SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 2, 1997
THE KROGER CO.
(Exact name of registrant as specified in its charter)
An Ohio Corporation No. 1-303 31-0345740
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Number)
1014 Vine Street
Cincinnati, OH 45201
(Address of principal
executive offices)
Registrant's telephone number: (513) 762-4000
<PAGE>
Item 5. Other Events
- ------- ------------
On May 28, 1997, The Kroger Co. executed a 364-Day
Credit Agreement and a Five-Year Credit Agreement,
both among the Company, the Initial Lenders named
therein, Citibank, N.A., as Administrative Agent, The
Chase Manhattan Bank, as Administrative Agent, First
Chicago Capital Markets, Inc., as Syndication Agent,
and The Bank of New York, as Documentation Agent. A
copy of the 364-Day Credit Agreement is attached
hereto as Exhibit 99.1 and a copy of the Five-Year
Credit Agreement is attached hereto as Exhibit 99.2.
Item 7. Financial Statements, Pro Forma Financial Information
- ------- -----------------------------------------------------
and Exhibits
------------
(c) Exhibits:
99.1 364-Day Credit Agreement dated May 28, 1997,
among the Company, the Initial Lenders named
therein, Citibank, N.A., as Administrative Agent,
The Chase Manhattan Bank, as Administrative
Agent, First Chicago Capital Markets, Inc., as
Syndication Agent, and The Bank of New York, as
Documentation Agent.
99.2 Five-Year Credit Agreement dated May 28,
1997, among the Company, the Initial Lenders
named therein, Citibank, N.A., as Administrative
Agent, The Chase Manhattan Bank, as
Administrative Agent, First Chicago Capital
Markets, Inc., as Syndication Agent, and The Bank
of New York, as Documentation Agent.
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereto duly authorized.
THE KROGER CO.
June 2, 1997 By (Paul Heldman)
______________________
Paul Heldman
Vice President, Secretary
and General Counsel
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ------------ -------
99.1 364-Day Credit Agreement dated May 28, 1997,
among the Company, the Initial Lenders named
therein, Citibank, N.A., as Administrative
Agent, The Chase Manhattan Bank, as
Administrative Agent, First Chicago Capital
Markets, Inc., as Syndication Agent, and The
Bank of New York, as Documentation Agent.
99.2 Five-Year Credit Agreement dated May 28,
1997, among the Company, the Initial Lenders
named therein, Citibank, N.A., as
Administrative Agent, The Chase Manhattan
Bank, as Administrative Agent, First Chicago
Capital Markets, Inc., as Syndication Agent,
and The Bank of New York, as Documentation
Agent.
364-DAY CREDIT AGREEMENT
Dated as of May 28, 1997
THE KROGER CO., an Ohio corporation (the "Borrower"), the
--------
banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof,
---------------
and CITIBANK, N.A. ("Citibank"), as an administrative agent
--------
(in such capacity, an "Administrative Agent") for the Lenders
--------------------
(as hereinafter defined) and paying agent (in such capacity, the
"Paying Agent") for the Lenders, THE CHASE MANHATTAN BANK ("Chase"),
- -------------- -----
as an administrative agent (in such capacity, an "Administrative Agent";
--------------------
the Administrative Agents and the Paying Agent are, collectively,
the "Agents") for the Lenders, FIRST CHICAGO CAPITAL MARKETS,
------
INC., as syndication agent for the Lenders and THE BANK OF NEW
YORK, as documentation agent for the Lenders, agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
---------------------
Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acquired EBITDA" means, for any period, with respect to
---------------
any Acquired Entity, (a) the sum of (i) Acquired Net Income
for such period, (ii) depreciation and amortization expense
for such period, (iii) interest expense net of interest income
for such period, (iv) Federal and state income taxes for such
period as determined in accordance with GAAP, (v)
extraordinary losses that have been included in the
calculation of Acquired Net Income for such period, (vi) LIFO
charges included in the calculation of Acquired Net Income for
such period and (vii) non-cash charges made with respect to
"expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No. 106
minus (b) the sum of (i) extraordinary gains that have been
- -----
included in the calculation of Acquired Net Income for such
period and (ii) LIFO credits included in the calculation of
Acquired Net Income for such period.
"Acquired Entity" means any Person in the Borrower's line
---------------
of business or the assets of any Person in the Borrower's line
of business to be invested in or acquired.
"Acquired Entity Fiscal Quarter" means, with respect to
------------------------------
any Acquired Entity, any fiscal quarter of such Acquired
Entity.
"Acquired Net Income" means, for any period, with respect
-------------------
to any Acquired Entity, the net income of such Acquired Entity
for such period before the payment of dividends on all capital
stock, determined in accordance with GAAP.
"Administrative Questionnaire" means an Administrative
----------------------------
Questionnaire in the form of Exhibit D.
"Advance" means a Revolving Credit Advance or a
-------
Competitive Bid Advance.
"Affiliate" means, with respect to any designated Person,
---------
any other Person that has a relationship with the designated
Person whereby either of such Persons directly or indirectly
controls or is controlled by or is under common control with
the other of such Persons, or holds or beneficially owns 10%
or more of the equity interest in the other Person or 10% or
more of any class of voting securities of the other Person.
The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct
or cause the direction of the management or policies of any
Person, whether through ownership of voting securities, by
contract or otherwise.
"Applicable Lending Office" means, with respect to each
-------------------------
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance and, in the case of a
Competitive Bid Advance, the office of such Lender specified
in a notice of such Lender to the Paying Agent as such
Lender's Applicable Lending Office with respect to such
Competitive Bid Advance.
"Applicable Margin" means, until September 30, 1997, 0.0%
-----------------
per annum for Base Rate Advances and 0.17% per annum for
Eurodollar Rate Advances and thereafter, as of any date prior
to the Term Loan Conversion Date, a percentage per annum
determined by reference to the Borrower's Performance Level in
effect on such date as set forth below:
<TABLE>
<CAPTION>
Performance Applicable Margin for Applicable Margin for
Level Base Rate Advances Eurodollar Rate Advances
- ------------ --------------------- ------------------------
<S> <C> <C>
Level 1 0.0000% 0.1250%
Level 2 0.0000% 0.1325%
Level 3 0.0000% 0.1400%
Level 4 0.0000% 0.1550%
Level 5 0.0000% 0.1700%
Level 6 0.0000% 0.2000%
</TABLE>
and, as of any date on or after the Term Loan Conversion Date,
a percentage per annum determined by reference to the
Borrower's Performance Level in effect on such date as set
forth below:
<TABLE>
<CAPTION>
Performance Applicable Margin for Applicable Margin for
Level Base Rate Advances Eurodollar Rate Advances
- ----------- ----------------------- ------------------------
<S> <C> <C>
Level 1 0.0000% 0.1750%
Level 2 0.0000% 0.1875%
Level 3 0.0000% 0.2000%
Level 4 0.0000% 0.2250%
Level 5 0.0000% 0.2500%
Level 6 0.0000% 0.3000%
</TABLE>
"Applicable Percentage Ratio" means the ratio (determined
---------------------------
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) Consolidated EBITDA for such
Rolling Period to (b) Consolidated Total Interest Expense for
such Rolling Period.
"Assignment and Acceptance" means an assignment and
-------------------------
acceptance entered into by a Lender and an assignee, and to
the extent required by Section 8.06, accepted by the Borrower
and the Administrative Agents, in substantially the form of
Exhibit C hereto or such other form as shall be approved by
the Administrative Agents.
"Assuming Lender" has the meaning specified in Section
---------------
2.16(c).
"Assumption Agreement" has the meaning specified in
--------------------
Section 2.16(c).
"Base Rate" means a fluctuating rate per annum equal to
---------
the highest from time to time of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearer 1/16 of 1% or,
if there is no nearest 1/16 of 1%, to the next higher
1/16 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the
----
rate obtained by dividing (A) the latest three-week
moving average of secondary market morning offering rates
in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average (adjusted to the basis of a
year of 360 days) being determined weekly on each Monday
(or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the
basis of quotations for such rates received by the Paying
Agent from three New York certificate of deposit dealers
of recognized standing selected by the Paying Agent, by
(B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period
by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve
requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities
consisting of or including (among other liabilities)
three-month U.S. dollar non-personal time deposits in the
United States, plus (iii) the average during such
----
three-week period of the daily annual assessment rates
estimated by Citibank for determining the current annual
assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring
U.S. dollar deposits of Citibank in the United States;
and
(c) a rate equal to 1/2 of 1% per annum above the
Federal Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that
-----------------
bears interest as provided in Section 2.06(a).
"Borrowing" means a Revolving Credit Borrowing or a
---------
Competitive Bid Borrowing.
"Business Day" means a day of the year on which banks are
------------
not required or authorized to close in New York City and, if
the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London
interbank market.
"Capital Lease Obligation" means, with respect to any
------------------------
lessee, the obligations under any lease of property that, in
accordance with GAAP, should be capitalized on such lessee's
balance sheet.
"Change of Control" means any one or more of the
-----------------
following events:
(a) the acquisition, by contract or otherwise
(including the entry into a contract or arrangement that
upon consummation will result in such acquisition), by
any Person or group (as such term is defined for purposes
of Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and
------------
regulations pertaining thereto), other than the trusts
for the employee benefit plans (as defined in Section
3(2) of ERISA) maintained by the Borrower or any Subsidiary
of the Borrower that is an ERISA Affiliate, of beneficial
ownership (within the meaning of Rule 13d-3, or any
regulation or ruling promulgated to replace or supplement
Rule 13d-3, of the General Rules and Regulations under the
Exchange Act), directly or indirectly, of securities of the
Borrower representing 20% or more of the voting power of
all securities of the Borrower, or
(b) during any period of up to 24 consecutive
months, commencing before or after the date of this
Agreement, individuals who at the beginning of such period
were directors of the Borrower (together with any new
directors whose election by the Board of Directors or whose
nomination for election by the stockholders of the
Borrower was approved by a vote of at least 75% of the
directors then in office who either were directors at the
beginning of such period or whose election or nomination
for election was previously so approved) shall cease for
any reason to constitute at least 75% of the Board of
Directors of the Borrower.
"Commercial Paper" means any unsecured promissory note
----------------
issued by the Borrower pursuant to any commercial paper
program (whether rated or unrated) with a maturity of not more
than nine months from the time of issuance, exclusive of grace
periods.
"Commercial Paper Set-Aside Amount" has the meaning
---------------------------------
specified in Section 2.01(c).
"Commitment" has the meaning specified in
----------
Section 2.01(a).
"Competitive Bid Advance" means an advance by a Lender to
-----------------------
the Borrower as part of a Competitive Bid Borrowing resulting
from the competitive bidding procedure described in Section
2.01(b).
"Competitive Bid Borrowing" means a borrowing consisting
-------------------------
of simultaneous Competitive Bid Advances from each of the
Lenders whose offer to make one or more Competitive Bid
Advances as part of such borrowing has been accepted by the
Borrower under the competitive bidding procedure described in
Section 2.01(b).
"Competitive Bid Reduction" has the meaning specified in
-------------------------
Section 2.01(a).
"Consenting Lender" has the meaning specified in Section
-----------------
2.16(b).
"Consolidated" refers to the consolidation of accounts in
------------
accordance with GAAP, including principles of consolidation,
consistent with those applied in the preparation of the
Consolidated financial statements referred to in Section
4.01(e).
"Consolidated Cash Interest Expense" means, for any
----------------------------------
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Borrower and its Subsidiaries
on a Consolidated basis for such period, including (a)
commissions and other fees and charges payable in connection
with letters of credit, (b) net payments payable in connection
with all Interest Rate Agreements, (c) interest capitalized
during construction and (d) cash dividends paid in respect of
any preferred stock issued by the Borrower, but excluding,
---------
however, the sum of (i) interest expense not payable in cash
- -------
and (ii) amortization of discount and deferred debt expense,
all as determined in conformity with GAAP.
"Consolidated EBITDA" means, for any period, on a
-------------------
Consolidated basis for the Borrower and its Subsidiaries, (a)
the sum of (i) Consolidated Net Income for such period, (ii)
depreciation and amortization expense for such period, (iii)
interest expense net of interest income for such period, (iv)
Federal and state income taxes for such period as determined
in accordance with GAAP, (v) extraordinary losses (and any
unusual losses in excess of $1,000,000 arising in or outside
of the ordinary course of business not included in
extraordinary losses (determined in accordance with GAAP) that
have been included in the calculation of Consolidated Net
Income) for such period, (vi) LIFO charges that have been
included in the calculation of Consolidated Net Income for
such period and (vii) non-cash charges made with respect to
"expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No. 106
minus (b) the sum of (i) extraordinary gains (and any unusual
- -----
gains in excess of $1,000,000 arising in or outside of the
ordinary course of business not included in extraordinary
gains (determined in accordance with GAAP) that have been
included in the calculation of Consolidated Net Income) for
such period and (ii) LIFO credits that have been included in
the calculation of Consolidated Net Income for such period.
"Consolidated Net Income" means, for any period, the net
-----------------------
income of the Borrower and its Consolidated Subsidiaries for
such period, before the payment of dividends on all capital
stock, determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any period, the
---------------------------
aggregate rental expense (including any contingent or
percentage rental expense) of the Borrower and its
Subsidiaries on a Consolidated basis for such period
(excluding real estate taxes and common area maintenance
charges) in respect of all rent obligations under all
operating leases for real or personal property minus any
-----
rental income of the Borrower and its Subsidiaries on a
Consolidated basis for such period, all as determined in
conformity with GAAP.
"Consolidated Total Interest Expense" means, for any
-----------------------------------
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Borrower and its Subsidiaries
on a Consolidated basis for such period, including (a)
commissions and other fees and charges payable in connection
with letters of credit, (b) net payments payable in connection
with all Interest Rate Agreements and (c) cash dividends paid
in respect of any preferred stock issued by the Borrower, but
excluding, however, (i) amortization of deferred debt expense
- --------- -------
and (ii) interest capitalized during construction, all as
determined in conformity with GAAP.
"Convert", "Conversion" and "Converted" each refers to a
------- ---------- ---------
conversion of Revolving Credit Advances of one Type into
Revolving Credit Advances of the other Type pursuant to
Section 2.02(b), 2.07 or 2.08.
"Debt" of any Person means, without duplication, (a) all
----
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (including all
obligations, contingent or otherwise, of such Person in
connection with letter of credit facilities, acceptance
facilities or other similar facilities and in connection with
any agreement to purchase, redeem, exchange into debt
securities, convert into debt securities or otherwise acquire
for value (i) any capital stock of such Person or (ii) any
warrants, rights or options to acquire such capital stock, now
or hereafter outstanding), (b) all obligations of such Person
evidenced by bonds, notes, debentures or other similar
instruments, (c) all indebtedness created or arising under any
conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession
or sale of such property), (d) all Capital Lease Obligations
of such Person, (e) all Debt referred to in clause (a), (b),
(c) or (d) above secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be
secured by) any lien, security interest or other charge or
encumbrance upon or in property (including accounts and
contract rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Debt,
(f) all Guaranteed Debt of such Person and (g) any preferred
stock of such Person that is classified as a liability on such
Person's Consolidated balance sheet.
"Default" means any Event of Default or any event that
-------
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Domestic Lending Office" means, with respect to any
-----------------------
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance or the Assumption Agreement, as
the case may be, pursuant to which it became a Lender, or such
other office of such Lender as such Lender may from time to
time specify to the Borrower and the Paying Agent.
"Effective Date" has the meaning specified in
--------------
Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate
-----------------
of a Lender; (iii) a commercial bank organized under the laws
of the United States, or any State thereof, and having total
assets in excess of $5,000,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the
United States, or any State thereof, and having total assets
in excess of $5,000,000,000; (v) a commercial bank organized
under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to
Borrow or of the Cayman Islands, or a political subdivision of
any such country, and having total assets in excess of
$5,000,000,000 so long as such bank is acting through a branch
or agency located in the United States or in the country in
which it is organized or another country that is described in
this clause (v); (vi) the central bank of any country that is
a member of the Organization for Economic Cooperation and
Development; or (vii) any other Person approved by the
Administrative Agents and the Borrower, such approval not to
be unreasonably withheld; provided, however, that neither the
-------- -------
Borrower nor any Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Laws" means all current and future
------------------
Federal, state, local and foreign laws, rules or regulations,
codes, ordinances, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder or other
requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances, or
wastes into the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing,
distribution, use, generation, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions therefrom.
"ERISA" means the Employee Retirement Income Security Act
-----
of 1974, or any successor statute, as the same may be amended
from time to time.
"ERISA Affiliate" means any trade or business (whether or
---------------
not incorporated) that, together with the Borrower, is treated
as a single employer under Section 414 of the Internal Revenue
Code.
"Eurocurrency Liabilities" has the meaning assigned to
------------------------
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
-------------------------
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance or the Assumption Agreement, as
the case may be, pursuant to which it became a Lender (or, if
no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Paying Agent.
"Eurodollar Rate" means, with respect to each day during
---------------
each Interest Period for a Eurodollar Rate Advance, the rate
of interest determined on the basis of the rate for deposits
in United States dollars for a period equal to such Interest
Period appearing on Page 3750 of the Telerate 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 Service (or
otherwise on such service), the "Eurodollar Rate" for the
purposes of this paragraph shall be determined by reference to
such other publicly available service for displaying
eurodollar rates as may be agreed upon by the Paying Agent and
the Borrower or, in the absence of such agreement, the
"Eurodollar Rate" for the purposes of this paragraph shall
instead be an interest rate per annum equal to the rate of
interest (rounded upward to the nearest whole multiple of
1/100 of 1% per annum, if such average is not such a multiple)
of the rate per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks
in London, England, to prime banks in the London interbank
market at 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurodollar Rate
Advance to be outstanding during such Interest Period (or, if
such Reference Bank shall not have a Eurodollar Rate Advance
that is to be outstanding during such Interest Period, in an
amount equal to $1,000,000) and for a period equal to such
Interest Period. The Eurodollar Rate for an Interest Period
shall be determined by the Paying Agent on the basis of
applicable rates furnished to and received by the Paying Agent
two Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.07.
