Exhibit 10.11

 

FIVE-YEAR CREDIT AGREEMENT

 

Dated as of November 15, 2006

 

THE KROGER CO., an Ohio corporation (the “Borrower”), the banks, financial
institutions and other institutional lenders (the “Initial Lenders”) listed on
Schedule I hereto, and JPMORGAN CHASE BANK, N.A. (“JPMorgan Chase”), 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, CITIBANK, N.A. (“Citibank”), 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, and BANK OF
AMERICA, N.A., THE ROYAL BANK OF SCOTLAND PLC, UNION BANK OF CALIFORNIA, N.A.
and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., CHICAGO BRANCH, as co-syndication
agents for the Lenders and the Issuing Banks, agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01. Certain Defined Terms.

 

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.

 

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“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 November 15, 2007 and November 15 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, on any date, a percentage per annum determined by
reference to the Borrower’s Performance Level in effect on such date as set
forth below:

 

Performance
Level

 

Applicable Margin for
Base Rate Advances

 

Applicable Margin for
Eurodollar Rate Advances,
Standby Letters of Credit and
Documentary Letters of Credit

Level 1

 

0.000%

 

0.190%

Level 2

 

0.000%

 

0.230%

Level 3

 

0.000%

 

0.270%

Level 4

 

0.000%

 

0.400%

Level 5

 

0.000%

 

0.475%

Level 6

 

0.000%

 

0.575%

 

“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 B hereto or such other form as shall be approved by the Administrative
Agents.

 

“Assuming Lender” has the meaning specified in Section 2.17(c).

 

“Assumption Agreement” has the meaning specified in Section 2.17(c).

 

“Available Amount” of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).

 

“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 JPMorgan Chase in New York, New
York, from time to time, as JPMorgan Chase’s base rate;

 

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(b) the sum (adjusted to the nearer 1/16 of 1% or, if there is no nearest 1/16
of 1%, to the next higher 1/16 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the
rate obtained by 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
JPMorgan Chase 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 JPMorgan Chase 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 JPMorgan
Chase for determining the current annual assessment payable by JPMorgan Chase to
the Federal Deposit Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of JPMorgan Chase 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 2.07(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.

 

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“Commitment” means as to any Lender (a) the amount set forth opposite such
Lender’s name on Schedule I hereto as such Lender’s “Commitment”, (b) if such
Lender has become a Lender hereunder pursuant to an Assumption Agreement, the
amount set forth in such Assumption Agreement or (c) if such Lender has entered
into an Assignment and Acceptance, the amount 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 2.05 or increased pursuant to
Section 2.19.

 

“Commitment Date” has the meaning specified in Section 2.19(b).

 

“Commitment Increase” has the meaning specified in Section 2.19(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).

 

“Consenting Lender” has the meaning specified in Section 2.17(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, (ii) amortization
of discount and deferred debt expense and (iii) gains and losses due to the
extinguishment of Debt, 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.

 

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“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 (ii) interest capitalized during construction and
(iii) gains and losses due to the extinguishment of Debt, 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), 2.08 or 2.09.

 

“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.

 

“Disclosed Litigation” has the meaning specified in Section 3.01(b)

 

“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.

 

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“Effective Date” has the meaning specified in Section 3.01.

 

“Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) 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 Moneyline Telerate Markets screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Moneyline Telerate Markets Service (or otherwise on such service), the
“Eurodollar Rate” for the purposes of this paragraph shall be determined by
reference to such other publicly available service for displaying eurodollar
rates as may be agreed upon by the Paying Agent and the Borrower or, in the
absence of such agreement, the “Eurodollar Rate” for the purposes of this
paragraph shall instead be an interest rate per annum equal to the rate of
interest (rounded upward to the nearest whole multiple of 1/100 of 1% per annum,
if such average is not such a multiple) of the rate per annum at which deposits
in U.S. dollars are offered by the principal office of each of the Reference
Banks in London, England, to prime banks in the London interbank market at
11:00 a.m. (London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to such Reference Bank’s Eurodollar Rate
Advance to be outstanding during such Interest Period (or, if such Reference
Bank shall not have a Eurodollar Rate Advance that is to be outstanding during
such Interest Period, in an amount equal to $1,000,000) and for a period equal
to such Interest Period. The Eurodollar Rate for an Interest 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 2.08.

 

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“Eurodollar Rate Advance” means a Revolving Credit Advance that bears interest
as provided in Section 2.07(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)(ii).

 

“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 an
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 2.17(b).

 

“Facility Fee Percentage” means, on any date, a percentage per annum determined
by reference to the Borrower’s Performance Level in effect on such date as set
forth below:

 

Performance
Level

 

Facility Fee
Percentage

Level 1

 

0.060%

Level 2

 

0.070%

Level 3

 

0.080%

Level 4

 

0.100%

Level 5

 

0.125%

Level 6

 

0.175%

 

“Facility Fees” has the meaning specified in Section 2.04.

 

“Facility Usage” means, at any time, without duplication, the sum of (a) the
amount of Advances outstanding at such time and (b) the aggregate Available
Amount of outstanding Letters of Credit.

 

“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.

 

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“Fiscal Quarter” means (a) with respect to the first Fiscal Quarter of any
Fiscal Year, the first 16 calendar weeks of such Fiscal Year, (b) with respect
to the second Fiscal Quarter of such Fiscal Year, the next successive period of
12 calendar weeks in such Fiscal Year, (c) with respect to the third Fiscal
Quarter of any Fiscal Year, the next successive period of 12 calendar weeks in
such Fiscal Year and (d) with respect to the last Fiscal Quarter of any Fiscal
Year, the period of time after the first three Fiscal Quarters of such Fiscal
Year through the last day of such Fiscal Year.

 

“Fiscal Year” means a year of 364 or 371 days, as the case may be, ending on the
Saturday closest to the 31st day of January in any calendar year, and such
Fiscal Year, when referred to from time to time herein by reference to a
calendar year shall be the Fiscal Year that includes February 28th of such
calendar year.

 

“Fitch” means Fitch, Inc.

 

“Fixed Charge Coverage Ratio” means the ratio (determined as of the last day of
each Fiscal Quarter for the Rolling Period ending on such day) of (a) the sum of
(i) Consolidated EBITDA for such Rolling Period and (ii) Consolidated Rental
Expense for such Rolling Period to (b) the sum of (i) Consolidated Cash Interest
Expense for such Rolling Period and (ii) Consolidated Rental Expense for such
Rolling Period.

 

“Fixed Rate” means, for the period for each Fixed Rate Advance comprising part
of the same Competitive Bid Borrowing, the fixed interest rate per annum
determined for such Advance, as provided in Section 2.01(b).

 

“Fixed Rate Advance” means a Competitive Bid Advance that bears interest at a
fixed rate per annum determined as provided in Section 2.01(b).

 

“GAAP” has the meaning specified in Section 1.03.

 

“Governmental Authority” means any Federal, state, local or foreign court or
governmental agency, authority, instrumentality or regulatory body.

 

“Guarantee Agreement” means the Guarantee Agreement, substantially in the form
of Exhibit E, among the Guarantors and the Paying Agent, as amended,
supplemented or otherwise modified from time to time in compliance with
Section 8.01.

 

“Guaranteed Debt” of any Person means all Debt referred to in clause (a), (b),
(c), (d) or (e) of the definition of the term “Debt” in this Section guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (a) to pay or
purchase such Debt or to advance or supply funds for the payment or purchase of
such Debt, (b) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to
make payment of such Debt or to assure the holder of such Debt against loss,
(c) to supply funds to, or in any other manner invest in, the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (d) otherwise to assure a
creditor against loss, but excluding leases at a rental at least as favorable to
the Borrower as could be obtained in an arm’s-length transaction with a party
that is not an Affiliate.

 

“Guarantor” means (a) each existing and hereafter created or acquired Material
Subsidiary of the Borrower and (b) each other existing or hereafter acquired
Subsidiary of the Borrower designated from time to time by the Borrower as a
Guarantor.

 

“Hazardous Materials” means any toxic substance, hazardous waste, hazardous
constituents, hazardous materials, asbestos or asbestos containing material,
polychlorinated biphenyls, petroleum, including crude oil and any fractions
thereof, or other wastes, chemicals, substances or materials regulated by any
Environmental Laws.

 

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“Increase Date” has the meaning specified in Section 2.19(a).

 

“Increasing Lender” has the meaning specified in Section 2.19(b).

 

“Information Memorandum” means the information memorandum dated October 20, 2006
used by the Agents in connection with the syndication of the Commitments.

 

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the
same Revolving Credit Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance
into such Eurodollar Rate Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be seven days, one, two, three or six months (or, if available from
all the Lenders, nine months), as the Borrower may, upon notice received by the
Paying Agent not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, select; provided,
however, that:

 

(i) the Borrower may not select any Interest Period that ends after the latest
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.

 

“Issuance” with respect to any Letter of Credit means the issuance, amendment,
renewal or extension of such Letter of Credit.

 

“Issuing Bank” means any Lender so long as such Lender expressly agrees to
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as an Issuing Bank and
notifies the Paying Agent of its Applicable Lending Office (which information
shall be recorded by the Agent in the Register).

 

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“Lenders” means the Initial Lenders, each Assuming Lender that shall become a
party hereto pursuant to Section 2.17 or Section 2.19 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 Agreement” has the meaning specified in Section 2.03(a).

 

“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 2.18.

 

“Letter of Credit Facility” means, at any time, an amount equal to the lesser of
(a) $750,000,000 and (b) the aggregate amount of the Commitments, as in effect
from time to time.

 

“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 2.04.

 

“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 any Subsidiary of the Borrower that is a captive insurance
company) having (a) assets with a value of not less than 5% of the total value
of the assets of the Borrower and its Consolidated Subsidiaries, taken as a
whole, or (b) Consolidated EBITDA not less than 5% of the Consolidated EBITDA of
the Borrower and its Consolidated Subsidiaries, taken as a whole, in each case
as of the end of or for the most recently completed Fiscal Year of the Borrower.

 

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“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 2.17(b).

 

“Note” has the meaning specified in Section 2.15.

 

“Notice of Competitive Bid Borrowing” has the meaning specified in
Section 2.01(b).

 

“Notice of Issuance” has the meaning specified in Section 2.03(a).

 

“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 JPMorgan with its office at 111 Fannin Street, 10th Floor,
Houston , Texas, Account No. 323-243312, Attention: Loan and Agency Services.

 

“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 A, A2 or A or better by two of S&P, Moody’s or Fitch,
respectively, or the Applicable Percentage Ratio is 7.75:1.00 or greater;

 

 

 

Level 2

 

The Public Debt Rating is A-, A3 or A- or better by two of S&P, Moody’s or
Fitch, respectively, or the Applicable Percentage Ratio is 7.25:1.00 or greater
but less than 7.75:1.00;

 

 

 

Level 3

 

The Public Debt Rating is BBB+, Baa1 or BBB+ by two of S&P, Moody’s or Fitch,
respectively, or the Applicable Percentage Ratio is 6.75:1.00 or greater but
less than 7.25:1.00;

 

 

 

Level 4

 

The Public Debt Rating is BBB, Baa2 or BBB by two of S&P, Moody’s or Fitch,
respectively, or the Applicable Percentage Ratio is 6.25:1.00 or greater but
less than 6.75:1.00;

 

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Level 5

 

The Public Debt Rating is BBB-, Baa3 or BBB- by two of S&P, Moody’s or Fitch,
respectively, or the Applicable Percentage Ratio is 5.75:1.00 or greater but
less than 6.25:1.00;

 

 

 

Level 6

 

The Public Debt Rating is lower than BBB-, Baa3 or BBB- by two of S&P, Moody’s
or Fitch and the Applicable Percentage Ratio is lower than 5.75:1.00;

 

provided (a) if any rating established or deemed to have been established by
S&P, Moody’s or Fitch shall be changed (other than as a result of a change in
the rating system of any of S&P, Moody’s or Fitch), such change shall be
effective as of the date on which such change is first announced publicly by the
rating agency making such change, (b) any change in the Performance Level based
on a change in the Applicable Percentage Ratio shall be effective for all
purposes on and after the date of delivery to the Administrative Agents of a
certificate of the Borrower with respect to the financial statements to be
delivered, as applicable, pursuant to Section 5.01(h) for the most recently
ended Fiscal Quarter, (c) if two of the Public Debt Ratings by S&P, Moody’s and
Fitch and the Applicable Percentage Ratio shall fall within different Levels the
Applicable Margin, the Facility Fee Percentage and the Utilization Fee
Percentage shall be determined based upon the higher Level (it being understood
that Level 1 is the highest Level and Level 6 is the lowest Level) and
(d) notwithstanding the foregoing provisions of clause (b), no increase 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, P-1 by Moody’s or F-1 by Fitch,
in each case having a maturity at the time of issuance not exceeding 270 days,
(d) commercial paper rated at least A-2 by S&P, P-2 by Moody’s or F-2 by Fitch,
in each case having a maturity at the time of issuance not exceeding 30 days and
not exceeding for any issuer thereof $50,000,000, and (e) 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 or doing business under the laws
of the United States of America or any state thereof or the District of
Columbia.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government (domestic or foreign)
or any political subdivision or agency thereof.

 

“Plan” means any pension plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Internal Revenue Code that
is maintained for current or former employees, or any beneficiary thereof, of
the Borrower or any ERISA Affiliate.

 

“Public Debt Rating” means, as of any date, the rating that has been most
recently announced by either S&P, Moody’s or Fitch, as the case may be, for any
class of non-credit enhanced long-term senior unsecured debt issued by the
Borrower. For purposes of the foregoing, (a) if only one of S&P, Moody’s and
Fitch shall have in effect a Public Debt Rating, the Applicable Margin, the
Facility Fee Percentage and the Utilization Fee Percentage shall be determined
by reference to the available rating; (b) if none of S&P, Moody’s or Fitch shall
have in effect a Public Debt Rating, the Applicable Margin, the Facility Fee
Percentage and the Utilization Fee Percentage will be set in accordance with the
Applicable Percentage Ratio; (c) if the ratings established by S&P, Moody’s and
Fitch shall fall within different levels, the Applicable Margin, the Facility
Fee Percentage and the Utilization Fee Percentage shall be based upon the
highest rating of two such agencies; (d) if any rating established by S&P,
Moody’s or Fitch shall be changed, such change shall be effective as of the date
on which such change is first announced publicly by the rating agency making
such change; and (e) if S&P, Moody’s or Fitch shall change the basis on which
ratings are established, or any such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of such amendment, the Applicable Margin, the Facility
Fee Percentage and the Utilization Fee Percentage shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.

 

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“Ratable Share” of any amount means, with respect to any Lender at any time, the
product of such amount times a fraction the numerator of which is the amount of
such Lender’s Commitment at such time (or, if the Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender’s Commitment as in
effect immediately prior to such termination) and the denominator of which is
the aggregate amount of all Commitments at such time (or, if the Commitments
shall have been terminated pursuant to Section 2.05 or 6.01, the aggregate
amount of all Commitments as in effect immediately prior to such termination).

 

“Reference Banks” means JPMorgan Chase, Citibank, Bank of America, N.A. and The
Bank of Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch.

 

“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, a division of The McGraw-Hill Companies, Inc.

 

“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.

 

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“Termination Date” means the earlier of (a) November 15, 2011, subject to the
extension thereof pursuant to Section 2.17, and (b) the date of termination in
whole of the aggregate Commitments pursuant to Section 2.05 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 2.17 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.

 

“Type” has the meaning specified in the definition of Revolving Credit Advance,
and refers to the distinction between Base Rate Advances and Eurodollar Rate
Advances.

 

“Unused Commitment” means, with respect to each Lender at any time, (a) such
Lender’s Commitment at such time minus (b) the sum of (i) the aggregate
principal amount of all Revolving Credit Advances made by such Lender (in its
capacity as a Lender) and outstanding at such time, plus (ii) such Lender’s
Ratable Share of (A) the aggregate Available Amount of all the Letters of Credit
outstanding at such time and (B) the aggregate principal amount of all Advances
made by each Issuing Bank pursuant to Section 2.03(c) that have not been ratably
funded by such Lender and remain outstanding at such time.

