Exhibit 99.2
FIVE-YEAR CREDIT AGREEMENT
Dated as of May 22, 2002
THE KROGER CO., an Ohio corporation (the "Borrower"), the
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banks, financial institutions and other institutional lenders (the "Initial
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Lenders") listed on the signature pages hereof, and CITIBANK, N.A. ("Citibank"),
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as an Issuing Bank (as defined below) and as an administrative agent (in such
capacity, an "Administrative Agent") for the Lenders (as hereinafter defined)
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and the Issuing Banks and paying agent (in such capacity, the "Paying Agent")
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for the Lenders and the Issuing Banks, JPMORGAN CHASE BANK ("JPMorgan Chase"),
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as an Issuing Bank and as an administrative agent (in such capacity, an
"Administrative Agent"; the Administrative Agents and the Paying Agent are,
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collectively, the "Agents") for the Lenders and the Issuing Banks, and BANK OF
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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 and the Issuing Banks, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms.
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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
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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
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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
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Acquired Entity, any fiscal quarter of such Acquired Entity.
"Acquired Net Income" means, for any period, with respect to
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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
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Questionnaire in the form of Exhibit D.
"Advance" means a Revolving Credit Advance, drawings under
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Letters of Credit or a Competitive Bid Advance.
"Affiliate" means, with respect to any designated Person, any
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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.
"Anniversary Date" means May 22, 2003 and May 22 in each
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succeeding calendar year occurring during the term of this Agreement.
"Applicable Lending Office" means, with respect to each
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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, on any date, a percentage per annum
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determined by reference to the Borrower's Performance Level in effect
on such date as set forth below:
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Performance Applicable Margin for Applicable Margin for
Level Base Rate Advances Eurodollar Rate Advances,
Standby Letters of Credit and
Documentary Letters of Credit
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Xxxxx 0 0.000% 0.300%
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Xxxxx 0 0.000% 0.500%
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Xxxxx 0 0.000% 0.600%
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Xxxxx 0 0.000% 0.750%
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Xxxxx 0 0.000% 0.950%
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provided that, in each case, the Applicable Margin for Eurodollar Rate
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Advances set opposite the Performance Xxxxx 0 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,
Xxxxx'x or Fitch, respectively.
"Applicable Percentage Ratio" means the ratio (determined as
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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
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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
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2.16(c).
"Assumption Agreement" has the meaning specified in Section
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2.16(c).
"Base Rate" means a fluctuating rate per annum equal to the
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highest from time to time of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
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(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
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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
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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
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bears interest as provided in Section 2.06(a).
"Borrowing" means a Revolving Credit Borrowing or a
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Competitive Bid Borrowing.
"Business Day" means a day of the year on which banks are not
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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,
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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
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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
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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 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
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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
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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.
"Commitment" has the meaning specified in Section 2.01(a).
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"Competitive Bid Advance" means an advance by a Lender to the
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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
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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
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Section 2.01(a).
"Consenting Lender" has the meaning specified in Section
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2.16(b).
"Consolidated" refers to the consolidation of accounts in
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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,
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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 and other 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
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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
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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
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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.
"Consolidated Net Income" means, for any period, the net
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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
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aggregate rental expense (including any contingent or percentage rental
expense) of the Borrower and its Subsidiaries on a Consolidated basis
for
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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
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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,
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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 and other 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
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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
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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
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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 the Letters
of Credit, 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
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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
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3.01(b)
"Documentary Letter of Credit" means any Letter of Credit that
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is issued under the Letter of Credit Facility in support of trade
obligations incurred in the ordinary course of business and that
includes, as a condition to drawing thereunder, the presentation to the
Issuing Bank of negotiable bills of lading, invoices and related
documents sufficient, in the judgment of the Issuing Bank, to create a
valid and perfected security interest in the goods covered thereby.
"Domestic Lending Office" means, with respect to any Lender,
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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.
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"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
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Lender; (iii) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$5,000,000,000; (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
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Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means all current and future Federal,
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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
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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
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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
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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,
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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
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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
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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 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,
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however, to the provisions of Section 2.07.
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"Eurodollar Rate Advance" means a Revolving Credit Advance
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that bears interest as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" means the reserve
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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.
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"Existing Credit Agreement" has the meaning specified in
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Section 3.01(i).
"Existing Lenders" has the meaning specified in Section
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2.01(c).
"Existing Letters of Credit" means each standby Letter of
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Credit that (a) was issued for the account of the Borrower by one of
the issuing banks under the Existing Credit Agreement that is also an
Issuing Bank under this Agreement, (b) is outstanding on the Closing
Date and (c) is listed on Schedule 2.01(c).
"Extension Date" has the meaning specified in Section 2.16(b).
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"Facility Fee Percentage" means, on any date, a percentage per
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annum determined by reference to the Borrower's Performance Level in
effect on such date as set forth below:
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Performance Facility Fee
Level Percentage
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Xxxxx 0 0.100%
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Xxxxx 0 0.125%
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Xxxxx 0 0.150%
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Xxxxx 0 0.250%
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Xxxxx 0 0.300%
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"Facility Fees" has the meaning specified in Section 2.03.
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"Facility Usage" means, at any time, without duplication, the
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sum of (a) the amount of Advances outstanding at such time and (b) the
aggregate amount available at such time to be drawn under outstanding
Letters of Credit (in each case assuming the occurrence of, and
compliance with, all conditions referred to therein).
"Federal Funds Rate" means a fluctuating rate per annum equal
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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
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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,
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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.
"Fiscal Year" means a year of 364 or 371 days, as the case may
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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.
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"Fixed Charge Coverage Ratio" means the ratio (determined as
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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
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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
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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.
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"Governmental Authority" means any Federal, state, local or
----------------------
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee Agreement" means the Guarantee Agreement,
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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
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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.
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"Guarantor" means (a) each existing and hereafter created or
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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 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 Termination Date then in effect;
(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.
"Issuing Bank" means any Lender that is a commercial bank
------------
acting through a branch or agency located in the United States, as
issuer of a Letter of Credit.
"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.
