇▇▇ Law
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇- ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
MITSUBISHI, LTD., Suite 2300 Suite 2300
CHICAGO BRANCH Chicago, IL 60606 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇/Vigi ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇/▇▇▇▇ ▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇/4702 Tel: (▇▇▇) ▇▇▇-▇▇▇▇/4702
Fax: Fax:
BANK ONE, N.A. 1 Bank ▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
BNP PARIBAS ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
1
CITIBANK, N.A. Two Penns Way, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
COMERICA BANK ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ MC3268
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FIFTH THIRD BANK ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FIRSTAR BANK, N.A. Firstar Tower Firstar Tower
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 8/th/ Floor ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
WACHOVIA BANK, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ One First Union Center,
NATIONAL ASSOCIATION Charlotte, NC 28288-0745 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
JPMORGAN ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Plaza 1 Chase Manhattan Plaza
BANK ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
KBC N.V. KBC, N.V., KBC, N.V.,
New York Branch Cayman Islands Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
MELLON BANK, N.A. Three Mellon Bank Center Three Mellon Bank Center
Room 1203 Room 2305
Pittsburgh, PA 15259-0003 ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
2
THE ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇ 245 Park Avenue, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇ ▇▇▇ ▇▇▇-▇▇▇ ▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PNC BANK, NATIONAL ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
RABOBANK NEDERLAND c/o Rabo Support Services, Inc. c/o Rabo Support Services, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SUMITOMO MITSUI ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
COBANK, ACB ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
THE ROYAL BANK OF
SCOTLAND
▇▇▇▇▇ FARGO, NATIONAL ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
ASSOCIATION ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET NATIONAL BANK
NATIONAL CITY BANK ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
HIBERNIA BANK
4
SCHEDULE 3.01(b)
DISCLOSED LITIGATION
On November 29, 2001, a lawsuit titled ▇▇▇▇, et al. v. The Kroger Co., et al.,
was filed in the U.S. District Court, Western District of Kentucky, Louisville
Division, against The Kroger Co. The complaint, filed by several former and
present management and hourly employees, alleges that Kroger discriminates
against African-Americans in compensation, selection, and promotion. The
plaintiffs, on behalf of themselves and all other African-American persons
similarly situated, are seeking declaratory and injunctive relief, as well as
compensatory and punitive damages and attorneys' fees.
The case is in the earliest stages of discovery, which currently is ordered to
close on March 1, 2003. At this stage of the proceedings, the Company is unable
to express any opinion on whether a class will be certified, or whether a
Material Adverse Effect is reasonably likely.
SCHEDULE 5.02(a)
Permitted Liens
1 The following list represents all IRB properties where the bond is secured
by the property.
BOND NAME FACE AMOUNT
--------- -----------
Rome-▇▇▇▇▇ County, GA $3,500,000.00
Halls Crossroads, TN (▇▇▇▇ Co.) $3,400,000.00
-------------
Subtotal $6,900,000/00
2. Assignments and interests in intellectual property existing on the date
hereof which would not reasonably be likely to result in a Material Adverse
Effect.