 

“Utilization Fee Percentage” means, as of any date that the aggregate Advances
exceed 50% of the aggregate Commitments, a percentage per annum determined by
reference to the Borrower’s Performance Level in effect on such date as set
forth below:

 

Performance
Level

 

Utilization Fee
Percentage

Level 1

 

0.100%

Level 2

 

0.100%

Level 3

 

0.100%

Level 4

 

0.100%

Level 5

 

0.100%

Level 6

 

0.100%

 

“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”).

 

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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 applicable to such Lender in an amount not to exceed such
Lender’s Unused Commitment at such time. Each Revolving Credit Borrowing shall
be in an aggregate minimum amount of $10,000,000 or any whole multiple of
$1,000,000 in excess thereof and shall consist of Revolving Credit Advances of
the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender’s Commitment, the
Borrower may borrow under this Section 2.01(a), prepay pursuant to Section 2.10
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 latest Termination Date then in effect
in the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances plus the
Available Amount of Letters of Credit then outstanding shall not exceed the
aggregate amount of the Commitments of the Lenders.

 

(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, 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 latest Termination Date then in effect), 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 Fixed 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.

 

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(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 and tenor of the Competitive Bid Borrowing.

 

(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.

 

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(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) Upon the terms and subject to the conditions
hereinafter set forth, the Borrower may request any Issuing Bank to issue, and
any such Issuing Bank may in its discretion issue, letters of credit (each, a
“Letter of Credit”) for the account of the Borrower and its Subsidiaries from
time to time on any Business Day during the period from the Effective Date until
30 days before the latest Termination Date in an aggregate Available Amount
(i) for all Letters of Credit not to exceed at any time the Letter of Credit
Facility at such time and (ii) for each such Letter of Credit not to exceed an
amount equal to the Unused Commitments of the Lenders at such time. 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 latest Termination Date in effect at the date of issuance
thereof, provided that Letters of Credit having an aggregate Available Amount of
not more than $25,000,000 may have an expiration date of later than one year
from the date of issuance, but in any event shall expire no later than 30 days
prior to the latest Termination Date; provided further that no Letter of Credit
shall have an expiration date later than 30 days prior to the Termination Date
of Lenders having Commitments in an amount equal to or exceeding the available
undrawn amount of all Letters of Credit after giving effect to the issuance of
such Letter of Credit. 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. Within the limits referred to above, the Borrower
may from time to time request the issuance of Letters of Credit under this
Section 2.01(c).

 

(ii) Each letter of credit listed on Schedule 2.01(c) shall be deemed to
constitute a Letter of Credit issued hereunder, and each Lender that is an
issuer of such a Letter of Credit shall, for purposes of Section 2.03, be deemed
to be an Issuing Bank for each such letter of credit, provided than any renewal
or replacement of any such letter of credit shall be issued by an Issuing Bank
pursuant to the terms of this Agreement. Effective as of the Closing Date, the
lenders under each 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 such 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, equal to such Lender’s Ratable Share.

 

SECTION 2.02. Making the Revolving Credit Advances. (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. Each such notice of a Revolving Credit
Borrowing (a “Notice of Revolving Credit Borrowing”) shall be by telephone,
confirmed immediately in writing, or telecopier 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.

 

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(b) Anything in subsection (a) above or Section 2.09 to the contrary
notwithstanding,

 

(i) if the Eurodollar Rate cannot be determined by reference to the Moneyline
Telerate Service page 3750 or such other publicly available service agreed by
the Paying Agent and the Borrower and 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 nine months for any
Eurodollar Rate Advances and any Lender shall notify the Paying Agent that the
Eurodollar Rate for such Interest Period will not adequately reflect the cost to
such Lender of making or funding its Eurodollar Rate Advance for such Interest
Period, the Paying Agent shall forthwith so notify the 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 nine months shall be
suspended until the Paying Agent shall notify the Borrower and such Lenders that
the circumstances causing such suspension no longer exist.

 

(c) Each Notice of Revolving Credit Borrowing shall be irrevocable and binding
on the Borrower and, in respect of any Revolving Credit Borrowing comprised of
or including Eurodollar Rate Advances specified in such Notice of Revolving
Credit 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 Revolving Credit
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.

 

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(d) Unless the Paying Agent shall have received notice from a Lender prior to
the time 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. Issuance of and Drawings and Reimbursement Under Letters of
Credit. (a) Request for Issuance. (i) Each Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (New York City time) on the fifth
Business Day prior to the date of the proposed Issuance of such Letter of Credit
(or on such shorter notice as the applicable Issuing Bank may agree), by the
Borrower to any Issuing Bank, and such Issuing Bank shall give the Paying Agent
prompt notice thereof. Each such notice by the Borrower of Issuance of a Letter
of Credit (a “Notice of Issuance”) shall be by telecopier or telephone,
confirmed immediately in writing, in substantially the form of Exhibit A-3,
specifying therein the requested (A) date of such Issuance (which shall be a
Business Day), (B) Available Amount of such Letter of Credit, (C) expiration
date of such Letter of Credit and (D) name and address of the beneficiary of
such Letter of Credit, such Letter of Credit shall be issued pursuant to such
application and agreement for letter of credit as such Issuing Bank and the
Borrower shall agree for use in connection with such requested Letter of Credit
(a “Letter of Credit Agreement”). If the requested form of such Letter of Credit
is acceptable to such Issuing Bank in its reasonable discretion (it being
understood that any such form shall have only explicit documentary conditions to
draw and shall not include discretionary conditions), such Issuing Bank may,
upon fulfillment of the applicable conditions set forth in Section 3.03, make
such Letter of Credit available to the Borrower at its office referred to in
Section 8.02 or as otherwise agreed with the Borrower in connection with such
Issuance. In the event and to the extent that the provisions of any Letter of
Credit Agreement shall conflict with this Agreement, the provisions of this
Agreement shall govern.

 

(b) Participations. By the Issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing or decreasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the Lenders, such
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
such Issuing Bank, a participation in such Letter of Credit equal to such
Lender’s Ratable Share of the Available Amount of such Letter of Credit. The
Borrower hereby agrees to each such participation. In consideration and in
furtherance of the foregoing, in accordance with Section 2.03(c), each Lender
hereby absolutely and unconditionally agrees to pay to the Paying Agent, for the
account of such Issuing Bank, such Lender’s Ratable Share of each drawing made
under a Letter of Credit funded by such Issuing Bank and not reimbursed by the
Borrower on the date made, or of any reimbursement payment required to be
refunded to the Borrower for any reason, which amount will be advanced, and
deemed to be a Base Rate Advance to the Borrower hereunder, regardless of the
satisfaction of the conditions set forth in Section 3.02. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender further acknowledges and agrees that its
participation in each Letter of Credit will be automatically adjusted to reflect
such Lender’s Ratable Share of the Available Amount of such Letter of Credit at
each time such Lender’s Commitment is amended pursuant to a Commitment Increase
in accordance with Section 2.19, an assignment in accordance with Section 8.06
or otherwise pursuant to this Agreement.

 

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(c) Drawing and Reimbursement. The payment by an Issuing Bank of a draft drawn
under any Letter of Credit which is not reimbursed by the Borrower on the date
made shall constitute for all purposes of this Agreement the making by any such
Issuing Bank of an Advance, which shall be a Base Rate Advance, in the amount of
such draft, without regard to whether the making of such an Advance would exceed
such Issuing Bank’s Unused Commitment. Each Issuing Bank shall give prompt
notice of each drawing under any Letter of Credit issued by it to the Borrower
and the Paying Agent. Upon written demand by such Issuing Bank, with a copy of
such demand to the Paying Agent and the Borrower, each Lender shall pay to the
Paying Agent such Lender’s Ratable Share of such outstanding Advance. Each
Lender acknowledges and agrees that its obligation to make Advances pursuant to
this paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Promptly after receipt thereof, the Paying Agent shall transfer such
funds to such Issuing Bank. Each Lender agrees to fund its Ratable Share of an
outstanding Advance on (i) the Business Day on which demand therefor is made by
such Issuing Bank, provided that notice of such demand is given not later than
11:00 A.M. (New York City time) on such Business Day, or (ii) the first Business
Day next succeeding such demand if notice of such demand is given after such
time. If and to the extent that any Lender shall not have so made the amount of
such Advance available to the Paying Agent, such Lender agrees to pay to the
Paying Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by any such Issuing Bank until the date such
amount is paid to the Paying Agent, at the Federal Funds Rate for its account or
the account of such Issuing Bank, as applicable. If such Lender shall pay to the
Paying Agent such amount for the account of any such Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute an
Advance made by such Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Advance made by such Issuing Bank
shall be reduced by such amount on such Business Day.

 

(d) Letter of Credit Reports. Each Issuing Bank shall furnish (i) to the Paying
Agent (with a copy to the Borrower) on the first Business Day after the
Issuance, expiration, drawing or change of Available Amount of any Letter of
Credit, a report in the form of Exhibit F hereto or such other form as is
reasonably acceptable to the Paying Agent and (ii) to the Paying Agent (with a
copy to the Borrower) on the first Business Day of each month a written report
summarizing Issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the preceding month and drawings during such month under all
Letters of Credit.

 

(e) Failure to Make Advances. The failure of any Lender to make the Advance to
be made by it on the date specified in Section 2.03(c) shall not relieve any
other Lender of its obligation hereunder to make its Advance on such date, but
no Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on such date.

 

SECTION 2.04. Fees. (a) Facility Fees. The Borrower agrees to pay to the Paying
Agent for distribution to each Lender until the Termination Date applicable to
such Lender 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 applicable to such Lender.

 

(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).

 

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(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
Available Amount of outstanding Letters of Credit issued pursuant to
Section 2.01(c) for the account of the Borrower, 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 2.05. Termination or Reduction of the Commitments. (a) The Commitment of
each Lender shall be automatically terminated on the Termination Date applicable
to such Lender.

 

(b) The Borrower shall have the right, upon at least three Business Days’ notice
to the Administrative Agents, to terminate in whole, or, subject to
Section 2.19, permanently reduce ratably in part (in a minimum principal amount
of $10,000,000 or any whole multiple of $1,000,000 in excess thereof), the
Unused Commitments).

 

(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 2.05.

 

SECTION 2.06. Repayment of Revolving Credit Advances. The Borrower shall repay
to the Paying Agent for the account of each Lender on the Termination Date
applicable to such Lender the aggregate principal amount of the Revolving Credit
Advances owing to such Lender on such date.

 

SECTION 2.07. Interest on Revolving Credit Advances. The Borrower shall pay
interest on the unpaid principal amount of each Revolving Credit Advance owing
to each Lender from the date of such Revolving Credit Advance until such
principal amount shall be paid in full, at the following rates per annum:

 

(a) Base Rate Advances. During such periods as such Revolving Credit Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of (x) the
Base Rate in effect from time to time plus (y) the Applicable Margin plus
(z) the Utilization Fee Percentage, if any, payable quarterly in arrears on the
third day of each January, April, July and October and on the date such Base
Rate Advance shall be Converted into a Eurodollar Rate Advance or paid in full;
provided that commencing on the date and during the continuance of any Event of
Default the applicable interest rate for all outstanding Base Rate Advances
shall be a rate per annum equal at all times to 2% per annum above the rate
otherwise in effect for such Base Rate Advances pursuant to this
Section 2.07(a) from time to time.

 

(b) Eurodollar Rate Advances. During such periods as such Revolving Credit
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (x) the Eurodollar Rate for
such Interest Period plus (y) the Applicable Margin plus (z) the Utilization Fee
Percentage, if any, payable on the last day of each Interest Period and, if such
Interest Period has a duration of six months or nine months, on each day that
occurs during such Interest Period every three months from the first day of such
Interest Period, provided that commencing on the date and during the continuance
of any Event of Default the applicable interest rate for all outstanding
Eurodollar Rate Advances shall be a rate per annum equal at all times to 2% per
annum above the rate otherwise in effect for such Eurodollar Rate Advances
pursuant to this Section 2.07(b).

 

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SECTION 2.08. 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 2.07(a) or (b), and the rate, if any, furnished by each Reference Bank
for the purpose of determining the interest rate under Section 2.07(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 2.09. 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),
2.07, 2.08, 2.09(d) and 2.11(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 2.11(d), 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 2.10. 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 2.10 shall be in an aggregate principal amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof and (y) in the event of any such
prepayment of a Eurodollar Rate Advance, such prepayment shall either be made on
the last day of an Interest Period for such Eurodollar Rate Advance or shall be
made together with payment of all amounts required pursuant to Section 8.03(c).

 

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(b) Mandatory Prepayments. (i) 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 Available Amount of Letters of
Credit then outstanding exceeds the Letter of Credit Facility on such Business
Day.

 

(ii) 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 2.11. 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 2.09, except that such Conversion may occur,
notwithstanding Section 2.09, 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).

 

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SECTION 2.12. 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 2.04(c)(ii) or Facility Fees ratably (other than amounts
payable pursuant to Section 2.04(b), 2.04(c)(i), 2.04(d), 2.11, 2.14, 2.17 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 2.17 or as a result of a Commitment
Increase pursuant to Section 2.19, 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 2.13. Nothing contained in this subsection (b) shall impair the
obligations of any Lender under Section 2.13, 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.

 

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SECTION 2.13. 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
(x) as payment of a Base Rate Advance made by an Issuing Bank pursuant to the
first sentence of Section 2.03(c) or (y) pursuant to Section 2.04(b),
2.04(c)(i), 2.04(d), 2.04(e),2.11, 2.14, 2.17 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 2.13
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 2.14. Taxes. (a) Any and all payments by the Borrower hereunder or under
any Note shall be made, in accordance with Section 2.12, 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 2.14) 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 2.14) 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.

 

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(e) Prior to or on the Effective Date in the case of each Lender that is a
Lender on the Effective Date, and on the date of the Assignment and Acceptance
or the Assumption Agreement, as the case may be, pursuant to which it became a
Lender in the case of each other Lender, and from time to time thereafter if
reasonably requested by the Borrower or the Paying Agent, each Lender organized
under the laws of a foreign jurisdiction that is exempt from United States
Federal withholding tax, or that is subject to such tax at a reduced rate under
an applicable treaty, with respect to payments under this Agreement has provided
or is herewith providing the Borrower or the Paying Agent with an Internal
Revenue Form W-8BEN or Form W-8ECI or other certificate or document required
under United States law to establish entitlement to such exemption or reduced
rate. A determination of whether a Lender is exempt from United States Federal
withholding tax or is subject to such tax at a reduced rate shall be within the
reasonable judgment of the Lender.

 

(f) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.14 shall survive the payment in full of principal and interest
hereunder.

 

SECTION 2.15. 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 2.16. 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, including liquidity support for
commercial paper.

 

SECTION 2.17. Extension of Termination Date. (a) At least 30 days but not more
than 60 days prior to either or both 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.

 

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(b) If all of the Lenders consent in writing to any such request in accordance
with subsection (a) of this Section 2.17, 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 2.17, 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 2.17
and the Commitment of such Lender is not assumed in accordance with subsection
(c) of this Section 2.17 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 2.11, 2.14, 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 2.17, 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, and each Eligible Assignee that agrees to become a Lender
hereunder pursuant to Section 2.19 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 2.04(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;

 

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provided further that such Non-Consenting Lender’s rights under Sections 2.11,
2.14, 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, 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 2.17 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 2.17) 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 2.17, 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.

 

(e) If at any Termination Date, the sum of the aggregate outstanding principal
amount of Advances plus the Available Amount of Letters of Credit outstanding
exceed the Commitments of the Lenders having Commitments that extend to a date
later than such Termination Date, the Borrower shall repay Advances and/or
deposit funds into the Letter of Credit Collateral Account in an amount equal to
such excess.