9
"Letter of Credit" means any Standby Letter of Credit and any
----------------
Documentary Letter of Credit.
"Letter of Credit Collateral" has the meaning specified in
---------------------------
Section 6.02(b).
"Letter of Credit Collateral Account" has the meaning
-----------------------------------
specified in Section 6.02(a).
"Letter of Credit Documents" has the meaning specified in
--------------------------
Section 2.17.
"Letter of Credit Facility" has the meaning specified in
-------------------------
Section 2.01(c)(ii).
"Letter of Credit Obligations" means, at any time, the sum of
----------------------------
(a) the maximum aggregate amount then available to be drawn under the
Letters of Credit outstanding at such time (the determination of such
maximum amount to assume the occurrence of, and compliance with, all
conditions for drawing referred to therein) plus (b) the aggregate
----
amount of the Borrower's obligations then outstanding under this
Agreement in respect of the Letters of Credit, including all Advances
resulting from drawings under Letters of Credit and all fees and
expenses in respect of the Letters of Credit payable pursuant to
Section 2.03.
"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, the
--------------
Letter of Credit Documents 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.
"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, the Issuing Banks 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.
"Moody's" means Xxxxx'x 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.
10
"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 0 Xxxxx
Xxxxxx, 0xx Xxxxx, Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000, Account No.
00000000, Attention: Xxxxxxx Xxxxxxx.
"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:
Xxxxx 0 Xxx Xxxxxx Xxxx Rating is A-, A3 or A- or better by two
of S&P, Xxxxx'x or Fitch, respectively, or the Applicable
--
Percentage Ratio is 5.25:1.00 or greater;
Xxxxx 0 Xxx Xxxxxx Xxxx Rating is BBB+, Baa1 or BBB+ by two of
S&P, Xxxxx'x or Fitch, respectively, or the Applicable
--
Percentage Ratio is 4.75:1.00 or greater but less than
5.25:1.00;
Xxxxx 0 Xxx Xxxxxx Xxxx Rating is BBB, Baa2 or BBB by two of S&P,
Xxxxx'x or Fitch, respectively, or the Applicable
--
Percentage Ratio is 4.00:1.00 or greater but less than
4.75:1.00;
Xxxxx 0 Xxx Xxxxxx Xxxx Rating is BBB-, Baa3 or BBB- by two of
S&P, Xxxxx'x or Fitch, respectively, or the Applicable
--
Percentage Ratio is less than 4.00:1.00;
Xxxxx 0 Xxx Xxxxxx Xxxx Rating is lower than BBB-, Baa3 or BBB-
by two of S&P, Xxxxx'x 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, Xxxxx'x 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
11
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, Xxxxx'x 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, Xxxxx'x 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, Xxxxx'x 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).
12
"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.
"Revolving Credit Advance" means an advance by a Lender to the
------------------------
Borrower as part of a Revolving Credit Borrowing 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
---
XxXxxx-Xxxx Companies, Inc.
"Settlement Amount" has the meaning specified in Section 2.18.
-----------------
"Settlement Date" has the meaning specified in Section 2.18.
---------------
"Standby Letter of Credit" means a Letter of Credit other than
------------------------
a Documentary Letter of Credit, including direct-pay Letters of Credit.
"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.
"Termination Date" means the earlier of (a) May 22, 2007,
----------------
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 Termination Date of
-------- -------
any Lender that is a Non-Consenting Lender to any requested extension
pursuant to Section 2.16 shall be the Termination Date in effect
immediately prior to the applicable Extension Date for all purposes of
this Agreement.
"Trade-Related Letters of Credit" means Documentary Letters of
-------------------------------
Credit and Standby Letters of Credit issued in support of trade
obligations incurred in the ordinary course of business.
"Utilization Fee Percentage" means, as of any 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
-----------------------------------------------------------
Xxxxx 0 0.100%
-----------------------------------------------------------
Xxxxx 0 0.125%
-----------------------------------------------------------
13
------------------------------------------------------
Xxxxx 0 0.125%
------------------------------------------------------
Xxxxx 0 0.125%
------------------------------------------------------
Xxxxx 0 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 AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit. (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 Termination 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 among the Lenders ratably according
to their respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "Competitive Bid Reduction"). The aggregate amount of each
-------------------------
Lender's Advances outstanding at any time shall be adjusted to the extent
necessary to give effect to the provisions for the adjustment of Advances set
forth in Section 2.18. 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 Termination 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
14
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 Termination 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 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.
15
(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.
(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) The Letters of Credit. (i) Effective as of the Closing
---------------------
Date, the lenders under the Existing Credit Agreement (the "Existing Lenders")
----------------
will be deemed to have sold and transferred an undivided interest and
participation, pro rata to such Existing Lender's "Commitment" under the
Existing Credit Agreement, in respect of the Existing Letters of Credit and each
Lender under this Agreement will be deemed to have purchased and received,
without further action on the part of any party, an undivided interest and
participation in such Existing Letters of Credit, pro rata to such Lender's
Commitment under this Agreement and such Existing Letters of Credit shall be
deemed to be issued and outstanding hereunder.
(ii) Upon the terms and subject to the conditions of this
Agreement, the Borrower may request any Issuing Bank to issue, and any such
Issuing Bank may in its discretion issue, additional Letters of Credit from time
to time on any Business Day during the period from the Closing Date until the
date that is 30 days prior to the Termination Date in an aggregate undrawn
amount that (together with the aggregate undrawn amount at such time under
Existing Letters of Credit, if any), shall not exceed $350,000,000 (such
aggregate amount being the
16
"Letter of Credit Facility"); provided, however, that immediately after giving
------------------------- -------- -------
effect to each such issuance, Facility Usage shall not exceed the aggregate
amount of the Commitments of the Lenders.