------- -------
"Eurodollar Rate Advance" means a Revolving Credit
-----------------------
Advance that bears interest as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" means the reserve
----------------------------------
percentage under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined).
"Events of Default" has the meaning specified in
-----------------
Section 6.01.
"Extension Date" has the meaning specified in Section
--------------
2.16(b).
"Facility Fee Percentage" means, until September 30,
-----------------------
1997, 0.08% per annum and thereafter, as of any date, a
percentage per annum determined by reference to the Borrower's
Performance Level in effect on such date as set forth below:
Performance Facility Fee
Level Percentage
- ----------- ------------
Level 1 0.050%
Level 2 0.055%
Level 3 0.060%
Level 4 0.070%
Level 5 0.080%
Level 6 0.100%
"Facility Fees" has the meaning specified in Section
-------------
2.03.
"Facility Usage" means, at any time, without duplication,
--------------
the sum of (a) the amount of the Advances outstanding at such
time and (b) the Commercial Paper Set-Aside Amount at such
time.
"Federal Funds Rate" means a fluctuating rate per annum
------------------
equal for each day to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for
such day on such transactions received by the Paying Agent
from three Federal funds brokers of recognized standing
selected by it.
"Financial Officer" means, with respect to any
-----------------
corporation, the chief financial officer, principal accounting
officer, treasurer or controller of such corporation.
"Fiscal Quarter" means (a) with respect to the first
--------------
Fiscal Quarter of any Fiscal Year, the first 12 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 16 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 be, ending on the Saturday closest to the 31st day of
December 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 January
30th of such calendar year.
"Fixed Charge Coverage Ratio" means the ratio (determined
---------------------------
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) the sum of (i) Consolidated
EBITDA for such Rolling Period and (ii) Consolidated Rental
Expense for such Rolling Period to (b) the sum of (i)
Consolidated Cash Interest Expense for such Rolling Period and
(ii) Consolidated Rental Expense for such Rolling Period.
"Fixed Rate" means, for the period for each Fixed Rate
----------
Advance comprising part of the same Competitive Bid Borrowing,
the fixed interest rate per annum determined for such Advance,
as provided in Section 2.01(b).
"Fixed Rate Advance" means a Competitive Bid Advance that
------------------
bears interest at a fixed rate per annum determined as
provided in Section 2.01(b).
"GAAP" has the meaning specified in Section 1.03.
----
"Governmental Authority" means any Federal, state, local
----------------------
or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantee Agreement" means the Guarantee Agreement,
-------------------
substantially in the form of Exhibit E, among the Guarantors
and the Paying Agent, as amended, supplemented or otherwise
modified from time to time in compliance with Section 8.01.
"Guaranteed Debt" of any Person means all Debt referred
---------------
to in clause (a), (b), (c), (d) or (e) of the definition of
the term "Debt" in this Section guaranteed directly or
indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an
agreement (a) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (b) to
purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (c) to supply funds to,
or in any other manner invest in, the debtor (including any
agreement to pay for property or services irrespective of
whether such property is received or such services are
rendered) or (d) otherwise to assure a creditor against loss,
but excluding leases at a rental at least as favorable to the
Borrower as could be obtained in an arm's-length transaction
with a party that is not an Affiliate.
"Guarantor" means (a) each existing and hereafter created
---------
or acquired Material Subsidiary of the Borrower and (b) each
other existing or hereafter acquired Subsidiary of the
Borrower designated from time to time by the Borrower as a
Guarantor.
"Hazardous Materials" means any toxic substance,
-------------------
hazardous waste, hazardous constituents, hazardous materials,
asbestos or asbestos containing material, polychlorinated
biphenyls, petroleum, including crude oil and any fractions
thereof, or other wastes, chemicals, substances or materials
regulated by any Environmental Laws.
"Information Memorandum" means the information memorandum
----------------------
dated April 30, 1997 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 one, two, three or six months (or, if
available from all the Lenders, nine or twelve months), as the
Borrower may, upon notice received by the Paying Agent not
later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period,
select; provided, however, that:
-------- -------
(i) the Borrower may not select any Interest Period
that ends after the scheduled Revolver Termination Date
then in effect or, if the Advances have been converted to
a term loan pursuant to Section 2.05 prior to such
selection, which ends after the Maturity Date;
(ii) Interest Periods commencing on the same date
for Eurodollar Rate Advances comprising part of the same
Revolving Credit Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day,
provided that, if such extension would cause the last day
--------
of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which
there is no numerically corresponding day in the calendar
month that succeeds such initial calendar month by the
number of months equal to the number of months in such
Interest Period, such Interest Period shall end on the
last Business Day of such succeeding calendar month.
"Interest Rate Agreement" means any forward contract,
-----------------------
forward option, futures contract, futures option, interest
rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate floor agreement or other
similar agreement or arrangement entered into by the Borrower.
"Internal Revenue Code" means the Internal Revenue Code
---------------------
of 1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Lenders" means the Initial Lenders, each Assuming Lender
-------
that shall become a party hereto pursuant to Section 2.16 and
each Person that shall become a party hereto pursuant to
Section 8.06.
"Lien" means, with respect to any asset, (a) any
----
mortgage, deed of trust, lien, pledge, assignment for security
(whether collateral or otherwise), hypothecation, encumbrance,
lease, sublease, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention
agreement relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a
third party with respect to such securities.
"LIFO" means the pretax charge against income determined
----
by using the last-in-first-out method of valuing inventory.
"Loan Documents" means this Agreement and Notes, if any,
--------------
and each Guarantee Agreement.
"Material Adverse Change" means any material adverse
-----------------------
change in the business, assets, operations, properties,
prospects or condition (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means (a) a materially adverse
-----------------------
effect on the business, assets, operations, properties,
prospects or condition (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, (b) material
impairment of the ability of the Borrower to perform any of
its obligations under any Loan Document to which it is or will
be a party or (c) material impairment of the rights of or
benefits available to the Administrative Agents, the Paying
Agent or the Lenders under any Loan Document.
"Material Subsidiary" of the Borrower means, at any time,
-------------------
any Subsidiary of the Borrower (other than One Holdings, Inc.)
having (a) assets with a value of not less than 5% of the
total value of the assets of the Borrower and its Consolidated
Subsidiaries, taken as a whole, or (b) Consolidated EBITDA not
less than 5% of the Consolidated EBITDA of the Borrower and
its Consolidated Subsidiaries, taken as a whole, in each case
as of the end of or for the most recently completed Fiscal
Year of the Borrower.
"Maturity Date" means the earlier of (a) the second
-------------
anniversary of the Term Loan Conversion Date and (b) the date
of termination in whole of the aggregate Commitments pursuant
to Section 2.04 or 6.01.
"Moody's" means Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means a multiemployer plan, as
------------------
defined in Section 4001(a)(3) of ERISA, to which the Borrower
or any ERISA Affiliate (other than one considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Internal Revenue Code) is making or accruing an
obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to
make contributions.
"Net Debt" means, on a Consolidated basis for the
--------
Borrower and its Subsidiaries as of any date, (a) Debt minus
-----
(b) the sum as of such date of (i) the aggregate outstanding
amount of Debt represented by investments made by the Borrower
in Debt of another Person in connection with a real estate
transaction, so long as the Borrower or one of its
Subsidiaries is or becomes an anchor tenant of the real estate
development with respect thereto and no more than two anchor
tenants exist with respect to such real estate development or
the Borrower or one of its Subsidiaries has a contractual
obligation to make lease or other payments to such Person as a
result of the real estate transaction in which such Debt was
issued and (ii) the aggregate amount of Permitted Investments
in excess of $100,000,000.
"Non-Consenting Lender" has the meaning specified in
---------------------
Section 2.16(b).
"Note" has the meaning specified in Section 2.14.
----
"Notice of Revolving Credit Borrowing" has the meaning
------------------------------------
specified in Section 2.02(a).
"Paying Agent's Account" means the account of the Paying
----------------------
Agent maintained by the Paying Agent at Citibank with its
office at 1 Court Square, 7th Floor, Long Island City, New
York 11120, Account No. 36852248, Attention: Leonard Sarcona.
"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:
Level 1 The Public Debt Rating is A1/A+ or the Applicable
--
Percentage Ratio is 6.50:1.00 or greater;
Level 2 The Public Debt Rating is A2/A or the Applicable
--
Percentage Ratio is 5.75:1.00 or greater but less
than 6.50:1.00;
Level 3 The Public Debt Rating is A3/A- or the Applicable
--
Percentage Ratio is 5.25:1.00 or greater but less
than 5.75:1.00;
Level 4 The Public Debt Rating is Baa1/BBB+ or the
--
Applicable Percentage Ratio is 4.75:1.00 or greater
but less than 5.25:1.00;
Level 5 The Public Debt Rating is Baa2/BBB or the Applicable
--
Percentage Ratio is 4:00:1.00 or greater but less
than 4.75:1.00;
Level 6 The Public Debt Rating is Baa3/BBB- or lower 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 or Moody's shall be changed (other than as
a result of a change in the rating system of either S&P or
Moody's), 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 and (c) notwithstanding the
foregoing provisions of clause (a), 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 highest
------------------
rating that has been most recently announced by either S&P or
Moody's, 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 and Moody's shall have in effect a Public Debt Rating, the
Applicable Margin and the Facility Fee Percentage shall be
determined by reference to the available rating; (b) if
neither S&P nor Moody's shall have in effect a Public Debt
Rating, the Applicable Margin and the Facility Fee Percentage
will be set in accordance with the Applicable Percentage
Ratio; (c) if the ratings established by S&P and Moody's shall
fall within different levels, the Applicable Margin and the
Facility Fee Percentage shall be based upon the higher rating;
(d) if any rating established by S&P or Moody's 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 or Moody's shall
change the basis on which ratings are established, each
reference to the Public Debt Rating announced by S&P or
Moody's, as the case may be, shall refer to the then
equivalent rating by S&P or Moody's, as the case may be.
"Reference Banks" means Citibank, Chase, The First
---------------
National Bank of Chicago/NBD and The Bank of New York.
"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 there-
under with respect to a Plan (other than a Plan maintained by
an ERISA Affiliate that is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the
Internal Revenue Code).
"Required Lenders" means, at any time, Lenders holding at
----------------
least 51% of the then aggregate unpaid principal amount of all
outstanding Advances (other than Competitive Bid Advances) or,
if no such principal amount is then outstanding, Lenders
having at least 51% of the Commitments.
"Responsible Officer" of any corporation means any
-------------------
executive officer or Financial Officer of such corporation and
any other officer or similar official thereof responsible for
the administration of the obligations of such corporation in
respect of this Agreement.
"Revolver Termination Date" means the earlier of (a) May
-------------------------
27, 1998, subject to the extension thereof pursuant to Section
2.16, and (b) the date of termination in whole of the
aggregate Commitments pursuant to Section 2.04 or 6.01;
provided, however, that the Revolver Termination Date of any
- -------- -------
Lender that is a Non-Consenting Lender to any requested
extension pursuant to Section 2.16 shall be the Revolver
Termination Date in effect immediately prior to the applicable
Extension Date for all purposes of this Agreement.
"Revolving Credit Advance" means an advance by a Lender
------------------------
to the Borrower as part of a Revolving Credit Borrowing and,
if the Borrower has made the Term Loan Election in accordance
with Section 2.05, includes each such advance that remains
outstanding after the Term Loan Conversion Date, and refers to
a Base Rate Advance or a Eurodollar Rate Advance (each of
which shall be a "Type" of Revolving Credit Advance).
----
"Revolving Credit Borrowing" means a borrowing consisting
--------------------------
of simultaneous Revolving Credit Advances of the same Type
made by each of the Lenders pursuant to Section 2.01(a).
"Rolling Period" means, in respect of any Fiscal Quarter,
--------------
such Fiscal Quarter and the three preceding Fiscal Quarters.
"S&P" means Standard & Poor's Ratings Group, a division
---
of The McGraw-Hill Companies, Inc.
"Subsidiary" of any Person means any corporation,
----------
partnership, joint venture, limited liability company, trust
or estate of which (or in which) more than 50% of (a) the
issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock
of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of
such limited liability company, partnership or joint venture
or (c) the beneficial interest in such trust or estate is at
the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Term Loan Conversion Date" has the meaning specified in
-------------------------
Section 2.05.
"Term Loan Election" has the meaning specified in Section
------------------
2.05.
"Withdrawal Liability" means liability to a Multiemployer
--------------------
Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this
---------------------------
Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms
----------------
not specifically defined herein shall be construed in
accordance with generally accepted accounting principles
consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(e) ("GAAP").
----
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Revolving Credit
------------ --------------------
Advances. Each Lender severally agrees, on the terms and
- --------
conditions hereinafter set forth, to make Revolving Credit
Advances to the Borrower from time to time on any Business Day
during the period from the Effective Date until the earlier of
the Revolver Termination Date and the Term Loan Conversion
Date in an aggregate amount not to exceed at any time
outstanding the amount set forth opposite such Lender's name
on the signature pages hereof or, if such Lender has become a
Lender hereunder pursuant to an Assumption Agreement, the
amount set forth as the Commitment of such Lender in such
Assumption Agreement or, if such Lender has entered into any
Assignment and Acceptance, set forth for such Lender in the
Register maintained by the Paying Agent pursuant to Section
8.06(d), as such amount may be reduced pursuant to Section
2.04 (such Lender's "Commitment"), provided that (i) the
---------- --------
Facility Usage shall not exceed the aggregate amount of the
Commitments of the Lenders and (ii) the aggregate amount of
the Commitments of the Lenders shall be deemed used from time
to time to the extent of the aggregate amount of the
Competitive Bid Advances then outstanding and such deemed use
of the aggregate amount of the Commitments shall be allocated
among the Lenders ratably according to their respective
Commitments (such deemed use of the aggregate amount of the
Commitments being a "Competitive Bid Reduction"). Each
-------------------------
Revolving Credit Borrowing shall be in an aggregate minimum
amount of $10,000,000, in the case of Eurodollar Rate
Advances, or $5,000,000, in the case of Base Rate Advances and
shall consist of Revolving Credit Advances of the same Type
made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's
Commitment, the Borrower may borrow under this Section
2.01(a), prepay pursuant to Section 2.09 and reborrow under
this Section 2.01(a).
(b) The Competitive Bid Advances. (i) Each Lender
----------------------------
severally agrees that the Borrower may make Competitive Bid
Borrowings under this Section 2.01(b) from time to time on any
Business Day during the period from the date hereof until the
date occurring 30 days prior to the earlier of the Revolver
Termination Date and the Term Loan Conversion Date in the
manner set forth below; provided that, following the making of
--------
each Competitive Bid Borrowing, the aggregate amount of the
Advances then outstanding shall not exceed the aggregate
amount of the Commitments of the Lenders (computed without
regard to any Competitive Bid Reduction).
(A) The Borrower, either directly or through the
Specified Administrative Agent (as defined in paragraph
(B) below), may request a Competitive Bid Borrowing or
Competitive Bid Borrowings under this Section 2.01(b) by
delivering to the Paying Agent and some or all of the
Lenders, by telephone, telex or cable, confirmed
immediately in writing or by telecopier, a notice of a
Competitive Bid Borrowing or Borrowings (a "Notice of
---------
Competitive Bid Borrowing"), in substantially the form of
-------------------------
Exhibit A-2 or in such other form as the Administrative
Agents and the Borrower may agree upon specifying the
date and aggregate amount of the proposed Competitive Bid
Borrowing, the maturity date for repayment of each
Competitive Bid Advance to be made as part of such
Competitive Bid Borrowing (which maturity date may not be
earlier than the date that is 27 days after the date of
such Competitive Bid Borrowing in the case of Eurodollar
Rate Advances, may not be later than the date that is
270 days after the date of such Competitive Bid Borrowing
in the case of Fixed Rate Advances, and in any case may
not be later than the earlier of the Revolver Termination
Date and the Term Loan Conversion Date), whether the
Lenders should offer to make Fixed Rate Advances or
Eurodollar Rate Advances, the interest payment date or
dates relating thereto and any other terms to be applicable
to such Competitive Bid Borrowing, not later than (1)
11:00 a.m. (New York City time) on the same Business Day as
any proposed Competitive Bid Borrowing consisting of Fixed
Rate Advances and (2) 12:00 noon (New York City time) at
least three Business Days, or, if through the Specified
Administrative Agent, 10:00 a.m. (New York City time) at
least four Business Days prior to the date of a proposed
Competitive Bid Borrowing consisting of Eurodollar Rate
Advances.
(B) Each Lender so notified may, if, in its sole
discretion, it elects to do so, irrevocably offer to make
one or more Competitive Bid Advances (which Competitive
Bid Advances may, subject to the provisos to the first
sentence to this Section 2.01(b), have a principal amount
exceeding such Lender's Commitment) to the Borrower as
part of such proposed Competitive Bid Borrowing at a
Fixed Rate or Rates or a margin or margins relative to
the Eurodollar Rate, as requested by the Borrower. Each
Lender electing to make such an offer shall do so by
notifying the Borrower or one of the Administrative
Agents, as shall be specified in the Notice of Competitive
Bid Borrowing (the "Specified Administrative
------------------------
Agent"), before such time and date as is specified in the
-----
Notice of Competitive Bid Borrowing in paragraph (A)
above, of the minimum amount and maximum amount of each
Competitive Bid Advance that such Lender would be willing
to make as part of such proposed Competitive Bid
Borrowing (which amount may exceed such Lender's Commitment),
the Fixed Rate or Rates or margin or margins relative to
the Eurodollar Rate, as requested by the Borrower, that
such Lender would be willing to accept for such Competitive
Bid Advance and such Lender's Applicable Lending Office
with respect to such Competitive Bid Advance, provided
--------
that, if the Specified Administrative Agent in its capacity
as a Lender shall, in its sole discretion, elect to make any such
offer, it shall notify the Borrower of such offer before 15 minutes
prior to the Borrower's deadline specified in paragraph (A) above on
the date on which notice of such election is to be given
to such Administrative Agent by the other Lenders. If
any Lender shall elect not to make such an offer, such
Lender shall so notify the Specified Administrative
Agent, before such time as is specified in the Notice of
Competitive Bid Borrowing on the date on which notice of
such election is to be given to the Borrower or the
Specified Administrative Agent, as the case may be, by
the other Lenders, and such Lender shall not be obligated
to, and shall not, make any Competitive Bid Advance as
part of such Competitive Bid Borrowing, provided that the
--------
failure by any Lender to give such notice shall not cause
such Lender to be obligated to make any Competitive Bid
Advance as part of such proposed Competitive Bid
Borrowing.
