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364-DAY CREDIT AGREEMENT
Dated as of May 22, 2002
THE KROGER CO., an Ohio corporation (the "Borrower"), the banks,
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financial institutions and other institutional lenders (the "Initial Lenders")
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listed on the signature pages hereof, and CITIBANK, N.A. ("Citibank"), as an
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administrative agent (in such capacity, an "Administrative Agent") for the
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Lenders (as hereinafter defined) and paying agent (in such capacity, the "Paying
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Agent") for the Lenders, JPMORGAN CHASE BANK ("JPMorgan Chase"), as an
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administrative agent (in such capacity, an "Administrative Agent"; the
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Administrative Agents and the Paying Agent are, collectively, the "Agents") for
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the Lenders, and BANK OF AMERICA, N.A., BANK ONE, NA and THE BANK OF
TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH and UNION BANK OF CALIFORNIA, N.A. as
co-syndication agents for the Lenders, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
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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
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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)
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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
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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
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Entity, any fiscal quarter of such Acquired Entity.
"Acquired Net Income" means, for any period, with respect to any
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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
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in the form of Exhibit D.
"Advance" means a Revolving Credit Advance or a Competitive Bid
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Advance.
"Affiliate" means, with respect to any designated Person, any other
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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
{PAGE}
the equity interest in the other Person or 10% or more of any class of
voting securities of the other Person. The term "control" means the
possession, directly or indirectly, of the power, whether or not exercised,
to direct or cause the direction of the management or policies of any
Person, whether through ownership of voting securities, by contract or
otherwise.
"Applicable Lending Office" means, with respect to each Lender, such
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Lender's Domestic Lending Office in the case of a Base Rate Advance, such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance
and, in the case of a Competitive Bid Advance, the office of such Lender
specified in a notice of such Lender to the Paying Agent as such Lender's
Applicable Lending Office with respect to such Competitive Bid Advance.
"Applicable Margin" means, as of any date prior to the Term Loan
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Conversion Date, a percentage per annum determined by reference to the
Borrower's Performance Level in effect on such date as set forth below:
{TABLE}
{CAPTION}
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Performance Applicable Margin for Applicable Margin for
Level Base Rate Advances Eurodollar Rate Advances
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{S} {C} {C}
Level 1 0.0000% 0.330%
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Level 2 0.0000% 0.525%
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Level 3 0.0000% 0.625%
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Level 4 0.0000% 0.800%
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Level 5 0.0000% 1.000%
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{/TABLE}
and, as of any date on or after the Term Loan Conversion Date, a percentage
per annum determined by reference to the Borrower's Performance Level in
effect on such date as set forth below:
{TABLE}
{CAPTION}
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Performance Applicable Margin for Applicable Margin for
Level Base Rate Advances Eurodollar Rate Advances
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{S} {C} {C}
Level 1 0.0000% 0.500%
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Level 2 0.0000% 0.750%
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Level 3 0.0000% 0.875%
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Level 4 0.0000% 1.125%
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Level 5 0.0000% 1.500%
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{/TABLE}
provided that, in each case, the Applicable Margin for Eurodollar Rate
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Advances set opposite the Performance Level 1 and Performance Level 2
above shall be increased by 0.125% until the date that the Borrower's
Commercial Paper is rated at least A2, P2 or F2 by at least two of S&P,
Moody's or Fitch, respectively.
"Applicable Percentage Ratio" means the ratio (determined as of the
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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
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into by a Lender and an assignee, and to the extent required by Section
8.06, accepted by the Borrower and the Administrative Agents, in
substantially the form of Exhibit C hereto or such other form as shall be
approved by the Administrative Agents.
"Assuming Lender" has the meaning specified in Section 2.16(c).
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"Assumption Agreement" has the meaning specified in Section 2.16(c).
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"Base Rate" means a fluctuating rate per annum equal to the highest
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from time to time of:
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