(iii) Each Letter of Credit (other than Existing Letters of
Credit) shall be for a period of no more than one year or shall be renewable or
terminable (upon no more than 180 days' notice) annually and, in each case,
shall contain such terms and conditions as may be acceptable to the
Administrative Agents and the Issuing Bank in their sole discretion, but in any
event shall expire no later than 30 days prior to the Termination Date in effect
at the date of issuance thereof. The Issuing Bank may, in its sole discretion,
renew such Letter of Credit, and such renewal shall in any case be subject to
the conditions specified herein. Concurrently with the issuance of each Letter
of Credit by an Issuing Bank, such Issuing Bank shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed to have purchased
and received from such Issuing Bank, in each case without any further action on
the part of any party, an undivided interest and participation, pro rata to such
Lender's Commitment, in and to such Letter of Credit and the obligations of the
Borrower under this Agreement in respect of such Letter of Credit. Upon each
drawing or payment under a Letter of Credit, the amount of such drawing or
payment shall become and be deemed to be, without any further action on the part
of any Person, an Advance by the Issuing Bank that issued such Letter of Credit
made on the date of such drawing or payment for all purposes under this
Agreement (but without any requirement for compliance with the conditions to the
making of Advances contained in Article III).
SECTION 2.02. Making the Revolving Credit Advances; Issuing
---------------------------------------------
the Letters of Credit. (a) Each Revolving Credit Borrowing (other than a
---------------------
Borrowing resulting from a drawing under a Letter of Credit) 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
17
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
(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.
(f) Each Letter of Credit shall be issued on reasonable
notice from the Borrower to the Paying Agent specifying the date of issuance
(which shall be a Business Day) and the amount, expiration date, beneficiary and
other terms thereof. Upon fulfillment of such conditions as the Issuing Bank
issuing such Letter of Credit or the Paying Agent may reasonably require, which
shall include the conditions set forth in Article III (as though the issuance of
the Letter of Credit were an Advance), the Issuing Bank will issue the Letter of
Credit in accordance with its terms. The Paying Agent shall notify the Lenders
of any issuance by an Issuing Bank of a Letter of Credit on the Settlement Date
next succeeding the date of such issuance.
18
SECTION 2.03. Fees. (a) Facility Fees. The Borrower agrees to
---- -------------
pay to the Paying Agent for distribution to each Lender until the Termination
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 Termination Date.
(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.
(c) Letter of Credit Fees. (i) Upon the issuance, extension
---------------------
or renewal of each Letter of Credit by an Issuing Bank, the Borrower agrees to
pay to such Issuing Bank a fee in an amount to be agreed upon between such
Issuing Bank and the Borrower, payable on the date of such issuance (or on such
other date as may be agreed upon by such Issuing Bank and the Borrower).
(ii) The Borrower agrees to pay to the Paying Agent, for
the ratable benefit of the Lenders (determined in accordance with the respective
amounts of their Commitments), a letter of credit fee at the Applicable Margin
on the maximum amount available to be drawn on each day under outstanding
Letters of Credit issued pursuant to Section 2.01(c) for the account of the
Borrower (the determination of such maximum amount to assume the occurrence of,
and compliance with, all conditions for drawing referred to therein), in each
case payable quarterly in arrears on the third day of each January, April, July
and October after the date of issuance until the date each such Letter of Credit
shall expire or terminate in accordance with its terms and on the date of such
expiration or termination.
(d) Transfer Fee; Amendment Fee. (i) The Borrower agrees to
---------------------------
pay to each Issuing Bank, upon each transfer or amendment of a Letter of Credit
issued for the account of the Borrower, the normal and customary transfer fee or
amendment fee, as the case may be (or such other fee as the Borrower and such
Issuing Bank may agree upon), charged by such Issuing Bank upon the transfer or
amendment of letters of credit.
(e) Letter of Credit Expenses. The Borrower agrees to pay to
-------------------------
each Issuing Bank, on demand, sums equal to any and all reasonable charges such
Issuing Bank may assess, and expenses that such Issuing Bank may pay or incur,
relative to the issuance by such Issuing Bank of any Letter of Credit issued for
the account of the Borrower or to presentment to, or to a payment by, the
Issuing Bank thereunder.
SECTION 2.04. Termination or Reduction of the Commitments. (a)
-------------------------------------------
The Commitments shall be automatically terminated on the Termination Date.
(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).
(c) The Letter of Credit Facility shall not be reduced until
such time as the Commitments shall equal such Letter of Credit Facility, and
thereafter shall reduce proportionately with any reduction in the amount of the
Commitments pursuant to this Section 2.04.
SECTION 2.05. Repayment of Revolving Credit Advances. The
--------------------------------------
Borrower shall repay to the Paying Agent for the account of the Lenders on the
Termination Date the aggregate principal amount of the Advances owing to the
Lenders on such 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:
19
(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).
(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.
20
(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. Prepayments. (a) Optional Prepayments. 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).
(b) Mandatory Prepayments. (i) If any Lender shall for any
---------------------
reason fail to pay the Settlement Amount payable by it on a Settlement Date, on
demand by the Administrative Agents the Borrower shall forthwith prepay the
Advances in an amount equal to such Settlement Amount, and the Paying Agent
shall apply such prepayment in the same manner as is specified in the second
sentence of Section 2.18.
(ii) The Borrower shall, on each Business Day, pay to the
Paying Agent for deposit in the Letter of Credit Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate maximum amount available to be drawn under Letters
of Credit then outstanding (assuming compliance with all conditions to drawing)
exceeds the Letter of Credit Facility on such Business Day.
(iii) All prepayments by the Borrower under this subsection
(b) shall be made together with accrued interest to the date of such prepayment
on the principal amount prepaid and shall be applied first against the Advances
to be prepaid that are Base Rate Advances and thereafter against the Advances to
be prepaid that are Eurodollar Advances having Interest Periods ending as close
as possible to the date of such prepayment.
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 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 or of the Letters of Credit
(or similar contingent obligations), 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
21
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to lend hereunder or to
the issuance or maintenance of the Letters of Credit. 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) If, due to either (i) the introduction of or any 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 Issuing Bank or any Lender of agreeing to issue or of issuing or
maintaining any Letter of Credit or any participation therein, then the Borrower
shall from time to time, upon demand by such Issuing Bank or Lender (with a copy
of such demand to the Administrative Agents), pay to the Paying Agent for the
account of such Issuing Bank or such Lender, as the case may be, additional
amounts sufficient to compensate such Issuing Bank or such Lender, as the case
may be, for such increased cost. A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agents by such
Issuing Bank or such Lender, as the case may be, shall be conclusive and binding
for all purposes, absent manifest error.