(C) The Borrower (either directly or through the
Specified Administrative Agent) shall, in turn, before
such time and date as is specified in the Notice of
Competitive Bid Borrowing, either
(1) cancel such Competitive Bid Borrowing by
giving the Lenders who received notice pursuant to
paragraph (A) above notice to that effect, or
(2) accept one or more of the offers (or
portions of such offers) made by any Lender or
Lenders pursuant to paragraph (B) above, in its sole
discretion, by giving notice to the applicable Lender
or Lenders of the amount of each Competitive Bid
Advance to be made by each Lender as part of such
Competitive Bid Borrowing, with simultaneous notice
thereof to the Paying Agent, and reject any remaining
offers made by Lenders pursuant to paragraph (B)
above by giving them notice to that effect.
(D) If the Borrower notifies the Paying Agent that
such Competitive Bid Borrowing is canceled pursuant to
paragraph (C)(1) above, the Borrower or the Specified
Administrative Agent, as the case may be, shall give
prompt notice thereof to the Lenders and such Competitive
Bid Borrowing shall not be made.
(E) If the Borrower accepts one or more of the
offers (or portions of such offers) made by any Lender or
Lenders pursuant to paragraph (C)(2) above, the Borrower
or the Specified Administrative Agent, as the case may
be, shall in turn promptly notify each Lender that is to
make a Competitive Bid Advance as part of such
Competitive Bid Borrowing, of the amount of each Competitive
Bid Advance to be made by such Lender as part of such
Competitive Bid Borrowing.
(ii) Each Lender that is to make a Competitive
Bid Advance as part of a Competitive Bid Borrowing shall,
before 12:00 noon (New York City time) on the date of such
Competitive Bid Borrowing specified in the Notice of
Competitive Bid Borrowing relating thereto, make available for
the account of its Applicable Lending Office to the Paying
Agent in same day funds, such Lender's ratable portion of such
Competitive Bid Borrowing. Upon fulfillment of the applicable
conditions set forth in Article III and after receipt by the
Paying Agent of such funds, the Paying Agent will make such
funds available to the Borrower. Promptly after each
Competitive Bid Borrowing, the Paying Agent will notify each
Lender of the amount of the Competitive Bid Borrowing, the
consequent Competitive Bid Reduction and the dates upon which
such Competitive Bid Reduction commenced and will terminate.
(iii) Each Competitive Bid Borrowing shall be in
an aggregate principal amount of not less than $1,000,000.
Following the making of each Competitive Bid Borrowing, the
Borrower shall be in compliance with the limitations set forth
in the proviso to the first sentence of subsection (i) above.
(iv) Within the limits and on the conditions set
forth in this Section 2.01(b), the Borrower may from time to
time borrow under this Section 2.01(b), repay or prepay
pursuant to subsection (v) below, and reborrow under this
Section 2.01(b).
(v) The Borrower shall repay to the Paying Agent
for the account of each Lender that has made, or holds the
right to repayment of, a Competitive Bid Advance on the
maturity date of each Competitive Bid Advance (such maturity
date being that specified by the Borrower for repayment of
such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection
(i)(A) above) the then-unpaid principal amount of such
Competitive Bid Advance. The Borrower shall not have any
right to prepay any principal amount of any Competitive Bid
Advance unless, and then only on the terms, specified by the
Borrower for such Competitive Bid Advance in the related
Notice of Competitive Bid Borrowing delivered pursuant to
subsection (i)(A) above.
(vi) The Borrower shall pay interest on the unpaid
principal amount of each Competitive Bid Advance from and
including the date of such Competitive Bid Advance to but
excluding the date the principal amount of such Competitive
Bid Advance is repaid in full, at the rate of interest for
such Competitive Bid Advance (including any rate specified for
past due amounts) specified by the Lender making such
Competitive Bid Advance in its notice with respect thereto
delivered pursuant to subsection (i)(B) above, payable on the
interest payment date or dates specified by the Borrower for
such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection
(i)(A) above.
(c) Set Aside of Commitments to Backstop Commercial
-----------------------------------------------
Paper. At any time during which the Borrower has outstanding
- -----
any Commercial Paper, a portion of the unused Commitments in
an aggregate amount equal to the aggregate face amount of such
Commercial Paper outstanding at such time shall, without
further action on the part of any party, be deemed to be
reserved for use as support for the obligations of the
Borrower under such Commercial Paper; provided that the
--------
reservation of Commitments described in this Section 2.01(c)
shall terminate upon notice from the Borrower at any time that
the Borrower's Commercial Paper is rated at least A2 by S&P or
P2 by Moody's. The amount of Commitments so reserved at any
time pursuant to this Section 2.01(c) is referred to herein as
the "Commercial Paper Set-Aside Amount".
---------------------------------
SECTION 2.02. Making the Revolving Credit Advances.
------------------------------------
(a) Each Revolving Credit Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Revolving
Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurodollar Rate Advances, or the Business Day of
the proposed Revolving Credit Borrowing in the case of a
Revolving Credit Borrowing consisting of Base Rate Advances,
by the Borrower to the Paying Agent, which shall give to each
Lender prompt notice thereof by telecopier or telex. Each
such notice of a Revolving Credit Borrowing (a "Notice of
---------
Revolving Credit Borrowing") shall be by telephone, confirmed
- --------------------------
immediately in writing, or telecopier or telex in
substantially the form of Exhibit A-1 hereto, specifying
therein the requested (i) date of such Revolving Credit
Borrowing, (ii) Type of Advances comprising such Revolving
Credit Borrowing, (iii) aggregate amount of such Revolving
Credit Borrowing, and (iv) in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Revolving Credit Advance. Each
Lender shall, before 12:00 noon (New York City time) on the
date of such Revolving Credit Borrowing, make available for
the account of its Applicable Lending Office to the Paying
Agent at the Paying Agent's Account, in same day funds, such
Lender's ratable portion of such Revolving Credit Borrowing.
After the Paying Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
III, the Paying Agent will make such funds available to the
Borrower at the Paying Agent's address referred to in Section
8.02.
(b) Anything in subsection (a) above or Section 2.08 to
the contrary notwithstanding,
(i) if fewer than two Reference Banks furnish
timely information to the Paying Agent for determining
the Eurodollar Rate for any Eurodollar Rate Advances, (A)
the Paying Agent shall forthwith notify the Borrower and
the Lenders that the interest rate cannot be determined
for such Eurodollar Rate Advances, (B) each such Advance
will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate
Advance (or if such Advance is then a Base Rate Advance,
will continue as a Base Rate Advance), and (C) the
obligation of the Lenders to make Eurodollar Rate
Advances or to Convert Revolving Credit Advances into
Eurodollar Rate Advances shall be suspended until the Paying
Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist,
(ii) if, with respect to any Eurodollar Rate
Advances, the Lenders required to make at least 51% of
such Eurodollar Rate Advances notify the Paying Agent that
the Eurodollar Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lenders
of making or funding their respective Eurodollar Rate
Advances for such Interest Period, the Paying Agent shall
forthwith so notify the Borrower and the Lenders,
whereupon (A) each Eurodollar Rate Advance will
automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate
Advance, and (B) the obligation of the Lenders to make, or
to Convert Revolving Credit Advances into, Eurodollar Rate
Advances shall be suspended until the Paying Agent shall
notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist,
and
(iii) if the Borrower shall select an Interest
Period of six months, nine months or twelve 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, nine months or twelve months shall be suspended
until the Paying Agent shall notify the Borrower and such
Lenders that the circumstances causing such suspension no
longer exist.
(c) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower and, in respect of any Borrowing
comprised of or including Eurodollar Rate Advances specified
in such Notice of Borrowing, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such
Lender solely as a result of any failure by the Borrower to
borrow on the date specified in the Notice of Borrowing for
such Borrowing, including any loss (including loss of
anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Eurodollar Rate Advance to
be made by such Lender as part of such Borrowing when such
Eurodollar Rate Advance, solely as a result of such failure,
is not made on such date. Without prejudice to the survival
of any other provision of this Agreement, the provisions of
this paragraph shall survive any termination of this
Agreement.
(d) Unless the Paying Agent shall have received notice
from a Lender prior to the date of any Revolving Credit
Borrowing that such Lender will not make available to the
Paying Agent such Lender's ratable portion of such Revolving
Credit Borrowing, the Paying Agent may assume that such Lender
has made such portion available to the Paying Agent on the
date of such Revolving Credit Borrowing in accordance with
subsection (a) of this Section 2.02 and the Paying Agent may,
in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the
extent such Lender shall not have so made available to the
Paying Agent on the date of any Revolving Credit Borrowing
such Lender's ratable portion of such Borrowing, such Lender
agrees, and the Borrower agrees, to pay or repay to the Paying
Agent forthwith on demand such amount together with interest
thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is paid
or repaid to the Paying Agent, at (in the case of such Lender)
the Federal Funds Rate and (in the case of the Borrower) the
Base Rate plus the Applicable Margin (provided that such
payment at the Federal Funds Rate or the Base Rate (plus the
Applicable Margin) with respect to any Eurodollar Rate Advance
shall not affect the status of such Advance as a Eurodollar
Rate Advance). If such Lender shall pay to the Paying Agent
such amount, the amount so paid shall constitute such Lender's
Revolving Credit Advance as part of such Revolving Credit
Borrowing for purposes of this Agreement from and including
the date of such Revolving Credit Borrowing.
(e) The failure of any Lender to make the Revolving
Credit Advance to be made by it as part of any Revolving
Credit Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Revolving Credit Borrowing, but no
Lender shall be responsible for the failure of any other
Lender to make the Revolving Credit Advance to be made by such
other Lender on the date of any Revolving Credit Borrowing.
SECTION 2.03. Fees. (a) Facility Fees. The Borrower
---- --------------
agrees to pay to the Paying Agent for distribution to each
Lender until the earlier of the Revolver Termination Date and
the Term Loan Conversion Date a facility fee (the "Facility
--------
Fee") with respect to such Lender's Commitment, at a rate per
- ---
annum equal to the Facility Fee Percentage from time to time
in effect on the aggregate amount of such Lender's Commitment,
regardless of usage. The Facility Fees will commence to
accrue on the date of execution of this Agreement and will be
payable in arrears on (i) the Effective Date, (ii) on the
third day of each January, April, July and October and (iii)
on the Revolver Termination Date or the Term Loan Conversion
Date, as the case may be.
(b) Paying Agent's Fees. The Borrower agrees to
-------------------
pay to the Paying Agent, for its own account, such fees as may
from time to time be agreed between the Borrower and the
Paying Agent.
SECTION 2.04. Termination or Reduction of the
-------------------------------
Commitments. (a) If the Borrower has not made the Term Loan
- -----------
Election on or prior to the Revolver Termination Date, the
Commitments shall be automatically terminated on the Revolver
Termination Date. If the Borrower has made the Term Loan
Election in accordance with Section 2.05, from time to time
after the Term Loan Conversion Date upon each prepayment of
the Revolving Credit Advances, the aggregate Commitments of
the Lenders under this Agreement shall be automatically and
permanently reduced on a pro rata basis by an amount equal to
the amount by which the aggregate Commitments of the Lenders
under this Agreement immediately prior to such reduction
exceeds the aggregate unpaid principal amount of the Revolving
- -------
Credit Advances outstanding at such time.
(b) The Borrower shall have the right, upon at least
three Business Days' notice to the Administrative Agents, to
terminate in whole, or reduce ratably in part (in minimum
principal amounts of $1,000,000), the unused portion of the
Commitments (such unused portion having been determined after
subtracting the Competitive Bid Reduction and the Facility
Usage).
SECTION 2.05. Repayment of Revolving Credit Advances;
--------------------------------------
Term Loan Election. (a) The Borrower shall, subject to the
- ------------------
next succeeding sentence, repay to the Paying Agent for the
account of the Lenders on the Revolver Termination Date the
aggregate principal amount of the Advances owing to the
Lenders on such date.
(b) The Borrower may, at any time prior to the Revolver
Termination Date and upon not less than 15 days' notice to the
Paying Agent, elect (the "Term Loan Election") to convert all
------------------
of the Revolving Credit Advances outstanding on the date
specified in such notice (the "Term Loan Conversion Date")
-------------------------
into a term loan which the Borrower shall repay in full
ratably to the Paying Agent for the account of the Lenders on
the Maturity Date; provided that no Default has occurred and
--------
is continuing on the date of notice of the Term Loan Election
or on the Term Loan Conversion Date.
SECTION 2.06. Interest on Revolving Credit Advances.
-------------------------------------
The Borrower shall pay interest on the unpaid principal amount
of each Revolving Credit Advance owing to each Lender from the
date of such Revolving Credit Advance until such principal
amount shall be paid in full, at the following rates per
annum:
(a) Base Rate Advances. During such periods as such
------------------
Revolving Credit Advance is a Base Rate Advance, a rate per
annum equal at all times to the Base Rate in effect from time
to time plus the Applicable Margin, 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 Eurodollar Rate for such Interest
Period plus the Applicable Margin, payable on the last day of
each Interest Period and, if such Interest Period has a
duration of six months, nine months or twelve 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.
(c) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances having the same Interest
Period shall be reduced, by payment or prepayment or
otherwise, to less than $10,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(d) Upon the occurrence of any Default and so long as
such Default shall continue, (i) each Eurodollar Rate Advance
will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert any
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.09. Optional Prepayments of Revolving Credit
----------------------------------------
Advances. The Borrower may, upon at least two Business Days'
- --------
notice in the case of Eurodollar Rate Advances, and upon at
least one Business Day's notice in the case of Base Rate
Advances, to the Paying Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding
principal amount of the Revolving Credit Advances comprising
part of the same Revolving Credit Borrowing in whole or
ratably in part, together with accrued interest to the date of
such prepayment on the principal amount prepaid; provided,
--------
however, that (x) each partial prepayment pursuant to this
- -------
Section 2.09 shall be in an aggregate principal amount of
$1,000,000 and (y) in the event of any such prepayment of a
Eurodollar Rate Advance, such prepayment shall either be made
on the last day of an Interest Period for such Eurodollar Rate
Advance or shall be made together with payment of all amounts
required pursuant to Section 8.03(c).
SECTION 2.10. Increased Costs; Illegality. (a) If, due
---------------------------
to either (i) the introduction of or any change (including any
change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve
Percentage) in or change in the interpretation of any law or
regulation or (ii) the compliance with any guideline or
request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any
increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances, then
the Borrower shall from time to time, upon demand by such
Lender (with a copy of such demand to the Administrative
Agents), pay to the Paying Agent for the account of such
Lender additional amounts sufficient to compensate such Lender
for such increased cost. A certificate as to the amount of
such increased cost, submitted to the Borrower and the
Administrative Agents by such Lender, shall be conclusive and
binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any
law or regulation or any guideline or request from any central
bank or other Governmental Authority (whether or not having
the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender
or any corporation controlling such Lender and that the amount
of such capital is increased by or based upon the existence of
such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender
(with a copy of such demand to the Administrative Agents), the
Borrower shall pay to the Paying Agent for the account of such
Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the
light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable
to the existence of such Lender's commitment to lend
hereunder. A certificate as to such amounts, submitted to the
Borrower and the Administrative Agents by such Lender, shall
be conclusive and binding for all purposes, absent manifest
error.
(c) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it
unlawful, as determined by any Lender, or any central bank or
other Governmental Authority shall assert that it is unlawful,
for such Lender or its Eurodollar Lending Office to perform
its obligations hereunder to make Eurodollar Rate Advances or
to continue to fund or maintain Eurodollar Rate Advances
hereunder, then, on notice thereof and demand therefor by such
Lender to the Borrower through the Administrative Agents, (i)
the obligation of such Lender to make Eurodollar Rate Advances
and to Convert Advances into Eurodollar Rate Advances shall
terminate and (ii) the Borrower shall forthwith Convert all
Eurodollar Rate Advances of such Lender then outstanding into
Base Rate Advances in accordance with Section 2.08, except
that such Conversion may occur, notwithstanding Section 2.08,
other than on the last day of the respective Interest Periods
for such Eurodollar Rate Advances, if the Borrower has paid
all amounts payable under Section 8.03(c).
SECTION 2.11. Payments and Computations. (a) The
-------------------------
Borrower shall make each payment hereunder and under the
Notes, if any, without set-off or counterclaim, not later than
12:00 noon (New York City time) on the day when due in U.S.
dollars to the Paying Agent at the Paying Agent's Account in
same day funds. The Paying Agent will promptly thereafter
cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than
amounts payable pursuant to Section 2.03(b), 2.10, 2.13, 2.16
or 8.03(c)) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this
Agreement. Upon any Assuming Lender becoming a Lender
hereunder as a result of an extension of the Revolver
Termination Date pursuant to Section 2.16, and upon the Paying
Agent's receipt of such Lender's Assumption Agreement and
recording of the information contained therein in the
Register, from and after the applicable Extension Date, the
Paying Agent shall make all payments hereunder and under any
Notes issued in connection therewith in respect of the
interest assumed thereby to the Assuming Lender. Upon its
acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to
Section 8.06(d), from and after the effective date specified
in such Assignment and Acceptance, the Paying Agent shall make
all payments hereunder and under the Notes, if any, in respect
of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for
periods prior to such effective date directly between
themselves.