 

SECTION 2.18. Obligations Absolute. The obligations of the Borrower under this
Agreement in respect of any Letter of Credit, any Letter of Credit Agreement 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, such Letter of Credit 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, any Letter
of Credit Agreement 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;

 

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(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 2.19. Increase in the Aggregate Commitments. (a) The Borrower may, at
any time but in any event not more than twice in any calendar year prior to the
latest Termination Date, by notice to the Paying Agent, request that the
aggregate amount of the Commitment be increased by an amount of $10,000,000 or
an integral multiple thereof (each a “Commitment Increase”) to be effective as
of a date that is at least 90 days prior to the latest scheduled Termination
Date then in effect (the “Increase Date”) as specified in the related notice to
the Paying Agent; provided, however that (i) in no event shall the aggregate
amount of the Commitments at any time exceed $3,000,000,000 and (ii) on the date
of any request by the Borrower for a Commitment Increase and on the related
Increase Date no Default shall have occurred and be continuing.

 

(b) The Paying Agent shall promptly notify the Lenders of a request by the
Borrower for a Commitment Increase, which notice shall include (i) the proposed
amount of such requested Commitment Increase, (ii) the proposed Increase Date
and (iii) the date by which Lenders wishing to participate in the Commitment
Increase must commit to an increase in the amount of their respective
Commitments (the “Commitment Date”). Each Lender that is willing to participate
in such requested Commitment Increase (each an “Increasing Lender”) shall, in
its sole discretion, give written notice to the Paying Agent on or prior to the
Commitment Date of the amount by which it is willing to increase its Commitment.
If the Lenders notify the Paying Agent that they are willing to increase the
amount of their respective Commitments by an aggregate amount that exceeds the
amount of the requested Commitment Increase, the requested Commitment Increase
shall be allocated among the Lenders willing to participate therein in such
amounts as are agreed between the Borrower and the Paying Agent. No Lender shall
have any obligation to participate in such a requested Commitment Increase, and
the election of any Lender to Participate in such a requested Commitment
Increase shall not obligate any other Lender to so participate.

 

(c) Promptly following each Commitment Date, the Paying Agent shall notify the
Borrower as to the amount, if any, by which the Lenders are willing to
participate in the requested Commitment Increase. If the aggregate amount by
which the Lenders are willing to participate in any requested Commitment
Increase on any such Commitment Date is less than the requested Commitment
Increase, then the Borrower may extend offers to one or more Eligible Assignees
to participate in any portion of the requested Commitment Increase that has not
been committed to by the Lenders as of the applicable Commitment Date; provided,
however, that the Commitment of each such Eligible Assignee shall be not less
than $10,000,000.

 

(d) On each Increase Date, each Eligible Assignee that accepts an offer to
participate in a requested Commitment Increase in accordance with
Section 2.19(b) shall become a Lender party to this Agreement as of such
Increase Date and the Commitment of each Increasing Lender for such requested
Commitment Increase shall be so increased by such amount (or by the amount
allocated to such Lender pursuant to the last sentence of Section 2.19(b)) as of
such Increase Date; provided, however, that the Paying Agent shall have received
on or before such Increase Date the following, each dated such date:

 

(i) (A) certified copies of resolutions of the Board of Directors of the
Borrower or the Executive Committee of such Board approving the Commitment
Increase and the corresponding modifications to this Agreement and (B) an
opinion of counsel for the Borrower (which may be in-house counsel), in
substantially the form of Exhibit C hereto;

 

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(ii) an Assumption Agreement from each Assuming Lender, if any, duly executed by
such Eligible Assignee, the Paying Agent and the Borrower; and

 

(iii) confirmation from each Increasing Lender of the increase in the amount of
its Commitment in a writing satisfactory to the Borrower and the Paying Agent.

 

On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.19(d), the Paying Agent shall
notify the Lenders (including, without limitation, each Assuming Lender) and the
Borrower, on or before 1:00 P.M. (New York City time), by telecopier, of the
occurrence of the Commitment Increase to be effected on such Increase Date and
shall record in the Register the relevant information with respect to each
Increasing Lender and each Assuming Lender on such date.

 

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 January 28, 2006.

 

(b) There shall exist no action, suit, investigation, litigation or proceeding
affecting the Borrower or any of its Subsidiaries pending or threatened before
any court, governmental agency or arbitrator that (i) could be reasonably likely
to have a Material Adverse Effect other than the matters described on Schedule
3.01(b) hereto (the “Disclosed Litigation”) or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby, and there shall have been
no adverse change in the status, or financial effect on the Borrower or any of
its Subsidiaries, of the Disclosed Litigation from that described on Schedule
3.01(b) hereto.

 

(c) Nothing shall have come to the attention of the Lenders during the course of
their due diligence investigation to lead them to believe that the Information
Memorandum was or has become misleading, incorrect or incomplete in any material
respect; without limiting the generality of the foregoing, the Lenders shall
have been given such access to the management, records, books of account,
contracts and properties of the Borrower and its Subsidiaries as they shall have
requested.

 

(d) All governmental and third party consents and approvals necessary in
connection with the transactions contemplated hereby shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lenders) and shall remain in effect, and no law or regulation shall be
applicable in the reasonable judgment of the Lenders that restrains, prevents or
imposes materially adverse conditions upon the transactions contemplated hereby.

 

(e) The Borrower shall have notified each Lender and the Agents in writing as to
the proposed Effective Date.

 

(f) The Borrower shall have paid all accrued fees and expenses of the Agents,
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:

 

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(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, Executive Vice President, Secretary
and General Counsel for the Borrower, substantially in the form of Exhibit C
hereto and as to such other matters as any Lender through the Agents may
reasonably request.

 

(v) A favorable opinion of Shearman & Sterling LLP, 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 Five-Year Credit Agreement dated as of
May 22, 2002, as amended, among the Borrower, the lenders parties thereto,
Citibank and JPMorgan Chase, as administrative agents, and Bank of America,
N.A., Bank One, NA, The Bank of Tokyo-Mitsubishi Ltd., Chicago Branch and Union
Bank of California, as co-syndication agents, and (ii) the Five Year Credit
Agreement dated as of May 20, 2004, as amended, among the Borrower, the lenders
parties thereto, Citibank and JPMorgan Chase, as administrative agents, and Bank
of America, N.A., The Royal Bank of Scotland plc, The Bank of Tokyo-Mitsubishi
Ltd., Chicago Branch and Union Bank of California, as co-syndication agents, and
each of the Lenders that is a party to either of the foregoing credit agreements
(each, an “Existing Credit Agreement”) hereby waives any requirement of prior
notice for the termination of the commitments or prepayment of advances under
such credit agreement.

 

SECTION 3.02. Conditions Precedent to Each Revolving Credit Borrowing and
Issuance. The obligation of each Lender to make a Revolving Credit Advance
(other than a Base Rate Advance made by any Issuing Bank or any Lender pursuant
to Section 2.03(c)) on the occasion of each Revolving Credit Borrowing and the
obligation of each Issuing Bank to issue 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 Section 4.01 (other
than the representations and warranties in the last sentence of subsection
(e) and in subsection (f) (other than clause (ii) thereof)) 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

 

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(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
January 28, 2006, and the related Consolidated statements of income and cash
flows of the Borrower and its Subsidiaries for the Fiscal Year then ended,
accompanied by an opinion of PricewaterhouseCoopers LLP, independent public
accountants, copies of which have been furnished to each Lender, fairly present
the Consolidated financial condition of the Borrower and its Subsidiaries as at
such date and the Consolidated results of the operations of the Borrower and its
Subsidiaries for the period ended on such date, all in accordance with generally
accepted accounting principles consistently applied. Since January 28, 2006,
there has been no Material Adverse Change.

 

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(f) There is no pending or threatened action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
governmental agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect (other than the Disclosed Litigation) and there has been
no adverse change in the status, or financial effect on the Borrower or any of
its Subsidiaries, of the Disclosed Litigation from that described on Schedule
3.01(b) hereto, 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 an “investment company”, within
the meaning of the Investment Company Act of 1940, 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.

 

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(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, the
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
and a calculation of the Applicable Percentage Ratio, 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 the Consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such Fiscal Year and
Consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, in each case accompanied by an opinion
acceptable to the Required Lenders by PricewaterhouseCoopers LLP or other
independent public accountants acceptable to the Required Lenders, provided that
in the event of any change in generally accepted accounting principles used in
the preparation of such financial statements, the Borrower shall also provide,
if necessary for the determination of compliance with Section 5.03, a statement
of reconciliation conforming such financial statements to GAAP;

 

(iii) as soon as possible and in any event within five days after the occurrence
of each Default continuing on the date of such statement, a statement of a
Financial Officer of the Borrower setting forth details of such Default and the
action that the Borrower has taken and proposes to take with respect thereto;

 

(iv) promptly after the sending or filing thereof, copies of all quarterly and
annual reports and proxy solicitations that the Borrower sends to any of its
securityholders, and copies of all reports on Form 8-K that the Borrower or any
Subsidiary files with the Securities and Exchange Commission (other than reports
on Form 8-K filed solely for the purpose of incorporating exhibits into a
registration statement previously filed with the Securities and Exchange
Commission);

 

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(v) promptly after the commencement thereof, notice of all actions and
proceedings before any court, governmental agency or arbitrator affecting the
Borrower or any of its Subsidiaries of the type described in Section 4.01(f);
and

 

(vi) such other information respecting the Borrower or any of its Subsidiaries
as any Lender through the Agents may from time to time reasonably request.

 

The financial statements required to be delivered pursuant to clauses (i) and
(ii) and the reports required to be delivered pursuant to clause (iv) of this
Section 5.01(h) shall be deemed to have been delivered on the date on which the
same have been posted on the SEC’s website at www.sec.gov; provided that the
Borrower shall deliver paper copies of the reports referred to in clauses (i),
(ii) and (iv) above to the Agent or any Lender who requests the Borrower to
deliver such paper copies until written notice to cease delivering paper copies
is given by the Agent or such Lender.

 

(i) Guarantors. Cause (i) each Material Subsidiary organized under the laws of
the United States of America or any political subdivision thereof created or
acquired by it from time to time and (ii) each Subsidiary that is not a Material
Subsidiary immediately prior to becoming such a Material Subsidiary to undertake
the obligation of and to become a Guarantor pursuant to the Guarantee Agreement
pursuant to one or more instruments or agreements satisfactory in form and
substance to the Paying Agent.

 

SECTION 5.02. Negative Covenants. So long as any Advance shall remain unpaid or
any Lender shall have any Commitment hereunder or any Letter of Credit shall
remain outstanding, the Borrower will not:

 

(a) Liens, Etc. Create or suffer to exist, or permit any of its Subsidiaries to
create or suffer to exist, any Lien on or with respect to any of its properties,
whether now owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other than:

 

(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;

 

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(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 securing obligations in an aggregate
amount not to exceed $300,000,000; 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

 

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(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 20% of the total assets from time to time before
giving effect to the LIFO reserve of the Borrower and its Subsidiaries on a
Consolidated basis.

 

(b) Mergers, Etc. Merge or consolidate with or into any Person, or permit any of
its Subsidiaries to do so, except that any Subsidiary of the Borrower may merge
or consolidate with or into any other Subsidiary of the Borrower or into any
other Person (so long as the surviving corporation is a Subsidiary of the
Borrower), and except that any Subsidiary of the Borrower or any other Person
may merge into the Borrower, provided, in each case, that no Default shall have
occurred and be continuing at the time of such proposed transaction or would
result therefrom.

 

(c) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any significant change in accounting policies or reporting
practices, except as required by generally accepted accounting principles;
provided, however, that the Borrower may make or permit its Subsidiaries to make
any changes in accounting policies or reporting practices in order to conform to
any policies or practices of Fred Meyer, Inc. and its Subsidiaries or to conform
any policies or practices of Fred Meyer, Inc., or its Subsidiaries to those of
Borrower or its Subsidiaries. The parties acknowledge that the Borrower and its
Subsidiaries may change their fiscal years to conform the fiscal years of the
Borrower and its Subsidiaries (including Fred Meyer, Inc. and its Subsidiaries).

 

(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, or
permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of,
any assets, or grant any option or other right to purchase, lease or otherwise
acquire any assets, except (i) dispositions of assets in the ordinary course of
its business, (ii) in a transaction authorized by subsection (b) of this
Section, (iii) pursuant to sale-leaseback transactions for not less than fair
market value, (iv) in a transaction with any Subsidiary that is, or as a result
of such transaction becomes, a Material Subsidiary and (v) sales of assets for
fair value, provided that the aggregate value of such assets sold, leased,
transferred or otherwise disposed of pursuant to clause (v) during the term of
this Agreement shall not be greater than 20% of the total assets from time to
time before giving effect to the LIFO reserve of the Borrower and its
Subsidiaries on a Consolidated basis.

 

SECTION 5.03. Financial Covenants. So long as any Advance shall remain unpaid or
any Lender shall have any Commitment hereunder, the Borrower will:

 

(a) Leverage Ratio. Maintain a ratio (determined as of the last day of each
Fiscal Quarter for the Rolling Period ending on such day) of (i) Net Debt on
such day to (ii) the sum of (A) Consolidated EBITDA for such Rolling Period and
(B) from and after the making of any investment or acquisition, the Acquired
EBITDA for such Rolling Period for any Acquired Entity so invested in or
acquired (determined as of the last day of the Acquired Entity Fiscal Quarter
ending during such Rolling Period) of not greater than: 3.50:1.00.

 

(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio
(determined as of the last day of any Fiscal Quarter for the Rolling Period
ending on such day) of not less than 1.70:1.00.

 

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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 $100,000,000 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 $100,000,000
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

 

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(g) Any non-monetary judgment or order shall be rendered against the Borrower or
any of its Subsidiaries that could be reasonably expected to have a Material
Adverse Effect, and there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

 

(h) Any Change in Control shall have occurred; or

 

(i) A Reportable Event or Reportable Events, or a failure to make a required
installment or other payment (within the meaning of Section 412(n)(l) of the
Internal Revenue Code), shall have occurred with respect to any Plan or Plans
that reasonably could be expected to result in liability of the Borrower or any
of its Subsidiaries to the PBGC or to a Plan in an aggregate amount exceeding
$100,000,000 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 $200,000,000 or requires payments
exceeding $100,000,000 in any year or (B) is less than $200,000,000 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
$100,000,000; 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 (other than Advances to be made by an
Issuing Bank or a Lender pursuant to Section 2.03(c)) 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

 

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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 (other than Advances to
be made by an Issuing Bank or a Lender pursuant to Section 2.03(c)) 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 2.10 of
all Advances or shall have prepaid in whole all Advances, (iii) the latest
Termination Date shall have occurred or (iv) if at any time, as a result of
prepayments pursuant to Section 2.10, the latest 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.

 

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(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.

 

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(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 willful 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 latest 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 2.17 or Section 2.19, or an Assignment and Acceptance
entered into by such Lender, as assignor, and an 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 or telex) believed by it to be genuine and signed or
sent by the proper party or parties.

 

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SECTION 7.03. JPMorgan Chase, Citibank and Affiliates. With respect to its
Commitment(s), the Advances made by it and any Note or Notes issued to it, each
of JPMorgan Chase and Citibank 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 JPMorgan Chase and Citibank in its individual
capacity. Each of JPMorgan Chase and Citibank 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.

 

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SECTION 7.06. Successor Agents. The Administrative Agents and the Paying Agent
may resign at any time by giving written notice thereof to the Lenders and the
Borrower and may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Administrative Agent or Paying Agent, as the
case may be. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent’s resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

 

ARTICLE VIII

 

MISCELLANEOUS

 

SECTION 8.01. Waivers; Amendments, Etc. (a) No failure or delay on the part of
the Administrative Agents, the Issuing Banks, the Paying Agent or any Lender in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuation of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agents, the
Issuing Banks, the Paying Agent and the Lenders hereunder are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below (other than a waiver of the minimum amount of
Commitment assumed by an Assuming Lender pursuant to Section 2.17 or by an
assignee pursuant to Section 8.06, 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 2.17), 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 (other than as
provided in Section 2.17 or 2.19) or reduce or extend the date for payment of
the Facility Fees or other amounts payable under this Agreement to any Lender,
in each case without the prior written consent of such Lender or (C) amend or
modify the provisions of this Section 8.01(b) or Section 8.05 or the definition
of the term “Required Lenders” without the prior written consent of each Lender;
and provided further that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agents, the Issuing Banks or
the Paying Agent hereunder without the prior written consent of the
Administrative Agents, the Issuing Banks or the Paying Agent, respectively.