(d) 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, letter of credit
fees payable pursuant to Section 2.03(c)(ii) or facility fees ratably (other
than amounts payable pursuant to Section 2.03(b), 2.03(c)(i), 2.03(d), 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 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 (i) each Issuing Bank on
behalf of each Lender, if and to the extent payment owed to such Lender is not
made by the Borrower to the Paying Agent when due hereunder, to charge from time
to time against any or all of the Borrower's accounts with such Issuing Bank any
amount so due and (ii) each Lender, if and to the extent payment is not made
when due hereunder, 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.
22
(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 the case
may be, and all computations of interest based on 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
facility 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), 2.03(c)(i), 2.03(d),
2.03(e),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
23
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such 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)
24
the date and amount of each Borrowing made hereunder, the Type of Advances
comprising such Borrowing and, if 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 each of the first and second Anniversary
Dates, the Borrower, by written notice to the Paying Agent, may request an
extension of the Termination Date in effect at such time by one year from its
then scheduled expiration. The Paying Agent shall promptly notify each Lender of
such request, and each Lender shall in turn, in its sole discretion, at least 20
days prior to such Anniversary 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 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 pending Anniversary Date
of the decision of the Lenders regarding the Borrower's request for an extension
of the 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 Termination
Date in effect at such time shall, effective as at the next Anniversary Date
(the "Extension Date"), be extended for one calendar year; 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 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 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
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 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 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 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
-------- -------
25
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 and fees pursuant to Section 2.03(c)(ii) 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 Lenders holding a majority in interest of the aggregate
Commitments (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
Termination Date then in effect with respect to the Commitment of such
Consenting Lenders and Assuming Lenders shall be extended for the additional
one-year period described in subsection (a) of this Section 2.16, and all
references in this Agreement, and in the Notes, if any, to the "Termination
-----------
Date" shall, with respect to each Consenting Lender and each Assuming Lender for
----
such Extension Date, refer to the 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 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.
SECTION 2.17. Obligations Absolute. The obligations of the
--------------------
Borrower under this Agreement in respect of any Letter of Credit and under any
other agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and such other agreement or instrument under all
circumstances, including to the extent permitted by law, the following
circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit or any other agreement or instrument relating thereto
(collectively, the "Letter of Credit Documents") or any Loan Document;
--------------------------
26
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the Borrower in
respect of any Letter of Credit or any other amendment or waiver of or
any consent to departure from all or any of the Letter of Credit
Documents or any other Loan Document;
(c) any exchange, release or nonperfection of any collateral,
or any release or amendment or waiver of or consent to departure from
any guaranty, for all or any of the obligations of the Borrower in
respect of any Letter of Credit;
(d) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any of the Lenders,
the Administrative Agent, the Paying Agent or any other Person, whether
in connection with any Loan Document, the transactions contemplated
hereby or thereby or any unrelated transaction;
(e) any statement or any other document presented under or in
connection with any Letter of Credit or other Loan Document proving to
be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(f) payment in good faith by an Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that does not
comply with the terms of such Letter of Credit; and
(g) any other circumstance or happening whatsoever other than
the payment in full of all obligations hereunder in respect of any
Letter of Credit or any agreement or instrument relating to any Letter
of Credit, whether or not similar to any of the foregoing, that might
otherwise constitute a defense available to, or a discharge of, the
Borrower.
SECTION 2.18. Special Adjustments of Advances. The Paying
-------------------------------
Agent will notify the Lenders of the aggregate amount of Advances (other than
Competitive Bid Advances) outstanding upon the occurrence of a Default and at
such times and at such frequencies as the Paying Agent or any Issuing Bank in
their sole discretion may determine, but in any event not less frequently than
weekly (the date of each such notice by the Paying Agent being a "Settlement
----------
Date"). Upon receipt of any such notice, such Issuing Bank or each of the other
----
Lenders, as the case may be, will forthwith unconditionally pay to the Paying
Agent (for distribution by the Paying Agent to such Issuing Bank or each of the
other Lenders, as the case may be) such amount (a "Settlement Amount"), if any,
-----------------
as is necessary to cause the aggregate unpaid principal amount of the Advances
(other than Competitive Bid Advances) to be shared by the Lenders ratably in
accordance with the amounts of their Commitments. Upon each payment and
distribution pursuant to the preceding sentence, each Lender will be deemed from
the date of such payment and distribution for all purposes under the Loan
Documents (including in respect of interest accruing from such date on the
principal amount of such Advances) to have outstanding Advances owed to it in
the amount of its ratable share of such Advances as aforesaid; provided that in
--------
no event shall any Lender have Advances (other than Competitive Bid Advances) in
an aggregate outstanding principal amount greater than such Lender's Commitment.
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:
(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
27
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, the Issuing Banks 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.
(iv) A favorable opinion of Xxxx X. Xxxxxxx, 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.
28
(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 Xxxx Xxxxx, 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 and the right of the Borrower to request the
issuance of a Letter of Credit shall be subject to the conditions precedent that
the Effective Date shall have occurred and on the date of such Revolving Credit
Borrowing or issuance (a) the following statements shall be true (and each of
the giving of the applicable Notice of Revolving Credit Borrowing or notice of
issuance and the acceptance by the Borrower of the proceeds of such Revolving
Credit Borrowing or of such Letter of Credit shall constitute a representation
and warranty by the Borrower that on the date of such Borrowing or issuance 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 or issuance of a Letter of Credit 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 issuance of a Letter of Credit 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.