(b) The Borrower hereby authorizes each Lender, if and
to the extent payment owed to such Lender is not made when due
hereunder or under the Note, if any, held by such Lender, to
charge from time to time against any or all of the Borrower's
accounts with such Lender any amount so due to such Lender
prior to any sharing under Section 2.12. Nothing contained in
this subsection (b) shall impair the obligations of any Lender
under Section 2.12, the rights of the Administrative Agents,
the Paying Agent or any Lender under Section 8.04 or any other
rights and remedies (including other rights of set-off) that
the Administrative Agents, the Paying Agent or such Lender may
have.
(c) All computations of interest based on the Base Rate
(when determined pursuant to clause (a) of the definition
thereof) and fees shall be made by the Paying Agent on the
basis of a year of 365 or 366 days, as the case may be, and
all computations of interest based on the Base Rate (when
determined pursuant to clause (b) or (c) of the definition
thereof), the Eurodollar Rate or the Federal Funds Rate shall
be made by the Paying Agent on the basis of a year of 360
days, in each case for the actual number of days (including
the first day but excluding the last day) occurring in the
period for which such interest or fees are payable. Each
determination by the Paying Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder or under the Notes,
if any, shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of
interest or fees, as the case may be; provided, however, that
-------- -------
if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the
next preceding Business Day.
(e) Unless the Paying Agent shall have received notice
from the Borrower prior to the date on which any payment is
due to the Lenders hereunder that the Borrower will not make
such payment in full, the Paying Agent may assume that the
Borrower has made such payment in full to the Paying Agent on
such date and the Paying Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due
date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such
payment in full to the Paying Agent, each Lender shall repay
to the Paying Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the
Paying Agent, at the Federal Funds Rate.
SECTION 2.12. Sharing of Payments, Etc. If any Lender
------------------------
shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on
account of the Revolving Credit Advances made by it (other
than pursuant to Section 2.03(b), 2.10, 2.13, 2.16 or 8.03(c))
in excess of its ratable share of payments on account of the
Revolving Credit Advances obtained by all the Lenders, such
Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Credit Advances made to the
other Lenders as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess
- -------- -------
payment is thereafter recovered from such purchasing Lender,
such purchase from each Lender shall be rescinded and each
such other Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an
amount equal to each such other Lender's ratable share
(according to the proportion of (i) the amount of such other
Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender
pursuant to this Section 2.12 may, to the fullest extent
permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such
participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
SECTION 2.13. Taxes. (a) Any and all payments by the
-----
Borrower hereunder or under any Note shall be made, in
accordance with Section 2.11, free and clear of and without
deduction for any and all current or future taxes, levies,
imposts, deductions, charges or withholdings, and all
liabilities with respect thereto (including interest,
additions to tax, and penalties thereon) imposed by the United
States of America or any political subdivision thereof (or, in
the event that the Borrower assigns any of its rights or
obligations or any interest hereunder or under any Notes, by
any foreign country and its political subdivisions in which
the assignee is incorporated or is resident), excluding, in
---------
the case of each Lender, the Paying Agent and each
Administrative Agent, taxes imposed on or measured by its net
income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Administrative Agent, the Paying
Agent or such Lender (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender,
taxes imposed on or measured by its net income, and franchise
taxes imposed on it, by the jurisdiction of such Lender's
Applicable Lending Office or any political subdivision thereof
(all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be required by
-----
law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender, the Paying Agent or either
Administrative Agent, (i) the sum payable shall be increased
as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this Section 2.13) such Lender, the Paying Agent
or such Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such
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
4224 or Form 1001 or other certificate or document required
under United States law to establish entitlement to such
exemption or reduced rate. A determination of whether a
Lender is exempt from United States Federal withholding tax or
is subject to such tax at a reduced rate shall be within the
reasonable judgment of the Lender.
(f) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.13
shall survive the payment in full of principal and interest
hereunder.
SECTION 2.14. Evidence of Debt. (a) Each Lender shall
----------------
maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Advance owing to such Lender from
time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
The Borrower agrees that upon notice by any Lender to the
Borrower (with a copy of such notice to the Paying Agent) to
the effect that a promissory note or other evidence of
indebtedness is required or appropriate in order for such
Lender to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made
by, such Lender, the Borrower shall promptly execute and
deliver to such Lender a promissory note or other evidence of
indebtedness, in form and substance reasonably satisfactory to
the Borrower and such Lender (each a "Note"), payable to the
----
order of such Lender in a principal amount equal to the
Commitment of such Lender.
(b) The Register maintained by the Paying Agent pursuant
to Section 8.06(d) shall include a control account, and a
subsidiary account for each Lender, in which accounts (taken
together) shall be recorded (i) the date and amount of each
Borrowing made hereunder, the Type of Advances comprising such
Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any
principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, and (iv)
the amount of any sum received by the Paying Agent from the
Borrower hereunder and each Lender's share thereof.
(c) Entries made in good faith by the Paying Agent in
the Register pursuant to subsection (b) above, and by each
Lender in its account or accounts pursuant to subsection (a)
above, shall be prima facie evidence of the amount of
----- -----
principal and interest due and payable or to become due and
payable from the Borrower to, in the case of the Register,
each Lender and, in the case of such account or accounts, such
Lender, under this Agreement, absent manifest error; provided,
--------
however, that the failure of the Paying Agent or such Lender
- -------
to make an entry, or any finding that an entry is incorrect,
in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this
Agreement.
SECTION 2.15. Use of Proceeds. The proceeds of the
---------------
Advances shall be available (and the Borrower agrees that it
shall use such proceeds) for general corporate purposes of the
Borrower and its Subsidiaries.
SECTION 2.16. Extension of Termination Date. (a) At
-----------------------------
least 30 days but not more than 60 days prior to the Revolver
Termination Date in effect at any time, the Borrower, by
written notice to the Paying Agent, may request an extension
of the Revolver Termination Date in effect at such time for a
period of 364 days from its then scheduled expiration;
provided, however, that the Borrower shall not have made the
- -------- -------
Term Loan Election prior to the then scheduled Revolver
Termination Date. The Paying Agent shall promptly notify each
Lender of such request, and each Lender shall in turn, in its
sole discretion, not earlier than 30 days but at least 20 days
prior to such Revolver Termination Date, notify the Borrower
and the Paying Agent in writing as to whether such Lender will
consent to such extension. If any Lender shall fail to notify
the Paying Agent and the Borrower in writing of its consent to
any such request for extension of the Revolver Termination
Date at least 20 days prior to the scheduled occurrence
thereof at such time, such Lender shall be deemed to be a Non-
Consenting Lender with respect to such request. The Paying
Agent shall notify the Borrower not later than 15 days prior
to the scheduled Revolver Termination Date in effect at such
time of the decision of the Lenders regarding the Borrower's
request for an extension of the Revolver Termination Date.
(b) If all of the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section
2.16, the Revolver Termination Date shall, effective as at the
Revolver Termination Date otherwise in effect at such time
(the "Extension Date"), be extended for a period of 364 days
--------------
from such Extension Date; provided that on each Extension
--------
Date, no Default shall have occurred and be continuing, or
shall occur as a consequence thereof and the giving of a
request for extension shall constitute a representation and
warranty by the Borrower that the representations and
warranties contained in Section 4.01 are correct in all
material respects on and as of the date of such notice and on
such Extension Date, as though made on and as of such dates.
If Lenders holding at least a majority in interest of the
aggregate Commitments at such time consent in writing to any
such request in accordance with subsection (a) of this Section
2.16, the Revolver Termination Date in effect at such time
shall, effective as at the applicable Extension Date, be
extended as to those Lenders that so consented (each a
"Consenting Lender") but shall not be extended as to any other
-----------------
Lender (each a "Non-Consenting Lender"). To the extent that
---------------------
the Revolver Termination Date is not extended as to any Lender
pursuant to this Section 2.16 and the Commitment of such
Lender is not assumed in accordance with subsection (c) of
this Section 2.16 on or prior to the applicable Extension
Date, the Commitment of such Non-Consenting Lender shall
automatically terminate in whole on such unextended Revolver
Termination Date without any further notice or other action by
the Borrower, such Lender or any other Person; provided that
--------
such Non-Consenting Lender's rights under Sections 2.10, 2.13,
8.03 and 8.07, and its obligations under Section 7.05, shall
survive the Revolver Termination Date for such Lender as to
matters occurring prior to such date. It is understood and
agreed that no Lender shall have any obligation whatsoever to
agree to any request made by the Borrower for any requested
extension of the Revolver Termination Date.
(c) If Lenders holding at least a majority in interest
of the aggregate Commitments at any time consent to any such
request pursuant to subsection (a) of this Section 2.16, the
Borrower may arrange for one or more Consenting Lenders or
other Eligible Assignees (each such Eligible Assignee that
accepts an offer to assume a Non-Consenting Lender's
Commitment as of the applicable Extension Date being an
"Assuming Lender") to assume, effective as of the Extension
---------------
Date, any Non-Consenting Lender's Commitment and all of the
obligations of such Non-Consenting Lender under this Agreement
thereafter arising, without recourse to or warranty by, or
expense to, such Non-Consenting Lender; provided, however,
-------- -------
that the amount of the Commitment of any such Assuming Lender
as a result of such substitution shall in no event be less
than $10,000,000 unless the amount of the Commitment of such
Non-Consenting Lender is less than $10,000,000, in which case
such Assuming Lender shall assume all of such lesser amount;
and provided further that:
-------- -------
(i) any such Consenting Lender or Assuming Lender
shall have paid to such Non-Consenting Lender (A) the
aggregate principal amount of, and any interest accrued
and unpaid to the effective date of the assignment on,
the outstanding Revolving Credit Advances, if any, of
such Non-Consenting Lender plus (B) any accrued but
----
unpaid Facility Fees owing to such Non-Consenting Lender
as of the effective date of such assignment;
(ii) all additional costs reimbursements, expense
reimbursements and indemnities payable to such Non-
Consenting Lender, and all other accrued and unpaid amounts
owing to such Non-Consenting Lender hereunder, as of the
effective date of such assignment shall have been paid to
such Non-Consenting Lender; and
(iii) with respect to any such Assuming Lender, the
applicable processing and recordation fee required under
Section 8.06(a) for such assignment shall have been paid;
provided further that such Non-Consenting Lender's rights
-------- -------
under Sections 2.10, 2.13, 8.03 and 8.07, and its obligations
under Section 7.05, shall survive such substitution as to
matters occurring prior to the date of substitution. At least
three Business Days prior to any Extension Date, (A) each such
Assuming Lender, if any, shall have delivered to the Borrower
and the Paying Agent an assumption agreement, in form and
substance satisfactory to the Borrower and the Paying Agent
(an "Assumption Agreement"), duly executed by such Assuming
---------- ---------
Lender, such Non-Consenting Lender, the Borrower and the
Paying Agent, (B) any such Consenting Lender shall have
delivered confirmation in writing satisfactory to the Borrower
and the Paying Agent as to the increase in the amount of its
Commitment and (C) each Non-Consenting Lender being replaced
pursuant to this Section 2.16 shall have delivered to the
Paying Agent any Note or Notes held by such Non-Consenting
Lender. Upon the payment or prepayment of all amounts
referred to in clauses (i), (ii) and (iii) of the immediately
preceding sentence, each such Consenting Lender or Assuming
Lender, as of the Extension Date, will be substituted for such
Non-Consenting Lender under this Agreement and shall be a
Lender for all purposes of this Agreement, without any further
acknowledgment by or the consent of the other Lenders, and the
obligations of each such Non-Consenting Lender hereunder
shall, by the provisions hereof, be released and discharged.
(d) If all of the Lenders (after giving effect to any
assumptions pursuant to subsection (c) of this Section 2.16)
consent in writing to a requested extension (whether by
execution or delivery of an Assumption Agreement or otherwise)
not later than one Business Day prior to such Extension Date,
the Paying Agent shall so notify the Borrower, and, so long as
no Default shall have occurred and be continuing as of such
Extension Date, or shall occur as a consequence thereof, the
Revolver Termination Date then in effect with respect to the
Commitments of such Consenting Lenders and Assuming Lenders
shall be extended for the 364-day period described in
subsection (a) of this Section 2.16, and all references in
this Agreement, and in the Notes, if any, to the "Revolver
--------
Termination Date" shall, with respect to each Consenting
- ----------------
Lender and each Assuming Lender for such Extension Date, refer
to the Revolver Termination Date as so extended. Promptly
following each Extension Date, the Paying Agent shall notify
the Lenders (including, without limitation, each Assuming
Lender) of the extension of the scheduled Revolver Termination
Date in effect immediately prior thereto and shall thereupon
record in the Register the relevant information with respect
to each such Consenting Lender and each such Assuming Lender.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness
-------------------------------------
of Section 2.01. Section 2.01 of this Agreement shall become
- ---------------
effective on and as of the first date (the "Effective Date")
--------------
on which the following conditions precedent have been
satisfied:
(a) There shall have occurred no Material Adverse Change
since December 28, 1996.
(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 or (ii) purports to
affect the legality, validity or enforceability of this
Agreement or any Note or the consummation of the transactions
contemplated hereby.
(c) Nothing shall have come to the attention of the
Lenders during the course of their due diligence investigation
to lead them to believe that the Information Memorandum was or
has become misleading, incorrect or incomplete in any material
respect; without limiting the generality of the foregoing, the
Lenders shall have been given such access to the management,
records, books of account, contracts and properties of the
Borrower and its Subsidiaries as they shall have requested.
(d) All governmental and third party consents and
approvals necessary in connection with the transactions
contemplated hereby shall have been obtained (without the
imposition of any conditions that are not acceptable to the
Lenders) and shall remain in effect, and no law or regulation
shall be applicable in the reasonable judgment of the Lenders
that restrains, prevents or imposes materially adverse
conditions upon the transactions contemplated hereby.
(e) The Borrower shall have notified each Lender and the
Agents in writing as to the proposed Effective Date.
(f) The Borrower shall have paid all accrued fees and
expenses of the Agents and the Lenders (including the accrued
fees and expenses of counsel to the Agents).
(g) On the Effective Date, the following statements
shall be true and the Agents shall have received for the
account of each Lender a certificate signed by a duly
authorized officer of the Borrower, dated the Effective Date,
stating that:
(i) The representations and warranties contained in
Section 4.01 are correct on and as of the Effective Date,
and
(ii) No event has occurred and is continuing that
constitutes a Default.
(h) The Agents shall have received on or before the
Effective Date the following, each dated such day, in form and
substance satisfactory to the Agents and in sufficient copies
for each Lender:
(i) The Guarantee Agreement, duly executed by each
Guarantor existing on the Effective Date.
(ii) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this
Agreement, certified copies of the resolutions of the Board
of Directors of each Guarantor approving the Guarantee
Agreement and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement and the other Loan Documents.
(iii) A certificate of the Secretary or an
Assistant Secretary of the Borrower and each Guarantor
certifying the names and true signatures of the officers of
the Borrower or such Guarantor, as applicable, authorized
to sign this Agreement, each other Loan Document to which
it is a party and the other documents to be delivered
hereunder or thereunder.
(iv) A favorable opinion of Paul W. Heldman, Vice
President, Secretary and General Counsel for the
Borrower, substantially in the form of Exhibit D hereto
and as to such other matters as any Lender through the
Agents may reasonably request.
(v) A favorable opinion of Shearman & Sterling,
counsel for the Agents, in form and substance
satisfactory to the Agents.
(i) The termination of the commitments of the lenders
and the payment in full of all Debt outstanding under (i) the
Senior Competitive Advance and Revolving Credit Agreement
dated as of July 19, 1994 among the Borrower, certain of its
Subsidiaries, the lenders parties thereto, Chase, as swing
line bank, issuing bank and administrative agent, and
Citibank, as swing line bank, administrative agent and paying
agent, and (ii) the Credit Agreement dated as of December 13,
1996 among the Borrower, the banking institutions parties
thereto, The Bank of New York, as agent, and BNY Capital
Markets, Inc., as arranging agent.
SECTION 3.02. Conditions Precedent to Each Revolving
--------------------------------------
Credit Borrowing. The obligation of each Lender to make a
- ----------------
Revolving Credit Advance on the occasion of each Revolving
Credit Borrowing shall be subject to the conditions precedent
that the Effective Date shall have occurred and on the date of
such Revolving Credit Borrowing (a) the following statements
shall be true (and each of the giving of the applicable Notice
of Revolving Credit Borrowing and the acceptance by the
Borrower of the proceeds of such Revolving Credit Borrowing
shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing such statements are true):
(i) the representations and warranties contained in
Section 4.01 are correct in all material respects on and as of
the date of such Revolving Credit Borrowing, before and after
giving effect to such Revolving Credit Borrowing and to the
application of the proceeds therefrom, as though made on and
as of such date, and
(ii) no event has occurred and is continuing, or would
result from such Revolving Credit Borrowing or from the
application of the proceeds therefrom, that constitutes a
Default;
and (b) the Agents shall have received such other approvals,
opinions or documents as any Lender through the Agents may
reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For
---------------------------------
purposes of determining compliance with the conditions
specified in Section 3.01, each Lender shall be deemed to have
consented to, approved or accepted or to be satisfied with
each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to
the Lenders unless an officer of any Agent responsible for the
transactions contemplated by this Agreement shall have
received notice from such Lender prior to the date that the
Borrower, by notice to the Lenders, designates as the proposed
Effective Date, specifying its objection thereto. The Agents
shall promptly notify the Lenders of the occurrence of the
Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
-------------------------------------
Borrower. The Borrower represents and warrants as follows:
- ---------
(a) The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Ohio. Each Guarantor is a corporation duly
organized, validly existing and in good standing under the
laws of the jurisdiction of its organization.
(b) The execution, delivery and performance by the
Borrower and each Guarantor of this Agreement and the Notes,
if any, delivered hereunder, in the case of the Borrower, or
the Guarantee Agreement, in the case of each Guarantor, and
the consummation of the transactions contemplated hereby, are
within the Borrower's or such Guarantor's corporate powers,
have been duly authorized by all necessary corporate action,
and do not contravene (i) the Borrower's or such Guarantor's
charter, regulations or by-laws, as applicable, or (ii) law or
any contractual restriction binding on or affecting the
Borrower or such Guarantor.