 

SECTION 8.02. Notices, Etc. (a) Notices. 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:

 

(i) If to the Borrower, to it at The Kroger Co., 1014 Vine Street, Cincinnati,
Ohio 45202, Attention of Mr. Scott M. Henderson (Telecopy No. (513) 762-1203);
with a copy to Mr. Paul W. Heldman (Telecopy No. (513) 762-4935).

 

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(ii) If to JPMorgan Chase in its capacity as an Administrative Agent, to it at
1111 Fannin Street, 10th Floor Houston, Texas 77002, Attention of Cherry Arnaez
(Telecopy No. (713) 750-2782); with a copy to 270 Park Avenue, New York, New
York 10017, Attention of Ms. Ruby Tulloch (Telecopy No. (212) 270-6937). If to
Citibank in its capacity as an Administrative Agent or Paying Agent, to it at
388 Greenwich Street, New York, NY 10013, Attention of Marc Merlino (Telecopy
No. (212) 816-8156).

 

(iii) 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.

 

(iv) 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.

 

(b) Electronic Communications. Notices and other communications to the Lenders
and the Issuing Banks hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Paying Agent, provided that the foregoing shall not
apply to notices to any Lender or Issuing Bank pursuant to Article II if such
Lender or Issuing Bank, as applicable, has notified the Paying Agent that it is
incapable of receiving notices under such Article by electronic communication.
The Paying Agent or the Borrower may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

 

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 LLP, counsel for the
Administrative Agents, the Issuing Banks and the Paying Agent, in connection
with any such enforcement or protection and the reasonable fees, disbursements
and other charges of any other counsel for the Administrative Agents, the
Issuing Banks, the Paying Agent or any Lender. The Borrower further agrees that
it shall indemnify the Administrative Agents, the Issuing Banks, the Paying
Agent and the Lenders from, and hold them harmless against, any documentary
taxes, assessments or similar charges made by any Governmental Authority by
reason of the execution and delivery of this Agreement or any Note.

 

(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 willful misconduct
of such Indemnitee.

 

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(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 2.06, prepayment pursuant to clause
(ii) of the proviso to Section 2.10(a) or acceleration of the maturity of the
Advances pursuant to Section 6.01 or for any other reason, the Borrower shall,
upon demand by any Lender (with a copy of such demand to the Administrative
Agents), pay to the Paying Agent for the account of such Lender any amounts
required to compensate such Lender for any additional losses, costs or expenses
that such Lender may incur as a result of such payment, including any loss
(excluding loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Advance.

 

(d) The provisions of this Section 8.03 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Advances, the invalidity or unenforceability of any term or provision of
this Agreement, or any investigation made by or on behalf of the Administrative
Agents, the Issuing Banks, the Paying Agent or any Lender. All amounts due under
this Section 8.03 shall be payable on written demand therefor.

 

SECTION 8.04. Right of Set-off. If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized, in addition to any other right
or remedy that any Lender may have by operation of law or otherwise, at any time
and from time to time, without notice to the Borrower (any such notice being
expressly waived by the Borrower), to exercise its banker’s lien or right of
setoff and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower against any
of and all the obligations of the Borrower now or hereafter existing under this
Agreement and any Note held by such Lender, irrespective of whether such Lender
shall have made any demand under this Agreement or any Note and although such
obligations may be unmatured.

 

SECTION 8.05. Binding Effect. This Agreement shall become effective (other than
Section 2.01, which shall only become effective upon satisfaction of the
conditions precedent set forth in Section 3.01) when it shall have been executed
by the Borrower, the Administrative Agents, the Issuing Banks and the Paying
Agent and when the Paying Agent shall have been notified by each Initial Lender
that such Initial Lender has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Administrative Agents, the Issuing
Banks, the Paying Agent and each Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lenders.

 

SECTION 8.06. Successors and Assigns. (a) Subject to Section 8.05, whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, the Administrative
Agents, the Issuing Banks, the Paying Agent or the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.

 

(b) Each Lender may assign to one or more assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment, 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 $5,000,000 (or an
amount equal to the remaining balance of such Lender’s Commitment), (iii) the
parties to each such assignment shall execute and deliver to the Paying Agent
(with a copy to the other Administrative Agent) an Assignment and Acceptance,
together with a processing and recordation fee of $3,500 (except that such fee
shall not be required with respect to assignments to Affiliates), and (iv) the
assignee, if it shall not be a Lender, shall

 

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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 2.11, 2.14 and 8.03, as well as to any Facility Fees
accrued for its account and not yet paid). Notwithstanding the foregoing,
(i) any Lender assigning its rights and obligations under this Agreement may
retain any Competitive Bid Advances made by it outstanding at such time, and in
such case shall retain its rights hereunder in respect of any Advances so
retained until such Advances have been repaid in full in accordance with this
Agreement.

 

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim created by
it and that its Commitment, and the outstanding balances of its Advances, in
each case without giving effect to assignments thereof that have not become
effective, are as set forth in such Assignment and Acceptance; (ii) except as
set forth in clause (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of any amendments or consents
entered into prior to the date of such Assignment and Acceptance and copies of
the most recent financial statements delivered pursuant to Section 5.01(h) and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(v) such assignee will independently and without reliance upon the
Administrative Agents, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee 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 (vii) 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.

 

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(e) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an 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 2.11, 2.14 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 2.11, 2.14 or 8.03 in an amount that exceeds the amount that would have
been payable thereunder to such Lender had such Lender not sold such
participation) and (iv) the Borrower, the Administrative Agents, the Issuing
Banks, the Paying Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower and to approve any amendment,
modification or waiver of any provision of this Agreement (provided that the
participating bank or other entity may be provided with the right to approve
amendments, modifications or waivers affecting it with respect to (A) any
decrease in the Facility Fees or other amounts payable hereunder with respect to
Commitments in which the participating bank or other entity has purchased a
participation, (B) any change in the amount of principal of, or decrease in the
rate at which interest is payable on, the Advances in which the participating
bank or other entity has purchased a participation or (C) any extension of the
final scheduled maturity of any Advance in which the participating bank or other
entity has purchased a participation.

 

(g) Notwithstanding the limitations set forth in paragraph (b) above, any Lender
may at any time assign all or any portion of its rights under this Agreement to
a Federal Reserve Bank without the prior written consent of the Borrower or the
Administrative Agents, provided that no such assignment shall release a Lender
from any of its obligations hereunder or substitute any such Bank for such
Lender as a party hereto.

 

(h) Except as expressly provided in this Agreement, the Issuing Banks may not
assign or delegate any of their respective rights and duties hereunder without
the prior written consent of the Borrower and the Administrative Agents.

 

(i) The Borrower may, with the prior written consent of the Administrative
Agents, replace any of the Lenders with one or more assignees, provided (i) that
the Lender being replaced has been paid in full for all Advances made by such
Lender and all other amounts accrued or due to such Lender hereunder, (ii) that
the full amount of the Commitments remain unchanged and (iii) that the
percentages of the total Commitments allocated to the Lenders (other than any
replaced Lenders) remain unchanged unless prior written consent from any such
affected Lenders has been obtained. Upon any such replacement, such Lender shall
cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.11, 2.14 and 8.03, as well as to any Facility Fees accrued for its
account under Section 2.04 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);

 

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(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 2.11 or 2.14;

 

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 2.11, 2.14 and 8.03, as well as to any
fees accrued for its account under Section 2.04 and not yet paid.

 

(j) Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle (an “SPC”) of
such Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Administrative Agents and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to this Agreement
provided that (i) nothing herein shall constitute a commitment to make any
Advance by any SPC and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Advance, the Granting Lender
shall be obligated to make such Advance pursuant to the terms hereof. The making
of an Advance by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if, such Advance were made by the Granting
Lender. Each party hereto hereby agrees that no SPC shall be liable for any
payment under this Agreement for which a Lender would otherwise be liable, for
so long as, and to the extent, the related Granting Lender makes such payment.
In furtherance of the foregoing, each party hereto hereby agrees that, prior to
the date that is one year and one day after the payment in full of all
outstanding senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or similar
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in this
Section 8.06, any SPC may (i) with notice to, but without the prior written
consent of, the Borrower or the Administrative Agents and without paying any
processing fee therefor, assign all or a portion of its interests in any
Advances to its Granting Lender or to any financial institutions (if consented
to by the Borrower and the Administrative Agent) providing liquidity and/or
credit facilities to or for the account of such SPC to fund the Advances made by
such SPC or to support the securities (if any) issued by such SPC to fund such
Advances and (ii) disclose on a confidential basis any non-public information
relating to its Advances to any rating agency, commercial paper dealer or
provider of a surety, guarantee or credit or liquidity enhancement to such SPC.

 

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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 or
other electronic medium 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. Patriot Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies each borrower, guarantor or
grantor (the “Loan Parties”), which information includes the name and address of
each Loan Party and other information that will allow such Lender to identify
such Loan Party in accordance with the Act.

 

50

--------------------------------------------------------------------------------

 

SECTION 8.12. No Liability of the Issuing Banks. The Borrower assumes all risks
of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither an Issuing Bank
nor any of its officers or directors shall be liable or responsible for: (a) the
use that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall have
a claim against such Issuing Bank, and such Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by such Issuing Bank’s
willful misconduct or gross negligence when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof. In
furtherance and not in limitation of the foregoing, such Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary;
provided that nothing herein shall be deemed to excuse such Issuing Bank if it
acts with gross negligence or willful misconduct in accepting such documents.

 

[The rest of this page is intentionally left blank.]

 

51

--------------------------------------------------------------------------------

 

SECTION 8.13 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

/s/ Scott M. Henderson

 

Name:

Scott M. Henderson

 

Title:

Vice President and Treasurer

 

 

 

JPMORGAN CHASE BANK, N.A., as

 

Administrative Agent, Issuing Bank and as

 

Paying Agent

 

 

 

By

/s/ Christine Herrick

 

Name:

Christine Herrick

 

Title: 

Vice President

 

 

 

CITIBANK, N.A.

 

as Administrative Agent and Issuing Bank

 

 

 

By

/s/ Marc Merlino

 

Name:

Marc Merlino

 

Title:

Vice President

 

52

--------------------------------------------------------------------------------

 

 

Lenders

 

 

 

JPMORGAN CHASE BANK, N.A.

 

 

 

By

/s/ Christine Herrick

 

Name:

Christine Herrick

 

Title:

Vice President

 

 

 

CITIBANK, N.A.

 

 

 

By

/s/ Marc Merlino

 

Name:

Marc Merlino

 

Title:

Vice President

 

 

 

BANK OF AMERICA, N.A.

 

 

 

By

/s/ Ross Evans

 

Name:

Ross Evans

 

Title:

Vice President

 

 

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

 

CHICAGO BRANCH

 

 

 

By

/s/ Hirotsugu Hayashi

 

Name:

Hirotsugu Hayashi

 

Title:

General Manager

 

 

 

UNION BANK OF CALIFORNIA, N.A.

 

 

 

By

/s/ Ching Lim

 

Name:

 Ching Lim

 

Title:

Vice President

 

 

 

THE ROYAL BANK OF SCOTLAND PLC

 

 

 

By

/s/ Mica Galluzzo

 

Name:

Mica Galluzzo

 

Title:

Vice President

 

 

 

BARCLAYS BANK PLC

 

 

 

By

/s/ Alison McGuigan

 

Name:

Alison McGuigan

 

Title:

Associate Director

 

 

 

THE BANK OF NEW YORK

 

 

 

By

/s/ Randolph E.J. Medrano

 

Name:

Randolph E.J. Medrano

 

Title:

Vice President

 

53

--------------------------------------------------------------------------------

 

 

COOPERATIEVE CENTRALE

 

RAIFFEISENBORENLEENBANK B.A.,

 

“RABOBANK INTERNATIONAL”

 

NEW YORK BRANCH

 

 

 

By

/s/ Peter Glawe

 

Name:

Peter Glawe

 

Title:

Vice President

 

 

 

By

/s/ Andrew Sherman

 

Name:

Andrew Sherman

 

Title:

Executive Director

 

 

 

US BANK, N.A.

 

 

 

By

/s/ Patrick H. McGraw

 

Name:

Patrick H. McGraw

 

Title:

Vice President

 

 

 

WELLS FARGO BANK NATIONAL

 

ASSOCIATION

 

 

 

By

/s/ Steven M. Buehler

 

Name:

Steven M. Buehler

 

Title:

Senior Vice President

 

 

 

FIFTH THIRD BANK

 

 

 

By

/s/ Megan S. Heisel

 

Name:

Megan S. Heisel

 

Title:

Vice President

 

 

 

FORTIS CAPITAL CORPORATION

 

 

 

By

/s/ Timothy Streb

 

Name:

Timothy Streb

 

Title:

Managing Director

 

 

 

By

/s/ Clay Jackson

 

Name:

Clay Jackson

 

Title:

Managing Director

 

 

 

COBANK, ACB

 

 

 

By

/s/ Teresa L. Fountain

 

Name:

Teresa L. Fountain

 

Title:

Assistant Corporate Secretary

 

 

 

REGIONS BANK

 

 

 

By

/s/ Monty Trimble

 

Name:

Monty Trimble

 

Title:

Senior Vice President

 

54

--------------------------------------------------------------------------------

 

 

THE BANK OF NOVA SCOTIA

 

 

 

By

/s/ V.H. Gibson

 

Name:

V.H. Gibson

 

Title:

Assistant Agent

 

 

 

COMERICA BANK

 

 

 

By

/s/ Blake Arnett

 

Name:

Blake Arnett

 

Title:

Assistant Vice President

 

 

 

MELLON BANK, N.A.

 

 

 

By

/s/ Mark F. Johnston

 

Name:

Mark F. Johnston

 

Title:

First Vice President

 

 

 

PNC BANK, NATIONAL ASSOCIATION

 

 

 

By

/s/ C. Joseph Richardson

 

Name:

C. Joseph Richardson

 

Title:

Senior Vice President

 

 

 

THE NORTHERN TRUST COMPANY

 

 

 

By

/s/ Thomas Hasenauer

 

Name:

Thomas Hasenauer

 

Title:

Vice President

 

 

 

GREENSTONE FARM CREDIT SERVICES,

 

ACA/FLCA

 

 

 

By

/s/ Alfred S. Compton, Jr.

 

Name:

Alfred S. Compton, Jr.

 

Title:

Vice President/Senior Lending Officer

 

 

 

SOVEREIGN BANK

 

 

 

By

/s/ Judith C.E. Kelly

 

Name:

Judith C.E. Kelly

 

Title:

Senior Vice President

 

 

 

U.S. AGBANK, FCB

 

 

 

By

/s/ Patrick Zeka

 

Name:

Patrick Zeka

 

Title:

Vice President

 

 

 

AGFIRST FARM CREDIT BANK

 

 

 

By

/s/ John W. Burnside, Jr.

 

Name:

John W. Burnside, Jr.

 

Title:

Vice President

 

55

--------------------------------------------------------------------------------

 

 

BRANCH BANKING AND TRUST COMPANY

 

 

 

By

/s/ Robert Bass

 

Name:

Robert Bass

 

Title:

Senior Vice President

 

56

--------------------------------------------------------------------------------

 

SCHEDULE I

THE KROGER CO.

FIVE-YEAR CREDIT AGREEMENT

APPLICABLE LENDING OFFICES

 

Name of Initial Lender

 

Commitment

 

Domestic Lending Office

 

Eurodollar Lending Office

 

 

 

 

 

 

 

AgFirst Farm Credit Bank

 

$

20,000,000

 

1401 Hampton Street

 

1401 Hampton Street

 

 

 

 

Columbia, SC 29202

 

Columbia, SC 29202

 

 

 

 

Attn: Felicia Morant

 

Attn: Felicia Morant

 

 

 

 

F: 803 254-4219

 

F: 803 254-4219

Amsouth Bank

 

$

50,000,000

 

315 Deaderick Street

 

315 Deaderick Street

 

 

 

 

Nashville, TN 37237-0310

 

Nashville, TN 37237-0310

 

 

 

 

Attn: Betty Parker

 

Attn: Betty Parker

 

 

 

 

T: 615 770-4405

 

T: 615 770-4405

 

 

 

 

F: 615 748-2731

 

F: 615 748-2731

Bank of America, N.A.