29
(b) The execution, delivery and performance by the Borrower
and each Guarantor of the Loan Documents to which it is a party and
which are delivered hereunder and the consummation of the transactions
contemplated hereby and thereby, 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 or any Guarantor of any Loan Document
to which it is a party, 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 other Loan
Documents to which it is a party, 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 other Loan Documents, 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 or of any Letter of Credit 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
SECTION 5.01. Affirmative Covenants. So long as any Advance
---------------------
shall remain unpaid or any Lender shall have any Commitment hereunder or any
Letter of Credit shall remain outstanding, the Borrower will:
30
(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 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
31
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 xxx.xxx.xxx; 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 or any Letter of
Credit shall remain outstanding, the Borrower will not:
(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:
32
(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;
(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
33
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 or into any other Person (so long as
the surviving corporation is a Subsidiary of the Borrower), and except
that any Subsidiary of the Borrower or any other Person may merge into
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 Xxxx Xxxxx, Inc. and its Subsidiaries or to conform any
policies or practices of Xxxx Xxxxx, 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 Xxxx
Xxxxx, 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 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)
34
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 Kroger 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
any Loan Document 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 any Loan Document 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 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
35
(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 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
36
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) any Loan Document 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 such Loan Document
(including 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, (ii) shall at the request, or may with the consent,
of any Issuing Bank or of the Required Lenders, by notice to the Borrower,
declare the obligation of any Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (iii) 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 and of any Issuing Bank to issue
Letters of Credit 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.
SECTION 6.02. Actions in Respect of Letters of Credit. (a) If,
---------------------------------------
at any time and from time to time, any Letters of Credit shall have been issued
by any Issuing Bank hereunder and (i) a Default shall have occurred and be
continuing, (ii) the Borrower shall have given notice of prepayment in whole
under Section 2.09 of all Advances or shall have prepaid in whole all Advances,
(iii) the Termination Date shall have occurred or (iv) if at any time, as a
result of prepayments pursuant to Section 2.09, the Termination Date shall be a
date not more than 30 days following the expiration of any Letter of Credit,
then, upon the occurrence of any of the events described in clauses (i) through
(iv) above, the Administrative Agents may, and upon the request of any Issuing
Bank or of the Required Lenders shall, whether in addition to the taking by the
Administrative Agents of any of the actions described in Article VI or
otherwise, make demand upon the Borrower to, and forthwith upon such demand the
Borrower will, pay to the Paying Agent for its benefit and the ratable benefit
of the Lenders in same day funds at the Paying Agent's office designated in such
demand, for deposit in a special cash collateral account (the "Letter of Credit
----------------
Collateral Account") to be maintained in the name of the Paying Agent and under
------------------
the sole dominion and control of the Paying Agent for the benefit of the Paying
Agent and the ratable benefit of the Lenders at such place as shall be
designated by the Paying Agent, an amount equal to the amount of the Letter of
Credit Obligations.
(b) The Borrower hereby pledges and assigns to the Paying
Agent for its benefit and the ratable benefit of the Lenders, and grants to the
Paying Agent for its benefit and the ratable benefit of the Lenders a lien on
and a security interest in, the following collateral (the "Letter of Credit
----------------
Collateral"):
----------
(i) the Letter of Credit Collateral Account, all cash
deposited therein, and all certificates and instruments, if any, from
time to time representing or evidencing the Letter of Credit Collateral
Account;
(ii) all Eligible Securities (as defined below) from time to
time held by the Paying Agent and all certificates and instruments from
time to time representing or evidencing Eligible Securities;
37
(iii) all notes, certificates of deposit and other instruments
from time to time hereafter delivered to or otherwise possessed by the
Paying Agent for or on behalf of the Borrower in substitution for or in
respect of any or all of the then existing Letter of Credit Collateral;
(iv) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the then
existing Letter of Credit Collateral; and
(v) to the extent not covered by clauses (i) through (iv)
above, all proceeds of any or all of the foregoing Letter of Credit
Collateral.
The lien and security interest granted hereby secures the payment of all
obligations of the Borrower now or hereafter existing hereunder and under any
other Loan Document.
(c) The Borrower hereby authorizes the Paying Agent to
apply, from time to time after funds are deposited in the Letter of Credit
Collateral Account, funds then held in the Letter of Credit Collateral Account
to the payment of any amounts, in such order as the Paying Agent may elect, as
shall have become or shall become due and payable by the Borrower to the Lenders
in respect of the Letters of Credit.
(d) Neither the Borrower nor any Person claiming or acting
on behalf of or through the Borrower shall have any right to withdraw any of the
funds held in the Letter of Credit Collateral Account, except as provided in
Section 6.02(h); provided, however, that as long as no Default shall have
-------- -------
occurred and be continuing, and to the extent that there is an amount in excess
of $1,000,000 in the Letter of Credit Collateral Account at the end of any
Business Day after taking into account applications of funds, if any, from the
Letter of Credit Collateral Account made pursuant to Section 6.02(c), the Paying
Agent will, at the written request of the Borrower, from time to time invest
amounts on deposit in the Letter of Credit Collateral Account in such
instruments described in clause (b), (c) or (d) of the definition of the term
"Permitted Investments" in Section 1.01 as the Borrower may select and the
Paying Agent may approve (the "Eligible Securities"); provided further that in
------------------- -------- -------
order to provide the Paying Agent with a perfected security interest therein,
each investment in Eligible Securities shall be evidenced by negotiable
certificates or instruments, of which the Paying Agent shall take physical
possession. If the Borrower shall have the right to have amounts on deposit in
the Letter of Credit Collateral Account invested by the Paying Agent, but shall
have failed to request the Paying Agent to invest such amounts, the Paying Agent
will endeavor to invest such amounts in such Eligible Securities as the Paying
Agent shall select. Any interest received by the Paying Agent in respect of
Eligible Securities shall be credited against the Letter of Credit Obligations.
Non-interest proceeds from Eligible Securities that are not invested or
reinvested in Eligible Securities as provided above shall be deposited and held
in cash in the Letter of Credit Collateral Account under the sole dominion and
control of the Paying Agent.
(e) The Borrower agrees that it will not (i) sell or
otherwise dispose of any interest in the Letter of Credit Collateral or (ii)
create or permit to exist any lien, security interest or other charge or
encumbrance upon or with respect to any of the Letter of Credit Collateral,
except for the security interest created by this Section 6.02.