(c) No authorization or approval or other action by, and
no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for the
due execution, delivery and performance by the Borrower of
this Agreement or the Notes, if any, delivered hereunder, or
by any Guarantor of the Guarantee Agreement, except for those
authorizations, approvals, actions, notices and filings listed
on Schedule4.01(c) hereto, all of which have been duly
obtained, taken, given or made and are in full force and
effect.
(d) This Agreement has been, and each of the Notes, if
any, will have been, duly executed and delivered by the
Borrower. The Guarantee Agreement has been duly executed and
delivered by each Guarantor. This Agreement and the Guarantee
Agreement are, and each of the Notes, when delivered
hereunder, will be, the legal, valid and binding obligation of
the Borrower and each Guarantor party thereto,as the case may
be, enforceable against the Borrower and such Guarantor,as the
case may be, in accordance with their respective terms.
(e) The Consolidated balance sheet of the Borrower and
its Subsidiaries as at December 28, 1996, 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 Coopers & Lybrand, L.L.P.,
independent public accountants, and the Consolidated balance
sheet of the Borrower and its Subsidiaries as at March 22,
1997, and the related Consolidated statements of income and
cash flows of the Borrower and its Subsidiaries for the three
months then ended, duly certified by the chief financial
officer of the Borrower, copies of which have been furnished
to each Lender, fairly present, subject, in the case of said
balance sheet as at March 22, 1997, and said statements of
income and cash flows for the three months then ended, to
year-end audit adjustments, the Consolidated financial
condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of the operations of the
Borrower and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting
principles consistently applied. Since December 28, 1996,
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 or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any
Note or the consummation of the transactions contemplated
hereby.
(g) Neither the Borrower nor any Guarantor is engaged in
the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation U
issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin
stock.
(h) Neither the Borrower nor any Guarantor is (i) an
"investment company", within the meaning of the Investment
Company Act of 1940, as amended or (ii) a "holding company" as
defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
---------------------
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each
--------------------------
of its Subsidiaries to comply, in all material respects, with
all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with
ERISA and Environmental Laws.
(b) Payment of Taxes, Etc. Pay and discharge, and cause
---------------------
each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by
law become a Lien upon its property; provided, however, that
-------- -------
neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge
or claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being
maintained.
(c) Maintenance of Insurance. Maintain, and cause each
-------------------------
of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations in such
amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or
such Subsidiary operates; provided, however, that the Borrower
-------- --------
and its Subsidiaries may self-insure to the same extent as
other companies engaged in similar businesses and owning
similar properties in the same general areas in which the
Borrower or such Subsidiary operates and to the extent
consistent with prudent business practice.
(d) Preservation of Corporate Existence, Etc. Preserve
----------------------------------------
and maintain, and cause each of its Subsidiaries to preserve
and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that the
-------- -------
Borrower and its Subsidiaries may consummate any merger or
consolidation permitted under Section 5.02(b) and provided
--------
further that neither the Borrower nor any of its Subsidiaries
- -------
shall be required to preserve any right or franchise if a
Responsible Officer of the Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable
in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is
not disadvantageous in any material respect to the Borrower,
such Subsidiary or the Lenders.
(e) Visitation Rights. At any reasonable time and from
-----------------
time to time, permit any Agent or any of the Lenders or any
agents or representatives thereof, to examine and make copies
of and abstracts from the records and books of account of, and
visit the properties of, the Borrower and any of its
Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any of its Subsidiaries with any
of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep, and cause each of its
----------------
Subsidiaries to keep, proper books of record and account, in
which full and correct entries shall be made of all financial
transactions and the assets and business of the Borrower and
each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and
------------------------------
preserve all of its properties in good working order and
condition, ordinary wear and tear excepted, and maintain all
necessary licenses and permits if, in each case, failure to so
maintain and preserve would result in a Material Adverse
Effect.
(h) Reporting Requirements. Furnish to the Lenders:
----------------------
(i) as soon as available and in any event within 50
days after the end of each of the first three quarters of
each Fiscal Year of the Borrower, Consolidated balance
sheet of the Borrower and its Subsidiaries as of the end
of such quarter and Consolidated statements of income and
cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous Fiscal Year
and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by a Financial
Officer of the Borrower as having been prepared in
accordance with generally accepted accounting principles
and certificates of a Financial Officer of the Borrower as
to compliance with the terms of this Agreement and setting
forth in reasonable detail the calculations necessary to
demonstrate compliance with Section 5.03, provided that in
--------
the event of any change in generally accepted accounting
principles used in the preparation of such financial statements,
the Borrower shall also provide, if necessary for the determination
of compliance with Section 5.03, a statement of reconciliation
conforming such financial statements to GAAP;
(ii) as soon as available and in any event within
100 days after the end of each Fiscal Year of the
Borrower, a copy of the annual audit report for such year
for the Borrower and its Subsidiaries, containing
Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Year and
Consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for such Fiscal Year, in
each case accompanied by an opinion acceptable to the
Required Lenders by Coopers & Lybrand, L.L.P. 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.
(i) Guarantors. Cause (i) each Material Subsidiary
----------
organized under the laws of the United States of America or
any political subdivision thereof created or acquired by it
from time to time and (ii) each Subsidiary that is not a
Material Subsidiary immediately prior to becoming such a
Material Subsidiary to undertake the obligation of and to
become a Guarantor pursuant to the Guarantee Agreement
pursuant to one or more instruments or agreements satisfactory
in form and substance to the Paying Agent.
SECTION 5.02. Negative Covenants. So long as any
------------------
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit
----------
any of its Subsidiaries to create or suffer to exist, any Lien
on or with respect to any of its properties, whether now owned
or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other
than:
(i) Liens on any property or assets of any
corporation existing at the time such corporation becomes
a Subsidiary provided that such Lien does not extend to
--------
any other property of the Borrower or any of its
Subsidiaries;
(ii) Liens on any property or assets (including
stock) existing at the time of acquisition of such
property or assets by the Borrower or any of its
Subsidiaries, or Liens to secure the payment of all or
any part of the purchase price of such property or assets
(including stock), upon the acquisition of such property
or assets by the Borrower or any of its Subsidiaries or
to secure Debt incurred, assumed or guaranteed by the
Borrower or any of its Subsidiaries for the purpose of
financing all or any part of the purchase price of such
property or in the case of real property, construction
or improvements thereon or attaching to property
substituted by the Borrower to obtain the release of a
Lien on other property of the Borrower on which a Lien
then exists, which Debt is incurred, assumed or guaranteed
prior to, at the time of, or within 18 months after such
acquisition (or in the case of real property, completion
of construction (including any improvements on an existing
asset) or commencement of full operations at such
property, whichever is later (which in the case of a retail
store is the opening of the store for business to the
public)), provided that in the case of any such
--------
acquisition, construction or improvement, the Lien shall
not apply to any other property or assets theretofore
owned by the Borrower or any of its Subsidiaries;
(iii) Liens securing Debt owing by any
Subsidiary of the Borrower to the Borrower or to another
Subsidiary of the Borrower;
(iv) Liens on any property or assets of the Borrower
or any of its Subsidiaries in favor of the United States
of America or any State thereof, or any department,
agency or instrumentality or political subdivision of the
United States of America or any State thereof, or in
favor of any other country, or any political subdivision
thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to secure
any Debt incurred or guaranteed for the purpose of
financing all or any part of the purchase price (or, in
the case of real property, the cost of construction) of
the property or assets subject to such Liens (including,
but not limited to, Liens incurred in connection with
pollution control, industrial revenue or similar financing);
(v) Liens existing on properties or assets of the
Borrower or any of its Subsidiaries existing on the
Effective Date and described on Schedule 5.02(a);
provided that such Liens shall secure only those
--------
obligations which they secure on the Effective Date or
any extension, renewal or replacement thereof;
(vi) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole
or in part, of any Lien referred to in the foregoing clauses
(i) to (v), inclusive; provided that such extension,
renewal or replacement shall be limited to all or a part
of the property or assets which secured the Lien so
extended, renewed or replaced (plus improvements and
construction on real property);
(vii) Liens imposed by law, such as mechanics',
workmen's, repairmen's, materialmen's, carriers'
warehouseman's, vendors', or other similar Liens arising in
the ordinary course of business of the Borrower or any of
its Subsidiaries, or governmental (federal, state or
municipal) Liens arising out of contracts for the sale of
products or services by the Borrower or any of its
Subsidiaries, or deposits or pledges to obtain the release
of any of the foregoing Liens;
(viii) pledges, Liens or deposits under worker's
compensation laws or similar legislation and Liens or
judgments thereunder which are not currently
dischargeable, or in connection with bids, tenders,
contracts (other than for the payment of money) or leases
to which the Borrower or any of its Subsidiaries is a
party, or to secure the public or statutory obligations
of the Borrower or any of its Subsidiaries, or in
connection with obtaining or maintaining self insurance or
to obtain the benefits of any law, regulation or arrangement
pertaining to unemployment insurance, old age pensions,
social security or similar matters, or to secure surety,
appeal or customs bonds to which the Borrower or any of its
Subsidiaries is a party, or in litigation or other
proceedings such as, but not limited to, interpleader
proceedings, and other similar pledges, Liens or deposits
made or incurred in the ordinary course of business;
(ix) Liens created by or resulting from any
litigation or other proceeding which is being contested in
good faith by appropriate proceedings, including Liens
arising out of judgments or awards against the Borrower or
any of its Subsidiaries, with respect to which the
Borrower or such Subsidiary is in good faith prosecuting an
appeal or proceedings for review or for which the time to
make an appeal has not yet expired; or final unappealable
judgment Liens which are satisfied within 30 days of the
date of judgment; or Liens incurred by the Borrower or any
of its Subsidiaries for the purpose of obtaining a stay or
discharge in the course of any litigation or other
proceeding to which the Borrower or such Subsidiary is a
party;
(x) Liens for taxes or assessments of governmental
charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings;
landlord's Liens on property held under lease; and any
other Liens or charges incidental to the conduct of the
business of the Borrower or any of its Subsidiaries or
the ownership of the property or assets of any of them
which were not incurred in connection with the borrowing of
money or the obtaining of advances or credit and which do
not, in the opinion of the Borrower, materially impair
the use of such property or assets in the operation of
the business of the Borrower or such Subsidiary or the
value of such property or assets for the purposes of such
business; or
(xi) Liens not permitted by the foregoing clauses
(i) to (x), inclusive, if at the time of, and after
giving effect to, the creation or assumption of such Lien,
the aggregate amount of all Debt of the Borrower and its
Subsidiaries secured by all Liens not so permitted by the
foregoing clauses (i) through (x) above does not exceed
10% of the total assets from time to time before giving
effect to the LIFO reserve of the Borrower and its
Subsidiaries on a Consolidated basis.
(b) Mergers, Etc. Merge or consolidate with or into any
------------
Person, or permit any of its Subsidiaries to do so, except
that any Subsidiary of the Borrower may merge or consolidate
with or into any other Subsidiary of the Borrower, and except
that any Subsidiary of the Borrower or any other Person may
merge into the Borrower, 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.
(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) during the term of this Agreement shall not be
greater than 10% of the total assets before giving effect to
the LIFO reserve of the Borrower and its Subsidiaries on a
Consolidated basis as of December 28, 1996.
(e) Dividends, Etc. Declare or make any cash dividend
--------------
payment on account of any shares of any class of its common
stock.
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 the ratio set forth below
for each period set forth below:
Rolling Period Ending Ratio
--------------------- -----
On or before December 1998 3.65:1.00
After December 1998 3.50:1.00
(b) Fixed Charge Coverage Ratio. Maintain a Fixed
---------------------------
Charge Coverage Ratio (determined as of the last day of any
Fiscal Quarter for the Rolling Period ending on such day) of
not less than 1.70:1.00.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
-----------------
following events ("Events of Default") shall occur and be
-----------------
continuing:
(a) The Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable; or the Borrower
shall fail to pay any interest on any Advance or make any
other payment of fees or other amounts payable under this
Agreement or any Note within three Business Days after the
same becomes due and payable; or
(b) Any representation or warranty made by the Borrower
herein or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been
incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section 5.01(d),
(e) or (h), 5.02 or 5.03, or (ii) the Borrower shall fail to
perform or observe any other term, covenant or agreement
contained in this Agreement on its part to be performed or
observed if such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to the
Borrower by any Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt
that is outstanding in a principal or notional amount of at
least $30,000,000 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
(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 $30,000,000 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 fail-
ure 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 $30,000,000 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 $30,000,000 in any
year or (B) is less than $100,000,000 but any Withdrawal
Liability payment remains unpaid 30 days after such payment is
due (unless such Withdrawal Liability is being contested in
good faith by the Borrower or any ERISA Affiliate); or
(k) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if solely
as a result of such reorganization or termination the
aggregate contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in
reorganization or have been or are being terminated have been
or will be increased over the amounts required to be
contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding
$30,000,000; or
(l) this Agreement, any Note or any Guarantee Agreement
shall not be for any reason, or shall be asserted by the
Borrower or any Guarantor party thereto (except as otherwise
expressly provided in this Agreement or Section 11 of the
Guarantee Agreement) not to be, in full force and effect and
enforceable in all material respects in accordance with its
terms;
then, and in any such event, the Agents (i) shall at the
request, or may with the consent, of the Required Lenders, by
notice to the Borrower, declare the obligation of each Lender
to make Advances to be terminated, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may
with the consent, of the Required Lenders, by notice to the
Borrower, declare the Advances, all interest thereon and all
other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Advances, all such interest and all
such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or
-------- -------
deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation
of each Lender to make Advances shall automatically be
terminated and (B) the Advances, all such interest and all
such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by the
Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender
------------------------
hereby appoints and authorizes each Agent to take such action
as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Agents
by the terms hereof, together with such powers and discretion
as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Advances), no
Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting
(and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Required Lenders, and
such instructions shall be binding upon all Lenders and all
holders of Notes; provided, however, that no Agent shall be
-------- --------
required to take any action that exposes such Agent to
personal liability or that is contrary to this Agreement or
applicable law. Each Agent agrees to give to each Lender
prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. No Agent nor any
---------------------
of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement, except for
its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the
Agents: (i) may treat the Lender which made any Advance as
the holder of the Debt resulting therefrom until the Paying
Agent receives and accepts an Assumption Agreement entered
into by an Assuming Lender as provided in Section 2.16, or an
Assignment and Acceptance entered into by such Lender, as
assignor, and an Eligible Assignee, as assignee, as provided
in Section 8.06; (ii) may consult with legal counsel
(including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel,
accountants or 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, 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 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
Chase in its individual capacity. Each of Citibank and Chase
and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business
with, the Borrower, any of its Subsidiaries and any Person who
may do business with or own securities of the Borrower or any
such Subsidiary, all as if it were not an Agent and without
any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
----------------------
acknowledges that it has, independently and without reliance
upon any Agent or any other Lender and based on the financial
statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon any Agent or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to
---------------
indemnify the Agents in their capacity as such (to the extent
not reimbursed by the Borrower without limiting the
obligations of the Borrower to do so), ratably according to
the respective principal amounts of the Revolving Credit
Advances then owing to each of them (or if no Revolving Credit
Advances are at the time outstanding or if any Revolving
Credit Advances are then owing to Persons that are not
Lenders, ratably according to the respective amounts of their
Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted
against any Agent in any way relating to or arising out of
this Agreement or any action taken or omitted by such Agent
under this Agreement (collectively, the "Indemnified Costs"),
-----------------
provided that no Lender shall be liable for any portion of the
- --------
Indemnified Costs resulting from such Agent's gross negligence
or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse each Agent promptly upon
demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by such Agent in connection
with the preparation, execution, delivery, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the
extent that such Agent is not reimbursed for such expenses by
the Borrower. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, this Section
7.05 applies whether any such investigation, litigation or
proceeding is brought by any Agent, any Lender or a third
party.
SECTION 7.06. Successor Agents. The Administrative
----------------
Agents and the Paying Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may
be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor
Administrative Agent or Paying Agent, as the case may be. If
no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States of America or of
any State thereof and having a combined capital and surplus of
at least $50,000,000. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement. After
any retiring Agent's resignation or removal hereunder as
Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Waivers; Amendments, Etc. (a) No failure
-------------------------
or delay on the part of the Administrative Agents, the Paying
Agent or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any
abandonment or discontinuation of steps to enforce such a
right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and
remedies of the Administrative Agents, the Paying Agent and
the Lenders hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any
departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b)
below (other than a waiver of the minimum amount of Commitment
assumed by an Assuming Lender pursuant to Section 2.16 or by
an Eligible Assignee pursuant to Section 8.03, which may be
waived by unilateral consent of the Borrower), and then such
waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or
demand on the Borrower in any case shall entitle the Borrower
to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may
be waived, amended or modified except (i) in the case of this
Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or (ii)
in the case of the Guarantee Agreement, pursuant to an
agreement or agreements in writing entered into by the
Guarantors and the Paying Agent and consented to by the
Required Lenders; provided, however, that no such agreement
-------- -------
shall (A) change the principal amount of any Advance, extend
the final scheduled maturity of any Advance, extend the
scheduled date for payment (but not prepayments) of principal
of or interest on any Advance (other than as provided in
Sections 2.05 and 2.16), forgive any such payment or any part
thereof or reduce the rate of interest on any Advance, in each
case without the prior written consent of each Lender affected
thereby, (B) increase the amount or extend the termination
date of the Commitment of any Lender or reduce or extend the
date for payment of the Facility Fees or other amounts payable
under this Agreement to any Lender, in each case without the
prior written consent of such Lender or (C) amend or modify
the provisions of this Section 8.01(b) or Section 8.05 or the
definition of the term "Required Lenders" without the prior
written consent of each Lender; and provided further that no
-------- -------
such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agents or the Paying
Agent hereunder without the prior written consent of the
Administrative Agents or the Paying Agent, respectively.