 

$

230,000,000

 

901 Main Street

 

901 Main Street

 

 

 

 

Dallas, TX 75202

 

Dallas, TX 75202

 

 

 

 

Attn: Portfolio Management

 

Attn: Portfolio Management

 

 

 

 

T: 214 209-0978

 

T: 214 209-0978

 

 

 

 

F: 214 209-0905

 

F: 214 209-0905

The Bank of New York

 

$

150,000,000

 

One Wall Street

 

One Wall Street

 

 

 

 

New York, NY 10286

 

New York, NY 10286

 

 

 

 

Attn: USCM Administration or

 

Attn: USCM Administration or

 

 

 

 

Patricia Butler

 

Patricia Butler

 

 

 

 

T: 212 635-8208

 

T: 212 635-8208

 

 

 

 

F: 212 635-7926

 

F: 212 635-7926

The Bank of Nova Scotia

 

$

50,000,000

 

600 Peachtree St., NE

 

600 Peachtree St., NE

 

 

 

 

Suite 2700

 

Suite 2700

 

 

 

 

Atlanta, GA 30308

 

Atlanta, GA 30308

 

 

 

 

Attn: Shannon Law

 

Attn: Shannon Law

 

 

 

 

T: 404 877-1561

 

T: 404 877-1561

 

 

 

 

F: 404 888-8998

 

F: 404 888-8998

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch

 

$

150,000,000

 

227 West Monroe Street

 

227 West Monroe Street

 

 

 

Suite 2300

 

Suite 2300

 

 

 

 

Chicago, IL

 

Chicago, IL

 

 

 

 

Cheryl Lyons/Vigi Luz

 

Cheryl Lyons/Vigi Luz

 

 

 

 

T: 312 782-4709/4702

 

T: 312 782-4709/4702

 

 

 

 

F: 312 696-4532

 

F: 312 696-4532

Barclays Bank PLC

 

$

150,000,000

 

200 Park Avenue

 

200 Park Avenue

 

 

 

 

New York, NY 10166

 

New York, NY 10166

 

 

 

 

Attn: Jan Becker

 

Attn: Jan Becker

 

 

 

 

T: 212 412-3795

 

T: 212 412-3795

 

 

 

 

F: 212 412-5308

 

F: 212 412-5308

Branch Banking and Trust Company

 

$

20,000,000

 

200 West 2nd Street

 

200 West 2nd Street

 

 

 

16th Floor

 

16th Floor

 

 

 

 

Winston Salem, NC 27101

 

Winston Salem, NC 27101

 

 

 

 

Attn: Beth Cook

 

Attn: Beth Cook

 

 

 

 

T: 336 733-2726

 

T: 336 733-2726

 

 

 

 

F: 336 733-2740

 

F: 336 733-2740

 

--------------------------------------------------------------------------------

 

Citibank, N.A.

 

$

230,000,000

 

Two Penns Way, Suite 200

 

Two Penns Way, Suite 200

 

 

 

 

New Castle, DE 19720

 

New Castle, DE 19720

 

 

 

 

Attn: Brian Maxwell

 

Attn: Brian Maxwell

 

 

 

 

T: 302 894-6023

 

T: 302 894-6023

 

 

 

 

F: 302 894-6120

 

F: 302 894-6120

CoBank, ACB

 

$

75,000,000

 

5500 S. Quebec Street

 

5500 S. Quebec Street

 

 

 

 

Greenwood Village, CO 80111

 

Greenwood Village, CO 80111

 

 

 

 

Attn: D. Moran

 

Attn: D. Moran

 

 

 

 

T: 303 740-4033

 

T: 303 740-4033

 

 

 

 

F: 303 740-4021

 

F: 303 740-4021

Comerica Bank

 

$

35,000,000

 

500 Woodward Avenue,

 

500 Woodward Avenue,

 

 

 

 

MC3268

 

MC3268

 

 

 

 

Detroit, MI 48226

 

Detroit, MI 48226

 

 

 

 

Attn: Stacie McVeigh

 

Attn: Stacie McVeigh

 

 

 

 

T: 313 222-4515

 

T: 313 222-4515

 

 

 

 

F: 313 222-9514

 

F: 313 222-9514

Cooperatieve Centrale RaiffeisenBorenleenbank B.A., “Rabobank International” New
York Branch

 

$

150,000,000

 

245 Park Avenue

 

245 Park Avenue

 

 

 

New York, NY 10167

 

New York, NY 10167

 

 

 

T: 201 499-5200

 

T: 201 499-5200

 

 

 

F: 201 499-5326

 

F: 201 499-5326

Fifth Third Bank

 

$

120,000,000

 

38 Fountain Square Plaza

 

38 Fountain Square Plaza

 

 

 

 

Cincinnati, OH 45263

 

Cincinnati, OH 45263

 

 

 

 

Attn: Judy Brown

 

Attn: Judy Brown

 

 

 

 

T: 513 579-4224

 

T: 513 579-4224

 

 

 

 

F: 513 534-0875

 

F: 513 534-0875

Fortis Capital Corporation

 

$

100,000,000

 

Two Embarcadero Center

 

Two Embarcadero Center

 

 

 

 

Suite 1330

 

Suite 1330

 

 

 

 

Attn: Gladysa Valverde

 

Attn: Gladysa Valverde

 

 

 

 

T: 201 631-8190

 

T: 201 631-8190

 

 

 

 

F: 201 631-8181

 

F: 201 631-8181

GreenStone Farm Credit Services, ACA/FLCA

 

$

25,000,000

 

1760 Abbey Road

 

1760 Abbey Road

 

 

 

East Lansing, MI 48823

 

East Lansing, MI 48823

 

 

 

 

Attn: Laura Roessler

 

Attn: Laura Roessler

 

 

 

 

T: 517 318-4139

 

T: 517 318-4139

 

 

 

 

F: 517 318-1240

 

F: 517 318-1240

JPMorgan Chase Bank, N.A.

 

$

230,000,000

 

1111 Fannin Street, 10th Floor

 

1111 Fannin Street, 10th Floor

 

 

 

 

Houston, TX 77002

 

Houston, TX 77002

 

 

 

 

Attn: Cherry Arnaez

 

Attn: Cherry Arnaez

 

 

 

 

T: 713 750-

 

T: 713 750-

 

 

 

 

F: 713 750-2782

 

F: 713 750-2782

Mellon Bank, N.A.

 

$

35,000,000

 

Three Mellon Bank Center

 

Three Mellon Bank Center

 

 

 

 

Room 1203

 

Room 1203

 

 

 

 

Pittsburgh, PA 15259

 

Pittsburgh, PA 15259

 

 

 

 

Attn: Richard Bouchard

 

Attn: Richard Bouchard

 

 

 

 

T: 412 234-5767

 

T: 412 234-5767

 

 

 

 

F: 412 234-6124

 

F: 412 234-6124

The Northern Trust Company

 

$

35,000,000

 

50 South LaSalle

 

50 South LaSalle

 

 

 

 

Chicago, IL 60603

 

Chicago, IL 60603

 

 

 

 

Attn: Sharon Jackson

 

Attn: Sharon Jackson

 

 

 

 

T: 312 630-1609

 

T: 312 630-1609

 

 

 

 

F: 312 630-1566

 

F: 312 630-1566

 

2

--------------------------------------------------------------------------------

 

PNC Bank, National Association

 

$

35,000,000

 

201 East Fifth Street

 

201 East Fifth Street

 

 

 

 

Cincinnati, OH 45201

 

Cincinnati, OH 45201

 

 

 

 

Attn: C. Joseph Richardson

 

Attn: C. Joseph Richardson

 

 

 

 

T: 513 651-8688

 

T: 513 651-8688

 

 

 

 

F: 513 651-8957

 

F: 513 651-8957

The Royal Bank of Scotland plc

 

$

205,000,000

 

Level 12, 101 Park Avenue

 

Level 12, 101 Park Avenue

 

 

 

 

New York, NY 10178

 

New York, NY 10178

 

 

 

 

Attn: Juanita Baird

 

Attn: Juanita Baird

 

 

 

 

T: 212 401-1420

 

T: 212 401-1420

 

 

 

 

F: 212 401-1336

 

F: 212 401-1336

Sovereign Bank

 

$

25,000,000

 

75 State Street

 

75 State Street

 

 

 

 

4th Floor

 

4th Floor

 

 

 

 

Boston, MA 02109

 

Boston, MA 02109

 

 

 

 

Attn: Roxanne Ellison

 

Attn: Roxanne Ellison

 

 

 

 

T: 610 378-6677

 

T: 610 378-6677

 

 

 

 

F: 610 378-6718

 

F: 610 378-6718

U.S. AgBank, FCB

 

$

25,000,000

 

245 N. Waco

 

245 N. Waco

 

 

 

 

Wichita, KS 67202

 

Wichita, KS 67202

 

 

 

 

Attn: Kathy Scobee

 

Attn: Kathy Scobee

 

 

 

 

T: 316 266-5688

 

T: 316 266-5688

 

 

 

 

F: 316291-5085

 

F: 316291-5085

Union Bank of California, N.A.

 

$

55,000,000

 

1980 Saturn Street

 

1980 Saturn Street

 

 

 

 

Monterey Park, CA 91755

 

Monterey Park, CA 91755

 

 

 

 

Attn: Ruby Gonzales

 

Attn: Ruby Gonzales

 

 

 

 

T: 323 720-7055

 

T: 323 720-7055

 

 

 

 

F: 323 724-6198

 

F: 323 724-6198

US Bank, N.A.

 

$

150,000,000

 

425 Walnut Street

 

425 Walnut Street

 

 

 

 

CN-OH-W8

 

CN-OH-W8

 

 

 

 

Cincinnati, OH 45202

 

Cincinnati, OH 45202

 

 

 

 

Attn: Patrick McGraw

 

Attn: Patrick McGraw

 

 

 

 

T: 513 632-3032

 

T: 513 632-3032

 

 

 

 

F: 513 632-2068

 

F: 513 632-2068

Wells Fargo Bank National Association

 

$

150,000,000

 

230 West Monroe, Suite 2900

 

230 West Monroe, Suite 2900

 

 

 

Chicago, IL 60606

 

Chicago, IL 60606

 

 

 

 

Attn: Scott Miller

 

Attn: Scott Miller

 

 

 

 

T: 312 845-4522

 

T: 312 845-4522

 

 

 

 

F: 312 553-4783

 

F: 312 553-4783

 

3

--------------------------------------------------------------------------------

 

SCHEDULE 2.01(c)

 

STAND-BY LETTERS OF CREDIT

 

BANK

 

LOC #

 

FACE
AMOUNT

 

EXP
DATE

 

BENEFICIARY

 

REFERENCE

 

 

 

 

 

 

 

 

 

 

 

USBank

 

CIN 00133

 

$

7,614,905.00

 

11/15/07

 

USBank 7/1/11

 

IRB - Lucas Co. OH

USBank

 

MMSP02172

 

$

9,775,891.00

 

8/15/07

 

USBank 11/1/12

 

IRB - Crawfordsville

USBank

 

MMSP02341

 

$

8,108,844.00

 

11/15/07

 

USBank 2/1/12

 

IRB - Bradley Cnty, TN

USBank

 

MMSP02342

 

$

1,029,042.00

 

11/15/07

 

USBank 2/1/12

 

IRB - Winchester, KY

USBank

 

MMSP02343

 

$

1,029,042.00

 

11/15/07

 

USBank 2/1/12

 

IRB - Murray, KY

USBank

 

MMSP02068

 

$

9,107,014.00

 

8/15/07

 

USBank 8/1/15

 

IRB - Bluffton, IN

USBank

 

MMSP02535

 

$

7,717,809.00

 

4/15/07

 

USBank 4/1/09

 

IRB - Colorado Housing

USBank

 

MMSP02538

 

$

2,824,718.00

 

4/15/07

 

USBank 8/1/11

 

IRB - Town of Avon, CO

USBank

 

MMSP02537

 

$

1,543,562.00

 

4/15/07

 

USBank 8/1/11

 

IRB - Hotchkiss, CO

USBank

 

MMSP02536

 

$

4,630,685.00

 

4/15/07

 

USBank 8/1/11

 

IRB - Thornton, CO

USBank

 

MMSP02642

 

$

2,881,316.00

 

5/15/07

 

USBank 8/1/12

 

IRB - Meigs County

USBank

 

MMSP02643

 

$

3,704,548.00

 

5/15/07

 

USBank 8/1/12

 

IRB - Hilliard

USBank

 

MMSP02644

 

$

3,087,124.00

 

5/15/07

 

USBank 8/1/12

 

IRB - Warren County

USBank

 

CIN123465

 

$

3,185,445.00

 

11/30/07

 

Chase Trust

 

Montgom. Cnty IRB

USBank

 

MMSP02735

 

3,591,480.00

 

9/15/07

 

USBank 11/1/11

 

IRB-Rome/Floyd County

USBank

 

MMSP02734

 

3,215,754.00

 

9/15/07

 

USBank 12/1/13

 

IRB-East Peoria, IL

USBank

 

MMSP02733

 

1,029,042.00

 

9/15/07

 

USBank 12/1/13

 

IRB-Hutchinson, KS

USBank

 

MMSP02791

 

3,601,644.00

 

9/15/07

 

USBank 11/1/11

 

IRB-Lawrence Cnty, OH

USBank

 

MMSP02917

 

3,344,384.00

 

1/15/07

 

USBank 10/1/09

 

IRB-Panola County, MS

USBank

 

MMSP02916

 

4,836,494.00

 

1/15/08

 

USBank 10/1/09

 

IRB-Montgomery County, OH

USBank

 

MMSP03068

 

2,263,891.00

 

6/15/07

 

USBank 12/1/12

 

IRB-City of Ripley

USBank

 

MMSP03067

 

2,855,590.00

 

6/15/07

 

USBank 12/1/12

 

IRB-Harison

 

--------------------------------------------------------------------------------

 

USBank

 

MMSP03066

 

3,190,028.00

 

6/15/07

 

USBank 12/1/12

 

IRB-Monongolia

USBank

 

MMSP02956

 

2,109,535.00

 

8/15/07

 

USBank 11/1/12

 

IRB-Madeira

USBank

 

MMSP02955

 

823,233.00

 

8/15/07

 

USBank 11/1/12

 

IRB-W. Frankfort, IL

USBank

 

MMSP02957

 

3,190,028.00

 

8/15/07

 

USBank 9/1/12

 

IRB-Stark County

USBank

 

MMSP03195

 

3,190,028.00

 

8/15/07

 

USBank 11/1/12

 

IRB-Marmet WVA

USBank

 

MMSP03423

 

3,190,028.00

 

10/15/07

 

USBank 7/1/10

 

IRB-Allegheny County

USBank

 

MMSP03379

 

3,344,384.00

 

10/15/07

 

USBank  7/1/10

 

IRB-City of Charlotte, VA

USBank

 

MMSP03380

 

1,029,042.00

 

10/15/07

 

USBank  7/1/10

 

IRB-Rutherford County, TN

USBank

 

MMSP03251

 

4,630,685.00

 

8/15/07

 

USBank  2/1/12

 

IRB-Springfield, TN

USBank

 

MMSP03250

 

4,630,685.00

 

8/15/07

 

USBank  2/1/12

 

IRB-Kanawha, Wva

USBank

 

MMSP03583

 

3,009,946.00

 

3/15/07

 

USBank 3/1/16

 

IRB-Montgomery County, OH 2

USBank

 

MMSP03289

 

7,048,932.00

 

10/15/07

 

USBank 4/1/13

 

IRB-Kanawha, Wva 2

USBank

 

CIN00198

 

14,060,668.00

 

2/8/08

 

Continental Casualty #1

 

Insurance

USBank

 

CINS124412

 

$

443,014.67

 

5/1/07

 

City of Greenwood (IN)

 

Indy KMA

USBank

 

CIN00268

 

$

650,000.00

 

5/5/07

 

USF&G

 

Insurance (Tibbet/Brit)

USBank

 

CIN00427

 

$

2,300,000.00

 

9/18/07

 

USF&G #2

 

Insurance

USBank

 

STL02613

 

$

5,800,000.00

 

8/31/07

 

Michigan Dept of Agriculture

 

Mich Dairy

USBank

 

CIN122303

 

$

250,000.00

 

12/31/06

 

COMM OF INS (St of VT) #1

 

VINE CT

USBank

 

CIN124954

 

$

250,000.00

 

10/1/07

 

COMM OF INS (St of VT) #2

 

Queen City Assurance

USBank

 

SLCC122681

 

$

250,000.00

 

2/1/07

 

COMM OF INS (St of VT) #3

 

RJD Assurance

USBank

 

CIN00505

 

$

157,452.90

 

12/10/07

 

Manor Township

 

Turkey Hill Dairy

USBank

 

CIN00152

 

$

5,000,000.00

 

1/30/07

 

Albert Kessel

 

Kessel Trx (D.Schroeder info)

USBank

 

CIN00151

 

$

2,350,000.00

 

1/30/07

 

James Kessel (dec. Beg 5/1/06)

 

Kessel Trx (D.Schroeder info)

USBank

 

CIN00150

 

$

1,800,000.00

 

1/30/07

 

Thomas Kessel

 

Kessel Trx (D.Schroeder info)

USBank

 

CIN00149

 

$

2,000,000.00

 

1/30/07

 

Timothy Kessel

 

Kessel Trx (D.Schroeder info)

USBank

 

CIN00164

 

$

50,000.00

 

1/11/07

 

San Isabel Electric Co.