(f) If any Event of Default shall have occurred and be
continuing:
(i) The Paying Agent may, in its sole discretion, without
notice to the Borrower except as required by law and at any time from
time to time, charge, set off and otherwise apply all or any part of
first, the Letter of Credit Obligations and second, the obligations of
----- ------
the Borrower now or hereafter existing under any of the Loan Documents,
against the Letter of Credit Collateral Account or any part thereof, in
such order as the Paying Agent shall elect. The Paying Agent agrees
promptly to notify the Borrower after any such set-off and application
made by the Paying Agent, provided that the failure to give such notice
--------
shall not affect the validity of such set-off and application. The
rights of the Paying Agent under this Section 6.02(f) are in addition
to other rights and remedies (including other rights of set-off) that
the Paying Agent may have.
38
(ii) The Paying Agent may also exercise, in its sole
discretion, in respect of the Letter of Credit Collateral Account, in
addition to the other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party upon default under the Uniform Commercial Code in effect in the
State of New York at that time, and the Paying Agent may, without
notice except as specified below, sell the Letter of Credit Collateral
or any part thereof in one or more parcels at public or private sale,
at any of the Paying Agent's offices or elsewhere, for cash, on credit
or for future delivery, and upon such other terms as the Paying Agent
may deem commercially reasonable. The Borrower agrees that, to the
extent notice of sale shall be required by law, at least ten days'
notice to the Borrower of the time and place of any public sale or the
time after which any private sale is to be made shall constitute
reasonable notification. The Paying Agent shall not be obligated to
make any sale of Letter of Credit Collateral or any part thereof,
regardless of notice of sale having been given. The Paying Agent may
adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(iii) Any cash held in the Letter of Credit Collateral
Account, and all cash proceeds received by the Paying Agent in respect
of any sale of, collection from or other realization upon all or any
part of the Letter of Credit Collateral Account may, in the discretion
of the Paying Agent, then or at any time thereafter be applied (after
payment of any amounts payable pursuant to Section 8.03) in whole or in
part by the Paying Agent for the ratable benefit of the Lenders against
all or any part of the obligations of the Borrower now or hereafter
existing under any of the Loan Documents in such order as the Paying
Agent may elect.
(g) The Paying Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Letter of Credit
Collateral if the Letter of Credit Collateral is accorded treatment
substantially equal to that which the Paying Agent accords its own property, it
being understood that the Paying Agent shall not have any responsibility or
liability (i) for ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Eligible Securities, whether or not the Paying Agent has or is deemed to have
knowledge of such matters, (ii) for taking any necessary steps to preserve
rights against any parties with respect to the Letter of Credit Collateral,
(iii) for the collection of any proceeds from Eligible Securities, (iv) by
reason of any invalidity, lack of value or uncollectability of any of the
payments received by the Paying Agent from obligors with respect to Eligible
Securities, or (v) for any loss resulting from investments made pursuant to
Section 6.02(d), except to the extent such loss was attributable to the Paying
Agent's gross negligence or wilful misconduct in complying with Section 6.02(d),
or (vi) in connection with any investments made pursuant to Section 6.02(d)
without a written request from the Borrower, or any failure by the Paying Agent
to make any such investment.
(h) Any surplus of the funds held in the Letter of Credit
Collateral Account and remaining after payment in full of all of the obligations
of the Borrower under this Agreement and under any other Loan Document after the
Termination Date shall be paid to the Borrower or to whomsoever may be lawfully
entitled to receive such surplus.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender (in its
------------------------
capacity as a Lender and an Issuing Bank (if applicable)) 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
39
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 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. (a) The Lenders agree to
---------------
indemnify the Agents in their capacity as such (to the extent not reimbursed by
the Borrower without limiting the obligation 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 the Loan Documents
(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
40
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.
(b) The Lenders agree to indemnify each Issuing Bank (to the
extent not reimbursed by the Borrower), 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
Issuing Bank in any way relating to or arising out of this Agreement or any
action taken or omitted by such Issuing Bank under the Loan Documents, provided
--------
that no Lender shall be liable for any portion of such indemnified costs
resulting from such Issuing Bank's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse such
Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including counsel fees) payable by the Borrower under Section 8.03, to
the extent such Issuing Bank is not promptly reimbursed for such costs and
expenses by the Borrower.
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, 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 Issuing Banks, 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
Issuing Banks, 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, (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 or (iii) in the case of a Letter
of Credit, pursuant to an agreement or agreements entered into by the Borrower
and the applicable Issuing Bank; provided, however, that no such agreement shall
-------- -------
(A) change the principal amount of any Advance or Letter of Credit Obligation,
extend the final scheduled maturity of any Advance, extend
41
the scheduled date for payment (but not prepayments) of principal of or interest
on any Advance (other than as provided in Section 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, the Issuing Banks or the Paying Agent
hereunder without the prior written consent of the Administrative Agents, the
Issuing Banks 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., 0000 Xxxx
Xxxxxx, Xxxxxxxxxx, Xxxx 00000, Attention of Xx. Xxxxx X. Xxxxxxxxx
(Telecopy No. (000) 000-0000); with a copy to Xx. Xxxx X. Xxxxxxx
--------------
(Telecopy No. (000) 000-0000).
(b) If to Citibank in its capacity as an Administrative Agent
or Paying Agent, to it at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention of Xxxx Xxxxxxx (Telecopy No. (000) 000-0000); with a copy to
Bank Loan Syndications, Xxx Xxxxx Xxx, Xxx Xxxxxx, Xxxxxxxx 00000,
Attention of Xxxxx Xxxxxxx. If to JPMorgan Chase in its capacity as an
Administrative Agent, to it at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention of Xx. Xxxx Xxxxxxxxx (Telecopy No. (000) 000-0000).
(c) If to any other Lender as Issuing Bank, at its address
(or telecopy number) set forth on Schedule I or in the Assignment and
Acceptance pursuant to which such Lender shall have become a party
hereto.