SECTION 8.02. Notices, Etc. Except as otherwise
------------
expressly permitted herein, notices and other communications
provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed or sent by
telecopy, as follows:
(a) If to the Borrower, to it at The Kroger Co., 1014
Vine Street, Cincinnati, Ohio 45202, Attention of Mr. Lawrence
M. Turner (Telecopy No. (513) 762-4454); with a copy to Mr.
--------------
Paul W. Heldman (Telecopy No. (513) 762-4935).
(b) If to Citibank in its capacity as an Administrative
Agent or Paying Agent, to it at 399 Park Avenue, New York, NY
10043, Attention of William P. Stengel (Telecopy No. (212)
793-7585); with a copy to Citicorp Agency Services, One Court
Square, Long Island City, New York 11120, Attention of Leonard
Sarcona. If to Chase in its capacity as an Administrative
Agent, to it at 270 Park Avenue, New York, New York 10017,
Attention of Mr. William P. Rindfuss (Telecopy No. (212)
270-1474).
(c) If to a Lender, at its address (or telecopy number)
as set forth on Schedule 2.01 or in the Assumption Agreement
or Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto.
All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered
by hand or overnight courier service or sent by telecopy, or
on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or
mailed (properly addressed) to such party as provided in
Section 8.02 or in accordance with the latest unrevoked
direction from such party given in accordance with this
Section 8.02. The Administrative Agents shall deliver to the
Borrower a copy of each Administrative Questionnaire received
by it.
SECTION 8.03. Expenses; Indemnity. (a) The Borrower
-------------------
agrees to pay (i) the reasonable fees, disbursements and other
charges of counsel for the Administrative Agents and the
Paying Agent incurred in connection with the preparation of
this Agreement and the other Loan Documents or in connection
with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions
hereby contemplated shall be consummated) and (ii) all
reasonable out-of-pocket expenses incurred by the
Administrative Agents, the Paying Agent or any Lender in
connection with the enforcement or protection of their rights
in connection with this Agreement and the other Loan Documents
or in connection with the Advances, including the reasonable
fees, disbursements and other charges of Shearman & Sterling,
counsel for the Administrative Agents and the Paying Agent, in
connection with any such enforcement or protection and the
reasonable fees, disbursements and other charges of any other
counsel for the Administrative Agents, the Paying Agent or any
Lender. The Borrower further agrees that it shall indemnify
the Administrative Agents, the Paying Agent and the Lenders
from, and hold them harmless against, any documentary taxes,
assessments or similar charges made by any Governmental
Authority by reason of the execution and delivery of this
Agreement or any Note.
(b) The Borrower agrees to indemnify the Administrative
Agents, the Paying Agent and each Lender and each of their
respective directors, officers, employees and agents (each
such person being called an "Indemnitee") against, and to hold
----------
each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including
reasonable counsel fees, disbursements and other charges,
incurred by or asserted against any Indemnitee arising out of,
in any way connected with, or as a result of (i) the execution
or delivery of this Agreement or any agreement or instrument
contemplated hereby or thereby, the performance by the parties
hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) the use of the proceeds
of the Advances or (iii) any claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not
any Indemnitee is a party thereto, provided that such
--------
indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or
related expenses have resulted from the gross negligence or
wilful misconduct of such Indemnitee.
(c) If any payment of principal of any Eurodollar Rate
Advance is made other than on the last day of the Interest
Period for such Advance, as a result of any Conversion,
payment pursuant to Section 2.05, prepayment pursuant to
clause (ii) of the proviso to Section 2.09(a) or acceleration
of the maturity of the Advances pursuant to Section 6.01 or
for any other reason, the Borrower shall, upon demand by any
Lender (with a copy of such demand to the Administrative
Agents), pay to the Paying Agent for the account of such
Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that such Lender may
incur as a result of such payment, including any loss
(excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or
maintain such Advance.
(d) The provisions of this Section 8.03 shall remain
operative and in full force and effect regardless of the
expiration of the term of this Agreement, the consummation of
the transactions contemplated hereby, the repayment of any of
the Advances, the invalidity or unenforceability of any term
or provision of this Agreement, or any investigation made by
or on behalf of the Administrative Agents, the Paying Agent or
any Lender. All amounts due under this Section 8.03 shall be
payable on written demand therefor.
SECTION 8.04. Right of Set-off. If an Event of Default
----------------
shall have occurred and be continuing, each Lender is hereby
authorized, in addition to any other right or remedy that any
Lender may have by operation of law or otherwise, at any time
and from time to time, without notice to the Borrower (any
such notice being expressly waived by the Borrower), to
exercise its banker's lien or right of setoff and apply any
and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness
at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations
of the Borrower now or hereafter existing under this Agreement
and any Note held by such Lender, irrespective of whether such
Lender shall have made any demand under this Agreement or any
Note and although such obligations may be unmatured.
SECTION 8.05. Binding Effect. This Agreement shall
--------------
become effective (other than Section 2.01, which shall only
become effective upon satisfaction of the conditions precedent
set forth in Section 3.01) when it shall have been executed by
the Borrower, the Administrative Agents and the Paying Agent
and when the Paying Agent shall have been notified by each
Initial Lender that such Initial Lender has executed it and
thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agents, the Paying Agent and
each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior
written consent of the Lenders.
SECTION 8.06. Successors and Assigns. (a) Subject to
----------------------
Section 8.05, whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the
Borrower, the Administrative Agents, the Paying Agent or the
Lenders that are contained in this Agreement shall bind and
inure to the benefit of their respective successors and
assigns.
(b) Each Lender may assign to one or more assignees all
or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitments
and the Advances at the time owing to it); provided, however,
-------- -------
that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender, each of the Administrative Agents and
the Borrower must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld);
provided further, however, the consent of the Borrower shall
- -------- ------- -------
not be required if a Default has occurred and is continuing on
the date of the Assignment and Acceptance, (ii) except in the
case of an assignment to a Lender or an Affiliate of a Lender,
the amount of the Commitment of the assigning Lender subject
to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agents) shall not be less than
$10,000,000 (or an amount equal to the remaining balance of
such Lender's Commitment), (iii) the parties to each such
assignment shall execute and deliver to the Paying Agent (with
a copy to the other Administrative Agent) an Assignment and
Acceptance, together with a processing and recordation fee of
$3,500 (except that such fee shall not be required with
respect to assignments to Affiliates), and (iv) the assignee,
if it shall not be a Lender, shall deliver to the
Administrative Agents an Administrative Questionnaire. Each
assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations
under this Agreement (other than any right to make Competitive
Bid Advances and Competitive Bid Advances owing to it). Upon
acceptance and recording pursuant to paragraph (e) of this
Section 8.06, from and after the effective date specified in
each Assignment and Acceptance, which effective date shall be
at least five Business Days after the execution thereof and in
no event shall precede the date of such recording, (i) the
assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance,
shall have the rights and obligations of a Lender under this
Agreement and (ii) the assigning Lender thereunder shall, to
the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto, but shall continue to be entitled
to the benefits of Sections 2.10, 2.13 and 8.03, as well as to
any Facility Fees accrued for its account and not yet paid).
Notwithstanding the foregoing, any Lender assigning its rights
and obligations under this Agreement may retain any
Competitive Bid Advances made by it outstanding at such time,
and in such case shall retain its rights hereunder in respect
of any Advances so retained until such Advances have been
repaid in full in accordance with this Agreement.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of
any adverse claim created by it and that its Commitment, and
the outstanding balances of its Advances, in each case without
giving effect to assignments thereof that have not become
effective, are as set forth in such Assignment and Acceptance;
(ii) except as set forth in clause (i) above, such assigning
Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement,
or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto, or the
financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under
this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants
that it is legally authorized to enter into such Assignment
and Acceptance; (iv) such assignee confirms that it has
received a copy of this Agreement, together with copies of any
amendments or consents entered into prior to the date of such
Assignment and Acceptance and copies of the most recent
financial statements delivered pursuant to Section 5.01(h) and
such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (v) such assignee
will independently and without reliance upon the
Administrative Agents, such assigning Lender or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement;
(vi) such assignee confirms that it is an Eligible Assignee;
(vii) such assignee appoints and authorizes the Administrative
Agents and the Paying Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as
are delegated to the Administrative Agents and the Paying
Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and (viii) such assignee agrees
that it will perform in accordance with their terms all the
obligations that by the terms of this Agreement are required
to be performed by it as a Lender.
(d) The Paying Agent shall maintain at its address
referred to in, or determined pursuant to, Section 8.02 a copy
of each Assignment and Acceptance delivered to and accepted by
it and a register (the "Register") for the recordation of the
--------
names and addresses of the Lenders and the Commitment of, and
principal amount of the Advances owing to, each Lender from
time to time and whether such Lender is a Lender on the
Effective Date, or the assignee of such a Lender or an
Assuming Lender. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Administrative Agent, the Paying
Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with an
Administrative Questionnaire completed in respect of the
assignee (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in
paragraph(b) above to the extent required under paragraph (b)
above and the written consent (to the extent required under
paragraph (b) above), of the Administrative Agents and the
Borrower, the Administrative Agents shall (i) accept such
Assignment and Acceptance, (ii) in the case of the Paying
Agent, record the information contained therein in the
Register and (iii) give prompt notice thereof to the Lenders.
No assignment shall be effective unless it has been recorded
in the Register as provided in this paragraph (e).
(f) Each Lender may, without the consent of the Borrower
or the Administrative Agents, sell participations to one or
more banks or other entities in all or a portion of its rights
and obligations under this Agreement (including all or a
portion of its Commitment and the Advances owing to it);
provided, however, that (i) such Lender's obligations under
- -------- -------
this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks
or other entities shall be entitled to the benefit of the cost
protection provisions contained in Sections 2.10, 2.13 and
8.03 to the same extent as if they were Lenders (provided that
--------
the Borrower shall not be required to reimburse the
participating banks or other entities pursuant to Section
2.10, 2.13 or 8.03 in an amount that exceeds the amount that
would have been payable thereunder to such Lender had such
Lender not sold such participation) and (iv) the Borrower, the
Administrative Agents, the Paying Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under
this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower and to approve any
amendment, modification or waiver of any provision of this
Agreement (provided that the participating bank or other
--------
entity may be provided with the right to approve amendments,
modifications or waivers affecting it with respect to (A) any
decrease in the Facility Fees payable hereunder with respect
to Commitments in which the participating bank or other entity
has purchased a participation, (B) any change in the amount of
principal of, or decrease in the rate at which interest is
payable on, the Advances in which the participating bank or
other entity has purchased a participation or (C) any
extension of the final scheduled maturity of any Advance in
which the participating bank or other entity has purchased a
participation.
(g) Notwithstanding the limitations set forth in
paragraph (b) above, any Lender may at any time assign all or
any portion of its rights under this Agreement to a Federal
Reserve Bank without the prior written consent of the Borrower
or the Administrative Agents, provided that no such assignment
--------
shall release a Lender from any of its obligations hereunder
or substitute any such Bank for such Lender as a party hereto.
(h) The Borrower may, with the prior written consent of
the Administrative Agents, replace any of the Lenders with one
or more assignees, provided (i) that the Lender being replaced
--------
has been paid in full for all Advances made by such Lender and
all other amounts accrued or due to such Lender hereunder,
(ii) that the full amount of the Commitments remain unchanged
and (iii) that the percentages of the total Commitments
allocated to the Lenders (other than any replaced Lenders)
remain unchanged unless prior written consent from any such
affected Lenders has been obtained. Upon any such
replacement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections
2.10, 2.13 and 8.03, as well as to any Facility Fees accrued
for its account under Section 2.03 and not yet paid.
(i) In the event that:
(i) any Lender shall have refused (and shall not
have retracted such refusal) to make available any
Advance on its part to be made available hereunder, other
than solely as a result of the failure of any condition
set forth in Article III to be satisfied (such condition
not having been effectively waived in accordance with the
terms hereof);
(ii) any Lender shall have notified either the
Administrative Agents or the Borrower (and shall not have
retracted such notification) that it does not intend to
comply with any of its obligations hereunder, other than
solely as a result of the failure of any condition set
forth in Article III to be satisfied (such condition not
having been effectively waived in accordance with the
terms hereof);
(iii) (A) a receiver, trustee, conservator or
other custodian shall have been appointed with respect to
any Lender or its property at the direction or request of
any Governmental Authority or (B) an order, action,
process or proceeding of the type contemplated by
paragraph (e) of Section 6.01 shall be commenced by or
against such Lender (or such Lender shall have consented to
the entry of any such order, action, process or proceeding);
or
(iv) any Lender shall make demand upon the Borrower
for any amount pursuant to Section 2.10 or 2.13;
the Borrower shall have the right, at its own expense, upon
notice to such Lender and the Administrative Agents (A) to
require such Lender, and such Lender hereby agrees, to use
commercially reasonable efforts to transfer and assign without
recourse (in accordance with and subject to the restrictions
contained in Section 8.06(b)) all the interests, rights and
obligations of such Lender to an assignee; provided, however,
-------- -------
that (1) no such assignment shall conflict with any law, rule
or regulation or order of any Governmental Authority and (2)
the Borrower or such assignee, as the case may be, shall pay
to such Lender in same day funds on the date of such
assignment the principal of and interest accrued on the date
of payment on the Advances made by such Lender hereunder and
all other amounts accrued for such Lender's account or owed to
it hereunder or (B) to replace such Lender with one or more
assignees, provided, in the case of this clause (B), (1) that
--------
the Lender being replaced has been paid in full for all
Advances made by such Lender and all other amounts accrued or
due to such Lender hereunder, (2) that the full amount of the
Commitments remains unchanged and (3) that the percentage of
the total Commitments allocated to the Lenders (other than any
replaced Lenders) remains unchanged unless prior written
consent from such Lenders has been obtained, (4) no Default
shall have occurred and be continuing, (5) the replacement
Lender is acceptable to the Paying Agent and (6) if such
replacement Lender is not an existing Lender, the Borrower
shall have paid the Paying Agent a processing and recordation
fee of $3,500. Upon any assignment, such Lender shall cease
to be a 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.
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.
(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.
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 and as
Paying Agent
By
-----------------------
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
----------------------
Title:
<PAGE>
Initial Lenders
---------------
Commitment Administrative Agents
- ---------- ----------------------
$ 36,718,750 CITIBANK, N.A.
By
------------------------------
Title:
$ 36,718,750 THE CHASE MANHATTAN BANK
By
------------------------------
Title:
Syndication Agent
-----------------
$ 36,718,750 THE FIRST NATIONAL BANK OF CHICAGO
By
------------------------------
Title:
Documentation Agent
-------------------
$ 36,718,750 THE BANK OF NEW YORK
By
------------------------------
Title:
Managing Agents
---------------
$ 19,375,000 BANK OF MONTREAL
By
-----------------------------
Title:
$ 19,375,000 BANKERS TRUST COMPANY
By
-----------------------------
Title:
$ 19,375,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
CHICAGO BRANCH
By
------------------------------
Title:
$ 19,375,000 CIBC, INC.
By
-------------------------------
Title:
$ 19,375,000 COMERICA BANK
By
------------------------------
Title:
$ 19,375,000 FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By
-------------------------------
Title:
$ 19,375,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By
----------------------------
Title:
$ 18,750,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, CHICAGO BRANCH
By
-----------------------------
Title:
Co-Agents
---------
$ 12,500,000 BANK OF AMERICA ILLINOIS
By
-----------------------------
Title:
$ 12,500,000 THE BANK OF NOVA SCOTIA
By
----------------------------
Title:
$ 12,500,000 BANK ONE, N.A.
By
-----------------------------
Title:
$ 12,500,000 CAISSE NATIONALE DE CREDIT AGRICOLE
By
------------------------------
Title:
$ 12,500,000 DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By
------------------------------
Title:
By
------------------------------
Title:
$ 12,500,000 MELLON BANK, N.A.
By
-------------------------------
Title:
$ 12,500,000 PNC BANK, OHIO, N.A.
By
------------------------------
Title:
Lenders
-------
$ 6,250,000 BANQUE PARIBAS
By
------------------------------
Title:
By
------------------------------
Title:
$ 6,250,000 THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By
-----------------------------
Title:
$ 6,250,000 FIFTH THIRD BANK
By
----------------------------
Title:
$ 6,250,000 FIRST HAWAIIAN BANK
By
----------------------------
Title:
$ 6,250,000 THE FUJI BANK LIMITED, CHICAGO BRANCH
By
-----------------------------
Title:
$ 6,250,000 KREDIETBANK, N.V.
By
-----------------------------
Title:
$ 6,250,000 THE LONG TERM CREDIT BANK OF JAPAN,
LTD., CHICAGO BRANCH
By
-----------------------------
Title:
$ 6,250,000 MICHIGAN NATIONAL BANK
By
-----------------------------
Title:
$ 6,250,000 THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, NEW YORK BRANCH
By
------------------------------
Title:
$ 6,250,000 THE NORTHERN TRUST COMPANY
By
-----------------------------
Title:
$ 6,250,000 THE SANWA BANK, LIMITED, CHICAGO
BRANCH
By
-----------------------------
Title:
$ 6,250,000 STAR BANK, N.A.