 

GHC

USBank

 

SLCC122276

 

$

602,426.00

 

11/4/07

 

First Chicago

 

7.88% mtg bonds

USBank

 

CIN00583

 

$

11,000.00

 

2/27/07

 

Twp of West Lampeter

 

Turkey Hill Minit Mkts

 

2

--------------------------------------------------------------------------------

 

USBank

 

CIN00600

 

$

700,000.00

 

3/20/07

 

Arkansas WC

 

Arkansas W/C

USBank

 

CIN00615

 

$

31,088.00

 

4/2/07

 

City of Brentwood, TN

 

L-896

USBank

 

CIN00620

 

$

2,500,000.00

 

4/9/07

 

Nevada WC

 

Nevada W/C

USBank

 

CIN00590

 

$

61,130.00

 

3/11/08

 

County of Franklin

 

Mid Atl

USBank

 

STL00775

 

$

1,309,531.98

 

11/29/06

 

Town of Bennett

 

Kings

USBank

 

STL00875

 

$

89,854.00

 

11/20/07

 

Bd of Comm, Fairfield Cnty, OH

 

Columbus N532

USBank

 

STL00978

 

$

940,909.00

 

2/3/07

 

Old Republic #5

 

Republic Risk Manag.

USBank

 

STL00979

 

$

818,547.00

 

2/3/07

 

Old Republic #6

 

Republic Risk Manag.

USBank

 

STL01106

 

$

10,027,045.00

 

4/8/07

 

Commission of Arizona

 

Fry’s

USBank

 

STL01472

 

$

2,232,000.00

 

10/29/06

 

State of Nevada

 

 

USBank

 

STL01472

 

$

2,483,000.00

 

10/29/07

 

State of Nevada

 

 

USBank

 

STL01780

 

$

1,000.00

 

5/23/07

 

TN Dept. of Agriculture

 

Delight

USBank

 

STL01791

 

$

38,000.00

 

5/31/07

 

Jefferson County Public Works

 

Mid-South

USBank

 

STL01943

 

$

8,065,000.00

 

9/13/07

 

Ohio Bureau of Workers Comp

 

Insurance

USBank

 

STL02087

 

$

22,050.00

 

11/28/07

 

Witchita

 

Dillons Stores

USBank

 

STL02227

 

$

2,182,819.00

 

2/23/07

 

Ace American Insurance

 

insurance - auto liability

USBank

 

STL02228

 

$

2,065,313.00

 

2/23/07

 

Ace American Insurance

 

insurance - insured w/c

USBank

 

STL02230

 

$

1,225,000.00

 

2/23/07

 

Ace American Insurance

 

insurance - self insured w/c

USBank

 

STL02261

 

$

5,000.00

 

2/23/07

 

Jefferson County Public Works

 

Mid-South

USBank

 

STL02309

 

$

10,000.00

 

3/15/07

 

Jefferson County Public Works

 

Mid-South

USBank

 

STL02652

 

$

150,000.00

 

9/14/07

 

City of Murfreesboro

 

Mid-South

USBank

 

STL02684

 

$

10,000.00

 

9/28/07

 

Jefferson County Public Works

 

Mid-South

USBank

 

STL2744

 

$

316,701.70

 

10/24/07

 

City of Andover, KS

 

Dillon Stores

 

 

 

 

 

 

 

 

 

 

 

Union Bank

 

S233496

 

9,000.00

 

6/4/07

 

Mutual Indemnity

 

Insurance

Union Bank

 

S233495

 

55,000.00

 

2/23/07

 

Bkrs Std Insur

 

Fred Meyer

Union Bank

 

S006588

 

7,311,110.00

 

12/31/07

 

Reliance Insurance

 

Ralphs/hughes

Union Bank

 

S234643

 

424,512.00

 

1/10/08

 

Old Republic #1

 

Auto Deductible

Union Bank

 

S234782

 

4,950,000.00

 

3/7/07

 

IL Workers Comp

 

Illinois W/C

Union Bank

 

S234774

 

9,073,737.00

 

3/6/08

 

WV Workers Comp

 

West Va W/C

Union Bank

 

S234862

 

732,625.00

 

1/10/08

 

Old Republic #2

 

insurance

 

3

--------------------------------------------------------------------------------

 

Union Bank

 

S234892

 

1,867,038.00

 

5/7/07

 

Old Republic #3

 

insurance

Union Bank

 

S234958

 

1,900,000.00

 

2/3/07

 

Continental Casualty #3

 

insurance

Union Bank

 

S235183

 

19,448,000.00

 

9/17/07

 

State of Washington

 

Washington W/C

Union Bank

 

S235184

 

3,077,330.00

 

9/17/07

 

State of Oregon

 

Oregon W/C

Union Bank

 

S235206

 

6,125,000.00

 

10/1/07

 

State of New Mexico

 

New Mex W/C

Union Bank

 

S235266

 

9,642,770.00

 

10/30/07

 

Commonwealth of KY

 

KY W/C

Union Bank

 

s235301

 

8,540,000.00

 

11/21/07

 

Kansas Workers Comp

 

KS W/C

Union Bank

 

s235461

 

1,500,000.00

 

2/3/07

 

Continental Casualty #4

 

cna

Union Bank

 

s236107

 

1,634,868.00

 

2/3/07

 

Ace American Insurance

 

insurance

Union Bank

 

s236108

 

2,621,365.00

 

2/3/08

 

Old Republic #7

 

insurance

Union Bank

 

s236816

 

114,600.00

 

3/9/07

 

Town of Colierville

 

Delta

Union Bank

 

s236817

 

100,000.00

 

3/9/07

 

Town of Colierville #2

 

Delta

Union Bank

 

s237098

 

595,000.00

 

8/23/07

 

Ace American insurance

 

Vernon meat plant (Bicara)

 

 

 

 

 

 

 

 

 

 

 

PNC

 

S257160OHO

 

24,145.46

 

5/1/07

 

Twp of Derry, PA

 

THMM

PNC

 

18100259

 

92,150.00

 

1/7/08

 

West Pottsgrove Twp

 

THMM

PNC

 

18100273

 

117,144.00

 

7/19/07

 

Penn DOT 2

 

THMM

PNC

 

18102108

 

122,404.51

 

8/24/07

 

Twp of South Hanover

 

THMM

PNC

 

18102921

 

58,311.00

 

3/10/07

 

Shippensburg

 

THMM

PNC

 

18103140

 

294,788.92

 

5/3/07

 

Clay Township

 

THMM

PNC

 

18103141

 

7,925,000.00

 

5/31/07

 

Penn DOT 3

 

THMM

PNC

 

18103183

 

45,000.00

 

11/10/07

 

Red Hill Borough 2

 

THMM

PNC

 

18103278

 

237,027.29

 

5/31/07

 

Hampden Twp

 

THMM

PNC

 

18103327

 

470,502.56

 

6/8/07

 

Borough of Mount Joy

 

THMM

 

 

 

 

 

 

 

 

 

 

 

Comerica

 

582779-01

 

3,000,000.00

 

5/1/07

 

Dept of Cons/Industry Svcs

 

Mich W/C

 

 

 

 

 

 

 

 

 

 

 

AmSouth

 

1612758

 

6,000,000.00

 

3/8/09

 

UFCW LOCAL #1529

 

DELTA H.R.

AmSouth

 

1814740

 

8,100,000.00

 

1/9/08

 

Georgia Self-Insurers Guaranty

 

Georgia Insurance

AmSouth

 

1815235

 

5,795,000.00

 

8/25/07

 

TN Dept of Commerce & Insurance

 

Insurance

 

4

--------------------------------------------------------------------------------

 

SCHEDULE 3.01(b)
DISCLOSED LITIGATION

 

Any actions, suits, investigations, litigation or proceedings disclosed in
Borrower’s periodic or current reports filed with the SEC are incorporated by
reference in this Schedule 3.01(b).

 

--------------------------------------------------------------------------------

 

EXHIBIT A-1 - FORM OF NOTICE OF
REVOLVING CREDIT BORROWING

 

JPMorgan Chase Bank, N.A., as Paying Agent
     for the Lenders parties
     to the Credit Agreement
     referred to below
[Address]                                                                                                                                               
[Date]

                         Attention: Loan and Agency Services

 

Ladies and Gentlemen:

 

The undersigned, The Kroger Co., refers to the Five-Year Credit Agreement, dated
as of November 15, 2006 (as amended or modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent and as Paying Agent for said Lenders, Citibank,
N.A., as Administrative Agent for said Lenders, and Bank of America, N.A., The
Royal Bank of Scotland plc, Union Bank of California, N.A. and The Bank of
Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch, as Syndication Agents, and hereby
gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement
that the undersigned hereby requests a Revolving Credit Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Revolving Credit Borrowing (the “Proposed Revolving Credit
Borrowing”) as required by Section 2.02(a) of the Credit Agreement:

 

(i) The Business Day of the Proposed Revolving Credit Borrowing is
                              , 200  .

 

(ii) The Type of Advances comprising the Proposed Revolving Credit Borrowing is
[Base Rate Advances] [Eurodollar Rate Advances].

 

(iii) The aggregate amount of the Proposed Revolving Credit Borrowing is
$                              .

 

[(iv) The initial Interest Period for each Eurodollar Rate Advance made as part
of the Proposed Revolving Credit Borrowing is            month[s].]

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Revolving Credit
Borrowing:

 

(A) the representations and warranties contained in Section 4.01 of the Credit
Agreement (other than the representations and warranties in the last sentence of
subsection (e) and in subsection (f) (other than clause (ii) thereof)) are
correct, before and after giving effect to the Proposed Revolving Credit
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date;

 

(B) no event has occurred and is continuing, or would result from such Proposed
Revolving Credit Borrowing or from the application of the proceeds therefrom,
that constitutes a Default; and

 

--------------------------------------------------------------------------------

 

(C) the aggregate amount of the Proposed Revolving Credit Borrowing and all
other Borrowings to be made on the same day under the Credit Agreement is within
the aggregate amount of the Unused Commitments.

 

 

Very truly yours,

 

 

 

THE KROGER CO.

 

 

 

 

 

By

 

 

 

Title:

 

2

--------------------------------------------------------------------------------

 

EXHIBIT A-2 - FORM OF NOTICE OF
COMPETITIVE BID BORROWING

 

                                         , as Agent
     for the Lenders parties
     to the Credit Agreement
     referred to below

                                         

 

 

 

 

 

 

 

[Date]

 

Attention: Loan and Agency Services

 

Ladies and Gentlemen:

 

The undersigned, The Kroger Co., refers to the Five-Year Credit Agreement, dated
as of November 15, 2006 (as amended or modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent and as Paying Agent for said Lenders, Citibank,
N.A., as Administrative Agent for said Lenders, and Bank of America, N.A., The
Royal Bank of Scotland plc, Union Bank of California, N.A. and The Bank of
Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch, as Syndication Agents, and hereby
gives you notice, irrevocably, pursuant to Section 2.01(b) of the Credit
Agreement that the undersigned hereby requests a Competitive Bid Borrowing under
the Credit Agreement, and in that connection sets forth the terms on which such
Competitive Bid Borrowing (the “Proposed Competitive Bid Borrowing”) is
requested to be made:

 

(A)

Date of Competitive Bid Borrowing

 

 

(B)

Amount of Competitive Bid Borrowing

 

 

(C)

[Maturity Date] [Interest Period]

 

 

(D)

Interest Rate Basis

 

 

(E)

Interest Payment Date(s)

 

 

(F)

 

 

 

 

(G)

 

 

 

 

(H)

 

 

 

 

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Competitive Bid
Borrowing:

 

(a) the representations and warranties contained in Section 4.01 are correct,
before and after giving effect to the Proposed Competitive Bid Borrowing and to
the application of the proceeds therefrom, as though made on and as of such
date;

 

(b) no event has occurred and is continuing, or would result from the Proposed
Competitive Bid Borrowing or from the application of the proceeds therefrom,
that constitutes a Default; and

 

(c) the aggregate amount of the Proposed Competitive Bid Borrowing and all other
Borrowings to be made on the same day under the Credit Agreement is within the
aggregate amount of the Unused Commitments.

 

--------------------------------------------------------------------------------

 

The undersigned hereby confirms that the Proposed Competitive Bid Borrowing is
to be made available to it in accordance with Section 2.01(b) of the Credit
Agreement.

 

 

Very truly yours,

 

 

 

THE KROGER CO.

 

 

 

 

 

By

 

 

 

Title:

 

2

--------------------------------------------------------------------------------

 

EXHIBIT A-3 - FORM OF
NOTICE OF ISSUANCE

 

                                     , as Issuing Bank
[Address]

 

JPMorgan Chase Bank, N.A., as Paying Agent
     for the Lenders parties
     to the Credit Agreement
     referred to below
[Address]                                                                                                         
[Date]

                         Attention: Loan and Agency Services

 

Ladies and Gentlemen:

 

The undersigned, The Kroger Co., refers to the Five-Year Credit Agreement, dated
as of November 15, 2006 (as amended or modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined),
among the undersigned, certain Lenders parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent and as Paying Agent for said Lenders, Citibank,
N.A., as Administrative Agent for said Lenders, and Bank of America, N.A., The
Royal Bank of Scotland plc, Union Bank of California, N.A. and The Bank of
Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch, as Syndication Agents, and hereby
gives you notice pursuant to Section 2.03 of the Credit Agreement that the
undersigned hereby requests a Letter of Credit under the Credit Agreement, and
in that connection sets forth below the information relating to the Issuance of
such Letter of Credit (the “Proposed Issuance”) as required by
Section 2.03(a) of the Credit Agreement:

 

(i) The Business Day of the Proposed Issuance is                     , 200  .

 

(ii) The Available Amount of such Letter of Credit is                     .

 

(iii) The expiration date of such Letter of Credit is                     ,
200  .

 

(iv) The name and address of the beneficiary of such Letter of Credit is
                    .