(d) If to a Lender, at its address (or telecopy number) as
set forth on Schedule I 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, the Issuing Banks 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 Issuing Banks, 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
or the Letters of Credit issued hereunder, including the reasonable fees,
disbursements and other charges of Shearman & Sterling, counsel for the
Administrative Agents, the Issuing Banks 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
Issuing Banks, the Paying Agent or any Lender. The Borrower further agrees that
it shall indemnify the Administrative Agents, the Issuing Banks, 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.
42
(b) The Borrower agrees to indemnify the Administrative Agents,
the Paying Agent, the Issuing Banks 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 Letters of
Credit or 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 Issuing Banks, the Paying Agent or any Lender. All
amounts due under this Section 8.03 shall be payable on written demand therefor.
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, the Issuing
Banks 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 Issuing Banks, 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 Issuing Banks, 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, the outstanding Letters of Credit and the
Advances at the time owing to it); provided, however, that (i) except in the
-------- -------
case of an assignment to a
43
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, (i) 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 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
44
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 and the Issuing Banks. 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, the outstanding of Letters of
Credit 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 Issuing Banks, 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 or other amounts 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 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) Except as expressly provided in this Agreement, the Issuing
Banks may not assign or delegate any of their respective rights and duties
hereunder without the prior written consent of the Borrower and the
Administrative Agents.
(i) 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.
(j) In the event that:
45
(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 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
46
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 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.
47
(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.
[The rest of this page is intentionally left blank.]
48
SECTION 8.11 Waiver of Jury Trial. Each of the Borrower, the
--------------------
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_______________________________
Title:
CITIBANK, N.A., as Administrative
Agent, Issuing Bank and as Paying
Agent
By_______________________________
Title:
JPMORGAN CHASE BANK, as
Administrative Agent and Issuing
Bank
By_______________________________
Title:
49
Initial Lenders
---------------
Commitment Administrative Agents
---------- ---------------------
$53,295,000 CITIBANK, N.A.
By ______________________________
Title:
$66,818,000 JPMORGAN CHASE BANK
By ______________________________
Title:
Co-Syndication Agents
---------------------
$65,625,000 BANK OF AMERICA, N.A.
By ______________________________
Title:
$52,898,000 BANK ONE, NA
By ______________________________
Title:
Senior Managing Agents
----------------------
$27,727,000 THE BANK OF TOKYO-MITSUBISHI,
LTD. CHICAGO BRANCH
By ______________________________
Title:
$20,000,000 UNION BANK OF CALIFORNIA
By ______________________________
Title:
$43,750,000 COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND" NEW YORK BRANCH
By ______________________________
Title:
50
$47,727,000 THE ROYAL BANK OF SCOTLAND
By ______________________________
Title:
$47,727,000 FIRSTAR BANK, N.A.
By ______________________________
Title:
$35,795,000 BNP PARIBAS
By ______________________________
Title:
By ______________________________
Title:
$31,818,000 COBANK, ACB
By ______________________________
Title:
$31,818,000 XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By ______________________________
Title:
By ______________________________
Title:
$27,841,000 FIFTH THIRD BANK
By ______________________________
Title:
$23,864,000 THE BANK OF NEW YORK
By ______________________________
Title:
$23,864,000 WACHOVIA BANK, NATIONAL
ASSOCIATION
By ______________________________
Title:
51
$32,614,000 THE BANK OF NOVA SCOTIA
By ______________________________
Title:
Co-Agents
---------
$15,909,000 COMERICA BANK
By ______________________________
Title:
$15,909,000 SUMITOMO MITSUI BANKING
CORPORATION
By ______________________________
Title:
Lenders
-------
$7,955,000 FLEET NATIONAL BANK
By ______________________________
Title:
$5,568,000 MELLON BANK, N.A.
By ______________________________
Title:
$7,955,000 NATIONAL CITY BANK
By ______________________________
Title:
$7,955,000 THE NORINCHUKIN BANK, NEW YORK
BRANCH
By ______________________________
Title:
52
$3,977,000 PNC BANK, NATIONAL ASSOCIATION
By______________________________
Title:
$1,591,000 HIBERNIA BANK
By______________________________
Title:
$700,000,000 Total of Commitments
53
SCHEDULE I
THE KROGER CO.
FIVE-YEAR CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
Name of Initial Lenders Domestic Lending Office Eurodollar Lending Office
------------------------------------------------------------------------------------------------
BANK OF AMERICA, N.A. 000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Portfolio Management Portfolio Management
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
XXX XXXX XX XXX XXXX Xxx Xxxx Xxxxxx Xxx Xxxx Xxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Xxxxx Xxxxxxx Xxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
THE BANK OF NOVA SCOTIA 000 Xxxxxxxxx Xx., XX 000 Xxxxxxxxx Xx., XX
Xxxxx 0000 Xxxxx 0000
Xxxxxxx, XX 30308 Xxxxxxx, XX 00000
Xxxxxxx Law Xxxxxxx Law
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
XXX XXXX XX XXXXX- 000 Xxxx Xxxxxx Xxxxxx 000 Xxxx Xxxxxx Xxxxxx
MITSUBISHI, LTD., Suite 2300 Suite 2300
CHICAGO BRANCH Chicago, IL 60606 Xxxxxxx, XX 00000
Xxxxxx Xxxxx/Vigi Xxx Xxxxxx Xxxxx/Xxxx Xxx
Tel: (000) 000-0000/4702 Tel: (000) 000-0000/4702
Fax: (000) 000-0000 Fax: (000) 000-0000
BANK ONE, N.A. 1 Bank Xxx Xxxxx 0 Xxxx Xxx Xxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Xx Xxxxx Xx Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