By
-----------------------------
Title:
$ 6,250,000 THE SUMITOMO BANK, LIMITED, CHICAGO
BRANCH
By
-----------------------------
Title:
$ 6,250,000 THE TOKAI BANK, LIMITED-NEW YORK
BRANCH
By
-----------------------------
Title:
$6,250,000 UNITED STATES NATIONAL BANK OF
OREGON
By
----------------------------
Title:
$ 5,000,000 COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By
-----------------------------
Title:
$ 5,000,000 FIRST AMERICAN NATIONAL BANK
By
------------------------------
Title:
$3,750,000 CREDIT LYONNAIS CHICAGO BRANCH
By
-----------------------------
Title:
$ 3,750,000 THE SAKURA BANK, LIMITED
By
-----------------------------
Title:
$ 500,000,000 Total of the Commitments
<PAGE>
FIVE-YEAR CREDIT AGREEMENT
Dated as of May 28, 1997
THE KROGER CO., an Ohio corporation (the "Borrower"), the
--------
banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof,
---------------
and CITIBANK, N.A. ("Citibank"), as an Issuing Bank (as
--------
defined below) and as an administrative agent (in such
capacity, an "Administrative Agent") for the Lenders (as
--------------------
hereinafter defined) and the Issuing Banks and paying agent
(in such capacity, the "Paying Agent") for the Lenders and the
------------
Issuing Banks, THE CHASE MANHATTAN BANK ("Chase"), as an
-----
Issuing Bank and as an administrative agent (in such capacity,
an "Administrative Agent"; the Administrative Agents and the
--------------------
Paying Agent are, collectively, the "Agents") for the Lenders
------
and the Issuing Banks, FIRST CHICAGO CAPITAL MARKETS, INC.,
as syndication agent for the Lenders and the Issuing Banks,
and THE BANK OF NEW YORK, as documentation agent for the
Lenders and the Issuing Banks, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
---------------------
Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acquired EBITDA" means, for any period, with respect to
---------------
any Acquired Entity, (a) the sum of (i) Acquired Net Income
for such period, (ii) depreciation and amortization expense
for such period, (iii) interest expense net of interest income
for such period, (iv) Federal and state income taxes for such
period as determined in accordance with GAAP, (v)
extraordinary losses that have been included in the
calculation of Acquired Net Income for such period, (vi) LIFO
charges included in the calculation of Acquired Net Income for
such period and (vii) non-cash charges made with respect to
"expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No. 106
minus (b) the sum of (i) extraordinary gains that have been
- -----
included in the calculation of Acquired Net Income for such
period and (ii) LIFO credits included in the calculation of
Acquired Net Income for such period.
"Acquired Entity" means any Person in the Borrower's line
---------------
of business or the assets of any Person in the Borrower's line
of business to be invested in or acquired.
"Acquired Entity Fiscal Quarter" means, with respect to
------------------------------
any Acquired Entity, any fiscal quarter of such Acquired
Entity.
"Acquired Net Income" means, for any period, with respect
-------------------
to any Acquired Entity, the net income of such Acquired Entity
for such period before the payment of dividends on all capital
stock, determined in accordance with GAAP.
"Administrative Questionnaire" means an Administrative
----------------------------
Questionnaire in the form of Exhibit D.
"Advance" means a Revolving Credit Advance, drawings
-------
under Letters of Credit or a Competitive Bid Advance.
"Affiliate" means, with respect to any designated Person,
---------
any other Person that has a relationship with the designated
Person whereby either of such Persons directly or indirectly
controls or is controlled by or is under common control with
the other of such Persons, or holds or beneficially owns 10%
or more of the equity interest in the other Person or 10% or
more of any class of voting securities of the other Person.
The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct
or cause the direction of the management or policies of any
Person, whether through ownership of voting securities, by
contract or otherwise.
"Anniversary Date" means May 28, 1998 and May 28 in each
----------------
succeeding calendar year occurring during the term of this
Agreement.
"Applicable Lending Office" means, with respect to each
-------------------------
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance, such Lender's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance and, in the case of a
Competitive Bid Advance, the office of such Lender specified
in a notice of such Lender to the Paying Agent as such
Lender's Applicable Lending Office with respect to such
Competitive Bid Advance.
"Applicable Margin" means, until September 30, 1997, 0.0%
-----------------
per annum for Base Rate Advances and 0.15% per annum for
Eurodollar Rate Advances, Standby Letters of Credit and
Documentary Letters of Credit and thereafter, a percentage per
annum determined by reference to the Borrower's Performance
Level in effect on such date as set forth below:
<TABLE>
<CAPTION>
Applicable Margin for
Eurodollar Rate Advances,
Performance Applicable Margin for Standby Letters of Credit and
Level Base Rate Advances Documentary Letters of Credit
- ------------ ---------------------- ------------------------------
<S> <C> <C>
Level 1 0.0000% 0.1050%
Level 2 0.0000% 0.1125%
Level 3 0.0000% 0.1200%
Level 4 0.0000% 0.1350%
Level 5 0.0000% 0.1500%
Level 6 0.0000% 0.1750%
</TABLE>
"Applicable Percentage Ratio" means the ratio (determined
---------------------------
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) Consolidated EBITDA for such
Rolling Period to (b) Consolidated Total Interest Expense for
such Rolling Period.
"Assignment and Acceptance" means an assignment and
-------------------------
acceptance entered into by a Lender and an assignee, and to
the extent required by Section 8.06, accepted by the Borrower
and the Administrative Agents, in substantially the form of
Exhibit C hereto or such other form as shall be approved by
the Administrative Agents.
"Assuming Lender" has the meaning specified in Section
---------------
2.16(c).
"Assumption Agreement" has the meaning specified in
--------------------
Section 2.16(c).
"Base Rate" means a fluctuating rate per annum equal to
---------
the highest from time to time of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearer 1/16 of 1% or,
if there is no nearest 1/16 of 1%, to the next higher
1/16 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the
----
rate obtained by dividing (A) the latest three-week
moving average of secondary market morning offering rates
in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average (adjusted to the basis of a
year of 360 days) being determined weekly on each Monday
(or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the
basis of quotations for such rates received by the Paying
Agent from three New York certificate of deposit dealers
of recognized standing selected by the Paying Agent, by
(B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period
by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve
requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve
requirement) for Citibank with respect to liabilities
consisting of or including (among other liabilities)
three-month U.S. dollar non-personal time deposits in the
United States, plus (iii) the average during such
----
three-week period of the daily annual assessment rates
estimated by Citibank for determining the current annual
assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring
U.S. dollar deposits of Citibank in the United States;
and
(c) a rate equal to 1/2 of 1% per annum above the
Federal Funds Rate.
"Base Rate Advance" means a Revolving Credit Advance that
-----------------
bears interest as provided in Section 2.06(a).
"Borrowing" means a Revolving Credit Borrowing or a
---------
Competitive Bid Borrowing.
"Business Day" means a day of the year on which banks are
------------
not required or authorized to close in New York City and, if
the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London
interbank market.
"Capital Lease Obligation" means, with respect to any
------------------------
lessee, the obligations under any lease of property that, in
accordance with GAAP, should be capitalized on such lessee's
balance sheet.
"Change of Control" means any one or more of the
-----------------
following events:
(a) the acquisition, by contract or otherwise
(including the entry into a contract or arrangement that
upon consummation will result in such acquisition), by
any Person or group (as such term is defined for purposes
of Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and the rules and
------------
regulations pertaining thereto), other than the trusts
for the employee benefit plans (as defined in Section
3(2) of ERISA) maintained by the Borrower or any
Subsidiary of the Borrower that is an ERISA Affiliate, of
beneficial ownership (within the meaning of Rule 13d-3,
or any regulation or ruling promulgated to replace or
supplement Rule 13d-3, of the General Rules and
Regulations under the Exchange Act), directly or indirectly,
of securities of the Borrower representing 20% or more of
the voting power of all securities of the Borrower, or
(b) during any period of up to 24 consecutive
months, commencing before or after the date of this
Agreement, individuals who at the beginning of such period
were directors of the Borrower (together with any new
directors whose election by the Board of Directors or whose
nomination for election by the stockholders of the
Borrower was approved by a vote of at least 75% of the
directors then in office who either were directors at the
beginning of such period or whose election or nomination
for election was previously so approved) shall cease for
any reason to constitute at least 75% of the Board of
Directors of the Borrower.
"Commercial Paper" means any unsecured promissory note
----------------
issued by the Borrower pursuant to any commercial paper
program (whether rated or unrated) with a maturity of not more
than nine months from the time of issuance, exclusive of grace
periods.
"Commitment" has the meaning specified in Section
----------
2.01(a).
"Competitive Bid Advance" means an advance by a Lender to
-----------------------
the Borrower as part of a Competitive Bid Borrowing resulting
from the competitive bidding procedure described in Section
2.01(b).
"Competitive Bid Borrowing" means a borrowing consisting
-------------------------
of simultaneous Competitive Bid Advances from each of the
Lenders whose offer to make one or more Competitive Bid
Advances as part of such borrowing has been accepted by the
Borrower under the competitive bidding procedure described in
Section 2.01(b).
"Competitive Bid Reduction" has the meaning specified in
-------------------------
Section 2.01(a).
"Consenting Lender" has the meaning specified in Section
-----------------
2.16(b).
"Consolidated" refers to the consolidation of accounts in
------------
accordance with GAAP, including principles of consolidation,
consistent with those applied in the preparation of the
Consolidated financial statements referred to in Section
4.01(e).
"Consolidated Cash Interest Expense" means, for any
----------------------------------
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Borrower and its Subsidiaries
on a Consolidated basis for such period, including (a)
commissions and other fees and charges payable in connection
with Letters of Credit 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 payable in cash and (ii) amortization of
discount and deferred debt expense, all as determined in
conformity with GAAP.
"Consolidated EBITDA" means, for any period, on a
-------------------
Consolidated basis for the Borrower and its Subsidiaries, (a)
the sum of (i) Consolidated Net Income for such period, (ii)
depreciation and amortization expense for such period, (iii)
interest expense net of interest income for such period, (iv)
Federal and state income taxes for such period as determined
in accordance with GAAP, (v) extraordinary losses (and any
unusual losses in excess of $1,000,000 arising in or outside
of the ordinary course of business not included in
extraordinary losses (determined in accordance with GAAP) that
have been included in the calculation of Consolidated Net
Income) for such period, (vi) LIFO charges that have been
included in the calculation of Consolidated Net Income for
such period and (vii) non-cash charges made with respect to
"expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No. 106
minus (b) the sum of (i) extraordinary gains (and any unusual
- -----
gains in excess of $1,000,000 arising in or outside of the
ordinary course of business not included in extraordinary
gains (determined in accordance with GAAP) that have been
included in the calculation of Consolidated Net Income) for
such period and (ii) LIFO credits that have been included in
the calculation of Consolidated Net Income for such period.
"Consolidated Net Income" means, for any period, the net
-----------------------
income of the Borrower and its Consolidated Subsidiaries for
such period, before the payment of dividends on all capital
stock, determined in accordance with GAAP.
"Consolidated Rental Expense" means, for any period, the
---------------------------
aggregate rental expense (including any contingent or
percentage rental expense) of the Borrower and its
Subsidiaries on a Consolidated basis for such period
(excluding real estate taxes and common area maintenance
charges) in respect of all rent obligations under all
operating leases for real or personal property minus any
-----
rental income of the Borrower and its Subsidiaries on a
Consolidated basis for such period, all as determined in
conformity with GAAP.
"Consolidated Total Interest Expense" means, for any
-----------------------------------
period, interest expense net of interest income, whether paid
or accrued (including the interest component of Capital Lease
Obligations) on all Debt of the Borrower and its Subsidiaries
on a Consolidated basis for such period, including (a)
commissions and other fees and charges payable in connection
with Letters of Credit 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 of deferred debt expense and (ii)
- -------
interest capitalized during construction, all as determined in
conformity with GAAP.
"Convert", "Conversion" and "Converted" each refers to a
------- ---------- ---------
conversion of Revolving Credit Advances of one Type into
Revolving Credit Advances of the other Type pursuant to
Section 2.02(b), 2.07 or 2.08.
"Debt" of any Person means, without duplication, (a) all
----
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (including all
obligations, contingent or otherwise, of such Person in
connection with 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 constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Documentary Letter of Credit" means any Letter of Credit
----------------------------
that 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, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance or the Assumption Agreement, as
the case may be, pursuant to which it became a Lender, or such
other office of such Lender as such Lender may from time to
time specify to the Borrower and the Paying Agent.
"Effective Date" has the meaning specified in Section
-------------
3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate
-----------------
of a Lender; (iii) a commercial bank organized under the laws
of the United States, or any State thereof, and having total
assets in excess of $5,000,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the
United States, or any State thereof, and having total assets
in excess of $5,000,000,000; (v) a commercial bank organized
under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to
Borrow or of the Cayman Islands, or a political subdivision of
any such country, and having total assets in excess of
$5,000,000,000 so long as such bank is acting through a branch
or agency located in the United States or in the country in
which it is organized or another country that is described in
this clause (v); (vi) the central bank of any country that is
a member of the Organization for Economic Cooperation and
Development; or (vii) any other Person approved by the
Administrative Agents and the Borrower, such approval not to
be unreasonably withheld; provided, however, that neither the
-------- -------
Borrower nor any Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Laws" means all current and future
------------------
Federal, state, local and foreign laws, rules or regulations,
codes, ordinances, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder or other
requirements of Governmental Authorities or the common law,
relating to health, safety, or pollution or protection of the
environment, including laws relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances, or
wastes into the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing,
distribution, use, generation, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances, or wastes, or
underground storage tanks and emissions therefrom.
"ERISA" means the Employee Retirement Income Security Act
-----
of 1974, or any successor statute, as the same may be amended
from time to time.
"ERISA Affiliate" means any trade or business (whether or
---------------
not incorporated) that, together with the Borrower, is treated
as a single employer under Section 414 of the Internal Revenue
Code.
"Eurocurrency Liabilities" has the meaning assigned to
------------------------
that term in Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
-------------------------
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in
the Assignment and Acceptance or the Assumption Agreement, as
the case may be, pursuant to which it became a Lender (or, if
no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Paying Agent.
"Eurodollar Rate" means, with respect to each day during
---------------
each Interest Period for a Eurodollar Rate Advance, the rate
of interest determined on the basis of the rate for deposits
in United States dollars for a period equal to such Interest
Period appearing on Page 3750 of the Telerate 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 Service (or
otherwise on such service), the "Eurodollar Rate" for the
purposes of this paragraph shall be determined by reference to
such other publicly available service for displaying
eurodollar rates as may be agreed upon by the Paying Agent and
the Borrower or, in the absence of such agreement, the
"Eurodollar Rate" for the purposes of this paragraph shall
instead be an interest rate per annum equal to the rate of
interest (rounded upward to the nearest whole multiple of
1/100 of 1% per annum, if such average is not such a multiple)
of the rate per annum at which deposits in U.S. dollars are
offered by the principal office of each of the Reference Banks
in London, England, to prime banks in the London interbank
market at 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period in an amount
substantially equal to such Reference Bank's Eurodollar Rate
Advance to be outstanding during such Interest Period (or, if
such Reference Bank shall not have a Eurodollar Rate Advance
that is to be outstanding during such Interest Period, in an
amount equal to $1,000,000) and for a period equal to such
Interest Period. The Eurodollar Rate for an Interest Period
shall be determined by the Paying Agent on the basis of
applicable rates furnished to and received by the Paying Agent
two Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.07.
------- -------
"Eurodollar Rate Advance" means a Revolving Credit
-----------------------
Advance that bears interest as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" means the reserve
----------------------------------
percentage under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with
respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined).
"Events of Default" has the meaning specified in Section
-----------------
6.01.
"Existing Credit Agreement" has the meaning specified in
-------------------------
Section 3.01(i).
"Existing Lenders" has the meaning specified in Section
----------------
2.01(c).
"Existing Letters of Credit" means each standby Letter of
--------------------------
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).
"Facility Fee Percentage" means, until September 30,
-----------------------
1997, 0.10% per annum and thereafter, as of any date, a
percentage per annum determined by reference to the Borrower's
Performance Level in effect on such date as set forth below:
Performance Facility Fee
Level Percentage
- ----------- ------------
Level 1 0.070%
Level 2 0.075%
Level 3 0.080%
Level 4 0.090%
Level 5 0.100%
Level 6 0.125%
"Facility Fees" has the meaning specified in Section
-------------
2.03.
"Facility Usage" means, at any time, without duplication,
--------------
the sum of (a) the amount of 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 for each day to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for
such day on such transactions received by the Paying Agent
from three Federal funds brokers of recognized standing
selected by it.
"Financial Officer" means, with respect to any
-----------------
corporation, the chief financial officer, principal accounting
officer, treasurer or controller of such corporation.
"Fiscal Quarter" means (a) with respect to the first
--------------
Fiscal Quarter of any Fiscal Year, the first 12 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 16 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 be, ending on the Saturday closest to the 31st day of
December 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 January
30th of such calendar year.
"Fixed Charge Coverage Ratio" means the ratio (determined
---------------------------
as of the last day of each Fiscal Quarter for the Rolling
Period ending on such day) of (a) the sum of (i) Consolidated
EBITDA for such Rolling Period and (ii) Consolidated Rental
Expense for such Rolling Period to (b) the sum of (i)
Consolidated Cash Interest Expense for such Rolling Period and
(ii) Consolidated Rental Expense for such Rolling Period.
"Fixed Rate" means, for the period for each Fixed Rate
----------
Advance comprising part of the same Competitive Bid Borrowing,
the fixed interest rate per annum determined for such Advance,
as provided in Section 2.01(b).
"Fixed Rate Advance" means a Competitive Bid Advance that
------------------
bears interest at a fixed rate per annum determined as
provided in Section 2.01(b).
"GAAP" has the meaning specified in Section 1.03.
----
"Governmental Authority" means any Federal, state, local
----------------------
or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantee Agreement" means the Guarantee Agreement,
-------------------
substantially in the form of Exhibit E, among the Guarantors
and the Paying Agent, as amended, supplemented or otherwise
modified from time to time in compliance with Section 8.01.
"Guaranteed Debt" of any Person means all Debt referred
---------------
to in clause (a), (b), (c), (d) or (e) of the definition of
the term "Debt" in this Section guaranteed directly or
indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an
agreement (a) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (b) to
purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure
the holder of such Debt against loss, (c) to supply funds to,
or in any other manner invest in, the debtor (including any
agreement to pay for property or services irrespective of
whether such property is received or such services are
rendered) or (d) otherwise to assure a creditor against loss,
but excluding leases at a rental at least as favorable to the
Borrower as could be obtained in an arm's-length transaction
with a party that is not an Affiliate.
"Guarantor" means (a) each existing and hereafter created
---------
or acquired Material Subsidiary of the Borrower and (b) each
other existing or hereafter acquired Subsidiary of the
Borrower designated from time to time by the Borrower as a
Guarantor.