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Issuance:

 

(A) the representations and warranties contained in Section 4.01 of the Credit
Agreement (other than the representations and warranties in the last sentence of
subsection (e) and in subsection (f) (other than clause (ii) thereof)) are
correct, before and after giving effect to the Proposed Issuance and to the
application of the proceeds therefrom, as though made on and as of such date;

 

(B) no event has occurred and is continuing, or would result from such Proposed
Issuance or from the application of the proceeds therefrom, that constitutes a
Default; and

 

--------------------------------------------------------------------------------

 

(C) the aggregate Available Amount of the Proposed Issuance is within (i) the
aggregate amount of the Unused Commitments and (ii) the Letter of Credit
Facility.

 

 

Very truly yours,

 

 

 

THE KROGER CO.

 

 

 

 

 

By

 

 

 

Title:

 

2

--------------------------------------------------------------------------------

 

EXHIBIT B - FORM OF
ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Five-Year Credit Agreement dated as of November 15,
2006 (as amended or modified from time to time, the “Credit Agreement”) among
The Kroger Co., an Ohio corporation (the “Borrower”), the Lenders (as defined in
the Credit Agreement), JPMorgan Chase Bank, N.A., as Administrative Agent and as
Paying Agent for said Lenders, Citibank, N.A., as Administrative Agent for said
Lenders, Bank of America, N.A., The Royal Bank of Scotland plc, Union Bank of
California, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch, as
Syndication Agents. Terms defined in the Credit Agreement are used herein with
the same meaning.

 

The “Assignor” and the “Assignee” referred to on Schedule I hereto agree as
follows:

 

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, an interest in and to the
Assignor’s rights and obligations under the Credit Agreement as of the date
hereof (other than in respect of Competitive Bid Advances and Competitive Bid
Notes) equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement (other than in
respect of Competitive Bid Advances and Competitive Bid Notes). After giving
effect to such sale and assignment, the Assignee’s Commitment and the amount of
the Revolving Credit Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.

 

2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim created by it; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Credit Note held by the Assignor and requests
that the Agent exchange such Revolving Credit Note for a new Revolving Credit
Note payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto or new Revolving Credit Notes payable to
the order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto and the Assignor in an amount equal to the Commitment
retained by the Assignor under the Credit Agreement, respectively, as specified
on Schedule 1 hereto.

 

3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (iv) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender;
and (v) attaches any U.S. Internal Revenue Service forms required under
Section 2.14 of the Credit Agreement.

 

4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the “Effective Date”) shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1
hereto.

 

--------------------------------------------------------------------------------

 

 

5. Upon such acceptance and recording by the Agent, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.

 

6. Upon such acceptance and recording by the Agent, from and after the Effective
Date, the Agent shall make all payments under the Credit Agreement and the
Revolving Credit Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and facility fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Revolving
Credit Notes for periods prior to the Effective Date directly between
themselves.

 

7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment and Acceptance by telecopier or other electronic
medium shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.

 

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

2

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Schedule 1

to

Assignment and Acceptance

 

 

Percentage interest assigned:

 

 

 

 

%

 

 

 

 

 

 

Assignee’s Commitment:

 

$

 

 

 

 

 

 

 

 

 

 

Aggregate outstanding principal amount of Revolving Credit Advances assigned:

 

 

 

$

 

 

 

 

 

 

 

 

Principal amount of Revolving Credit Note payable to Assignee:

 

 

 

$

 

 

 

 

 

 

 

 

Principal amount of Revolving Credit Note payable to Assignor:

 

 

 

$

 

 

 

Effective Date*:                               , 200  

 

 

 

[NAME OF ASSIGNOR], as Assignor

 

 

 

 

 

By

 

 

 

 

Title:

 

 

 

 

 

Dated:                               , 200  

 

 

 

 

 

[NAME OF ASSIGNEE], as Assignee

 

 

 

 

 

By

 

 

 

 

Title:

 

 

 

 

 

Dated:                               , 200  

 

 

 

 

 

Domestic Lending Office:

 

 

[Address]

 

 

 

 

 

Eurodollar Lending Office:

 

 

[Address]

Accepted and Approved this

 

 

           day of                               , 200  

 

 

 

 

 

JPMORGAN CHASE BANK, N.A., as Administrative

 

 

Agent and as Paying Agent

 

 

 

 

 

By

 

 

 

 

Title:

 

 

 

 

 

 

--------------------------------------------------------------------------------

*     This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.

 

3

--------------------------------------------------------------------------------

 

Approved this            day

 

 

of                               , 200  

 

 

 

 

 

CITIBANK, N.A.,

 

 

as Administrative Agent

 

 

 

 

 

By

 

 

 

 

Title:

 

 

 

 

 

Approved this            day

 

 

of                               , 200  

 

 

 

 

 

THE KROGER CO.

 

 

 

 

 

By

 

 

 

 

Title:

 

 

 

4

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EXHIBIT C - FORM OF
OPINION OF COUNSEL
FOR THE BORROWER

 

To each of the Lenders parties
     to the Credit Agreement referred to below
     and to JPMorgan Chase Bank, N.A.,
     as Administrative Agent
     and Paying Agent, and Citibank, N.A.,
     as Administrative Agent

 

The Kroger Co.

 

Ladies and Gentlemen:

 

As Executive Vice President, Secretary and General Counsel of The Kroger Co., an
Ohio corporation (the “Company”), I am familiar with its affairs and, to the
extent necessary to render this opinion, the affairs of its subsidiaries and in
particular the Five-Year Credit Agreement, dated as of November 15, 2006 (the
“Credit Agreement”), among the Company, the banking institutions listed on the
signature pages thereof (the “Lenders”), JPMorgan Chase Bank, N.A. and Citibank,
N.A., as Administrative Agents, and Bank of America, N.A., The Royal Bank of
Scotland plc, Union Bank of California, N.A. and The Bank of Tokyo-Mitsubishi
UFJ, Ltd., Chicago Branch, as Syndication Agents. This opinion is delivered to
you pursuant to the Credit Agreement. All capitalized terms used herein which
are defined in, or by reference in, the Credit Agreement have the meanings
assigned to such terms in, or be reference in, the Credit Agreement unless
otherwise indicated herein.

 

In connection with the preparation of this opinion, I have examined originals,
or certified, conformed or reproduction copies, of such corporate records,
agreements, instruments and documents of the Borrower, such certificates of
public officials and such other documents as I have deemed necessary or
appropriate to its preparation and delivery. In all such examinations, I have
assumed the genuineness of all signatures on original or certified, conformed or
reproduction copies of documents of all parties other than the Company and the
conformity to original or certified copies of all copies submitted to me as
conformed or reproduction copies. As to various questions of fact relevant to
such opinions, I have relied upon, and assume the accuracy of, statements or
certificates of public officials and statements or certificates of officers or
representatives of the Borrower and others. I am familiar with the proceedings
of the Board of Directors of the Borrower in connection with the Credit
Agreement.

 

Based on the foregoing, and subject to the limitations, qualifications and
assumptions set forth herein, I am of the opinion that:

 

(1) The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Ohio. The Borrower has all requisite
corporate power and authority to own or lease and operate its properties, and to
carry on its business as presently conducted. The Borrower has the corporate
power and authority to execute and deliver the Credit Agreement, and to perform
its obligations under the Credit Agreement. The Borrower is duly qualified or
licensed to do business as a foreign corporation in good standing in all
jurisdictions in which it owns or leases assets or in which the conduct of its
business requires it to so qualify or be licensed except where the failure to be
so licensed or qualified is not likely to have a material adverse effect on the
business, condition (financial or otherwise), performance, operation, properties
or prospects thereof.

 

(2) The Credit Agreement has been duly executed and delivered on behalf of the
Borrower.

 

--------------------------------------------------------------------------------

 

(3) There are no pending or overtly threatened actions or proceedings against
the Company or any of its Subsidiaries before any court, governmental agency or
arbitrator which, (a) except as set forth in the Credit Agreement, are
reasonably likely to have a Material Adverse Effect or (b) purport to affect the
legality, validity or enforceability of the Credit Agreement.

 

(4) The execution and delivery by the Borrower of the Credit Agreement and the
performance by the Borrower of its obligations under the Credit Agreement
(a) have been duly authorized by all necessary corporate action, (b) do not
require any filing or registration with, or approval or consent of, any
governmental agency or authority generally applicable to corporations for profit
that has not been made or obtained, and (c) do not contravene (i) any provisions
of the Articles of Incorporation of the Borrower or Regulations of the Borrower
and all amendments thereto, or (ii) any present law, or governmental regulation
of any governmental agency or authority of the State of Ohio generally
applicable to corporations for profit which, to my knowledge, is applicable to
the Borrower.

 

(5) The execution and delivery by the Borrower of the Credit Agreement and the
performance by it of its obligations thereunder, to my knowledge, will not
contravene any indenture, loan or credit agreement, lease, guarantee, mortgage,
security agreement, bond, note or other agreement or instrument, or any order,
writ, judgment, award, injunction or decree, which affect or purport to affect
any of the rights or obligations of the Borrower under the Credit Agreement,
except as disclosed in the Credit Agreement.

 

(6) No authorization, consent, approval or other action by, and no notice to or
filing with, any governmental authority is required for the due execution,
delivery and performance by the Borrower of the Credit Agreement.

 

(7) The Credit Agreement constitutes the legal, valid and binding obligation of
the Borrower, enforceable against the Borrower in accordance with its terms.

 

(8) In general, an Ohio court would give effect to the choice of law provisions
in the Credit Agreement which specify New York law as the applicable law (other
than instances where Ohio law specifically governs Ohio property, persons or
activities, for example, with respect to real property and choice of law
rules under the Uniform Commercial Code (“UCC”)). The Supreme Court of Ohio has
validated contractual choice of law provisions. Jarvis v. Ashland Oil, Inc., 17
Ohio St. 3d 189 (1985); Schulke Radio Productions, Ltd. v. Midwestern
Broadcasting Co., 6 Ohio St. 3d 436 (1983). In the latter case, the Supreme
Court held that the parties may choose the law applicable to their contract
unless (i) the state whose law is chosen has no substantial relationship to the
parties or to the transaction and there is no other reasonable basis for the
parties’ choice or (ii) application of the chosen law would be contrary to a
fundamental policy of a state having a materially greater interest in the issue
than the chosen state and such other state would be the state of applicable law
in the absence of a choice by the parties. In addition, Ohio Revised Code
(“R.C.”) § 1301.05 (UCC 1-105) provides generally with respect to UCC matters
(not including issues specifically addressed to the contrary by the Ohio UCC,
for example, perfection issues governed by R.C. § 1309.03 (UCC 9-103)) that when
a transaction bears a reasonable relation to Ohio and also to another state, the
parties may agree that the law of either Ohio or of such other state shall
govern their rights and duties. Under the present circumstances, it would appear
that the parties’ stipulation that the law of New York should control should be
given effect in Ohio. This conclusion is based upon our understanding that the
transactions provided for in the Credit Agreement were negotiated primarily in
New York, were executed and delivered in New York, and are to be performed, in
whole or in part, in New York and that the Administrative Agents and the Paying
Agent have their chief places of business outside of the State of Ohio.

 

The opinions set forth above are subject to the following qualifications:

 

(a) My opinion in paragraph 7 above as to enforceability is subject to the
effect of any applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar law affecting creditors’ rights generally.

 

(b) My opinion in paragraph 7 above as to enforceability is subject to the
effect of general principles of equity, including, without limitation, concepts
of materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law).

 

2

--------------------------------------------------------------------------------

 

(c) I express no opinion as to (i) Section 2.13 of the Credit Agreement insofar
as it provides that any Lender purchasing a participation from another Lender
pursuant thereto may exercise set-off or similar rights with respect to such
participation and (ii) the effect of the law of any jurisdiction other than the
State of Ohio wherein any Lender may be located or wherein enforcement of the
Credit Agreement or the Notes may be sought that limits the rates of interest
legally chargeable or collectible.

 

The opinions stated herein are limited to the federal laws of the United States
of America and the laws of the State of Ohio. To the extent the opinions stated
herein relate to laws of a jurisdiction other than the United States of America
or the State of Ohio, I have assumed for purposes of such opinions that the laws
of such jurisdiction are identical to the laws of the State of Ohio. The
opinions are limited to the matters on which I have been expressly asked to
opine and do not extend beyond such limits. The opinions expressed herein are
solely for the benefit of the Agent and the Lenders and may not be relied on in
any manner or for any purpose by any other person or entity.

 

 

Very truly yours,

 

3

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EXHIBIT D - FORM OF
ADMINISTRATIVE QUESTIONNAIRE

 

 

[g107751km19i001.jpg]

JANUARY 2005

 

JPMorgan

 

ADMINISTRATIVE QUESTIONNAIRE

 

The Kroger Co.

 

Agent Address:

JPMorgan Chase Bank, N.A.

Return form to:

Omar Musule

 

JPMorgan Loan Services

Telephone:

713-286-3247

 

1111 Fannin Street, 10th Fl.

Facsimile:

713-750-2666

 

Houston, TX  77002

E-mail:

Omar.P.Musule@JPMorgan.com

 

It is very important that all of the requested information be completed
accurately and that this questionnaire be returned promptly.  If your
institution is sub-allocating its allocation, please fill out an administrative
questionnaire for each legal entity.

 

Legal Name of Lender to appear in Documentation:

 

 

Tax ID Number:

 

Signature Block Information:

 

 

 

·

Signing Credit Agreement

Yes

No

 

 

 

 

·

Coming in via Assignment

Yes

No

 

Type of Lender:

 

 

(Bank, Asset Manager, Broker/Dealer, CLO/CDO, Finance Company, Hedge
Fund, Insurance, Mutual Fund, Pension Fund, Other Regulated Investment Fund,
Special Purpose Vehicle, Other-please specify)

 

Lender Parent:

 

 

Domestic Address

 

Eurodollar Address

 

 

 

 

 

 

 

 

 

 

LSTA JANUARY 2005                   Copyright © LSTA 2005.  All rights reserved.

 

--------------------------------------------------------------------------------

 

Contacts/Notification Methods:  Borrowings, Paydowns, Interest, Fees, etc.

 

Primary Credit Contact

 

Secondary Credit Contact

 

 

 

 

Syndicate-level information (which may contain material non-public information
about the Borrower and its related parties or their respective securities) will
be made available to the Credit Contact(s).  The Credit Contacts identified must
be able to receive such information in accordance with his/her institution’s
compliance procedures and applicable laws, including Federal and state
securities laws.

 

Name:

 

Company:

 

Title:

 

Address:

 

 

Telephone:

 

Facsimile:

 

E-Mail Address:

 

Primary Operations Contact

 

Secondary Operations Contact

 

 

 

 

Name:

 

Company:

 

Title:

 

Address:

 

 

Telephone:

 

Facsimile:

 

E-Mail Address:

 

Bid Contact

 

L/C Contact

 

 

 

 

Name:

 

Company:

 

Title:

 

Address:

 

 

Telephone:

 

Facsimile:

 

E-Mail Address:

 

--------------------------------------------------------------------------------

 

Lender’s Domestic Wire Instructions

 

Bank Name:

 

 

 

ABA/Routing No.:

 

 

 

Account Name:

 

 

 

Account No.:

 

 

 

FFC Account Name:

 

 

 

FFC Account No.:

 

 

 

Attention:

 

 

 

Reference:

 

 

Lender’s Foreign Wire Instructions

 

Currency:

 

 

 

Bank Name:

 

 

 

Swift/Routing No.:

 

 

 

Account Name:

 

 

 

Account No.:

 

 

 

FFC Account Name:

 

 

 

FFC Account No.:

 

 

 

Attention:

 

 

 

Reference:

 

 

Agent’s Wire Instructions

 

Bank Name:

JPMorgan Chase Bank, N.Al

 

 

ABA/Routing No.:

021 0000 021

 

 

Account Name:

 

 

 

Account No.:

 

 

 

Attention:

Cherry Arnaez

 

 

Reference:

Kroger Co.

 

--------------------------------------------------------------------------------

 

Tax Documents

 

NON-U.S. LENDER INSTITUTIONS:

 

I. Corporations:

 

If your institution is incorporated outside of the United States for U.S.
federal income tax purposes, and is the beneficial owner of the interest and
other income it receives, you must complete one of the following three tax
forms, as applicable to your institution: a.) Form W-8BEN (Certificate of
Foreign Status of Beneficial Owner), b.) Form W-8ECI (Income Effectively
Connected to a U.S. Trade or Business), or c.) Form W-8EXP (Certificate of
Foreign Government or Governmental Agency).