BNP PARIBAS 000 Xxxxx Xxxxxx, 0/xx/ Xxxxx 000 Xxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Xxxxx Xxxxxx Xxxxx Xxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
CITIBANK, N.A. Two Penns Way, Xxxxx 000 Xxx Xxxxx Xxx, Xxxxx 000
Xxx Xxxxxx, XX 00000 Xxx Xxxxxx, XX 00000
Xxxxx Xxxxxxx Xxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
1
COMERICA BANK 000 Xxxxxxxx Xxxxxx, 000 Xxxxxxxx Xxxxxx,
XX0000 MC3268
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Xxxxxx XxXxxxx Xxxxxx XxXxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
FIFTH THIRD BANK 00 Xxxxxxxx Xxxxxx Xxxxx 00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Xxxx Xxxxx Xxxx Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
FIRSTAR BANK, N.A. Firstar Tower Firstar Tower
000 Xxxxxx Xxxxxx 8/th/ Floor 000 Xxxxxx Xxxxxx 0/xx/ Xxxxx
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
WACHOVIA BANK, 000 Xxxxx Xxxxxxx Xxxxxx One First Union Center,
NATIONAL ASSOCIATION Charlotte, NC 28288-0745 Xxxxxxxxx, XX 00000-0000
Xxxx Xxxxxx Xxxx Xxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
JPMORGAN XXXXX 0 Xxxxx Xxxxxxxxx Plaza 1 Chase Manhattan Plaza
BANK 0xx xxxxx 0xx xxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Xxxx Xxxxxxxxx Xxxx Xxxxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Tel: (000) 000-0000 Tel: (000) 000-0000
MELLON BANK, N.A. Three Mellon Bank Center Three Mellon Bank Center
Room 1203 Room 2305
Pittsburgh, PA 15259-0003 Xxxxxxxxxx, XX 00000-0000
Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
THE XXXXXXXXXXX XXXX, 000 Xxxx Xxxxxx, 00/xx/ Xxxxx 245 Park Avenue, 00/xx/ Xxxxx
XXX XXXX XXXXXX Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Xxx-Xxx Xxx Xxx-Xxx Xxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
PNC BANK, NATIONAL 000 Xxxx Xxxxx Xxxxxx 000 Xxxx Xxxxx Xxxxxx
XXXXXXXXXXX Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
C. Xxxxxx Xxxxxxxxxx C. Xxxxxx Xxxxxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
2
RABOBANK NEDERLAND c/o Rabo Support Services, Inc. c/o Rabo Support Services, Inc.
00 Xxxxxxxx Xxxxx, 00/xx/ Xxxxx 00 Xxxxxxxx Xxxxx, 00/xx/ Xxxxx
Xxxxxx Xxxx, XX 00000 Xxxxxx Xxxx, XX 00000
Xxx XxXxxxxxx Xxx XxXxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
SUMITOMO MITSUI 000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
XXXXXXX XXXXXXXXXXX Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Xxxxxxxx Xxxxxxxx Xxxxxxxx Xxxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
COBANK, ACB 0000 X. Xxxxxx Xx. 0000 X. Xxxxxx Xx.
Xxxxxxxxx Xxxxxxx, XX 00000 Xxxxxxxxx Xxxxxxx, XX 00000
X Xxxxx X. Xxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
THE ROYAL BANK OF
SCOTLAND
XXXXX FARGO, NATIONAL 000 Xxxx Xxxxxx Xxxxxx 000 Xxxx Xxxxxx Xxxxxx
ASSOCIATION Xxxxx 0000 Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
FLEET NATIONAL BANK
NATIONAL CITY BANK 000 Xxxx Xxxxx Xxxxxx 000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Xxxxxxxxx XxXxx Xxxxxxxxx XxXxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
XXXXX XXXX XX 0000 Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx
XXXXXXXXXX Xxxxxxxx Xxxx, XX 00000 Xxxxxxxx Xxxx, XX 00000
Xxxx Xxxxxxxx Xxxx Xxxxxxxx
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
HIBERNIA BANK
3
SCHEDULE 2.01(C)
STAND-BY LETTERS OF CREDIT
Union Bank of California
List of Issued LCs for Kroger / Xxxx Xxxxx Inc.
As of May 19, 2002
----------------------------------------------------------------------------------------------------------------------
Issuer LC# Applicant Beneficiary Amount Expiry
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
US Bank SLCCCIN00198 Continental Casualty $70,776,000.00 2/8/03
----------------------------------------------------------------------------------------------------------------------
Union Bank 306S233023 Xxxx Xxxxx Inc. Monogram Credit Card $ 1,000,000.00 9/11/02
Bank of GA
----------------------------------------------------------------------------------------------------------------------
Union Bank 306S233495 Xxxx Xxxxx Inc. Bankers Standard $ 191,000.00 7/15/03
Insurance Co.
----------------------------------------------------------------------------------------------------------------------
Union Bank 306S233496 Xxxx Xxxxx Inc. Mutual Indemnity Ltd. $ 25,000.00 6/4/03
----------------------------------------------------------------------------------------------------------------------
Union Bank 306S006588 Xxxxxx Markets Inc. Reliance Insurance* $ 8,879,626.00 12/31/02
----------------------------------------------------------------------------------------------------------------------
Union Bank 306S008016 Xxxxxx Markets Inc. City of L.A. - $ 103,000.00 8/1/02
Transportation Dept.
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
TOTAL $10,198,626.00
----------------------------------------------------------------------------------------------------------------------
SCHEDULE 3.01(b)
DISCLOSED LITIGATION
On November 29, 2001, a lawsuit titled Xxxx, 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-Xxxxx County, GA $3,500,000.00
Halls Crossroads, TN (Xxxx 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
Xxxxxxxx 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
Xxxxxxx & Co. 2,876,000.00
------------
Subtotal 7,954,000.00
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 Xxxx Xxxxx, Inc. Lines are set forth below:
LENDOR FACE AMOUNT
------ -----------
G & M Xxxxx 2,700,000.00
J & F Xxxxx 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/Xxxxxx 198,000.00
Xxxxx & 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 _________________
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
Xxx Xxxxx Xxx, Xxxxx 000
Xxx Xxxxxx, Xxxxxxxx 00000 [Date]
Attention: Xxxxx Xxxxxxx
Ladies and Gentlemen:
The undersigned, The Kroger Co., refers to the Five-Year
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 Five-Year 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:
2
EXHIBIT B - FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Five-Year 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, 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 Five-Year 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, 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
1
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.
(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. Xxxxxx x.
---------
Ashland Oil, Inc., 17 Ohio St. 3d 189 (1985); Xxxxxxx 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.") (S) 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. (S)
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:
2
(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.
(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