"Hazardous Materials" means any toxic substance,
-------------------
hazardous waste, hazardous constituents, hazardous materials,
asbestos or asbestos containing material, polychlorinated
biphenyls, petroleum, including crude oil and any fractions
thereof, or other wastes, chemicals, substances or materials
regulated by any Environmental Laws.
"Information Memorandum" means the information memorandum
----------------------
dated April 30, 1997 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 one, two, three or six months (or, if
available from all the Lenders, nine or twelve 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.
"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.)
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 Moody's Investors Service, Inc.
-------
"Multiemployer Plan" means a multiemployer plan, as
------------------
defined in Section 4001(a)(3) of ERISA, to which the Borrower
or any ERISA Affiliate (other than one considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Internal Revenue Code) is making or accruing an
obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to
make contributions.
"Net Debt" means, on a Consolidated basis for the
--------
Borrower and its Subsidiaries as of any date, (a) Debt minus
-----
(b) the sum as of such date of (i) the aggregate outstanding
amount of Debt represented by investments made by the Borrower
in Debt of another Person in connection with a real estate
transaction, so long as the Borrower or one of its
Subsidiaries is or becomes an anchor tenant of the real estate
development with respect thereto and no more than two anchor
tenants exist with respect to such real estate development or
the Borrower or one of its Subsidiaries has a contractual
obligation to make lease or other payments to such Person as a
result of the real estate transaction in which such Debt was
issued and (ii) the aggregate amount of Permitted Investments
in excess of $100,000,000.
"Non-Consenting Lender" has the meaning specified in
---------------------
Section 2.16(b).
"Note" has the meaning specified in Section 2.14.
----
"Notice of Revolving Credit Borrowing" has the meaning
------------------------------------
specified in Section 2.02(a).
"Paying Agent's Account" means the account of the Paying
----------------------
Agent maintained by the Paying Agent at Citibank with its
office at 1 Court Square, 7th Floor, Long Island City, New
York 11120, Account No. 36852248, Attention: Leonard Sarcona.
"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:
Level 1 The Public Debt Rating is A1/A+ or the
--
Applicable Percentage Ratio is 6.50:1.00 or
greater;
Level 2 The Public Debt Rating is A2/A or the
--
Applicable Percentage Ratio is 5.75:1.00 or
greater but less than 6.50:1.00;
Level 3 The Public Debt Rating is A3/A- or the
--
Applicable Percentage Ratio is 5.25:1.00 or
greater but less than 5.75:1.00;
Level 4 The Public Debt Rating is Baa1/BBB+ or the
--
Applicable Percentage Ratio is 4.75:1.00 or
greater but less than 5.25:1.00;
Level 5 The Public Debt Rating is Baa2/BBB or the
--
Applicable Percentage Ratio is 4:00:1.00 or
greater but less than 4.75:1.00;
Level 6 The Public Debt Rating is Baa3/BBB- or lower
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 or Moody's shall be changed (other than as
a result of a change in the rating system of either S&P or
Moody's), 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 and (c) notwithstanding the
foregoing provisions of clause (a), 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 highest
------------------
rating that has been most recently announced by either S&P or
Moody's, 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 and Moody's shall have in effect a Public Debt Rating, the
Applicable Margin and the Facility Fee Percentage shall be
determined by reference to the available rating; (b) if
neither S&P nor Moody's shall have in effect a Public Debt
Rating, the Applicable Margin and the Facility Fee Percentage
will be set in accordance with the Applicable Percentage
Ratio; (c) if the ratings established by S&P and Moody's shall
fall within different levels, the Applicable Margin and the
Facility Fee Percentage shall be based upon the higher rating;
(d) if any rating established by S&P or Moody's 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 or Moody's shall
change the basis on which ratings are established, each
reference to the Public Debt Rating announced by S&P or
Moody's, as the case may be, shall refer to the then
equivalent rating by S&P or Moody's, as the case may be.
"Reference Banks" means Citibank, Chase, The First
---------------
National Bank of Chicago/NBD and The Bank of New York.
"Register" has the meaning specified in Section 8.06(d).
--------
"Reportable Event" means any reportable event as defined
----------------
in Section 4043(b) of ERISA or the regulations issued
thereunder with respect to a Plan (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Internal Revenue Code).
"Required Lenders" means, at any time, Lenders holding at
----------------
least 51% of the then aggregate unpaid principal amount of all
outstanding Advances (other than Competitive Bid Advances) or,
if no such principal amount is then outstanding, Lenders
having at least 51% of the Commitments.
"Responsible Officer" of any corporation means any
-------------------
executive officer or Financial Officer of such corporation and
any other officer or similar official thereof responsible for
the administration of the obligations of such corporation in
respect of this Agreement.
"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 McGraw-Hill 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 28, 2002,
----------------
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.
"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, in the case of
Eurodollar Rate Advances, or $5,000,000, in the case of Base
Rate Advances 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 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.
(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 he
---------------------
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 $25,000,000 (such aggregate amount being the
"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 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, nine months or twelve 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, nine months or twelve 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.
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 minimum
principal amounts of $1,000,000), 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:
(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 Base Rate in
effect from time to time plus the Applicable Margin,
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 Eurodollar Rate
for such Interest Period plus the Applicable Margin,
payable on the last day of each Interest Period and, if
such Interest Period has a duration of six months, nine
months or twelve 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.
(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 $1,000,000 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 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.
(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 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
4224 or Form 1001 or other certificate or document required
under United States law to establish entitlement to such
exemption or reduced rate. A determination of whether a
Lender is exempt from United States Federal withholding tax or
is subject to such tax at a reduced rate shall be within the
reasonable judgment of the Lender.
(f) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 2.13
shall survive the payment in full of principal and interest
hereunder.
SECTION 2.14. Evidence of Debt. (a) Each Lender shall
----------------
maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Advance owing to such Lender from
time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
The Borrower agrees that upon notice by any Lender to the
Borrower (with a copy of such notice to the Paying Agent) to
the effect that a promissory note or other evidence of
indebtedness is required or appropriate in order for such
Lender to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made
by, such Lender, the Borrower shall promptly execute and
deliver to such Lender a promissory note or other evidence of
indebtedness, in form and substance reasonably satisfactory to
the Borrower and such Lender (each a "Note"), payable to the
----
order of such Lender in a principal amount equal to the
Commitment of such Lender.
(b) The Register maintained by the Paying Agent pursuant
to Section 8.06(d) shall include a control account, and a
subsidiary account for each Lender, in which accounts (taken
together) shall be recorded (i) the date and amount of each
Borrowing made hereunder, the Type of Advances comprising such
Borrowing and, if 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 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;
(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 December 28, 1996.
(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 or (ii) purports to affect the legality, validity
or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby.
(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 Paul W. Heldman,
Vice President, Secretary and General Counsel for
the Borrower, substantially in the form of Exhibit D
hereto and as to such other matters as any Lender
through the Agents may reasonably request.
(v) A favorable opinion of Shearman &
Sterling, counsel for the Agents, in form and
substance satisfactory to the Agents.
(i) The termination of the commitments of the
lenders and the payment in full of all Debt outstanding
under (i) the Senior Competitive Advance and Revolving
Credit Agreement dated as of July 19, 1994 among the
Borrower, certain of its Subsidiaries, the lenders parties
thereto, Chase, as swing line bank, issuing bank and
administrative agent, and Citibank, as swing line bank,
administrative agent and paying agent (the "Existing Credit
---------------
Agreement"), and (ii) the Credit Agreement dated as of
---------
December 13, 1996 among the Borrower, the banking institutions
parties thereto, The Bank of New York, as agent, and BNY Capital
Markets, Inc., as arranging agent.
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.
(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 December 28, 1996, 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 Coopers & Lybrand, L.L.P.,
independent public accountants, and the Consolidated balance
sheet of the Borrower and its Subsidiaries as at March 22,
1997, and the related Consolidated statements of income and
cash flows of the Borrower and its Subsidiaries for the three
months then ended, duly certified by the chief financial
officer of the Borrower, copies of which have been furnished
to each Lender, fairly present, subject, in the case of said
balance sheet as at March 22, 1997, and said statements of
income and cash flows for the three months then ended, to
year-end audit adjustments, the Consolidated financial
condition of the Borrower and its Subsidiaries as at such
dates and the Consolidated results of the operations of the
Borrower and its Subsidiaries for the periods ended on such
dates, all in accordance with generally accepted accounting
principles consistently applied. Since December 28, 1996,
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 or (ii) purports to affect the
legality, validity or enforceability of the Loan Documents or
the consummation of the transactions contemplated hereby and
thereby.
(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:
(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 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 Coopers & Lybrand, L.L.P. 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.
(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:
(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 insurance
or to obtain the benefits of any law, regulation or
arrangement pertaining to unemployment insurance, old age
pensions, social security or similar matters, or to
secure surety, appeal or customs bonds to which the
Borrower or any of its Subsidiaries is a party, or in
litigation or other proceedings such as, but not limited
to, interpleader proceedings, and other similar pledges,
Liens or deposits made or incurred in the ordinary course
of business;
(ix) Liens created by or resulting from any
litigation or other proceeding which is being contested
in good faith by appropriate proceedings, including Liens
arising out of judgments or awards against the Borrower
or any of its Subsidiaries, with respect to which the
Borrower or such Subsidiary is in good faith prosecuting
an appeal or proceedings for review or for which the time
to make an appeal has not yet expired; or final
unappealable judgment Liens which are satisfied within 30
days of the date of judgment; or Liens incurred by the
Borrower or any of its Subsidiaries for the purpose of
obtaining a stay or discharge in the course of any
litigation or other proceeding to which the Borrower or
such Subsidiary is a party;
(x) Liens for taxes or assessments of governmental
charges or levies not yet due or delinquent, or which can
thereafter be paid without penalty, or which are being
contested in good faith by appropriate proceedings;
landlord's Liens on property held under lease; and any
other Liens or charges incidental to the conduct of the
business of the Borrower or any of its Subsidiaries or
the ownership of the property or assets of any of them
which were not incurred in connection with the borrowing
of money or the obtaining of advances or credit and which
do not, in the opinion of the Borrower, materially impair
the use of such property or assets in the operation of
the business of the Borrower or such Subsidiary or the
value of such property or assets for the purposes of
such business; or
(xi) Liens not permitted by the foregoing clauses
(i) to (x), inclusive, if at the time of, and after
giving effect to, the creation or assumption of such
Lien, the aggregate amount of all Debt of the Borrower
and its Subsidiaries secured by all Liens not so
permitted by the foregoing clauses (i) through (x) above
does not exceed 10% of the total assets from time to time
before giving effect to the LIFO reserve of the Borrower
and its Subsidiaries on a Consolidated basis.
(b) Mergers, Etc. Merge or consolidate with or into any
------------
Person, or permit any of its Subsidiaries to do so, except
that any Subsidiary of the Borrower may merge or consolidate
with or into any other Subsidiary of the Borrower, and except
that any Subsidiary of the Borrower or any other Person may
merge into the Borrower, 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.
(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) during the term of this Agreement shall not be
greater than 10% of the total assets before giving effect to
the LIFO reserve of the Borrower and its Subsidiaries on a
Consolidated basis as of December 28, 1996.
(e) Dividends, Etc. Declare or make any cash dividend
--------------
payment on account of any shares of any class of its common
stock.
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 the ratio set forth below
for each period set forth below:
Rolling Period Ending Ratio
--------------------- -----
On or before December 1998 3.65:1.00
After December 1998 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 $30,000,000 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
(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 $30,000,000 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 reason ably 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 $30,000,000
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 Report able 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 here under; 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 Multi employer Plan that it
has incurred Withdrawal Liability to such Multi employer 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 $30,000,000 in any
year or (B) is less than $100,000,000 but any Withdrawal
Liability payment remains unpaid 30 days after such payment is
due (unless such Withdrawal Liability is being contested in
good faith by the Borrower or any ERISA Affiliate); or
(k) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being
terminated, within the meaning of Title IV of ERISA, if solely
as a result of such reorganization or termination the
aggregate contributions of the Borrower and its ERISA
Affiliates to all Multi employer 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 Multi employer Plans for their most
recently completed plan years by an amount exceeding
$30,000,000; 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;
(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.
(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 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, 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 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
Chase in its individual capacity. Each of Citibank and 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
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
there from 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 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 other wise affect the rights or duties of the
Administrative Agents, the Issuing Banks or the Paying Agent
hereunder without the prior written con sent 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., 1014
Vine Street, Cincinnati, Ohio 45202, Attention of Mr. Lawrence
M. Turner (Telecopy No. (513) 762-4454); with a copy to Mr.
-----------
Paul W. Heldman (Telecopy No. (513) 762-4935).
(b) If to Citibank in its capacity as an Administrative
Agent, Issuing Bank or Paying Agent, to it at 399 Park Avenue,
New York, NY 10043, Attention of William P. Stengel (Telecopy
No. (212) 793-7585); with a copy to Citicorp Agency Services,
One Court Square, Long Island City, New York 11120, Attention
of Leonard Sarcona. If to Chase in its capacity as an
Administrative Agent or Issuing Bank, to it at 270 Park
Avenue, New York, New York 10017, Attention of Mr. William P.
Rindfuss (Telecopy No. (212) 270-1474).
(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 enforce ment 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.
(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 there for.
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, when ever 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 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 $10,000,000 (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 speci fied in each Assign ment
and Accept ance, 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
there under 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 here under 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
there under 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
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 here under 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 here under 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:
(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.
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 sit ting in New
York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in
this Agreement shall affect any right that any Lender may
otherwise have to bring any action or proceeding relating to
this Agreement against the Borrower or its properties in the
courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively
do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out
of or relating to this Agreement in any New York State or
Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in
Section 8.02. Nothing in this Agreement will affect the right
of any party to this Agreement to serve process in any other
manner permitted by law.
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:
THE CHASE MANHATTAN BANK, as
Administrative Agent and Issuing
Bank
By
---------------------------
Title:
<PAGE>
Initial Lenders
---------------
Commitment Administrative Agents
- ---------- ----------------------
$ 110,156,250 CITIBANK, N.A.
By
-----------------------
Title:
$ 110,156,250 THE CHASE MANHATTAN BANK
By
--------------------------
Title:
Syndication Agent
-------------------
$ 110,156,250 THE FIRST NATIONAL BANK OF
CHICAGO
By
-------------------------
Title:
Documentation Agent
--------------------
$ 110,156,250 THE BANK OF NEW YORK
By
-------------------------
Title:
Managing Agents
---------------
$ 58,125,000 BANK OF MONTREAL
By
-------------------------
Title:
$ 58,125,000 BANKERS TRUST COMPANY
By
--------------------------
Title:
$ 58,125,000 THE BANK OF TOKYO-MITSUBISHI,
LTD. CHICAGO BRANCH
By
--------------------------
Title:
$ 58,125,000 CIBC, INC.
By
-------------------------
Title:
$ 58,125,000 COMERICA BANK
By
--------------------------
Title:
$ 58,125,000 FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By
--------------------------
Title:
$ 58,125,000 MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By
--------------------------
Title:
$ 56,250,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, CHICAGO BRANCH
By
--------------------------
Title:
Co-Agents
---------
$ 37,500,000 BANK OF AMERICA ILLINOIS
By
-------------------------
Title:
$ 37,500,000 THE BANK OF NOVA SCOTIA
By
------------------------
Title:
$ 37,500,000 BANK ONE, N.A.
By
-----------------------
Title:
$ 37,500,000 CAISSE NATIONALE DE CREDIT
AGRICOLE
By
------------------------
Title:
$ 37,500,000 DEUTSCHE BANK AG, NEW YORK
BRANCH AND/OR CAYMAN ISLANDS
BRANCH
By
------------------------
Title:
By
-------------------------
Title:
$ 37,500,000 MELLON BANK, N.A.
By
--------------------------
Title:
$ 37,500,000 PNC BANK, OHIO, N.A.
By
-------------------------
Title:
Lenders
--------
$ 18,750,000 BANQUE PARIBAS
By
-------------------------
Title:
By
-------------------------
Title:
$ 18,750,000 THE DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By
--------------------------
Title:
$ 18,750,000 FIFTH THIRD BANK
By
-------------------------
Title:
$ 18,750,000 FIRST HAWAIIAN BANK
By
--------------------------
Title:
$18,750,000 THE FUJI BANK LIMITED, CHICAGO
BRANCH
By
--------------------------
Title:
$18,750,000 KREDIETBANK, N.V.
By
--------------------------
Title:
$18,750,000 THE LONG TERM CREDIT BANK OF
JAPAN, LTD., CHICAGO BRANCH
By
-------------------------
Title:
$ 18,750,000 MICHIGAN NATIONAL BANK
By
-------------------------
Title:
$ 18,750,000 THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, NEW YORK
BRANCH
By
-------------------------
Title:
$ 18,750,000 THE NORTHERN TRUST COMPANY
By
--------------------------
Title:
$ 18,750,000 THE SANWA BANK, LIMITED, CHICAGO
BRANCH
By
---------------------------
Title:
$ 18,750,000 STAR BANK, N.A.
By
---------------------------
Title:
$ 18,750,000 THE SUMITOMO BANK, LIMITED,
CHICAGO BRANCH
By
---------------------------
Title:
$ 18,750,000 THE TOKAI BANK, LIMITED-NEW YORK
BRANCH
By
----------------------------
Title:
$ 18,750,000 UNITED STATES NATIONAL BANK OF
OREGON
By
----------------------------
Title:
$ 15,000,000 COMPAGNIE FINANCIERE DE CIC ET
DE L'UNION EUROPEENNE
By
--------------------------
Title:
$ 15,000,000 FIRST AMERICAN NATIONAL BANK
By
---------------------------
Title:
$ 11,250,000 CREDIT LYONNAIS CHICAGO BRANCH
By
---------------------------
Title:
$ 11,250,000 THE SAKURA BANK, LIMITED
By
--------------------------
Title:
$ 1,500,000,000 Total of Commitments
<PAGE>