 

A U.S. taxpayer identification number is required for any institution submitting
Form W-8ECI.  It is also required on Form W-8BEN for certain institutions
claiming the benefits of a tax treaty with the U.S.  Please refer to the
instructions when completing the form applicable to your institution.  In
addition, please be advised that U.S. tax regulations do not permit the
acceptance of faxed forms.  An original tax form must be submitted.

 

II. Flow-Through Entities:

 

If your institution is organized outside the U.S., and is classified for U.S.
federal income tax purposes as either a Partnership, Trust, Qualified or
Non-Qualified Intermediary, or other non-U.S. flow-through entity, an original
Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity,
or Certain U.S. Branches for United States Tax Withholding) must be completed by
the intermediary together with a withholding statement.  Flow-through entities
other than Qualified Intermediaries are required to include tax forms for each
of the underlying beneficial owners.

 

Please refer to the instructions when completing this form.  In addition, please
be advised that U.S. tax regulations do not permit the acceptance of faxed
forms.  Original tax form(s) must be submitted.

 

U.S. LENDER INSTITUTIONS:

 

If your institution is incorporated or organized within the United States, you
must complete and return Form W-9 (Request for Taxpayer Identification Number
and Certification).  Please be advised that we request that you submit an
original Form W-9.

 

Pursuant to the language contained in the tax section of the Credit Agreement,
the applicable tax form for your institution must be completed and returned
prior to the first payment of income.  Failure to provide the proper tax form
when requested may subject your institution to U.S. tax withholding.

 

--------------------------------------------------------------------------------

 

 

EXHIBIT E - FORM OF
GUARANTEE AGREEMENT

 

GUARANTEE AGREEMENT dated as of November 15, 2006, made by the subsidiaries of
The Kroger Co., an Ohio corporation (the “Borrower”), listed on the signature
page hereof and the Additional Guarantors (as defined in Section 21) (such
subsidiaries so listed and the Additional Guarantors being, collectively, the
“Guarantors”) to JPMorgan Chase Bank, N.A. (“JPMorgan”), with an office at 270
Park Avenue, New York, New York  10017, as paying agent (such paying agent,
together with any successor thereto appointed pursuant to the Credit Agreement
referred to below, being the “Paying Agent”) for the lenders (the “Lenders”)
parties to the Credit Agreement (as hereinafter defined) .

 

Reference is made to the Five-Year Credit Agreement dated as of November 15,
2006 (as amended or modified from time to time, the “Credit Agreement”), among
the Borrower, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as an
Administrative Agent and as the Paying Agent, and Citibank, N.A., as an
Administrative Agent.

 

The Lenders have agreed to make Advances to the Borrower pursuant to, and upon
the terms and subject to the conditions specified in, the Credit Agreement.  The
obligations of the Lenders to make Advances are conditioned on, among other
things, the execution and delivery by each Guarantor of a guarantee agreement in
the form hereof.  Capitalized terms used herein and not defined herein shall
have the meanings assigned to such terms in the Credit Agreement or, to the
extent not defined in the Credit Agreement, in the other Loan Documents.

 

Accordingly, the parties hereto agree as follows:

 

SECTION 1.   Guarantee.  Each Guarantor unconditionally guarantees, jointly with
the other Guarantors and severally, as a primary obligor and not merely as a
surety, all obligations of the Borrower under or in respect of the Credit
Agreement and the other Loan Documents in respect of loans, advances, debts,
liabilities, covenants and indemnities of any kind or nature, present or future,
whether or not evidenced by any note, guaranty or other instrument, whether or
not for the payment of money, whether arising by reason of an extension of
credit, loan, guaranty, letter of credit, indemnification, or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired (the “Obligations”).  Without limitation of the foregoing,
the Borrower’s obligations under the Credit Agreement and the other Loan
Documents include (a) all principal, interest, charges, expenses, indemnities,
fees, attorneys’ fees and disbursements and any other amounts payable to or to
become payable by the Borrower under the Credit Agreement or any other Loan
Document and (b) any amount in respect of any of the foregoing which any Lender,
in its sole discretion, may elect to advance on behalf of the Borrower.  Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation.

 

SECTION 2.   Obligations Not Waived.  To the fullest extent permitted by
applicable law, each Guarantor waives presentment to, demand of payment from and
protest of any of the Obligations, and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment.  To the fullest extent permitted
by applicable law, the obligations of each Guarantor hereunder shall not be
affected by (a) the failure of the Paying Agent to assert any claim or

 

1

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demand or to enforce any right or remedy against the Borrower or any other
Guarantor pursuant to provisions of this Agreement, any Loan Document or
otherwise; (b) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of this Agreement, any other Loan
Document, any guarantee or any other agreement, including with respect to any
other Guarantor under this Agreement; (c) the release of any security held by
the Paying Agent for the Obligations or any of them; or (d) the failure of the
Paying Agent to exercise any right or remedy against any other Guarantor or
guarantor of the Obligations.

 

SECTION 3.   Guarantee of Payment.  Each Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Paying Agent to the
security, if any, held for payment of the Obligations or to any balance of any
deposit account or credit on the books of the Paying Agent in favor of the
Borrower or any other Person.

 

SECTION 4.   No Discharge or Diminishment of Guarantee.  The obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise.  Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Paying Agent to assert any claim or
demand or to enforce any remedy under the Credit Agreement, any other Loan
Document, any other guarantee or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other act
or omission that may or might in any manner or to any extent vary the risk of
any Guarantor or that would otherwise operate as a discharge of any Guarantor as
a matter of law or equity (other than the indefeasible payment in full in cash
of all the Obligations).  The liability of each Guarantor shall not exceed at
any time the Maximum Amount (as hereinafter defined) less the sum of the
amounts, if any, collected by or on behalf of the Paying Agent from such
Guarantor pursuant to any Loan Documents executed by such Guarantor.  The
“Maximum Amount” means, with respect to each Guarantor, 95% of the difference
between (i) fair salable value of the property of such Guarantor and (ii) the
total liabilities of such Guarantor (including contingent liabilities, but
excluding liabilities of such Guarantor under the Loan Documents) from time to
time.

 

SECTION 5.   Defenses of Borrower Waived.  To the extent permitted by applicable
law, each of the Guarantors waives any defense based on or arising out of any
defense of the Borrower or any other Guarantor or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower or any other Guarantor, other than final and
indefeasible payment in full in cash of the Obligations.  Each of the Guarantors
waives any defense arising out of any such election even though such election
operates to impair or to extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrower or any other
Guarantor, as the case may be, or any security.

 

SECTION 6.   Continued Effectiveness.  Each Guarantor further agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be, if at any

 

2

--------------------------------------------------------------------------------

 

time payment, or any part thereof, of principal of or interest on any Obligation
is rescinded or must otherwise be restored by the Paying Agent upon the
bankruptcy or reorganization of the Borrower, any other Guarantor or otherwise.

 

SECTION 7.   Subrogation.  In furtherance of the foregoing and not in limitation
of any other right that the Paying Agent has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Borrower or any other
Guarantor to pay any Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or otherwise, each
Guarantor hereby promises to and will, upon receipt of written demand by the
Paying Agent, forthwith pay, or cause to be paid, to the Paying Agent as is
designated thereby in cash the amount of such unpaid Obligations, and thereupon
the Paying Agent shall, assign (except to the extent that such assignment would
render such Guarantor a “creditor” of the Borrower or another Guarantor within
the meaning of Section 547 of Title 11 of the United States Code as now in
effect or hereafter amended or any comparable provision of any successor
statute) the amount of the Obligations owed to it and paid by such Guarantor
pursuant to this guarantee to such Guarantor, such assignment to be pro tanto to
the extent to which the Obligations in question were discharged by such
Guarantor, or make such other disposition thereof as such Guarantor shall direct
(all without recourse to the Paying Agent, and without any representation or
warranty by the Paying Agent).  If (a) any Guarantor shall make payment to the
Paying Agent of all or any part of the Obligations, (b) all the Obligations and
all other amounts payable under this Agreement shall be indefeasibly paid in
full and (c) the Commitments shall have expired or terminated, the Paying Agent
will, at such Guarantor’s request, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Obligations resulting from such payment by the Guarantor.

 

SECTION 8.   Information.  Each of the Guarantors assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that the Paying Agent will
have no duty to advise any of the Guarantors of information known to it or any
of them regarding such circumstances or risks.

 

SECTION 9.   Subordination.  Upon payment by any Guarantor of any sums to the
Paying Agent, as provided above, all rights of such Guarantor against the
Borrower, arising as a result thereof by way of right of subrogation or
otherwise, shall in all respects be subordinated and junior in right of payment
to the prior indefeasible payment in full in cash of all the Obligations to the
Paying Agent; provided, however, that any right of subrogation that such
Guarantor may have pursuant to the Credit Agreement or this Agreement is subject
to Section 7 hereof.

 

SECTION 10. Representations and Warranties.  Each of the Guarantors represents
and warrants as to itself that all representations and warranties relating to it
contained in the Credit Agreement are true and correct.

 

SECTION 11. Termination.  The guarantees made hereunder shall terminate when all
the Obligations have been indefeasibly paid in full and the Lenders have no
further commitment to lend under the Credit Agreement.  This Agreement will
terminate as to any Guarantor upon any sale or other disposition of such
Guarantor that is permitted by the Credit

 

3

--------------------------------------------------------------------------------

 

Agreement or upon the date such Guarantor otherwise ceases to be a Material
Subsidiary of the Borrower, provided that such Guarantor shall give notice to
the Lenders promptly upon such termination.

 

SECTION 12. Binding Agreement; Assignments.  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 Guarantors that are contained in this Agreement shall
bind and inure to the benefit of each party hereto and their respective
successors and assigns.  This Agreement shall become effective as to any
Guarantor when a counterpart hereof executed on behalf of such Guarantor shall
have been delivered to the Paying Agent, and thereafter shall be binding upon
such Guarantor and the Paying Agent and their respective successors and assigns,
and shall inure to the benefit of such Guarantor, the Paying Agent, and their
respective successors and assigns, except that no Guarantor shall have the right
to assign its rights or obligations hereunder (and any such attempted assignment
shall be void), except as expressly contemplated by this Agreement or the other
Loan Documents.

 

SECTION 13. Waivers; Amendment.  (a)  No failure or delay of the Paying Agent 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 discontinuance 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 Paying Agent hereunder are
cumulative and are not exclusive of any rights or remedies that it would
otherwise have.  No waiver of any provisions of this Agreement or consent to any
departure by any Guarantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, 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 any Guarantor in any case shall entitle such
Guarantor 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 pursuant to a written agreement
entered into between the Guarantors and the Paying Agent, with the prior written
consent of the Required Lenders.

 

SECTION 14.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 15.  Notices.  All communications and notices hereunder shall be in
writing and given as provided in Section 8.02 of the Credit Agreement.

 

SECTION 16.  Survival of Agreement; Severability.  (a)  All covenants,
agreements, representations and warranties made by the Guarantors herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Paying Agent and shall survive the making by the
Lenders of the Advances regardless of any investigation made by such parties or
on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Advance or any other fee or amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid and as long as the Commitments have not been terminated.

 

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(b)                                 In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction).  The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

 

SECTION 17.  Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
as provided in Section 12.

 

SECTION 18.  Rules of Interpretation.  The rules of interpretation specified in
Section 1.02 of the Credit Agreement shall be applicable to this Agreement.

 

SECTION 19.  Jurisdiction, Consent to Service of Process.  (a)  Each Guarantor
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 the other Loan Documents, 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 the Paying Agent may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against any Guarantor or its properties in the courts
of any jurisdiction.

 

(b)                                 Each Guarantor 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 or
the other Loan Documents 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
15.  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 20.  Waiver of Jury Trial.  Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by
jury in respect of any litigation directly or indirectly arising out of, under
or in connection with this Agreement.  Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce the foregoing waiver and (b) acknowledges that it and the other
parties hereto have been

 

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induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section.

 

SECTION 21.  Additional Guarantors.  Pursuant to Section 5.01(i) of the Credit
Agreement, certain Subsidiaries of the Borrower are required to enter into this
Agreement as Guarantors (the “Additional Guarantors”).  Upon execution and
delivery, after the date hereof, by a subsidiary of an instrument in the form of
this Agreement, such subsidiary shall become a Guarantor hereunder with the same
force and effect as if originally named as a Guarantor herein.  The execution
and delivery of any instrument adding an additional Guarantor as a party to this
Agreement shall not require the consent of any Guarantor hereunder.  The rights
and obligations of each Guarantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Guarantor as a party to this
Agreement.

 

SECTION 22.  Right of Setoff.  If an Event of Default shall have occurred and be
continuing and the Agents shall have declared, or the Required Lenders shall
have requested the Agents to declare, the Advances immediately due and payable
pursuant to Article VI of the Credit Agreement, each Lender is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other Debt at any time owing by such
Lender to or for the credit or the account of any Guarantor against any of and
all the obligations of such Guarantor now or hereafter existing under the Credit
Agreement and the other Loan Documents held by such Lender, irrespective of
whether or not such Lender shall have made any demand under the Credit Agreement
or any such other Loan Document and although such obligations may be unmatured. 
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender may have.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

 

DILLON COMPANIES, INC.

 

FOOD 4 LESS HOLDINGS, INC.

 

FRED MEYER, INC.

 

FRED MEYER STORES, INC.

 

THE KROGER CO. OF MICHIGAN

 

KROGER LIMITED PARTNERSHIP I

 

By:  KRGP Inc., its General Partner

 

KROGER TEXAS L.P.

 

By:  KRGP Inc., its General Partner

 

RALPHS GROCERY COMPANY

 

SMITH’S FOOD & DRUG CENTERS, INC.

 

 

 

 

 

By

 

 

 

Name:

 

 

Title:

 

6

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EXHIBIT F - FORM OF
ISSUING BANK REPORT

 

JPMorgan Chase Bank, N.A.,
     as Paying Agent for the Lenders parties
     to the Credit Agreement
     referred to below
[Address]

 

Fax: 713 750
2782                                                                      [Date]

 

Attention: Loan and Agency Services

 

Ladies and Gentlemen:

 

Reference is made to the Five-Year Credit Agreement dated as of November 15,
2006 (as amended or modified from time to time, the “Credit Agreement”) among
The Kroger Co., an Ohio corporation (the “Borrower”), the Lenders (as defined in
the Credit Agreement), JPMorgan Chase Bank, N.A., as Administrative Agent and as
Paying Agent for said Lenders, Citibank, N.A., as Administrative Agent for said
Lenders, Bank of America, N.A., The Royal Bank of Scotland plc, Union Bank of
California, N.A. and The Bank of Tokyo-Mitsubishi UFJ, Ltd., Chicago Branch, as
Syndication Agents. Terms defined in the Credit Agreement are used herein with
the same meaning.

 

The undersigned is an Issuing Bank under the Credit Agreement. Pursuant to
Section 2.03(d) of the Credit Agreement, undersigned hereby notifies you of the
following event(s) (check all that apply):

 

o

New issue Letter of Credit

 

 

o

Cancellation of Letter of Credit

 

 

o

Letter of Credit expiry date change

 

 

o

Increase of Available Amount of Letter of Credit

 

 

o

Decrease of Available Amount of Letter of Credit

 

Letter of Credit #:

 

 

Effective date:

 

 

 

 

 

 

 

 

Beneficiary:

 

 

Expiry date:

 

 

 

 

 

 

 

 

Original Available Amount:

 

 

New Available Amount:

 

 

 

Please contact                                [name] at
                               [phone #] or                               
[email address] with any questions.

 

 

[NAME OF ISSUING BANK], as Issuing Bank

 

 

 

By

 

 

 

Title:

 

 

 

Dated:                               , 200  

 

 

cc: The Kroger Co., Assistant Treasurer

 

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