3. Mortgages in association with the following debt issuances:
BOND NAME FACE AMOUNT
--------- -----------
8.50% First Mortgage Bonds 8,510,000.00
8.73% First Mortgage Bonds 24,608,000.00
9.27% First Mortgage Bonds 35,620,000.00
7.88% First Mortgage Bonds 30,580,000.00
Atlanta Dairy 8,500,000.00
Topvalco 860,670.00
10.23% Mortgage Notes (Manuco) 50,721,088.54
Secured Finance Inc. 605,665,127.00
GA-335 2,129,718.00
▇▇▇▇▇▇▇▇ Properties 2,372,950.00
E-776 2,800,000.00
N-893 3,597,445.00
L-762 1,000,000.00
N-348 1,250,000.00
--------------
Subtotal 778,214,998.54
4. Dillon Co. Mortgages, as shown below:
LENDOR FACE AMOUNT
------ -----------
National Life 868,000.00
National Life 963,000.00
National Life 720,000.00
American United Life 842,249.00
Indianapolis Life 421,251.00
Minnesota Mutual Life 842,249.00
Ohio National Life Assurance 421,251.00
▇▇▇▇▇▇▇ & Co. 2,876,000.00
------------
Subtotal 7,954,000.00
1
LENDOR FACE AMOUNT
------ -----------
United of Omaha Life 4,057,483.00
United of Omaha Life 917,000.00
Aetna Life 13,500,000.00
Penn Mutual 15,500,000.00
Protective Life 1,750,000.00
Nationwide Employers 2,900,000.00
Nationwide Employers 4,100,000.00
Nationwide Life 6,575,000.00
Nationwide Life 8,300,000.00
Nationwide Life 6,150,000.00
Jefferson Pilot Life 4,850,000.00
Jefferson Pilot Life 4,250,000.00
Minnesota Mutual Life 10,032,906.30
-------------
Subtotal 82,882,389.30
5 ▇▇▇▇ ▇▇▇▇▇, Inc. Lines are set forth below:
LENDOR FACE AMOUNT
------ -----------
G & M ▇▇▇▇▇ 2,700,000.00
J & F ▇▇▇▇▇ 26,687.45
WF - Nationwide 15,038,208.51
Grand Rapids 185,212.64
IBM 5,821,579.00
------------
Subtotal 23,771,687.60
6 Ralphs Grocery Company Lines are set forth below:
LENDOR FACE AMOUNT
------ -----------
Note #354 916,000.00
IBM/▇▇▇▇▇▇ 198,000.00
▇▇▇▇▇ & Vermont 4,486,000.00
------------
Subtotal 5,600,000.00
7 Sale Leaseback of leasehold improvements:
LENDOR FACE AMOUNT
------ -----------
Fleet & Syndicate 132,000.00
-------------------
TOTAL $898,555,075.44
-------------------
Permitted Lien Amount ===================
2
EXHIBIT A-1 - FORM OF NOTICE OF
REVOLVING CREDIT BORROWING
Citibank, N.A., as Paying Agent
for the Lenders parties
to the Credit Agreement
referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ [Date]
Attention: Bank Loan Syndications
Ladies and Gentlemen:
The undersigned, The Kroger Co., refers to the 364-Day Credit
Agreement, dated as of May 22, 2002 (as amended or modified from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
----------------
defined), among the undersigned, certain Lenders parties thereto, Citibank,
N.A., as Administrative Agent and as Paying Agent for said Lenders, JPMorgan
Chase Bank, as Administrative Agent for said Lenders, and Bank of America, N.A.,
Bank One, NA and The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch and Union
Bank of California, N.A., as co-syndication agents, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Revolving Credit Borrowing under the Credit
Agreement, and in that connection sets forth below the information relating to
such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as
-----------------------------------
required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Credit Borrowing is
_______________, 200_.
(ii) The Type of Advances comprising the Proposed Revolving Credit
Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Revolving Credit
Borrowing is $_______________.
[(iv) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Revolving Credit Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Revolving Credit Borrowing:
(A) the representations and warranties contained in Section 4.01
of the Credit Agreement are correct, before and after giving effect to the
Proposed Revolving Credit Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date;
(B) no event has occurred and is continuing, or would result from
such Proposed Revolving Credit Borrowing or from the application of the
proceeds therefrom, that constitutes a Default; and
(C) the aggregate amount of the Proposed Revolving Credit
Borrowing and all other Borrowings to be made on the same day under the
Credit Agreement is within the aggregate amount of the unused Commitments
of the Lenders less Facility Usage.
Very truly yours,
THE KROGER CO.
By____________________
Title:
2
EXHIBIT A-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING
____________________, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
_______________________ [Date]
_______________________
Attention: _______________
Ladies and Gentlemen:
The undersigned, The Kroger Co., refers to the 364-Day Credit
Agreement, dated as of May 22, 2002 (as amended or modified from time to time,
the "Credit Agreement", the terms defined therein being used herein as therein
----------------
defined), among the undersigned, certain Lenders parties thereto, Citibank,
N.A., as Administrative Agent and as Paying Agent for said Lenders, JPMorgan
Chase Bank, as Administrative Agent for said Lenders, and Bank of America, N.A.,
Bank One, NA and The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch and Union
Bank of California, N.A., as co-syndication agents, and hereby gives you notice,
irrevocably, pursuant to Section 2.01(b) of the Credit Agreement that the
undersigned hereby requests a Competitive Bid Borrowing under the Credit
Agreement, and in that connection sets forth the terms on which such Competitive
Bid Borrowing (the "Proposed Competitive Bid Borrowing") is requested to be
----------------------------------
made:
(A) Date of Competitive Bid Borrowing _________________
(B) Amount of Competitive Bid Borrowing _________________
(C) [Maturity Date] [Interest Period] _________________
(D) Interest Rate Basis _________________
(E) Interest Payment Date(s) _________________
(F) ___________________ _________________
(G) ___________________ _________________
(H) ___________________ _________________
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:
(a) the representations and warranties contained in Section 4.01
are correct, before and after giving effect to the Proposed Competitive Bid
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date;
(b) no event has occurred and is continuing, or would result from
the Proposed Competitive Bid Borrowing or from the application of the
proceeds therefrom, that constitutes a Default; and
(c) the aggregate amount of the Proposed Competitive Bid Borrowing
and all other Borrowings to be made on the same day under the Credit
Agreement is within the aggregate amount of the unused Commitments of the
Lenders.
The undersigned hereby confirms that the Proposed Competitive Bid
Borrowing is to be made available to it in accordance with Section 2.01(b) of
the Credit Agreement.
Very truly yours,
THE KROGER CO.
By________________________
Title:
EXHIBIT B - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the 364-Day Credit Agreement dated as of May 22,
2002 (as amended or modified from time to time, the "Credit Agreement") among
----------------
The Kroger Co., an Ohio corporation (the "Borrower"), the Lenders (as defined in
--------
the Credit Agreement), Citibank, N.A., as Administrative Agent and as Paying
Agent for said Lenders, JPMorgan Chase Bank, as Administrative Agent for said
Lenders, and Bank of America, N.A., Bank One, NA and The Bank of
Tokyo-Mitsubishi, Ltd., Chicago Branch and Union Bank of California, N.A., as
co-syndication agents. Terms defined in the Credit Agreement are used herein
with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances and Competitive Bid
Notes) equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement (other than in
respect of Competitive Bid Advances and Competitive Bid Notes). After giving
effect to such sale and assignment, the Assignee's Commitment and the amount of
the Revolving Credit Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim created by it; (ii) makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or the performance or observance by the Borrower of
any of its obligations under the Credit Agreement or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Revolving Credit Note
held by the Assignor and requests that the Agent exchange such Revolving Credit
Note for a new Revolving Credit Note payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto or new
Revolving Credit Notes payable to the order of the Assignee in an amount equal
to the Commitment assumed by the Assignee pursuant hereto and the Assignor in an
amount equal to the Commitment retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vi)
attaches any U.S. Internal Revenue Service forms required under Section 2.13 of
the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
--------------
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Revolving Credit Notes in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
facility fees with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
and the Revolving Credit Notes for periods prior to the Effective Date directly
between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Commitment: $________
Aggregate outstanding principal amount of Revolving Credit
Advances assigned: $________
Principal amount of Revolving Credit Note payable to
Assignee: $________
Principal amount of Revolving Credit Note payable to
Assignor: $________
Effective Date*: _______________, 200_
[NAME OF ASSIGNOR], as Assignor
By____________________________________________
Title:
Dated: _______________, 200_
[NAME OF ASSIGNEE], as Assignee
By____________________________________________
Title:
Dated: _______________, 200_
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
Accepted and Approved this
____ day of _______________, 200_
CITIBANK, N.A., as Administrative
Agent and as Paying Agent
By_________________________________
Title:
Approved this ____ day
of _______________, 200_
--------------------------
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
3
JPMORGAN CHASE BANK,
as Administrative Agent
By__________________________
Title:
Approved this ____ day
of _______________, 200_
THE KROGER CO.
By__________________________
Title:
4
EXHIBIT C - FORM OF
OPINION OF COUNSEL
FOR THE BORROWER
To each of the Lenders parties
to the Credit Agreement dated
as of May 22, 2002
among The Kroger Co.,
said Lenders, Citibank, N.A., as
Administrative Agent and Paying
Agent, and JPMorgan Chase
Bank, as Administrative Agent
for said Lenders, and to Citibank, N.A.,
as Administrative Agent and Paying
Agent and JPMorgan Chase Bank,
as Administrative Agent
The Kroger Co.
--------------
Ladies and Gentlemen:
As Senior Vice President, Secretary and General Counsel of The Kroger
Co., an Ohio corporation (the "Company"), I am familiar with its affairs and, to
-------
the extent necessary to render this opinion, the affairs of its subsidiaries and
in particular the 364-Day Credit Agreement, dated as of May 22, 2002 (the
"Credit Agreement"), among the Company, the banking institutions listed on the
signature pages thereof (the "Lenders"), Citibank, N.A. and JPMorgan Chase Bank,
as Administrative Agents, and Bank of America, N.A., Bank One, NA and The Bank
of Tokyo-Mitsubishi, Ltd., Chicago Branch and Union Bank of California, N.A., as
co-syndication agents. This opinion is delivered to you pursuant to the Credit
Agreement. All capitalized terms used herein which are defined in, or by
reference in, the Credit Agreement have the meanings assigned to such terms in,
or be reference in, the Credit Agreement unless otherwise indicated herein.
In connection with the preparation of this opinion, I have examined
originals, or certified, conformed or reproduction copies, of such corporate
records, agreements, instruments and documents of the Borrower, such
certificates of public officials and such other documents as I have deemed
necessary or appropriate to its preparation and delivery. In all such
examinations, I have assumed the genuineness of all signatures on original or
certified, conformed or reproduction copies of documents of all parties other
than the Company and the conformity to original or certified copies of all
copies submitted to me as conformed or reproduction copies. As to various
questions of fact relevant to such opinions, I have relied upon, and assume the
accuracy of, statements or certificates of public officials and statements or
certificates of officers or representatives of the Borrower and others. I am
familiar with the proceedings of the Board of Directors of the Borrower in
connection with the Credit Agreement.
Based on the foregoing, and subject to the limitations, qualifications
and assumptions set forth herein, I am of the opinion that:
(1) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Ohio. The Borrower
has all requisite corporate power and authority to own or lease and operate its
properties, and to carry on its business as presently conducted. The Borrower
has the corporate power and authority to execute and deliver the Credit
Agreement, and to perform its obligations under the Credit Agreement. The
Borrower is duly qualified or licensed to do business as a foreign corporation
in good standing in all jurisdictions in which it owns or leases assets or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to be so licensed or qualified is not likely to have a
material adverse effect on the business, condition (financial or otherwise),
performance, operation, properties or prospects thereof.
1
(2) The Credit Agreement has been duly executed and delivered on
behalf of the Borrower.
(3) There are no pending or overtly threatened actions or
proceedings against the Company or any of its Subsidiaries before any court,
governmental agency or arbitrator which, (a) except as set forth in the Credit
Agreement, are reasonably likely to have a Material Adverse Effect or (b)
purport to affect the legality, validity or enforceability of the Credit
Agreement.
(4) The execution and delivery by the Borrower of the Credit
Agreement and the performance by the Borrower of its obligations under the
Credit Agreement (a) have been duly authorized by all necessary corporate
action, (b) do not require any filing or registration with, or approval or
consent of, any governmental agency or authority generally applicable to
corporations for profit that has not been made or obtained, and (c) do not
contravene (i) any provisions of the Articles of Incorporation of the Borrower
or Regulations of the Borrower and all amendments thereto, or (ii) any present
law, or governmental regulation of any governmental agency or authority of the
State of Ohio generally applicable to corporations for profit which, to my
knowledge, is applicable to the Borrower.
(5) The execution and delivery by the Borrower of the Credit
Agreement and the performance by it of its obligations thereunder, to my
knowledge, will not contravene any indenture, loan or credit agreement, lease,
guarantee, mortgage, security agreement, bond, note or other agreement or
instrument, or any order, writ, judgment, award, injunction or decree, which
affect or purport to affect any of the rights or obligations of the Borrower
under the Credit Agreement, except as disclosed in the Credit Agreement.
(6) No authorization, consent, approval or other action by, and no
notice to or filing with, any governmental authority is required for the due
execution, delivery and performance by the Borrower of the Credit Agreement.
(7) The Credit Agreement constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms.
(8) In general, an Ohio court would give effect to the choice of
law provisions in the Credit Agreement which specify New York law as the
applicable law (other than instances where Ohio law specifically governs Ohio
property, persons or activities, for example, with respect to real property and
choice of law rules under the Uniform Commercial Code ("UCC")). The Supreme
Court of Ohio has validated contractual choice of law provisions. ▇▇▇▇▇▇ ▇.
---------
Ashland Oil, Inc., 17 Ohio St. 3d 189 (1985); ▇▇▇▇▇▇▇ Radio Productions, Ltd. v.
----------------- ----------------------------------
Midwestern Broadcasting Co., 6 Ohio St. 3d 436 (1983). In the latter case, the
---------------------------
Supreme Court held that the parties may choose the law applicable to their
contract unless (i) the state whose law is chosen has no substantial
relationship to the parties or to the transaction and there is no other
reasonable basis for the parties' choice or (ii) application of the chosen law
would be contrary to a fundamental policy of a state having a materially greater
interest in the issue than the chosen state and such other state would be the
state of applicable law in the absence of a choice by the parties. In addition,
Ohio Revised Code ("R.C.") ss. 1301.05 (UCC 1-105) provides generally with
respect to UCC matters (not including issues specifically addressed to the
contrary by the Ohio UCC, for example, perfection issues governed by R.C. ss.
1309.03 (UCC 9-103)) that when a transaction bears a reasonable relation to Ohio
and also to another state, the parties may agree that the law of either Ohio or
of such other state shall govern their rights and duties. Under the present
circumstances, it would appear that the parties' stipulation that the law of New
York should control should be given effect in Ohio. This conclusion is based
upon our understanding that the transactions provided for in the Credit
Agreement were negotiated primarily in New York, were executed and delivered in
New York, and are to be performed, in whole or in part, in New York and that the
Administrative Agents and the Paying Agent have their chief places of business
outside of the State of Ohio.
The opinions set forth above are subject to the following
qualifications:
(a) My opinion in paragraph 7 above as to enforceability is
subject to the effect of any applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar law affecting creditors' rights
generally.
2
(b) My opinion in paragraph 7 above as to enforceability is
subject to the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether considered in a proceeding in equity or at
law).
(c) I express no opinion as to (i) Section 2.12 of the Credit
Agreement insofar as it provides that any Lender purchasing a participation
from another Lender pursuant thereto may exercise set-off or similar rights
with respect to such participation and (ii) the effect of the law of any
jurisdiction other than the State of Ohio wherein any Lender may be located
or wherein enforcement of the Credit Agreement or the Notes may be sought
that limits the rates of interest legally chargeable or collectible.
The opinions stated herein are limited to the federal laws of the
United States of America and the laws of the State of Ohio. To the extent the
opinions stated herein relate to laws of a jurisdiction other than the United
States of America or the State of Ohio, I have assumed for purposes of such
opinions that the laws of such jurisdiction are identical to the laws of the
State of Ohio. The opinions are limited to the matters on which I have been
expressly asked to opine and do not extend beyond such limits. The opinions
expressed herein are solely for the benefit of the Agent and the Lenders and may
not be relied on in any manner or for any purpose by any other person or entity.
Very truly yours,
3